The troubled Toronto Community Housing Corp. is facing two potentially damaging investigations that have not been revealed until now — one into possible financial wrongdoing, one into its hiring and promotion practices.

The first investigation, which was launched by the TCHC itself, is probing the possibility that documents were falsified by a former TCHC-owned subsidiary called Housing Services Inc.

Housing Services did maintenance and construction projects for both the TCHC and other Ontario landlords, including Ottawa Community Housing. According to two people briefed on the investigation, Housing Services may have altered documents to make it appear as though expenses from work actually done in Ottawa were from work done at the TCHC’s 200 Wellesley St. E. building in the aftermath of a major 2010 fire there.

“Toronto Community Housing has ongoing investigations with regards to various matters. I can confirm that one of our investigations is a forensic accounting investigation related to HSI and 200 Wellesley,” TCHC spokeswoman Sara Goldvine wrote in an email.

Improperly allocating expenses to 200 Wellesley could have made the Ottawa project appear more profitable than it was. Such a scheme could also have had serious insurance implications: the TCHC submitted a claim to its insurer, AIG, for 200 Wellesley costs.

AIG has been notified of the situation, said Bud Purves, chair of the TCHC board of directors.

“At whatever point, I’m confident that the police will be involved,” said Councillor Cesar Palacio, another member of the board.

Palacio said he could not discuss any details of the investigation.

Asked to explain why he believes the police will be involved, he said, “That’s the nature of the investigation, the nature of what’s taken place.”

The two people briefed on the investigation, who asked for anonymity to discuss confidential matters, said it appears Wite-Out was used to alter documents. An AIG spokesman refused to comment.

TCHC chief executive Gene Jones would not answer questions on the specifics of the investigation, and the TCHC acknowledged its existence on Monday only upon prodding from the Star. The city-owned public housing provider initially refused to confirm the investigation was occurring.

“To protect the integrity of the investigation while it is ongoing, we cannot comment further at this time,” Goldvine said. “In the interests of transparency and accountability, we will disclose information about the investigation when we are in a position to do so.”

Purves said the probe into Housing Services extends wider than the 200 Wellesley case.

“We’re looking at a lot of things, just to make sure — there’s been so much conversation around the history of Toronto Community Housing, around the history of HSI. We have to move forward, and either put those to rest or validate them. We just can’t turn a blind eye,” Purves said Tuesday.

The city’s auditor general and TCHC employees have previously questioned whether Housing Services and other TCHC-created subsidiaries were being adequately scrutinized.

In 2012, the city auditor, Jeffrey Griffiths, found that the subsidiaries’ reporting of financial results to the TCHC was “limited and in some cases nonexistent.” He also found that “virtually all” meetings of the Housing Services board of directors were “in camera” closed sessions.

“Whether it’s HSI or Toronto Community Housing, we’re just trying to get to a standard where we can say we’re doing our job,” Purves said. “We’ve got to bring credibility to this company. And I’m hoping by this time next year we’ll be a landlord of excellence, and I won’t have to be having these conversations with you.”

The second investigation is being conducted by city ombudsman Fiona Crean. She is studying personnel moves during Jones’s 15-month tenure, in which there has been high turnover in the management ranks.

“This investigation will examine TCHC’s adherence to recruitment policies in the hiring and promotion of staff,” Crean wrote in an Aug. 27 letter to Jones that was viewed by the Star.

“The investigation is being initiated as a result of complaints brought to my office about the hiring and promotion processes employed by TCHC since the summer of 2012,” Crean wrote, “and whether the manner in which those activities were carried out contravened existing policies and procedures, or deviated from human resources practices. I have taken no position with respect to these matters.”

The TCHC and Crean both said they could not speak about an ongoing ombudsman investigation.

Jones, a veteran of U.S. public housing agencies, took over in June 2012 as the permanent replacement for Keiko Nakamura, who was fired in March 2011 in the wake of a spending and procurement scandal. Jones quickly embarked on a broad leadership shakeup, firing several longtime senior officials without cause and creating several new management positions.

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TCHC employees have complained to Crean and reporters that Jones has hired and promoted managers without allowing other people to compete for the jobs. The complaints have not been independently substantiated.

“Gene’s doing a lot of work to turn this company around. I’m not privy to all his practices,” Purves said.

“There is a lot going on at Toronto Community Housing to try to bring in accountability and responsibility . . . and Gene’s a great leader. We just have to see where this takes us.”

The two investigations come on top of a third investigation, into possible “kickbacks” and double-billing, that was announced and discussed by Jones in February. That investigation continues. The TCHC contacted the police in May about two cases of “possible criminal wrongdoing” related to its dealings with outside contractors.

Both of the new investigations are delicate, not only for the TCHC but also the city government.

Mayor Rob Ford forced the ouster of the TCHC board of directors after the 2011 scandal. He strongly endorsed appointing Jones, whom he has praised at length, and he is eager to prove his May assertion that the agency has “turned the corner.”

Housing Services has not yet been formally dissolved, but its operations were folded into the larger TCHC last October. Two months earlier, the city hired the company’s chief executive, Josie Scioli, as its own chief corporate officer. Scioli now manages the government’s real estate, 311 service, facilities, fleet services, and environment and energy divisions.

Scioli, who led Housing Services for three years beginning in 2009, said she has not been interviewed as part of the investigation. She said was not aware, as chief executive, of the possibility that documents had been falsified and has only learned of the situation more recently, “from the grapevine.”

“Listen: anything that I know, I deal with,” Scioli said Monday. She referred all specific questions to Jones, saying she was in an “awkward position.”

“What you’re talking about, obviously it’s not something that was brought to my attention,” she said. “That’s all I can say.”

Housing Services, founded in 2004 as a money-making venture for the TCHC, was folded as a result of its poor financial performance. Much of its staff remains employed by the TCHC.

The September 2010 fire at 200 Wellesley forced more than 1,200 people from their homes and resulted in extensive water and smoke damage. Housing Services was the TCHC’s general contractor at the building during the “emergency response phase” and a subcontractor during the “reconstruction phrase,” Goldvine said.

Around the same time, Housing Services was doing railing-replacement and balcony repair work for Ottawa Community Housing, said that agency’s chief executive, Jo-Anne Poirier. The Ottawa agency paid Housing Services a total of $6 million between 2009 and 2012 for repairs, pest management and toilet retrofitting, Poirier said.

Daniel Dale can be reached at ddale@thestar.ca or 647-627-9734.