May 8, 2023
Surrey, BC – Today the results of the KPMG review of the Progressive Intercultural Community Services Society (PICS) are released to the public. No evidence has been found supporting any of the allegations about PICS and its CEO by the immediate former Chair of Progressive Intercultural Community Services Society (PICS), Mr. Dave Hans, based on the procedures performed by independent third-party forensic services provider KPMG. KPMG has delivered its confidential report to the Special Committee of the PICS board.
Although the Board is extremely pleased that the accusations have been shown to be unfounded, we are saddened that the reputation of our 36-year-old organization, which has always worked to build a more inclusive and mutually respectful community has been tarnished because of the actions of one individual.
We are confident that the findings of the KPMG report will provide a high level of comfort to all the stakeholders involved in the Guru Nanak Diversity Village project. The Board continues to have the full confidence in PICS’s management, including the CEO.
We know how important it is for the public to have confidence in the work of PICS as a community agency, and PICS treated this matter very seriously.
Our organization will now move forward in undertaking the fine work that PICS has been renowned for since being established in 1987. We thank our staff and supporters for their dedication, support, and perseverance during this difficult time and are reviewing any potential next steps in this matter.
Background:
On September 7, 2022, PICS became aware of a letter by immediate former board chair Mr. Hans to then Premier John Horgan. In the correspondence, Mr. Hans made a series of serious allegations about PICS and its CEO, and subsequently made comments to media outlets. It is important to note that he was the chair of the Annual General Meeting that occurred on August 28, 2022 and none of the concerns raised in the letter were mentioned to those in attendance at the AGM. It is further important to note that the individual making the accusations only chose to do so after his failed bid to be re-elected Chair – and not during the many years he was in a number of leadership positions on the Board, including the immediate Chair of the Board (2021-August 28, 2022), immediate past Chair of the Building Committee (2018-August 28, 2022) and Vice Chair of the Board (2020-2021). Tochi Sandhu was unanimously selected as the Board Chair on August 28, 2022 immediately following the AGM in a meeting with the Board in which Mr. Hans was present and not selected to be Chair.
In response to the accusations, the PICS Board retained the law firm Blake, Cassels & Graydon LLP and KPMG LLP, which conducted a review of the allegations and financial records of the organization, as an independent third-party. KPMG conducted a targeted analysis of relevant financial records of PICS and carried out a series of interviews with staff at various levels of the organization, along with consultants and members of the current board.
Key takeaways:
1. Qualifications/Pay of Consultant:
KPMG did not identify any payment by PICS to the development consultant in question that was not reflected in invoices from the consultant. Those invoices included detailed project time sheets and the amount ultimately paid to the consultant was less than what was budgeted for the Development Consultant in the GNDV budget. The report explains that there is a Building Committee responsible for overseeing the GNDV project, including oversight over the consultant, which publicly available sources indicate has experience in similar development and project management roles on many housing projects in British Columbia.
The allegation by Mr. Hans that the consultant was to be allotted an additional contract is incorrect. Rather, PICS planned and has begun to implement a rigorous process to request proposals for the next phase of the GNDV project.
2. Funds raised during PICS Radiothon:
All funds received via the online fundraising portal during the PICS radiothon on November 19, 2021, went to the PICS organization, despite the organization’s head accountant being mistakenly referenced as the recipient in auto-generated emails. The issue was the result of a glitch in the software being used. PICS staff immediately realized the issue and the following was posted on the PICS/GNDV Website on that same day:
“Some donors may have noticed our Controller’s name Kanwal Ghuman on their Credit Card statements. That was a system error, and we want to reassure all donors that their donations have been received by PICS Society (Guru Nanak Diversity Village). Tax receipts are being prepared and will be mailed out shortly”
KPMG was able to trace all amounts recorded for such donations into PICS’s bank account, less applicable service fees from the online payment provider.
3. Hiring a close relative:
The allegation that PICS’s CEO hired a close relative to be the head of PICS’s accounting department was also incorrect. The two individuals indicated that they may be distantly related, but the relation is so distant that neither were able to specifically articulate the connection, which was believed by both to be at the grandparent or great-grandparent level. PICS’s CEO was not involved in the hiring process for the position. Those involved in the hiring cited professional qualifications and business experience as the basis for their hiring decision.
PICS has specific policy relating to anti-nepotism which states that “there may not be an appointment which would result in a direct or indirect reporting relationship between two “family” members such that one employee would have input on the other’s performance evaluation, salary, stipend approval of leaves, approval for spending funds, promotional opportunities, hiring decisions, renewal of contracts, disciplinary procedures, or task assignments.” Family members are defined to include husband, wife, common-law spouse, son, daughter, mother, father, sister, brother, mother-in-law, father-in-law, grandparent or grandchild, nephew, niece, aunt, uncle.
PICS’s CEO stated that even though the prospective hire was not family as defined by the policy, he disclosed his understanding of the possible distant familial relationship to the PICS Board chair at the time, demonstrating his commitment to PICS policy and general best-practices.
4. Composition of the Board:
PICS has similarly robust policies and procedures, formalized in PICS’s bylaws, related to the composition of its Board to ensure independence and avoid concerns of undue influence, such as those cited by Mr. Hans.
Qualified applicants (being lifetime members of PICS and individuals who have been members in good standing for at least one year) may apply to join the Board. Thereafter, the application is considered by the Board’s nomination committee (that does not include PICS’s CEO) which approves or rejects the application. Applications that are approved are then provided to the Board for consideration. Finally, applications approved by the Board are put to a vote of PICS members at an annual general meeting.
KPMG reviewed PICS’s Board minutes for the period January 2017 to August 2022 which evidenced this process.
5. CEO cheque signing authority:
The KPMG report reviewed the meeting minutes of April 29, 2021 where the board considered an increase to the CEO’s cheque signing authority. The minutes indicate that the request was considered and approved by the board. Mr. Hans was board vice-chair at the time and seconded the motion. The CEO advised KPMG that he asked the board to increase his signing limit because of the number of recurring payments of $25,000 to PICS service providers. Cheques above $25,000 must still be co-signed by one of the executive Board members.
6. PICS CEO Remuneration
All remuneration received by PICS’s CEO was contemplated by his employment agreement and considered and approved by the board with the assistance and input of outside consultants.
The contractual agreement as of April 12, 2017, between PICS and the CEO states, “The contractor’s salary will be reviewed on an annual basis, will be raised to account for inflation, and may be adjusted further upon review in conjunction with the formal performance management review process negotiated by Board President.”
An independent third party consultant engaged by PICS in 2020 as part of its accreditation process determined that the CEO had not received a pay raise since his tenure began in 2017. That third party consultant recommended a retroactive pay raise in a specific amount based on industry comparables, which was considered and ultimately approved by the Board in 2021 without the CEO’s participation.
The retroactive amount approved and ultimately received by the CEO through 2022 was $5,191.04. The report observes a donation from the CEO into the GNDV project in the amount of $5,500 in December 2022.
The CEO’s travel allowance was also specifically provided for in his employment contract and the same amount had been received by PICS’s previous CEO.
