ARICHAT: Richmond County’s embattled chief administrative officer (CAO) has resigned from his post, days after the release of a forensic audit involving expenses incurred by Richmond municipal staff and councillors.
Warren Olsen confirmed last week that October 31 was his last day in the position he has held for six years and two months. The resignation announcement came two days after the municipality’s official Web site posted the findings of a forensic audit conducted by the legal firm Boyne Clarke with assistance from the county’s municipal auditors, Grant Thornton, regarding expenses incurred on credit cards issued to municipal councillors and Olsen between April 1, 2011 and March 30, 2016. The forensic audit can be found at: http://www.richmondcounty.ca/2016-forensic-investigation-report.html.
In an interview with The Reporter over the weekend, Olsen confirmed that he had discussed his potential departure with his family over the past month, adding that “mixed emotions” accompanied his decision to step down from the CAO position he secured in mid-2010.
“I certainly made some errors and mistakes in my time as CAO, and I apologize to all the people I have disappointed in making those,” said Olsen.
“I also feel, though, that I made a contribution to the betterment of Richmond, its citizens and operations of the municipality… [But] there were a certain number of people who wanted me gone as CAO, and at some point, when you do this type of job, you need to walk away.”
While Olsen described “constant harassment on social media” as a key factor in his resignation decision, he said he has not made a decision to join former Richmond Warden Steve Sampson in a defamation lawsuit against four people linked to the Internet Provider addresses of two pseudonyms frequently used to criticize Olsen and Sampson on the Facebook group “Taxpayers of Richmond County NS” over the past year. Olsen noted, however, that he will discuss the issue with Sampson and the Halifax-based lawyer who has represented the pair in this case, Michelle Awad.
“I have a wonderful wife and two beautiful children… As a family we have been through a lot via social media,” Olsen declared.
“The hurtful comments and ridicule have taken their toll not only on me, but on my immediate and extended family. Sometimes people forget the human element.”
Addressing the issue Monday morning, outgoing Richmond Warden Victor David said the process of replacing Olsen would have to be “done very carefully” by the incoming council and expressed optimism that the difficulties of the past 12 months would not deter any potential replacements.
David added that the municipality is expected to hold a public swearing-in meeting for its five new councillors on Monday, November 7 in Arichat. Originally scheduled for October 26, this meeting was pushed ahead when veteran councillor Gail Johnson requested a recount in the new District 5, which originally gave first-time candidate Jason MacLean an 11-vote victory.
These developments occurred against the backdrop of the long-awaited forensic audit.
The findings included several questionable travel expense claims by councillors and staff. Olsen was personally flagged for submitting a combined $31,233 in out-of-county travel claims for trips that the audit’s investigators expected to be covered by the municipality’s in-county travel allowance, with multiple trips by Olsen between Arichat and Port Hawkesbury cited as an example of this situation.                Mileage expenses accounted for the largest single expense claimed in the five-year period covered by the audit, with $129,100 in travel claims filed, as compared to $47,327 for meals, $30,951 for tech allowances and $20,188 for “other.” Among individual councillors, the highest mileage claims over the review period were filed by Sampson with $52,245, Johnson with $30,185, outgoing District 5 councillor Shirley McNamara with $27,657, and David with $27,118.
The findings pointed to insufficient supporting documentation attached to expense claim forms and expense claim forms being processed despite a lack of oversight.
The forensic audit also found the then CAO was “approving his own expense claims” and there was no oversight of his expense claims.
Olsen and two councillors were accused of claiming a meal allowance then expensing meals on municipal credit cards. In total $3,871 of double-dipping examples were identified but Richmond County officials told the auditors this “was considered regular practice.”
Election-related expenses totaling $3,694 were reimbursed by the CAO but there was no supporting documentation. Hockey fitness activity fees of $775 were reimbursed to the CAO.
Auditors also identified inconsistencies with the explanations attached to certain transactions, such as a dinner expense at 12:21 p.m. and a breakfast expense at 10:47 p.m. They also identified two transactions at adult entertainment establishments in Houston, Texas but from interviews were told “that the explanation attached was prepared by the CAO in advance and in anticipation of the forensic investigation.”
Despite what the municipal Employee Policy states, there were two examples where Olsen expensed valet services at hotels on the municipal credit card for travel that was less than five days. In-room movies were also charged to the municipal credit card and 22 instances were found where seat upgrades were charged.
Another problem uncovered by auditors was that detailed hotel receipts were not always provided. Of the 437 transactions relating to accommodations, a total of 54 transactions did not have detailed receipts. Most of the supporting documents relating to accommodation expenses did not indicate the business purpose.
Of the 167 transactions relating to air flight expenses, a total of 31 were without detailed receipts.
The auditors found that 440 of 602 transactions relating to meal and entertainment expenses were not supported by detailed receipts.
Meal allowances and meals charged to credit cards were claimed by and reimbursed to councillors that “appear to relate to the same day,” auditors said.
Also, councillors used credit cards to take family members to dinners during conferences and incurred the expenses on the credit cards.
According to media reports, Elections Nova Scotia is also investigating instances where councillors claimed reimbursements for attending political events, including a Liberal Party fundraising supper at St. Louis Parish Hall in Louisdale on May 23, 2014.
The audit was made public three weeks after Nova Scotia RCMP Media Relations Officer, Cpl. Jennifer Clarke, confirmed that a police investigation had opened with regards to “the Richmond County council finances matter.” This announcement came less than 48 hours after a leaked draft report from Nova Scotia’s Office of the Ombudsman suggested that a “culture of entitlement” emerged with regards to expense claims filed by councillors and staff members over a two-year period. The Department of Municipal Affairs also confirmed it was reviewing the draft report.
In early October, Olsen announced he was taking a leave of absence to undergo treatment for substance abuse. 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.” This leave of absence ended on October 21.