N.L. has already spent $50M on health-care bonuses, auditor general wants province to better track the money
Report also finds overpayment and fraud concerns among government employees
Newfoundland and Labrador's auditor general is warning the provincial government to keep an eye on its big financial incentives to lure and retain health-care workers.
In a report released on Thursday, Auditor General Denise Hanrahan said the government began using bonus programs to tackle the health-care crisis and the lack of physicians and nurses in April, 2022.
"While it's early days, it's important to note that the monitoring of this program, which has already paid out over $50 million, seems to be insufficient," Hanrahan told reporters on Thursday morning.
"My office will continue our analysis of this program and we will report back next year."
In her report, she found that between April 2023, and October 2024, approximately $34.8 million had been paid in bonuses. She also found that on average, the payout per person saw a dramatic increase from $41,501 in 2023-24 to $95,733 in 2024-25.
Hanrahan wants to see a detailed analysis of the bonus programs to help inform the government when it makes future decisions on what type of bonus program to use or if they need to be changed.
That will help the program get more effective with time, she said.
"I think things that get measured — get done. And so I think it's really important that they have … good monitoring so they can make better informed decisions, because it is a lot of money."
Overpayment problem
The report also highlights government employee salary overpayments as a growing problem.
Hanrahan said that between 2019 and 2024, the provincial government spent approximately $2 million in overpayments to current and former employees. There were 1,064 cases and some of those overpayments were by a few cents to almost $40,000.
According to the report, the vast majority of overpayments was to civil servants in the Department of Justice and Public Safety, followed by the Department of Transportation and Infrastructure.
"The degree of overpayments has increased significantly since 2019, so we are recommending government review its processes to determine the root cause of such overpayments, since preventing and detecting them quickly is very important," said Hanrahan.
In her report, she noted overpayment can happen for a multitude of reasons, like data input errors, incorrect information being submitted to payroll as well as system errors.
"We found a mixed bag of explanations for why. So we know some departments are more manual than others, any manual processes at a higher risk," she said.
There have also been 683 incidents of fraud found since Hanrahan's last report.
"While incidents have increased overall, the majority this year relate to one government benefit program that resulted in 582 attempted cheque frauds," she said.
"A true culture of zero tolerance for fraud requires clear and consistent action. And I continue to encourage government to promote fraud awareness and reporting so that these risks can be identified and mitigated."
In the report, she recommended issuing direct deposit as opposed to issuing cheques.
Call for acts to be amended
Hanrahan is also calling for the government to amend the Financial Administration Act, which she said is a piece of legislation that is more than 50 years old and contains old language and practices that are no longer best practice.
"It is the financial cornerstone for our province," she said.
"We are the only jurisdiction left that still allows cash-based accounting from the 90s to slow down — in my opinion — preparation of public accounts."
There are other provinces that update it regularly to keep up to date with best practices, she said.
No action taken
Hanrahan also took issue with the 95 points she raised with the government in her last report for improvements for things like internal controls, compliance with legislation and governance.
"It is concerning to me that almost 30 per cent of my last year's recommendations, 28 remain outstanding," she said.
Hanrahan said her office gives in-depth analysis so the government can improve its efficiency and effectiveness.
WATCH | Missed deadlines and conflicts of interest are also an issue:
"Of note, this year were problems with information quality, inaccurate tracking, errors that required rework by my staff and the staff of government, and gaps in information technology controls," Hanrahan said.
"More concerning, from my perspective, are the issues encountered with respect to conflict of interest, fraud risk, missed statutory deadlines, and segregation of duties."
She is urging the government to take steps to address the 95 points she has raised.
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