Financial irregularities at YWCA Agvvik Nunavut, audit reveals

The Qimaavik women’s shelter in Apex: the GN is currently auditing YWCA Aggvik Nunavut, which runs the shelter. (FILE PHOTO)

Bounced cheques, personal travel expenses, expired licenses and undocumented wages, these are only a few of the more dubious financial irregularities pointed out in an audit last year of YWCA Agvvik Nunavut, the organization responsible for running Iqaluit’s only women’s shelter.

That’s according to 2015-16 financial statements from YWCA Agvvik Nunavut, prepared for the organization by Lester Landau chartered accountants, and obtained by Nunatsiaq News.

Lester Landau identified more than 25 irregularities during its audit of the organization’s 2015-16 financial records and compiled those irregularities in a separate letter to management.

“It was noted during the audit that staff were reimbursed for expenses that appear to be personal in nature,” the management letter noted, recommending that a travel policy be implemented by the YWCA Agvvik Nunavut’s board of directors.

Some of the personal travel expenses noted by the auditors included a tour of Kensington Palace, a residence of the British monarchy, and the Imperial War Museum in London, England.

“The society incurred a significant deficit in 2015-16 and does not have the flexibility to reimburse costs that do not directly benefit the organization,” the management letter said.

Both the organization’s accounts receivable and accounts payable ledgers had irregularities. These prevented the accounts from matching up with what was being reported in the organization’s general ledger.

That may be because of the disorganized way YWCA Agvvik Nunavut issued its cheques.

“It was noted during the audit that the board President signs cheques in advance, this is done so that cheques can be issued when the board President is unavailable,” the management letter said.

As a result, cheques were issued out of order, with many bouncing from an over-drafted account, while others had yet to be cashed by their recipients.

The lack of a coherent chequing policy, the auditors warned, led to YWCA Agvvik Nunavut being unaware of its available funds on a daily basis.

According to the management letter, the director at the women’s shelter made personal payments to shore up the organization’s accounts out of her own pocket so the shelter could pay its bills.

“Although the funds were repaid, it is not appropriate for staff to cover the society’s expenses and if proper documentation is not maintained, it creates confusion and exposes the organization to unnecessary risk,” the management letter said.

Petty cash was also not being accounted for regularly, and the society was paying insurance premiums for vehicles it was no longer using.

YWCA Agvvik Nunavut’s commercial-grade general liability insurance had also expired by the end of the 2015-16 fiscal year, the auditors noted.

And, with respect to the payroll, auditors suggested that the organization’s executive director had centralized her authority, artificially making her role within the society irreplaceable.

“It was noted that the executive director has not taken any vacation in over four years and has accumulated 49 days of annual leave,” the management letter said, resulting in the accumulation of $18,000 in payroll liability.

“In addition to being inconsistent with the employee’s employment contract, it creates a significant dependence on one person and exposes the society to significant risk should this employee leave.”

It also creates the opportunity for fraud, the auditors warned.

The organization’s executive director also received about $75,000 in shift replacement pay, in addition to her regular salary, however the auditors could find no evidence of approval from the board of directors.

The executive director did not use timecards to track the hours worked, the management letter added.

And some of the contracted services paid for by the organization went to a numbered company owned by one of its employees, payments which amounted to about $3,500.

“Various other employees were hired to perform consulting services, the total funds paid during the fiscal year for these services was $11,218,” YWCA Agvvik Nunavut’s 2015-2016 financial statements noted.

YWCA Agvvik Nunavut reported a net deficit of $244,743 in 2015-16, and received nearly $2 million in public monies over that fiscal year.

The Government of Nunavut confirmed that it is performing a forensic audit of YWCA Agvvik Nunavut’s finances, following the leak of the society’s documents to federal and territorial bodies.

“The Board of Directors of YWCA Agvvik Nunavut said it was aware of the package that has been received from an anonymous source, and the allegations contained in these documents,” the Agvvik board told Nunatsiaq News in a May 28 statement.

“The Government of Nunavut is conducting due diligence and we are welcoming and fully cooperating in any review of our financial management controls.”

Suny Jacob, the executive director of the Qimaavik women’s shelter in Iqaluit, is currently on leave, according to lawyer James Morton.