Development authority faces questions

Leaked report questions shows ombudman critical of CREDA financial practices

Darrell Cole
Published on July 31, 2012
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.