The provincial government’s rush to provide COVID-19 financial relief to thousands of Nova Scotia businesses could mean nearly $60 million earmarked for pandemic relief will go unspent, but will not be returned to provincial coffers.
That’s one of the key findings of a report released Tuesday by Nova Scotia Auditor General Kim Adair, which reviewed early COVID-19 relief measures, including the province’s decision. last year to give $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 for major tourism operators and funding for workers who were not eligible for the programs federal.
The province, under the former Liberal government, “handed over control” of the money to the university, including the 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 his report.
“By spending and committing $100 million to Dalhousie University before relief programs were fully developed and costs were known, the province was no longer able to redirect potential savings if the earmarked funding to relief programs was not necessary.
“We are concerned that this money, spent before the government knew how much it would need, will never come back to the province.”
Of the initial $100 million, $23.9 million was unspent this summer, and another $34.7 million went to loan guarantees for the tourism sector and is “sitting on the sidelines.” Dalhousie University” until the end of the program in 2027 or one of the operators. default 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 the remaining funds” after the programs ended. The agreement was amended in September of last year so that this money would flow to Research Nova Scotia in 2027. The seven-year deadline was intended to allow sufficient time for loan guarantees to expire and borrowers to repay their loans.
In 2020-21, the non-profit 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 to go to public health research
Stefan Leslie, CEO of Research Nova Scotia, said the group was not part of the discussions that led to it being named a beneficiary of the residual funds. He said he found out about the clause about a year ago and had just learned how much provincial money Dalhousie was left with thanks to the auditor general’s new report.
If the full $58.6 million is still there by 2027, Research Nova Scotia should receive a large influx of funds. Most of its income comes from a provincial allowance, which has been around $15 million over the past two years.
“If we’re talking about funds of the magnitude that people are anticipating, that the Auditor General predicts are possible, we would look to spend those funds wisely, at the right time on valuable research projects,” Leslie said in an interview. .
The money has to go to public health research, but Leslie says it’s pretty broad. In the era of COVID-19, Leslie said public health research funded by Research Nova Scotia includes pandemic preparedness, vaccine development, and impacts on vulnerable populations, to name a few- one.
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 giving more money than needed to outside groups, the government was depriving itself of funds it could use for its own or emerging priorities.
“It’s just, in my opinion, not the best use of public funds,” she said at a press briefing.
She also worried about the level of accountability for the millions of dollars of taxpayers’ money.
“By putting significant public funds in the hands of external third parties there [are] limits on the degree of oversight the government continues to exercise and cannot exercise once it has. »
The report found that while there were no indications of “fraud or material errors, the lack of a documented program framework puts the province at risk.”
When reviewing the agreement with Dalhousie University, auditors noted:
- Risk assessments were not done consistently.
- The agreement between the university and the province lacked standard contractual clauses.
- Goals and objectives seemed to be understood, but not all had performance measures.
- Monitoring has not been documented by the province.
“The province should develop guidelines for emergency relief programs, including expectations for emergency funding situations,” according to a key recommendation in the report.
The ruling Liberals also gave the university full control over who it could contract out to, a problem for the auditor general.
“It 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 examined the province’s attempt to keep child care center operations and home child care providers afloat during the early months of the pandemic.
The report notes that auditors found “no documented evidence of comprehensive oversight” of the province’s $30 million child care support programs.
Auditors found that the Department of Education and Early Childhood Development did not have a documented process for administering emergency child care grants, nor a secondary review process “to verify the ‘accuracy or appropriateness of grant application decisions’.
In one case, auditors found a child care center that had been overpaid by $132,000. The error was noted as “resulting from overestimating staff costs for several cycles of the grant”.
In his recommendations, Adair calls on the province to “develop guidelines for granting in emergency situations” and urges the Department of Education and Early Childhood Development to “conduct audits to ensure that emergency child care subsidies are properly paid to recipients.”
The report notes that when it comes to keeping child care operators viable, money seems to have done the trick. According to the Department of Education, 96% of licensed child care centers active in March 2020 had reopened by August 2020, and 89% of home child care businesses resumed service by September 2020.