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The Department of Health provided grant funding to the AIDS Outreach Community Harm Reduction Education Support Society (ARCHES) to operate a Supervised Consumption Site (SCS) in the City of Lethbridge. ARCHES received total grant funding of $18.3 million from September 2017 to August 2020.

In March 2020, upon concerns of potential expenditure irregularities at ARCHES, the department initiated an expenditure review. The review concluded the grant funds were unaccounted for and lacked appropriate documentation. This resulted in the department terminating its grant agreement with ARCHES.

Objective and Scope

The scope of this report is on the underlying grant processes at the Department of Health that awarded grants to ARCHES. This report does not cover any processes or controls at ARCHES.


Based on our examination of the processes, we found that the Department of Health:

  • did not maintain sufficient documentation to evidence that it adequately monitored grant reporting information received from ARCHES
  • did not ensure financial information was certified by ARCHES
  • has not fully assessed whether third-party assurance should be required in grant agreements

Improvements to these processes are necessary so that the department is able to ensure that grant funds are spent in accordance with grant conditions and that grant objectives have been achieved. As a result, we have recommended that the Department of Health improve its grant monitoring processes by:

  • improving its grant policy and procedures to ensure monitoring and evaluation requirements are followed and documented
  • establishing timelines for completing the grant evaluation checklist
  • assessing whether third-party assurance should be required on large-dollar-value or high-risk grants