Development authority faces questions

Darrell Cole
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Leaked report questions shows ombudman critical of CREDA financial practices

A draft report by Nova Scotia's Office of the Ombudsman is questioning the financial practices of the Cumberland Regional Development Authority and is calling for a forensic audit.

AMHERST – A draft report from Nova Scotia’s ombudsmen is calling for a forensic audit of the Cumberland Regional Development Authority with the results being provided to police.

Dwight Bishop says in his report that there is evidence the development authority created invoices and obtained money from the province without direct expenditures.

“Invoices have been created and used to obtain funds from Nova Scotia Economic and Rural Development and Tourism without direct expenditures. These actions undermine the accountability process and brings into question matters of credibility and integrity,” Bishop said in his preliminary report, a copy of which was leaked to the CBC’s Information Morning.

The ombudsman’s office began its investigation late last year after responding to a complaint from two employees who has lost their jobs with the organization. The review took several months to complete, but found their complaints to be substantiated.

“CRDA’s financial practices revealed in this investigation are not acceptable,” Bishop said in his report. “There is insufficient financial detail on projects to allow for effective financial oversight and governance of CRDA.”

The development authority operates on about $700,000 in core funding it receives from the province, the Atlantic Canada Opportunities Agency and the county’s five municipalities. It also receives additional funds for projects.

ACOA announced earlier this year that it is removing its funding from development authorities in a year and the province announced last week it’s conducting its own review.

The development authority has until the end of today to respond to the ombudsman’s request for more information.

CRDA’s executive director Rhonda Kelly said it would not be appropriate to comment on the draft report.

She said the organization has co-operated fully with the ombudsman and stressed the draft report is not the final report. She said development authority is “somewhat taken aback” by the release of this confidential report “as is” which is both incomplete and misleading.

“The consultative report is part of the investigative process and is intended to enable feedback from involved parties. As such, it allows CRDA to respond with relevant documentation to enable a factual final report,” Kelly said in a statement. “The CRDA intends to complete its response and provide information to the Office of the Ombudsman as part of this consultative stage.”

Kelly said the development authority has consistently exceeded operating expectations through the performance-based funding criteria of regional development authorities. She said CRDA is proud of its accomplishments and track record and is recognized as a leader in regional community economic development in the province.


Organizations: Cumberland Regional Development Authority, Nova Scotia Economic and Rural Development, Atlantic Canada Opportunities Agency CBC

Geographic location: Nova Scotia

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Recent comments

  • Beenthere Donethat
    August 02, 2012 - 17:47

    So lets imagine the ombudsmans report comes out and they stick to their assertions. The real question then becomes: how can the board of directors and management at creda hold their positions? Do they resign en masse? Does someone give THEM the boot? Jump or get pushed? Can some of you anonymous creda types give an honest answer?

    • sueb
      August 03, 2012 - 09:48

      If the ombudsman's report proves to be accurate resignation won't even be an option. Those involved will be arrested and those who weren't will still be out of a job because the organization will be shut down. It's unfortunate that even if there ends up being no basis for the ombudsman's assertions just the suggestion of a possible impropriety will add fuel to last year's AIMS report calling for all RDAs to be closed. It's also going to haunt the people who worked there, following them wherever they go to look for other jobs.

  • Arnie McEachern
    August 02, 2012 - 16:55

    Someone anonymously correct me if I'm wrong, but I believe the whistleblowers came forward with allegations of corruption many months before they lost their jobs. And word has it that they lost their jobs out of revenge which is typical. Semantics aside, the Ombudsman's report said: the review took several months to complete, but found the whistleblowers complaints to be substantiated. So lets see that final report. Thats it thats all, we just need to see the bottom line, then we'll see where the sour grapes really are.

  • Lisa Rector
    August 02, 2012 - 07:55

    Kudos to the two whistleblowers who came forward to reveal this mess. Lost their jobs, but kept their integrity. Provincial budget cuts. LOL

    • integrity?
      August 02, 2012 - 13:48

      That is integrity? Making claims of impropriety after you loose your job due to budget cuts? That is not whistle blowing, and that is not integrity. Both of those two names could be applied to someone who blew the whistle, then lost their job. A name for this would be sour grapes.

  • Todd
    August 01, 2012 - 11:52

    Perhaps this report will force Mrs. Kelly to stop pointing the finger at everyone else and become accountable for her own actions and behaviour.

  • Wilf
    August 01, 2012 - 10:25

    I think if there is even a kernel of truth to this story, its wildly inappropriate to be asking Rhonda Kelly to make comments. The old expression "fox in the hen house" comes immediately to mind. I would assume that as she occupies the corner office then she is laregly responsible for any and all problems cited in this report. But if this report is calling for police action, I would have to say shame on you to Ms. Kelly and the CRDA board of directors. How dare you abuse the public trust and mis-spend tax dollars

    • Careful
      August 01, 2012 - 12:02

      People like WILF need to be careful when accusing people like Ms. Kelly and the board of directors, especially considering the accusations come from former employees who lost their jobs due to provincial budget cuts. Also lets not forget that one of the people who has made the accusations has political motivations, like an upcoming council run by the husband. But very easy to make anonymous accusations on a message board like this, making strong accusations to advance your own agenda, but in a cowardly way.

  • surprise
    July 31, 2012 - 20:02

    Surprise! Ned is the first to comment....

  • Jack On The Rocks
    July 31, 2012 - 11:36

    Oh oh....sounds like somebody is in trouble?????

    • mrc
      July 31, 2012 - 22:34

      its about time some one looked into crda i will be watching