AG finds more than $1M mismanaged by defunct Cape Breton employment agency
CBC
Nova Scotia's auditor general has confirmed a now-defunct Cape Breton employment agency mismanaged funds totalling more than $1 million.
In a report released today, Kim Adair said Cape Breton Regional Police are still investigating the former Island Employment Association two years after allegations of mismanagement were first made public by the provincial ombudsman.
Adair said managers and staff improperly bought equipment, paid out bonuses and expenses to themselves, and the executive director was allegedly involved in a kickback scheme.
"It was a perfect storm of mismanagement, which appeared to be deliberate and systematic and designed to benefit certain players at Island Employment," she said in a brief video posted to the auditor general's website.
In addition to problems with employees, the agency's board of directors provided poor governance and the province provided poor oversight, the auditor general said.
"Our investigation uncovered three major points of failure that persisted in the agency for almost a decade and led to the gross mismanagement of public funds that totalled more than $1 million."
The auditor general said her office is co-operating with police on their investigation into the agency, which employed about 30 people in offices in Sydney, Chéticamp, Inverness and Port Hawkesbury, and offered clients help with resumés and finding jobs.
The province shut it down in November 2021 and replaced it the following year with the YMCA and le Conseil de développement économique de la Nouvelle-Écosse in some of the Acadian regions of Cape Breton.
Adair is calling on the Department of Labour, Skills and Immigration to conduct a thorough review of the Nova Scotia Works program, which funded Island Employment and 16 other agencies like it.
In a statement, Labour Minister Jill Balser said the department has accepted all of the auditor general's recommendations and begun to implement them.
"While it can be difficult to guard against deliberate acts of unethical behaviour and mismanagement of funds, we must guard against it, hold people accountable and continually review and improve our processes," she said.
The auditor general and the minister are planning to hold news conferences this afternoon.
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