Civil servants charged more than $600K in personal spending on N.L. government credit cards

Public employees in the Newfoundland and Labrador government have spent hundreds of thousands of dollars on personal purchases and cash withdrawals using taxpayer-funded credit cards since 2015.

Internal documents obtained by CBC News spell out further details on the severity and scope of suspected fraud committed by civil servants, which was first revealed in the auditor general's annual report in January.

"There were potentially fraudulent incidents involving government employees, such as falsely representing credentials, personal use of corporate credit cards, or inappropriate use of government resources," wrote Auditor General Denise Hanrahan.

"In some cases, employees were terminated as a result of investigations conducted. Generally, these incidents were not reported to the police but handled internally through disciplinary processes."

Hanrahan's report did not specify the amount of money involved but she said the money had been largely repaid and that the province did not suffer any losses. 

However, a briefing note prepared for the executive council and obtained by CBC News through access-to-information reveals those dollar figures.

That internal document raises questions about how the suspected fraud was able to take place — and what's being done to stop it from happening again.

An expert in white collar crime says the ability of employees to use that much public money speaks to a weakness in their system. Meanwhile, government officials stress swift action has been taken to stop employees from committing fraud in the future. 

In October 2020, the executive council flagged the personal services and internal audit division, which carries out fraud investigations, that an employee had taken out $131,631 in personal cash advances over an unspecified period of time.

The employee, the note said, was fired and the money has been returned.

The next year, an employee from the same department was reported for having charged nearly $5,000 on a corporate card for personal use. In that case, the person kept their job but was disciplined.

The police were not notified in either of those cases, the note said. 

Seven employees of the Department of Fisheries, Forestry and Agriculture allegedly raked up more than $170,000 between them, using corporate credit cards for cash advances and charges between January 2015 and October 2020.

The employee with the highest debt had a balance of over $54,000 on their corporate card. The other employees had balances of between $7,878 and $44,962 on their respective cards.