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HomeMiscellanyExclusive: Auditors feast on BC Hydro’s appetite for reimbursement

Exclusive: Auditors feast on BC Hydro’s appetite for reimbursement

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Bob Mackin

An internal audit found BC Hydro personnel enjoy reading menus more than the Crown corporation’s policies.

BC Hydro directors, executives and employees racked-up $30.56 million in business and travel expenses during the year ended March 31, 2017, according to the first audit of its kind since 2015. 

The audit report, obtained by theBreaker under the freedom of information law, said employee meals were reimbursed $7.9 million through payroll and $5.4 million through expense claims during the last fiscal year of CEO Jessica McDonald, chair Brad Bennett and Premier Christy Clark. During Clark’s six years in office, more than 150,000 B.C. children lived in poverty, according to First Call.

Christy Clark (left), Brad Bennett, Bill Bennett (no relation) and Jessica McDonald. (BC Gov)

“Even though responsibilities are fully documented, testing identified that some employees and approving managers do not always comply with their responsibilities to fully document, review and challenge potential non-compliances to keep expenses reasonable,” the audit said. 

Employees are eligible for a so-called living out allowance of $130 a day for accommodation and three meals and missed meals payments in lieu of meal breaks, both of which are paid through payroll. Rather than claiming receipted meal expenses, employees have the option to claim per diems or cooking out allowances of $75 a day for remote locations. 

Auditors combined expense and payroll data and found $1.56 million in meal expenses for the top 50 employees, who each claimed meal expenses for “an equivalent of well over 240 days in [the 2017 fiscal year].”

“Most employees work approximately 240 days a year. One employee claimed 293 days of all-day per diems. Another employee claimed 253 missed meals and 21 all-day meal per diems,” the audit said. “Thirteen instances of employees claiming over four meals per day. Human Resources advised that more than four meals per day may be claimed in exceptional circumstances however, these should be rare and reviewed individually to verify validity and ensure employee safety.”

The audit also found catering expenses exceeded per diem guidelines for executive meetings. 

“Catering meals were often expensed by assistants for executive team meetings. These expenses were approved by executive team members who also attended the meetings which results in self-approval.”

Auditors found employee expenses had inadequate business reasons and miscoding, which impacted the ability to demonstrate prudent spending. Managers often approved expenses for group events they attended and costs were greater than they should have been.

“Receipted meals often exceed per diems, monitoring of overall meal expenses is not in place, and there is little guidance on recognition events and team building activities.”

The BC Hydro per diem for dinner is $26, but auditors found the rationale for non-compliance with the guideline is “seldom provided.” Overtime meals capped at $42, based on the collective agreement. 

“Controls are not in place to enforce the limit resulting in inconsistent application across the company. Some managers flag the overages while others do not identify the recoveries. Management is working on an initiative to introduce payroll deductions for meals that exceed this limit.”

Auditors tested 14 meal expenses over $750 and found “non-compliances including insufficient business reasons, 12 group meal expenses were not accompanied by a list of attendee names, and two employee recognition events were attended by spouses.” 

Nobody from BC Hydro was available for comment on May 7. Watchdog Dermod Travis of IntegrityBC said he is not surprised. 

“When the Clerk of the B.C. Legislature rewrites a travel policy at Elections BC to take his wife to Kenya, it sets a culture for everyone else across government,” Travis said, referring to Craig James’s $43,000-plus spending in 2010 when he headed the electoral agency. 

“While BC Hydro’s statements of financial information provide a helpful overlook of supplier payments, it fails miserably at disclosing discretionary spending on such things as personal expenses and hospitality, unlike what is found at the provincial level.”

McDonald charged $43,379 in expenses on top of her $429,232 pay package as CEO. The NDP fired the Clark-appointee when it came to power last July. The federal Liberal government hired McDonald to chair Canada Post. She recently became interim CEO.

BC Hydro is carrying a $22 billion debt and building the $10.7 billion Site C dam. The B.C. Utilities Commission rejected the NDP government’s promised rate freeze. The cost of electricity rose 3% on April 1. 

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