Operational Review Report For. CityHousing Hamilton. Date of Review:

Transcription

1 CityHousing Hamilton March 4, 2010 Page 1 Operational Review Report For CityHousing Hamilton Date of Review: Completed by: SHS Consulting in association with Refact Consulting, for Ron Wilson, Housing Officer City of Hamilton, Housing Division 71 Main Street West Hamilton, Ontario, L8P 45 Phone: (905) In Attendance: At the administration office (55 Hess St. / 191 Main St.): For SHS consulting: November 5, 2009, Ed Starr, Cassandra Vink, and Johanna Hashim, Alex Siniakov November 6, 2009, Cassandra Vink and Johanna Hashim November 9, 2009, Cassandra Vink, Johanna Hashim and Adene Kuchera November 10, 2009, Johanna Hashim and Adene Kuchera November 17, 2009, Johanna Hashim and Adene Kuchera At the buildings reviewed: For SHS consulting: Ed Starr and Johanna Hashim November 9, 2009: 155 Park The Martinique: Dave Chambers (Property Manager) and Kevin Johnson (Custodian), 20 Congress Pine Grove Place: Chris Saunders (custodian), 2 Oriole Crescent #104: Neil Johnson (Property Manager) November 10, 2009: 500 McNab North: Donna Kirchnoph (Property Manager), 10 Brock Street #3 and #7 Donna Kirchnoph (Property Manager) November 11, 2009: 95 Hess: Andy (Custodian), 120 Strathcona Strathcona Gardens: Jacqueline Rosettani (Property Manager), 66 Greendale #25: Dave Pangborn (Property Manager)

2 CityHousing Hamilton March 4, 2010 Page 2 Municipal Freedom of Information and Protection of Privacy Act: Please note that this report may include information which is protected under the Freedom of Information and Protection of Privacy Act. No private information contained in this report should be released without the written consent of the individual to whom the information relates. Disclaimer: The purpose of this operational review is to assist CityHousing Hamilton in meeting the requirements of a Local Housing Corporation and their responsibilities under the Social Housing Reform Act, 2000 (SHRA). This report does not provide a complete statement of issues and concerns arising from the operation of the housing portfolio which is the subject of this report. This report is not intended to be relied upon by any third party. The City of Hamilton, its employees, consultants and agents are not liable for any injury or damage (including death), property loss, damage, costs or expenses sustained by or claims or actions against CityHousing Hamilton, its directors, officers, employees, independent contractors, residents, members or any other third party, which may arise directly or indirectly from oral or written statements made by the City of Hamilton, its employees, consultants or agents as a result of the operational review conducted by the City of Hamilton. CityHousing Hamilton is advised to take all steps which may be needed to satisfy itself as to its compliance with the City of Hamilton s requirements under the program and at law.

3 CityHousing Hamilton March 4, 2010 Page GENERAL INFORMATION 1.1 PROJECT DESCRIPTION Issue: The Building Selection Form for Access to Housing does not accurately reflect all of the units in CityHousing Hamilton s portfolio. The total portfolio consists of: Project Name Address Municipality # of Units Program Municipal Non-Profit Housing Broadway 101 Broadway Ave Hamilton 45 Federal-Provincial Gageview Place 1285 Upper Gage Ave Hamilton 13 Federal-Provincial King St. E 1781 King St E Hamilton 18 Federal-Provincial Limeridge E Rd 1150 Limeridge Rd E Hamilton 66 Federal-Provincial Limeridge E Rd 580 Limeridge Rd E Hamilton 65 Federal-Provincial Oakwood Mews 25 Towercrest Dr Hamilton 64 Federal-Provincial Stone Chuch Rd. 470 Stone Church Rd E Hamilton 70 Federal-Provincial The Crofts of McClure 1884, 1900 Main St W Hamilton 158 Federal-Provincial PH 1 - Wentworth St N 75 Wentworth St N (40 Apts), Ashley St (8 Th), 89, 93 Century St (2 Th) Hamilton 47 Federal-Provincial PH 2 - Wentworth St. N 75 Wentworth St N (40 Apts), Ashley St (8 Th), 89, 93 Century St (2 Th) Hamilton 3 Federal-Provincial Brock St. 10 Brock St Hamilton 10 Provincial Cumberland Gage 430 Cumberland Ave Hamilton 152 Provincial Lillian Heights 67 Ossington Dr Hamilton 20 Provincial Rymal Court 1081 Rymal Rd E Hamilton 23 Provincial Wave 1 - The Trenholm 1100 Limeridge Rd E Hamilton 57 Provincial Upper Paradise Rd 772 Upper Paradise Rd Hamilton 47 Municipal Non-Profit Total Municipal Non-Profit 858 Villa Corvo - Gurnett Drive Hamilton Portuguese Non-Profit Housing / Hamilton Portuguese Community Homes 7, 11, 15, 19, 23 Gurnett Dr Hamilton 5 Federal-Provincial Villa Santa Maria 680 Stone Church Rd W Hamilton 65 Federal-Provincial Villa Sao Miguel 170 East Ave S Hamilton 46 Federal-Provincial Stonechurch Rd W Hamilton 45 Sec. 95 Private Non- Hamilton Portuguese Profit Community Homes (Federal)

4 CityHousing Hamilton March 4, 2010 Page 4 Project Name Address Municipality # of Units Program Total Hamilton Portuguese Non-Profit Housing 161 Dundas Valley Non-Profit Housing Motherwell Mills Hatt St Dundas 34 Federal-Provincial Sherwood Place 25 Lynden Ave Dundas 40 Municipal Non-Profit Total Dundas Valley Non-Profit Housing 74 City of Hamilton Properties Roxorough Park 1,3,6,22,23,26 / Bernard St./ Eaton Pl/ Airdrie Ave/ Bingham Rd Hamilton C 173 Federal-Provincial Roxorough Park (Even) Lang St. Hamilton C 91 Federal-Provincial Bernard / Britania 35,37(Odd),59 Bernard St./685, (Odd),699 Britannia Ave Hamilton C 10 Federal-Provincial Saint Andrews Dr 10 St. Andrews Drive Hamilton C 96 Public Housing Kenora Ave 245 Kenora Avenue Hamilton C 168 Public Housing Congress Crescent 20 Congress Crescent Hamilton C 110 Public Housing Congress Crescent 30 Congress Crescent Hamilton C 110 Public Housing Mt. Albion / Congress 50 Congress Crescent Hamilton C 53 Public Housing Crescent Queenston Road 555 Queenston Road Hamilton C 200 Public Housing 11 Holton Ave N, Balsam St S, Hamilton C 18 Scattered Units Brucedale Ave E, Walmer Rd, Private Hamilton OH 9 (scattered units) Bingham Rd/ 34,36,44 Martha St S./Roxborough Hamilton C 69 Public Housing Oriole Crescent 1 & 2 Oriole Crescent Hamilton C 159 Public Housing Stoney Creek OH 1 5 Maple Ave. Stoney Creek 43 Public Housing 10,12 Jotland Ct./ Markham Cres/ Stoney Creek 17 Stoney Creek OH 6 Arbut Cres. Public Housing Stoney Creek OH 3 Catherine St. North 12 Mellenby St./ Odessa St./ Rand St./William Johnson St 385,387,405,523 Catherine Street North Stoney Creek 23 Public Housing Hamilton C 4 Federal-Provincial Osler Drive 104 Osler Drive Dundas 29 Public Housing Sanford / Aikman Sts 30 Sanford Ave. South Hamilton C 350 Public Housing Main & Hess 191 Main St. W, 200 Jackson St W Hamilton C 462 Public Housing James Street North 4-10 (Even) Picton St. West/ James Hamilton C 17 St. North Public Housing

5 CityHousing Hamilton March 4, 2010 Page 5 Project Name Address Municipality # of Units Program Hamilton OH 11 (scattered units) 2-36 (Ev) Strachan St W/Macnab St N/ Ferrie W/James St N Hamilton C 91 Public Housing Martinique 155 Park Street South Hamilton C 375 Public Housing Rebecca St. 226 Rebecca St Hamilton C 199 Public Housing Kenneth Soble Towers 500 Macnab St. North Hamilton C 146 Public Housing Jackson / Hess 95 Hess St, 181 Jackson St W Hamilton C 555 Public Housing Governors Road 249 Governors Rd. Dundas 25 Public Housing Florence 120 Strathcona Ave N Hamilton C 259 Public Housing Mohawk Gardens 17,18,19,20 Seeley Ave./East 23rd Hamilton C 84 St./ East 24rd St./East 25st St./East 21st St./East 22st Federal-Provincial Fiddlers Green Road 109 Fiddlers Green Rd Ancaster 45 Public Housing Purnell Drive 77 Purnell Dr Hamilton C 131 Public Housing Quindale Gardens (scattered units) 11, 28 Rainham St/ Queen Victoria Dr/ Quinlan Ct/ Queenslea Dr/ Raleigh Ct Hamilton C 13 Public Housing Upper Ottawa St. 980 Upper Ottawa St Hamilton C 57 Public Housing Cranbrook / Greendale Locheed / Limeridge Rd (Odd) Cranbrook Dr / Greendale Dr 1111, (Odd) Limeridge Rd E/ Locheed Dr Hamilton C 66 Public Housing Hamilton C 54 Public Housing Hamilton OH 32 (scattered units) Limeridge Rd / Elgar Ave 11, 66, 83 Locheed Dr/ Birchview Dr/ Limeridge Rd/ Carson Dr/ (Even) Limeridge Rd / Elgar Ave Hamilton C 40 Public Housing Hamilton C 30 Public Housing Hamilton OH 6 (scattered units) Bobolink Rd /Millwood Place 1, 3, 5, 19, 20 Banff Dr/ Austin Dr. Hamilton C 86 Public Housing (Odd) Bobolink Rd/ 4, 6-48 (Even) Millwood Pl Hamilton C 46 Public Housing Montcalm Drive 45 Montcalm Dr Hamilton C 76 Public Housing Macassa Park 60, 92 Macassa Ave Hamilton C 40 Public Housing Upper Gage Ave 801 Upper Gage Ave Hamilton C 244 Public Housing Glamis Court 25 Glamis Ct Hamilton C 1 Public Housing Rexford Drive 209, 211, 230, 232 Rexford Dr Hamilton C 6 Public Housing Lawfield Manor 12 Lisa Ct / 15, 22, 35, 54 Folkstone Hamilton C 9 Ave/ 39, 62 Lawnhurst Dr Public Housing

6 CityHousing Hamilton March 4, 2010 Page 6 Project Name Address Municipality # of Units Program Gourley & Lawfield W 104,140 Lawnhurst Dr / Lester St/ Ling St/ Garrow Dr/ Gondola St Hamilton C 49 Public Housing Mohawk Gardens 395 Mohawk Rd E Hamilton C 28 Public Housing Hamilton Home Project 25 Brewster St/ 51, 91, 64 Berrisfield Cres Hamilton C 4 Public Housing Mohawk Gardens 395 Mohawk St E Hamilton C 169 Public Housing Total City of Hamilton Properties 5,130 First Place Hamilton Housing HOPE 405 ork Blvd Hamilton 60 Provincial Central & Pilgrim Place 185, Jackson St E Hamilton 79 Federal-Provincial First Place 350 King Street East Hamilton 463 Sec. 27 Non-Profit (Federal) Total First Place Hamilton 602 Ada Pritchard Apartments Section 27 Non-Profit 68 Macassa Avenue Hamilton 45 Coronation Park 41 Reid Ave South Hamilton 16 Total 61 Total CityHousing Hamilton Portfolio 6,886 Sec. 27 Non-Profit (Federal) Sec. 27 Non-Profit (Federal) The Building Selection Form for Access to Housing lists the projects an applicant can apply for. This list is available on the City s website. The number of units for the following projects is listed incorrectly: 122 Hatt Street: listed as 31, should be Macassa / Upper Sherman: listed as 61, should be Upper Gage Avenue: listed as 242, should be Queenston Road: listed as 199, should be Rebecca Street: listed as 189, should be Hess Street South: listed as 556, should be Jackson Street West: listed as 465, should be Ashley, Century: listed as 10, should be King Street East: listed as 85, should be ork Blvd.: listed as 54, should be 60 The following projects were listed on the Building Selection Form but were not in the list of CityHousing Hamilton projects: 280 Fiddlers Green Road 5 Kendale Court

7 CityHousing Hamilton March 4, 2010 Page 7 Directive To meet its requirements under the Social Housing Reform Act, CityHousing Hamilton is directed to request that the Building Selection Form posted on the City s website be updated to correct the discrepancies discussed above, and that CityHousing Hamilton staff regularly review the Building Selection Form to ensure that it matches with CityHousing Hamilton s portfolio listing. 2.0 CORPORATE REQUIREMENTS 2.1 MEMBERS, OFFICERS and DIRECTORS Issue: The corporate status information filed with the Ministry is not up to date. Section 3 of O. Reg. 339/01 requires that every housing provider be incorporated under one of the prescribed Acts under which non-profit or co-operative corporations are normally incorporated. The Corporations Information Act requires that a "notice of change" be filed when there is a change of directors/officers and/or a change of their home address. The corporate status should be active, the member/director list should be current and all corporate reporting should be up-to-date. A list of directors/members was provided by the group and reviewed. The list differs from the list contained in Corporate Search conducted on November 26, 2009, and no Notice of Change has been filed since the election of the current directors on April 30, The last Notice of Change was filed on June 7, Directive To meet the requirements of the Corporations Information Act, the Board is directed to file a "notice of change" with the Ministry of Consumer Services. 2.2 MINUTES AND MEETINGS Issue: Vacancy and unit allocation reports, maintenance reports, and resident relations reports are not reviewed regularly by the Board. The Corporations Act and The Co-operative Corporations Act require that a minute book be kept and that minutes are properly approved and certified. A minute book is kept for 2006 and electronic versions of the minutes are kept beginning in The minutes appear to be properly approved and certified.

8 CityHousing Hamilton March 4, 2010 Page 8 Minutes were reviewed onsite for the period January 2006 to December Six Board meetings, including the annual general meeting, were held during that period of time. Five Board meetings, including the annual general meeting, were held during the period January 2007 to December Seven Board meetings, including the annual general meeting, were held in the period January to December Seven Board meetings, including the annual general meeting, are scheduled for the period January to December There is evidence in the minutes that the Board reviews their operations through Board review and approval of: N N N the annual operating budget the audited financial statements monthly/quarterly financial reports the rental arrears report the vacancy and unit allocation report the maintenance report the resident relations report the personnel/staff report In addition to the reports above, the Board reviews the following reports at most Board meetings: List of Unfinished Business Financial / Administration Reports, such as Mortgage Renewal Reports Real Estate / Capital Works / Property Management Reports, such as Capital Works Summary Reports, Updates on Developments, Proposed Rental Rates Reports Recommendation It is recommended that the Board review the following reports: the vacancy and unit allocation report at each meeting and the maintenance report, and the resident relations report quarterly. The Social Housing Reform Act, 2000 prohibits the Non-Profit from lending or giving away any project funds (rent received or payments from the City of Hamilton or interest on such payments) or underwrite the repayment of any obligation of a third party. There is no evidence in the minutes that money is loaned or being given away.

9 CityHousing Hamilton March 4, 2010 Page ANNUAL GENERAL MEETING Issue: the directors are elected and officers are appointed at a meeting other than the annual general meeting which may not meet the requirements of the Corporations Act. An annual general meeting must be held every year as required under the Corporations Act for the purposes of: The appointment of an auditor Election of directors and appointment of officers The last Annual General Meeting was held on July 16 th, The appointment of an auditor was confirmed at the last annual general meeting. Election of directors and appointment of officers was not completed at the last annual general meeting. Directors were elected and officers were appointed on April 30, 2007 (which was not the annual general meeting) for a term to expire on November 30, A new Chief Executive Officer/Secretary was appointed on February 11, Directive To ensure its responsibilities under the Corporations Act are met, The Board is directed to obtain legal advice to confirm that electing the directors and appointing officers at a meeting other than the annual general meeting is legally binding. 2.4 QUORUM No Issues: a quorum was present at all meetings. According to Bylaw #1, the quorum size is the majority of the elected directors. A quorum was present at all of the meetings reviewed.

10 CityHousing Hamilton March 4, 2010 Page SOCIAL HOUSING REFORM ACT, 2000 REGULATIONS/MANUALS/DIRECTIVES Issues: There is no Service Agreement or Shareholders Agreement with the City of Hamilton. There are no written policies and procedures for internal transfers and internal reviews. The review revealed that: N The City of Hamilton Service Agreement has been fully executed and is on file. The City of Hamilton s Communiqués are available for reference and filed/stored in a convenient location (They are available for reference on the City of Hamilton s website) A copy of the Social Housing Reform Act, 2000 and related Regulations are available for reference. (They are available online and in hard copy) The Service Manager s Guides: Special Needs Housing and Central Waiting List & RGI Assistance are available for reference. There is no Guide to the Operating Framework. Access to Housing policy and procedure information is available for the public s reference, including the internal review process. (The access to Housing Application Guidelines are available on the City of Hamilton s website. Information on the internal review process is provided when a decision is made that is eligible for internal review) And that the following information concerning their housing project is available to the public: The information provided under section 60 of Ontario Regulation 298/01 to the housing provider by the service manager. The following information is available to the public on the City of Hamilton s website: 1. The housing projects within the service manager s service area and the housing providers that operate them 2. How to apply for rent-geared-to-income assistance 3. The eligibility criteria for rent-geared-to-income assistance 4. The requirements to be included in the special priority household category

11 CityHousing Hamilton March 4, 2010 Page The requirements to be included in the categories established by the service manager under local priority rules and ranking rules for these categories. 6. The requirements relating to waiting lists. 7. The geographic areas into which the service manager has divided its service area for the purposes of its centralized waiting list 12. The mandates, established under section 99 of the Act, of each housing provider that operates a housing project within the service manager s service area The following information was confirmed to be available elsewhere: 5. The provincial and local occupancy standards in force within the service manager s service area. (In the lease) 8. The rules and procedures in respect of the transfer of households to a unit in a housing project operated by a different housing provider. (In the lease and the Community Relations Worker provides this information to interested tenants) 9. The type of decisions of the service manager that are subject to internal review. (In the letter provided when a decision has been made that is subject to internal review) 9.1 The rules and procedures of the service manager in respect of the internal review of decisions. (In the letter provided when a decision has been made that is subject to internal review) 9.2 The rules and procedures of the service manager in respect of the opportunity for members of the household to comment on information that may form a significant basis for a decision that is adverse to the household. (In the letter provided when a decision has been made that is subject to internal review) Some information was not reviewed as it relates most directly to Access to Housing, and the City of Hamilton determined that they are beyond the scope of this review. Information concerning the types and sizes of units in its housing project. (On the City of Hamilton s website) N The housing provider s policies and procedures for internal transfers (Information on internal transfers is provided to interested tenants by the Community Relations Worker. No written policies and procedures are currently in use. A draft internal transfer policy was developed in April 2005.) Partial The housing provider s procedures for internal reviews under section 20, O.Reg.339/01,s.9(1). (Internal review procedures are explained verbally

12 CityHousing Hamilton March 4, 2010 Page 12 originally and then explained in the letter provided when a decision is subject to an internal review. No written procedures are currently in use.) Members of the public are allowed to make copies of the information at their own expense. O.Reg.339/01,s.9(2). (Staff indicated they would make copies of the information for anyone who is interested.) Recommendation It is recommended that the Board execute a Service Agreement and Shareholders Agreement with the City of Hamilton. It is recommended that the Board ensure that written policies and procedures are developed and followed for internal transfers and internal reviews. 3.0 CONFLICT OF INTEREST 3.1 CONFLICT OF INTEREST BLAW No Issues: The Board has a Conflict of Interest provision in its by-laws and staff have a Conflict of Interest Policy. Section 4 (2) of O. Reg. 339/01 states that: Conflict of interest is defined by the regulation as a situation in which: 1. The personal or business interests of a director, officer, agent or employee of a housing provider are in conflict with the interests of the housing provider. 2. A personal gain, benefit, advantage or privilege is directly or indirectly given to or received by a director, officer, agent or employee of a housing provider, or a person related to one of them, as a result of a decision by the housing provider. The Act requires that housing providers implement a conflict of interest policy/bylaw that is consistent with this directive. Policies in this directive may be reflected in a Conflict of Interest bylaw, or a Code of Conduct By-Law, or a Spending/Financial By-Law. The Conflict of Interest provisions of the bylaw approved by the Board, as well as the City of Hamilton s Conflict of Interest Policy for staff, were reviewed. The bylaw(s) meets all requirements of the Social Housing Reform Act, In addition, a conflict of interest declaration is a standing item on each agenda.

13 CityHousing Hamilton March 4, 2010 Page IDENTIFIED CONFLICT(S) OF INTEREST No Issues: Any conflict of interests identified have been appropriately disclosed and resolved. There was one known conflict of interest identified in the Board minutes reviewed; and was appropriately disclosed and resolved. 4.0 PROPERT MANAGEMENT The Social Housing Reform Act, 2000 Part VI and Section 8 of O. Reg. 339/01 requires that the housing provider follow an open and competitive selection process in hiring employees or engaging a property management company to manage its housing projects. Sections 4.1 and 4.2 apply to groups using a Property Management Firm. They have been deleted as they are not applicable to CityHousing Hamilton. 4.3 EMPLOEE CONTRACTS Issues: Although almost all positions have undergone job evaluations in the last few years, most job descriptions have not been updated recently Job descriptions are not signed by the Chief Executive Officer or designate The vast majority of performance appraisals are not being conducted annually according to City policy. Succession plans have not been prepared for managerial positions. Copies of the current job descriptions and collective agreements were reviewed. CityHousing Hamilton, through the City of Hamilton, has established Human Resources policies regarding hiring, discipline, benefits, record keeping, termination, regular performance reviews, etc. The City s solicitor has previously reviewed the contracts to ensure compliance with all applicable laws. Recent contracts have been based on the original version that was reviewed by the solicitor. Job descriptions have been developed for the following positions: Administrative Assistant Capital Works Administrative Coordinator

14 CityHousing Hamilton March 4, 2010 Page 14 Community Development Coordinator Housing Community Relations Worker Housing Custodian Family Support Worker Grounds person Housing Housing Energy Projects Coordinator Housing Operations Administrative Assistant Housing Programs Officer Maintenance Repair Person Housing Manager, Housing Technical Services Manager, Operations Housing Manager, Tenant Support Services Housing On-Site Support Worker (ROOFS Program) Paralegal Housing Program Manager, Housing Development and Partnerships Promotional Marketing Officer Property Manager Housing Property Management Assistant Public Health Nurse Receptionist / Clerk Housing Recreation Assistant Housing Security Tenant Senior Policy Analyst Housing Development and Partnerships Senior Policy Analyst Policy and Program Development Specifications Writer / Contract Administrator Housing Tenant Placement Representative Housing ardi Application Specialist Housing Loans Officer Home Management Worker

15 CityHousing Hamilton March 4, 2010 Page 15 The Property Management Support Officer position does not have a job description. The person filling this position is still listed as a Property Manager and doing property management duties. The duties and position of the Property Management Support Officer is still in the development process. Each job description is part of a job posting to fill that position and has the date of posting but is not signed by the Chief Executive Officer or delegate. Some job descriptions were posted in 2002 and have not been updated recently. More recent changes in legislation may have an impact on the duties performed by specific staff. Almost all positions have undergone job evaluations in the last few years. A City of Hamilton Performance Management and Appraisal Policy has been implemented and this policy applies to all City employees. The purpose of this process is to align employee performance with the strategic plan and developmental goals and objectives of the City. The appraisal is to be conducted at least once every twelve months and is mandatory for annual progressive salary increases. A Performance Appraisal spreadsheet was developed and this listed all full-time and part-time employees. This spreadsheet listed 110 staff in the Housing Division. As of July 16, 2009, only four appraisals have been listed as complete. The main reason given for not completing a performance appraisal was workload pressures. A number of training opportunities have been scheduled to support management training and staff have been directed to consider the Specialized Performance Appraisal Basics for Managers as a mandatory training course for Property Managers and staff. Succession plans have not been prepared for managerial positions. Recommendation It is recommended that the Board ensure that policies are in place and followed to ensure: That all job descriptions are updated to reflect changes in legislation and any changes arising from this Operational Review. That all job descriptions are signed by the Chief Executive Officer or designate within a reasonable time of the document being prepared. That performance appraisals are conducted annually, in keeping with the City s policy, together with the preparation of a learning plan for all staff. The achievement of performance appraisals and learning plans should be an item each manager is graded on in their performance appraisal. Recommendation It is recommended that succession plans are prepared for each managerial position and a succession policy is prepared for all positions.

16 CityHousing Hamilton March 4, 2010 Page COMPETITIVE PROCESS No Issues: With the exception of First Place, staff have been hired in a documented, open, and competitive process. Hiring is to be documented, open, and competitive. Human Resources staff confirmed that all staff hired in the past year (excluding for First Place) were selected after a documented, fair, open, competitive process. Documentation relevant to the hiring was not available for review. 5.0 FINANCIAL REVIEW 5.1 AUDITOR S MANAGEMENT LETTER RECOMMENDATIONS Issue: Existing software is not meeting the needs of the corporation. ear Auditor s Management Letter Issues and Recommendations Issues and Recommendations 2008 Journal entries: currently the Business Administrator has the ability to create and approve journal entries. It was recommended that the two functions be separated and have a restricted access in the ardi system. The functions have been separated, journal entries are only created by the FA1's/ Finance Officer and approved by the Business Administrator. The Business Administrator does not create any journals. The ardi system has not been changed to reflect this restriction. Software updates: there was an issue of financial reports being inconsistent (non balancing accounts). Resolving such issue proved to be difficult since technical staff have problems working with outdated software. It was recommended that management weigh the cost and benefit of updating ARDI software. Staff are currently developing specifications for new software. Tenant collections: the audit turned up a problem of collecting rents from certain tenants. Account balances indicated slow rent collection and lack of any consequences for failure to pay rent. It was recommended that the management reviews rent collection policies including any consequences for failure to pay rent. An Enhanced Rent Collection policy and Persistent Late Policy was approved by the Board July 16, 2009.

17 CityHousing Hamilton March 4, 2010 Page Only a Draft Management Representation Letter could be located. No other documents outlining deficiencies and/or recommendations could be located. The draft letter indicated that during the course of performing the audit, they did not identify any reportable weaknesses in internal control Unreconciled bank account: the auditor identified a weakness in internal control related to operating bank account which was unreconciled for most of 2006, the amount was roughly $20,000. The auditor notes that timely reconciliations are necessary to detect errors and omissions as early as possible. Management responded by investigating the issue of unreconciled bank account and has stated that it will continue its practice of monthly bank account reconciliation and review and will monitor such practice more closely. Rent revenue adjustments: there was an inconsistent practice of rent revenue adjustments by the outsourced property manager compared to the directly managed properties. The time it takes to process the applications and make the necessary adjustments differed between the two types of properties, subsequently affecting the timing of adjusting subsidy. It was recommended that management look into the cost and benefit of implementing controls which will consistently apply the same policy to all of its properties. All properties are now directly managed. Recommendation It is recommended that specifications continue to be developed for new software and the Board move forward with the software update. 5.2 SUBSID ESTIMATES No Issues: Budget estimates were provided for the Local Housing Corporation portion of the portfolio ninety days prior to the beginning of their fiscal year. On receipt of the approved subsidy from the City of Hamilton, the Board reviews and revises their annual operating budget plan for internal use. The operating agreements which established the funding obligations of the funder are terminated at the point of transfer for all non-profit and cooperative projects previously funded by the Ministry of Municipal Affairs and Housing and now being transferred to service managers. Consequently, the

18 CityHousing Hamilton March 4, 2010 Page 18 detail of the calculation of subsidy is set out in the SHRA, 2000 (Sections 102 to 111) and O. Reg. 339/01(Sections 27 to 34). CityHousing Hamilton provides estimates for the previous Local Housing Corporation portion of the portfolio as set out in the SHRA, 2000 (Section 105(1)). The budgets for the remainder of the portfolio are benchmarked, and thus budget submissions to the Service Manager are not required. For the years reviewed the group submitted its budget estimates ninety days prior to the beginning of their fiscal year which complies with the New Funding Model. On receipt of the approved subsidy from the City of Hamilton, the Board reviews and revises their annual operating budget plan for internal use. Summary of Budget Submission Date, and Budget and Subsidy Amount Approved ear Date Estimates Submitted Subsidy Amount Approved Board Approved Budget 2010 September of 2009 Not Available Not Available 2009 Not Available $27,101,735 $57,295, October of 2007 $25,736,561 $55,862, ANNUAL INFORMATION RETURN (A.I.R.) MANAGEMENT REPRESENTATION REPORT Issue: The 2008 A.I.R. was not submitted within five months of the corporation s fiscal year end. Section 113 of the SHRA, 2000 requires that a housing provider submit an audited statement and an annual report to the service manager. If a housing provider fails to give the service manager its annual report in accordance with this section, section 113(9) of the Act allows the service manager to reduce the amount of subsidy payments. The group submitted the 2008A.I.R. to the City of Hamilton October 1, 2009, ten months after their fiscal year end. It was not submitted within five months of their fiscal year end as required by the Social Housing Reform Act, 2000, Part VI, Section 113. The Management Representation Report for the 2008 A.I.R. indicated: the corporation did not receive a management letter from its auditors reporting deficiencies in internal controls or operations. This appears to be in contradiction to our review of the financial statements which included an auditor s management letter.

19 CityHousing Hamilton March 4, 2010 Page 19 Directive To meet its responsibilities under the Social Housing Reform Act, the Board is directed to ensure that policies and procedures are in place so that audited statements and the annual report are submitted to the service manager within five months of the corporation s fiscal year end. 5.4 FINANCIAL REPORTS Issue: There have been some occasions where financial reports appear not to have been prepared for the Board meeting. Financial reports are provided to the Board at every Board meeting on a bi-monthly basis. Overview of Financial Variance Reports, 2007 to 2009 ear-to-date Forecasted earend Variance from Date Spending Spending Approved Budget February 19, 2007 $52,629,065 $52,496,107 -$132,958 April 23, 2007 $8,960,930 $53,765,578 $51,732 June 25, 2007 $17,932,791 $53,798,374 $18,936 September 17, 2007 $26,967,618 $53,935,233 -$117,923 November 5, 2007 $36,043,791 $54,065,688 -$248,378 December 10, 2007 No report, Board meeting cancelled February 28, 2008 Report not found April 17, 2008 Report not found June 19, 2008 $18,489,068 $55,557,225 $305,472 September 18, 2008 $27,015,871 $55,425,553 $437,144 November 27, 2008 Report not found February 11, 2009 $27,050,360 $55,595,006 $267,691 July 16, 2009 $22,659,859 $57,393,095 -$97,640 September 16, 2009 $34,472,111 $57,504,715 -$209,263 The variances found in the bi-monthly financial reports between the spending and the approved annual budgets reviewed are moderate. While the by-monthly reports show modest variances to the budget, the financial position at the end of the year shows a materially larger deficit (discussed further in Section 5.12, below). As mentioned, the Appendix spreadsheet to the bi-monthly financial report for November 5, 2007 shows a $248,378 variance from the

20 CityHousing Hamilton March 4, 2010 Page 20 approved annual budget, and no report was found for December 10, 2007 and the Board meeting was cancelled. In the absence of a variance report for December, the year end deficit increased to $402,557. For 2008 the bi-monthly financial report from September 18, 2008 shows a $437,144 variance from the approved annual budget and no bi-monthly financial report was found for the meeting on November 27, The year-end deficit for 2008 was $1,231,760. Computer Records Computer records are protected with regular computer backup. Incremental backups are completed daily, and full system backups are conducted weekly. Back up files are stored offsite in a secure location. Recommendation It is recommended that the Board ensure that financial variance reports be prepared and reviewed by the Board at each meeting. 5.5 REVENUES Issue: There have been some occasions where financial reports appear not to have been prepared for the Board meeting. Current Tenant Accounts Receivables As of October 31, 2009, arrears of current tenants were $501,131, equivalent to 22.2% of all tenant charges in October A breakdown of arrears of current tenants by type of charge is shown in the following table: Arrears of Current Tenants as of October 31, 2009 by Type of Charge Percentage of All Tenant Amount Charges in Oct. 09 Rent $286, % Misrepresentation $172, % Maintenance $25, % Miscellaneous $16, % Total Arrears of Current Tenants $501, % Arrears of current tenants by age of receivable is shown below. Almost half of the arrears are more than 90 days old.

21 CityHousing Hamilton March 4, 2010 Page 21 Arrears of Current Tenants as of October 31, 2009 by Age of Receivable Total days 60 to 90 days More than 90 days old Amount $501,131 (678 $196, 368 $83,194 $231,466 households) Percentage 100% 39% 17% 46% Rent arrears of 12.7% in October 2009 are substantially lower than the 20.5% in October 2008, but higher than the 9.2% in October Rent arrears from January 2009 to the end of September 2009 have slight variances from the figures for the same period in 2008, but in general are relatively similar. Arrears in both 2008 and 2009 have trended higher than in Accounts Receivables by Project Manager Rent arrears by Project Manager have been reviewed for the ten-month period starting January Arrears vary significantly both by mandate of the buildings and by Property Manager. The variance among Property Managers managing seniors housing portfolios and those managing the family segment are shown below. Average arrears are much lower in the seniors segment of the portfolio. The largest decreases and increases in rent arrears between January and October for Property Managers managing seniors and family portfolios is also shown. Accounts Receivables by Property Manager Property Manager Average Arrears Largest Change January to October 2009 Lowest Highest Decline Incline Seniors 0.1% 10.9%. 8.3% to 3.5% 0.7% to 3.0% Family 9.4% 34.0% 32.4% to 17.0% 1.7% to 22.7% There are likely a number of reasons for differences in arrears by property manager, though timely reporting to property managers of their level of arrears, use of arrears as a performance indicator for property managers, and annual performance appraisals are important to ensure staff diligence on controlling and securing arrears. Accounts Receivables and Write-offs From Former Tenants As of October 31, 2009, the outstanding balance on receivables from former tenants is $468,599. Over the past several years the write-offs have been increasing in dollar amounts but as a percentage of revenue from operations they have decreased somewhat. As mentioned in the 2008 Debt Write-off report, a collections co-ordinator has been hired by CityHousing Hamilton and has proven to be more successful than the previously used collections agency.

22 CityHousing Hamilton March 4, 2010 Page 22 For the period July 1, 2008 to December 31, 2008, debt-write off was $231,992 or 1.28% of revenue from operations. This is somewhat higher than their target of 1.0%. An overview of the write-off amounts for the portion that was direct managed and portion outsourced for 2006 to 2008 is shown below. ear Write-offs From Former Tenants Write-Off Amount Direct Managed Outsourced Total 2008 N/A N/A $685,794 (18 months) 2007 $386,940 $45,860 $432, $309,610 $45,525 $355,135 As of November 18, 2009 there were $3,434,210 listed to a collection agency. Recoveries by the collection agency have been just over 16%, further details are provided below. Accounts From Formers Tenant in Collections ear Amount Listed Amount $3,434,210 Returned Amount $6,767 Bankrupt $60,639 Closed Deceased $8,188 Recoveries $549,034 Percentage Recoveries 16.30% Accounts Receivable Policies and Procedures According to the draft report to the Board (Enhanced Rent Collection Procedures - dated July 16, 2009), the current eviction policy has been in place since July 1, 2006 and it is believed it has contributed to arrears. Board approval on a more strict and updated policy July 16, 2009, with detailed changes outlined in that report. A policy is in place for rent arrears, former tenant arrears and collection for damages to units.

23 CityHousing Hamilton March 4, 2010 Page 23 Internal Controls for Revenues Internal controls for revenues include: N N/A N/A pre-number receipts are issued for cash received (Receipts are pre-numbered for cash and debit transactions, but not for cheques) cash payments are not formally discouraged whenever possible. cash is stored securely and/or deposited frequently (Cash is stored in a safe, and deposited on close to a daily basis) cheques are not cashed from current cash receipts (As confirmed by Ron Wilson) cheques are immediately endorsed for deposit only (As confirmed by Ron Wilson and Finance staff) two persons count revenue from coin laundry machines and coins are emptied and deposited regularly (laundry machines are rented, cards are used in lieu of coins, and vendor is responsible for dealing with revenues) GST filings are completed at least annually (Quarterly) Units are classified correctly on the Annual Information Return (Not verified as City of Hamilton indicated that they verify that units are classified correctly). Recommendation It is recommended that the Board ensure that timely reporting of accounts receivables is provided to Property Managers, and performance appraisals are conducted annually, with arrears being one of the key performance indicators in the evaluation of Project Mangers. It is recommended that the Board establish a policy to discourage cash payments whenever possible.

24 CityHousing Hamilton March 4, 2010 Page VACANC LOSS Issue: The turnover times following a vacancy have been increasing. Vacancy losses for the past five years are summarized in the following table. ear Units With At Least One Vacant Day Vacancy Losses, 2005 to 2009 Average Number of Vacant Days Days Lost Vacant Revenue Lost Percent of Potential Revenues 2009 (Nine Months) ,317 $382,131 N/A ,794 $475, % ,081 $369, % ,732 $402, % ,769 $454,759 N/A Vacancy figures tend to fluctuate, initially decreasing between 2005 and 2007, and then significantly increasing in 2008 and almost going back to original levels. The average length of vacancy has been increasing since Reasons for the high vacancy losses in 2009 include staff illness and units on hold and not available for rent. Units have been on hold as a result of bedbug infestations at two locations, elevator maintenance at one location (81 units), and delamination/asbestos removal renovations at one location (35 units). There is no reporting on vacancy loss and limited accountability for managing vacancy losses as no performance standards exist among Property Managers and Tenant Placement staff for managing losses. Another concern raised by informants is the curb appeal of some of the properties. Recommendation It is recommended that the Board direct staff to conduct an analysis of turnover time to determine the reasons for the length of the vacancies and strategies for reducing the turnover time.

25 CityHousing Hamilton March 4, 2010 Page INSURANCE No Issues: The group has insurance coverage as required by the SHRA and is using a system to report accidents to WSIB. The group is currently insured with a group insurance company as required by SHRA, Insurance is provided by Aon Reed Stenhouse Inc. under the Social Housing Services Corporation Insurance Program, and expires on November 1, Terms listed in the Certificate of Insurance outline a comprehensive coverage of property damage, loss of business revenue, breakdown of machinery, commercial general liability, crime, personal injury, etc. Diana Belaisis, Manager, Employment Services, Human Resources Division confirmed they are using a system to report accidents to WSIB. We were unable to verify the system for reporting other incidents (for example, accidents, emergencies, vandalism). 5.8 BANK STATEMENT REVIEW No Issues: The group has insurance coverage as required by the SHRA and is using a system to report accidents to WSIB. Bank statements for the period January to September 2009 were reviewed for the following. bank balance is reconciled monthly. reconciliations are reviewed by an alternate person (Reconciliations for the two most recent months have been reviewed by an alternate person (Business Administrator), though previously several months were not reviewed by an alternate person. However, there has been a number of turnovers in both the Business Administrator and person responsible for preparing the reconciliations over the period. The procedure appears to be being kept by current staff.) mortgage payments were made on time (Preauthorized) municipal taxes are current (Taxes are recorded by the city and funds are transferred from the group to the City at the end of the month) utilities are paid within discount periods (There are no discount periods, but penalties for late payment. Utilities are paid prior to the penalty period)

26 CityHousing Hamilton March 4, 2010 Page DISBURSEMENTS No Issues: The group has internal controls in place for disbursements. Internal controls for disbursements include: N/A written purchasing policies exist and are consistently followed (Written purchasing policy document exists outlining various policies and procedures such as maintaining and updating vendor list, pre-qualifying acceptable bidders, delegation of authority on purchases of material amount, etc.) three written quotations are obtained for goods/services costing from $5,000 to $49,999 and the lowest bids are accepted a public or pre-qualified tender or invitational (minimum three invitations) is held for goods/services costing over $50,000 there are board approved signing authorities and spending limits in place (Depending on the purchasing amount, various levels of approval are necessary. For purchases greater than $250,000, Council approval is required. For purchases greater than $100,000, City Manager approval is required, etc.) cheques and supporting invoices/documentation are reviewed by a board member and signed by two authorized signing authorities (Signing of cheques has been delegated to signing officers for the Corporation) cheques are not signed in advance all cheques are pre-numbered voided cheques are maintained on file appropriate payroll remittances are being made to Revenue Canada (Payroll remittances are made through the City of Hamilton, and the process was not verified) CityHousing Hamilton Staff regularly conduct petty cash reconciliations. There is currently one CityHousing Hamilton staff person with a corporate credit card. The credit card payments are reconciled monthly. No payments are made to directors, except in the case of reimbursement of expenses related to attendance of the Ontario Non Profit Housing Association Conference. Upon reviewing Accounts Payable Aging Summary for 2008, it is evident that majority of all bills are paid off quickly. Approximately 67% are paid within 30 days, and another 27% in the 30 days to follow, leaving only 6% still payable after 60 days. This is an improvement over the previous year where 64% were paid within 30 days, another 24% in the 30 days to follow, and 12% still payable after 60 days.

27 CityHousing Hamilton March 4, 2010 Page NON-SHELTER AGREEMENTS Issues: Formal agreements are not in place for all non-shelter space in the portfolio, and the expiry of the agreements and supporting documentation such as insurance certificates is not monitored, and documents are not kept in a central location. The non-shelter space in this portfolio is as follows: Non-shelter space agreements have been reviewed for the following spaces: Leasee Space Size Rent Expiry Evi's Super Store Deli Nino s Restaurant ( Ontario Inc. (Marta Buffa) Main Hess Mall, 191 Main St Unit 102, 162 King William St square feet 6,300/year, utilities paid separately $11 +GST per square foot Safin Grill Ltd. 95 King St. E 262 square feet $525 Alliance Computers 211 King St. E 2,100 square feet $27,300 and $.25 per square foot increase per year month to month June 2011, certificate of insurance on file is current month to month lease with 3 months written notice Feb Non-shelter space agreements were not available for the following spaces: Leasee Space Shoppers Drug Mart Hair Dresser Career Development Centre outh Transitional Housing Social Planning Research Council Good Shepherd Brain Injury Services Main Hess Mall, 191 Main St Unit 102, 162 King William St 3rd Floor, 191 Main St.) 4th and 5th Floor and office on 6th Floor, 191 Main St. (apparently have agreement for 4th and 5th floor, but not 6th) 162 King William St 500 MacNab 30 Stanford

28 CityHousing Hamilton March 4, 2010 Page 28 The non-shelter space at the following locations are vacant: 95 King St. The space has mold issues and cannot be rented and would require renovations to make it rentable. CityHousing Hamilton is planning to develop this building as Live/work for Artists and the planning is underway and the building won't be finished (rentable) until early King St, (1,775 square feet) The space was listed "to lease" on MLS network by a local Real Estate company. The real estate company were given the phone numbers of people who had called to potentially rent this space but there have been no serious written offer to rent. There has been interest from Fast food restaurant however the Board of Directors have been hesitant to rent the space for fast food operation due to noise and smell issues and to some extent they would prefer another retail use. Hamilton tourism were also contacted but they were not interested as they may be locating elsewhere. Currently there is possible interest to rent to a Cultural/Artist entity. The space was listed a triple net lease for about $15.00 per square foot depending upon the extent of the leasehold improvements negotiated. Current vacancies at 89 King St. could result in a deficit of $26,625 for the group. There is not a signed non-shelter agreement with the City of Hamilton for use of a portion of the 23 rd Floor at 55 Hess St. and 3 rd floor of 191 Main which sets out the terms of the cost sharing arrangements with the City of Hamilton. Recommendation It is recommended that the Board enter into formal agreements for all non-shelter space in the portfolio, including a formal agreement with the City of Hamilton for use of a portion of the 23 rd Floor at 55 Hess St, and monitor the expiry of the agreements and supporting documentation such as insurance certificates, and keep the documents in a central location.