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Comment: Eby sitting on forensic audit of BC Housing

As Western Investor delves into massive and questionable spending on social housing in B.C., premier is holding back a damning report
B.C. Premier David Eby at a BC Housing project in North Vancouver. | North Shore News

David Eby made a typically slick move in the run-up to the moment last year when he stepped down from cabinet to run for the premiership.

He’d spent 18 months responsible for the crucial housing portfolio, and it had become apparent — at least to insiders — there were problems with the main tool the government uses on housing issues — the B.C. Housing Management Commission.

So he did the right and proper thing, ordering an independent “financial systems and operational review” by the Ernst & Young accounting firm.

It was completed just as he was deep into planning his run for the premier’s office. The findings spelled trouble for him, because it listed a number of management and system deficiencies.

The NDP had massively increased its financing of the outfit, and it looked like B.C. Housing couldn’t begin to handle the increased responsibilities that came with the cash.

Not the kind of thing a leadership hopeful wants to deal with at kick-off.

So he managed it as best he could, with a low-key statement about the damage on the Canada Day weekend.

A week later he fired the NDP-appointed board, for good measure. That showed how serious the report was, but also signalled he was dealing with the damage.

Weeks later, long-time CEO Shayne Ramsay abruptly retired with an extraordinary notice. He said he didn’t have any confidence he could solve housing problems. He wrote of being threatened with violence at a public hearing and of being unable to sleep for thinking about murders of homeless people.

A police shooting near a homeless encampment was the final straw, he wrote.

But there was a subsequent chapter to the B.C. Housing story that was suppressed.

After the Ernst & Young indictment of management, a far more serious review was undertaken in secret at Eby’s direction.

It was a forensic investigation of B.C. Housing, and Eby didn’t reveal it until last November, during question period in the legislature.

A forensic investigation denotes suspicion of outright wrongdoing. It’s far more serious than an audit of management practices.

Revealing that he was commissioning such a probe would have raised even more questions about how he oversaw his portfolio. So he sat on the news until he was safely installed as premier. Around the same time in November he divulged the forensic audit had been underway for months, Liberals leaked yet another audit of a B.C. Housing contractor agency. Atira Women’s Resource Centre, run by Ramsay’s wife, was heavily criticized in a review that was started by the previous government and ran through the change of power.

Sloppy accounting and questionable management were cited in numerous instances, but the agency got more than $100 million from the government even through the audit period.

So that’s two damning audits of agencies under Eby’s watch that were conducted on the down low.

All of which leads to Monday’s question period. After Housing Minister Ravi Kahlon disclosed on Friday that the forensic audit has been completed and submitted, opposition Liberals demanded that it be released.

Another game of dodge ball ensued.

Eby said it’s a serious issue — perhaps a clue there is more bad news coming — and he’s working on releasing “as much of the report as the law allows.”

The law cited is the freedom-of-information and privacy protection law that requires close scrutiny of all findings to do with individuals.

“We’ll do it as soon as possible,” he said.

Whatever version of the audit is finally released, it’s an open question whether it will address the fundamental concern:

Are taxpayers getting full value for the astronomical sums of money being poured into housing?

B.C. Housing’s annual reports — all of which were blessed by independent auditors, by the way — show it got $513 million in provincial funding in 2017-18.

This year it’s $1.9 billion. B.C. Housing is producing 3,000 to 4,000 new units a year, but some targets are not being met.

The latest one says the government plans to commit $7 billion over 10 years.

That kind of cash needs a lot of rigorous cross checks to ensure it gets where it needs to go.

Every day of delay on releasing the forensic investigation heightens the speculation.

The NDP’s main measure of progress on assorted fronts is how much money they are spending.

There’s a lot more to it than that.