The provincial government’s rush to provide COVID-19 financial assistance to thousands of Nova Scotia businesses could mean nearly $ 60 million earmarked for pandemic relief will not be spent – but will not be returned in the provincial coffers.
That’s one of the key findings of a report released Tuesday by Nova Scotia Auditor General Kim Adair, who looked at the first COVID-19 relief measures, including the province’s decision l last year to donate $ 100 million to Dalhousie University.
The school was tasked with distributing the money, including to businesses forced to close due to public health measures, aid to large tour operators, and some funds for workers who were not eligible for federal programs. .
The province, under the previous Liberal government, “handed control” over money to the university, including interest generated by the fund, according to the auditor general.
“The government’s rapid response to the public health emergency is commendable; however, spending $ 100 million before relief programs are developed and costed is concerning,” Adair wrote in her report.
“By spending and committing $ 100 million to Dalhousie University before aid programs were fully developed and costs were known, the province was no longer able to redirect potential savings if the funding was earmarked aid programs was not necessary.
“We are concerned that this money, spent before the government knows how much it needs, will never come back to the province. “
Of the initial $ 100 million, $ 23.9 million had not been spent this summer, and an additional $ 34.7 million was spent on loan guarantees for the tourism sector and ‘sit on it’. Dalhousie University ”until the end of the program in 2027 or one of the operators defaults on their loan.
Although the original agreement, signed on March 31, 2020, included a clause on “residual funds”, auditors felt that the wording “created uncertainty as to the outcome of any remaining funds” after the programs ended. The deal was amended in September last year to allocate that money to Research Nova Scotia in 2027. The seven-year deadline was to allow enough time for loan guarantees to expire and borrowers to repay their loans.
In 2020-2021, the nonprofit group, mandated to support, organize and coordinate research funding in Nova Scotia, awarded approximately $ 15 million in research grants and awards.
Research Nova Scotia has funded projects to track the COVID-19 virus in wastewater, grow better wine grapes, and build improved cells for solar panels.
Residual funds for public health research
Stefan Leslie, CEO of Research Nova Scotia, said the group was not part of the discussions that led to its designation as the beneficiary of the residual funds. He said he discovered the clause about a year ago and had just learned how much provincial money was left in Dalhousie care thanks to the AG’s new report.
If the full $ 58.6 million is still there by 2027, Research Nova Scotia is expected to receive a significant influx of money. Most of its income comes from a provincial allocation, which has been around $ 15 million over the past two years.
“If we are talking about funds of the magnitude that people anticipate, which the Auditor General predicts to be possible, we would be looking to spend those funds wisely, at the right time, on valuable research projects,” Leslie said in a commentary. maintenance.
The money has to go for public health research, but Leslie said it was quite large. In the era of COVID-19, Leslie said public health research funded by Research Nova Scotia included pandemic preparedness, vaccine development and impacts on vulnerable populations, to name a few – a few.
Research Nova Scotia’s spending direction is driven by provincial priorities and it remains to be seen what those priorities will be in 2027.
Adair said that by handing over more money than needed to outside groups, the government was depriving itself of funds it could use for its own or emerging priorities.
“This is not fair, in my opinion, the best use of public funds,” she said at a press briefing.
Review of the agreement
She was also concerned about the level of accountability for the millions of dollars in taxpayer dollars.
“By placing significant public funds in the hands of external third parties, it [are] limits on how much oversight the government continues to exercise and can no longer exercise once it has done so. “
The report found that while there was no indication of “fraud or material errors, the lack of a documented program framework leaves the province at risk.”
When reviewing the agreement with Dalhousie University, the auditors noted:
- Risk assessments were not performed consistently.
- The agreement between the university and the province lacked standard contractual clauses.
- The goals and objectives appeared to be understood, but not all included performance measures.
- Surveillance has not been documented by the province.
“The province must develop guidelines for emergency relief programs, including expectations for emergency funding situations,” according to a key recommendation from the report.
The ruling Liberals also gave the university full control over who it could contract out to, a problem for the Auditor General.
“This means the province has accepted a significant level of risk by relinquishing control,” Adair said.
$ 30 million to daycares
The Auditor General’s office also reviewed the province’s attempt to keep day care operations afloat and home child care providers operating during the first months of the pandemic.
The report noted that the auditors found “no documented evidence of comprehensive oversight” of the province’s $ 30 million child care support programs.
The auditors found that the Department of Education and Early Childhood Development had no documented process to administer emergency child care grants, nor a secondary review process “to verify the accuracy or appropriateness of decisions on grant applications ”.
In one case, the auditors found a day care center that had received an overpayment of $ 132,000. The error was found to be “resulting from an overestimation of staff costs for several grant cycles”.
In his recommendations, Adair calls on the province to “develop guidelines for granting grants in emergencies” and urges the Department of Education and Early Childhood Development to “conduct audits to ensure that emergency childcare subsidies are properly paid to authorized beneficiaries ”.
The report notes that when it comes to keeping child care operators viable, money seems to have done the trick. According to the Ministry of Education, 96% of licensed child care centers active in March 2020 had reopened by August 2020, and 89% of family child care businesses resumed service in September 2020.