Police investigating former Cape Breton employment agency

After first being the subject of a damning report by the Nova Scotia ombudsman's office, Island Employment is now the subject of a police investigation.

The Cape Breton-based employment services organization closed its doors on Nov. 21 after the Department of Labour ended its contract early.

Less than twoweeks later, on Dec.2, the department asked Cape Breton Regional Police to investigate the possible misuse of public funds, according to a spokesperson for the police service.

In his annual report, ombudsman William A. Smith said his office had found "a misuse or gross mismanagement of public funds or assets" afterinvestigating four years' worth of records.

The Department of Labour declined an interview, citing the ongoing investigation.

In a statement, a spokesperson told CBCNews the government has a responsibility to hold taxpayer-funded service providers to certain standards and report information to the appropriate authorities.

The news of the police investigation came as a surprise to Jason MacLean, president of the Nova Scotia Government and General Employees Union. The union representsthe former workers at Island Employment.

MacLean has beenasking fora forensic audit of what happened at the organization for the past few weeks, saying he believes the process would clear his members' names.

"Why now is there a need for an investigation criminally when they don't have any new information? All they have is the ombudsman's information," he said.

Labour Minister Jill Balserhas declined to ordera forensic audit.Shetold CBC Radio'sMainstreet Cape Breton on Oct. 29 that herdepartment had all the information needed to make a decision to end its contract with Island Employment.

"That's what we made our decision on was the mismanagement of funds.... So that and our own internal review, the investigation was complete," said Balser.

MacLeansaidhe isn't concerned about the impact of a police investigation on his members, noting it was unionized employees at Island Employment who blew the whistle on the agency and triggeredthe ombudsman's review.

"As far as I know, our members reported what's been going on and haven't been privy to signing off for any money or anything like that, so I do not feel that our members are at risk," he said.