New Brunswick travel nursing contracts lacked oversight, created risk, audit finds

New Brunswick spent more than $173-million on private travel nurses over two years, according to an Auditor-General’s report that singles out the province’s Francophone health authority for failing to properly oversee payments to one Toronto company for staff, rental cars, hotels and other expenses.

Auditor-General Paul Martin noted in his report released Tuesday that the Vitalité Health Network conducted three internal audits on its dealings with Toronto agency Canadian Health Labs, but refused to share them with his office, so it’s unknown what risks those audits identified and if they were addressed.

“We are very concerned with the lack of ownership for the issues identified and unwillingness to clearly accept our recommendations,” Mr. Martin said in presenting his report before a legislature committee on Tuesday.

“Vitalité is a large organization entrusted with significant budget dollars intended to deliver on health care services to New Brunswickers. The oversight and accountability for those funds requires significantly more due diligence than what has been demonstrated to us during our work.”

He added that “we noted risks to government due to poor contract development and oversight, payments for care services and related travel expenses were authorized without sufficient support.”

Canadian Health Labs was the subject of a Globe and Mail investigation published this year that examined the rise of private agency nursing across the country. As the worst of COVID-19 waned, exhausted nurses and other health workers retired early, dropped down to part-time schedules or quit the profession, prompting health authorities to rely on expensive temporary nurses supplied by private agencies.

The New Brunswick audit confirmed many of The Globe’s findings about Vitalité’s three contracts with CHL, including the fact that the company used a pricing structure that was 3.6 times higher than those of its competitors. The CHL contracts also allowed the company to deploy staff where and when they weren’t needed. One contract, which is in effect until 2026, contains an auto-renewal clause.

CHL has said in past statements that its contracts are “fair and transparent” and reflect the “extraordinary logistical challenges” of recruiting and retaining health-care workers in rural Canada.

Some members of the legislature public accounts committee who received the report expressed outrage.

“This is scandalous that the taxpayers are on the hook for such large sums,” said Liberal MLA Richard Losier.

“I think Canadian Health Labs is laughing all the way to the bank like they have had quite a lucrative time in New Brunswick so far,” said Megan Mitton of the Green Party.

Mr. Martin noted that Vitalité’s contracts with CHL had concerning elements. “The contract management is quite scary,” he said, noting that the agency could ask to be paid regardless of need, and that there is an auto-renewal clause.

“I bet a lot of people would love to get a contract like this and I would challenge government to do better, way better. This is not good,” Mr. Martin said.

Between February 2022 and February 2024, travel nursing cost New Brunswick $173-million, with Vitalité spending just over $123-million. That was more than twice the nearly $48-million spent by Horizon, the province’s English-language health authority.

Vitalité paid just over $98-million to CHL over two years, the audit found, far more than the nearly $17-million it paid to Magnus, another agency.

“Contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money,” Mr. Martin’s report said.

The report was particularly critical of the Vitalité Health Network, which manages the province’s francophone public medical services.

Vitalité has said it needed to contract private agencies because of pandemic-related staff shortage but the auditors found that the network’s “travel nurse spend did not correlate with staff absences due to Covid-19.”

Vitalité has also said that it retained CHL because the agency was able to supply bilingual nurses. In fact, the audit found that while CHL accounted for more than 80 per cent of Vitalité’s spending on travel nurses, the ability to speak French was only required at two facilities and “there were concerns with the level of French language services provided.”

As reported by The Globe, there were significant disparities in the rates charged by agencies. The audit corroborated The Globe’s calculations that CHL billed the equivalent of $306 an hour for the services of a nurse, two to three times what other agencies charged. “CHL’s costing model was significantly more expensive,” the report said.

The report also noted that Vitalité did not have lawyers review any of the contracts it signed, and that the CHL agreements included features such as an auto-renewal clause and the agency having the right to deploy a minimum number of staff teams, regardless of the actual need.

CHL invoices were based on 12-hour shifts but the report said that “we found instances where Vitalité paid over $18,000 for a bundle with some staff not working 12 hours and some worked as few as 3.5 hours.”

The Globe investigation found that CHL invoiced Vitalité for meal allowances for its personnel, even though the company told the nurses that it sent to New Brunswick that they had to pay for their own food. Mr. Martin’s review echoed that finding. The audit looked at a sample of 64 invoices and found that $281,640 were paid “without adequate support … Meal allowances were often paid for double or triple what the support provided would have allowed for.”

The report also looked at the fact that the CHL contracts allowed the agency to charge for the rental of vehicles from a firm called Canadian EV Labs, which actually had the agency’s CEO, Bill Hennessey, as its sole director.

Vitalité paid Canadian EV Labs $184 to $345 per day even though the New Brunswick government had negotiated daily rates with rental car companies ranging between $62.66 and $82.66, the audit found.

Among the Canadian EV Labs invoices reviewed by the audit was one for $11,305 “without support or description of the purpose or employee name” and another bill to rent 43 cars at a cost of $63,910 for one week.

While Vitalité has said that hiring travel nurses is a short-term solution to an emergency, the network “had not developed a comprehensive formalized travel nurse reduction plan and had not yet planned to do a review of the use of travel nurses for lessons learned,” Mr. Martin’s report said.

Mr. Martin’s audit also looked at $2.7-million that CHL invoiced the Department of Social Development to provide nurses to long-term care facilities.

Nearly half of CHL’s travel-related invoices were not properly supported, the report said. This included items such as accommodations and flights paid without receipts or documentation, a hotel room billed twice, hotel rooms booked for the same person at different hotels for the same dates, two flights invoiced and paid from Halifax to Newfoundland with no evidence of having worked in New Brunswick and $6,405 in gift cards.