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By LISA PRIEST, The Globe and Mail
Friday, September 13, 2002 , Print Edition, Page A8
Health Canada cut its funding for a non-profit agency in half after auditors could verify expenditures for only a tiny amount of the $647,243 in public money provided in 2000-2001, according to documents obtained under the Access to Information Act.
The failure of the Canadian Council for Tobacco Control to log employee work hours and management's arbitrary estimates for equipment and service costs were two key problems identified in the audit, obtained by The Globe and Mail.
Consequently, the federal government cut $200,000 in funding to the high-profile council last year. The council uses the money to administer the National Clearinghouse on Tobacco and Health Program, which feeds information to other agencies across Canada, in addition to having a virtual library and a 1-800 number.
"The auditors didn't identify any misspending," Health Canada spokesman Andrew Swift said yesterday. "It's just that their accounting practices were not as detailed as required."
The federal government has financed the Canadian Council for Tobacco Control and many other agencies as part of its initiative to reduce tobacco use, which Health Canada last year called the "most pressing public health issue in the country."
A routine audit done by Consulting and Audit Canada revealed a laundry list of expenditures that could not be verified. They included $226,381 for personnel; $7,306 on travel and accommodation; $105,282 on rent and utilities; $22,664 on materials and supplies; $264,925 on equipment costs and services; and $3,141 in other costs.
In fact, the auditing firm was able to verify only $17,544, under the category of "evaluation and dissemination of results" in contract-related expenses, documents show.
John Garcia, president of the Canadian Council for Tobacco Control, the agency that created weedless Wednesday and national non-smoking week, described the audit as a "painful process."
"Accountability is good for public funds and we have no problem with that," he said of the audit that scrutinized money provided in 2000-2001.
Mr. Garcia said detailed statements many pages thick were provided to auditors for all of the non-profit agency's expenditures, including rent, travel and equipment, among other things.
"We have been audited before and the council pretty much passed with flying colors and the same accounting system was in place then," Mr. Garcia said. "Health Canada's standards have changed substantially and so the requirements for accountability have changed."
The non-profit agency has been received $400,000 a year from the federal government to support the clearinghouse. In addition to federal funds, the clearinghouse also received money from provincial and territorial ministries of health, the Canadian Cancer Society and the Heart and Stroke Foundation for a total of $647,243 in the 2000-2001 fiscal year.
CCTC response
September 13, 2002
Dear colleague:
Today the Globe and Mail ran an article about the Health Canada audit of the National Clearinghouse on Tobacco and Health run by the Canadian Council on Smoking and Health. I wanted to provide additional information, on which the article is either silent or there was a lack of emphasis, even though the reporter was made well aware of these points through several conversations with me.
First, the article refers to the audit done for the year two fiscal years ago, and Health Canada reduced our clearinghouse program funding last fiscal year.
Second, the CCTC has been responsive to Health Canada's requests for enhanced accounting practices. We now have time sheet accounting practices in place and clearly defined procedures for the allocation of overhead expenses. The accounting system for the CCTC has been discussed and explained to Health Canada and they appear to be pleased with the system. (It is also notable that the system was in development and was included in our business plan before the audit.)
Third, this year's Health Canada funding of the Clearinghouse has been restored to the previous level.
Fourth, we have an open, constructive, and ongoing relationship with Health Canada. In fact, our relationship with Health Canada has not been this close and productive for a long time. Health Canada and others have also looked to the council as the organization to organize the national conference later this year.
Fifth, we have strengthened our board with highly respected professionals in tobacco control and business, completed a strategic planning exercise, reestablished linkages among national and provincial councils, and are ready to expand our role in tobacco control.
The Council has come through a challenging period, and we now look forward to working with you in pursuit of a smoke-free Canada. Thanks for your continuing support for the CCTC and tobacco control.
Sincerely,
John M. Garcia
President
Canadian Council for Tobacco Control