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The McGill University Health Centre offices in Montreal, where members of Quebec's anti-corruption squad conducted a raid at the premises. (Graham Hughes/The Canadian Press)

The McGill University Health Centre offices in Montreal, where members of Quebec's anti-corruption squad conducted a raid at the premises.

(Graham Hughes/The Canadian Press)

Montreal health centre given an overseer as deficit continues to spiral Add to ...

Alarmed by the deficit at McGill University’s Health Centre, which has spiraled out of control, the Quebec government has named an overseer to chaperon the province’s second biggest heath establishment, a move one step short of trusteeship.

The MUHC’s deficit could reach an eye-popping $115-million in the 2012-2013 fiscal year, a forecast described as “realistic” by the committee which investigated the health center’s finances at the request of the Quebec department of Health and Social Services. Roughly half of this deficit, or $61-million, is recurring in nature.

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“This is a major loss of control,” said Michel Fontaine, a deputy minister at the Health and Social Services department, before adding that the rapid deterioration of MUHC’s finances is unprecedented.

The MUHC paid close to 900,000 hours in questionable and unauthorized overtime since 2009, according to the findings of the committee headed by Dr. Michel Baron, also made of three accounting specialists. The overtime cannot be accounted for by increased surgical activities or additional care. On the contrary, the MUHC is underperforming other hospitals in Quebec by a significant margin.

The health center also concluded a number of unapproved real estate transactions through “hazardous processes” to avoid scrutiny. One specific transaction between a MUHC affiliate and the owner a building located at 1750, Cedar Avenue could alone lead to losses in the range of $40-million, according to the investigating committee. Figureheads and related parties were involved in this long-term lease.

The Baron committee wants the Quebec government’s real estate arm, the Société Immobilière du Québec, to review this and other real estate transactions. Should they find irregularities, it does not exclude apolice investigation.

The work done by Dr. Baron and his committee is unrelated to the construction of the new Glen campus super hospital. This $1.3-billion contract was awarded to a consortium lead by SNC-Lavalin. In November, police arrested the former president of the Montreal engineering firm, Pierre Duhaime, which stands accused of fraud, conspiracy and forgery in relation to this project.

The MUHC was so taken by the relocation of its hospitals that it lost sight of day-to-day management, Mr. Fontaine said by way of explanation.

The Baron investigation is a damning indictment of the MUCH’s former general manager, Dr. Arthur Porter, and of the health center’s board of directors, which was extensively overhauled at the beginning of last year.

The MUHC’s new overseer is Michel Bureau, a former dean of medicine at the University of Sherbrooke with a long experience in the administration of Quebec’s health network. Mr. Bureau will check in with management every two weeks and with the board every month.

If there is no improvement in the MUHC’s finances by June, the government intends to take further action. For the time being, however, it has no plans to sanction the MUHC’s management current or former management.

Follow on Twitter: @S_Cousineau

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