New financial system for troubled school district 'actively being worked on,' says Tom Osborne

More than a year after a critical report by the auditor general, officials are still figuring out how to address "significant weaknesses" in the financial management system at the province's largest school district.

"There's a number of options that are currently being looked at, but we are working towards resolving the issue," Finance Minister Tom Osborne said when asked about the status of the matter at an education-themed media event on Thursday. 

"The issue will be worked out. We've had discussions, as well, with the auditor general to ensure that what we're putting in place will meet the requirements as set forward by the auditor general."

Osborne said there was a meeting with school board trustees on the topic Wednesday.

Eddy Kennedy/CBC

The Newfoundland and Labrador English School District had scheduled a special meeting Thursday to discuss an executive committee report on the acquisition of a financial management system.

But that board meeting was cancelled due to a "scheduling issue."

In the wake of the auditor general's report, the police were called in to launch a fraud probe.

Earlier this year, the Royal Newfoundland Constabulary executed a search warrant to seize computers from the auditor general.

Those computers contained work product and supporting documents from the AG's 2½-year review of financial issues at the school board.

'Put the right controls in place' 

In an interview with CBC News last October, Auditor General Julia Mullaley explained why the NLESD needed to take action to get its financial oversight system in order.

"I think most important right now is that the district really put a concerted effort into addressing these significant weaknesses, because they're still there," Mullaley said at the time.

"And it's important that they move forward to address these risks and put the right controls in place. That's the most important thing in my mind."

I think everybody recognizes that we'd like to have done this yesterday. - Finance Minister Tom Osborne

Last month, NLESD officials outlined some of things that have been done to address financial oversight concerns, including:

  • Implementing a whistleblower policy to give employees a formal mechanism to report suspected unethical or fraudulent behaviour.
  • Establishing a fraud risk management program.
  • Completing ethics training with staff.
  • Delivering ongoing targeted financial training to staff, including at schools.

But a big-ticket action plan recommended last fall — at a cost of more than $2 million in each of the first two years, then $1.3 million annually afterwards — still hasn't happened.

On Thursday, Osborne said one of the options on the table is a "shared services" system with the government.

"I think everybody recognizes that we'd like to have done this yesterday," he said.

"But building a system from the ground up, if we're going to look at a shared system model, takes a little more time. But it is actively being worked on."

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