In 2011, the Auditor General issued two separate audit reports relating to the Toronto Community Housing Corporation (TCHC) as follows:
- Toronto Community Housing Corporation – Procurement Policies and Procedures Are Not Being Followed
- Toronto Community Housing Corporation – Controls Over Employee Expenses Are Ineffective
In view of the absence of basic internal controls identified in both reports, the Auditor General determined that further audit work in other areas within TCHC should be conducted during the balance of 2011.
One of the projects selected related to the procurement process at Housing Services Inc. (HSI) a subsidiary of TCHC. While reviewing the governance structure at HSI, it became apparent that there were a significant number of other subsidiary companies, joint ventures, as well as two further minority equity investments. Our initial review of these entities indicated that there had been minimal reporting to both the TCHC and the City of any detailed information and, in particular, financial information. Consequently, it was determined that a more detailed analysis of TCHC’s governance structure be conducted.