Alberta sacks AFSC board over top brass’ expenses

Alberta’s government has dismissed the board of its farm financing and crop insurance agency following an internal probe into “expense and procurement practices” for senior executives.

Three unnamed senior executives at Agriculture Financial Services Corp. (AFSC) have also been “relieved from active duty,” the province said in a release Monday.

The province on Monday named ATB Financial’s vice-president for business and agriculture, Ed Knash, to serve as AFSC’s interim CEO.

An interim AFSC board, made up of certain senior provincial government staff, has also been convened, but the province didn’t name the new board members in its release.

Monday’s announcements come with the release of a report by the province’s chief internal auditor, examining expenses and procurements at AFSC, mainly over the period from 2011 through 2015.

“The report’s findings point to a culture of entitlement in the last administration that Albertans firmly rejected in the election, a culture of entitlement that will not be tolerated by this government,” Agriculture Minister Oneil Carlier said Monday.

The report, dated April 28, has now been “handed over to law enforcement for review to determine if additional actions are required,” the province said.

The auditor’s report also called for a “further human resource investigation… to consider appropriate disciplinary action against the implicated senior executives.”

The auditor’s review called for oversight of senior executive expenses and procurement activities — and the AFSC code of conduct — to be “strengthened.”

However, for AFSC to carry out those recommendations “requires the continued confidence of the (agriculture) minister in the current board,” the auditor’s report added.

The recruitment process for a new AFSC board starts “immediately,” the province said. None of the dismissed board members were named in Monday’s release.

The auditor’s report, in the form published online, also doesn’t identify any of the three senior executives by name. The report also has at least one name redacted.

The province said its report found some expenses related to travel, meals and hospitality were “not necessary for AFSC’s business” and that expenses were “generally not properly authorized.”

The report looked at expense claims and corporate credit card bills for the three senior executives, plus those of an executive assistant who did not take part in the activities involved, over the five-year period.

In all, the expenses incurred for travel, accommodations, mileage, meals, hospitality, conference fees and other costs during the time period totalled $899,363.94.

From those, expenses that were “not clearly reasonable or necessary” were identified, the auditor said, citing limousine travel and luxury box tickets at Edmonton Oilers games.

Over $341,000 out of the total claims reviewed were identified as going toward out-of-province and international travel to meet with reinsurance companies, the auditor said, noting AFSC already contracts with brokers to serve as intermediaries in dealing and negotiating with reinsurers.

The AFSC board chairman, the auditor said, is responsible for “authorizing and therefore challenging” the expenses of one of the corporation’s executives. “The results of this examination indicate that the challenge function needs to be strengthened,” the report said.

Also, the report said, three specific AFSC senior executives received “gifts, such as event tickets, meals and golf from vendors, and vendors covered costs related to AFSC corporate events.”

AFSC’s procurement policy, the report noted, prohibits acceptance of gifts “of any kind” from vendors.

Also, the province said Monday, for “more than half of the vendors examined, AFSC’s requirements for fair, open, competitive or transparent procurement processes were not met.” — AGCanada.com Network

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