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Why did Legal Aid Ontario withdraw its funding from the African Canadian Legal Clinic?

Wednesday, September 20, 2017

The reasons

  • The management and board of ACLC were found in fundamental breach of their obligations to the community. There are serious concerns of financial mismanagement, lack of transparency and failure of accountability.

  • ACLCs management and board have failed to account for hundreds of thousands of dollars meant for client service.

  • ACLCs management and board repeatedly failed to meet their obligations, despite being given seven years to take specific steps and numerous opportunities to do so.

How did this start?

In 2009/10, LAO received numerous complaints from staff and board members within ACLC alleging financial mismanagement, gross misconduct and poor governance at the clinic. Two of ACLCs Board members resigned because of their concerns. LAO had a responsibility to look into these allegations and tried to resolve these concerns informally through a series of meetings, but the management and board of ACLC refused.

In June 2011, LAO retained PricewaterhouseCoopers (PWC) to conduct an independent forensic review. PWC released its report in April 2013.

What did PwC 2013 report find?

  • $2,281 credit card charges at various retail stores, including Stillwater Spa, La Senza, William Ashley, and Lava Life.

  • $754 for a ring from the Diamond Shop purchased by the executive director.

  • $6,650 in unexplained cash advances using ACLC credit card

  • $39,007 spent on taxis in and around GTA, an average of $38 per day. PwC found that taxis were frequently used to travel between ACLC and employees homes, including to and from work during the day. In PwCs opinion, the taxi expenditures appeared high, given the size of ACLC and relatively small number of staff.

  • $170,000 in lump sum bonuses to staff, $121,000 of which went to ACLCs executive director. PwC reviewed ACLC board minutes and did not find approval for the bonuses. There was also no corresponding reduction for this lump sum in the time claimed by the executive director, as is the practice for recording overtime payments. To pay these bonuses, ACLC used money that was meant for lawyer staff positions, which they kept vacant for many years.

  • $155,107 in compensatory time claimed to be owed to staff, $150,513 of which was recorded as owing to ACLCs executive director. The compensation accrual was in excess of the maximum of 168 hours permitted under ACLCs personnel policy. This created a large liability and deficit. Furthermore, PwC reviewed ACLCs board minutes and did not find approval for the compensatory time.

Did the executive director of ACLC ever pay back the diamond ring?

PwC did not find any evidence of reimbursement in ACLCs financial records. ACLCs executive director said she withdrew money from her bank account and repaid the purchase the same day. LAO asked that the executive director provide bank records to verify she had withdrawn money from her bank account. ACLCs executive director refused and ACLCs board supported her refusal.

In December 2012, ACLCs board and management told LAO that the executive director offered to pay back the ring a second time but the board declined. Five years later, in August 2017, ACLC posted on its website a photograph of a handwritten paper slip dated July 20, 2012 for $780 ($754 was the actual cost of the ring) that ACLCs board and management says shows a repayment, though this has not been authenticated or provided to LAO. PwC interviewed the executive director on August 8, 2012 and the paper slip was not mentioned or provided.

Was the $170,000 in lump sum bonuses used to pay Black lawyers for overtime?

ACLCs management and board told PwC that the bonuses were paid to staff for performance and to boost staff morale. They did not say this lump sum was for overtime. Of the $170,000, $121,000 went to the executive director, $19,000 went to four lawyers at ACLC, one of whom was Black.

What were the conditions that ACLCs management and board were asked to meet?

In November 2014, the clinics management and board were asked to meet the following conditions:

  1. Notify LAO of ACLC board of directors meetings in writing and allow an LAO staff member to attend board meetings.

  2. Take specific steps to have a board that includes two people with financial skills and two lawyers.

  3. Train ACLCs board members on their duties and responsibilities.

  4. Submit for LAOs approval a sound financial restructuring plan to eliminate the deficit in ACLCs LAO funds, stabilize the clinics financial position, and improve financial management.

  5. Implement best practices for financial controls, and financial reporting systems, including a policy not to use money provided by LAO for legal aid services to pay off unrelated debts.

  6. Co-operate with an independent audit of compensation time by an auditor of LAOs choice.

  7. Only request money for actual expenses. This included a prohibition from requesting and receiving funds for vacant positions.

  8. Implement all of the recommendations made by PricewaterhouseCoopers following the PwC Forensic Review.

Which conditions were not met?

Despite being given nearly three years, ACLCs board and management did not meet the following conditions:

  • Have an LAO staff person attend board meetings as an observer and provide financial documents (Condition 1): the board and management of ACLC did not include the LAO staff person in a number of board meetings. They refused to provide a number of financial documents. The Clinic Committee found that at least some of this was intentional and the ACLC management and boards reasons for not inviting LAO staff to some of the meetings were simply untrue.

  • Come up with a financial plan and eliminate ACLCs deficit (Condition 4): ACLCs management and board did not submit a sound financial restructuring plan that incorporated LAOs feedback. The clinics management and board also did not eliminate ACLCs deficit.

  • Stop transferring funds from LAO to other funders and vice versa (Condition 5): ACLCs board and management promised to adopt a policy to use LAO funds only for legal aid services and not to pay for unrelated debts. Instead, the clinics own financial statements showed that the board and management continued to use LAO funds to pay off debts to with other funders.

  • Stop collecting money for expenses the clinic does not actually have (Condition 7): The management and board of ACLC was required to request funding only for positions that it actually filled and for expenses that it actually incurred. However, between 2010/11 through to 2015/16, ACLC requested and received almost half a million dollars for vacant positions. Despite LAOs repeated requests for them, ACLCs board and management has provided receipts for only half this amount. Approximately $250,000 meant for client services is still unaccounted for.

Does LAO understand the need for this organization?

Yes, we understand the reality of anti-Black racism, the over-representation of members of the Black community in the justice system and the need for dedicated legal services to address these issues. LAO also recognizes that test cases and law reform are important tools in the fight against anti-Black racism.

However, these issues with ACLCs management and board are not minor. ACLCs management and board have failed to account for hundreds of thousands of dollars of taxpayer money that was supposed to be used to provide legal services to vulnerable members of the Black community.

We did not want it to come to this, but after seven years of trying to work with the ACLC management and board to resolve the concerns, LAO had no choice but to make the decision to withdraw funding.

What is the advisory committees role and when was it created?

The committee was created last year to provide advice on how best to meet the Black communitys needs and help ensure continued services. The members of the advisory committee were not involved in the dispute between ACLC and LAO or in LAOs decision to stop funding. They are serving on the committee in a volunteer capacity.

Who makes up the advisory committee?

The committee is made up of six people who are all Black:

  • Sandy Hudson
  • Rinadlo Walcott
  • Idil Abdillahi
  • Aba Stevens
  • Zanana Akande
  • Roger Rowe

For more information on the members, please visit our website.

Is it true that John McCamus is the board chair of this committee?

No. John McCamus is the chair of Legal Aid Ontario and the Clinic Committee that made the decision to withdraw funding from the ACLC. He is not the chair of the advisory committee. He has no role on this advisory committee whatsoever.

This committee is not an advisory committee of LAOs Board of Directors. It is a group of community members with a long history of working to combat anti-Black racism who came together to advise LAO on how to establish an independent, Black-led, Black-run community-based organization to deliver legal services to Black Ontarians.

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Moya Teklu
Staff Lawyer
Email: teklum@lao.on.ca
Phone: 416-523-9764