When you move management of something as large as all of Alberta’s health regions into one multibillion-dollar enterprise, you shouldn’t be too shocked when database and accounting problems creep up in the first year or so. Alberta Health Services and its superboard have certainly had their share of them.
It’s like merging nine multimillion-dollar companies into one. Even if they all had the same basic accounting system (and they probably didn’t), there’s still quite a variance in the way reports can be prepared.
So even with the best of planning, it shouldn’t come as a shock that creating a new set of accounts would run into glitches.
Alberta’s auditor general, Merwan Saher, reported on those glitches this week. Understandably, they were big glitches. A half-billion dollars in expenses were misclassified. Another $420 million was accidentally omitted from the books. The entire provincial health budget had to be amended three times, just to make the revenue and expense sides balance.
“The root cause is poor change management,” Saher wrote in his 246-page report. That’s putting it in mild accountancy language.
Although finding problems may be understandable, that doesn’t mean they are all forgivable.
Here’s one that should rank up there in “scandal” territory, but for some reason it creates very few waves in government:
Can you imagine any business with shareholders’ money in trust, investing $51.4 million in a project with a partner and then changing the very nature and purpose of the project, while it is in construction, which changes its funding agreement — with no written understanding about who pays for what?
The government partnered with Covenant Health to build Villa Caritas in Edmonton as a long-term care facility, similar to Extendicare Michener Hill in Red Deer.
Then, for reasons that had as much to do with political expediency as anything else, Villa Caritas was switched into a facility for geriatric mental health patients, so they could close an aging public institution (Alberta Hospital Edmonton), resulting in a net gain of 14 beds for mental health patients and a net loss of 120 long-term care beds for seniors. At an additional cost of millions. And now, we discover, with no written agreement in place.
If this is how the government manages its much-vaunted policy of public-private partnerships, let’s hope we never see another one.
Now, if you got a close look at the Advocate on Wednesday, you will find the story of the auditor general’s report right beside a story on the success of the Red Deer Neighbourhood Watch project Just Say Hi.
With $10,000 in grants from the Red Deer and District Community Foundation and the government’s Culture and Community Spirit program, two ambassadors were hired to promote a program to encourage city residents to get to know their neighbours, as a way of reducing crime in our residential districts.
We won’t debate the obvious merits of spending the money here, but you should know that Neighbourhood Watch had to sign agreements to account for every penny that was spent.
As a portion of income, our non-profits spend far more money on accounting than most businesses or any level of government. That is to satisfy their board members, community donors and granting agencies that everything is on the up-and-up. Collectively, it is a huge burden, and many smaller non-profits have a lot of trouble finding accounting and auditing expertise that they can afford, just to satisfy the contractual needs of funders — which is often the government.
To find that government agencies like AHS do not conform to accounting practices that are demanded of non-profits, for the pittance given to non-profits to deliver their services, is infuriating. AHS boss Stephen Duckett and his administration have a lot to answer for.
Greg Neiman is an Advocate editor.