Seldom in British Columbia has there been so much speculation about a 50-page report from an auditing firm.
But the Ernst and Young inquiry into BC Housing had been eagerly awaited by a number of groups before it was released on Monday by Prime Minister David Eby, who commissioned it as then Housing Secretary.
While the title was “Investigating BC Housing,” it delved deeper into the relationship between BC Housing and a nonprofit housing provider called the Atira Women’s Resource Society.
Prior to this year, the two organizations had CEOs who were married to each other — BC Housing’s Shayne Ramsay and Atira’s Janice Abbott — and the report (which you can read here) highlighted several issues in the organizations’ interaction.
Here are eight of them.
1: More money…
With a budget of $2 billion a year, BC Housing provides a range of different services across the province — but part of its job is simply giving money to other nonprofits that provide housing directly.
The largest of these is Atira, which has seen a steady budget increase in recent years, receiving $74.1 million from BC Housing in 2022, a 335 percent increase since 2016.
Of the four housing companies that received the most money from BC Housing, Atira had by far the highest percentage of units requiring more than $3,500 a month for maintenance and the highest percentage of its funding that went to administrative expenses.
Money BC Housing has given to its largest not-for-profit housing providers
2. …but more problems
Despite this, in 2022, Atira ran into cash flow problems after purchasing an SRO in 303 Columbia for $16.9 million, in part from using $2 million of restricted funds from BC Housing that it was not allowed to use.
Ernst and Young also noted that Atira was frequently behind in providing financial information to BC Housing, writing, “Given the amount of funding provided to Atira, the lack of accurate monthly or quarterly financial analysis represents a significant.” gap in BC Housing’s financial oversight.”
% of units costing more than $3500/month to budget
3. Conflict of interest?
Those concerns were heightened because of Ramsay and Abbott’s relationship.
In 2010, Ramsay signed a statement stating that “all transactions and decisions regarding Atira will be made without [his] Reference or consultation.” However, the Ernst and Young report found at least 26 instances where Ramsay broke this rule, sometimes lobbying for Atira to receive additional funding or projects.
“Several people have said it [Ernst and Young] Atira regularly bypassed traditional channels of communication by reaching out directly to senior members of BC Housing to raise matters such as funding requests,” the report said.
“In return, senior BC Housing officials urged other BC Housing associates to ‘make it happen’.”
4. Deleted Texts
How many times has this happened?
The report often relies on text messages Ramsay sent to various employees. But none of those messages were provided by Ramsay himself during the investigation – because he was inclined to delete them.
“I tidy them up when I don’t need them,” Ramsay told investigators, who found only 20 text messages on his phone upon pickup.
“I do it every day, have been doing it for years. I did it yesterday.”
This came despite an order from the chairman of BC Housing to “take steps to ensure that all records and belongings of BC Housing are retained and not destroyed”.
Ernst and Young also said that Abbas Barodawalla, BC Housing’s former CFO, was also involved in similar mass deletions of text messages.
“Your actions may constitute a departure from government record retention requirements. This behavior is not consistent with the expectations of the CEO and CFO of a publicly funded organization,” the report said.
5. Money in urgent proceedings?
In addition to the conflict of interest policy, which Ramsay agreed to, another layer of accountability at BC Housing was a group called the Executive Committee, made up of senior officials from across the organization.
In theory, all funding decisions greater than $250,000 required Executive Committee approval. In practice, Atira was granted more than $3 million in COVID-19-related funding without these approvals, including at least eight times between June and October 2020.
The person who approved the money without the approval of the committee has been redacted in the report.
6. 303 Columbia — the purchase
Many of these issues seemed to collide in one particular situation: Atira’s purchase of a $16.9 million Downtown Eastside property in January 2022.
BC Housing had already looked at the property and decided against buying it as the asking price was well above the appraised value. To get the finances going, Atira did two things: used $2 million in earmarked funds from BC Housing without its approval and asked for an additional $1.4 million.
BC Housing didn’t immediately provide the $1.4 million, but a month later Abbott texted someone with the organization and said, “We’re going to see some cash flow struggles for the next paycheck” unless they receive it the money – which was subsequently approved by the Executive Committee.
7. 303 Columbia — the minute change
This wasn’t the first time the Executive Committee had looked at the property: prior to the purchase, BC Housing had to sign off on the transfer to Atira of a subsidy originally intended for the management of another building.
A member of the Executive Committee abstained – but according to Ernst and Young, Ramsay then approached them and asked him to change his vote retrospectively.
The report states that Ramsay subsequently had the minutes of the meeting amended to downplay the concerns originally raised by the committee member.
8. 303 Columbia — the public statement
In April 2022, a member of BC Housing’s media relations team sent a request asking how to publicly refer to the $1.4 million given to Atira.
Someone at BC Housing responded by writing:
“By addressing this issue, we are only inviting others to ask further questions and delve deeper into the BC Housing Executive’s decisions. This ultimately negatively impacts our flexibility and “agility” to make decisions that are in the best interests of BC Housing, our providers, our tenants and serve the best public interest. I would strongly recommend that we do not raise this issue unless we are specifically asked for that information.”
BC Housing never addressed the issue. In July 2022, then Housing Secretary David Eby dismissed the board.
The following month, Ramsay stepped down as CEO while the investigation was still ongoing.
The person who made the comment in the report?
Your identity has been redacted.
