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Key housing questions answered

Michael L. Rice is not impressed with how the Housing Department investigation has been conducted. (Courtesy Michael L. Rice)

Michael L. Rice takes exception to the way the Housing Department fiasco has been handled up to this point, and he has some strong suggestions on what to do moving forward.

Rice is currently a director in two companies, First Nations Venture Capital Partnership and Indigenous Housing Solutions, and a “one-man show specializing in access to capital (financing) solutions for Indigenous peoples across Canada,” he said, so he has a strong pedigree when it comes to these types of issues.

But he has also worked in Kahnawake at the Caisse Populaire as manager for housing loans, and was the MCK’s economic development officer in 1981, when he performed a financial analysis of the local housing fund.

“With the exception of dealing correctly so far with the $145,000 embezzlement, the report demonstrates major flaws leading to unfounded conclusions and recommendations,” he sent to THE EASTERN DOOR in an overall assessment based on the information made available to the public.

Rice had issues with how information came out to the people as well, including who was leading it.

Alana Rice “should be left, front and centre and be the face of this,” Rice said, adding he thinks executive financial officer Paul Rice is in way over his head.

“It’s too much on his shoulders. We also should have known from the get go who is investigating it. Are they qualified? Closely linked to somebody inside there? There’s something wrong there. It’s bizarre.”

The media has been asking from the beginning of the investigation that started in the summer who was heading up the forensic portion of it, but have not gotten an answer.

“I asked three times for details, including the scope of work and the names of the independent consultants, but each time was told no comment. We have yet to know who the consultants are,” he said.

The executive summary of the final report released in late September did not have a name attached to it.

“The scope of assessment appears to be only the financial transactions inside the housing department and not those of the MCK Finance Department nor the auditor review/checks,” said Rice.

“A complete scope would have included these entities and their financial controls. This is where double financial checks should be and would have captured the embezzlement.

Rice also cautioned against shifting the Housing Department to a social focus as “a major error.”

“The whole purpose of the loan fund is to move people to private home ownership and if you look around Kahnawake the majority of homes are privately owned, well kept and people are proud,” he said.

“Of course, there will always be a need for some social housing but the goal is to move these people as well to private home ownership.”

According to Rice, over 550 homes have been built with the fund since 1977.

“If mortgage loans are no longer available what will happen to the people who do not qualify for a housing loan at the Caisse Populaire?” he asked.

“To conduct a correct strategic review exercise, one must consult the current and future users of the fund and generate real data sets. In this case it is very important, as the users, and by extension the whole community, also own the fund. They have been paying from their own monies to replenish the fund and therefore have established ownership in it,” said Rice.

THE EASTERN DOOR emailed the MCK’s executive financial officer Paul Rice for answers to some of Michael L. Rice’s questions.

“The housing assessment is focused on the Housing Department,” said Paul, in response to the question of why MCK’s Finance Department is not also being looked into.

“The Executive Director’s Committee (EDC) has agreed to tender the audit for fiscal year 2019-20. A risk assessment of the entire MCK organization is also in the works. MCK Finance is reviewing and overhauling all financial controls, beginning with cash controls, with the assistance of outside financial accountants,” said Paul.

“The demand for housing in the community is changing from mortgages to social, rental and rent to own housing. The Housing Department will be consulting the community, through various methods, on what type of housing is in demand most and will continue to use the housing reserve to supply housing,” he said.

The MCK receives $230,000 annually from Indigenous Affairs, which is then allocated to the administration of the Housing Department to manage the Revolving Loan Fund (RLF) and other housing programs, according to Rice.

Meaning there is $11.5 million in the appropriated housing reserve, “an accumulation of RLF dollars that were not loaned as mortgages between the years 2005-2014,” said Rice.

A few years ago, close to a million dollars from housing was used to balance the MCK’s budget for that fiscal year, and, according to Paul, “Now that we are projecting a surplus for the next five years, MCK Finance will be recommending paying back the housing reserve as part of the 2019-20 budget.”

Further, “The Finance department’s standing within the MCK is being restructured and will be given independent authority over management. More information on this restructuring will be released in the weeks and months to come,” said executive financial officer Rice.

In terms of investigators hired, Paul Rice revealed, for the first time, the names to THE EASTERN DOOR on Thursday afternoon.

“No firm has been hired, we contracted two individuals so far,” he said.

“Scott McBride has been a professional accountant for 20 years and a specialist in forensic and investigative accounting working with various police forces, governments and organizations since 2002. His role was focused on analyzing the files and accounts in the housing department,” said Paul.

Miatta Gorvie is a McGill-trained lawyer called to the Ontario bar with four years’ of legal experience across Canada and abroad, including in Toronto, Winnipeg, Iqaluit and Kampala, Uganda. Her practice focus and experience include mediation, access to justice, treaty negotiations and civil law. Her role has been meeting with the clients, documenting their experiences and producing affidavits,” he said.

“We have also hired Marcy Delisle on a fixed term contract to plan and conduct our financial controls overhaul. Her work is ongoing with Erica Delisle (director of Financial Services) and myself.”

Many community members have asked why MCK executive director Alana Rice was not filling the role Paul Rice is currently, given her extensive experience, in terms of being the face of the investigation.

The Mohawk Council responded to THE EASTERN DOOR by email.

“During the MCK review in 2015, the Executive Office was restructured in a manner that would allow for Executive Officers to share the responsibilities with the Executive Director as follows:

The Executive Director (Alana Rice): In concert with Chief and Council, directs the business strategy and orchestrates the organizational affairs ensuring that goals and priorities set by Chief and Council are affected throughout the organization

The Executive Financial Officer (Paul Rice) ensures proper planning, implementation, management and control over all financial related activities with the goal of protecting the fiscal integrity and stability of the organization.

The Executive Operations Officer (Kevin Kennedy) ensures that the operations are properly controlled and have the necessary procedures and systems in place to ensure financial strength and operating efficiency.

The Executive Strategic Officer (Richard Basque) plays an instrumental role in leading the development and implementation of the long-term strategic growth plan, the strengthening of decision-making processes and goal-setting throughout the organization,” the email reads.

“Given the above, it was determined by the Executive Office, including the executive director, that an assessment would take place for the housing situation. Kevin Kennedy being the executive officer directly responsible for operations, including client based services (housing) would file the criminal complaint and Paul Rice, the executive officer responsible for finance, would conduct the assessment.

“Chief and Council sanctioned this plan and we determined that one spokesperson would be best and we appointed Paul Rice,” the email reads.

“I am very confident in the executive officers’, Paul Rice and Kevin Kennedy, ability to assess and rectify the situation that exists,” said Alana Rice. “We are a team and will work together to move this forward and regain the confidence of the Community.”

Michael L. Rice also mentioned the way the case management approach was being conducted lacked certain qualities.

“This tool or facility is misunderstood,” he said. “The purpose of this case management approach is to support borrowers to build up their money management skills. It is not just focused on late payments but also people who are in transitional housing (RTE and HOPE) and want to save money.

“The concept behind this tool is still sound,” said Michael. “Unfortunately, the person who was in charge of this function is under investigation and this is being addressed.

Killing this tool/facility will be like throwing out the baby with the bathwater.”

Michael also questioned the MCK line that said part of the problem with finding out there was in fact money missing, was they were told by people in the Housing Department that certain files were under case management.

“I was at the Caisse Populaire and they do cash receipt cheques every day,” he said. “I don’t buy what Paul said about case management and not being able to easily get information. No, no, no, you got there and you do cash receipt cheques at least every three months, if not monthly. That was very lame of him to say that.”

At the very least, Michael L. Rice said, the auditors should have caught the discrepancies.

“The Kahnawake model for private home ownership is widely regarded across Canada as a model where a First Nation can manage its own monies and not be dependent on any form of government,” Michael said.

“Are we to now lead First Nation people to go back to dependency on government? Go back to welfare thinking? Under social housing community members cannot own the house.”

steveb@easterndoor.com

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