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Manis, pedis & fancy chocolates: TCHC reacts to explosive audit report

Staff at Toronto Community Housing Corp., the agency in charge of finding shelter for the city’s most vulnerable residents, enjoyed elaborate Christmas parties, manicures, pedicures and fancy chocolates on the taxpayers’ dime, according to a scathing report released Monday.

Toronto’s auditor general, Jeff Griffiths, outlined thousands of dollars in inappropriate spending in his report, which covers spending at the agency between Jan. 1, 2009 and June 30, 2010. He describes a culture at TCHC where spending policies are in place, but not followed.

 “While the policies are adequate, they serve no purpose if they are not being followed. This is the case in many instances at the TCHC,” the report states.

Griffiths’ findings could  spark a major overhaul of the agency. Mayor Rob Ford and his brother, Coun. Doug Ford, have expressed support for rent-subsidies for private apartments.

The mayor sternly addressed the audit report on Monday.

“It’s very frustrating when you see this and there’s a sense of entitlement that has to go, it’s time for it to change immediately and change starts at the top,” he said.

“I’m asking for all the citizens that have sat on the board to resign immediately.”

Here’s a breakdown of some of the “inappropriate expenses” listed in Griffiths’ report:

  • $40,000 on a 2009 staff Christmas party; $53,500 spent on a similar event the year before.
  • $1,925 spent on a meeting at a local spa. The meeting included a three-course meal, water treatments, manicures and pedicures for eight staff.
  • $6,000 for a planning session in Muskoka.
  • $1,850 for a “staff development” four-hour cruise.
  • $1,000 on chocolates from Holt Renfrew, apparently given out as staff gifts.
  • $800 for “4 chair massage practitioners” at a staff summer picnic.
  • “Significant hospitality expenditures for staff relating to seasonal festivities. This appears to be common practice.”

 

The agency’s CEO Keiko Nakamura said she was “outraged” by the findings and issued a plan of action to address the problems, which include disciplining staff, recovering misused funds, implementing stricter spending controls and establishing an ethics hotline for employees.

“I am outraged that the poor judgment and unacceptable actions of a few employees have tarnished the reputation of the entire company. They have embarrassed our board, and let down tenants, the mayor and council, and the people of Toronto,” Nakamura said in a statement Monday.

“My expectations are crystal clear. Managers are accountable for how every dollar in their budget is spent. Employees must follow procedures, use good judgment, and spend the public’s money with the same care they would take spending their own money. Failure to do so will have consequences, for them and the company.”

In another report on the TCHC’s procurement policies, also released Monday, Griffiths said the agency’s former management paid little attention to best purchasing practices.

The agency could save between $4 and $10 million if procurement recommendations are followed, the report noted.

TCHC is Canada’s largest social housing provider.

Read Griffiths’ report on TCHC staff expenditures here and the report on procurement issues here (.pdf).

Read TCHC’s plan to resolve the issues here.