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(DARREN RATHWELL / iNFOnews.ca)

Investigators have presented their findings of the forensic audit into spending at the Thompson Nicola Regional District today, but the full report is being withheld from the public.

What began as a thorough forensic audit of expenses eventually expanded to investigations into contract procurement and vendor contracts.

Simon Padgett, director of forensic disputes and investigations with BDO Canada LLP, said there was an "inappropriate culture of spending" at the regional district.

"(The regional district) has promised a fulsome and transparent result of these findings," chief administrative officer Scott Hildebrand said ahead of the presentation. "Our lawyers have advised that a full copy cannot be released at this time."

Ahead of the presentation, Hildebrand addressed the board to explain that, in his view, it should be in the best interest of the regional district to abide by the recommendations BDO Canada has put forward in order to make sure spending and contract procurement is kept in check.

"This investigation will reveal significant gaps in policy, procedures, process and practices, and how they were exploited with no concerted effort to identify them or make the changes necessary to eliminate them," Hildebrand said. "Our staff deserves better, they deserve to be heard and secure in knowledge that they will be listened to, that they will feel safe at work and that appropriate actions or changes will be made as a result."

Padgett presented the forensic audit report and BDO's recommendations a regional district board meeting today, Dec. 16.

The forensic audit was sparked by the retirement of former chief administrative officer Sukh Gill and a subsequent Kamloops This Week investigation.

The year-long investigation revealed around $500,000 in credit card spending over five years on dinners, alcohol and lavish gifts for staff from Gill's corporate credit card.

The board of directors approved up to $75,000 for the independent forensic audit, in an effort to reveal where spending policies need improvements and to restore public trust after the spending scandal.

BDO Canada LLP was contracted to conduct the forensic audit, which is a deeper dive into expenses and spending practices than a typical audit. Over the months of investigation, it included interviews with employees and contractors.

While the entirety of the report was not presented to the public today because of privacy laws, the regional district eventually release it at some point in the future. No date has been set for the report's release.

Investigators conducted over 20 interviews during the investigation. They also reviewed 45,000 emails and 12,000 documents at the regional district, along with investigating hundreds of expense and remuneration reports.

There were inconsistencies and incomplete information "all over the place" related to invoices for Gill's expenses, Padgett said.

Across regional district spending in a five-year period, investigators reviewed over $750,000 in spending that received reimbursements. Nearly $200,000 of that spending did not have itemized receipts.

One particular expense Padgett used as an example was at Bearfoot Bistro, an upscale restaurant in Whistler. The total bill amounted to $8,600, but it was split into two bills. One employee paid a portion of the bill, then for reasons unexplained, another employee paid the remainder of the extravagant restaurant bill the next day.

There were times when different corporate credit cards were used at events instead of strictly Gill's. During subsequent interviews, Padgett said regional district staff whose credit cards were used would later say they did not attend the event.

Padgett also showed the board Gill's remuneration was well above the norm when compared to chief administrative officers of similar-sized municipal and regional governments.

This covered spending and remuneration from 2015 to 2019, and Gill's remuneration rose extremely high in 2017, in particular. 

BDO Canada LLP initially expected to present the final report of the audit in September, but current CAO Hildebrand told iNFOnews.ca the scope of the investigation widened, extending the time it took to complete.

Despite assurances from regional district administration and directors that the full report would be released once it was brought to the board ever since the forensic audit process began, it is not yet known when the full report will be released to the public. 

"I am confident it will be released once the lawyers have reviewed the contents and the form of the report," BDO Canada partner Jervis Rodrigues told the board.

BDO Canada recommended a review of performance reviews, training and implementing a policy for whistleblowers. They also recommended that the board engage more often with its own audit committee, along with reviewing the roles and responsibilities for the chief financial officer.

Padgett acknowledged that some of the recommendations have already been actioned, or are in the process, including engagements with the regional district's audit committee.

"We like to term this as zero tolerance — that's what we need to be aiming for," Padgett said.

Hildebrand added after the report was delivered that another business not named in the report was alleged to have potentially been given preferential treatment by the regional district. However, BDO Canada declared their own conflict of interest related to that business, so they relayed the allegations to the regional district.

"Concerns were raised about the amount of money spent at this establishment as opposed to other suppliers. Allegations also included preferential business being awarded, personal relationships and other concerns," Hildebrand said.

He added that the regional district is "not in a position to make findings of fact" that a forensic audit would, but he said the information was offered in the interest of transparency.

The results of the separate findings will be released at the same time as the forensic audit final report, Hildebrand said.

— This story was updated at 2:47 p.m., Dec. 16, 2021, to clarify that the full forensic audit report will be published at some point in the future.

— This story was updated at 4:20 p.m., Dec. 16, 2021, to add additional information.

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