The Canada Revenue Agency has denied or adjusted $458 million in funds disbursed to employers through a pandemic-era wage subsidy program as a result of a partially completed auditing process.

The agency is releasing a report Monday that offers detailed findings of its audits of the Canada Emergency Wage Subsidy Program. The bulk of the findings cover the period ending March 31, but the report also offers more up-to-date figures as of Sept. 29.

The CEWS program subsidized businesses staff wages by 75 per cent in hopes of encouraging companies to hold on to their employees during the COVID-19 pandemic, as governments enacted shutdowns.

Overall, the program disbursed about $100 billion in wage subsidies.

A report from auditor general Karen Hogan last year warned that thousands of businesses that received wage subsidies may not have been eligible for the program, after finding their GST and HST filings didnt show a sufficient drop in revenue to qualify.

Mondays report finds the majority of employers that received the subsidy were highly compliant. Most claim adjustments were related to calculation errors and lack of documentation, rather than ineligibility.

Out of the $5.53 billion worth of audits completed by the end of March, $325 million in claims were reduced or denied.

And the audits that overlapped with claims flagged by the auditor general found $134.5 million that needed to be adjusted or rejected. The report says insufficient revenue decline accounted for 14 per cent of those adjustments.

The total claims adjusted or denied rose to $458 million by the end of September.

Our reading of the results is they show a high level of compliance overall by the majority of employers who applied and received the wage subsidy, including those who were identified by the auditor general, Cathy Hawara, the assistant commissioner of the compliance branch at the Canada Revenue Agency, said in an interview.

The agency, however, did find significant problems with claimants who used a third party to prepare their applications, with 85 per cent of audits for such claims resulting in funding being reduced or denied.

The CRA says some aggressive non-compliance has been found in cases in which claimants are suspected of using intermediaries who knowingly facilitated the production of inaccurate or wilfully non-compliant claims.

The report says the vast majority of these cases were linked to small businesses with 25 or fewer employees.

It should be noted that although this report focused on CEWS results to date, many of these preparer-linked claimants also applied for the Canada Emergency Rent Subsidy ... which have been identified for review, the report said.

The CRA says it has already applied more than $15 million in penalties in relation to these files as of the end of September.

Hawara said that while intermediaries like accountants are often an important part of the tax system, the agency conducts audits specifically targeted at weeding out third-party preparers who may be skirting the law.

Were satisfied with what were seeing in terms of both the overall level of compliance by the vast majority of employers, but also, we believe weve identified the right risks. And were tackling them now, Hawara said.

The agency says the audits have resulted in some cases being referred to its criminal investigations program as well.

The CRAs audit of the program is ongoing and is expected to continue until at least 2025.