An examination of Hamilton’s initiative for outdoor shelters revealed that the project prioritized speed over proper scrutiny and governance. The Office of the Auditor General in Hamilton highlighted deficiencies in accountability, governance, cost oversight, and risk management within the project. Inadequate contracts and oversight, along with limited experience, created an environment where vendors could exploit the project at the expense of the city and taxpayers, leading to financial and operational repercussions.
The audit report, along with 11 recommendations for city managers, was released in advance of a meeting of the Audit, Finance, and Administration Committee scheduled for January 15. The report, prepared by the Office of the Auditor General, suggests that the city manager should respond to the recommendations and provide an update to the audit committee by July.
City officials have been asked to respond to the audit findings and recommendations. In a statement issued on Friday, the city indicated that they would review the report with the council and consider opportunities for improvement through the appropriate channels.
The outdoor shelter project, initiated in response to homelessness and housing challenges, resulted in the establishment of an outdoor compound on Barton Street W. Managed by Good Shepherd, the site comprises prefabricated cabins and communal buildings, offering temporary housing for individuals for whom traditional shelters are not suitable. The project mirrors similar initiatives in other communities like Kitchener-Waterloo and Kingston.
An audit initiated in 2025 following complaints revealed shortcomings in research, planning, risk assessment, and communication within the project. The audit identified the lack of experience in the city’s Housing Services project team, leading to oversights that contributed to cost escalations. The audit also criticized the city’s contracting approach, highlighting the absence of mechanisms to hold vendors accountable and control costs effectively.
The audit highlighted the city’s inadequate due diligence in selecting a supplier for the shelter units. The vendor, Microshelters, lacked a proven track record in temporary shelters, and the city failed to conduct thorough market research or explore alternative suppliers. The audit revealed that the city paid $2.3 million for shelter units without inspecting them, resulting in costly modifications to meet regulatory standards.
The Office of the Auditor General provided 11 recommendations to enhance future projects and address the lessons learned from the outdoor shelter project. These recommendations include establishing expert engagement expectations, forming steering committees for major projects, enhancing procurement and contract management training, and implementing robust procedures for vendor due diligence.
In conclusion, the audit report and recommendations aim to guide city management in improving project oversight, risk management, and procurement practices for future initiatives. The findings of the audit will be deliberated in upcoming committee meetings to address the challenges and inefficiencies identified in the outdoor shelter project.