The Lighthouse: Sask. shelter director used funds for private loans

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An impartial investigation has revealed an “overarching tradition” of blending private monetary pursuits with these of one in every of Saskatoon’s most high-profile non-profits.

The court-ordered investigation, performed by accounting agency MNP, was sought by three Lighthouse Supported Residing board members after they turned involved by transactions uncovered throughout an inner audit.

The majority of the transactions investigated by the accounting agency concerned Lighthouse government director and board member Don Windels.

In mid-January, Don Windels was positioned on depart with two members of the board, Twila Reddekopp and Jerome Hepfner, taking up his duties.

The shake-up got here after the Saskatoon Fireplace Division revealed it had discovered dozens of points on the shelter throughout inspections over the earlier 12 months.

Windels has served as director since 2003, main day-to-day operations on the group.

In a call initially issued on Dec. 6, largely based mostly on the findings of the investigators, Justice David Gerecke ordered Windels instantly faraway from each roles.

Windels mounted an attraction in December simply as a publication ban, which involved the choice and MNP’s findings, was set to run out.

A consortium of native information media, together with CTV Information, fought to overturn the ban.

On Monday, the Saskatchewan Court docket of Enchantment issued a ruling which lifted the restriction on publicly sharing particulars associated to the matter.

The court docket stated Windels’ future with the group and different points of Gerecke’s determination can be handled as a separate matter.

Nevertheless, as a result of court docket’s ruling, the findings of the investigation could be shared publicly for the primary time.

$287,000 IN PERSONAL LOANS

The MNP report outlines how, in response to Windels’ personal admission to investigators, a sequence of loans had been issued by the Lighthouse to his household’s company between 2008 and 2013 that added as much as $287,000.

Windels, his daughter Tiffany Klassen and his son-in-law Cory Klassen had been on the Lighthouse board and signed the decision authorizing one of many loans, price $110,000, issued in 2009.

Nevertheless, the authorization got here after the funds had already been borrowed and repaid.

“On the entire, it seems the Lighthouse board was conscious of and authorised a few of the loans,” the MNP report says.

Nevertheless, in some circumstances, Windels didn’t seem to have “strictly adhered” to the licensed phrases of the mortgage, in response to the investigators.

“For instance, in a single occasion the quantity loaned exceeded the authorised quantity and in one other occasion, the Lighthouse didn’t obtain curiosity as required below the settlement.”

In a sworn affidavit, Windels, who can also be a licensed accountant, known as MNP’s findings “deceptive” and stated all loans have been repaid.

“I deeply remorse having failed in previous, on a number of events, to fully separate my private pursuits from that of the Lighthouse, ” Windels stated.

Makes an attempt by CTV Information to contact Windels have been unsuccessful.

One other chief concern for investigators was a transaction that successfully amounted to a $60,000 mortgage from the non-profit to Windels so he may buy a house.


In 2017, the board authorised the acquisition of a house within the metropolis’s Caswell Hill neighbourhood, in accordance the MNP report.

The Lighthouse retained possession of the house, whereas Windels spent years renovating it with the intention of finally shifting his daughter in.

Windels then purchased the house from the Lighthouse in Dec. 2020 for $81,671, an quantity that coated the price of the house and the utilities, property taxes, insurance coverage charges and curiosity on the preliminary mortgage.

MNP discovered the quantity Windels paid in curiosity was “understated” because it did not embrace the quantities “successfully borrowed” from the non-profit to cowl the opposite prices the Lighthouse shouldered whereas appearing as the house’s house owners.

“Mr. Windels was primarily a tenant of the property for 4 years, rent-free,” the MNP report stated.

As soon as he owned it, in Jan. 2021 Windels borrowed $176,250 towards the property which was valued at $230,000 — a $170,000 enhance in market worth from when the Lighthouse offered the house to him.

“Successfully each events invested within the property, however solely Mr. Windels benefitted from any appreciation whereas the Lighthouse bore any threat of possession.”

In an affidavit, Windels stated his daughter was within the midst of leaving an “unlucky relationship” in 2017, and he was unable to acquire financing by way of conventional channels to buy her residence.

In his determination, Gerecke wrote scathingly of the association.

“The Lighthouse expended $60,000 of its personal cash for a transaction that was solely to learn Mr. Windels,” Gerecke stated.

“For almost 4 years the Lighthouse didn’t have these funds out there for programming or capital acquisitions and it additionally bore all of the carrying prices regarding (home).”

Actual property additionally options prominently in one other part of the MNP report.

5 homes owned by Windels’ quick relations, together with his spouse, had been leased by the Lighthouse which in flip rented out rooms within the houses to purchasers.

The month-to-month leases ranged between $1,100 and $1,425.

Whereas the association has ended for 3 of the houses, on the time of the investigation two of the houses had been nonetheless leased by the non-profit.

BLUE MOUNTAIN ADVENTURE PARK

One other space of focus for the MNP investigators was the connection between the Lighthouse-owned Blue Mountain Journey Park in North Battleford and the Kowach Basis for Advancing Schooling Inc. — an organization owned by Windels.

Blue Mountain is a non-profit company that operates a website the place low-income individuals can take part in outside actions like tenting and mountaineering.

Kowach applies for summer time college students below the federal Canada Summer season Jobs program and the employees are used to workers the journey park.

In flip, Blue Mountain reimburses Kowach for the portion of the scholar’s wages not coated by the federal funding.

When interviewed by the MNP investigators who ready the report, Windels stated the corporate’s function was to permit Blue Mountain to rent extra college students at a sponsored price than it may in any other case.

Based mostly on data out there to investigators, Kowach posted a $39,000 surplus throughout its 2021 fiscal 12 months, resulting from funds from the Canada Emergency Wage Subsidy that got here along with routine funds from Blue Mountain.

“We do not need enough data to verify if this quantity flowed to the good thing about Blue Mountain after April 1, 2021,” the investigators wrote within the report.

In his affidavit, Windels stated he acquired “no monetary profit from Kowach’s relationship with Blue Mountain.”

Windels stated if he transferred the excess to Blue Mountain it “may jeopardize its charitable standing.”

BOARD ASSUMES CONTROL

In a sworn affidavit, Twila Reddekopp, who serves on the board of each the Lighthouse and Blue Mountain, stated “each firms are in disaster.”

“I stay hopeful that by way of this court docket course of and with the arduous work and dedication of our boards, workers and neighborhood we will come by way of the opposite aspect,” Reddekopp stated.

Redekopp, together with board members Jerome Hepfner and Ian Hamilton, requested the court-ordered investigation after reaching an deadlock with Windels and different members of the group who assist him.

Reddekopp and Hepfner successfully took on Windels’ function after he was positioned on depart in January.

5 members of the senior management staff on the Lighthouse had been let go, lower than a month after he was eliminated by the board.

“We have now been working for greater than a 12 months to deal with critical governance, administrative and monetary points on the Lighthouse,” Hepfner stated in a press release despatched to information media on Monday morning.

“That course of was very painful and was made much more troublesome as a result of we had been unable to speak freely with our workers and supporters in the neighborhood as a result of publication ban.”

–This can be a creating story.

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