Prominent charity serving Black business community paid $1.5M to 2 board members' companies, records show
CBC
Some members of a prominent charity for the Canadian Black business community are calling for its board of directors to resign and for a third-party audit after discovering the non-profit paid two former board members' companies at least $1.5 million for services while they were on the board or CEO of the charity.
CBC Toronto obtained dozens of pages of internal records concerning the Black Business and Professional Association (BBPA) — including invoices and transaction records — which show the non-profit did not disclose more than $800,000 of that spending as related party transactions to the Canada Revenue Agency (CRA).
Any payments made to directors, staff or others who are not at arm's length from a charity (other than salary) are considered related party transactions, and must be disclosed to an auditor and also the CRA, according to a charity watchdog.
"We demand an immediate independent audit of the awarding and use of government, sponsorship, and all other funds," said Chandran Fernando, one of the BBPA members raising concerns, in a statement.
"The BBPA was established to empower Black entrepreneurs and professionals, and it must return to that vital mission through principled leadership and sound governance."
Fernando and a group of other members hired a lawyer to send their demands to the current board of directors in March. The group's lawyer, Kate Genest, sent a second letter last month alleging the BBPA submitted inaccurate financial filings to the CRA.
Denham Jolly founded the BBPA more than 40 years ago. He told CBC Toronto in a statement he supports the call for an independent audit and for the current board to step down.
"It is a critical first step to restoring transparency and accountability within the BBPA," said Jolly.
"Moving forward with good governance, leadership and service to the Black community a special election must happen immediately following the above process."
In response to questions from CBC Toronto last week, a lawyer for the BBPA said the board has recently become aware of these allegations and is taking them seriously.
"[The board] has launched an independent review, which is aligned with the BBPA's commitment to transparency, accountability and good governance," said lawyer Mariam Moktar in an emailed letter on behalf of her client.
"The independent review will be completed by a forensic auditor and an independent third-party firm with expertise in charity and non-profit law and governance."
In a second statement to CBC Toronto last Thursday, the BBPA board said board chair Ross Cadastre and director Rustum Southwell are temporarily stepping down while the external review and forensic audit take place to prevent any potential conflict of interest. The statement said both directors were on the board "at the time in question." In the meantime, the statement said the board will be led by an interim chair.
CBC Toronto previously reported on how the group's allegations of financial mismanagement led the daughter of renowned Canadian sprinter Harry Jerome to demand the BBPA stop using her father's name for its annual awards until the charity was cleared of the allegations.
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