Auditor General of Newfoundland and Labrador, Denise Hanrahan, today delivered a performance audit report to the House of Assembly on the Newfoundland and Labrador Housing Corporation’s Transitional Supportive Living Initiative. The report looked to determine whether the contracts related to the transitional supportive living initiative at 106 Airport Road were procured and managed appropriately, and whether there was appropriate oversight of the initiative.

“Comprehensive planning and appropriate adherence to the Public Procurement Act are essential to ensuring public resources are used responsibly. Since this initiative involved significant public spending, multiple contracted partners, and a high‑risk population, I expected the Corporation to have effective systems in place to manage risks, monitor performance, and demonstrate the project was meeting its objectives cost effectively,” commented Auditor General Hanrahan.

The audit found the Newfoundland and Labrador Housing Corporation did not adequately plan, procure, manage, or oversee the transitional supportive living initiative. Early involvement of the subsequent nonprofit operator obscured roles and responsibilities and contributed to a reactive operational process that did not follow the Corporation’s Supportive Living Program Policy. Additional information can be found in the Backgrounder below.

“While the transitional supportive living initiative helped 34 people find independent housing, I am concerned poor planning and ineffective contract management significantly affected accountability and the value for money of this initiative.  By December 2025, costs incurred were approximately $24 million, with at least $1.5 million a year being spent on vacant rooms,” added Auditor General Hanrahan.

The report contains eleven recommendations and can be found by visiting: www.ag.gov.nl.ca.

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Media contact
Chrysta Collins
Office of the Auditor General
709-730-1568
chrystacollins@oag.nl.ca

BACKGROUNDER

Procurement Planning and Execution
Planning
The Corporation did not complete comprehensive planning for the initiative.

The Corporation’s planning and procurement for the initiative was reactive, driven by the need for space due to rising homelessness, tent encampments, and impending winter weather.

The nonprofit operator of the transitional supportive living initiative was involved in planning starting in January 2024, even though they were not officially selected as the operator for the initiative until April 2024.

Procurement
The facility owner of 106 Airport Road approached government with a proposal in Fall 2023, and the facility lease for the transitional supportive living initiative was awarded without undertaking an open call for bids.

We found the Corporation did not utilize public procurement processes for the selection of the nonprofit operator. We found, despite selecting the hotel using non-urgent exemptions, and the security company through the regular procurement process, the Corporation chose to engage the nonprofit operator through the immediate response section of the Supportive Living Program Policy.

Contract Management
Payment Controls and Procedures
The Corporation did not follow the Supportive Living Program Policy when it issued quarterly payments to the nonprofit operator in advance, without reviewing invoices or detailed supporting documentation.

The Corporation did not routinely request or review supporting invoices for individual expense amounts reported by the nonprofit operator in quarterly financial information even though they had the ability to do so via the terms of the service agreement.

Nonprofit Operator Expenses
The Corporation approved amounts related to training of the nonprofit operator’s staff, which was in contradiction of policy.

Two unanticipated expenses were incurred due to operational issues:

• A smoking gazebo was constructed at a cost of $15,623 and paid for via the nonprofit operator’s funding for the initiative under capital expenses; and
• $126,850 was spent on tenant transportation, despite 106 Airport Road being selected due to its proximity to a bus stop.

Transitional Supportive Living Initiative Expenditures
Between the start of the lease term on February 15, 2024, and the end of our scope period, total expenditure amounted to approximately $24 million, compared to $13.8 million that was publicly known.

In March 2025, the Corporation had allotted 105 rooms to residents but capped residency at 75 tenants. As a result, 30 rooms, at a cost of $1.5 million annually, were not utilized for residents – a 29 per cent vacancy rate assuming the remaining 75 rooms were always utilized.

Oversight
Performance Monitoring
The Corporation did not adequately monitor the performance of the transitional supportive living initiative.

Quarterly and data reports required by the nonprofit operator were inadequate and inconsistent.

We found the nonprofit operator submitted one of six (17 per cent) required program monitoring reports between the date of the first report on July 31, 2024, and December 31, 2025; twenty-one of 74 (28 per cent) occupancy reports had errors.

Operational Issues
We found meeting minutes contained discussion of operational issues at the hotel that suggested tenant needs exceeded the Corporation’s expectations, and the capability of the transitional supportive living initiative providers to meet those needs.

Outcome Monitoring
The required Evaluation and Accountability Framework was drafted in March 2025. Although a draft framework containing six outcome measures with 87 indicators existed, the framework was never finalized, and no evaluations were completed.

There was no formal evaluation of the nonprofit operator’s performance before the service agreement was renewed, to ensure they were meeting expected outcomes of the initiative.