An employment services agency in Cape Breton is shut down after a damning report by the Nova Scotia ombudsman revealed that the organization was misusing funds.
In his June 2021 annual report, William A. Smith said his office discovered “gross misuse or mismanagement of public funds or assets” after investigating four years of files at Sydney-based Island Employment .
Island Employment workers received notice on October 1 that the province was terminating its contract in November – six months earlier. The organization employs approximately 30 people in offices in Sydney, Chéticamp, Inverness and Port Hawkesbury.
The agency, which teaches resume and interview skills to job seekers and connects employers with workers, was established by Nova Scotia Works, a division of the Department of Labor and Higher Education. Although it is almost entirely funded by the ministry, the province does not control Island Employment as a public entity.
Several complaints received
The decision to shut it down comes after several complaints have been filed against the organization. Representatives of the Ombudsman’s office investigated hundreds of pages of expense reports and expense reports dating back four years and interviewed management and staff.
Murdoch Moore, a nine-person board member of Island Employment, declined to comment on the findings.
The complaints concerned the misuse of program funds, such as billing different contracts for the same services or expenses, including rental of space, travel costs and employee salaries.
Another complaint concerned employees paid to offer training workshops to external organizations during normal working hours, when they were already receiving regular wages.
There were also allegations regarding the lack of transparency, accountability and oversight of operations, including spending practices.
Report cites travel expense claims, expense issues
The ombudsman uncovered a host of issues in the investigation, including conflicts of interest among employees, uncontrolled spending, and breaches of rules regarding travel expense claims and government procurement standards. The ombudsman made several recommendations to the organization, provided an implementation schedule, and planned to monitor the process.
Despite this, the province decided to end its contract with Island Employment, citing a review of the organization as well as the ombudsman’s report.
The Department of Labor, Skills and Immigration declined a CBC News interview request, but provided a statement and answers to questions.
“[The department] has regular monitoring processes for NS Works agreement holders to ensure they are meeting policies, standards and requirements, ”he said.
“This ongoing monitoring also included a recent investigation by the Ombudsman’s office, as published in the [2020-21] annual report of the ombudsman; these findings were taken into account in the decision. “
The statement explained that the province has issued an expression of interest, seeking other organizations to take over the services provided by Island Employment. It also indicates that offers made by Island Employment will not be taken into account.
General Employees Union and Nova Scotia Government President Jason MacLean said unionized workers are not to blame for the problems.
“[Workers] were convinced that there was a problem with the management and the board of directors, but they still continue to do their job, so it is in my discussions with the government, ”he said. “I say, ‘Let’s continue with this work. Let’s continue to serve Cape Bretoners. ‘”
MacLean said the province should dissolve the board and management while keeping the workers, who he says do a valuable service in an area with high unemployment.
Island Employment staff will no longer take clients as of October 29 and are expected to be laid off on November 21.