Pubdate: Thu, 20 Mar 2014
Source: National Post (Canada)
Copyright: 2014 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Brian Hutchinson
Page: A6

CLEANING HOUSE ON THE EASTSIDE

Financial -irregularities push bosses out

It poured rain here Wednesday morning. Mark Townsend was on a downtown
street corner, waving his arms, trying to hail a taxi. He had no
umbrella. He was getting soaked. I happened by in my car and offered
him a ride.

Mr. Townsend hopped in, and after exchanging some pleasantries, we
headed for his desired destination in the Downtown Eastside (DTES).

What a coincidence: Only minutes earlier, he had announced on local
CBC radio his resignation as co-executive director of the PHS
Community Services Society, the controversial - and more recently very
controversial - $28-million-a-year charity that manages Insite,
Canada's first supervised drug injection facility.

The PHS also owns real estate in the DTES, and manages more than a
dozen hotels and residences for hundreds of the neighbourhood's most
destitute, including drug addicts, sex trade workers and the mentally
ill.

The agency has been under an especially dark rain cloud lately,
because of suggestions from Rich Coleman, B.C.'s deputy premier and
the minister responsible for housing.

He t old reporters two weeks ago recent audits and financial reviews
have uncovered financial "irregularities" and questionable spending
practices at the PHS, which last year received almost $19-million in
provincial funding.

He refused to offer specifics and has not agreed to any interviews on
the subject.

Last week, government sources said something was afoot.

The National Post reported "the province will make an announcement
regarding the PHS and its future sometime in the next few days =C2=85 One

possible outcome is the removal of the society's executive staff and
board, with its operations placed under the direction of new
management."

Which is pretty much what happened. Mr. Townsend announced Wednesday
he is leaving the PHS as of March 31, the end of the charity's fiscal
year.

His wife and co-executive director, Liz Evans, will also step aside,
as will two other senior PHS managers, plus all eight members of the
charity's board of directors.

According to Mr. Townsend, t he province handed them an ultimatum: Get
out now, or stand back and watch as appointed receivers take control
of the whole operation.

"It was essentially do what we say or we'll burn the village," he
explained Wednesday morning.

Mr. Townsend and Ms. Evans have worked at the PHS since its founding
in 1993. They are fixtures in the community, both loved and loathed -
there's no middle ground inside Canada's poorest postal code. All
organizations, every decision, each dollar spent in the DTES are
highly politicized.

Many years ago, when the PHS was still small, my sister worked there,
and from what I observed then, staff did a remarkable job with the few
resources they had.

The PHS has since grown into the area's largest social services
provider, and while its focus is still on serving the DTES's poor and
the marginalized, it now runs Insite, and a radio station and an art
gallery, and various "social enterprise" operations in the food and
retail sectors.

Money for core programming remains tight, even with its new revenue
streams and the $28-million coming in every year from the provincial
and federal governments. PHS advocates say the work it performs would
cost taxpayers far more and would be conducted less effectively and
compassionately were it somehow handed over to the private sector.

Mr. Townsend and Ms. Evans were well-compensated, each earning
$120,000$160,000 in the last fiscal year. Four other PHS managers were
in the same pay bracket. All PHS activities will continue, just under
new management, starting in April.

Rachel Sawatzky welcomes the news. A young Vancouver entrepreneur and
chocolatier, she owns a popular chocolate shop on the city's west
side. Two years ago, the PHS asked if she would help it set up its own
chocolate business and cafe in the DTES, called East Van Roasters.

"I declined to work with the PHS after Mark Townsend met me for lunch
[in a local restaurant]," Ms. Sawatzky recalled.

"He was finishing a meeting when I arrived, and another started as I
was leaving - three lunches in a row, with wine at Mr. Townsend's
insistence, at $20-$30 per person, with the PHS footing the bill. My
stomach started turning.

"I have friends who work for the PHS, both at Insite and in the
hotels, and they often told me of understaffing and feeling unsafe,
particularly in the hotels. Three f at cat lunches in a row would pay
a whole day's salary for an extra staff member, I thought."

Ms. Sawatzky remembers asking how the PHS planned to obtain cacao
beans for its chocolate, "a process that usually takes months," she
said.

"I was told that they had both the money and the power to fly someone
to a tropical country the next day and have beans to work with three
or four days later, and that it might be a good way for someone to get
a free vacation."

Rumours began circulating this year and last about other inappropriate
expenses: staff haircuts; a trip to Disneyland; a European cruise.

To the charity's poverty stricken clients and its funders, these are
not trifles.

On Wednesday, Mr. Townsend admitted one of his managers was given a
paid vacation in Germany.

"She had been subjected to like [sic] torture" due to outside
financial reviews, he told The Globe and Mail. "We used money from a
social enterprise, the clothing store."

He was not quite so forthcoming in an opinion piece he wrote last week
in the Post.

"We acknowledge that we have made mistakes, as we have grown quickly
and have been focused on achieving things that impact peoples' lives
in the real world.=C2=85 We want to address the issues that have been
identified, including the fact that we occasionally hold meetings in
restaurants, or have even paid a staff member's expenses to fly home
for a funeral. These costs have been paid out of our administrative
fee."

What else happened inside the PHS? Government sources say the
province's independently conducted financial review of its finances
will be made public Thursday morning.

As it happens, the minister responsible, Mr. Coleman, will be making a
new housing announcement in the DTES later the same day. He should
draw a crowd, so things may get very lively. Mr. Townsend knows how to
mobilize supporters.

Perhaps he' l l even be there; our chance encounter Wednesday was too
brief.

Mr. Townsend stepped out of my car Wednesday morning at East Hastings
and Columbia, in the heart of the DTES. "God bless you," he said. He
promised to call later and answer more questions, but that didn't happen.
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MAP posted-by: Matt