Hospital used funds to provide interest-free loans to workers, physician-recruitment incentives, finds report
One Ontario hospital is in hot water for alleged financial irregularities after a group of citizens who characterize themselves as unofficial watchdogs for the use of public funds raised the issue of interest-free loans to some employees at the hospital.
Some of Renfrew Victoria Hospital’s (RVH’s) audited financial statements note that the hospital has been providing interest-free loans to workers, reported the Ottawa Citizen.
A note attached to the 2018 financial statement from the hospital read: “The hospital has provided financing to new physicians and certain employees. The loans are over a six-year period with annual repayment amounts, they are non-interest bearing and will be paid back prior to 31 December 2020,” according to the report.
The hospital has also provided other loans for physician-recruitment incentives, according to the financial statements.
The 2018 financial statement lists an amount of $466,667 under the line item “increase in loans receivable,” according to the report. However, it was unclear how much was used for physician recruitment.
All of the loans have since been repaid, according to the report, citing the hospital’s financial statements.
Hospitals cannot provide interest-free loans to employees with hospital-directed funds, or use the funds for physician recruitment, Ottawa Citizen reported, citing sources from within the Ontario government.
The majority of hospital operating funds comes from the provincial government for patient care, according to the report.
In March, two provincial governments were criticized for the way they are spending funding for healthcare workers.
Physician recruitment activities
Earlier this year, the Ontario government appointed Altaf Stationwala, president and CEO of Mackenzie Health in the Greater Toronto Area, as supervisor who will take over the operation and management of RVH.
That came after an independent audit uncovered “concerning governance and management practices at the hospital,” according to the Ottawa Citizen.
Earlier this month, the Ottawa Citizen reported that RVH had transferred more than $9.6 million in surplus funds over a decade to the not-for-profit corporation Renfrew Health.
The establishment of Renfrew Health in 2014 was “guided by expert advice received by counsel,” said hospital president and CEO Julia Boudreau, in an internal memo viewed by the Ottawa Citizen.
Renfrew Health helps recruit physicians to the community. To support the organization’s operations, part of the operating surplus of the hospital was transferred to the not-for-profit “in years when that was possible,” said Boudreau, according to the report.
“This practice was fully audited every year — in the financial statements of both organizations — and no concerns were ever raised by our independent auditors or the government authorities that received the audited statements every year,” she wrote in the internal memo sent to staff.
The federal government has been signing bilateral agreements to improve healthcare staffing in Canadian provinces and territories.