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Our latest response

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April 2nd, 2024

Shelley Spence, CPA, CA, LPA
Office of the Auditor General of Ontario
20 Dundas St W #1530, Toronto, ON M5G 2C2

Subject: Response to your letter regarding our request for a public audit

Dear Auditor General Shelley Spence, CPA, CA, LPA:

Thank you for your letter regarding our request for a public audit of the financial management and decision-making processes at Haliburton Highlands Health Services (HHHS), as well as funding delays, before the closure of Minden’s emergency department in 2023. We value your commitment to accountability and transparency within Ontario’s public sector.

We respectfully request that you and your team reconsider our request for a public audit and join us in conversation. This is for two reasons: first, we have identified critical material errors and inconsistencies in the 2023 Annual Report Value-for-Money-Audit: Emergency Departments; second, many events have occurred since our original submission in November 2023, including:

  • We audited every Ontario hospital financial statement for FY22 and FY23 and calculated deficits and total funding, including year-over-year changes in dollars and percentages. The information is available in multiple formats on our website.
    • Our analysis revealed 102 hospitals were in deficit in FY23, a stark increase from 33 in FY22 (209%). The average deficit rose by 992% (-$545k to -$5.9M), and the total deficit increased by 3300% (from -$17.9M to -$610M).
    • One hospital system, Mackenzie Health, posted a $93 million surplus, higher than every hospital with a surplus combined (29 others). The second-highest surplus was $14 million.
      • Mackenzie Health’s $93 million surplus in FY23 would have paid off 67 hospitals’ deficits.
      • Mackenzie Health had a $32 million surplus the year prior and received a 24% year-over-year total funding increase – amounting to a $132 million increase from FY22 ($550,828,000) to FY23 ($682,991,000).
    • FY24 is projected to be far worse than FY23. Five hospitals have publicly stated their FY24 projections, enabling us to compare them to their prior years:
      • FY22: 15.5M surplus
      • FY23: -38.3M deficit (347% increase in deficit)
      • FY24: -145.8M deficit (280% increase in deficit)
  • Public statements by HHHS’ CEO Veronica Nelson, beginning shortly after Minden ER was permanently closed, now blame insufficient structural base funding for operational challenges. These funding struggles were not disclosed during the Minden ED closure process mere months prior.
  • HHHS faces imminent bankruptcy without significant funding support from the Ministry of Health, having nearly maxed out its line of credit and, as per board minutes, choosing to keep Haliburton Hospital’s doors open and accumulate deficit rather than close.
  • The Ontario Ombudsman deemed a critical meeting between HHHS and Haliburton County a week after the closure announcement – on April 27th, 2023, illegal. This was the meeting that discussed the closure rationale.
  • The public does not know which board members voted, when the vote occurred, or the business case/evidence behind the closure. A citizen filed an FOI seeking such information – the Ministry of Health had no records related to the closure and directed the citizen to HHHS, who ultimately redacted/rejected the request.
  • HHHS’ CEO Veronica Nelson acknowledged taking “drastic measures” regarding HR practices following public outcry. The public had been raising concerns about nurses applying at HHHS and never hearing back—some applying multiple times ahead of Minden ED’s permanent closure. The CEO’s drastic measures led to 30 new staff being hired after Minden ED was permanently closed.
  • HHHS asked Haliburton County to put up $1M for its CT Scanner at the Haliburton site in exchange for a seat on its board.
    • The County now has a seat on HHHS’ board.

Closure vs Consolidation

Our team notes your team’s reference to the closure of Minden ED in both your Value-for-Money Audit: Emergency Departments and your response letter to us, which differs significantly from the consolidation narrative often presented by the Ministry of Health and Haliburton Highlands Health Services (HHHS).

From page 12 of Value-for-Money Audit: Emergency Departments

Furthermore, we met with staff from the following hospitals to discuss specific initiatives and/or challenges faced in delivering emergency department care:

  • Haliburton Highlands Health Services regarding their staffing challenges, use of the Emergency Department Locum Program and the permanent closure of their Minden Hospital emergency department on June 1st, 2023;

Your use of the term closure in both your Value-for-Money-Audit: Emergency Departments and your response letter to us aligns with our stance along with the accounts of HHHS’ former board chairs, Minden ED physicians, the Ontario Ombudsman, world-renowned healthcare experts, elected officials across multiple levels, and the overwhelming majority of the general public. This underscores the severity and permanence of deeming the closure a closure vs. referring to it as a consolidation.

This distinction is critical in terms of the Multi-Sector Service Accountability Agreement (MSAA) and the expectations of the Ministry of Health (MOH). Under the MSAA, a closure implies a complete shutdown of a service and could constitute a breach of the agreement, whereas consolidation suggests a reorganization or merger of services. Deputy Premier Jones deemed the consolidation of Minden ER to be a unilateral decision. Such a decision could not be made unilaterally (without MOH approval) if the event were deemed a closure.

Section 4.1.2 of Value-for-Money Audit: Emergency Departments

There is a significant discrepancy in section 4.1.2 of the Value-for-Money Audit: Emergency Departments. The audit report indicates substantial utilization of the Health Force Ontario Locum Program by HHHS at its Haliburton and Minden sites, citing approximately 4,000 hours of use in 2020 and 2023. However, Minden ED did not utilize the locum program for physicians until April 2023, which falls under the following fiscal year (FY24).

From page 15 of Value-for-Money-Audit: Emergency Departments

“For example, as noted in Figure 7, Haliburton Highlands Health Services (HHHS) has been significantly reliant on the Locum Program to operate its emergency departments at its two sites (Haliburton and Minden). In the last five years, the Locum Program provided HHHS with approximately 11,500 hours of physician coverage, including almost 4,000 hours in 2019/20 and 2022/23.”

What further concerns us is that our public audit request specifically and intentionally included the May 11th, 2023, letter written by Minden ED’s Dr. Dennis Fiddler because it clearly stated vital information — such as that Minden did not use the locum program for physicians until April 2023. We are not sure how this incredibly significant detail was overlooked in your investigation of Emergency Departments, your conversations with HHHS leadership, and your review of our request for a public audit (which, as stated above, included this detail).

The Value-for-Money Audit: Emergency Departments oversights regarding locum program usage — incorrectly suggesting Haliburton and Minden used the locum program in equal amounts and wrongly assigning FY24 locum program usage to FY23 — raise serious concerns. These errors lead us to question the factual accuracy of the investigation and your subsequent response letter.

Oversights such as incorrectly attributing locum program usage also cast an unwarranted narrative regarding the operational challenges at Minden ED. Moreover, publicly reporting and subsequently referencing false information is an error that has significant implications because it suggests operational difficulties at Minden ED that are not supported by the actual use of the locum program, potentially misinforming any conclusions drawn about the necessity and rationale behind the closure of the Minden ED.

Given the gravity of this discrepancy and its implications, we urge your office to:

  • Reevaluate the data about Minden ED’s use of the locum program for physicians, ensuring that the correct fiscal years are represented and accurately reported. Consider expanding the network of people you talk to about this issue.
  • Consider the impact of this misrepresentation on the overall assessment of Minden ED’s operational challenges and the decision to close the facility.
  • Amend the Value-for-Money-Audit: Emergency Departments to reflect accurate data and provide a more factual basis for understanding the causative factors behind the closure of Minden ED.


The accuracy of public sector reporting, as mandated by the Auditor General Act, Public Sector Accounting Standards, Ontario Not-for-Profit Act (ONCA), and the Excellent Care for All Act (ECFAA), is essential to maintaining public trust. We sincerely believe the discrepancies in your Value-for-Money-Audit: Emergency Departments and your response letter require additional review and consideration.

As such, we propose a meeting to discuss our findings and additional concerns in detail, which we believe will be mutually beneficial. Such a discussion may provide a platform for a more comprehensive understanding of the events surrounding the permanent closure of Minden ER and their broader implications for public health and trust in Ontario.

Your dedication to the public interest is highly appreciated, and we look forward to the possibility of further discussions. Please note that we have included our original submission and your response letter in the appendices.

Thank you for your public service,

Minden Paper

Auditor General response

March 19th, 2024
Minden Paper

[names redacted]

Dear [names redacted],

Thank you for both your letters dated November 2023 and January 2024, and related correspondence, in which you requested my Office to conduct an audit of the financial management and decision-making processes of the Haliburton Highlands Health Services, as well as funding delays, prior to the closure of Minden’s emergency department in 2023.

I regret for the delay in responding to your earlier correspondence.  I can assure you that our Office values the information the public shares with us.

As you may be aware, our 2023 Annual Report included a report on Emergency Departments, highlighting issues with emergency department closures and systemic issues related to health human resources.  The Minden emergency department closure is discussed in section 4.1.2 of our report.  To address our audit findings, we have made a number of recommendations to the Ministry of Health, Ontario Health and hospitals.

As part of our normal audit processes, we conduct follow-up work to determine the status of implementation of our recommendations.  We will follow-up on the status of the recommendations made in our 2023 reports and publicly report the results of this work in 2025.

When selecting and planning our audits, we carefully consider all information at our disposal, including any information that has been sent to us by the public.  At present, all of our 2024 audits are underway; however, we will consider the issues you have raised when selecting future audit topics.

I appreciate the matters you have brought forward to our Office.


Shelley Spence
Auditor General

Our original submission

Note: We originally submitted this to the Acting Auditor General, who left office in December 2023. Auditor General Shelley Spence took office shortly after, and we re-submitted it in January 2024.

Shelley Spence, CPA, CA, LPA
Office of the Auditor General of Ontario
20 Dundas St W #1530
Toronto, ON M5G 2C2

Dear Auditor General Shelley Spence, CPA, CA, LPA:

Subject: Audit Request: CEO, Board and Ministry Financial Management and Decision-making Before, During, and After Minden Emergency Department’s (ED) Permanent Closure

We are writing to request an audit of the CEO, Board and Ministry financial management and decision-making processes at Haliburton Highlands Health Services (HHHS) prior to the abrupt and permanent closure of Minden’s Emergency Department (ED) – a successful public health institution and community linchpin for 30 years.

Enclosed are detailed financial charts for FY23 and unapproved net monies owed between HHHS and the Ministry of Health from FY17 to FY23, that indicate alarming trends and raise critical questions that we believe require your attention.

We feel it is important to understand the specific factors leading to HHHS’ $4 million deficit for FY23; the decision-making process and rationale for the permanent closure; and to assess whether measures could have been taken to avoid the loss.

Our team believes we now have a moral and ethical imperative to understand how these decisions affect the provision of essential healthcare services. We believe our request falls under your jurisdiction, considering the significant public dollars associated with the closure.

We believe this audit should focus on financial transparency, the accountability of decision-makers, and the impact of these decisions on public healthcare planning and provision, especially as it concerns vulnerable populations.

Key Areas of Concern

Decision details: Most stakeholders do not know when the decision was made or the details of the vote. A Freedom of Information (FOI) request seeking the business case and decision details was submitted; the business case was not included and the information sent was heavily redacted.

Reported Deficit Fluctuations: The enclosed charts show erratic deficit trends, with the reported deficit increasing from $220,000 to a staggering $4.1 million within a single fiscal year. We question the factors contributing to such fluctuations and the substantial discrepancy between the initial and audited financial statements.

Forecasting and Financial Oversight: HHHS inaccurately projected its FY23 Year End deficit by $1 million eight days beforehand. On March 23rd, 2023, the board projected a $3 million deficit for Year End (March 31st). At its AGM on June 22nd, HHHS reported a $4.1 million deficit for FY23 ending March 31, 2023.

Furthermore, the inability of HHHS to estimate additional monies, indicated in Note 21 of their financial statements, may be cause for concern about the integrity of financial management and reporting practices within HHHS and its ultimate oversight by the Ministry.

Strategies to Address Deficits: There is a concerning lack of information on what measures were taken to control the escalating deficits beyond repeatedly advocating with the Ministry to release approved funds and/or additional funds. This is evidenced and reflected repeatedly within HHHS’ board meeting minutes ahead of the closure and several years prior to it.

Of note:

  • Current HHHS board chair David O’Brien and former finance committee member Kelly Mitchell performed in ad hoc government relations assistance roles on behalf of HHHS beginning in 2018
  • HHHS’ board members initiated an advocacy effort (championed by then-chair Jan Walker) condemning Bill 124’s impact on staff and,
  • One month ahead of Minden ED’s closure, HHHS’ board meeting minutes specifically state that both financial and staffing pressures inform every decision they make; the minutes also state HHHS’ inability to retain staff due to higher wages elsewhere.

We urge your office to investigate whether appropriate actions were taken and the level of stakeholder engagement in HHHS’ planning and execution of strategies to address its deficit. Our team has identified different accounting and/or financial management practices across different healthcare systems in Ontario. We believe HHHS may have been able to mitigate its deficit and remain operational if it had adopted the best practices of other healthcare systems in Ontario.

FY 24 Budget Projections: It is imperative to ascertain whether HHHS projected continued deficits in the FY 24 budget and if these projections influenced the decision to close the ED. For instance, when did HHHS get access to FY24 budget vs. when was the decision made to close the ED?

Owed Monies and Financial Statements: The significant increase in monies owed to HHHS in FY21 and FY22, and the subsequent changes in FY23, warrant a detailed audit to understand the causative factors and their impact(s) on HHHS’s financial position.

Questions for Audit Investigation

  • Why did the monthly deficits reported by HHHS fluctuate so significantly?
  • What led to the unexpected rise in the deficit reported in the audited financial statements?
  • Why was there a lack of estimation for additional funds as indicated in Note 21 of the financial statements?
  • What steps were undertaken to mitigate the rising deficits, and were stakeholders involved in these discussions?
  • At what point in the fiscal timeline was the decision to close the Minden ED made, and were the fiscal projections for FY 24 considered in this decision?
  • What caused the substantial increase in monies owed to HHHS in FY21 and FY22, and why did this trend not affect the long-term care sector?
  • How are the monies owed recorded in the financial statements, and have there been any adjustments by the Ministry of Health?

These questions are crucial in understanding the fiscal management of HHHS and the factors leading to the closure of Minden ED. The patterns reflected in these charts and the subsequent permanent closure decision appear to be symptoms of deeper financial and operational malaise.

The closure of Minden ED stands to affect the well-being and health of our community profoundly, we implore your office to initiate an audit promptly. The findings of such an audit will be instrumental in restoring public trust and ensuring that similar incidents do not occur in other healthcare institutions across the province.

We thank you for your attention to this grave matter and stand ready to provide any further information required for your investigation.


[names redacted]

On behalf of Minden Paper