Health Canada statement on the results of the VFAF audit

January 30, 2004

In October 2000, Health Canada launched a forensic audit to investigate allegations of the misuse of public funds at the former Virginia Fontaine Addictions Foundation Inc. in Manitoba. This treatment centre provided addictions programs for First Nations and Inuit clients across Canada.

Health Canada hired two national firms of Chartered Accountants to conduct the audit, which is now completed. In the interest of public disclosure, an executive summary is currently available.

As soon as there were allegations of criminal misconduct, Health Canada also referred this matter to the RCMP. The RCMP investigation of the Virginia Fontaine Addictions Foundation Inc. has resulted in charges against nine individuals including three former Health Canada employees: former Assistant Deputy Minister Paul Cochrane, Aline Dirks, and Patrick Nottingham. The RCMP has advised that their investigation is ongoing and may lead to further charges. Health Canada has cooperated fully with the RCMP investigation and will continue to do so.

Health Canada has made significant efforts to enhance accountability, and to strengthen the management of public funds. Among these, Health Canada has developed and implemented new standard agreements, which include a more rigorous approval process that allows for an independent peer review. These controls also include a new audit regime following professional standards, as well as a quality control function to ensure policies and procedures are followed properly. These initiatives ensure that the development, approval and administration of these agreements is appropriate.

The department is also actively pursuing recovery of any public funds that may have been misused. The audit findings will be included in the evidence in a civil suit that has been launched against several of the treatment centre's former directors and officers.

A copy of this audit report can be obtained by contacting:

Audit and Accountability Bureau
Health Canada
Telephone: (613) 957-4360
FAX: (613) 957-8910
E-mail: aab-bvr@hc-sc.gc.ca

Media contact:

Jirina Vlk, Media Relations Officer
Telephone: (613) 957-2988
FAX: (613) 952-7747
E-mail: jirina_vlk@hc-sc.gc.ca