After auditing the Vancouver social housing provider the Portland Hotel Society, the British Columbia government has significant concerns and is nearly ready to act on them.

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"I can't give you all the information right now on it, but there's some concerns," said Rich Coleman, the minister responsible for BC Housing. "There's been an audit done. You'll be hearing more about it in the not too distant future as we work through the issue."

Told that The Tyee had heard from sources the government could put the PHS into receivership as early as Wednesday, Coleman said, "I don't think it will come as quickly as that... I think we're probably a week to 10 days, then I'll be able to talk to you more about it."

The process won't necessarily result in receivership as the government continues to work through the issues, but it appears headed that way, he said. "I'm not in a position to get into the details, though I know what the details are."

Reviews and audits

The PHS operates 16 housing sites with some 1,200 tenants in the Downtown Eastside of Vancouver and employs over 500 people. It provides housing and support for people with mental illnesses and substance abuse issues. It also runs a supervised safe-injection site.

In 2012 PHS had an operating budget of $28.2 million, with $17.1 million of that coming from provincial government ministries and agencies, the Canadian Press reported in November.

In the fall, BC Housing CEO Shayne Ramsay released a statement saying his agency brought in accountants to review the PHS books after discovering irregularities in spending. The goal was to make sure public resources were being spent appropriately and the PHS was using proper financial and operational controls, he said.

"We've been working with BC Housing to address any concerns," PHS executive director Mark Townsend said. "We thought that was going well." There's been no indication the process wasn't going well, he said.

Early in the interview Townsend said there had been no audit, but later said Vancouver Coastal Health, which funds some of PHS's projects, did do an audit but the results are not in yet. "We haven't seen that audit, so I doubt [Coleman] has. As far as I know it's not complete."

Financial arrangements

Coleman said the issues the auditors found are similar to ones at the Downtown Eastside Residents' Association a couple years ago. "It's all usually around the fiscal side and the management that we look at because we have operating agreements and financial arrangements with these guys, and so does [the ministry of] health. That's the piece the audits dealt with."

Townsend said that for a relatively low management fee of about 6.9 per cent the PHS provides housing and services to a difficult, challenging population. "These are difficult projects to run," he said. "I hope [Coleman] will actually speak to us directly and we can explain what we're doing and the reasons we do things."

Townsend said there are definitely things the PHS could do better in terms of spending and management practices, but it's not like the agency owes money to anyone that it hasn't been able to pay. "If we were like a bureaucracy we couldn't do the things we do," he said. "We're not like a bureaucracy. We're trying to get things done."

Coleman said the issue is about more than how the PHS spends its administration fees. "If it was just an admin fee issue, it wouldn't be at the stage that it's at," he said.

On March 4 Coleman is scheduled to sign a five-year affordable housing agreement at the B.C. legislature with the federal minister of state for social development, Candice Bergen.