City allegedly filing fake documents for COVID-19 funds under Auditor General’s findings
A Newfoundland and Labrador city allegedly filed fake paperwork to obtain COVID-19 stimulus funding, according to the province’s Comptroller General’s annual report, which details several cases of potential government fraud.
Denise Hanrahan’s report, released Thursday, lists numerous instances of potential fraud reported by provincial government ministries, such as:
“During the final reimbursement report process, the city allegedly provided forged invoices and proof of payment,” the report reads. According to the report, no work was done on the project and the city has returned all payments. The magistrate’s office is planning a special audit on this topic.
The report doesn’t say how much was paid to the city, but the program in question offered municipalities up to $150,000, which was offered to municipalities to repair community buildings or fund projects that support the well-being of residents, such as e.g. B. the improvement of hiking trails.
The report does not provide further details on the city incident, but lists several other allegations of fraud by recipients of state funds. Another allegation related to COVID stimulus funds involves the province’s artist support program. This program offered professional artists $3,000 in lost revenue and opportunity. Hanrahan’s report says 29 applications contained misleading information, and although most of these were identified and cancelled, some went through. “In 2020-21, four applications to suspected irregular applicants were paid, and in 2021-22, ten applications were paid.”
Other scams reported by government agencies
In January, the Department of Education reported that stolen identities were being used to apply for student financial aid. A review found that 28 potentially fraudulent claims had been received and were being processed. “Some applications have gone through all steps of the application process, resulting in awards totaling over $54,000 in both federal and state student grants.” The matter is under investigation.
The board reported possible group insurance fraud by an employee, with the insurance provider uncovering 43 fraudulent claims made by an employee from 2015 to 2020.
The Department of Tourism, Culture, Arts and Recreation reported several cases of suspected fraud under its artists’ grants program, with 29 applications containing what appeared to be misleading or misrepresented information. Most applications were canceled before payments were made, but in 2020-21 four applications resulted in payments to “suspected irregular applicants”. in 2021-22, payments were made for 10 irregular claims.
The Department of Health and Community Services reported that an employee appeared to be working with another organization while receiving sick pay from the provincial government.
The Department of Transport and Infrastructure reported one case of an altered check that never reached the intended payee. “The check was intercepted and significantly altered to change the date and payee, while the amount of the check remained unchanged,” Hanrahan’s report said.
An unnamed former Assistant Secretary of the Department of Natural Resources may have been involved in his own hiring or the hiring of his company by the newly formed Oil and Gas Corporation of Newfoundland and Labrador.
Multiple cases of potential check fraud have been reported in multiple departments, mostly involving people attempting to cash the same check more than once. In all cases, the checks were identified as duplicates, so no harm was done to the government.
There have also been several reports of government credit cards being used for personal use. In every case reported, the funds were reported to have been or are in the process of being repaid.
Treasury Secretary Siobhan Coady said she was happy with the report overall, noting that the fraud found had not had a major impact.
“We catch the scam very quickly and get a refund very, very quickly,” she said. “There are many preventive measures.”
Hanrahan’s report also targets untapped COVID-19 resources pledged by federal and provincial governments. Out of a total of $700.8 million in combined funding from both tiers of government, the Auditor General found that over $141 million of the committed funds had not yet been used.
Noting that the report only focused on the fiscal period between April 2021 and March 2022, Coady said a lot of spending has happened since then.
“We have had many subsistence grants to the people of the province. Since March 2022, there may have been changes in the disbursement of these funds since that time.”
The report also says that the province’s fiscal stability remains a major concern. In 2022, the deficit was $271.91 million while the net debt was $16.37 billion. Coady said last year’s deficit was the province’s smallest deficit in about a decade, except for 2019, when a one-off accounting surplus due to the Atlantic Accord put the province $479 million in the black.
The Auditor General said several other audit reports are due to be completed this year, including one on Memorial University.
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