Confusion over how $500K in provincial funding was supposed to be spent, says P.E.I. non-profit

The P.E.I. Alliance for Mental Well-Being is defending its decision to spend a top-up to its government-funded budget internally, rather than giving it out in community grants.

The alliance was created in 2021 and put in charge of distributing roughly $2 million a year in government grants to community organizations.

P.E.I.'s auditor general issued a report looking into the alliance's finances last July. The report says $500,000 in additional funding awarded in March 2023 didn't go out in grants. The report also stated it wasn't specified in the alliance's agreement with the provincial government where the money should go.

That's why it was spent on operational expenses, said Nancy Anderson, the alliance's executive director, who spoke in front of the province's public accounts committee Tuesday.

"When the contract came out... the way that it was termed, it led us to believe that it was for operational [purposes] so that we could expand on the research and knowledge mobilization pillar. And it allowed us to move in that direction and to work with researchers from various locations such as UPEI," Anderson told the committee.

She said the money is also going toward outreach events to help the alliance connect with other organizations and people in the community.

During the meeting, Liberal MLA Gord McNeilly said the auditor general's report notes that the request for additional funds was needed to respond to a high volume of applications for funding. 

The alliance launched with an annual operating budget of $1 million. Money for staff salaries and other operational expenses account for about 14 per cent of the budget, Anderson said. 

The auditor general's report also highlighted a lack of paperwork detailing why some funding applications were accepted and others were turned down, and said the process of handing out grants wasn't always uniform.

The alliance has improved that process, Anderson said.

Applicants can now apply for funding through an online grant portal. After adjudication, the alliance will conduct followup calls if the applicant wasn't successful. Then the applicant can work with staff to improve their application in hopes of landing funding in the future, Anderson said.

Conflict of interest concerns

There were also concerns in the auditor general's report about conflicts of interest, including cases where the AG said board members should have declared conflicts but none were documented.

In one case, the report said a grant was awarded to an organization of which a member of the alliance's board was a founder but no longer an active volunteer.

"Our board has the process in place to declare should there be a perceived conflict of interest, and we feel that that process is robust and is sufficient," Anderson said.

However, the alliance has not enacted all of the AG's recommendations around its conflict of interest declarations, including one that board members file annual disclosures outlining their private interests.

Anderson said she worried asking for personal financial information as part of conflict of interest protocols might deter qualified professionals from becoming part of the alliance.

"We are a non-profit organization," she said. "There are over 1,000 non-profit organizations on P.E.I. It's a much larger issue of trying to attract volunteer board members and the difficulty that would pose if all of a sudden every board member had to disclose all their financial interests."

Jon Horrelt, chair of the board of directors for the alliance, told MLAs he was worried if board members had to disclose personal financial information then other non-governmental organizations might come under the same scrutiny.

However, Green MLA Matt MacFarlane said he doesn't see it that way.

"I don't necessarily agree that precedent would be set in this particular instance given I see a pretty clear distinction between what the mandate is of the alliance in handing out public funding versus the mandate of a health charity like the kidney foundation for example," MacFarlane said, adding that all funds that go to the alliance are public dollars.

"I'm not advocating that all those organizations be subject [to] those disclosure rules, but this one I would see a distinction for where there could be merit in that additional layer."

MacFarlane wondered why the provincial government can't just give grants out itself rather than filtering the money through the alliance.