Lethbridge's Supervised Consumption Site. (Lethbridge News Now)

By David Opinko

Lethbridge Police investigating financial mismanagement at ARCHES

Jul 23, 2020 | 5:17 PM

LETHBRIDGE, AB – LPS has confirmed that they are looking into the operator of the city’s Supervised Consumption Site (SCS).

Last week, the results of an audit conducted by Deloitte were released, which found that $1.6-million in provincial taxpayer dollars was unaccounted for, among other issues. As a result, the Government of Alberta announced that it was pulling its funding from ARCHES.

Police issued a brief statement to LNN, saying that their Economic Crimes Unit is conducting an investigation, which is currently in the very early stages.

A spokesperson was not able to clarify if there were specific charges being investigated.

“In order to protect the integrity of the ongoing investigation we aren’t in a position to comment further.”

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The full audit can be found online here.

Below is a full summary of the fiscal audit’s findings:

• $1,617,094 unaccounted for due to missing documentation for expenditures from 2017 to 2018.
• $13,000 of interest off ARCHES bank accounts was used to fund parties, staff retreats, entertainment and gift cards.
• A senior executive’s compensation totalled $342,943 for calendar year 2019. This includes $70,672 in overtime for fiscal year 2019-20. The grant agreement allows for a salary of $80,000.
• The Everyone Comes Together (ECT) program staff salaries and benefits also exceeded the amount allocated by the grant agreement by $16,000.
• The number of ARCHES employees is greater than allowed by the grant agreement. ARCHES maintained up to 126 employees. However, the exact number could not be verified.
• $4,301 spent on European travel for management to attend a conference in Portugal.
• Thousands of dollars in unverifiable travel expenses, including trips charged to company credit cards but not recorded in the ledger.
• A senior executive’s family member was hired, earning $9,900. The auditors could not locate a resume or personnel file to verify any qualifications.
• $7,557 for management retreats, including meals and mileage where documentation for spending was unclear.
• The grant agreement requires the organization to maintain the funding received from Alberta Health within a separate bank account; however, the audit revealed that it was comingled with other funding sources. As a result of ARCHES comingling their accounts, the auditors could not verify thousands of dollars of expenses.
• Proper personal conflict of interest declarations were not recorded when related individuals or vendors were hired or utilized.
• Vendors were repeatedly secured in secrecy with a lack of transparency and accountability.
• No petty cash reconciliations have been completed.
• $1,129 was used to buy gift cards for board members for The Keg, iTunes, Boston Pizza, Earls, Gap, Shell, Chapters, Cineplex, Amazon, Starbuck’s, Tim Hortons, MasterCard, and Bath and Bodyworks. The expense was recorded as “Gift cards – Board Members.”
• $2,100 was spent on gift cards to The Oil Changer – a business owned by a senior executive’s spouse.
• $2,205 was spent on a television with no receipt documentation to support the purchase.