PPAO in the Media
Psychiatric hospitals beef up anti-fraud scrutiny
The Globe and Mail
August 11, 2007
KAREN HOWLETT
Ontario's 10 psychiatric hospitals have put in place more stringent controls for safeguarding and managing patients' money following the alleged misappropriation of funds at two institutions.
The hospitals conducted a sweeping review of their systems after an advocate group for psychiatric patients informed them that an employee in the cashier's office at each of the two hospitals had allegedly stolen money from patients. Some hospitals have put in place more checks and balances, including requiring multiple signatures on financial documents, while others are withdrawing from offering a broad range of banking services, said David Simpson, acting director of the Psychiatric Patient Advocate Office.
The problem of how vulnerable individuals can be victimized by those who are supposed to protect them became news this week, with Ontario Attorney-General Michael Bryant's announcement that a former employee of the public guardian's office had allegedly stolen a "significant" sum of money from mentally incapable individuals. Mr. Bryant has not disclosed how much money is involved but the fact that he has called in the Ontario Provincial Police, a team of auditors led by the Auditor-General and the province's former integrity commissioner attests to the matter's seriousness.
The two psychiatric hospitals have been quietly grappling with a similar problem for more than a year. The Centre for Addiction and Mental Health in Toronto fired an employee last July for allegedly stealing more than $250,000 from 393 patients over a four-year period. The 64-year-old woman, who had worked in the cashier's office for eight years, is facing fraud and theft charges. All but six of the victims, who have not yet been located, have been compensated.
"It was a huge shock," said Dean Martin, the hospital's chief financial officer. "Whenever fraud happens in an organization, you never suspect that that person could do something of that magnitude."
The hospital is in the process of implementing new measures following a review of its internal controls. It is also reducing the services provided by its cash office, which has essentially acted as a bank, accepting deposits and withdrawals of patients' funds.
"This is not a business we want to be in," Mr. Martin said. "We're a hospital."
The charges against the former employee by the Toronto Police fraud squad last July prompted a second, unidentified hospital to conduct a forensic audit of patients' financial accounts. It too discovered that a former employee in the cashier's office had allegedly stolen from patients. The incidents prompted Mr. Simpson in the Advocate's Office to ask every psychiatric hospital to review its processes to safeguard patients' funds.
"By agreeing to provide financial services to clients, including the management and disbursement of their monies, hospitals assume responsibility for safeguarding funds and taking the necessary steps to heighten accountability," Mr. Simpson said in a letter to the hospitals last December. "Of necessity, this calls for the development of policies and practices that will reduce the risk of lost funds through theft or accounting error."
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