Former Fraser Health CEO Nigel Murray left B.C. in 2014 for a new job in New Zealand. Photo courtesy New Zealand Herald.

Auditors couldn’t tell if Fraser Health executives bought booze on taxpayers’ dime

Review from 2014 says one administrator bought Bose headphones on company credit card

A 2014 audit couldn’t determine whether Fraser Health senior managers were improperly using taxpayer dollars to treat themselves to boozy meals.

Administrators failed to produce hundreds of receipts for more than $22,000 in expenses claimed during Dr. Nigel Murray’s tenure as chief executive officer, according to a “confidential” report obtained by The News. They also used the company credit card to buy $1,600 worth of electronics, including Bose headphones and an iTunes card, in direct contravention of spending rules. And Murray billed Fraser Health $5,000 for a single month of hotel costs for his family prior to their relocation to Canada in 2007.

Murray spent seven years in Fraser Health before leaving to head up a health authority in his native New Zealand in 2014. Last year, he resigned after a scandal involving unauthorized spending.

Today, Fraser Health says that following the report, it tightened up expense rules and that detailed receipts are now required to receive reimbursement for expenses.

Just months after Murray left Canada in 2014, Fraser Health’s board ordered a “high-level review” of the expenses and wages of senior administrators between April 2009 and March of 2014. The review, which was requested by the incoming acting chair of the Fraser Health board, was released this week to The News following a freedom of information request.

In the review, accounting firm KPMG found that most, but not all, expenses claimed by management complied with the health authority’s policies.

While it described “generally positive observations,” KPMG discovered that in more than 400 instances, “meal expenses were either not supported by an itemized vendor receipt or failed to have a written explanation of the business purpose or the people attending.”

KPMG said those omissions meant it couldn’t tell if the managers submitting the receipts had claimed liquor consumption as an expense. When receipts were available and alcohol appeared on receipts, auditors found that employees properly paid for it themselves.

Those expenses, the review said, were usually approved “on exception,” either by Murray or, if it was Murray’s that were missing, then the board chair or vice-chair at the time.

Some meal charges were claimed on hotel receipts, with no indication of what type of food or drink was purchased. And while a 2012 guideline recommended administrators limit themselves to spending $52 per day on meals, expenses claimed by managers were often higher.

On more than 200 occasions, claims for expenses didn’t identify who was present during the meals, so auditors couldn’t determine whether any attendees weren’t Fraser Health employees.

In contrast, auditors found only a few occasions when travel expenses didn’t include supporting receipts.

The review looked at the expenses and wages of a dozen senior managers, and it’s unclear from the report which employees neglected to file proper receipts.

However, the report does touch on some expenses claimed by Murray, including electronic accessories. The report says administrators bought more than $1,600 worth of electronic accessories – including Bose headphones, Apple products, an iTunes card and keyboards on the company credit card, despite a policy prohibiting such purchases. Most of those claims were associated with Murray, the report said.

A Fraser Health accountant told auditors the products purchased weren’t available through the health authority’s “normal supplier channels,” according to the review.

Over the five-year span, the audit found Murray – who made $444,000 annually when he left Fraser Health – claimed a total of $18,000 in mileage for driving, on top of his monthly car allowance of $500.

The report also shows that Murray claimed a little more than $100,000 in expenses related to his relocation to Canada. Relocation expenses had been included in his agreement with Fraser Health when he took the job in 2007.

Included in those costs were $20,821 in travelling expenses while moving to Canada, $14,653 to move his family’s personal items, and $23,717 in “temporary living expenses while awaiting new permanent accommodation.” Murray billed Fraser Health $5,000 for a single month of hotel costs, according to the report.

When Murray relocated back to New Zealand in 2014 to take a $490,000/year job heading up a health authority, his new employer paid his new relocation costs.

The report notes that budgetary constraints made it impossible for auditors to validate the completeness of documents provided. Auditors also didn’t speak to managers or review emails or employee calendars that could have been helpful, the report notes. The report notes that some of the limitations came because it tried to limit awareness at the health authority of the review.

Following the 2014 review, the wages for Fraser Health’s CEO were rolled back from the $444,000 Murray made to around $350,000.

Fraser Health chair Jim Sinclair, who was appointed to his position by the NDP last year, said that the expenses process is now much more rigorous.

“The policy is very clear,” he said, and expenses are not paid out unless detailed receipts are submitted.

The health authority now also posts reports detailing the expenses of CEO Michael Marchbank, who replaced Murray. Between April and September of 2017, Marchbank claimed $2,538 in expenses. Nearly half was for mileage accrued, with $730 claimed to travel to a Victoria leadership meeting. Marchbank claimed $100 for meals over the six months.

Fraser Health has also stopped the practice of giving its CEO a car allowance.

Sinclair said the review suggested “nothing untoward had happened.” Pressed, though, he conceded that the lack of receipts made it difficult to draw some conclusions. Given his recent appointment, Sinclair said he couldn’t comment on the practices at Fraser Health at the time of the report.

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