Concerns Raised Over Financial Practices at Renfrew Victoria Hospital

An investigation conducted by a third party into Renfrew Victoria Hospital (RVH) and its associated not-for-profit, Renfrew Health (RH), has uncovered numerous “financial irregularities” and “gaps in governance.”

The report, prepared by Ministry of Health-appointed supervisor Altaf Stationwala and released on the ministry’s website Thursday, indicated that millions in hospital funds were directed towards executive pay, much of which wasn’t properly documented in salary or public expense reports.

“This was a case of a hospital using a related entity for the purposes of bypassing rigorous hospital financial practices,” Stationwala wrote.

The report highlighted that RVH had considerable financial flexibility but sometimes operated as if it didn’t, resulting in under-investment in patient care resources, security issues, and inadequate updates to its governance structure. In some years, any surplus over $300,000 was moved to the not-for-profit Renfrew Health instead of being used for patient care.

At the same time, Renfrew Health channeled nearly $3 million in hospital funds to executives who didn’t take on extra responsibilities.

The report revealed one former CEO received a $1.2-million trust fund, a $1-million interest-free loan along with a $100,000 transitional allowance, and an additional $1.6 million through Renfrew Health. This same executive charged $170,000 to corporate credit cards, with only nine percent backed by receipts.

Not-for-profit Lacked Substance

“RH was just one piece of a larger puzzle pertaining to a series of irregular transactions and practices involving certain former executives,” Stationwala noted.

When Stationwala directed RVH to take control of RH for dissolution and asset reunification purposes, he mentioned realizing that the structure was “superficial.”

“Operationally not a single action was required to support this transition as all activities were already being managed by RVH executives as part of their regular duties,” he explained.

“Where activities can be reasonably completed within the mandate of the hospital, it should be questioned whether a related entity is necessary.”

The report stressed that no current RVH executives were implicated in these financial irregularities, nor were any current board members involved in initiating them. Both RVH and the Renfrew Victoria Hospital Foundation (RVHF) sought legal advice from third parties when RH was established.

The findings suggested “it cannot be concluded that the directors of either organization breached their fiduciary duty since they acted based on legal advice.”

Commitment to Patient Care

Despite these financial concerns, the report found that patient care and operations at RVH remained strong.

“Staff and physicians demonstrate strong commitment to delivering excellent patient care and ensuring needs of patients and the community are met,” stated the report.</P

Even so, Stationwala acknowledged that patient care could have seen improvements if more funds had been allocated towards it rather than executive bonuses.</P

“The ultimate impact unfortunately comes at a loss to the community that could have benefitted from investment of these funds into expanded healthcare services.”</P

Stationwala made several recommendations which many are already underway. RH is being dissolved; new financial auditors have been hired; staff now have access to a whistleblower policy regarding financial irregularities; and there’s an entirely new senior management team distinct from those involved with RVH/RH’s financial issues.</P

Both the Ministry of Health and RVH chose not to comment on this matter.</P

An OPP Anti-Rackets Branch investigation is still ongoing but has declined further comments “to protect the integrity of that investigation.”

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