City looks to make changes after auditors question $13M in hotel shelter charges

Torontosun.com
June 7, 2022
Antonella Artuso

Toronto’s audit committee is recommending changes to how the city’s emergency hotel shelter program is administered after an investigation highlighted over $13 million in highly-questionable charges.

Audit Committee Chair Stephen Holyday said members adopted the recommendations of the city’s auditor general, including moving the responsibility for managing the shelter contracts to specialists in the real estate division.

“It takes it off the hands of the people that run the shelters to let them run the business they’re most familiar with, which is shelters,” Holyday said Monday.

The city has entered into contracts with hotels to provide additional emergency shelter if needed, and as of March, there were over 3,900 people staying in 2,900 rooms at 29 hotels.

Auditor General Beverly Romeo-Beehler and her team found that over $13 million of the $320 million spent on hotel shelter operations over two years were outside the contract, such as $5.3 million for a “facility surcharge” on meal invoices, $5.4 million for vacant rooms and $2.4 million for so-called voluntary “DMF” or destination marketing fees.

The auditor’s report spelled out why the findings were important.

“Every dollar and every room matters,” the report says. “It means more funds and rooms can go directly towards making sure there are enough shelter beds, especially in the winter months, or towards creating more permanent housing to address homelessness.”

The auditor estimated the overcharges could have paid for about 52,000 room nights, and meals and support services for an entire year.

The report also noted the city paid about $840,000 to one hotel alone over two years to store leftover client belongings in hotel banquet space.

The $68,000 the city was dinged to use between two and four hotel-provided printers over two years went over poorly with the committee, which wants staff to explore ways to get as much of these unnecessary expenses back as possible, Holyday said.

“Those things bother you, they bother the public,” he said. “When you think there were empty office buildings during the pandemic and lots of spare printers around, yet we incurred these charges.”

The findings should not be interpreted as a failing of public-private partnerships in general, as these contracts helped a hotel sector with high vacancies and a homeless population that needed more shelter space due to pandemic public health guidelines, Holyday told the committee.

“(The report) did find shortcomings, and it did find inefficiencies,” he said. “And those often distort the success of that public-private partnership.”

The audit committee’s findings will go before city council, which has final approval.