Saskatoon Lighthouse in receivership, board members claim financial mismanagement

Click to play video: 'Saskatoon Lighthouse in receivership, board members claim financial mismanagement'
Saskatoon Lighthouse in receivership, board members claim financial mismanagement
The Lighthouse in Saskatoon is in receivership after a decision at the Saskatoon Court of King's Bench on Friday. Easton Hamm reports accounting firm MNP LLP will take control of the non-profit organization for now. – Feb 24, 2023

The Lighthouse in Saskatoon is in receivership after a decision at the Saskatoon Court of King’s Bench on Friday.

The accounting firm MNP LLP will take control of the non-profit organization for the time being.

In early February, Jerome Hepfner and Twila Reddekopp – two members of the board – filed affidavits claiming that the Lighthouse governing body hadn’t been making decisions in the best interest of the organization.

“You have seen the reason for our application detailed in affidavits and supporting documents,” read a statement from Hepfner on Friday. “We believe that receivership is the best course of action to protect clients, staff, creditors, the assets and the organization itself.”

Hepfner and Reddekopp were co-managers of the Lighthouse, replacing executive director Don Windels after he was placed on leave.

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The pair were removed from their managerial positions last month but still remain members of the board.

Adeel Salman, another Lighthouse board member, said that regardless of sides in the courtroom, board members need to look past divisions.

“The most important people in this scenario are (the Lighthouse) residents,” said Salman. “We put them first, they are part of the community. The Lighthouse is a community organization, so we need to make sure that we make (the Lighthouse residents) a viable part of the community.”

Click to play video: 'Saskatoon’s Lighthouse shutting down shelter beds'
Saskatoon’s Lighthouse shutting down shelter beds

The decision to elect an entire new management board for the Lighthouse was not approved.

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“Today’s agreement is a testament that we can actually come together and agree on something. Both sides agreed that the corporation, the people, we have to put them first.”

The Lighthouse has recently suffered funding cuts, a fire and building code violations – the Lighthouse was faced with the financial burden of 42 different fire violations identified by the Saskatoon Fire Department.

It also struggled after Lighthouse funding was used for personal loans.

According to court documents, it was discovered that between 2008 and 2013, Windels had borrowed $287,000 in shelter funding. While some of these were recorded and approved by the board, there is very little to no evidence of board approval of a $60,000 loan Windels requested so he could buy a house for his daughter.

Reddekopp claimed that this was concealed from the board. Windels disagreed.

The Lighthouse ended up purchasing the property, paying the utilities and naming the property as a capital asset.

Now that MNP LLP has control of the Lighthouse’s assets, it gives them the power to put the three Lighthouse-owned properties in North Battleford on the market.

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This includes a shelter the Lighthouse is leasing to Battlefords Agency Tribal Chiefs and two homes.

Click to play video: 'STC takes on beds from Lighthouse'
STC takes on beds from Lighthouse

The company is allowed to take offers on the properties but doesn’t have the authority to sell.

Last winter, the Lighthouse was dealing with frozen pipes, burst sprinklers, and backed-up sewers. The facility experienced smashed sinks and a water heater failure in some of the coldest months of the year.

If that were to happen again in the future, the struggling shelter would have to battle through funding cuts  by the Saskatchewan government relating to transparency.

In the summer of 2022, the decision was made by Social Services Minister Gene Makowsky, local MLAs and community leaders to discontinue homeless assistance services at the facility after concern was stressed about the Lighthouse’s inability to produce numerous financial records.

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Over $100,000 in funding was pulled by the provincial government.

Last In September, after the government began withholding funds, the Lighthouse officially announced it was shutting down the beds it offered. Those beds have since been transitioned to the Salvation Army and the Wellness Centre.

Click to play video: 'Salvation Army filling void left by the Lighthouse'
Salvation Army filling void left by the Lighthouse

“My expectation, my hope, is that with the court order in place, the goal would be to uncover and understand what went wrong and where,” said Salman. “Once we are able to identify that, as a board, I believe we would be able to proceed with the governance measure that we had and were looking forward to.”

Wayne Pederson, the lawyer representing Affinity Credit Union confirmed on Tuesday that the Lighthouse only has $43,000 left on its open line of credit, which isn’t enough to cover upcoming payments to its employees.

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Pederson suggested that one of the only ways to cover the debt would be to sell Lighthouse assets.

MNP LLP is set to report back to the courts on April 13 after a thorough investigation of the Lighthouse’s finances.

– with files from Global News’ Ryan Kessler

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