Opening Statement to the Yukon Legislative Assembly Standing Committee on Public Accounts

Yukon Housing Corporation

(Yukon Housing Corporation—February 2010 Report of the Auditor General)

11 February 2010

Andrew Lennox
Assistant Auditor General

Mr. Chairman, thank you for the opportunity to discuss our February 2010 Report on the Yukon Housing Corporation. With me today is Eric Hellsten, Principal of the audit.

We undertook this audit as the fourth in a series of audits, under a long-range plan to carry out performance audits of the Government of Yukon’s departments and agencies.

The audit examined whether the Yukon Housing Corporation has adequately managed its social housing, staff housing, and lending programs. For the purposes of this audit, “adequate management” means that

• programs are being delivered in keeping with the Corporation’s legislative mandate, policies, and procedures;
• social and staff housing units are suitable (that is, they have the appropriate number of bedrooms for the size and makeup of resident households) for serving the changing needs of residents;
• housing units are being adequately maintained (that is, they do not require major repairs); and
• the Corporation has strategic planning, risk management, governance, and performance measurement processes to assist it in meeting the housing needs of all Yukon residents.

The Corporation administers and maintains a housing stock of 532 social housing units in Whitehorse and nine other communities, as well as 147 staff housing units located in communities other than Whitehorse. The Corporation has also issued loans totalling more than $40.9 million under the home ownership and home repair programs.

We examined the social housing program for the period from April 1, 2007 to September 4, 2009. Our examination of the other programs covered the period from April 1, 2008 to September 4, 2009. Audit work for this report was substantially completed in September 2009.

The Observations and Recommendations section of our report describes our audit findings and our recommendations for improvement. Our findings are presented under the four headings that cover the Corporation’s main programs:

• Social housing,
• Maintenance of housing stock,
• Home ownership and home repair loan programs, and
• Staff housing program.

We also reported on the Corporation’s strategic management which we presented under the two headings:

• Strategic planning, and
• Corporate governance and performance measurement.

For the social housing program, we found that the Yukon Housing Corporation has properly assessed applications for social housing using its rating system, in accordance with its policy.

Social and staff housing units are generally being well maintained, and they are not in need of major repair. However, the Corporation has determined that many of its units have exceeded their life expectancy and have to be replaced. Funding under the federal Economic Action Plan will help replace these units, but the large number of social housing construction projects to be undertaken within the territory in the next two years presents significant risks that the Corporation will need to manage and mitigate.

Under the home ownership and home repair loan programs, the Corporation has adequately managed its lending programs as it has a good collection record and few defaults on its loans. However, we found that loans are made without documenting that the applicant has been unable to obtain bank financing or has never owned a home—two things that are required by the Corporation’s legislative mandate, policies, and procedures. The risks of joint venture loans also need to be better identified and mitigated.

For the staff housing program, until recently there was little collaboration among the Corporation, the Public Service Commission, and individual departments to identify future needs for staff housing. The Corporation has recognized that many of its housing units for Government staff are aging and will eventually need to be replaced. However, it currently has no plans to build or acquire additional units. Although the waiting list for staff housing in communities is short, the lack of housing there for key personnel could undermine efforts to recruit and retain staff.

From a strategic management perspective, we found that the Corporation lacks integrated housing strategies. In other words, the Corporation needs to do a better job of determining the type and number of social and staff housing units that are needed in each community. The lack of such strategies increases the risk that new housing projects will not address the real housing needs in the Yukon. For example, many people living in social housing units have more bedrooms than they need. At the same time, there is a shortage of one-bedroom units in Whitehorse, and applicants in the victims-of-violence priority group have waited up to 15 months for housing. When planning the replacement of its housing stock, the Corporation needs to address the imbalance between the mix of housing in its portfolio and the kinds of units that are needed.

The Corporation also does not have adequate strategic planning or performance measurement processes to help it determine how it is performing in meeting the housing needs of Yukon residents, and it is only beginning to develop a risk management process. There are also significant weaknesses in the capacity of its financial accounting and reporting systems to provide timely, complete, and reliable information for decision making. These weaknesses affect the Corporation’s ability to deliver programs effectively and efficiently.

We made 18 recommendations. We are pleased to note that the Corporation has agreed with our recommendations and has committed to taking appropriate action to address them.

Mr. Chairman, your Committee may want to invite representatives from the Corporation, the Department of Health and Social Services, and the Public Service Commission to elaborate on the specific action plans that they have developed to implement our recommendations.

Mr. Chairman, that concludes my opening statement. My colleagues and I would be pleased to answer any questions that members may have.