From deleted texts to modified report minutes, 8 red flags identified in the B.C. Housing investigation

Rarely had a 50-page report from an accounting firm been subject to as much speculation in British Columbia.

But the investigation into B.C. Housing by Ernst and Young had been eagerly anticipated by a number of groups before it was released on Monday by Premier David Eby, who, as the then-housing minister, commissioned it.

While the title said "Investigation of B.C. Housing," it more specifically looked at the relationship between B.C. Housing and a non-profit housing provider called Atira Women's Resource Society.

Before this year, the two organizations had CEOs married to each other Shayne Ramsay at B.C. Housing and Janice Abbott at Atira and the report (which you can read here) highlighted several issues inhow the organizations interacted.

Here are eight of them.

1: More money

With a budget of $2 billion a year, B.C. Housing provides a number of different services across the province but some of its job is simply giving money to other non-profit organizations that directly provide housing.

Of those, the biggest is Atira: in recent years, the organization kept seeing its budget increase and received $74.1 million from B.C. Housing in 2022, a 335 per cent increase since 2016.

Of the four housing organizations that received the most money from B.C. Housing, Atira had by far the highest percentage of units that required more than $3,500 a month to serviceand the highest percentage of its funding going to administrativecharges.

2. but more problems

Despite this, Atira ran into cash flow issues in 2022, following the purchase of an SRO at 303 Columbia St. in Vancouver for $16.9 million, in part by using $2 million in restricted funds from B.C. Housing it was unauthorized to use.

Ernst and Young also found Atira frequently was behind in providing financial information to B.C. Housingand wrote, "Given the scale of funds provided to Atira, the lack of accurate monthly or quarterly financial analysis represents a significant gap in B.C. Housing's financial oversight."

3. Conflict of interest?

Those concerns wereheightened because of the relationship between Ramsay and Abbott.

In 2010, Ramsay signed a declaration saying that "all dealings and decisions regarding Atira will be made without [his] reference or consultation." But the Ernst and Young report found at least 26 instances where Ramsay broke this rule, at times advocating for Atira to get additional funding or projects.

"Multiple individuals told [Ernst and Young] that Atira regularly bypassed the traditional communication channels by approaching more senior members of B.C. Housing directly for matters such as funding requests," the report stated.

"In turn, the senior members of B.C. Housing told other B.C. Housing employees to 'make it happen.'"

4. Deleted texts

Just how often did this happen?

The report often relies on text messages that Ramsay sent to different employees. But none of those messages were provided during the investigation by Ramsay himself because he tended to delete them.

"I clean them up if I don't need them," Ramsay told investigators, who found just 20 text messages on his phone when they collected it.

"I do it every day, done this for years. I did it yesterday."

This was despite an order by B.C. Housing's chair to "take steps to ensure that all records and things of B.C. Housing are preserved and not destroyed."

Ernst and Young also said Abbas Barodawalla, B.C. Housing's former CFO, also engaged in similar mass deletions of text messages.

"Their actions may represent a deviation from government record retention requirements. This conduct is inconsistent with the expectations of the CEO and CFO of a publicly funded organization," read the report.

5. Money fast-tracked?

In addition to the conflict of interest policies agreed to by Ramsay, another layer of accountability at B.C. Housing was a group called the Executive Committee, comprised of senior officials across the organization.

In theory, any funding decisions of more than $250,000 had to be approved by the Executive Committee. In practice, more than $3 million in COVID-19-relatedfunding was given to Atira without those approvals, including at least eight times between June and October of 2020.

The person who approved the money without the committee's approval was 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 property on the Downtown Eastside for $16.9 million in January 2022.

B.C. Housing had already looked at the property and decided against purchasing it due to the asking price being well above its assessed value. To make the finances work, Atira did two things: used $2 million in restricted funds from B.C. Housing without its authorization and askedit for an additional $1.4 million.

B.C. Housing didn't immediately provide the $1.4 million, but a month later, Abbott sent a text message to someone with the organization, saying, "We are going to hit some cash flow struggles for next payroll" unless they were given the money which was then subsequently approved by the Executive Committee.

7. 303 Columbia the changing of minutes

This wasn't the first time the Executive Committee had dealt with the property: before the purchase happened, B.C. Housing had to sign off on transferring a subsidy to Atira, initially intended for it to manage a different building.

One member of the Executive Committee abstained from the vote but according to Ernst and Young, Ramsay then approached them and asked that he change his vote retroactively.

The report says that Ramsay then had the minutes of the meeting changed to downplay the concerns originally given by the committee member.

8. 303 Columbia the public explanation

In April 2022, a member of B.C. Housing's media relations team sent an inquiry asking how to publicly refer to the $1.4 million given to Atira.

Someone at B.C. Housing responded by writing the following:

"By raising this issue, we only invite others to ask further questions and dig deeper into the decisions of the B.C. Housing Executive. This ultimately negatively impacts our flexibility and "nimbleness" in making decisions that are in the best interests of B.C. Housing, our Providers, our tenants and serve in the best public interest. I would strongly suggest that we not raise this issue unless we are specifically asked for this information."

B.C. Housing never raised the issue. In July 2022, then-housing minister David Eby fired its board.

The following month, Ramsay retired as CEO, with the investigation still ongoing.

The person who made the comment in the report?

Their identity was redacted.