OTTAWA -- The RCMP was asked to investigate a First Nations health centre in the Maritimes over allegations half a million dollars that came from contribution agreements signed with the federal government was misappropriated, The Canadian Press has learned.
A newly released document lays bare a litany of troubling claims that came to light following complaints over the alleged mismanagement of the Woodstock First Nation Health Centre in New Brunswick.
The report is but one in a wider string of alleged wrongdoings by pharmacies, nursing stations and other service providers of the federal government's health plan for aboriginals uncovered over the course of a months-long investigation by The Canadian Press.
A July 2011 special examination report by Health Canada, which covers the period from April 2006 to March 2009, says auditors confirmed all but one of the allegations against the Woodstock First Nation Health Centre, prompting the department to refer the matter to the New Brunswick RCMP's commercial crime section.
The lone unconfirmed allegation was about the confidentiality of patients' personal medical information being "breached," the report says.
"The allegations fall within the jurisdiction of, and have been forwarded to the J Division Commercial Crime Section (CCS) for their review and action deemed appropriate," Sgt. Ghislain Marcil of the RCMP's commercial crime branch wrote in a letter to the chief of Health Canada's audit and accountability bureau in December 2011.
But the force felt the matter did not fall under its purview. "It wasn't a police matter," RCMP spokeswoman Cpl. Chantal Farrah explained. "It wasn't something that we could do."
Health Canada auditors allege the former director of the health centre hired his friends and family members without open competitions, job offers or work descriptions. Most of them did not even bother showing up for work, the audit alleges, while others "had a poor understanding of their duties."
"Those who were present showed up late during the day or for short periods of time," the document says. "Some of the people interviewed also declared that (blank) himself was rarely in the office."
The blacked-out name presumably refers to the health centre's former director, James Paul. He is listed as the director of the health centre in several of its newsletters from 2007, during the period covered by the Health Canada audit.
The Canadian Press obtained the 17-page Health Canada report under the Access to Information Act.
The Health Canada auditors say they could not find any proof the friends and family of the former director actually did any work. The report says the workers claimed records of the tasks they performed were kept in patients' files -- but when the auditors asked to see the files, the workers refused, claiming the records were confidential.
Auditors say the total amount of misappropriated money was $532,261. Of that, they say $54,109 came from Health Canada and the rest came from other government departments.
The chief of the Woodstock First Nation says all the money has since been paid back.
"As a result of the problems which were revealed during the audit, it was agreed funds for the WFN Health Centre would be administered under the discretion of and subject to controls put in place by Health Canada," Chief Len Tomah said in an email.
Tomah declined an interview request and did not answer follow-up questions. Paul refused to discuss the matter during a brief telephone interview.
"I can only tell you that the response that you got from the chief is the only response you will get from us," Paul said. "Simply because this is not something that a person can discuss."
The audit found many more questionable expenses.
The health centre spent $1,943 to enrol the former director's daughter on a local hockey team, and another $937 for the former director's ex-wife to take their daughter to a hockey tournament, the report claims.
The health centre also spent $23,000 to put the former director's relatives in a private rehabilitation centre without medical assistance, the document says.
Elders received gifts of $50 on their birthdays, it adds, adding that cost a total of $2,015 in one year alone.
The health centre's travel expenses also troubled the auditors.
"The review of unsupported travel expenses indicated that all of them are, or appear to be, misappropriated," the audit says.
"This includes travel expenses that are not supported and without evidence that the travel actually occurred, or travel expenses for activities unrelated to the health centre."
One unnamed employee could not remember the purpose of a trip or why the acronym AFN was written on his travel advance form, the document says.
"This occurred in a case where the advance was paid for a trip allegedly made to meet with members of the Assembly of First Nations (AFN)," the audit says.
"This memory lapse is quite remarkable in view of the circumstances and the fact that the AFN is an organization recognized nationally and internationally. In addition to this, numerous trips were unjustified or unrelated to the program."
Cell phone records also showed an unnamed employee made calls from home when he was allegedly out of town on business.
The audit also alleges the former director approved expenses for his benefit or the benefit of friends and relatives.
The auditors added that "the work climate at the health centre is visibly unhealthy." The report refers to "numerous instances of intimidation," and says there were allegations that the confidentiality of personal medical information was "breached." However, the auditors say they were unable to confirm the breach of confidentiality allegation.
The auditors say they even bore witness to an altercation, the details of which are blacked out.
"People are afraid to go to the centre," the document says.
"This is consistent with the observations of the auditors who noticed a low level of activity during their site visits, with only a few patients visiting the centre during the 11-day period."
The Woodstock First Nation disputes some of the report's findings, Tomah said, although he did not say which parts of the audit are disputed.
Tomah said Health Canada did not provide him or his council with a copy of the document. The Canadian Press shared a copy of the partially-censored report with him.
"While there are a number of things we disagree with in the report we appreciate the information provided and we had already taken steps to address these issues," Tomah said in an email.
"When the (Woodstock First Nation) chief and council (myself then-councillor) were made aware of lapses in procedural controls at the WFN Health Centre, several measures were taken to address this problem."
He added the Woodstock First Nation fully co-operated with Health Canada and named a new health director.
"The WFN has always and will continue, as directed, to work in the spirit of co-operation with any and all agencies mandated by the federal Crown from whom we receive approximately 20 per cent of our operating budget."
Health Canada spokeswoman Christelle Legault said two reviews were conducted: a full compliance audit and a special examination into the management of the health centre.
"The community was fully co-operative and proactive in this process," Legault said in an email.
The First Nation hired a Chief Financial Officer in 2008 to help get their finances under control, she added.
"Following the audit they willingly went into co-management to ensure proper administration of Health Canada funds," she said.
"Since then we have worked with the community to respond to the issues in the audit and have recovered all Health Canada funds. Any allegations against individuals were referred to the RCMP."
This is not the first time the RCMP has been asked to look into allegations of wrongdoing involving the federal government's health plan for aboriginals.
The Canadian Press reported this week that the RCMP was asked to step in after staff at a remote First Nations nursing station in northern Ontario allegedly authorized expensive emergency medical flights -- on the federal government's dime -- to go grocery shopping in a more populated community.
Earlier this year, The Canadian Press reported Health Canada called the Mounties after investigators found a Manitoba pharmacy used a gift-basket scheme to allegedly fleece the Non-Insured Health Benefits program.
However, the former owner of that pharmacy categorically denied any wrongdoing.
The department estimated it overpaid Winnipeg's Pharm Azeem drug store by up to $160,389 through the Non-Insured Health Benefits program, although Health Canada later reached a settlement with the pharmacy to recover $25,000.
