Winnipeg Free Press
Saturday, March 4th, 2006
By Mia Rabson
THE provincial auditor is examining how a school division came to spend more than $2 million to develop residential lots in north Winnipeg against the explicit rules of provincial legislation.
It is at least the fourth time since 2004 the auditor has investigated a case in which the province failed to heed early warnings of management problems in government-regulated agencies or programs. Auditor General Jon Singleton's office yesterday confirmed he will spend the next several months looking at Seven Oaks School Division's development of 70 residential properties in Swinford Park, a new community in Winnipeg's Riverbend neighbourhood. Seven Oaks spent more than $2 million to develop land originally purchased to build a new school.
The Department of Education and the Public Schools Finance Board will be included in what Singleton's office calls "an examination."
"There were concerns brought to us about this. We assessed those concerns and decided we would look into it," said a spokeswoman from Singleton's office.
He is out of the country until Monday.
Although land development is against the express rules of the Public Schools Act, the division asked for and received permission for the development scheme from the Public Schools Finance Board, a government-appointed board that oversees all capital projects in school divisions.
A private citizen wrote to Education Minister Peter Bjornson in the spring of 2004 telling him what Seven Oaks was up to and suggesting it was improper, but Bjornson's response was to tell the man to take it up with city hall or the school division.
Tory MLA Myrna Driedger, who raised the issue in the legislature in May 2005, said she is pleased there will finally be an external, unbiased look at the entire matter.
"This is one scandal the Doer government is no longer going to be able to sweep under the carpet," she said.
In the summer of 2004, the government struggled to explain why it never dealt with repeated warnings regarding spending irregularities at Hydra House, a for-profit care agency funded by the Department of Child and Family Services.
Singleton found Hydra executives misspent more than $1.5 million of public funds on trips, furniture, homes and cars between 1997 and 2002. The government was first told about the problems in 2000 but didn't cut the agency's funding off until the fall of 2004, after Singleton's report came out.
In 2005, the province was criticized for ignoring red flags about management and operational problems with the Crocus Investment Fund. That fund ceased trading in December 2004 and went into receivership last June.
And in January, Singleton released a report about human resource management issues at the Workers Compensation Board that again slammed the NDP for not listening to a whistle-blower who warned of abuses of power at the WCB five years ago.
mia.rabson@freepress.mb.ca