Report finds 'financial irregularities' at Renfrew Victoria Hospital

A third-party investigation into Renfrew Victoria Hospital (RVH) and a related not-for-profit, Renfrew Health (RH), has documented a slew of "financial irregularities" and "gaps in governance."

The report, prepared by Ministry of Health-appointed supervisor Altaf Stationwala and published on the ministry's website Thursday, found millions of dollars in hospital funds were allocated to executive compensation, much of which went undocumented in salary or public expense disclosures.

"This was a case of a hospital using a related entity for the purposes of bypassing rigorous hospital financial practices," Stationwala wrote.

The report found RVH had significant financial flexibility but operated at times like it didn't, leading to under-investment in resources for patient care, gaps in security and a lack of investment in updating its governance structure. In several years, any surplus funds over $300,000 were transferred to the not-for-profit Renfrew Health, rather than being spent on patient care.

At the same time, Renfrew Health funnelled nearly $3 million in hospital funds to executives despite their having no additional responsibilities. 

The report found one former CEO received a $1.2-million trust, a $1-million interest-free loan with a $100,000 transitional allowance, and $1.6 million in additional compensation through Renfrew Health. The same former executive charged $170,000 to corporate credit cards, only nine per cent of which was supported by receipts.

Not-for-profit a 'superficial structure'

"RH was just one piece of a larger puzzle pertaining to a series of irregular transactions and practices involving certain former executives," Stationwala wrote.

When Stationwala instructed RVH to assume control of RH to dissolve it and reunify assets, he said he realized the structure was "superficial."

"Operationally not a single action was required to support this transition as all activities were already being managed by RVH executives as part of their regular duties," he wrote.

"Where activities can be reasonably completed within the mandate of the hospital, it should be questioned whether a related entity is necessary."

The report emphasized no current RVH executives were involved in the financial irregularities, and no current board members "were involved in initiating these irregularities." Both RVH and the Renfrew Victoria Hospital Foundation (RVHF) obtained legal advice through a third party when RH was created.

The report noted "it cannot be concluded that the directors of either organization breached their fiduciary duty, given they were acting on legal advice."

Strong patient care

Despite financial irregularities, the report found patient care and operations at RVH were strong.

"Staff and physicians demonstrate strong commitment to delivering excellent patient care and ensuring needs of patients and the community are met," the report said.

Despite this, Stationwala also noted patient care could have been improved by further investment, rather than allocating funds to executive bonuses.

"The ultimate impact unfortunately comes at a loss to the community that could have benefitted from investment of these funds into expanded healthcare services."

Stationwala made a series of recommendations, many of which are already complete. RH is being dissolved, new financial auditors have been hired, a whistleblower policy has been implemented for staff concerned about financial irregularities, and a new senior management team is in place, separate from the team that was involved in the RVH/RH financial irregularities.

Both the Ministry of Health and RVH declined to comment.

An OPP Anti-Rackets Branch investigation is ongoing but the force declined to comment to "protect the integrity of that investigation."