Nunavut loan body scores clean audit

(Updated April 18, 11:05)

In her final appearance before Nunavut MLAs, Sheila Fraser, the Auditor General of Canada, brought a piece of rare good news: the Nunavut Business Credit Corp.’s books have finally passed muster.

“Well, they just really got their act together. They got the information in place,” Fraser told reporters April 14.

The NBCC, the Nunavut version of the old Northwest Territories Business Credit Corp., was set up to lend money to small Nunavut businesses that can’t qualify for bank loans.

In November 2007, Fraser’s office issued a devastating report on the NBCC’s 2005-06 financial statements.

In it, she said the NBBC’s financial systems had been so badly mismanaged, “the corporation lacked the most basic level of control.”

Because of that, she issued a rare denial-of-opinion, a judgement reserved only for the worst of the worst. It means the organization’s books are in such disarray, an auditor cannot form an opinion on their accuracy.

The fiasco also generated a range of spin-off scandals and embarrassments for the Government of Nunavut including,

• the resignation from cabinet of Baker Lake MLA David Simailak in December 2007;

• an Integrity Commissioner finding in September 2008 that Simailak breached the Integrity Act and must pay a $5,000 fine;

• a revelation that an acting CEO of the NBCC faced theft and fraud charges when he was hired;

• a revelation by another CEO that the GN hired him even after he told them he was unqualified for the job;

• a forensic investigation, now completed, by the RCMP’s commercial crime section in Ontario, which has yet to lead to the laying of any charges.

Fraser’s office later issued more denials of opinion for the NBCC’s financial statements in the years that followed, as Government of Nunavut staff and a new board of directors struggled to rebuild the organization.

But the NBCC’s latest financial statements, for 2009-10, are accurate.

“I was really very skeptical that it could be done this quickly, but I think they’ve done a remarkable job and I give them a lot of credit for it,” Fraser said.

She attributes this to the work of the GN and the organization’s new board, which the GN rebuilt after the NBCC fiasco came to light.

“They have some very capable people who tackled the problem and, you know, the board as well is, I think, much more engaged. It’s a very strong board that’s there,” she said.

Right now, Greg Cayen of Iqaluit serves as chair of the NBCC’s board and Nancy Karetak-Lindell of Arviat serves as vice-chair. Other board members are: Donald Havioyak, Marg Epp, Wayne Solomon, Tommy Owlijoot and Allan Lahure.

The corporation also moved its head office from Cape Dorset to Iqaluit.

Sherri Rowe, an accountant, was appointed chief executive officer of the NBCC as of this past April 1, after serving as interim CEO since the spring of 2010.

Fraser also said it may be too early to calculate how many bad loans still exist on the NBCC’s books, and how much of that debt may have to be written off by the GN.

The NBCC’s latest financial statements have yet to be tabled, and Fraser said she didn’t have precise information with her.

“They will have to go through it loan by loan to see what can be collected or not… It could be several years before they know,” Fraser said.