The Caisse de depot et placement du Quebec must strengthen its practices in the fight against corruption and conflicts of interest, said the province's auditor general Guylaine Leclerc.
The Caisse and its subsidiaries have supervisory procedures in place, but "certain elements still need to be improved," wrote Leclerc in a report made public Wednesday.
In addition, "key steps in the investment process have not always been carried out in compliance with applicable policies and directives," she said.
By investing more in private markets (companies that are not listed on the stock exchange) and in international markets in order to have a more diversified portfolio, the Caisse's strategy generates more risks in terms of conflict of interest, fraud and corruption, the auditor explained.
The Caisse must therefore ensure that its practices are "exemplary".
The report says that the Caisse does not have a policy or guidelines related to money laundering. The auditor found that the institution's internal policies were not consistent. The auditor also found that the reporting requirements are "unclear".
The auditor's office found in an analysis of some cases that some steps in the investment process were not followed.
In a sample of seven investments, a cash outflow of tens of millions of dollars was made before approval was obtained, and "there was no mention of this in the documentation presented to the approving committee."
The report notes that an unidentified manager of the fund was involved in discussions about an investment in which he had a conflict of interest.
The situation highlights the fact that the measures in place were not sufficient to ensure that a manager became aware of the conflict of interest at the appropriate time.
-- This report by The Canadian Press was first published in French on March 16, 2022.
