Statement from Health PEI Board Chair Diane Griffin and Health PEI CEO Melanie Fraser on their Responds to Auditor General’s Findings on Executive Compensation

Health PEI acknowledges and accepts the findings of the recent audit conducted by the Office of the Auditor General on executive leadership compensation. We accept all the recommendations, which are being implemented right now, with an expected completion date of December 31, 2024.

This audit examined employment practices for Health PEI's executive leadership team between January 22, 2021 and December 31, 2023, revealing a failure to follow standard procedures and established controls for classification and compensation. 

In February 2024, as part of their annual financial audit, the Auditor General’s Office noted an unusually high executive salary increase of 25% from the previous year. As a result, they initiated a formal engagement in March 2024. This increase was the result of new executive employment contracts signed between the CEO and Health PEI Executive Leadership Team (ELT) members from May to October 2023. The contracts were offered without approval of the Health PEI Board, the Department of Health & Wellness or Treasury Board (TB). At the same time, compliance reports due to the Board on the proper use of relevant policies were not submitted. 

The Public Service Commission (PSC) and TB have established policies and processes for classification and compensation of executives within Crown corporations. At Health PEI, controls are in place to ensure compliance with these directives, managed under the stewardship of the responsible executives -- professionals with responsibility in policy and control management within their areas of expertise, as noted in the auditor’s report.

The findings of the Auditor General presented to Health PEI showed contracts were offered at salaries above approved salary ranges as set by the PSC. The salaries were inconsistent with existing classifications and in some cases positions had no classification. The auditor findings also showed the contracts were issued without regard for the policies that govern them, without documentation and the appropriate approvals through known controls.  

The new leadership of Health PEI was informed of the audit on March 15, 2024, and work began immediately to support the Auditor’s field work. The Board and Deputy Minister of Health and Wellness were then informed, and Health PEI immediately engaged with PSC and TB to begin correcting the early issues being flagged by the Auditor General.

Health PEI has taken immediate steps to rectify the classification and compensation structures, working in close collaboration with PSC and TB. Additionally, under the oversight of Health PEI’s Board and the Department of Health and Wellness, we are enhancing our accountability, training and awareness programs to reinforce understanding of these policies at all levels.

While multiple levels of controls were in place, the Auditor found that the specific individuals accountable for their stewardship did not follow the protocols. Despite this, due to our control mechanisms, the issue was identified within the audit cycle, investigated, and addressed in partnership with the Auditor General’s Office. 

As part of our commitment to transparency and out of an abundance of caution, we are referring this matter under the established protocols for Treasury Board’s Section 21 Fraud Awareness and Reporting policy, to have the matter reviewed by the Deputy Attorney General.

We are committed to working in partnership with the Auditor General, PSC, Department of Health and Wellness, and TB to align with legislation and policy governing our work. In reviewing this matter, Health PEI noted other concerns and has sought the advice and support of the Auditor General in investigating these matters. Further information will be shared when the auditor completes their field work.  We are committed to report on the steps we are taking to fulfill our commitments and build trust with the communities we serve.

We acknowledge the impact on trust in our organization due to the actions of a few who were responsible for creating and offering executive contracts. We want to emphasize this should in no way reflect on the executives who signed contracts in good faith with their employer and the invaluable work being carried out by our dedicated team across the province. Every day, Health PEI staff and leaders work hard to support the health and well-being of the people of Prince Edward Island. Their commitment to providing compassionate, quality care and improving the lives of our communities remains unwavering.

Our entire team must be driven by a deep sense of purpose, integrity, and responsibility to those we serve. As we move forward, we are focused not only on addressing the issues raised but also on reinforcing a culture that values transparency, accountability, and service. Together, we are committed to ensuring that every action and decision reflects our dedication to the public good and strengthens the trust upon which our organization is built.

Media contact:
Autumn Tremere
Department of Health and Wellness 
agtremere@gov.pe.ca