For months, the Toronto Community Housing Corporation has been spoken of in hushed tones as the likely source of the city’s next spending scandal, and Auditor-General Jeffrey Griffiths’ report on procurement and staff spending policies, released Monday, did not disappoint on that front. On every other front, it’s not just very bad — it’s very bad in precisely the sort of cartoonish way Rob Ford has painted City Hall as a whole.
A “divisional planning meeting” for eight employees held “at a local spa,” including “a three-course lunch, pedicures, manicures and water therapy services,” for a total cost of $1,925? You couldn’t make that up. It would be an outrageous expenditure for any taxpayer-funded organization, but for one dedicated to housing Toronto’s low-income community, one constantly under the gun on everything from repairs backlogs to unjust evictions and bedbugs? It’s plutocratic. It’s vile.
“It’s a slap in the face to tenants,” as councillor Josh Matlow puts it.
And if the spa day is TCHC’s most outrageous expenditure, it might only be because staff were expensing so many things without bothering to itemize them. Nearly $5,000 spent on a company credit card at a downtown restaurant over the course of 2009 was approved by the person who spent it without providing any justification, a record of who was in attendance or even an itemized receipt.
The Auditor-General estimates $200,000 might be saved by tightening up spending policies and (ahem) enforcing the ones that exist, but that’s nothing compared to the nightmarish procurement policies he lays bare. There, we could be talking about $10-million. Most appallingly, a policy requiring board approval of expenditures over $500,000 was routinely circumvented by splitting purchase orders into as many chunks as necessary to stay under the limit, in some cases without competitive bidding or even formal contracts. Then there’s the $25-million refurbishment contract that was awarded without competing bids, even though it was the vendor who approached TCHC. It’s mind-boggling.
TCHC chair David Mitchell and CEO Keiko Nakamura made a big show on Monday of having accepted all of the Auditor-General’s recommendations. Remedial measures are already underway, they stressed. They both professed shock and betrayal. But these recommendations are so unbelievably basic as to poison the reputations of anyone associated with making their issuance necessary in the first place — certainly the civilian board members, whom Mr. Ford has asked to resign; certainly previous CEO Derek Ballantyne, who’s now CEO of Build Toronto; and almost certainly Ms. Nakamura as well.
She was acting CEO as of May 2009, four months into the period covered by Mr. Griffiths’ report. Either she knew how bad the situation was and said nothing, or she didn’t know and ought to have — in which case, she needs to explain that. But on Monday, she wouldn’t even address the question. Nor would she say how many people had been fired, when, or for what — only that the most “flagrant” violations had resulted in terminations, especially where they occurred repeatedly.
Asked which violations she found the most flagrant, she responded: “I think that’s for others to judge.” Pardon? She’s promising to pore over the books in search of malfeasance and recoverable costs! She’s the CEO!
The idea of dismantling TCHC altogether hangs ominously in the air, on the assumption it’s Mr. Ford’s preference — not unreasonable on its face — to hand rental subsidies directly to low-income Torontonians and let them rent on the open market.
“It would be tragic if we took the results — as stinging as they may be — of this audit to attack the mission of this organization and to attack social housing,” Mr. Mitchell said Monday, and he’s quite right. The fact his board and management didn’t insist upon basic managerial principles says nothing about the best way to house low-income Torontonians. All the more reason for them to clean out their desks and let more conspicuously competent people argue their side of the coming debate.
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