Update on unsupported expenses

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Following the recent CBC news story in relation to the serious financial irregularities that the Association was faced with in 2017, the Association’s Executive would like to address a number of questions and concerns put forth by you, our members.

This incident has shaken the Association.  It took everyone by surprise, including employees of the Association, elected officials, and the membership as a whole.  As soon as these irregularities were discovered and the Executive became aware of the potential missing funds, a rigorous and secured plan was immediately put in place.  Financial experts were consulted, legal advice was sought, Ottawa Police were contacted, and very quickly, measures were put in place to ensure the security of the membership dues – these new security measures will, in all likelihood, prevent this type of situation from ever happening again. We have been told that the security measures now in place exceed industry standards.

Obviously, this is a very serious issue involving large sums of Association funds and the President along with the National Executive Committee are not taking this situation lightly, nor are we sitting on our hands.

Several members have raised concerns that the Association’s Executive had not been forthcoming with information on this issue, and that the membership was left unaware of what had transpired.  That is simply not the case.

By November of 2017, the independent forensic audit was well underway – however, a first draft of the auditors’ report was the only item available at that point. Other than the fact that there were irregularities in finances, there was very little information available to share.  Still, the Executive ensured that the issue was open for discussion to the membership.

There have also been comments from a few members who believe information on the unsupported expenses was “buried” in the financial statement – again, that is simply not the case.  The financial statements must adhere to a specific format, including the ordering of notes according to Generally Accepted Accounting Principles (GAAP). The note related to the unsupported expenses was reflected on page 20 of the financial statement simply because of the order it appears in the financial statements.  There was certainly no intention to “bury” or “hide” that particular piece of information.  The fact of the matter is, this particular item was part of the financial statement package that every member had the opportunity to read, comment on, and ultimately vote on.

Due to the sensitivity of the matter, and that a forensic audit was underway and there was potential for a criminal or civil investigation, the Association was very limited in what it could reveal as the situation evolved.  Like any other investigation of this type, should sensitive information be made public or leaked, it could potentially compromise any investigation or legal action moving forward.  The Association followed clearly defined advice from its legal advisors as to how to properly proceed, while at the same time, protecting the membership at all costs. There are legalities involved, and to that end, the Association’s Executive could only reveal as much information as the law would allow and under the advice from our legal counsel.

The forensic audit was completed in January of this year. The Associations’ Executive had originally planned on providing information from the audit and openly discussing this issue as part of the upcoming budget meeting later this month. In fact, one of the reasons the Executive decided to move up the date of the 2018 Membership Budget Meeting to late June of this year so that further information on this matter could be shared and discussed. Unfortunately, that has been pre-empted by a CBC News story focussing on the Associations finances.

Here are the details as to what has occurred regarding this issue since it first came to light just over a year ago: 

The Associations Executive was first made aware of financial irregularities in late May, 2017.

The Executive took immediate action by alerting the Ottawa Police Department and acquiring the services of an independent Forensic Auditor (May 2017).

A series of security measures were implemented to prevent any further issues with the Associations finances:

Unsupported Expenses were posted as part of the Associations Financial Report, and were discussed openly at the Membership Budget Meeting in November 2017. 

The new President and the National Executive Committee took office in January 2018.

A Chartered Professional Accountant (CPA) was hired by the Association in January 2018.

Since the beginning of 2018, and most recently at the May meeting of the National Executive Committee, the New President and NEC consulted with the Associations legal advisors to consider next steps.

This remains an active file and continues to evolve, which the Association’s Executive is actively working on.

In conclusion, the Executive has made every effort to correct past issues with union finances.  In fact, there have been no further occurrences of unsupported expenses since late 2016. Since security measures have been put in place, the Association finances are in good order.  Taking into consideration the legal advice provided to us, we have followed proper procedures, and taken the necessary steps to deal with this issue head on, and will continue to do so in the future.

Members are more than welcome to provide any questions or comments on this matter. An excellent opportunity to do so would be at the 2018 Membership Budget Meeting later this month. 

All members are encouraged to register for and attend the upcoming MBM.