AG Raises Concerns with Hotel Purchase For Healthcare Facility

AG Raises Concerns with Hotel Purchase For Healthcare Facility  

For release February 13 -- Government’s purchase and conversion of an unfinished hotel to a transitional care facility has resulted in project delays, cost increases, and reduced service capacity due to design limitations, reveals a new report by Nova Scotia’s Auditor General.

The Province spent $34.5 million for the Hogan Court hotel in an unusual purchasing arrangement with a developer and quickly approved a $15 million renovation budget without detailed cost estimates.

The process failed to include an adequate market assessment or a proper retrofit evaluation, and relied on an appraisal report which assumed the property was complete, says Auditor General Kim Adair.

“We certainly acknowledge significant challenges and pressures on our healthcare system. However, addressing such challenges should not promote a culture where expediency takes precedence over appropriate due diligence and value for money,” she says.

The Auditor General undertook the audit after several requests to report on the use of public funds for the acquisition and conversion of the property on Hogan Court in Bedford, scheduled to open later this year.

Government has placed a high priority on investing in healthcare services across the province. The 2023-24 budget included an estimated $6.5 billion in healthcare spending - nearly half of the province’s total budget - and its Capital Plan includes an investment of $532 million to advance healthcare projects.

“With such significant investment, it is imperative that projects follow proper due diligence and consider value for money,” she says.

The Auditor General’s report also includes a wider look into the Province’s transitional care facilities – a step-down level of care between hospital and home, or from one care setting to another – including the construction of a new facility in Bayers Lake.

The report finds that approximately $81 million in untendered contracts for the development of transitional care facilities were not in compliance with provincial procurement protocols.

To ensure greater transparency and to achieve value for money on future construction and renovation projects, the Auditor General makes six recommendations in the report, including establishing formal guidelines for approving the acquisition of land and existing buildings.

“The necessity of a real property acquisition policy, particularly those that govern both real estate and capital development, is illustrated in the findings throughout the audit.”

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