AG finds more than $1 million mismanaged by defunct Cape Breton employment agency
The Nova Scotia Auditor General has confirmed that a now-defunct Cape Breton employment agency mismanaged funds totaling more than $1 million.
In a report released today, Kim Adair said Cape Breton Regional Police are still investigating the former Island Employment Association, two years after allegations of mismanagement were first made public by the provincial ombudsman.
Adair said managers and staff improperly purchased equipment, paid bonuses and expenses to themselves and that the executive director was allegedly involved in a kickback scheme.
“It was a perfect storm of mismanagement, which appeared to be deliberate and systematic and designed to benefit certain players at Island Employment,” she said in a terse statement. video posted on the website of the Auditor General.
In addition to employee problems, the agency’s board of directors provided poor governance and the county provided poor oversight, the auditor general said.
“Our investigation revealed three major failures that persisted at the agency for nearly a decade and led to the gross mismanagement of public funds that totaled more than $1 million.”
The Auditor General said her office is cooperating with police in their investigation of the agency, which employed about 30 people in offices in Sydney, Chéticamp, Inverness and Port Hawkesbury, and provided clients with help creating resumes and finding of work.
The province closed it in November 2021 and replaced it the following year with the YMCA and le Conseil de développement économique de la Nouvelle-Écosse in some of the Acadian regions of Cape Breton.
Adair is calling on the Department of Labor, Skills and Immigration to thoroughly review the Nova Scotia Works program, which funded Island Employment and 16 other similar agencies.
In a statement, Secretary of Labor Jill Balser said the department has accepted all of the Auditor General’s recommendations and has begun implementing them.
“While it can be difficult to guard against deliberate acts of unethical behavior and mismanagement of funds, we must guard against them, hold people accountable and continually review and improve our processes,” she said.
The Auditor General and the Minister plan to hold press conferences this afternoon.
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