June 2026 Board of Health Meeting - Management Response to Financial Control Finding 2025 Audit Information Report

PREPARED BY: Administration

DATE: June 25, 2026

Following the departure of the Director, Corporate Services & CFO, a financial audit identified a control gap related to oversight, segregation of duties, and authorization processes. Management has implemented immediate interim controls to mitigate risk and maintain financial integrity during this transition.

Key Interim Controls Implemented

1. Strengthened Oversight

• CEO has assumed direct oversight of financial reporting and reviews
• Monthly financial statements: 
  • Reviewed and approved by CEO
  • Include detailed variance and income statement analysis
• Weekly cash flow and bank balance monitoring reported to CEO
• External financial consultant (Capital Assist) engaged for independent review prior to audit submission
• Enhanced reporting to Audit/Finance Committee

2. Enhanced Authorization Controls

• Banking access fully updated: 
  • Former CFO access removed
  • New authorized signatories established
• Dual approvals now required for: 
  • EFTs (all require CEO approval)
  • Payments above thresholds
  • Payroll and cheque disbursements (two signatures required
• CEO or designate approval required for: 
  • Journal entries
  • Vendor payments
  • Inter-account bank transfers

3. Independent Review & Controls

• Bank reconciliations: 
  • Prepared by staff
  • Independently reviewed and signed off
• Monthly general ledger and key accounts reviewed with documented oversight
• External consultant provides an additional layer of independent assurance

4. Segregation of Duties

• Finance responsibilities reassigned to separate: 
  • Processing
  • Approval
  • Reconciliation functions
• Where full segregation is not possible: 
  • Compensating review controls implemented and documented

5. Access & Risk Mitigation

• Immediate removal of former CFO: 
  • Banking access and administrator privileges revoked
  • Corporate credit card cancelled
• Email monitoring and forwarding implemented to ensure continuity and oversight

Recruitment Status

Recruitment for the Director, Corporate Services & CFO role is underway.

Monitoring & Governance

• Controls are formally documented and actively monitored
• Ongoing compliance oversight by senior management
• Audit/Finance Committee receiving enhanced reporting
• Controls will be refined as needed to ensure effectiveness