The City of Toronto is likely granting millions of dollars of unwarranted rental subsidies per year, a report from the city’s auditor general has found.
In the report, which is set to be reviewed by the city’s audit committee on Friday, auditor general Beverly Romeo-Beehler says better oversight is needed to manage the nearly $385 million in annual subsidy funding distributed through the rent-geared-to-income (RGI) program.
“Some households may not be providing full and complete information, which could impact the extent of assistance they receive,” the report read.
The RGI program grants funding for individuals who need assistance in affording rent, with the funding set to 30 per cent of a household’s total monthly income before taxes and adjustments.
As a part of the conditions attached to receiving the subsidy, recipients are required to report their income and, if they own a property, they are required to sell it.
In one instance highlighted in the auditor general’s report, however, a mother and father jointly purchased a property in August valued at over $500,000 outside of Toronto while at the same time renting two properties through the Toronto subsidies.
That occurred, the report said, despite the fact that the couple were flagged for potential violations in the RGI program as far back as 2012.
“Annually, an average of about $7,200 in RGI assistance is provided to each RGI household,” the report said.
“While we expect that the vast majority of people are eligible, for every 1% of current RGI households that are ineligible, we estimate that the City is providing over $4,000,000 annually in unwarranted assistance which could be used to provide stable housing for over 650 households who are waiting and eligible.”
The report said in their review of 160 RGI households, 18 per cent were found to have potentially unreported assets or income and five per cent contained inconsistent or fabricated information.
Mayor John Tory responded to the report by calling for “immediate action” to address the concerns raised by the auditor general.
“I know I speak for all Toronto residents in saying that I am absolutely shocked by the examples identified by the auditor general that flagged potential ineligibility,” Tory said.
“These examples are deeply disappointing and frustrating to every hardworking Torontonian – many who themselves are struggling with the high cost of housing.”
The auditor general laid out several recommendations in her report, including calls for a new process to be in place by March 31, 2020 for “comprehensive RGI eligibility reviews,” and the establishment of an “eligibility review officer.”
The mayor’s office said Tory will be working to ensure city staff fully accept the recommendations in the auditor general’s report.