Superboard bookkeeping bad: auditor

EDMONTON — Alberta’s auditor general says the province’s health superboard must do a better job keeping its financial books in order or risk making millions of dollars more in financial mistakes.

EDMONTON — Alberta’s auditor general says the province’s health superboard must do a better job keeping its financial books in order or risk making millions of dollars more in financial mistakes.

Merwan Saher said a comprehensive plan wasn’t in place when the nine regional health authorities and three specialized boards merged a year and a half ago to create Alberta Health Services, which is the delivery arm of Alberta’s Health Department.

The result, he said, was that more than $500 million in expenses were misclassified and changes eventually needed to be made in the master ledger.

Another $420 million in expenses were accidentally omitted from the books because the money was classified under one category in one budget and under another in the main ledger.

He noted the mistakes forced Alberta Health Services staff to make well over 1,000 manual entries to reclassify data in the master ledger.

Those mistakes were large enough that the 2009-10 Alberta Health Services budget had to be amended three times to balance the numbers.

“The root cause is poor change management,” Saher said after he released his annual report for the 2009 fiscal year.

“Failing to provide for rigorous change management controls to future systems consolidation could lead to significant errors.”

The warning was one of 30 recommendations by the auditor in his review of select government operations and programs.

Among the other changes, Saher said Alberta Health Services needs to do a better job dotting the I’s and crossing the T’s on agreements.

He cited the case of Villa Caritas, a long-term care centre in Edmonton’s west end that was to be built under a public-private partnership.

The three-story care centre, set to open later this year, has since been changed to a care facility primarily for geriatric mental health patients — a plan that changed the funding deal.

Saher said the problem is that there was never a signed agreement in place between the province and the private partner.

The case highlights that, without a signed agreement, it’s not clear who is in charge, who pays what and who might be liable if problems lead to court action.

“Unfilled expectations may lead to difficult and costly resolution, and there is greater risk of cost escalation that would be borne by the taxpayers,” he said.

Opposition leaders say the findings point to a board that has lost its way.

NDP Leader Brian Mason said a superboard that can’t even balance its books can’t handle larger problems of health delivery.

“We’re not getting the kind of governance of the health system that’s going to lead to good outcomes,” said Mason.

David Swann of the Alberta Liberals said, “This government doesn’t understand the complexities of the health-care system and continues to spend wastefully and inappropriately and thumb their nose at the auditor general. This really has to stop.”

Rob Anderson of the Wildrose Alliance said the report shows the problems in health care are not related to funding.

“People are not asking this government to spend more money. They’re asking them to spend the money they’re spending right now wisely,” said Anderson.

“It’s amazing to think they’re actually building projects with no contract in place. I don’t know where they went to business school, but it’s embarrassing.”

Saher also reported that a government program launched in 2008 to create 14,000 new child-care spaces did not compromise overall quality or monitoring in the entire system.

But he did note that there could be problems down the road when caregivers are given verbal warnings for small problems. Saher said the current system could see those complaints not followed up on, allowing smaller problems to become bigger ones and perhaps putting children at risk.

Saher also took the University of Athabasca to task. The university’s core business is online learning, but Saher said despite that, the school does not have “well-designed and effective IT policies, processes, standards and project management systems.”

He said the school needs to develop a co-ordinated IT delivery plan, especially since it plans to invest about $90 million over the next decade in such technologies.