Skip to main content

The Globe and Mail

Troubling accounting practices dog TCHC: auditor-general

Toronto's Mayor Rob Ford inspects a resident's apartment during a tour of a Toronto community housing building in the city's east end on Feb. 16, 2012 .

Chris Young for The Globe and Mail/chris young The Globe and Mail

A year after he issued a damning report that rocked Canada's largest social housing agency, the city's auditor-general has unleashed three audits shedding more light on lax financial control and oversight at Toronto Community Housing Corp.

While not as explosive as reports that led Mayor Rob Ford to fire the agency's entire board last year, the report shows that troubling accounting practices continue at the agency.

In one case, the auditor-general found a TCHC subsidiary paying $25,000 for an audit that was never conducted.

Story continues below advertisement

"That seemed a little strange," said Jeffrey Griffiths, during a presentation to the TCHC board on Thursday morning.

Mr. Griffiths focused on three murky components of the mammoth corporation that houses over 164,000 people: its automobile fleet, subsidiary companies and purchasing controls.

He found that TCHC has managed its 120-car fleet through a third-party company, Automotive Resources International, for 10 years without any contract in place.

"If there's no contract and the company provides you with an invoice, the invoice may not be in compliance with the contract," he said. "They may be overbilling you for instance. Nobody knows if there's no contract."

ARI denies Mr. Griffiths' findings. "ARI's work for the TCHC has always been completed in compliance with and under the auspices of a contractual agreement -- a copy of which was provided by ARI to the City as part of the audit process in late 2011," said Peter Nogalo, marketing manager for ARI.

The report states that the agency has no inventory of vehicles and no financial controls over employee vehicle expense reimbursements.

"Very simply there is no central management oversight over TCHC's fleet," he said in the report.

Story continues below advertisement

In second report, Mr. Griffiths lifts the veil on eight subsidiary companies and five joint ventures whose operations have been largely shrouded from city oversight. He said that merely obtaining financial statements proved difficult for the some subsidiaries, which include Access Housing Connections Inc., a wait-list management service; Toronto Community Housing Enterprises, responsible for developing the energy system in Regent Park; and Housing Services Inc., the agency's construction and maintenance arm.

"It is extremely difficult to get financial statements from those subsidiaries," Mr. Griffiths said. With that nominal level of oversight, his greatest concern stems from large subsidiary transactions that are never reported to the city, including the mysterious $25,000 audit fee.

His third report focused specifically on purchasing procedures at Housing Service Inc. and found that it routinely passes to boost volume discounts by co-ordinating buying with TCHC. He also found that downtime for trades workers shot up from 15 per cent in 2010 to 34 per cent in 2011.

The social housing provider is still rebuilding following two scathing auditor general reports last February that revealed questionable purchasing practices and lavish spending on a spa day, a jaunt to Muskoka and gifts of chocolate for staff.

Board Chair Bud Purves said management at the agency are already acting on the auditor-general's recommendations.

"Management is taking very appropriate steps so far and I know they will be taking more," he said. "This is good. We are moving forward."

Story continues below advertisement

The board voted to have its internal auditor investigate all major contracts awarded by TCHC for the last five years to ensure they were awarded properly.

"People getting paid without contracts and people getting paid without work. You have to question what was going on," said Councillor Frances Nunziata, who introduced the motion. "All these contracts that were made in the past, who are these people? What companies? We don't even know that and we need to bring that all forward and review it."

Editor's note: an earlier version of this story incorrectly stated that the board asked the auditor-general to investigate the major contracts in the last five years. In fact, the board asked its own internal auditor to conduct the investigation. This version has been corrected.

Report an error Licensing Options
About the Author
National reporter

Patrick previously worked in the Globe's Winnipeg bureau, covering the Prairies and Nunavut, and at Toronto City Hall. He is a National Magazine Award recipient and author of the book Mountie In Mukluks. More

Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at