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Audit questions Portland Hotel Society spending

B.C. Housing demands ‘irregularities’ be addressed
B.C. Housing says it has found some irregular spending practices committed by the Portland Hotel Society, which operates many Downtown Eastside hotels including the Pennsylvania. Photo Dan Toulgoet

The housing branch of the provincial government has discovered irregularities in spending practices of a non-profit organization that helps operate the city’s supervised injection site and manages several Downtown Eastside hotels.

Shayne Ramsay, CEO of B.C. Housing, issued a statement Thursday saying his agency discovered the irregularities after a review of the Portland Hotel Society’s operations.

“We expect the Portland Hotel Society and all of our non-profit service providers to fulfill their contractual obligations and to spend taxpayers money appropriately,” Ramsay said. “B.C. Housing discovered some irregularities in the Portland Hotel Society’s spending practices and took immediate steps to appoint a third-party accounting firm to conduct an independent review.”

B.C. Housing hired the firm to “ensure public resources are being spent appropriately and that the society has proper financial and operational controls in place,” Ramsay said.

The findings mean the Portland has to improve financial reporting, corporate governance, compliance with agreements and expense management. Ramsay didn’t provide any more specifics or reveal how much money was in question.

“All irregularities will be addressed and the Province is prepared to take further actions, if warranted, to ensure public funds are protected,” Ramsay said.

Mark Townsend, co-executive director of the Portland, said in an email to the Courier the “taxpayer needs to know that their dollars are delivering efficient and effective service — and we continue to work with our funders to show that we deliver great outcomes at very low costs.”

Townsend said when contractors enter into an agreement with the government, they receive an “admin fee,” or management fee, which is set by B.C. Housing

“The average across all of our projects with B.C. Housing is 8.7 per cent,” he said. “From these fees, we must pay administration staff, IT, accounting services, legal, travel, etc. — all the cost of running the organization, outside of the direct contract costs. It is how we choose to allocate this management fee that B.C. Housing is now focusing on.”

The Portland’s has 16 sites that house 1,200 tenants and employs more than 500 people. The organization also runs a bank, a dental clinic and the Insite supervised injection site, in conjunction with Vancouver Coastal Health.

“We deal with a difficult group and face difficult tasks and we do it in an economic way that is cost effective, with a focus on getting things done,” Townsend said. “But we are also creative. We work across government silos and we advocate when necessary. We are not structured the same way as bureaucracy — but we are specialists in the service we deliver.”

Townsend said all of the Portland’s programs receive annual external audits. But when examining non-profits, he said, it’s the outcomes that should be judged.

“You want to see objectives being met and work accomplished on behalf of the people being served,” he added. “You want to see non-profits being creative, innovative and working towards the positive changes we all care about.”

News of the irregularities in spending practices comes after several years of Housing Minister Rich Coleman praising the work of the Portland and its dedication to housing and helping marginalized people.

B.C. Housing has given the Portland various amounts of money over the years to operate the government’s properties, including Downtown Eastside single-room-occupancy hotels such as the Pennsylvania, the Rainier, the Sunrise and the Washington.

The Portland became the first non-profit to operate one of the government’s new 14 supportive housing buildings in Vancouver. The $21.5 million six-storey building on Station Street, near Main and Terminal opened in December 2010.

The Portland, which is also known as the PHS Community Services Society, was behind a successful court challenge to keep Insite open. The society has also launched protests in the streets and at city hall for various causes, including homelessness and addiction.

The Portland is one of many non-profits working in the Downtown Eastside. Others include RainCity Housing, the Lookout Emergency Aid Society and Atira Women’s Resource Society, whose CEO is married to Ramsay.

B.C. Housing conducts annual reviews of all non-profits it has contracts with.

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