Serious conflict of interest and mismanagement issues at BC Housing and Atira, concludes government audit

May 8 2023, 7:14 pm

In a relatively lightly redacted report, the Government of British Columbia has found serious mismanagement and conflict of interest issues with BC Housing.

The forensic investigation was ordered by Premier David Eby last year following the initial findings of a preliminary analysis by Ernst and Young, which has since produced the newly released audit review for the provincial government’s Office of the Comptroller General.

During a press conference this morning, Eby noted the previous findings of the initial 2022 analysis undermined his confidence in Shayne Ramsay’s leadership at BC Housing, who was the CEO of the crown corporation for 22 years until September 2022. Eby shared the information with BC Housing’s previous board of directors, but he says when the old board did not take any action, a decision was made to change the board — an action that was performed in July 2022.

At the centre of the issues is Ramsay’s relationship with Atira Women’s Resource Society, where his wife, Janice Abbott, is the CEO. Their relationship was first disclosed in 2010, but the review charges that they failed to comply with proper conduct by providing Atira with preferential treatment. Over the past decade, Atira has grown into becoming one of BC Housing’s largest service providers for social and supportive housing.

Ramsay announced his resignation from BC Housing the following month, and in September 2022, he became the executive vice president of real estate and development for the Nch’ḵay̓ Development Corporation, which is the Squamish First Nation’s entity for carrying out Senakw.

Abbas Barodawalla, the former CFO of BC Housing during Ramsay’s leadership, is also repeatedly highlighted in the audit for problematic behaviour.

“The concerns raised seriously undermined my confidence of Mr. Ramsay’s leadership at BC Housing,” said Eby today.

“The report concludes there was a conflict of interest breached by Mr. Ramsay, the CEO, and the former chief financial officer. No one is above the rules. There must be strong safeguards in place to preserve the public’s trust. We cannot allow bad behaviour to slow down our progress on providing housing to people.”

With that said, Eby emphasized there is no evidence of public funds being used outside their purpose or to provide material benefit to any individual.

The Premier notes BC Housing’s new leadership is already making major headway in reforming BC Housing, including a new board makeup and the appointment of a new CEO. In late April, Vincent Tong was named as the new permanent CEO of the organization after filling the role on an interim basis since Ramsay’s resignation, and was previously BC Housing’s vice president of development and asset strategies for just over a year. Prior to his time with BC Housing, Tong was an executive of the non-profit housing entity of the City of Toronto.

BC Minister of Housing Ravi Kahlon says the provincial government and BC Housing have accepted all 20 recommendations outlined by Ernst & Young for implementation, with the new measures and policy changes now well underway. They have already created an anonymous employee whistleblower hotline and mandated standard of conduct training and changes in tracking, reporting, and accountability.

All 20 recommendations will be implemented by April 2024.

“Most concerningly was the disregard of conflict of interest protocols,” said Kahlon. “We saw that the former CEO of BC Housing repeatedly [involved] himself in influencing decisions that were made to benefit Atira Women’s Resource Society. Rules were routinely bypassed and not followed. The findings speak for themselves. These practices are unacceptable at anytime.”

“It’s clear from the investigation that Atira did not follow guidelines and used inappropriate channels to obtain operating and operator funding.”

Kahlon says with the release of the forensic investigation report, a new phase of the investigation began. He says the provincial government and BC Housing’s new leadership will soon conduct an operational review of Atira and its financial transactions related to BC Housing and its agreements.

As part of the new investigation, the provincial government will restrict any new funding to Atira and suspend all of its agreements with BC Housing. Residents in Atira’s existing buildings will not be impacted, as the provincial government will continue to provide funding to existing buildings.

Starting this week, all Atira buildings will be physically inspected.

Kahlon notes these measures on Atira have already begun and will remain in place until the provincial government is satisfied and the concerns are addressed.

The investigation by the Office of the Comptroller General — supported by a specialized Ernst & Young team flown in from Toronto — seized and mirrored laptops, mobile devices, desktop computers, and tablets issued to BC Housing employees. About 2.5 million electronic documents were processed, including spreadsheets, emails, text messages, and other corporate records and documents, plus hard copy documents related to Atira projects.

However, the report states both Ramsay and Barodawalla deleted text messages. “With respect to the former CEO, we noted that he deleted his text messages despite explicit instructions from the Office of the Comptroller General to ‘take steps to ensure that all records and things of BC Housing are preserved and not destroyed.'”

Ramsay repeatedly involved himself in matters related to Atira through other BC Housing employees, according to the report.

He modified BC Housing’s executive committee meeting minutes to “alter the concerns raised by a voting member” in regards to supporting Atira’s interest in acquiring 303 Columbia Street in the Downtown Eastside — a 74-unit supportive housing building. He also directly communicated with committee members on Atira’s purchase of the Hollywood Motel at 9145 King George Boulevard in Surrey with BC Housing’s assistance. Atira used $2 million in restricted funds repayable to BC Housing to help fund the purchase of 303 Columbia Street, without BC Housing’s knowledge or consent.

In 2021, Atira acquired Burns’ Block market rental housing building at 18 West Hastings Street, which was being released by Reliance Properties due to the building’s high vacancies brought upon by the spillover of public disorder surrounding the property in the midst of the pandemic.

Email exchanges between Abbott and BC Housing staff indicate that Atira “cannot close” on the contract for Burns’ Block, with investigators stating “we were unable to identify documentation supporting the rationale for BC Housing accepting assignment of Atira’s contract after it was determined that Atira ‘cannot close.’ Furthermore, we were unable to identify a rationale for Atira being directly awarded the operating agreement for this property.”

Atira assigned the operating agreement for Sereena’s House for Women at 143 Dunlevy Avenue to Vancity Credit Union as additional security for a mortgage without BC Housing’s knowledge or permission, which led to “significant additional financial risk” to BC Housing.

Moreover, in general, Atira was repeatedly direct-awarded contracts without a transparent, competitive bidding processes designed to ensure the proper and efficient use of public funds.

“Multiple individuals told Ernst & Young that Atira regularly bypassed the traditional communication channels by approaching more senior members of BC Housing directly for matters such as funding requests. In turn, the senior members of BC Housing told other BC Housing employees to ‘make it happen,'” states the report.

It was identified that Ramsay directly communicated with other BC Housing employees regarding Atira, violating conflict of interest rules at least 24 additional instances during the investigation period.

The former CEO also advocated for properties to be leased to the Community Impact Real Estate Society, which contracts with Atira’s for-profit arm.

The forensic investigation found a larger percentage of Atira’s projects receive higher operating subsidies from BC Housing on a per-unit, per-month basis, which is exacerbated by Atira having more projects than its peer non-profit housing operators in recent years.

Financial reviews of Atira by BC Housing have been “substantially delayed,” with the most recently completed review performed for the fiscal year of 2020, which was only finalized in August 2022 following the initial Ernst & Young review. Even after a years-long delay in the review, the forensic investigation found the financial review for Atira’s 2020 fiscal year “contained inaccurate and misleading components, such as the application of adjustments to projects in an arbitrary fashion.” BC Housing has not received Atira’s financial reports for the 2021 and 2022 fiscal years.

Despite not knowing Atira’s financial status, BC Housing continued to advance substantial amounts of funding to Atira. This not-for-profit society received at least $90 million from BC Housing between the end of the 2020 fiscal year and August 2022. The analysis found Atira received administration charge funding totalling about 15% of its operating budget — well above the 9% average of for all BC Housing service providers.

“Key financial document are still not available to document from Atira. We have extensive work to do with them to get them back on track,” said Eby during the press conference, while also noting that the provincial government has now insisted that a government official sit on Atira’s board of directors during the investigation proceedings. Eby added that the investigators deemed only one organization, Atira, appeared to benefit from preferential treatment. While these are serious issues, he says, the investigators do not believe the actions amounted to criminal conduct.

“If someone has a personal connection to the individual who is making the decisions about where those public dollars go, they shouldn’t be at an added advantage in terms of getting awarded those contracts. The concern that I have… is that when we look to our crown corporations, we get advice about where the programs are going, what the best approach is, and that this is independent of any personal relationship. That it is impartial between different organizations, and the advice is simply that this is the best approach for the allocation of the public dollars,” continued Eby.

“Unfortunately, because of this activity at BC Housing, we can’t have confidence in that, and that is completely unacceptable both at the political level and certainly to the public. When they send dollars to government for housing, they want to know that it goes the best and most qualified organization, which may or may not be Atira.”

On BC Housing’s part, the investigators determined the crown corporation lacked sufficient financial oversight and record keeping expected for a publicly funded organization.

Major reforms are now in the process of being implemented, especially with BC Housing being tasked to deliver the provincial government’s new multi-billion dollar housing plan over the coming years.

Buoyed by the provincial government’s previous housing plans, BC Housing’s annual budget has increased from $782 million in the 2017/2018 fiscal year to $2.2 billion in 2021/2022.

Daily Hive Urbanized reached out to Atira for comment.

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