Complaint by former Liberal party president against N.S. auditor general dismissed

Nova Scotia auditor general Kim Adair addresses a news conference in Halifax on Thursday, Feb. 20, 2025. THE CANADIAN PRESS/Michael Tutton

HALIFAX — A regulatory body has dismissed a complaint by the former president of the Nova Scotia Liberal Party against the province’s auditor general regarding a report she completed last year on the misuse of public funds.

Joseph Khoury complained to Chartered Professional Accountants Nova Scotia last year after Kim Adair asked the RCMP to investigate a potential “concealment” of the theft of public money by a party employee.

A spokeswoman for the accountants’ oversight body said it decided on June 10 “to dismiss the complaint in whole” against Adair, though the reasoning wasn’t made public.

Khoury was the party’s president when the theft was discovered in December 2020.

He has said the party investigated the theft and recovered the stolen money.

He also alleged Adair’s report issued in February 2024 was incomplete and that it is defamatory toward him and the Liberals.

However, Adair’s office sent an email Monday stating “she stands fully behind the report and the process followed to prepare it.”

“The report recommendations from February 2024 were accepted and endorsed formally by the legislature’s public accounts committee. Also, then-Liberal Leader Zach Churchill indicated he immediately acted on the recommendations (to contact the RCMP).”

Cindy Bayers, a spokeswoman for the RCMP, said in an email that “the matter remains under investigation.”

In her report, Adair said her office was aware of “concerning information” that revealed the party tried to hide and delay the matter “until after the 2021 election,” which the incumbent Liberals lost to the Progressive Conservatives.

It also said the former employee’s misuse of travel claims and a party credit card led to the employee’s resignation and the reimbursement of more than $194,000 by the employee.

The reimbursements were to cover the cost of the missing funds and of the forensic audit that followed.

The auditor’s report says, “The (Liberal) association’s delay in providing information to our office was not in compliance with the Auditor General Act,” which gives her office unrestricted access to records of any organization that receives public funding.

Zach Churchill, who was elected party leader in July 2022 and resigned after last fall’s election loss, supported the auditor general’s finding and has said he went to police “and urged them to look into this matter further.”

Khoury wasn’t immediately available for comment.

However, last year he sent an email to The Canadian Press saying he believed the auditor general’s report was “inaccurate.”

He wrote that the party immediately took steps to recover the money and ensure it would be “repaid in full” as soon as it discovered funds were missing in December 2020. The steps they took included hiring a law firm and following its advice, he added.

The Liberals also hired Deloitte to conduct a forensic examination of the party’s computer networks, financial records and other files from previous years, Khoury said.

“Contrary to what the auditor general asserts in her report, the independent auditor for the (Liberal) association was completely aware that there were very likely previous years impacted by this loss and that the investigation was being conducted by Deloitte,” wrote Khoury.

“To do this work properly took time. Simply put, we did not know what the previous years’ investigation would unearth. In this area of her report, the auditor general is wholly and unequivocally mistaken or has been misinformed.”

This report by The Canadian Press was first published July 14, 2025.

By Michael Tutton