Top municipal officials in Guysborough, including former warden and current provincial cabinet minister Lloyd Hines, engaged in "indulgent" spending and "opportunistic" practices, according to a report released Friday by Nova Scotia's Office of the Ombudsman.
The report singles out Hines for his use of a corporate credit card while he was warden of the Municipality of the District of Guysborough. He charged thousands of dollars in personal purchases and cash advances, all of which he paid back. He was also granted travel advances totaling $4,350.
Susanne Roy, a citizen who complained to the ombudsman's office about expenses in Guysborough County, said she felt "complete and utter satisfaction" with the findings.
"The fact that they decided not to make any changes until this investigation was started sort of speaks to the overall sense of entitlement that this municipality has felt for all these years," she said Friday.
"And the fact that they still deny there is any problem still shows that there's a lot of work to be done in the future."
Movies, alcohol and lounges
Hines's personal expenses included seven in-room movie purchases at various hotels, which added up to almost $150. He also made several charges for alcohol, airport lounge access and a return airfare ticket for his spouse.
Although Hines did repay the expenses, the ombudsman's report states "the former warden benefited from a form of short-term loans from the municipality to cover expenses."
Travel claims and municipal credit card expenses were examined over a two-year period, from April 1, 2012, to March 31, 2014.
Hines was Guysborough warden for most of that time, until he was elected as a provincial MLA in October 2013. He is currently minister of Natural Resources.
The report also points to a pattern where municipal officials, including Hines, current Warden Vernon Pitts and CAO Barry Carroll, expensed meals — often well above per diem rates — with little or no supporting documentation to indicate the purpose of the meeting and guests present.
Examples include two receipts on the same day for Trulucks in Houston in May 2012 — $56.72 for "pre-dinner" and $595.10, which included $166.50 for alcohol charges. Guysborough officials make regular trips to Houston for oil and gas conferences.
In May 2013, Carroll expensed $582.86 to the Lift Bar Grill View in Vancouver, where he was attending a Federation of Canadian Municipalities conference. The report notes there was no receipt or list of attendees to accompany this charge.
"In many instances, where costs exceeded per diems, alcohol was included in the final bill," the ombudsman found.
Hines told the ombudsman's office that some meals were also meetings. This is what he said, according to the report:
"[You] might find yourself in company of others who have specific ideas on where they want to go. I mean, that's what keeps those high-end places going. Drives me crazy to spend the kind of money some of these places charge for a meal. Comes with the territory. If a guest, sometimes you paid. It's a general rule. Depending on circumstances [it's] generally up to discretion of individual. In circumstances where you are trying to invest, improve long-term future for communities, these are the techniques and devices that are age-old in the system. Alcohol is a process, an accepted process for the way society works as a general rule… To me [it's] all part of devices and tools that will get you where you need to be in terms of the objectives for the municipality."
The report said one thing the ombudsman's office found that was of particular concern "was a practice where meal per diem rates exceeded the prescribed limits when the only persons listed as attending the meal were members of the council or its administrators."
The ombudsman also questions the municipality's use of federal mileage and per diem rates, which are higher than provincial rates.
"We would characterize the federal rates, combined with other practices such as personal use of corporate credit cards, advances and certain conference costs, as inappropriate or opportunistic. Practices in some areas appear indulgent, such as the choices of restaurants and purchases of alcohol for meals attended only by municipality officials."
Last November, the municipality brought in new expense policies limiting alcohol expenses to promotional and business development events.
It's also started posting the expenses of elected officials online. The expenses of top staff, including the CAO, are not posted.
Hines, as well as municipal officials in Guysborough, declined interview requests. In written statements, both Hines and Pitts said they are pleased the "report confirms there was no misappropriation of funds."
The ombudsman's report offers 10 recommendations, including that the Municipality of the District of Guysborough start naming guests, their positions and the business objective when expensing meals.
It also suggests that the use of travel advances be prohibited, except in extraordinary circumstances, and that personal charges and cash advances to corporate credit cards are forbidden.
Another key recommendation is that the Department of Municipal Affairs include "certain municipal spending activities, such as travel and other discretionary spending" in the updated Municipal Government Act.
The ombudsman suggests that annual municipal audits also be done, and "certain standardized travel and expense authorization and accountability policies at the municipal level" should be promoted and established.