Non-profit helping Vancouver’s Downtown Eastside lived large on taxpayer dollars, audit shows

No one expects the people working at non-profit organizations to be martyrs, but audits of one of British Columbia's largest organizations has found that senior staff members were living large while working with the province's poorest citizens.

As a result of an audit by the B.C. health authority, the board of directors for the Portland Hotel Society are all on their way out.

The bad news about the tangled financials of the Portland Hotel Society, which operates Vancouver's safe-injection site and offers 25-cent crack pipes in a vending machine, was not unexpected.

The society, whose staff of more than 300 employees administers 1,200 social housing units and delivers various health and social programs on Vancouver's Downtown Eastside, gets most of its budget (more than $28 million last year) from the federal and provincial governments.

BC Housing, the provincial agency that oversees the society, warned last fall its books were being audited after an initial review found irregularities in its spending practices.

Still, the results of the BC Housing audit, and a parallel audit by the Vancouver Coastal Health Authority, produced some shocking findings, as CBC News notes.

For example: More than $8,000 for a trip to Britain to look at heroin prescription programs, including a hotel room costing almost $900 a night; A $5,900 trip to Austria to teach drug harm-reduction practices with another luxury hotel bill; roughly $2,700 at the Disney Resort Grand Anaheim for two adults and two children and $6,000 on Transat Holidays with no receipts or documentation.

[ Related: Spending by major non-profit helping Vancouver’s homeless, addicts under scrutiny ]

There's more: A $7,000 tab for a celebration of life gathering for a staff member who'd died, an $8,900 bill to hire a minibus and driver during a British visit and $5,800 for a Danube Cruise. Executive directors also charged $1,600 a month to the society to use part of the home they share as an office. They also billed the society for improvements such as new cabinets.

And, oh yes, $917 for a staff member's baby shower.

The Vancouver Sun noted managers and directors claimed more than $69,000 for restaurant bills over three years and expensed more than $300,000 in trips to destinations such as Vienna, Paris, Istanbul, New York, Los Angeles, Banff, and Ottawa.

The audit by the health authority, which is jointly responsible for the Insite supervised-injection site, did find the society was achieving its service objectives, "providing specialized services to a unique population."

But it also found many examples of questionable spending or expenses that weren't properly documented, such as a $679 limo ride for 11 people from Vancouver's posh Fairmont Pacific Rim hotel to Grouse Mountain ski area on the city's North Shore. The same executive billed the society for more than $8,600 in limo expenses in the 2013 fiscal year.

The list of problems found by the audits includes "unsupported expenses" such as those we've noted, misuse of corporate credit cards, sloppy record-keeping and missing receipts, unusual payments to companies owned by society personnel and inadequate criminal record checks of employees.

The government announced Thursday it had reached an agreement with the society that included resignation of its board of directors, including executive director Mark Townsend and wife Liz Evans, and the firing of senior managers.

The resignations came Tuesday before audits were made public. Townsend told CBC News the board and senior managers were given an ultimatum to quit or see the province cut its contacts with the society.

[ Related: Portland Hotel Society managers resign following ultimatum ]

An interim board and management team is being put in place to oversee restructuring of the society.

"The province took this action to safeguard public funds and ensure that more than 1,000 people who depend on housing and support services from the organization continue to receive the care they need," Rich Coleman, minister responsible for BC Housing, said in a news release.

"It will allow us to avoid the costs involved with court action and move quickly to address the financial and operational issues that threaten the programs and services delivered by the society."

Health Minister Terry Lake said the government's main priority is to avoid disrupting delivery of health services to the society's clients and Downtown Eastside residents.

News reports before the audits were completed said there were no allegations of criminal wrongdoing. It's not clear whether that will chance now that the reviews are finished.