Pubdate: Fri, 21 Mar 2014
Source: National Post (Canada)
Copyright: 2014 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Brian Hutchinson

FINANCIAL REVIEW OF INSITE OPERATOR DETAILS QUESTIONABLE SPENDING

The money was spent on "a very particular thing," or so KPMG's
forensic bean counters were told: a bill in the amount of $5,749 for a
May 2010 trip to Paris, charged to Mark Townsend's Visa Business
Platinum Avion credit card.

Very particular, except there are no particulars. The accountants were
offered no details, no receipts. Such things are "unnecessary" when
you're the head of a $28-million-a-year charity funded almost entirely
by taxpayers, and your mission is to assist the poor and the mentally
ill, and drug addicts, and folks with AIDS and other communicable
diseases, and no one has ever insisted that you explain - let alone
justify - all of your expenses before.

But what's $5,749 when you've personally racked up more than $470,000
over three years on the same credit card, and your wife has charged
another $140,000, and the two other key members of your tax-funded
charity's executive team have added $260,000 of their own? On dubious
expenses, luxury travel. For starters. Mr. Townsend was until
Wednesday co-executive director of the PHS Community Services Society
(PHS), the largest social services provider in Vancouver's severely
distressed Downtown Eastside. His wife, Liz Evans, was until Wednesday
the other PHS coexecutive director. They "resigned," along with two
other senior PHS executives, Kerstin Stuerzbecher and Dan Small, who
was until recently married to B.C. NDP MLA Jenny Kwan, whose riding
includes the Downtown Eastside.

The four executives and the entire PHS board were removed over a
financial scandal that has motored along for weeks, initially fuelled
by vague accusations of improper spending, rumours and innuendo.

Much was revealed Thursday, with more tawdry disclosures coming late
in the day, involving Mr. Small and Ms. Kwan. First, two crucial
financial documents were finally made public, one by Vancouver Coastal
Health, this city's health provider, the other by B.C. Housing, a
provincial Crown corporation. The two organizations provide the PHS
with most of its annual funding, some $17-million a year. Ottawa kicks
in another $2.2-million annually.

B.C. Housing asked KPMG Forensic Ltd. to examine PHS financials
covering three fiscal years, starting in 2009-10 and ending in
2011-12. KPMG completed its work last year. Its efforts were hindered
by lack of disclosure on the part of the PHS, which operates, among
other things, Canada's first supervised drug injection facility,
called Insite, located in the heart of the Downtown Eastside.

"The PHS declined to provide the associated credit card receipts" for
travel, conference and related expenses, noted KMPG in its 126-page
financial review. "PHS also reiterated, among other things, their view
that provision of these receipts was unnecessary to complete a proper
review of these charges. We respectfully disagree."

The PHS spent generously on executive compensation and benefits. Mr.
Townsend and Ms. Evans were each paid more than $120,000 per annum. On
top of that, they charged the PHS $1,400 to $1,600 every month for use
of a "home office" in the basement of their Vancouver home, and over
the three years that were reviewed they billed $11,000 more to have
the space cleaned on a regular basis.

Four PHS executives each received another 30% to 40% in payments on
top of their six-figure salaries, in benefits, according to KPMG;
these supplements included vacation pay, which averaged $20,000 per
executive per year, plus $6,500 each in "statutory holiday pay."

PHS managers also received "retroactive compensation" for fiscal 2010,
receiving cheques of between $4,600 and $6,100 each.

"This increase represented an average 7.8% increase in the wages of
the executive and senior management team," KPMG noted.

After releasing the reports, B.C. Health Minister Terry Lake stood
before reporters in Vancouver and acknowledged the province has for
years been aware of the "mess" at the PHS, hitherto heroes in the
Downtown Eastside, at least to some.

Why had the government not acted sooner to have the charity's senior
management and board of directors removed? Careful scrutiny takes
time, he explained. Things were even worse than initially feared.

There was more, much more, the accountants discovered. Close to
$1-million was put on the Visa Business Platinum Avion credit cards
alone, for luxury travel, world famous hotels, fine dining, liquor,
floral arrangements, hair salons, spas, limousines.

KPMG cites dozens of individual cases, including Item 14, a November
2009 trip to New York City, charged by Mr. Townsend and Ms. Evans. A
stay at the fabulous Plaza Hotel, for $9,266. Ms. Evans spent another
$250 in New York salons.

There was Mr. Townsend's Paris trip in May 2010, for reasons unknown.
Cruise holidays and other vacations were gifted to staff members,
perks of the poverty-solving trade. And a KPMG found "764 restaurant
charges totalling approximately $69,000 over the three-year period of
our review, representing an average of $1,927 per month."

There were questionable payments to various companies under the PHS's
control, including a janitorial supply outfit selling the charity
products at inflated prices. A maintenance and construction company
that billed the charity for work that KPMG could not discern.
Conflicting statements from PHS managers regarding contracts and paid
jobs.

Vancouver Coastal Health produced an audit that covers fiscal 2013. It
found more "questionable" spending and expenses that were not
"reasonably incurred," including a $5,832 Danube River cruise for a
PHS manager, and tens of thousands more dollars spent on other travel,
without supporting documentation. There was a $2,700 Disneyland
vacation for four, in May 2012, paid for by the PHS.

The lucky vacationers? Dan Small, then the PHS's community services
director, and his then wife, Jenny Kwan, plus their two children. Ms.
Kwan, the MLA for the Downtown Eastside, acknowledged in a statement:
"I was assured at the time by my former partner that he paid out of
his pocket for the family-portion of the travel expenses. I never
would have gone had I known that the family portion of the travel
would appear to have been be paid for by PHS."

People always say the Downtown Eastside is rotten. Well, the rot has
sure spread. Many thought the worst might be allowed to happen. It's
now clear that it did.
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MAP posted-by: Matt