Hospital lawyer tells former CEO’s fraud trial flight passes improperly purchased

HALIFAX — A hospital CEO’s use of flight passes for personal travel was questioned early in her tenure, the general counsel of the IWK Health Centre testified Tuesday during the former executive’s fraud trial.  

Jennifer Feron gave her evidence in the Halifax provincial court trial of Tracy Kitch, who has been charged with breach of trust and fraud over $5,000 in relation to her expense claims at the children’s hospital between 2014 and 2017. 

Feron said that in May 2015 she observed Kitch’s executive assistant dealing with flights Kitch had taken in February for personal reasons but still hadn’t reimbursed.

She said she observed a similar situation in June of that year for a personal flight Kitch had taken in April, even though Feron said by then she’d informed a senior executive in the finance department about her concerns.

“You can’t have personal expenses that are three months old,” Feron said.

“I said to her (Kitch’s executive assistant) ‘You need to follow some kind of policy, not just winging it,’ ” she testified.

She added that it wasn’t her role as the hospital’s legal counsel to oversee the expense statements, but she felt she should express her concerns to the executive assistant about the use of the flight passes after she observed the practice.

Flight passes are bundles of prepaid flights that are valid within a specific region and for a certain period of time.

Kitch had started working at the children’s hospital in August 2014 after moving to Nova Scotia from her home in Oakville, Ont. 

In 2017, an internal report ordered by the hospital found $47,000 in expenses the auditors deemed to be “potentially personal” had been charged to the hospital. All the money was repaid by the time Kitch stepped down that summer.

The Crown said in its opening statement Monday it will focus on 68 transactions by Kitch between 2014 and 2017, including flights between Toronto and Halifax.

However, defence lawyer Jacqueline King has said in court that while Kitch did use her corporate credit card for personal expenses, she flagged them for future reimbursement. The lawyer has also stated in court that “all of Ms. Kitch’s expense reports were signed off by the (IWK) board chairmen.”

During testimony Tuesday, Steve Ashton, the vice president of people and organizational development at IWK Health Centre, testified he couldn’t recall board chairmen ever coming to him to question Kitch’s expenses.

King had asked during cross-examination whether he’d heard former chairman Phil Otto or his successor Bob Hanf say, “‘What the heck is going on? I’m not approving these expenses.’ ” 

Ashton responded that neither board chairman had ever come to him directly and asked about Kitch’s expenses. 

In 2018, provincial auditor general Michael Pickup said he was shocked by a lack of oversight and basic financial management controls at the hospital. Pickup concluded the IWK’s board of directors failed to create a culture that promoted accountability.

The IWK’s former chief financial officer, Stephen D’Arcy, faces charges of breach of trust, unauthorized use of a computer, and mischief to data in a separate trial next year.

This report by The Canadian Press was first published Nov. 9, 2021.

Michael Tutton, The Canadian Press