N.S. Ombudsman says Guysborough County spending built for "personal advantage"
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HALIFAX — An Ombudsman's report says a former warden of a Nova Scotia municipality made thousands of dollars in personal purchases on his corporate credit card that broke written policies _ ranging from $3.39 for earphones on an Air Canada flight to $365.76 for a return airline ticket for his wife.
The report released Friday notes that in every case of personal purchases, Lloyd Hines, who went on to become a provincial cabinet minister, repaid the money within the same month or in the following month to the Municipality of the District of Guysborough.
However, it also says the policy was clear in not allowing use of the municipal credit cards for personal use or cash advances, and it is critical of Hines' use of his card to do both things, saying it amounted to a form of short-term loans from the community.
The Ombudsman says the expense system was built for "personal advantage" and allowed top officials indiscriminate purchasing on their cards, including alcohol and various meals at restaurants.
"Apart from the current Warden, councillors exhibited only limited knowledge about routine travel spending practices or amounts, while at the same time they generally expressed deference to, and strong support for, spending decisions made by the leadership group," said the report.
The report criticized council's travel policy, highlighting a 2014 Federation of Canadian Municipalities meeting in Niagara Falls attended by 30 delegations from Nova Scotia.
Guysborough sent six delegates at a cost of $24,580.15, the largest expense by any delegation and much more than the Halifax Regional Municipality which sent three delegates at a cost of $7,615.
"The average cost for the other municipalities was half that (Guysborough's) amount, with the exception of one municipality whose costs were $24,053.74," said the report.
It highlighted spending by Hines, who was either a councillor or warden for about 25 years, and notes a significant jump in mileage, meals and accommodation costs covering the period 2009-2010 to 2011-2012.
It said Hines' costs for travel and related expenses including corporate credit card charges during that period tripled from a total of $16,394 to $44,404.
The report notes that Hines various municipal board duties at the provincial and national levels was at least partly responsible for the level of his overall expenses.
"The extensive activities that took the former Warden beyond their normal duties on behalf of the Municipality were formally supported by the Municipality, even if at some cost to the municipal taxpayer. There is a value reflected in council documents that there would be potential benefits to the Municipality in having a high-profile and engaged Warden."
The report says that last November Guysborough revised its expense policies to increase clarity and to bring them closer to provincial government travel policies.
The Ombudsman's involvement came following concerns reported to the office in April 2015 by a citizen who gathered information through a Freedom of Information and Protection of Privacy request. It covers the fiscal years of April 1, 2012 to March 31, 2014 with spot checking of records from 2010 to 2011.
Current Warden Vernon Pitts welcomed the report in a written statement from council, saying it confirmed allegations received by the Ombudsman's Office from a resident "were unfounded and there was no misappropriation of municipal funds."
"Unlike the large regional municipalities and cities, the municipality does not have an economic development agency," the statement reads.
"All of our economic development and business work is done in house and all associated expenses are accounted for on our books, and our officials are directly accountable for same."
Hines declined to do an interview, but sent an email also saying he was pleased that the original allegations of misappropriation of funds "were unfounded."
Last month Municipal Affairs Minister Zach Churchill said provincial taxpayers will no longer foot the bill for alcohol expensed by individual councillors and municipal officials under rule changes to be tabled after the legislature opens next week.
Churchill said the new bill would bring the expense rules for municipalities in line with those in place for provincial politicians.
As a result, Churchill said all expenses would have to be reported online under a uniform set of rules for all municipalities.