Winnipeg Free Press - PRINT EDITION

Findings fan flames of fire office scandal

$300K in expenses wrongly paid to staff: Bellringer

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Former senior members of the Office of the Fire Commissioner allegedly colluded to fabricate expense claims for several years before getting caught.

At least $300,000 in inappropriate expenses were paid to OFC employees -- often with little or no documentation -- between 2007 and 2011, the province's auditor general, Carol Bellringer, concluded in a report released Wednesday.

She said the financial irregularities may have escaped notice longer if American Express hadn't cancelled a government-issue credit card for non-payment.

The credit card had been issued to then-fire commissioner Christopher Jones. The province's comptroller, Betty-Anne Pratt, was informed of the cancelled card in early 2011 and launched an internal investigation.

By July of that year, Jones, deputy OFC commissioner Justin Panagapko and one other senior employee were fired. A fourth employee took early retirement.

Then-finance minister Rosann Wowchuk asked Bellringer to conduct a forensic audit of the OFC. The government received the report this past November and has forwarded a copy to the RCMP.

In a press conference Wednesday, Bellringer, flanked by four members of her staff, released her annual report, which included a 12-page summary of the OFC audit.

"Over several years, we believe, OFC employees received payments they were not entitled to that were supported by documents that may have been fabricated and, in one instance, may have been forged," she said.

Travel expenses believed to be fabricated included meal per diems, private accommodation (billing the employer, in some cases $80 per night, for staying at a friend's or relative's place), private vehicle mileage and incidental expenses, none of which required a receipt.

The auditor general said she wanted to examine the OFC's expense accounts extending back to 2005, but couldn't because the OFC destroys such record after four years.

While the province had previously acknowledged the involvement of four former employees in the questionable expense activities, Bellringer's report mentions a total of five. None (including Jones) was named in the report released on Wednesday.

"I still cannot understand how so many people could have been involved and it was not found sooner," Bellringer remarked at one point during the press conference that lasted more than an hour. Her report offers a couple of explanations, however.

The OFC's own financial comptroller had his authority usurped, at some point, by superiors, leaving him unable to examine or approve expense claims. Instead, expense claims were processed by an accounting clerk. The comptroller complained to a provincial government human resources director, but no action was taken.

The fire commissioner approved the expenses of his underlings. His own expenses were supposed to be approved by the overseeing department's deputy minister. But Bellinger said her findings suggest "that the former OFC officials colluded to circumvent" this requirement. Cash advances made to the fire commissioner were "cleared off by an expense claim of other OFC staff members," according to her report. "We believe these expense claims may have been fabricated by OFC staff at the insistence of the former fire commissioner," Bellringer said.

Family Services and Labour Minister Jennifer Howard was on vacation and could not be reached for comment Wednesday.

Dave Dyson, an assistant deputy minister, said the department is working with the OFC to implement 57 recommendations for improvement put forward by a team of government finance officials and internal auditors more than a year ago.

"Our job is to do everything we can to make sure it doesn't happen again," he said.

Dyson noted because senior officials were involved in the alleged wrongdoing, it was more difficult for the government to discover it. "What occurred here is that we had senior people collude," he said.

The Progressive Conservative Opposition, meanwhile, wondered what other accounting skeletons might be lurking in the NDP government's closet.

Morris MLA Mavis Taillieu said the government failed to exercise sufficient oversight over the OFC, noting the office's own financial comptroller tried to warn the government something was amiss but was ignored.

Bellringer has recommended the government review its Public Interest Disclosure Act in light of the OFC problems. But so far, she said, the government feels its whistle-blower policies and procedures are effective.


Explosive details

Findings on the Office of the Fire Commissioner made by Manitoba's auditor general in her annual report:

More than $300,000 in inappropriate spending was discovered, including questionable meal per diems, mileage claims, billings for private accommodation and incidental expenses.

Five former senior Office of the Fire Commissioner officials are implicated. Sources say former fire commissioner Christopher Jones and deputy fire commissioner Justin Panagapko were among them.

The former fire commissioner used his work American Express card "extensively for cash advances and personal expenses," contrary to government guidelines.

Alleged wrongdoing occurred between 2007 and 2011. OFC financial records predating April 1, 2007, were destroyed.

There is evidence former senior OFC officials "colluded" to prevent a government deputy minister from overseeing the fire commissioner's expenses.

Government oversight over the OFC, a special operating agency reporting to the Family Services and Labour Department, was lacking.

Republished from the Winnipeg Free Press print edition January 17, 2013 A7

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