Two former presidents of a Halifax children’s hospital testified Tuesday that a former CEO accused of fraud never lied about her spending, but there were major omissions in what she submitted.
The testimony of Bob Hanf and his successor Karen Hutt was heard during the trial of Tracy Kitch, who has been charged with breach of trust and fraud of more than $ 5,000 in relation to expenses claimed from the IWK Health Center between 2014 and 2017.
Hutt, who was chair of the board from June 2017 to 2019, told the provincial court that the hospital ordered a formal review of Kitch’s expenses in 2017 after a CBC investigation revealed discrepancies in Kitch’s expenses.
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The resulting report concluded that $ 47,000 in expenses charged to the hospital were “potentially personal,” although all funds were reimbursed when Kitch resigned that summer.
Hutt said that some of the expenses Kitch was ordered to pay were for travel on Air Canada flight passes after Kitch was unable to document that he was traveling on business. Two of the passes mentioned in Tuesday’s testimony cost about $ 5,000 each and allow flight reservations on short notice.
Hutt said Kitch told him in another case that she used her hospital credit card during a sports tournament in New England because she did not have her personal credit card with her; in other cases, he said he used the flight passes for personal travel because he couldn’t book a regular flight.
The former board chair said she was the person who finally called the police to file a formal complaint in September 2017.
During cross-examination of defense attorney Jacqueline King, Hutt was asked if Kitch had ever lied about the reason for her expenses.
“Not explicitly, no,” she replied. “There were circumstances in which we could not put together his schedule and why maybe he would have justified a flight that the health center paid for. But having an openly falsified situation … no. “
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The defense has also frequently pointed to the fact that Hanf and his predecessor, Phil Otto, signed the Kitch expenses.
Hanf, who was chairman of the board from October 2015 to June 2017, said he approved Kitch’s expenses, often without itemized receipts, based on assumptions that she was abiding by the rules. “I would look at the document and, from the description on this page (the expense report), I would try to determine if it was a business expense … and I would look for the CEO’s signature and then I would sign,” he recalled.
He said that if Kitch had informed him that some of his Air Canada flight passes were being used for personal travel, he would have objected. “If they had told me, I would have said ‘That’s not on, (it’s) just business trips,” he said.
Like Hutt, Hanf testified that Kitch never explicitly lied to him about his expense statements.
Hanf said that when he made public statements in defense of the hospital in June 2017 at the annual general meeting, he relied on Kitch’s assurances that he had complied with the expense claim rules and had reimbursed the personal expenses he had collected.
“I asked him, ‘Is everything okay? There are mistakes? And has everything been returned? Are we in full compliance? And she said, “Yes,” she testified.
However, in a scathing auditor general report of December 11, 2018 on the IWK, the auditor concluded that lax oversight problems ran deep at the hospital. “Major transactions were often inappropriate, not properly supported or properly authorized,” the audit concluded. “For example, almost half of the samples that required approval had not been properly approved.”
Of 76 multi-employee expense claims that auditors reviewed in 2018, 59 were not in compliance with hospital policies. About a third did not have the proper approval and about a quarter lacked sufficient detail to indicate why the expense occurred or whether it was for business purposes.
This Canadian Press report was first published on November 23, 2021.
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