Forensic Audit, Accountability Needed

A forensic audit has confirmed serious and significant unauthorized spending occurred within the Strait Regional School Board.

The report, compiled after a three-month investigation by PricewaterhouseCoopers, makes recommendations to improve financial controls, reporting and accountability. The report also recommends the board focus solely on its mandate of delivering education.

Acting Education minister Neil LeBlanc said education dollars are meant to benefit students and is angered by the findings.

"This report shows that parents, teachers, taxpayers and students were let down. They have every reason to be outraged. I know I am," said Mr. LeBlanc. "The forensic auditors identified huge amounts of money that were either spent inappropriately or without proper authority -- money that could have been spent on textbooks, teachers and teacher's aids."

The report makes recommendations in the following areas:

• payments to employees and board members;
• tendering of goods and services;
• involvement in commercial and not-for-profit enterprises;
• reporting and approvals; and
• financial monitoring.

The recommendations include better reporting, more approvals at the board level, development of a procurement policy and immediate review of the board's association with commercial and not-for-profit organizations. In addition, the report recommends the creation of an audit committee with at least two members from the community with expertise in financial reporting.

Taxpayers give school boards approximately $760 million a year. Mr. LeBlanc said that is not a blank cheque, it is money meant for the classroom.

"We must have the right controls and clear accountabilities in place so we know, and taxpayers know, the money is benefitting students," he said. "All of the pieces of this investigation are now coming together. The situations in the Strait and Chignecto- Central school boards have exposed gaps in the system. We will take whatever steps are necessary to fill those gaps so students get the full benefit of every education dollar."

The province was to release the full report today, however, the RCMP has advised that full disclosure would compromise its criminal investigation. The province has released the report with sensitive information left out.

"Minister Purves has been up front with releasing information throughout this entire process. It was our intent to release the full report today. After speaking with the RCMP, we are releasing the information we can," said Mr. LeBlanc. "We will not jeopardize a criminal investigation or our ability to recover taxpayers' money. We will release the full report when we can."

The Department of Education will review the report in detail. Mr. LeBlanc said he would not speculate on the specific actions the province will take, but he did commit to making changes to fix the problem. Decisions will be made in the coming weeks by Education Minister Jane Purves in consultation with cabinet.

A copy of the report is availble at www.ednet.ns.ca