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Auditor general’s survey finds fraud common in B.C. government entities

In a recent survey of 23 public sector organizations, B.C.'s auditor general four nearly two-thirds had detected some form of fraud
B.C. Auditor General Michael Pickup asked Crown corporations, agencies, universities, health boards and school boards to self-report fraud risks and incidents within their respective organizations | Office of the Auditor General of British Columbia

Fraud was detected within the last year at 61 per cent of the B.C. government organizations polled by Auditor General Michael Pickup.

The most common incidents were theft of physical assets (43 per cent), misappropriation of company funds (22 per cent) and information theft, regulatory or compliance breach and internal financial fraud (17 per cent each).

Pickup’s staff surveyed 23 organizations that account for 86 per cent of government assets in the Fraud Risk and Financial Statements: B.C. Public Sector, Part 1 report, which was published Tuesday.

“Fraud is a lot more than stealing money or cash out of the drawer,” Pickup told reporters. “There’s many facets to what constitutes fraud. So we have to think of fraud in that broader context.”

Pickup found more than two in 10 organizations polled had not assessed the need for fraud risk management training for staff, and nine per cent had not assigned a senior manager to oversee fraud risks. More than a third did not have a dedicated fraud risk management policy and almost four in 10 organizations did not have ways and means of identifying and documenting fraud risks.

The Office of the Auditor General asked Crown corporations, agencies, universities, health boards and school boards to self-report. They ranged from BC Housing, BC Lottery Corp, BC Liquor Distribution Branch and BC Hydro, to the Burnaby and Surrey school boards, University of British Columbia, Vancouver Coastal Health Authority and Community Living BC.

A similar survey gauging fraud risks in ministries is forthcoming, Pickup said.

Pickup’s report, however, did not name names.

“There are findings in here that organizations can look at and say, ‘Okay, why aren't we doing this? Does this make sense that we're not doing it? Here's what other organizations may be doing,’” Pickup said.

Pickup found that one organization had no fraud risk management policies at all, while another said it did not have all incidents of fraud and corrective measures reviewed by senior executives and senior management.

The report did not mention any specific incidents.

Pickup’s office is the auditor for five of the 23 organizations polled. One of those is the Provincial Health Services Authority, which employed a fake nurse at BC Women’s Hospital in 2020 and 2021.

Brigitte Cleroux was charged in late 2021 with fraud over $5,000 and personation with intent. She is serving a seven-year jail sentence in Ontario.

Pickup’s office also audits BC Hydro. In April 2022, he found the NDP-appointed board did not formally assess the potential for fraud at the $16 billion Site C dam project until after his staff began to investigate.

The recently released survey did not include the Legislative Assembly. Disgraced former clerk Craig James was convicted last May of fraud and breach of trust for using taxpayers’ money to buy personal clothing. He was sentenced to a month of house arrest followed by two months under curfew.

Also not included was the Ministry of Children and Family Development. Former social worker Robert Riley Saunders was jailed for five years in 2002. He used a fraudulent university degree to get the job and then deprived Indigenous clients of $460,000.