CityHousing promises financial ‘report card’

Agency turns to municipality to help address risky practices

The city’s social housing agency will lean on its municipal parent for help fixing sloppy financial oversight that could leave it open to fraud or spiralling project costs.

City councillors had their first chance Thursday to ask questions about an internal audit of CityHousing Hamilton that identified problems like frequent spending on sole-sourced contracts, dangerous cash-handling practices and poor documentation for tender awards.

No examples of fraud were found, but city auditor Charles Brown pointed to the risk of collecting large cash payments for project documents, or relying on the same employees to both collect and deposit cheques, for example.

CityHousing head Tom Hunter told councillors the agency agrees with virtually all of the auditor’s 24 recommendations and said many of the needed fixes have already gone ahead — like banning cash payments for documents in favour of debit payment.

Other quick-fixes include employing “peer reviews” of outgoing contracts and requiring two signatures on “change orders” for existing projects and budgets.

Lack of such oversight contributed to a recent high-profile problem with a parking lot project for a seniors’ residence on the Mountain that saw budgeted costs spiral from $350,000 to $1.1 million.

Ward 7 Coun. Donna Skelly, who first highlighted that infamous project, asked if the agency could speed up its planned improvements to procurement practices, noting the agency has highprofile projects coming up that will use millions in public funds.

That includes affordable housing repairs and new development making use of $20 million of the $50 million in poverty-fighting cash recently committed by council over the next decade.

Hunter committed to come back to council with a “report card” in six months.

But he also noted the agency will be trying to work out a service agreement with the city to make use of municipal procurement staff.

Hunter said the recommended “segregation of duties” between staffers can be a challenge for a smaller employee group like the social housing agency.

CityHousing is about to embark on several ambitious development projects, ranging from a $6-million rehabilitation of a North End apartment tower, to a redevelopment of the Jamesville townhouse complex, to a proposed privatepublic housing partnership in the east end.

Many of the problems identified in the audit have previously plagued the city itself.

For example, the city overhauled its cash-handling practices after discovering in 2012 a collections employee managed to siphon off close to a million dollars in small increments over eight years.