A Toronto legal clinic that has advocated for the Black community for over two decades is in jeopardy of having its funding cut amid allegations of financial mismanagement.

The African Canadian Legal Clinic has failed to address a number of issues, including misuse of public funds, since they first surfaced in 2009, according to a June 2016 decision from a committee of Legal Aid Ontario’s board of directors. The decision, obtained this summer by Metro, found the clinic was in “fundamental breach of its obligations” under its funding agreement with Legal Aid Ontario.

The decision specifically cites an audit by independent auditors PwC, which names Margaret Parsons, the clinic’s executive director, and found she charged $754 for a diamond ring to a company credit card in 2007. Auditors found no evidence the money had been paid back.

The decision also alleges the clinic used money from undisclosed staff vacancies to pay out $170,000 in bonuses, including $121,000 that went to Parsons.

In an interview with Metro, Parsons denied any wrongdoing and said no public funds were ever misused. She did not deny that she bought the ring with the card but says she “paid it back twice” and provided auditors with a receipt. She also said the clinic was transparent about staff vacancies and she never gave or received the bonuses.

“We've always been treated as a pariah of the clinic system,” she said, adding the African Canadian Legal Clinic has been held to a “higher standard” than other community legal clinics.

“They have never given us a fair shake,” she said about Legal Aid.

Parsons said the non-profit clinic has 26 employees, with a budget of about $1.7 million a year that's “for the most part public funding.”

The clinic committee of Legal Aid’s board of directors is expected to decide in the next few weeks if it will suspend the funding it provides. The money makes up 35 per cent of the clinic’s total annual income, according to Legal Aid, which Parsons confirmed. In 2016-17, Legal Aid gave $669,730 to the clinic, Legal Aid spokesman Graeme Burk said.

Since 1994, the African Canadian Legal Clinic has advocated for the Black community on issues ranging from school board discrimination to carding.

“Before Black Lives Matter was around, this clinic was talking about anti-Black racism when no one wanted to say the word,” Parsons said.

Legal Aid's concerns date back several years.

A 2003 forensic audit by Legal Aid Ontario identified several problems with management at the African Canadian Legal Clinic, the Toronto Star reported. Later that year, Legal Aid and the clinic’s board of directors announced a plan to address concerns, including accounting problems, according to the Star.

Legal Aid staff became concerned again in 2009 following the resignation of two clinic board members over concerns of “financial irregularities” and “gross misconduct and illegalities,” the June 2016 decision states, referencing emails from the board members. Legal Aid hired PwC to complete a forensic audit that was finalized in 2013.

Parsons disputes that the board members resigned because of financial concerns and said it was the clinic that requested the PwC audit.

The PwC audit also found that a clinic credit card was used to buy alcohol from the LCBO for on-site “Bacardi Friday” events.

A separate 2014 report from Legal Aid found $6,650 in unexplained cash advances using the African Canadian Legal Clinic's credit card and flagged $39,007 spent on taxis in Toronto.

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Parsons said in the interview that the taxis were legitimate travel expenses for clinic employees. She said the unexplained cash advances and alcohol purchases are due to a few employees who were immediately fired when she found out. She also said that the money was paid back to the clinic.

Based on that report, the clinic was found in “fundamental breach” of its statutory obligations under the Legal Aid funding agreement and was instructed to meet eight conditions to avoid losing funding, ranging from training for board members to submitting a financial restructuring plan.

The June 2016 decision found that the clinic had met only one of them: to co-operate with an audit of overtime. A second internal document from Legal Aid Ontario references a decision from early 2017 that found the African Canadian Legal Clinic had made some progress but had not fulfilled the eight conditions. It declared funding would be suspended March 31, 2017 unless there was full compliance from the board and management.

Parsons and Rawle Elliott, the chair of the clinic’s board, told Metro that all conditions have since been met.

“It’s challenging for a volunteer board, but we’ve met the challenge,” Elliott said.

Burk, the Legal Aid spokesperson, wrote in an email to Metro that “whether or not (the clinic) has complied with the conditions is the very question before the Clinic Committee. We cannot comment beyond that.”

Julian Falconer, a lawyer hired to handle the issue for Legal Aid, said the agency has convened an advisory committee of African Canadian leaders who are helping to assess what the needs are in the community and how to meet them “regardless of what direction the clinic committee takes.”

“It’s essential that at the end of the day the folks that were ultimately intended to be helped by legal services are not lost in what has been a difficult process,” he added.

Falconer said the findings of the clinic committee in the 2016 decision obtained by Metro “speak for themselves.”

“No one is happy with the nature of the allegations involved here. Everyone is concerned,” he added.