New premier in hot seat as leaked report outlines mismanagement at BC Housing provider

The BC Liberals accuse the NDP government of trying to bury a 2018 audit critical of the way social housing provider Atira and BC Housing managed funds meant to help some of the most vulnerable people. Rumina Daya reports.

A leaked report outlining extensive mismanagement within a well-known government-funded housing provider has forced B.C.’s new premier and his New Democrats into the hot seat.

The report by BDO Canada LLP claims the board of the Atira Women’s Resources Society (AWRS) has made decisions based on “incorrect, incomplete or misleading information,” applied “inconsistent accounting practices across the portfolio,” and operated on “assumptions that BC Housing will cover any overages” to its budget.

BC Housing and Atira initiated the financial review and it was sent to the non-profit organization on Nov. 7, 2018. It was circulated Tuesday by the BC Liberals, who claim David Eby knew about the report when he was housing minister and buried it, while BC Housing continued to fund the group.

Eby told 980 CKNW’s The Jas Johal Show on Tuesday afternoon that he hasn’t seen the BDO review “to the best of (his) knowledge.”

“I’ll absolutely be engaged on that,” Eby said. “I think it’s critically important that as we expand housing and we work with the non-profit sector that British Columbians have confidence.

“That’s why we did a fairly major restructure at BC Housing to make sure that British Columbians can have confidence about the work that’s being done there.”

Speaking to reporters, BC Liberal Leader Kevin Falcon described “chaos and total mismanagement” at BC Housing, a Crown corporation that reports to the attorney general and the minister responsible for housing. Eby held that position from October 2020 to July of 2022.

“It makes for some pretty scary reading,” said Falcon, a former finance minister, of the 30-page report leaked by whistleblowers. “It’s not about how much money the government is spending or the announcements they’re making, it’s about what results we’re getting.”

The BC Liberals are calling for an independent and transparent audit of BC Housing and Atira.

Eby was not in Question Period Tuesday to respond to allegations of “incompetence” and “disarray” within BC Housing under his watch, and at a separate event, told Global News he did not have time for an interview.

He told The Jas Johal Show, however, that BC Housing was “quite a small organization” under the BC Liberals and “their governance needs to catch up.”

“We’ve got a great board that is delivering on that right now,” said Eby.

In Question Period, current Minister Responsible for Housing Murray Rankin told the BC Liberals there has been “great growth” and a “great deal to be proud of” within the Crown corporation over the past two years. He said the NDP government is tackling the housing crisis “head-on” and “entirely disagree(d) with the characterization” of mismanagement presented by Falcon.

“We acknowledge in this house that there is a housing crisis and that’s why this week, we released historic legislation — the Housing Supply Act — that will allow us to work with local governments to create the housing that is desperately needed in so many parts of this province,” Rankin said.

“We’re on target to spend $7 billion over 10 years in order to create new housing.”

Global News has reached out to BC Housing for comment.

Atira CEO Janice Abbott said she was not available for an interview Tuesday, but noted that the BDO review was reported on by The Globe and Mail and The Tyee earlier this year.

According to the BDO review, BC Housing had sought its help with the review as Atira suffered from a series of annual deficits as well as a pattern of late financial reporting and meetings about cash flow deficiencies. At the time, Atira had 22 buildings supporting various accommodations, with BC Housing as its primary funder.

The review included fiscal years dating back as far as March 2009. The BC Liberal government held the housing portfolio from 2001 to mid-2017, when John Horgan ousted Christy Clark as premier.

The review said financial mismanagement at Atira had led staff to look for ways to reduce the cash flow pressure, resulting in “other downstream consequences,” and made 11 recommendations to the board. Those recommendations included a clarification of the relationship and budget approval process between Atira and BC Housing, clarification of its procurement and purchasing process, improved tracking of commitments and payments, and a review of the competencies and capacities of key roles within its oversight, operations, finance and human resources teams.

After Question Period, Rankin pointed out the review covered activity at Atira while the BC Liberals were in charge.

“I understand the issues have been addressed through conversations and back-and-forth between (BC Housing and Atira),” he told reporters. “And it’s of course, a Liberal report investigating Liberals.”

In response, BC Liberal press secretary Andrew Reeve said BDO chose to focus on 2018 financial statements from Atira rather than the historical fiscal statements.

The damning report has resurfaced less than five months after more than half of BC Housing’s board was fired. Those dismissals came in the wake of findings that roles and responsibilities within the organization were unclear, project administration processes were largely undocumented and did not apply a risk-based approach, and no formalized data governance was in place.

The May report by Ernst & Young auditors made 26 findings and 44 recommendations. It said BC Housing’s organizational structure has resulted in siloed service delivery, its systems were not meeting the needs of “functional areas,” and with 80 to 85 per cent of its services delivered through non-profit housing providers, BC Housing’s manual oversight process was limited.

Longtime BC Housing CEO Shayne Ramsay then retired in August after repeated threats to his safety and a lack of confidence that he could “solve the complex problems facing us at BC Housing.”

Atira’s website says it has housed 1,500 women and children and served another 8,000. It provides services in Vancouver’s Downtown Eastside, Burnaby, Surrey and White Rock.

The provider operated the Winters Hotel, a single-room occupancy hotel in downtown Vancouver, where two people were killed and five were injured in a fire sparked by unattended candles last spring.

The building’s sprinklers had been turned off due to a fire several days prior to the incident, and at the time, Atira was under orders to have the fire suppression system serviced, and to put a fire watch in place. Some fire extinguishers in the building had not yet been replaced when the April 11 fire began.

Editor’s Note: This is a corrected story. A previous version incorrectly stated that David Eby held the housing portfolio in July 2017. In fact, he was attorney general at the time, and appointed to the position in October of 2020. A previous version also incorrectly stated the review was commissioned on Sept. 26, 2017.

© 2022 Global News, a division of Corus Entertainment Inc.

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