Unusable masks, catered meals, redone renos: B.C. health minister orders review of PHSA spending

British Columbia's health minister has ordered an immediate review of alleged misspending by the Provincial Health Services Authority (PHSA) during the COVID-19 crisis.

The order comes after CBC News brought forward concerns raised by multiple sources with intimate knowledge of operations within the PHSA, which is charged with ensuring access to a provincial network of health-care services.

The whistleblowers accuse B.C.'s central health authority of squandering $7 million on the purchase of unusable face masks from China; hundreds of thousands of dollars on unnecessary renovations to its executive offices; and tens of thousands of dollars on high-end catered meals for executives and their staff.

Insiders say the costs were racked up despite Ministry of Health orders to end discretionary spending and direct every dollar to front-line workers fighting the pandemic.

"I was shocked and felt it was simply unconscionable," said one source.

CBC News has agreed to protect the informants' identities because they fear professional repercussions.

"As a taxpayer, it makes me sick. It's wasteful," said a second insider.

Health Minister Adrian Dix moved quickly after being shown their concerns.

"I appreciate these allegations being raised to me," Dix said in a statement to CBC News. "I have directed the deputy minister of health to assess PHSA's decisions and conduct ... and provide advice and recommendations to me." 

New president, new spending

The whistleblowers claim the misspending started shortly after Feb. 3, when the PHSA board hired a new president and CEO from Montreal, Benoit Morin.

Morin is paid $352,000 a year, and his accommodation and a car are provided — part of his relocation package.

Both the PHSA and Morin declined to be interviewed, stating the minister has responded on their behalf.

Dix's written announcement of a review includes the health authority's submitted response to him — confirming some allegations while denying others.

The health minister indicated the PHSA's answers will be scrutinized.

$7M worth of masks deemed unusable

The most costly mistake by the PHSA was the purchase of unusable face masks in the early days of the COVID-19 pandemic.

The health authority, in its response to Dix, confirms that Morin personally sought a supplier in his home province of Quebec "early in the pandemic."

Of $11.5 million paid to the supplier, almost $7 million worth of masks brought in from China were deemed "problematic" and unusable in the health sector.

Sources said many were KN95 masks (Chinese standard) instead of N95 (North American standard) and failed fit tests, while other masks were deemed to be counterfeit.

The PHSA admits it eventually wrote off $6.7 million of the cost at the end of March but said nothing of potential additional losses carried into this fiscal year.

Insiders said the mistake was kept from the public.

By comparison, the federal government admitted it had purchased unusable face masks through a Montreal supplier back in May. It publicly vowed it would not pay for the shipments.

It's not known if B.C. used the same Montreal-based middleman.

The PHSA said it decided not to pursue court action against the supplier because "the cost ... would have outweighed any potential return."

The health authority said that since the face mask fiasco, the Ministry of Health has toughened ordering procedures, "ensuring due diligence is undertaken before a final purchase is made."

Redone renos to executive offices

Sources also criticize renovations that were torn up to accommodate more renos.

After more than $17 million had already been spent on renovations to the health authority's new Vancouver headquarters at 1333 West Broadway, the PHSA admits that changes were ordered to the 14th floor.

It says the total cost of the "re-renovations," which are ongoing, is almost $400,000, including nearly $60,000 on "technology upgrades."

Whistleblowers allege that the changes were made to give Morin a better view of downtown Vancouver and the North Shore mountains.

But the PHSA "refutes that the CEO's office was moved to improve the view. The new CEO office is smaller and incorporates a previously existing meeting room, enabling more privacy."

It also says the renovations created additional office space, Zoom-enabled facilities and a reception area to "improve security on the floor."

Critics say that's spin — and whatever the reasons, the money could have been much better spent.

"At the height of a pandemic, spending $400,000 on a re-reno versus putting that money toward ... MRI or CT scanners or ventilators, it's just inexcusable," one whistleblower said.

The PHSA said the money came out of its internal capital budget.

Catered avocado toast and steak nicoise salads

Insiders also take issue with catered meals provided at PHSA headquarters, well past the onset of the COVID-19 pandemic.

Staff say they observed breakfast and lunch being brought in for a total of 18 executives and their assistants virtually every workday until about May. This was reduced to just lunches that continued into June, even after local restaurants reopened.

The PHSA confirmed the numbers and dates.

Breakfasts reportedly included avocado toast with lemon ricotta berry crêpes. Lunches featured steak and salmon nicoise salads and sparkling water.

Sources estimate the total cost to taxpayers was between $30,000 and $40,000. At the same time, many front-line health-care workers were putting in 12-hour days, often without adequate meal breaks.

"What bothered me the most was seeing the people paid the least suffering the most," one source said. "And the people paid the most got the most."

The PHSA insists its executives were working around the clock, holding meetings at all hours, and were trying to keep "their bubbles small."

Insiders insist that only happened in the early weeks of the pandemic.

Dix, B.C.'s health minister, said one aspect of his review will be to "assess the policies, guidance and spending directives ... [for] catered meals." 

'Cost-effective' goals at odds with alleged spending

With a $3.7 billion annual budget, the PHSA co-ordinates services with B.C.'s regional health authorities, sets provincewide health standards and runs the B.C. Ambulance Service, among other responsibilities.

Its website states that it's "driven to ... be cost-effective."

But insiders said key senior executives who once oversaw spending at the health authority no longer have their jobs.

They include the chief internal auditor, the chief financial officer and the executive vice-president of commercial services and procurement.

In addition, the PHSA's veteran chief operating officer has revealed he's retiring.

Sources say all four executives had raised concerns about spending prior to their departures being announced.

"No one will speak up internally anymore," one insider said. "We've all seen what's happened to some of our most respected leaders who've already tried."

The health authority says its board hired a new CEO to lead organizational change — and the resulting changes to the senior leadership team were supported by the PHSA board.

Whistleblowers want more extensive probe

While the whistleblowers who spoke to CBC News welcome the review of spending ordered by B.C's health minister, they want a deeper investigation.

"The ministry needs to investigate how something like this could have happened and why a number of warning signals were missed or ignored," one source said.

Yet another insider wants B.C.'s auditor general to look into the spending decisions.

"These are public funds, and our health-care providers and their patients should be a priority — especially during a pandemic," the insider said. "This is irresponsible ... and it needs to stop."

As for the PHSA's justifications provided to the health minister, one whistleblower doesn't mince words: "I think B.C. taxpayers are smart enough to see through all that — they can tell when someone is trying to put lipstick on a pig."