Inside the collapse of the Multicultural Association of Nova Scotia
Emma Smith | CBC News | Posted: June 9, 2017 7:09 PM | Last Updated: June 9, 2017
'The board people just became overwhelmed and jumped ship,' says interim president
The cancellation last summer of a popular, long-running multicultural festival in Halifax and the collapse of its board is being blamed on years of bad governance.
After months of silence, current members of the Multicultural Association of Nova Scotia are speaking out about what went wrong. The three remaining members are also selling off the organization's assets after its charitable status was revoked in March.
A CBC News investigation last May revealed that after 32 years, the festival would not go ahead and details about the organization's precarious financial situation trickled out.
Interim president Debbie Phinney joined last year, and said she saw warning flags from her very first board meeting.
"A board functions and a board hires staff to do certain things and they're in control of that staff," said Phinney.
"In this scenario I believe the staff became in control of the board and because of that, the board people just became overwhelmed and jumped ship."
Financial troubles date back years
Many vendors, who'd already paid deposits, learned of the festival's cancellation when CBC News called them last spring. At the time, Communities, Culture and Heritage Minister Tony Ince said he was surprised by the news.
"I've worked with that festival and volunteered and helped out so we value everything that they bring," he said.
The charitable association, which was founded in 1975, ran on grants from the department, among other revenue sources. The department withheld its grant in 2015 because the association hadn't filed financial statements for several years.
RBC, a sponsor of the festival since 2008, pulled its funding in 2013 and later successfully sued the organization for more than $23,000. The association was also ordered to pay more than $3,500 to Bourque Security Services for an unpaid security bill from 2014.
After the provincial grant was cancelled, the organization used vendors' deposits to pay its own bills, said Phinney. Still, the organization started running out of cash, it was behind on rent and board members started leaving.
Questionable purchases
That's when Phinney said the board realized something needed to be done about the staff member in charge.
Board members say former executive director Mohamed Ifthikhar Illyas was making questionable purchases. There was a paid storage locker full of walkie-talkies, dishes and tents.
"Mountains and mountains of paperwork, useless tidbits of stuff, no sort of filing system, no sorts of record management — nothing like that. Just chaos and chaos," said Duane Kaiser, the board's treasurer, during a tour of the storage space.
Illyas declined an interview with CBC News, but said in a statement that he hadn't been paid for 4½ months before he decided to leave the organization. He said at the end, he was trying to keep it all together so the 2016 festival could happen "despite the past government's lack of support and not keeping their promise to give us the balance of our operating grant."
"This is also despite meeting all the requested financial requirements. I put my heart and soul into this organization for 10 years and this board treated me very shabbily with no respect for my hard work and commitment," the statement read.
"For this reason I have decided not to engage in this matter any further until I am remunerated properly."
Selling off assets
Because Phinney was new to the board, her name hadn't been added to documents that would make her financially responsible. But she said she felt an obligation to help the organization, so she brought in two friends.
The three board members tried to get an audit done of the association, but ultimately Communities, Culture and Heritage decided not to go ahead with it.
A statement from the department read, in part, "The department took the time to work with the Multicultural Association of Nova Scotia, providing advice and funding, to help the organization find solutions. When the organization could not provide the required financial reports, the department decided not to further invest into the organization, including a financial audit."
Should the province have known?
The department said it's uncommon for organizations that it funds not to meet their obligations.
"Organizations that receive government funding, like the Multicultural Association of Nova Scotia, are required to provide proper financial reports and are held accountable in a fair and transparent manner," the department said in a statement.
But the unravelling of the association should be a cautionary tale for the province, said Mark Blumberg, a Toronto lawyer who specializes in charitable groups.
"I wouldn't expect that the government of Nova Scotia is going to be watching over every single non-profit in Nova Scotia but if they're handing out cheques for say $120,000 or something like that, shouldn't they make sure that the organization they're giving such a large contribution to is in fact run properly?" he said.