Auditor general, minister at odds over critical review of COVID business, tourism supports

Newfoundland and Labrador's auditor general is raising questions about how COVID assistance programs for businesses were run, while the minister in charge is defending the work of staff to get money out the door to people who needed it.

The programs in question provided grants to support the tourism and hospitality sector and assist small businesses trying to weather the pandemic storm in 2020 and 2021.

"Regarding the two COVID-19 programs, we found that these programs were not effectively managed or overseen," Auditor General Denise Hanrahan told reporters at a press conference Wednesday morning.

"As a result, there were overpayments made to some businesses, and financial support given to ineligible businesses."

Industry Minister Andrew Parsons, meanwhile, lauded the efforts of staff who processed thousands of approvals in difficult circumstances.

"This was in the context of a pandemic, people working from home and businesses that were desperate and calling us day in, day out about possibly losing their business and losing mortgages and all these really, you know, desperate times," Parsons said in an interview with CBC News.

"And so overall, I think that the program worked extremely well. Like anything, there definitely are, you're going to find some faults with it. But no malfeasance."

During her press conference, Hanrahan said auditors took all that into account.

"We understand it was a pandemic," the auditor general told reporters.

"We understand there was tremendous pressure and need to flow funds appropriately to various sectors and individuals, and we certainly took that under consideration when we did our audit."

Review examined small sample of grants 

In her report, Hanrahan said the province should determine the full extent of ineligible applicants and applicant overfunding, and pursue collection of that cash.

The total amount of any problem payments is not clear, as the AG's work touched on just a small sample of grants handed out.

Auditors found "four instances (five per cent) of organizations that obtained double the amount of funding they were eligible for."

Hanrahan said there is value in the review from an accountability perspective, to make the next initiative stronger going forward.

"The next time you design a program, we need a little bit more time up front to make sure those controls are appropriate," she said.

"It's public funds. If it's a dollar or it's a million, the process doesn't matter. … Those errors need to be learned from."

Parsons, meanwhile, said he was "pretty impressed with the staff who oversaw and administered this program." 

He noted they processed thousands of approvals in the same time it would normally take to deal with a couple of hundred.

According to the AG's report, the industry department initially said it did not intend to pursue the collection of any double payments when presented with the audit's findings in early 2023.

Parsons disputed that.

"There was no official conversation between our department and the auditor general as it relates to non-collection of outstanding payments or repayments," he said.

"Our position certainly always was that we would take efforts for collection on that." 

Thousands of grants approved

In total, the tourism and hospitality support grant program gave out $17.7 million over two phases in 2020 and 2021. 

The maximum grants topped out at $10,000 in the first round and $50,000 in the second.

The small business assistance program saw $21.7 million handed out. More than 4,000 applications were approved, with a top grant amount of $10,000.

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