Kleefeld Rec Association Fraud Exceeds $100K

The Rural Municipality of Hanover has provided an update on the forensic audit involving the Kleefeld Recreation Association (KRA).

Back in 2017, an audit uncovered issues which could have left municipal funds exposed to fraudulent activities. This prompted Hanover last August to announce it would be taking over all aspects of the accounting functions of the KRA. Reeve Stan Toews said last August that there were also concerns raised regarding the winner of the annual Chili Cookoff Competition held at the Kleefeld Honey Festival. The winner happened to be the spouse of a Hanover councillor. Some of the concerns stemmed from Hanover providing grant money to the Festival and a perceived conflict of interest.

Then in September, about 40 people packed into the Kleefeld Recreation Centre to attend a meeting of the KRA. The board went over a long list of questions that had been pre-submitted by Kleefeld residents. There were questions such as why expenses are being approved without receipts and how much money board members receive as annual honorariums. There were also questions specific to the Kleefeld Honey Festival, including how much money is given to the winner of the Chili Cook Off and why Festival prizes are allowed to be won by the family of board members.

That same month, Toews announced they had taken a closer look at the 2018 books, only to find some disturbing documentation that did not line up. As a result, Hanover asked for a forensic audit to be conducted and suspended the Secretary-Treasurer from her duties.

Then in March, Hanover announced the RCMP had taken over the investigation.

And today, Hanover released the following statement:

"The Rural Municipality of Hanover has settled an insurance claim for $112,029 for losses and expenses as a result of the forensic audit of the Kleefeld Recreation Association. An investigation is continuing with the RCMP. Hanover has no further comments on the situation at this time."

This is a developing story and we will provide more details as we receive them.