04/27/2017 14:23 EDT | Updated 04/30/2017 10:25 EDT

Alberta puts new leaders in place at controversial farm-aid agency

EDMONTON — Alberta has new leaders and oversight rules in place at a Crown agency tasked with helping farmers with loans, crop insurance, and disaster aid.

Agriculture Minister Oneil Carlier says the new board of the Agriculture Financial Services Corp. will have eight members chaired by Jennifer Wood, a professional agrologist and agribusiness executive.

Carlier sacked the old six-member board about a year ago and suspended three top executives.

"I lost confidence in the last board after an investigation of staff expenses left me seriously concerned that there was a culture of entitlement at AFSC," Carlier said Thursday.

An audit found the executives engaged in questionable purchasing practices and racked up lavish expenses for trips, dinners and limousine rides. The executives were suspended with pay.

Carlier said two of the executives have retired while the former president, Brad Klak, did not have his contract renewed.

Many irregularities were done with one unnamed client company, but the corporation says it no longer does business with that group.

Carlier says a police investigation continues, and says the new board will now hire a permanent CEO.

"As we move ahead I have every confidence that AFSC will continue to be an important partner to Alberta's agricultural sector," said Carlier.

The corporation has 600 employees spread over 46 offices with a head office in Lacombe.

An internal audit, delivered to Carlier a year ago, focused on the preceding four years and found numerous irregularities.

Many of the problems surrounded the broker hired by the corporation.

Despite rules forbidding gifts from vendors, the report says the three executives received "meals, alcohol, paid entertainment (including theatre and concert tickets and sporting event admissions), rounds of golf and gifts on a frequent basis over four years from the broker.''

In some cases, the broker pitched in to help pay for AFSC functions, including one at the 2014 Calgary Stampede.

The report said executives racked up unjustified expenses including a return trip limousine ride from Lacombe to Edmonton for the president to attend the company Christmas party.

There was $5,108 for a dinner for the executives in Tokyo and $19,144 paid to a consultant in return for a share of a luxury suite at Edmonton Oilers hockey games.

The audit also found procurement rules weren't followed and that the broker was paid almost $300,000 more than the official agreed-upon price.

Premier Rachel Notley's government has been reviewing the work all agencies, boards and commissions and has begun reining in extravagant salaries it says were allowed to run amok under the former Progressive Conservative government.

In February, Finance Minister Joe Ceci announced the government was cutting the pay of the highest-earning executives at 23 agencies boards and commissions.

It is also phasing in a salary band ranging from $154,000 a year to just under $397,000.

According to salary figures on the government website, Klak took in $732,000 in salary and benefits in 2015.

The second executive, chief operating officer Merle Jacobson, accrued $341,000.

The third, Wayne McDonald, the vice-president in charge of product development, got $330,000.