Councillor Josh Matlow

Auditor General’s report on Toronto Community Housing

Dear residents,

You may of heard about the City of Toronto’s Auditor General’s report on employee expense spending and a dearth of financial oversight at the Toronto Community Housing Corporation (TCHC) – an arms length corporation of the City.

I’m sending you the following articles, along with the reports attached below, for your information.

I am very upset and deeply concerned about we’ve learned and, as your city councillor, a new member of the City’s Audit Committee and as a Toronto resident, am holding the TCHC to account for its actions. Community housing is too important to over 160, 000 Torontonians to either fall into disrepute or to have tax dollars be spent so thoughtlessly.

If you have any questions or comments, please feel welcome to contact me at 416-392-7906 or by email at






National Post: Chris Selley: Housing Corp.’s spending the gravy Ford was looking for

Feb 28|19:41

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.

To read this article at the, please click here.

CBC: Toronto housing staff spent on manicures, boat rides

Feb 28|18:21

The CEO of Toronto Community Housing Corporation says she is “shocked and appalled” by some of the staff expenses uncovered by the city’s auditor general.

Spending by staff at the housing corporation — the largest social housing provider in North America — included almost $2,000 for manicures and pedicures at a local spa for eight staff members and Christmas parties costing more than $40,000 each.

A report by Auditor General Jeff Griffiths also questioned expenditures such as $1,800 for a boat cruise, retail gift cards for employees and $6,000 for an offsite planning session in Muskoka.

Speaking to reporters Monday, corporation CEO Keiko Nakamura said she was “outraged” by Griffiths’s findings and vowed to bring in changes to prevent such spending in the future.

“It angers me that the poor judgment of a few individuals has impacted the reputation of the entire company,” she said. “Staff are being disciplined. Those responsible for the most flagrant actions no longer work for this company.”

When asked to explain how such spending could have happened, board chair David Mitchell said he would not go into details about “human resources matters.”

“I realize that people in whom I put my trust were not deserving of that trust,” Mitchell said. “Frankly, I feel betrayed. … Processes are now in place to prevent this kind of thing from happening again.”

Toronto Mayor Rob Ford took a tougher line, calling on all board members of the TCHC to resign.

“It’s very, very frustrating when you see this,” Ford said. “There’s a sense of entitlement that has to go. It’s time for it to change immediately.”

Coun. Josh Matlow said spending practices outlined in the report are “absolutely out of whack” with the city’s financial situation.

“It just seems egregious, if these allegations are true, that staff would be spending money on such thoughtless expenditures,” Matlow said.

While reining in misspending alone may not be enough to put a significant dent in the projected City of Toronto’s $774-million budget shortfall next year, Matlow said it “sends a really really awful message to people who are struggling to make ends to meet, who are relying on these services, who are waiting for repairs to be made.”

‘Complete dumps’

Steve Hayden, a tenant who was forced to leave his apartment in a TCHC building at 200 Wellesley St. after a massive blaze, said he’s eager to look at the report, particularly in light of the problems he says are prevalent among many corporation-run properties.

“We’re living in places that are complete dumps,” he said. “This is the biggest housing building in Canada. It’s the biggest for bed bugs, crime and … worst for maintenance.”

Matlow said that while the report will not reflect well on TCHC, it does not provide justification to shut the agency down entirely in favour of a model that would provide people subsidies in order to find dwellings in the private rental market.

Ford floated that idea during his election campaign, although it’s unclear where he currently stands on the issue.

“Toronto Community Housing is a vital service for over 160,000 Torontonians,” Matlow said. “These are some of the most vulnerable people in the city who needs this support. I don’t agree it should be abolished.”

A TCHC spokesperson wouldn’t comment on the report before its release, but said the corporation’s board plans to hold a special meeting to discuss the audit findings and the response.

To read this article at, please click here.

City of Toronto Auditor General’s report on the Toronto Community Housing Corporation

Feb 28|15:43

For your information, City of Toronto Auditor General’s Jeff Griffiths’ report on TCHC staff expenditures and the report on procurement issues (.pdf).


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