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Newfoundland and Labrador English School District asks for money to address fraud concerns

Newfoundland and Labrador English School District CEO Tony Stack (left) and board of trustees chair Goronwry Price speak with reporters after answering questions from MHAs on Tuesday.
Newfoundland and Labrador English School District CEO Tony Stack (left) and board of trustees chair Goronwry Price speak with reporters after answering questions from MHAs on Tuesday. - David Maher

An all-day grilling at the hands of six MHAs gives detail on how NLESD will prevent widespread fraud in the future

The Newfoundland and Labrador English School District (NLESD) has asked the Department of Education for about $2 million to help it detect and prevent fraud within the organization.

NLESD CEO Tony Stack and board of trustees chair Goronwry Price faced a grilling from MHAs sitting on the Public Accounts Committee on Tuesday morning, after an auditor general’s report on the school district found thousands of dollars of missing or stolen equipment from the school district from 2011 to 2016.

At the time, Auditor General Julia Mullaley couldn’t say for sure exactly how much had been stolen, except to say it was in the hundreds of thousands of dollars.

Stack says the additional money will help modernize the school district, in hopes of preventing similar theft from happening again.

“The resources are for improved financial management systems, primarily. But there are some human resources (needed), so that can happen. Some budget analysts, additional support for procurement, that sort of thing,” he said.

“It would allow for fraud prevention, better risk management procedure, and then we’re not relying solely on prevention.”

The request will be part of the budgetary process for 2019. An outside consultant will be brought in over the coming weeks to help implement changes made in the wake of the auditor general’s report.

To date, three people have been fired from the school district as a direct result of the report, though Stack indicated a number of other employees had also been let go since the report was delivered.

Derek Newhook, a former operations manager with the NLESD, was convicted on two counts of fraud, though Newhook is appealing his conviction.

Stack did not specify exactly how many investigations are ongoing into employees of the school district.

In their testimony, Stack and Price pointed to a number of practices at the school district that likely contributed to a culture where fraud was able to happen.

Emergency procurement orders of up to $3,000 were able to be signed off by a procurement officer at more or less a moment’s notice without additional oversight. The practice was used in the spirit of allowing procurement to happen quickly. In an example given to the committee, Stack said if a pipe were to burst at night, emergency procurement orders were used in an effort to ensure the school could still open the next day.

A greater separation of responsibilities – requiring more than one person to sign off on an order – is one way the NLESD hopes to provide the oversight needed to prevent the system from being abused.

The report only focused on a span of five years, but Stack says there’s a culture within the school district that needs to change in order to prevent any future theft of public funds through the school district.

Price says changing that culture is the biggest task ahead.

“One of the attributes of the old culture is everyone would focus on children in classrooms and making sure that happened – the financial parts were someone else’s responsibilities,” he said.

“One of the shifts is that it’s not just the children in the classroom that’s the focus. Everyone in our whole organization is aware of the financial component and the fact that you have to do these things correctly.”

david.maher@thetelegram.com

Twitter: DavidMaherNL

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