One of the Penticton Indian Band’s largest business interests, Westhills Aggregates, shows more than $880,000 in overstated income, according to a recent financial audit report.

Conducted by K’uL Group (formerly Penticton Indian Band Development Corporation), which manages the business interest of the Penticton Indian Band, the report states it has uncovered financial errors, poor accounting procedures and “shoddy” management practices at the construction sand, gravel services and excavation company.

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“Westhills Aggregates has an excellent group of dedicated employees who take a lot of pride in working in the business. Employees possess a good range of knowledge and are committed to doing a good job for the company. However, there was a lack of leadership, direction and communication as the team felt disconnected from Westhills management,” reads the report signed off by Jonathan Baynes, chief executive officer for K’uL Management Group.

Baynes told the Western News that the report comes at a time when chief and council want to provide more transparency which the band members have been calling for.

“This is the first year, ever, that the companies have been properly audited. Historically they have been part of a review with the PIB, so it gave us a look at our financial statements and we put it into the report or whatever,” said Baynes.

The report, undertaken by Westhills interim general manager Andre Chevigny and a technical advisory team comprised of industry specialists from Lake Excavating and Ecora Engineering, also uncovered practices that put workers at risk, reduced the service life of equipment and threaten the capacity of Westhills’ non-renewable pit resource.

“The review determined no safety training or programming was in place. This puts employees and company at extreme risk. Most recently, on March 12, a Westhills employee was injured when an excavator hit an electrical line at a Skaha Hills job site,” said Baynes in his report.

Conservation of the non-renewable pit resource was also improperly managed, according to the report. Untested and uncompacted waste material was dumped into a hole to generate $220,000 in short-term profit while impacting about 10 acres of future development land that has a value of more than $3 million.

Poor accounting practices include improper and missing invoices, poor account reconciliation procedures for credit and debit card transactions and other error showing accounts paid by customers are still owing. The report said the results is $887,000 in overstated profit for the 2018 fiscal year.

It was reported that one subcontractor was invoicing Westhills $29,000 each month and after a proper mechanical dispatch program was instituted costs dropped to $16,000 a month with no impact on productivity.

In Westhills’ civil division, unresolved job deficiencies resulted in almost $400,000 in unrecovered deposits. Baynes said Westhills is now following up to close these jobs and collect the funds.

Moving forward, Baynes said key measures have been put in action over the past four weeks including implementing safety meetings, the hiring process for an Occupation Health and Safety representative, reducing maintenance costs, focus on employee morale, development of a long-term business plan and pit management plan and reviewing financial controls. The report also states that the general manager has met with all of their largest customers and secured an increased commitment to purchasing products from Westhills Aggregates.

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