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Ex-Castlegar Community Services executive director’s salary criticized

Audit also shows $66,000 paid to former executive director’s family members
Kristein Johnson was the executive director of Castlegar and District Community Services Society for about 10 years. Photo: submitted

Financial statements released by the Castlegar and District Community Service Society, that include $219,000 paid to the non-profit’s former executive director Kristein Johnson as well as payments made to her family, have raised concerns among the organization’s membership.

CDCSS is a local agency that runs 14 programs ranging from counselling services to housing supports and a homeless shelter. It employs about 30 people.

The statements were released at a Nov. 15 annual general meeting that covered the fiscal year spanning April 1, 2022 to March 31, 2023.

The Societies Act of B.C. requires reporting of remuneration for directors, employees and contractors, including disclosing any individuals who were paid more than $75,000.

For the 2023 fiscal year, two employees were singled out. One employee with multiple counselling and project roles received $92,000. The other was Johnson, who received $219,000 during the year.

The auditor’s report also makes note of $66,659 in payments made to Johnson’s family members.

Payments totalling $7,414 were made for reimbursements and repair and maintenance costs to a direct family connection.

A further $12,761 in repair and maintenance labour costs were paid to a corporation that is associated with a member of Johnson’s family.

In addition, payroll totalling $46,484 was paid to the son of the executive director during the year.

Overall, the agency’s expenses on employees jumped from $1.2 million in the 2022 fiscal year to $1.7 million in the 2023 fiscal year. CDCSS also went from a $219,248 surplus at the end of fiscal 2022 to a deficit of $18,517 this year.

Johnson declined to comment when contacted by the Castlegar News.

During the AGM’s question time, society member Cherryl MacLeod, who is also a city councillor but was not attending the meeting on behalf of the city, said she wanted answers about the payments to Johnson and her family.

“When and how will we get an answer to how and why that happened and assurances it will not happen again? Things were done that were not OK.”

MacLeod, who also called for a forensic audit, said she did not want the matter to just drop after the meeting without some accountability.

She said she’d like to “find out if we can recoup any of that [money] and if someone can be held responsible.

“I truly think that is what needs to happen to heal this society.”

Board members

The agency has recently gone through major changes that started at the non-profit society’s 2022 AGM last September when several new board members were elected at the end of a tense gathering.

At that meeting four of six board members were re-elected — chair Tim Turnbull, vice-chair Bernice Kavic, secretary Jane Lippa and Margaret Nickle. Janette Dascent was not re-elected and Karen Leman was noted as away on a six-month leave of absence.

Four new members were elected — former Castlegar mayor Bruno Tassone, Linda McLaughlin, Carrie Leeson and Peter Freitas.

Since that time, seven board members have departed and several new members were added.

The sitting board at the beginning of the AGM consisted of Leanna Kozak, Chris Popoff, Jodi St. Thomas, Bruno Tassone, Kim Tassone, Tim Turnbull and Heather Wheating. All were re-elected for the upcoming year.

During the meeting, Allistair Bradley and Bruna Horcoff were also elected for the upcoming year.

Turnbull is now the only remaining board member from the 2022 board. The current board, with the exception of Turnbull, began their terms after the majority of the fiscal year has passed.

Turbulent transition

In his report to the CDCSS membership, acting board chair Bruno Tassone said the 2023 fiscal year was “turbulent and transitional” for the organization and was a “very difficult transition of financial struggle.”

Tassone also mentioned that there had been numerous employee changes during the past year. Those changes included the departure of Johnson who had led CDCSS for 10 years, the shelter director and finance staff.

At the time of Johnson’s departure, CDCSS said they could not release any details due to confidentiality issues.

CDCSS brought in Rona Park to serve as acting executive director from February to May. Tassone thanked Park for her time and expertise.

“She came in during a time of board dissension and helped us sort through programs, staffing, and financial obligations that were unresolved,” said Tassone.

Reidun Rossi was hired in June, after the close of the fiscal year, as the society’s new executive director.

Park remains a society member and was asked by the CDCSS board to attend the AGM and act as a moderator for the meeting.

Auditor’s report

The majority of the more than two-hour AGM was taken up with presenting the independent auditor’s report and questions about finances.

Tassone said Childs Chanton Chartered Professional Accountants, the auditing firm for the 2023 fiscal year, found completing the audit a “big challenge.”

Childs Chanton preformed an “audit engagement” of CDCSS financial records. This type of audit is more in depth than the “review engagement” type of reports CDCSS has had in past years. Audit engagements include testing of records and financial controls and include an opinion from the auditor — review engagements do not.

“A general purpose financial statement audit is almost always required for an organization of this size,” said audit presenter Jeremy Childs at the AGM. “It was unusual, I think, that a review engagement had been done previously.”

The auditor presented a “qualified opinion” of the agency’s 2023 fiscal year financials. According to the BC Auditor General, a qualified opinion means that the financial statements contain material misstatements or omissions.

The auditor stated that many of the aspects of CDCSS financial statements “present fairly, in all material respects” but they qualified that statement with a few exceptions regarding recorded amounts in food and beverage purchases, vehicle operating expenses, repairs and maintenance, utilities and program expenses.

“The society retained many, but not all of the records required to support satisfactory verification within certain classes of expenses. Accordingly we were not able to obtain sufficient and appropriate audit evidence relating to the occurrence and classification of the recorded amounts.”

Another flag was raised over deferred contributions.

“The society has not maintained sufficient records and reconciliations to support the disclosed additions and expenditures for all programs within its reported deferred contributions,” states the audit report.

“Accordingly, we were unable to verify the existence, completeness and presentation and disclosure of deferred contributions and the resulting effects on amounts recognized as revenue in the period.”

Membership response

Responding to a question from a society member asking about why Childs Chilton took issue with some of the agency’s procedures and last year’s auditor didn’t, Childs said, “We did way more procedures … From what I can tell, they were expecting a review engagement again and it’s kind of like taking a test you weren’t expecting to take and scraping through with a D.”

Society member Ken Wylie wanted to know how much money was paid to the former executive director, financial controller and other employees at the end of their employment with CDCSS during the turbulent transition mentioned by Tassone.

“No where is that referenced in this report,” said Wylie. “All of the monies expended are either government funds or donations — surely both the government and the membership are entitled to know if monies of that magnitude are expended.”

The auditor stated that answering that question was outside of his role, and is something the board of directors would have to account for.

Several other members voiced their concerns over the $219,000 paid to the former director.

“Where did that money come from?” said one member. “It would have had to come from donations, cash coming in, grants.”

She then questioned if that meant that some programs may not have been fully delivered.

Again, it was a question that the auditor could not answer, and no one from the CDCSS board offered an answer either.

“Clearly there are many missing pieces here that a lot of people do not have answers for,” added another society member. “It would seem that the ship needs to be righted and sent in a direction that is worthy of what this society has as its mission.

“I would hope that the new board, with the direction of the executive director would say, OK, we have some serious house keeping to do and we need to make sure that we have great advice from whoever our business manager is going to be … and we need to get our act together with generally acceptable accounting principles, because missing things like that … I don’t think that’s good enough.”

With more how and why questions sent his way that he was unable to answer, Childs told the group, ”I think you may need more of like a legal, forensic type investigation in order to get the answers that I am sensing you are looking for.”

However, other attendees wanted to see the society move on and leave the past in the past.

Tassone said that the current board has been frustrated with trying to find answers about what happened before their election to the board.

“The new board, the board that is here now, has faith in Reidun bringing forth proper financials, month-to-month [reports] as well as proper budgets … what the credit cards have been used for and so forth. Those are the things the board is looking at, as well as management, moving forward.”

Castlegar News has put some of these unanswered questions to the CDCSS board. We have asked for clarification as to the matters surrounding the departure of the former executive director and if any the payments made to her were severance-type payments. We have also asked about her previous yearly wages, and how her wages were established.

In addition, we have asked for more details regarding the employment status of Johnson’s family members and what kind of contracts they were under.

CDCSS told Castlegar News that they would respond to our questions after their next board meeting, which is scheduled for this week.

RELATED: New Castlegar Community Services director lays out goals

Betsy Kline

About the Author: Betsy Kline

After spending several years as a freelance writer for the Castlegar News, Betsy joined the editorial staff as a reporter in March of 2015. In 2020, she moved into the editor's position.
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