Cape Breton job agency shutting down in wake of ombudsman's report

An employment services agency in Cape Breton is being shut down after a damning report from Nova Scotia's ombudsman found the organizationwas misusing funds.

In his June 2021 annual report, William A. Smith said his officefound "a misuse or gross mismanagement of public funds or assets" after investigating four years' worth of records at Island Employment based in Sydney.

Workers at Island Employment received notice Oct. 1 that the province is ending its contract in Novembersix months early. The organization employs about30 people in offices in Sydney, Chticamp, Invernessand Port Hawkesbury.

The agency, which teachesresumand interview skills for people seeking work and connects employers with workers,was created by Nova Scotia Works a division of the Department of Labour and Advanced Education. Although it is almost entirely funded through the department, the province does not control Island Employmentas a public entity.

Multiple complaints received

The move to shut it down comes after multiple complaints were made against the organization. Representatives of the ombudsman's office investigated hundreds of pages of expense claims and spending records dating back four years and did interviews with management and staff.

Murdoch Moore, a member of Island Employment's nine-person board of directors, declined to comment on the findings.

The complaints surrounded the misuse of program funds, such asbilling different contracts for the same services or expenses, including rental of space, travel expensesand employee salaries.

Another complaint involved employees being paid a fee to provide training workshops to external organizations during regular working hours, despite already receiving a regular salary.

There were also claims aboutlack of transparency, accountabilityand oversight to the operations, including spending practices.

Report cites travel claims, spending issues

The ombudsman found a slew of issues in theinvestigation, includingconflicts of interest by employees, uncontrolled spendingand rule-breaking around travel claims and government procurement standards. The ombudsmanmade multiple recommendations to the organization, provideda timeline for implementation and planned to monitor the process.

Despite that, the province decided to end its contract with Island Employment,citing a review of the organization as well as the ombudsman's report.

The Department of Labour, Skills and Immigration declined an interview request ,but provided a statement and answers to questions.

"[The department]has regular monitoring processes for NS Works agreement holders to ensure they are meeting policies, standardsand requirements," it said.

"This ongoing monitoring also included a recent investigation by the office of the ombudsman, as published in the [2020-21] ombudsman's annual report; those findings were factored into the decision."

The statement said the province has put out an expression of interest, looking for other organizations to take over the services Island Employment provides. It also states bids made by Island Employment will not be considered.

Nova Scotia Government and General Employees Unionpresident Jason MacLean said the unionized workers are not to blame for the issues.

"[Workers]were of the belief that there was an issue with management and the board, but they still continue to do their work, so that's in my talks with government," he said. "I'm saying, 'Let's continue on with this work. Let's continue servicing Cape Bretoners.'"

It wasunion members who went to the ombudsman seeking an investigation in the first place, according to NSGEU spokesperson Holly Fraughton.

In an email, she saidthe NSGEU hasnot been informed of any members currently working at Island Employment takingextra pay for the work they would normally do.

MacLean saidthe province shoulddissolve the board and management while keeping the workers, who he believes are performing a valuable service in an area with a high unemployment rate.

Staff at Island Employment will not be taking any more clients as of Oct.29 and are set to be laid off Nov.21.