02/02/2016 08:17 EST | Updated 02/02/2016 08:59 EST

B.C. First Nations Health Authority Is Flawed: Auditor General

VANCOUVER — The First Nations Health Authority in British Columbia has numerous problems with executive hiring, compensation and conflict of interest, a report by Canada's auditor general says.

Michael Ferguson's office was conducting a study of the health authority in the fall of 2014 when it received an anonymous letter outlining several allegations including workplace misconduct by senior officials.

A report released by the office Tuesday said the authority became the subject of an audit in the midst of the study that was launched in October 2013.

It said the country's only such health authority was not transparent about the amount of money it spent on professional and service contracts, hospitality and travel or senior executives' salaries.

michael ferguson

A report by Canada's auditor general, Michael Ferguson, said B.C.'s First Nations Health Authority has numerous issues. (Photo: CP)

The letter also raised questions about hiring practices, prompting auditors to review 14 personnel files.

"We found that evidence was limited, in most of these files, to demonstrate that the most qualified candidate was the one hired,'' the report said.

Three of the 14 positions were publicly posted, resumes showing the candidate had the required qualifications were found in six of the files, and background checks were done on three of the employees, the report said.

While the health authority had established an accountability and governance model, the report said it didn't meet its own requirements.

"Without question, there's so much more to do."

"We found gaps in the policies we examined pertaining to conflict of interest, recruitment, personnel security, administrative investigations, financial information and disclosure, and employee relocation,'' the report said.

A policy requiring staff to disclose whether they had conflicts of interest involving personal or family relationship was not followed even though such disclosure was a condition of employment, the report said.

The agency, which employs 500 people, also had no documentation to justify considerable variation in senior management employment agreements, it said.

As for an allegation involving workplace misconduct by senior officials, the report stated that authority officials said no such incidents were brought forward.

"However, we found that the authority had completed no documentation setting out steps taken, including whether it had conducted any additional investigation beyond asking managers whether these incidents had taken place.''

Authority is concentrating on 'accountability'

Lydia Hwitsum, board chairwoman of the authority, called the "unsubstantiated'' allegations troubling and said the agency accepts the auditor general's recommendations to improve transparency and accountability.

"The First Nations Health Authority is focusing on meeting our accountability targets,'' she said, adding the agency's goal is to address systemic barriers to health services for people living on and off reserves.

"Without question, there's so much more to do. When the auditor general came in, we were one year into the transfer.

"We continue now, post transfer, to assure and reassure First Nations people and British Columbians that the work we're doing is focused not only on addressing the systemic barriers but putting qualified people in place to ensure the job gets done.''

"We found that evidence was limited ... to demonstrate that the most qualified candidate was the one hired.''

The health authority was created after nearly 10 years of negotiations among the federal and B.C. governments and First Nations leaders from three groups — the Union of B.C. Indian Chiefs, the First Nations Summit and the B.C. Assembly of First Nations.

The 2013 transfer of responsibility for health programs and services from the federal government to First Nations in B.C. was meant to improve health outcomes for over 200 First Nations in the province.

Suicide rates among First Nations, for example, are more than four times higher than other British Columbians, the report said.

The federal government committed to providing $4.7 billion in funding over 10 years, while the province promised $83.5 million for the same period.

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