Former IWK Health Centre CEO Tracy Kitch had issues with the timeliness of her expense reporting, producing necessary receipts and billing for personal items almost as soon as she received a corporate credit card, the hospital's former interim chief financial officer testified Wednesday.
Sean Walker was one of three people to testify in Halifax provincial court on the third day of Kitch's trial. She's charged with fraud over $5,000 and breach of trust.
Walker, who served as interim CFO from 2014 to 2015, testified the hospital set up corporate credit cards for purchases in 2014, in part because some small vendors the hospital used wouldn't take purchase orders.
The hospital established a policy outlining the cards were not to be used for personal expenses and that violations of the rules could result in an employee repaying costs and possibly facing disciplinary action, up to and including termination. Kitch and others who received credit cards signed the policy.
Even with those steps, Walker said he had concerns about the idea of getting the cards.
"We had been reluctant to even have credit cards for years and years and years because we didn't want to have to deal with personal use," he testified.
Cardholders asked to submit receipts
While the balance of the cards was paid off automatically each month by the hospital, each cardholder received a monthly statement and was asked to submit receipts to the hospital's finance department within two weeks of receiving their statement.
Walker said he immediately noticed a problem with Kitch's expenses. Receipts were sometimes missing, there were personal items billed to her card and the filings were often late, he testified.
"The only one that tended to be continuously late was the CEO's expense reports," he said.
Along with speaking to Kitch's assistant about the matter, Walker said he raised the issue with the hospital's vice-president in charge of human resources and, in both cases, was left with the impression the situation would be addressed.
Although he tried reaching out to several members of the board's finance committee, Walker testified Kitch told him in early 2015 that he was not to speak to board members without her being present or a message going through her.
"So I didn't feel it would be appropriate for me to take these items to the board at the time," he said.
Report flagged $47K in personal charges
Questions about Kitch's expenses and the use of her corporate card for personal items are ultimately what led to the police investigation that resulted in charges. An auditor's report ordered by the hospital board flagged about $47,000 in charges deemed personal, charges Kitch eventually paid back in full.
Kitch's lawyer, Jacqueline King, has had multiple witnesses so far acknowledge they saw no examples of fraud by the former hospital executive during her tenure. Under cross examination Wednesday, Jennifer Feron, the IWK's general legal counsel, was the latest witness to do so.
"I never saw any expense reports and so no one ever came to me saying anything was falsified," she testified.
The court also heard from Alison Lucio, one of Kitch's former executive assistants.
Lucio testified she was the one who explored the idea of buying a flight pass for Kitch, which allows for open booking of airline tickets, following frustrations with repeated last-minute travel booking and change requests. The unlimited pass Kitch selected cost about $12,500 with tax, Lucio testified.
Lucio is expected to resume her testimony Friday.
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