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Financial mismanagement issues found at BC Housing relating to former CEO and spouse

Evan Saunders
Financial mismanagement issues found at BC Housing relating to former CEO and spouse
GOVERNMENT OF B.C. - Premier of British Columbia David Eby at an event in 2019 as attorney general. In 2021, Eby ordered an investigation into financial management issues at BC Housing which has led to a recently released report by Ernst and Young accusing former CEO Shane Ramsay of mismanagement relating to a conflict of interest with his wife, CEO of Atira Women’s Resource Society Janice Abbott.

An independent investigation has found financial mismanagement occurred at BC Housing under the leadership of former CEO Shayne Ramsay.

The forensic investigation, completed by Ernst and Young, found a conflict of interest (COI) between Ramsay and his spouse, Janice Abbott, the CEO of Atira Women’s Resource Society.

According to Ernst and Young’s report, Atira is the largest recipient of funding from BC Housing. The conflict of interest between Ramsay and Abbott was known and documented with the Board of Commissioners for BC Housing.

“In 2021, I ordered a review into concerns at BC Housing, which ultimately led to today’s findings,” said Premier of British Columbia David Eby in a news release.

“We expect the rules to be followed. There must be strong safeguards in place to preserve the public trust.”

Ramsay resigned from BC Housing in September 2022 after more than two decades leading the organization.

In its release, the Government of British Columbia writes the investigation found no evidence of public funds being used outside of their intended purpose or to provide material benefit to any one individual.

Ernst and Young observed “numerous instances whereby the former CEO engaged in the influence of decisions that were made to benefit Atira, clearly demonstrating that the policies put in place to manage the COI were ineffective,” reads the report.

The report found a culture of breaking COI policies had permeated throughout the entire BC Housing organization, stating employees had either enabled or been inactive regarding the mismanagement.

“Furthermore, the cultural implications appear to have resulted in Atira receiving preferential treatment from BC Housing and being afforded greater access to public funds than similar providers,” writes Ernst and Young.

Atira was able to regularly bypass communication channels by approaching senior BC Housing members directly for funding requests and senior members ordered regular employees to “make it happen,” according to the report.

Atira was also awarded contracts without an open and competitive process meant to ensure public funds are properly used.

In 2022, Atira received $35 million more in funds from BC Housing than the next highest provider and its 2021 financial statement states Atira’s revenue is 84 per cent dependent on BC Housing and other government agencies. BC Housing had no access to Atira’s financial records when doling out this funding in 2022, the report claims.

“These factors have rendered BC Housing’s financial oversight processes ineffective. As a result, it has affected BC Housing’s ability to make appropriate decisions, placed a significant risk to public funds and calls into questions the diligence with which these funds are dispersed to Atira.”

Ernst and Young reported Ramsay obstructed the investigation.

The report claims Ernst and Young contacted BC Housing stating it needed to take all precautions to preserve records and things relating to itself.

Ernst and Young were told that text messaging was routinely used as a means of communication for BC Housing executives. When scanning Ramsay’s phone, they found there to be less than 20 text messages on the device demonstrating he had deleted them before turning in his device, according to the report.

When Ramsay was confronted about the deleted messages, he reportedly said, “I clean them up if I don’t need them. I do it every day, done this for years. I did it yesterday.

“In addition to the destruction of records that may be subject to government retention requirements, this practice effectively obstructed our investigation,” reads the report.

Former chief financial officer Abbas Barodawalla was also found to have engaged in the same practice.

As a result of the findings, Ernst and Young have put forward 20 recommendations to modernize and improve the organization’s financial management.

Some of the recommendations have already been accomplished such as the creation of an anonymous whistleblower hotline, executive committee changes to revamp the project approval system, and the installation of a government representative on the board.

Other recommendations underway include an enhanced oversight and governance structure through the Ministry of Housing, stronger conduct and COI policies and changes to budget and financial reviews for housing providers.

The Government of British Columbia is also suspending the renewal of all AWRS operating agreements, physically inspecting all Atira-operated buildings and restricting new funding to AWRS and ADS until an operational review is completed.

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