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TNRD: Audit recommendations near complete

The Thompson Nicola Regional District says it has com- pleted more than 90 per cent of forensic audit recommen- dations and the remainder are expected by year’s end.
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The Thompson Nicola Regional District says it has completed more than 90 per cent of forensic audit recommendations and the remainder are expected by year’s end.

“I feel like we’re in a really good place,” TNRD CAO Scott Hildebrand told KTW. “I feel like we’ve made some significant improvements and changes over the last two- and-a-half years.”

A $500,000 forensic audit was conducted by BDO Canada after reporting by this newspaper into question- able spending under the regional district’s longtime former CAO, Sukh Gill. Gill departed the regional district suddenly in early 2020 with a severance package worth $520,000. His departure has never been explained publicly but he had a clause in his settlement agreement to call his departure a “retirement.” The audit identified control weaknesses and outlined dozens of recommendations.

Hildebrand said the most significant change at the regional district since the audit is culture. The audit report described a culture of inappropriate spending. Hildebrand said he is “positive” that culture is gone to the point he for- got his corporate credit card pin number on one occasion. He said the regional district has retained and recruited “excellent staff.” Two senior managers are no longer with the regional district: Debbie Sell, who long headed human resources, and Doug Rae, who was chief financial officer.

Hildebrand said Sell retired and would not comment on Rae’s departure. Rae headed the finance department for years under Gill and the regional district recently announced his departure.

The audit included multiple references to need for a “zero tolerance” tone at the top. Hildebrand said his involvement in shifting culture includes leading by example and bringing forward changes, even when some board directors may not support them. Hildebrand said he “absolutely” received support from the board in making changes recommended by BDO Canada. He said changes went through a board policy review committee for feedback before final board approval.

“Most times, it would be supported nearly 100 per cent but there’s been the odd time where, as you would know, you’re going to get a few [TNRD directors] push back in conversations where I cringe a little bit about that but, in the end, it works out,” he said. “You’re never going to get all 26 [TNRD directors] on board all the time because they have different perspectives.”

KTW has written about various policy changes since the audit and some disagreement, including over meal rules.

A new board will be sworn in on Nov. 17. The board will expand by one director to 27, with the addition of a seventh Kamloops director on account of population growth, and include 18 new faces, including former board chair and Cache Creek mayor John Ranta. Ranta was chair during Gill’s tenure but was absent during his departure, payout and spending revelations. He told KTW he is not sure whether he will run for TNRD board chair.

Asked how a new board will impact changes made in the wake of the audit, Hildebrand said what is being done now is best practice, so he does not anticipate bumps in the road with a new board. He said board orientation will be more extensive, focussed and ongoing than in the past, including budgeting training.

Additional changes included: new finance and policy review committees, a new expense policy outlining meal per diems and reimbursements, a new procurement policy that distributes spending authority to a wider range of
staff and increases board oversight; an updated code of conduct and training and declarations made on an annual basis; declaration of conflicts of interest; a formal CAO performance review; whistleblower process; broader participation in the Emergency Operations Centre; rotation of auditors and more. Credit card and purchase order policies remain outstanding and Hildebrand said they are expected to be completed soon.

One audit recommendation requiring itemized receipts will not be realized, as the new meal policy does not require itemized receipts to claim flat-rate per diems up to $100 per day. Former TNRD CFO Rae previously said it was decided because it was less administrative work and common practice. The TNRD is also posting expense totals of directors online — but it is not showing what those expenses were for.

The TNRD posts progress of the audit recommendations on its website.