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HALIFAX: The embattled Chief Administrative Officer (CAO) of Richmond County has taken a leave of absence from his job to undergo treatment for substance abuse.

“I believe this is the best course for me, for my family, and for the citizens of Richmond County,” Warren Olsen said in a statement released Tuesday morning.

“I am thankful for the support I have received from friends, council members, and co-workers in reaching this decision.”

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Olsen said he made the decision “in light of the turmoil that has gripped Richmond County for the last two years, and after reflecting on the draft report of the Ombudsman…”

On Tuesday morning, the RCMP confirmed the launch of an investigation into the finances of Richmond Municipal Council, less than 48 hours after a leaked draft report from Nova Scotia’s Office of the Ombudsman suggested that a “culture of entitlement” has emerged with regards to expense claims filed by councillors and staff members over a two-year period.

Nova Scotia RCMP Media Relations Officer, Cpl. Jennifer Clarke, confirmed that a police investigation has opened with regards to “the Richmond County council finances matter,” but offered no further details on the specifics of the investigation.

The Department of Municipal Affairs (DMA) is also reviewing the draft report.

“Nova Scotians have every right to expect their elected representatives to be responsible and accountable,” DMA spokesperson Sarah Gillis responded via e-mail Monday afternoon.

“Government has taken steps to make us more open and transparent. We’re reviewing the report now and determining next steps. We’re taking this seriously and these recommendations will form part of our review of the Municipal Government Act.”

Originally designed to remain private while receiving a once-over from Richmond municipal councillors and staff and DMA members, the draft report reached the public last weekend.
The office of Ombudsman William A. Smith, who signed off on the 34-page consultative report that was recently leaked to provincial media sources, conducted a review of expenses connected to travel and related purchases made by municipal councillors and staff between January 1, 2012 and December 31, 2014. The review also made reference to the recommendations of a management letter issued by municipal auditors Grant Thornton in 2015 with regards to the same issues.

While the Ombudsman’s Office was initially contacted last winter by county residents regarding these issues, the office’s executive director, Christine Brennan, told The Reporter that the office made its own decision to conduct a probe of the matter, rather than responding to the complaint of any individual resident.

“Once word began to trickle out that there were concerns, the office was inundated with calls from folks expressing their concern,” Brennan recalled.

“It wasn’t a true complainant-based [investigation] … Originally, the complaint came to our office as a ‘wrongdoing’ under the [provincial] Public Interest Disclosure of Wrongdoing Act. But that doesn’t apply to municipalities, just provincial departments, agencies, boards, commissions and so on. So it was moved to the Ombudsman’s Office as an own-motion [review].”

The resulting consultative report includes eight recommendations split evenly between the municipality and DMA, including a review and potential revisions of Richmond’s existing expense-claim policy and a provincially-led independent forensic audit of the municipality’s financial records from January 1, 2010 to December 31, 2015.

In reviewing 24 months’ worth of expense claims and conducting interviews with 27 different people – including Olsen, current warden Victor David, former warden Steve Sampson and other elected councillors and past and present staff members – members of the Ombudsman’s Office traced spending patterns that, in the words of the report’s authors, “collided with existing law, policies, or codes of conduct” and were often justified as a traditional means of doing municipal business.

“Certain spending practices reflected ambiguous or inconsistent policies,” the report stated.

“Others reflected random rules seemingly fashioned on the spot, handed down as customary, and justified as traditional or ‘the way it has always been done.’”

Interviews with former Chief Financial Officer (CFO) Stewart MacDonald and current Director of Finance (DOF) Jason Martell trace a sharp spike in travel expenses during the period of the review for Sampson, who served as warden from October 2012 to October 2014, and Olsen. Originally budgeted as $15,000 in each of 2013 and 2014, Sampson’s travel costs reached $12,128 in 2013 before climbing to $45,744 in 2014, while the CAO’s budgeted amounts of $27,000 for 2013 and $30,000 for 2014 were below estimates provided by the DOF that put Olsen’s 2013 travel costs of $34,100 for 2013 and $43,300 in 2014.

The consultative report also flags the repeated charging of five items described as non-reimbursable expenses in Richmond County’s employee policy manual: alcohol, credit card delinquency fees, laundry or valet services for travel of fewer than five days, frequent flyer miles and other similar rewards for hotel and car rentals, and upgrades in services such as air travel, hotel accommodations and automobile rentals.

The Office of the Ombudsman has given Richmond councillors and staff, as well as the report’s other participants, until October 28 to respond to the report and provide any clarifications.

In a press release issued Tuesday morning, Sampson said he will be submitting a detailed response, pointing out a number of errors and omissions in the draft but said he agrees that tighter rules and higher standards are needed.

“We need clear rules and consistent enforcement. I caution that the rules should also be realistic,” the former warden said in a statement. “They must give council and staff the  flexibility to promote the county’s interests in meetings and conferences with industry and other levels of government.

“That’s why three councillors and I proposed a comprehensive package of financial reforms last January. Unfortunately, council did not accept our  proposals at that time.”

While the Office of the Ombudsman pointed out that the final report will arrive prior to this date if all respondents respond quickly in this regard, the executive director also warned that the finished product may not be made public.

“[The final report] has more of a likelihood of being released publicly from the ombudsman, but there hasn’t been a decision made yet,” Brennan explained.

“Public interest and all of those other issues will factor in. If I can be blunt and direct, there’s certainly a lot of public interest in this particular file.”