Manitobas auditor has issued a report on a for-profit social service agency that is as juicy as an auditors report can get.
CUPE represents about 100 front line workers at the Hydra House. With 11 facilities in Manitoba, it provides residential services and specialized foster care to people with disabilities. Almost all its revenue comes from fees paid to it by the provincial government.
The union sees Hydra House as an extreme example of what happens when social services are run on a for-profit basis. The Manitoba auditor found Hydra House executives used government funds to:
- pay Hydra executives salaries that were 58% higher than they would be in the non-profit sector;
- send a Hydra executive to Florida for two weeks to provide the company owner, who maintained a residence in Florida, with an update on company operations;
- spend over $17,000 for furniture and appliances that were delivered to the residence of the personal assistant of the owner;
- pay the personal assistants cable bills;
- ir the personal assistants trailer; and
- donate $19,200 to a private Winnipeg high school.
Over six years, salaries, bonuses, and consulting fees in excess of $3.8 million were paid to five Hydra executives, while thousands of dollars were spent on personal benefits.
Members of CUPE Local 2348 at Hydra House note that management has consistently pleaded poverty when it was running profits and putting flagrant amounts into the pockets of the owners. The last contract provided workers with only a 6.5 per cent increase over three years.