BC Housing audit finds ‘mismanagement’ between CEO and Atira housing

A forensic investigation into BC Housing has found mismanagement related to a conflict of interest between the former CEO of the Crown corporation and his spouse, the CEO of the Atira Women’s Resource Society.

In findings released Monday, the province says the independent investigation has identified 20 recommendations to improve oversight, prevent future conflicts of interest, and ensure accountability for public funding to be used to provide housing.

“We expect the rules to be followed. There must be strong safeguards in place to preserve the public’s trust,” said Premier David Eby.

In 2021, Eby, who was the housing minister at the time, called for the audit following a damning, independent report from Ernst & Young, which found a number of issues at the Crown corporation, including a lack of oversight when it comes to spending, and its inability to manage risks, among other concerns. It wasn’t known he asked for the audit until November.

Following that report, Eby fired the entire board at BC Housing in July 2022. In September, the CEO, Shayne Ramsay, resigned.

The audit was completed and delivered to the provincial government in March of this year, but details are only being made public now.

“In 2021, I ordered a review into concerns at BC Housing, which ultimately led to today’s findings. We are working with the new leadership at BC Housing to implement all 20 of the report’s recommendations to ensure that BC Housing operates effectively as we deliver housing for people,” Eby said Monday.

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“We’re building a record amount of housing, but we need to do even more. That means our organizations must be equipped to properly manage these public funds,” Ravi Kahlon, minister of housing, said. “We have a new leadership team in place at BC Housing, who are leading the work to implement these recommendations and those from last year’s review. We’re united in our efforts to strengthen BC Housing’s processes and capacity as we continue to deliver the homes people need.”

The province says while the forensic audit found no evidence that public money was used outside of intended purposes or to provide “any material benefit to any one individual, Ernst and Young identified concerns with BC Housing’s financial oversight processes, including its conflict-of-interest protocols and the requirements under which funds were provided to Atira.”

Ernst and Young’s comptroller’s report alleges that multiple people told the financial organization that Atria regularly bypassed the “traditional communication channels by approaching more senior members of BC Housing directly for matters such as funding requests.”

It says Atira was “direct-awarded” contracts without “transparent, competitive processes designed to ensure the proper use of public funds,” and adds that it was told that Atira was given a level of consideration “that others might not be … or a level of comfort with BC Housing that does not exist with other providers.”

Recommendations made to improve oversight, accountability

The financial corporation has now made 20 recommendations to “modernize” BC Housing’s financial accounting capabilities and improve its project and fiscal tracking systems.

These recommendations include but are not limited to: the creation of an anonymous whistleblower hotline, changes to the way projects are approved, enhanced governance oversight with processes and structures with the ministry, a government representative on the board, enhanced tracking and reporting to the board, and changes regarding how budget and financial reviews of housing providers are completed.

The government says work is underway to implement the recommendations by spring 2024.

The province says it will be “exercising its full rights” to also review Atira’s dealings, including reviewing the province’s largest housing non-profit’s financial transactions, restricting any new funding to the housing operator until the operational review is completed, suspending the renewal of Atira’s operating agreements until the review is complete, and physically inspecting all Atira-operated buildings, beginning Tuesday.

Since resigning from BC Housing, Ramsay is now working for the Squamish Nation’s Nch’ḵay̓ Development Corporation. Atira CEO Janice Abbott remains in her position.

Opposition pushed for publication of unredacted audit

On March 27, Kamloops-North Thompson MLA Peter Milobar, who’s BC United’s finance critic, called for the complete, unredacted audit to be released as soon as possible.

“As housing affordability and homelessness continues to get worse in British Columbia, the public deserves to know the full extent of the mismanagement at BC Housing under this premier’s watch. Yesterday, we learned from the housing minister that despite the government receiving the forensic audit of BC Housing a few weeks ago, it appears to have sat unread on the minister’s desk for those few weeks,” insisted Milobar.

“The very existence of this forensic audit, of a multi-billion-dollar public body is something the premier was very hesitant to try and even acknowledge to this chamber. He didn’t tell the Legislature. He didn’t tell the opposition. He didn’t tell the media. He didn’t tell anyone for months.”

“… The public deserves to know the full extent of the mismanagement at BC Housing under this premier’s watch.”

Eby responded to the opposition’s pressure.

“This is indeed a serious issue. My commitment to this House was that we would release as much of the report as the law allowed us to do. We’re working on that, and we’ll do it as soon as possible. I’ll keep that commitment,” the premier said in March.

Milobar pushed back.

“Frankly, that’s just not good enough. The government has been sitting on this report for the last couple of weeks without taking action on it,” he said.

Cut to the first full week of May, and both sides of the aisle were back at arguing about the audit in the Legislature, and again, Milobar pushed for details to be released.

“The housing minister successfully dodged releasing this report while his budget estimates would have been open, so he could have actually had to answer some questions in this chamber at length on this. Convenient timing for that.”

Housing Minister Ravi Kahlon at that time assured the Legislature details would be released soon.

“I’ve made it clear that I believe that it’s in the public’s interest for this report to be made public, as much as legally possible. I notified the House, that I met with the privacy commissioner. I shared with the privacy commissioner our plan to inform certain entities that are named in the report,” explained Kahlon.