Nova Scotia’s auditor general is asking the Mounties to investigate the provincial Liberal party over its “apparent concealment” of the misuse of public funds by a former employee.

Kim Adair’s work on the file started in 2022 after she was notified by officials at Elections Nova Scotia of “significant misuse of funds” over several years at the Liberal Association of Nova Scotia.

The report released today says a former employee’s misuse of travel claims and a party credit card led to the person’s resignation and the reimbursement of more than $194,000.

However, Adair says the association chose not to complete a forensic audit or file a complaint with the RCMP and did not report full knowledge of missing funds to its auditors before finalizing the 2020 audit in the spring of 2021.

The auditor says the Liberal association didn’t fully convey to its auditor the extent of the misuse of public funds and that police should have followed up.

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The report says Adair’s office became aware that the party allegedly sought to conceal a delay in disclosing the misuse of funds until after the Aug. 17, 2021, election, which the Liberals lost.

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Adair says the party signed a settlement agreement with a confidentiality provision with the former employee, who was subsequently hired at another publicly funded organization.

While party officials and auditors did meet with the auditor general’s office, Adair says the association didn’t provide key information it requested on numerous occasions between July and October 2022.

Zach Churchill was elected party leader in July 2022, succeeding Iain Rankin, who remains a member of the legislature after he lost the 2021 election and resigned as leader.

In a news release, Adair also says, “the (Liberal) association’s delay in providing information to our office was not in compliance with the Auditor General Act,” which gives her office unrestricted access to records of any organization that receives public funding.

All registered parties receive annual operating funds from Elections Nova Scotia. In the past ten years, the Nova Scotia Liberal Party has received $6.4 million in public funds: $2.9 million for party operations and $3.5 million in candidate expense reimbursements.

Adair recommends in her report that the Liberal Association of Nova Scotia file formal complaints and fully co-operate with the RCMP relating to the misuse of public funds and alleged misrepresentation of the association’s audited financial statements.

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The second recommendation is to amend the Elections Act to give the CEO of the elections agency the authority to deal with any similar issues in the future.

This report by The Canadian Press was first published Feb. 27, 2024.

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