There was a time when Housing Minister Rich Coleman praised the PHS Community Services Society for the work it does in managing hard-to-house people in the Downtown Eastside.
The praise was not given privately but very publicly at press conferences to announce the official opening of renovated social housing buildings such as the Pennsylvania, Rainier and social housing units at the Woodward's complex on East Hastings Street.
"Governments can bring the money and actually get the buildings built with some partnerships, but somebody has got to make these things work for the people who need it the most and one of our great partners in Vancouver is the Portland Hotel Society," said Coleman at a press conference at Woodward's in 2010.
But what now?
Coleman’s relationship with the PHS appears to have soured after B.C. Housing raised concerns last fall about irregularities it says it found in the society’s spending practices. Over the years, the government has given the society millions of dollars to operate several hotels and other services in the Downtown Eastside.
Within the next two weeks, Coleman is expected to announce what action, if any, the provincial government will take against the PHS, whose books are being scrutinized by accounting firm Deloitte. Vancouver Coastal Health, which also funds the PHS, conducted a separate review.
“They do do some work with tough clients, but at the same time, there is a responsibility when you’re spending millions of dollars to have it properly used and properly managed and properly spent,” Coleman told the Courier by telephone Thursday. “If it isn’t, then I have a concern and I have to defend the taxpayers’ interest and that’s what I’ll do.”
Asked whether the PHS is headed for receivership, Coleman said it hasn’t been determined and that he was waiting for senior staff in his ministry to give him recommendations.
Mark Townsend, co-executive director of the PHS, told the Courier earlier this week he was surprised by a media report’s suggestion that his society could soon be in receivership.
Townsend described the PHS’s recent meetings with Deloitte and B.C. Housing as “going well” and there was no indication the society could be taken over by a court-appointed receiver.
Townsend sent a letter to Coleman to ask for clarification but the minister declined to discuss the concerns of the PHS, which has acknowledged it could do a better job of managing its operations.
“I’m not going to get into a he said, who said what,” Coleman said. “My job is to let my guys come back with the recommendations and then we’ll determine which direction we’re going to go.”
Added Coleman: “They haven’t brought me all the options, yet. But basically it is, can we sort it out? Can we structure it in such a way that we have confidence? If we don’t have confidence we can restructure in such a way, then we have to act in a way to protect the taxpayers’ money.”
B.C. Housing CEO Shayne Ramsay announced in November 2013 that it discovered irregularities in spending practices of the PHS, which also helps operate the Insite supervised drug injection site in conjunction with Vancouver Coastal Health.
At the time, Ramsay said the PHS had to improve financial reporting, corporate governance, compliance with agreements and expense management. Ramsay did not release any more specifics about the review or reveal how many millions of dollars were in question.
Townsend responded at the time that “we deal with a difficult group and face difficult tasks and we do it in an economic way this is cost effective, with a focus on getting things done.”
