Investigation into Renfrew, Ont. hospital finds ‘range of financial irregularities’

Outside Renfrew Victoria Hospital on June 28, 2024 (Sam Houpt/CTV News Ottawa)

An investigation into the relationship between Renfrew Victoria Hospital (RVH) and Renfrew Health (RH) concludes there was a “range of financial irregularities pertaining to the actions” of the former CEO at the hospital in Renfrew, Ont.

The report by the Ontario government appointed supervisor found nearly $3 million was spent on executive compensation at the hospital with “no demonstrated roles or accountabilities” within Renfrew Health and there wasn’t a “strong governance framework.”

Supervisor Altaf Stationwala submitted a final report into his investigation into concerns raised about the “appropriateness of hospital funds” transferred to Renfrew Health, which was established in 2014. Renfrew Health was established to support the operations of the Renfrew Victoria Hospital and to advance the goals and objectives of the hospital.

“There is a recurring theme of poor business and governance practices that enabled this activity to persist over many years,” Stationwala writes.

“The RH construct was misused from the beginning through the redirection of RVH operating funds and payments to RVH executives. This was increasingly carried out over time with the continued movement of significant RVH operating funds, vacation banks, bonus payouts, and other activities that should have been under purview of the hospital.

The Ministry of Health appointed Stationwala in June 2024 to oversee the Renfrew Victoria Hospital, saying “concerning financial practices” were found during a review of the hospital.

Stationwala says the hospital had “significant financial flexibility,” but many decisions “were made internally under the auspice of having limited financial resources.”

“Meanwhile, certain executives were being compensated via RH in addition to RVH compensation and a longstanding former chief executive officer with a tenure of over 30 years received both RH compensation and a range of other financial arrangements, including a Supplementary Employee Retirement Plan and an approximately $1 million interest free loan,” the report said.

“There were also concerns regarding such former executive’s use of company credit cards. These practices began at RVH as early as 1997 and continued until recently. These practices began at RVH as early as 1997 and continued until recently.”

The report says the former CEO of the Renfrew Victoria Hospital received over $1.6 million in compensation on top of their CEO salary, plus $1 million interest free loan and $1.3 million SERP retirement plan. Stationwala says other former Renfrew Victoria Hospital executives also received compensation from Renfrew Health in addition to their hospital compensation.

“In total, nearly $3 million over 11 years was spent in executive compensation through RH for RVH executives with no demonstrated roles or accountabilities within RH,” the report says. “Over time, these compensation practices became the operating norm, continuing even as new executives came on board as this was understood as the way things were done at RVH.

Stationwala said a further analysis of Renfrew Health revealed “it was a superficial structure,” and stated the creation of Renfrew Health “did not free up” time for hospital executives because “RVH executives did all of the work or RH.”

The investigation also found “gaps in formalized oversight on medical staff, with Stationwala saying the Renfrew Victoria Hospital “did not have a strong governance framework.”

Stationwala concludes, “the completed puzzle reveals a lack of sound governance and, specifically, a lack of standard checks and balances in relation to executive decision making.”

“With nearly $3 million directed into executive compensation alone, notwithstanding legal costs and other misguided spending of public dollars, the ultimate impact unfortunately comes at a loss to the community that could have benefitted from investment of these funds into expanded healthcare services,” the report says.

In November, Ontario Provincial Police launched an investigation into the Renfrew Victoria Hospital, but provided no other details. An OPP spokesperson told CTV News Ottawa on Thursday the investigation by the OPP Anti-Rackets Branch “is ongoing.”

Stationwala’s report does not list any names of hospital executives.

Stationwala says no current active members of the Renfrew Victoria Hospital are part of the irregularities.

The report recommends keeping the current board in place, appointing new auditors to oversee the hospital and instituting a whistleblower policy supported by a third-party organization. A recommendation to dissolve Renfrew Health was also accepted, with the report saying “asset transfer and dissolution underway.”

“We thank Mr. Stationwala for his work as supervisor to strengthen the governance, accountability and financial management practices of Renfrew Victoria Hospital,” Ema Popovic, a spokesperson for the Minister of Health, said in a statement to CTV News Ottawa.

“Mr. Stationwala’s final report and overall work has ensured the continuation of high-quality care with no disruptions to services.

“As of April 28, a new CEO, Suzanne Madore, is now in place alongside a strong new senior management team to foster a high-functioning and accountable organization at Renfrew Victoria Hospital. Financial irregularities with Renfrew Health have been addressed and the organization is in the process of dissolution. All funds held by Renfrew Health will be returned to Renfrew Victoria Hospital.”