Nonprofits investigated for financial discrepancies

Nonprofit organizations that operated long-term supportive housing for Aboriginals in Edmonton and have some of the same directors could be facing more than receivership.

Amisk Housing Association is now the subject of an RCMP investigation while Umisk Housing Association could soon find itself following in Amisk’s footsteps – again.

Homeward Trust is in the process of completing a financial audit to determine if criminal charges should be brought against Umisk. In July 2009, a subsidiary of Homeward Trust took over management of Umisk’s Aboriginal housing, which ran over 60 units in Edmonton.
“We don’t expect (the audit) to take much longer, but it’s really dependent on things that are not in our control,” said Homeward Trust chair Susan McGee, noting that primary information is being obtained from banks as part of that audit.

“Part of the responsibility of our organization is oversight and to make sure money is used for the intended purpose,” said McGee. In this case, that purpose was to provide housing for disadvantaged people in Edmonton. Until the audit is completed it is impossible to say how much money has been misdirected, she said.

When Homeward Trust took over management of the Umisk units it immediately took action, which included assuming the mortgage on one property which was in the process of being foreclosed on, dealing with city ordinances, and paying outstanding bills.

“There was a lot of tenant anxiety about being evicted,” said McGee.

Concerns with the way Amisk managed its 96-unit urban Native housing projects resulted in the Canada Mortgage and Housing Corp. referring the matter to the RCMP for investigation early in 2010.

“CMHC takes these matters very seriously, including the recovery of funds. That is why we have referred this to the police,” said CMHC media relations officer Kate Munroe.

In 2008, “irregularities” in Amisk’s financial statement forced CMHC’s hand, said Charles Sauriol, senior media relations officer with CMHC. Financial discrepancies had also been noted in 2005 but dealt with at that time.
In 2008 CMHC petitioned the court to force Amisk into receivership. Price Waterhouse Coopers was granted receivership/management of Amisk in November 2008 and continues to manage the nine projects.  Health and safety concerns in the Amisk units were immediately addressed.

“CMHC also restricted the disbursement of the federal subsidy to essential project expenses such as mortgage payments, taxes, utilities and salaries,” said Munroe.
Sauriol would not elaborate on what the 2008 irregularities were “because of the (RCMP) investigation.”

However, CBC News is reporting that Amisk Housing Association directors Mel Buffalo, Lawrence Willier and Geordy Saulteaux wrote cheques of nearly $700,000 of public funds to themselves.

While Umisk and Amisk shared some directors they are separate organizations and McGee noted that action taken against the two housing associations was done separately by CMHC and Homeward Trust.

Homeward Trust has funded 70 projects and 1,900 units in Edmonton. McGee said this is the first time in Homeward Trust’s history that these kind of steps have had to be taken. While other problems have occurred it has never been to this extent.

“This is certainly a new circumstance, but we have to be prepared to go this length to ensure the organizations are doing what they’re committed to doing,” McGee said.