No charges will be laid after an investigation into alleged financial impropriety at the Lethbridge supervised consumption site run by ARCHES.
The investigation started after the provincial government said an audit of the site conducted by Deloitte could not account for $1.6 million in government funds.
The government used that audit as a basis for pulling funding from the site — the busiest of its kind in Canada — and set up a smaller mobile site instead.
"The funds that were unaccounted for were actually found during this investigation and now they are accounted for," police Chief Shahin Mehdizadeh said at a news conference Tuesday.
"Police's role in this has been to look at whether there were any criminal wrongdoings and provide the findings to the special prosecution unit. In this case, our recommendation was there wasn't enough to proceed with criminal charges."
Acting Insp. Pete Christos from the force's criminal investigations unit said it turned out the money wasn't actually missing — it was "misallocated."
He said auditors for Deloitte didn't have access to all bank accounts.
"In all fairness, the initial information that was brought forward, these individuals didn't have access to the means that we did," Christos said.
"We wrote production orders to financial institutions and through those records were able to account for those missing funds."
Christos said individuals involved with the organization explained in extensive interviews with police that the cash had been put in another ARCHES account.
In March, Associate Minister of Mental Health and Addictions Jason Luan said an anonymous tip about financial mismanagement at ARCHES prompted the government to ask a contractor to audit how the organization was managing provincial funds.
"The degree of misappropriation, misspending public money, violation to their contractual obligation and the poor governance of the organization displayed is deeply, deeply troubling," said Luan as he released the results of the audit in July.
That came after a government review was released that focused on the negative effects of consumption sites, and which critics said demonstrated the government had an ideological opposition to harm reduction for people with addictions.
The government has focused funding on expanding the number of inpatient treatment spaces across Alberta.
On Tuesday afternoon, Premier Jason Kenney said despite the conclusion of the criminal investigation, the government has lost confidence in the ARCHES operation. He said the mobile site is working.
"The threshold for what we pay tax dollars on is a lot different than the threshold of a potential successful criminal investigation," he said.
Kenney highlighted concerns raised by the audit, as well as what he said were concerns from the community.
Deloitte's audit found the organization allegedly violated the terms of its grant agreement with the government and its internal policies in numerous ways.
The auditors found provincial funding was mixed up in bank accounts with other money, which violated the grant agreement and made it difficult to track how public funding was used.
It also questioned a series of expenses and said missing paperwork was endemic.
The Deloitte report found $13,000 had been used for parties, staff retreats and gift cards, and thousands more was spent on travel, including $4,300 for a manager to attend a conference in Portugal.
An independent audit commissioned by ARCHES in order to improve the organization also found problems, including improper hiring.