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Audit gives Ontario Health Ministry failing grade for oversight of Ornge

Rescue workers on the scene of a derailed Via train in Burlington, Ont., help an injured passenger onto an ORNGE helicopter on Feb. 26, 2012.

Glenn Lowson For The Globe and Mail/glenn lowson The Globe and Mail

The Auditor-General of Ontario is expected to sharply rebuke the Ministry of Health for failing to use its powers to oversee the province's troubled air-ambulance service, Ornge.

These criticisms are outlined in draft copies of an audit of Ornge's operations that Auditor-General Jim McCarter is expected to release within the next two weeks. The draft reports have been shared with a number of government officials and professionals, but there is no guarantee that the criticisms will be included in the final report.

According to people familiar with the audit, the Ministry of Health is faulted for ignoring numerous complaints and warnings about operational problems, patient care and financial practices.

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The ministry has the power under the terms of a 2005 performance agreement to investigate Ornge's facilities and examine its books and records, but, according to sources, these supervisory powers were never exercised. Since it was launched, Ornge has operated under three different ministers – George Smitherman, David Caplan and current Health Minister Deb Matthews.

"There were huge red flags here," said one person familiar with the audit. "Something happened here and the system didn't kick in properly."

Ms. Matthews said in a statement on Friday that it would be "completely inappropriate" to comment on the auditor's report before it is released. But she said the performance agreement did not contain provisions to stop changes Ornge had made to its corporate structure. She said a new agreement she plans to introduce will give the ministry increased inspection powers.

"We're changing this performance agreement to make sure this doesn't happen again," she said.

Revelations about Ornge's lavish salaries and an unusual network of for-profit affiliates have triggered a police investigation, the departure of the service's directors and half a dozen senior executives, including founding chief executive officer Chris Mazza. At the heart of the scandal is the web of for-profit companies, outlined by Ornge to the ministry last year, that compensated Ornge officers and financed new ventures.

The Ornge controversy marks the second time in recent years that the McGuinty government has been rocked by scandal. Mr. Caplan resigned in 2009 following revelations of lavish spending on untendered contracts at eHealth, the province's electronic health records unit. A report by Mr. McCarter faulted the ministry for poor oversight of the division.

Since it was created in 2005, Ornge has operated as an unusual appendage of the Ontario government, one whose unique legal status as a corporation without share capital shielded it from the scrutiny of the legislature. Ornge was initially incorporated as a federal company, but then further complicated its status by transforming itself into a charitable organization. Unlike hundreds of other government-funded entities in Ontario, officials at Ornge were not required to answer questions about the service's activities before the legislature's public accounts committee.

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"They essentially insulated this outfit from any of the checks and balances that the public would ordinarily expect in a parliamentary democracy," said one person familiar with the rules governing these entities.

Complaints about Ornge's operations appear to have gone mostly unheeded at the ministry. Some Ontario hospitals began complaining as early as 2006 that they were required to lend medical staff to Ornge because its aircraft often arrived without sufficient paramedical staff.

The service was also faulted for response delays. The Ontario Air Transport Association wrote to Ms. Matthews last May calling for a review of Ornge because of concerns that long waits for air transport were compromising patient care.

There were other troubling signs inside Ornge. According to a number of former and current employees, staff departures were unusually high because Dr. Mazza, a former emergency room doctor, frequently opposed staff and, in some cases, directors who challenged his decisions.

Insiders said the company did not conduct exit interviews when employees left and it had no policy in place to allow whistleblowers to register concerns. At least one former employee did complain to the ministry about accounting practices at Ornge in 2008, but after the employee was interviewed by government officials, the matter was dropped.

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About the Author

Karen Howlett is a national reporter based in Toronto. She returned to the newsroom in 2013 after covering Ontario politics at The Globe’s Queen’s Park bureau for seven years. Prior to that, she worked in the paper’s Vancouver bureau and in The Report on Business, where she covered a variety of beats, including financial services and securities regulation. More

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