The Foxes in the Chicken Coop

"The PHS [Portland Hotel Society -- Community Services Society] declined to provide the associated credit card receipts [for travel, conference and related expenses]. 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."
KPMG forensic audit (professional services)

Mark Townsend of the Portland Hotel Society in Vancouver, British Columbia, Monday September 10, 2012. (CARMINE MARINELLI/QMI AGENCY)

Tell a rigidly proficient, detail-oriented auditing firm that receipts are irrelevant to claims of financial propriety and that's a red cape before a rampaging bull. The staid professionalism of KPMG permitted them the laconic comment that they 'respectfully disagree'. Spending public funding that comes out of tax dollars meant to succour the poor, the homeless, the drug-and-alcohol afflicted profligately, then be prepared to answer for the consequences.

The senior staff of Vancouver's downtown eastside charitable group financed by public dollars asserted that they were above reproach, that they worked hard and endlessly to alter the lives of those whom they served for the better. They also ran the (in)famous Insite program, ameliorating the harm inflicted on drug addicts through their use of unsanitary equipment, with the hope of eventually leading them away from drugs, but in the interim allowing them safety in use.

An invoice, for example, for $5,749 for a trip to Paris in May 2010 charged to the Visa Business Platinum Avion credit card of Mark Townsend. No details, certainly no receipts. Unnecessary, said the head of a $28-million-annually charity. Who would dare question the enterprise and honesty of those involved in assistance to the poor, the mentally ill, the drug addicted, people suffering with AIDS and other communicable diseases?

Portland Hotel Society co-executive director Mark Townsend led the non-profit agency, which opened Canada's first supervised drug injection site, for two decades. He announced his resignation Tuesday.

Theirs is an honourable mission, one that most folks would not care to change places with them for. The credit card that had that Paris trip charged to it also had over $470,000 charged on it over a three year period. And, as it happened, Mark Townsend, PHS co-executive director's wife was the other co-executive director, and her credit card reflected $260,000-worth of travel and payment for luxury goods and pricey restaurants.

Isn't that a hoary old story, now? Those who deny wrong-doing, who sanctimoniously speak of their dedication to the welfare of the poor and describe their efforts to help them to a better life, somehow always seem to feel entitled to special privileges. It is so psychically exhausting to deliver services to those in need that a reward of some significant proportions must of necessity accompany the good deed deliveries.

Alas, Mark Townsend and his wife Liz Evans, until Wednesday PHS co-executive directors "resigned", with two other senior PHS executives. The entire PHS board along with the four executives involved in a financial scandal led by accusations of improprieties in spending. All resigned their posts, and with good cause. Vancouver's Coastal Health, and B.C. Housing revealed critical financial documents attesting to rather severe irregularities in the use of public funds.

B.C. Housing invited KPMG Forensic Ltd. to examine PHS finances over three fiscal years, and the work was completed last year. The auditors cited lack of disclosure on the part of PHS management resulting in a grave hindrance of their work in progress. But it did progress, and it was completed and the result was that the auditors had a quite in-the-round view of executive compensation and benefits and lavish spending.

Mr. Townsend and Ms. Evans had take-home pay over $120,000 annually, while billing the PHS $1,400 to $1,600 monthly for a "home office" located in the basement of their home in Vancouver. Charges of $11,000 in addition for professional cleaning of that office space in their home. A November 2009 trip to New York City when Mr. Townsend and Ms. Evans stayed at the Plaza Hotel for $9,266, and another $250 at a hair salon for Ms. Evans.

The revealing of  "764 restaurant charges totalling approximately $69,000 over the three-year span of the review, representing an average of $1,927 per month." Payment for contracts and paid jobs with no paperwork attached. A $5,832 Danube River cruise for a PHS manager, tens of thousands on other travel, and no supporting documentation.

"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 paid for by PHS", said Jenny Kwan, an NDP MLA representing the riding, who with her two children and her then-husband enjoyed a $2,700 Disneyland vacation in May 2012.