AG's report finds improper payments to some top managers at Health P.E.I.

A report released by Prince Edward Island's auditor general has prompted Health P.E.I.’s CEO to ask the province's attorney general to weigh in on whether acts of fraud were committed at the agency.

Melanie Fraser said she first caught wind of what she described as “concerns with payroll activities” in the spring of 2024 when an employee came to her with worries of their own. That’s when Fraser called on P.E.I. Auditor General Darren Noonan to investigate.

Noonan's 45-page report, released Wednesday, confirmed that some rules around job classification were not followed, and that some managers were paid thousands of dollars without appropriate approval — findings Fraser said were enough to escalate things to Bloyce Thompson, P.E.I.'s attorney general and the current premier. 

“When the auditor gives us a report, if there’s any potential indication of fraud… or even activities that could approach fraud, out of an abundance of caution we share the findings,” Fraser said. 

"[The attorney general] may or may not refer the matter to police for follow up, and I think they make a determination about whether it meets the test of fraud.… I wouldn't have the expertise to make that call, so I just follow the obligations that I have as a head of a public body."

Noonan said he's also unable to make a determination of fraud — but said the results of his audit are a clear indication of rules being broken at Health P.E.I.

“We obviously confirmed that the rules weren't followed,” he said. “Now, whether it was intentionally done or whether there was direction, we don't conclude on that."

The AG's report outlines Health P.E.I.’s failure to comply with rules established by the Public Service Commission, specifically when it comes to reclassifying job positions.

For example, employees whose job duties change are to be compensated for that, but the compensation can't be backdated more than 60 work days.

In one case, Noonan found an employee was paid retroactively for 935 days, which resulted in around $34,500 in back pay. 

Health P.E.I. was also found to be paying some managers vacation and overtime — something they're expected to do without extra pay.  

"Under the terms and conditions of the excluded employees agreement, you're not supposed to pay out time-in-lieu," Noonan said. "They did pay it out, so they went against the terms and conditions of the agreement."

While the audit captured irregularities that happened prior to Fraser becoming the agency's CEO, she said she's taking the results as a way to learn from the past. 

"I think an audit can be a really important way to learn," she said. "Certainly we’ve learned through these findings where we can implement better processes, better controls and educate staff on the policies and processes that exist."