Former IWK Health Centre CEO Tracy Kitch still owes $22,000 for personal expenses she charged to the Halifax children’s hospital, including air travel, hotel costs, car rentals and taxis.
On Thursday, the hospital released the results of an independent financial investigation that showed during her time as CEO, Kitch billed $47,000 in expenses deemed to be personal.
The report shows those expenses included $26,000 for air travel, $4,600 for overusing data on her mobile device, $4,400 for taxis, $2,600 for relocation costs, $1,900 for car rentals and $1,500 for hotel and related costs. The personal expenses date from October 2014 until June 30 of this year.
Kitch resigned last week. At the time, hospital officials said it was to pursue other opportunities.
In June, a CBC News investigation found Kitch had used a corporate credit card for a variety of personal charges, as well as billed personal travel to the hospital. At the time, Kitch and other officials, including the chief financial officer and former board chair, called the errors unintended and said everything had been repaid.
Thursday’s report by accounting firm Grant Thornton shows that wasn’t true.
IWK board chair Karen Hutt, who assumed the role in June, said in an interview Thursday that it was this summer when the board realized “there was a more serious issue around CEO expenses” and took matters into its own hands.
Hutt said Kitch and management were asked to step back while the board sought to answer questions. It formed a special committee to focus on CEO expenses and brought in Grant Thornton to do a third-party review.
“What was clearly troubling is that, even with the guidance of policies around how things should be happening, it didn’t appear as though they were,” Hutt said.
A lack of documentation
Hutt said that led to questions about the use of the corporate card for personal expenses, the timeliness of things being repaid and the lack of documentation.
The review by Grant Thornton showed Kitch’s record-keeping lacked detail. For example, 10 of 31 credit card expense claims she submitted had no documented evidence of board chair approval.
More than half — 17 of 31 — credit card expense reports prepared were not signed by the CEO, and she did not sign two of the seven expense claims either.
“There’s no circumstance going forward that there can be any tolerance for non-compliance of policy,” said Hutt.
“We trust that the CEO and management will carry out those policies; certainly not blind trust, but we trust that those things are going to happen the way they’re intended to.”
The review contained 14 recommendations, all of which the board has approved. They include reviewing all travel and expense policies, only reimbursing expenses with proper documentation and considering whether the corporate credit card program continues to be appropriate.
Hutt said she isn’t satisfied the necessary checks and balances are currently in place. The board has directed management to provide weekly written updates on what it’s doing to make changes within the system.
“That will stop when we are sufficiently comfortable that this is working the way it is intended and that the process changes that occur are sustainable.”
Police not called in
Hutt said after internal discussions and consultation, the board is of the view that there is “no evidence of criminal activity.” She said the total Kitch owes the hospital could be adjusted if the ex-CEO can provide proper documentation to show certain charges were incurred through the course of hospital business.
“At this point specifically, if you’re asking have we called in the authorities, no, we have not.”
Kitch was hired in the summer of 2014 at a salary of $280,000. She earned $296,000 last year.
Dr. Krista Jangaard, the IWK’s vice-president of medicine and academic affairs, is serving as interim CEO. Hutt said a search would begin soon to fill the role permanently and that the experience with Kitch would inform that process.
“The best thing we can do here is learn everything that we can from this and make sure that it doesn’t happen again,” she said.
“This has gone right to our core. And I just can’t underscore how much we care about resolving this issue properly and making sure that this isn’t something that we ever need to talk about again.”