Eight senior Health PEI executives received salaries or raises without proper approval, according to a report from the Prince Edward Island Auditor General’s office tabled in the Legislative Assembly on Tuesday.

According to the 23-page reportMost Health PEI employees have a classification level based on their skills and duties, but “the salaries paid to these employees did not always correspond to the salary scales assigned to the classification level.”

The audit covered the period from January 2021 to December 2023.

The issues flagged in the report would have been the responsibility of Dr. Michael Gardam, who served as Health PEI’s permanent CEO. for most of this period.

The eight positions audited include:

• Administrative Director.
• Responsible for communications.
• Financial Director.
• Director of Human Resources.
• Chief physician.
• Responsible for nursing care, professional practice and quality.
• Head of performance and innovation.
• Operational Director.

The salary of Health PEI’s CEO, who is appointed by the lieutenant governor, was not included in the audit.

The highest salary of the executives listed is that of the chief medical officer, at $383,526, while the lowest salary is that of the director of communications, at $158,496.

The minister ignores contracts

The report indicates that five of the eight positions had received a salary classification and therefore had a salary scale recommended by the Treasury Board.

The remaining three positions, established when Health PEI’s new leadership structure. came into force in January 2021, have never been classified.

We would like to emphasize that this should in no way harm the managers who signed the contracts in good faith.— Melanie Fraser, Executive Director of Health PEI

Of the three classified executives, the Auditor General’s office found that two executives received salaries that “did not correspond to the salary ranges of the assigned classification level.”

These positions include the director of communications, who is paid more than $50,000 more than the recommendation, and the chief performance and innovation officer, who is paid almost $40,000 more than the recommendation.

These increases were supposed to be approved by the Treasury Board and the Minister of Health, which was not the case. The current minister, Mark McLean, says he was unaware of the contracts.

The audit also showed that the 2024-2025 provincial budget allocated to Health PEI. includes more than $2 million in salaries for listed executives – a 25 percent increase from two fiscal years ago.

In total, Health PEI devotes 66 percent of its budget, or $560 million, to the salaries of 4,166 full-time equivalent employees and 252 medical staff.

“I don’t feel bad for one second about what I paid people”

Dr Gardam, who was CEO at the time, said if he had not increased salaries for these positions, he would have risked losing staff to other provinces.

“I don’t feel bad for one second about what I paid people,” Gardam told CBC News on Tuesday. “We paid them below average and it’s really, you know, fair market value for the hard work that these people were doing.”

The report also reveals that executive employment contracts were not authorized in accordance with Treasury Board policies. This includes contracts with an effective date more than 60 business days before the date of signing, sometimes up to two years, “resulting in significant payment arrears.”

These contracts have not been approved by the Minister of Health, the Health PEI Board of Directors. or the Treasury Board, the report states.

The report makes six recommendations, including that Health PEI. should seek approval from the Minister of Health and the Treasury Board for future employment contracts, and that contracts should not be backdated by more than 60 days.

Health PEI reacts

Health PEI said in a statement Tuesday that it had taken “immediate action” to resolve the classification and compensation issues raised by the report and would comply with the recommendations before the end of 2024.

“We recognize the impact on trust in our organization due to the actions of a few individuals responsible for creating and offering executive contracts,” said the statement, co-signed by the chair of the Santé board of directors. PEI, Diane Griffin, and Executive Director, Melanie Fraser.

“We would like to emphasize that this should in no way detract from the leaders who have signed contracts in good faith with their employer and the invaluable work carried out by our dedicated team across the province.”

At a news conference Tuesday, Fraser said she didn’t think executives were overpaid.

She said the problem was people bending the rules.

“I can confirm that controls are in place. There are three lines of defense within our organisation, there are controls at all levels,” she said. “In fact, it was when we got to the third line of defense, which is when the AG looks at our final statement, our financial statements at the end of the financial year, that these problems were detected .”