Toronto Housing Corp. expenses include
spa meeting, $90K on Christmas parties
Toronto
Housing Corp. CEO Keiko Nakamura.
Mayor Rob
Ford called on civilian board members of the Toronto Community Housing
Corporation, including its chairman, to resign Monday after two scathing
audits revealed staff at the public housing authority have ignored rules
for awarding contracts while expensing spa treatments and boat cruises.
The future
of CEO Keiko Nakamura, who has held the job since last February, also
appeared to hang in the balance, after the Mayor told reporters he will
meet with her to “discuss her future.” As well, he said he will be
“dealing with” Derek Ballantyne, CEO of the housing authority until
May 2009, who is now chief operating officer at Build Toronto. The audits
looked at the TCHC’s books from Jan. 1, 2009 to June 30, 2010.
Among the
most flagrant “inappropriate” expenses Auditor-General Jeffrey
Griffiths identifies: $53,500 spent on a Christmas party in 2008 and
$40,000 in 2009; $1,925 for a planning meeting at a local spa that covered
manicures, pedicures and water therapy services; $1,850 for a boat cruise
for “staff training and development”; and $1,000 on chocolates from
Holt Renfrew.
“A greater
concern is a culture at the TCHC which allows such expenses to occur,”
wrote the auditor, who released reports on the agency’s expenses and
procurement practices on Monday.
Mr.
Griffiths also raised alarms about “single tendering” in which
contracts are awarded without getting competitive bids. Moreover, purchase
orders were “routinely split to circumvent procedures,” he found.
The TCHC
spends $200-million a year on procurement. Mr. Griffiths estimated that
obtaining competitive bids could “conservatively” save $4-million to
$10-million.
“This
money could go to helping people that need it the most, the people I have
monthly meetings with to try to get people’s units fixed, get them
transferred. Time after time after time, the excuse is we don’t have
enough money. Well, obviously that excuse does not hold water,” said Mr.
Ford, who continued to muse openly about overhauling the public housing
system.
Councillors
of all stripes were aghast at the audit’s revelations. The procurement
findings were especially troubling, given that a $17-million inquiry and
2005 report into the MFP computer leasing scandal addressed many of the
issues.
“We’ve
got over 100,000 tenants in Toronto Community Housing who are waiting for
repairs. We’ve got bedbugs, we’ve got issues that we need to deal with
and we have a city that is going through austerity measure. For this to
come out I think is disgraceful, I think it’s a slap in the face to
tenants, and it’s a slap in the face to every Toronto taxpayer,” said
Councillor Josh Matlow (St. Paul’s).
In his
audit, Mr. Griffiths found that purchase orders were divided to circumvent
procedures that require board approval for contracts in excess of
$500,000. For example, there were 37 separate orders totally nearly
$3-million over 18 months to buy kitchen, bathroom and lighting fixtures
from a China-based supplier.
Six orders
totalling more than $700,000 were placed in one month alone, the auditor
wrote. In another case, a single-sourced purchase of solar panels worth
more than $500,000 was ordered from a supplier in China through an
overseas-based agent who, the auditor found, was a long-time friend of the
TCHC staff recommending the agency. In another example, nearly $25-million
in work was awarded based on one vendor’s unsolicited proposal.
“I am
angry and indignant as to what the auditor general found,” David
Mitchell, chairman of the TCHC board of directors, said Monday at a press
conference, before Mr. Ford called on him to step down. But he said it
would be “a tragedy” if the findings were used to “attack Toronto
Community Housing’s mission.”
He said the
board has “full confidence” in Ms. Nakamura, who expressed outrage at
the “poor judgment and unacceptable actions of a few individuals.”
She was a
member of the executive team reporting to Mr. Ballantyne. She said the
audit showed she conducted herself with “complete integrity” and vowed
to correct the ills. The agency intends to recover funds from
inappropriately claimed expenses, she said, and some members of the 1,400
staff have been “terminated,” but was unable to recall how many.
When pressed
by reporters, she said her entire five-person executive team has been
replaced although it was not clear if it stemmed from the audit.
In a brief
statement, Mr. Ballantyne said he shares the concerns over the findings,
and is “encouraged” by the TCHC’s response.
