FACS turns to credit line for finances

Peggy Revell

Facing a $604,000 deficit, Family & Children’s Services of the District of Rainy River has had to tap into its $450,000 line of credit as it struggles to make it to the end of its financial year.
The decision to access this line of credit came after a “lengthy discussion” by the board of directors, explained its president, Bob McGreevy.
“We have a line of credit that we use for normal business transactions because cash is always coming and going, but we’ve never used our line of credit to actually pay foster parents or pay salaries or to pay rent,” he noted.
“At the ministry’s request, we have decided we would use our line of credit so that we could continue to operate as long as we could, so we have gone ahead and done that.”
The impact of using this line of credit means the agency now is borrowing from the bank, which means it will have to find a way to pay the money back, along with interest payments “which we don’t want,” McGreevy said.
As first reported by the Fort Frances Times earlier this fall, the $604,000 deficit arose due to several reasons, including declining provincial revenue and funding, ministry-imposed caps on “infrastructure” which affect smaller agencies, and because this year FACS has in their care children who require “expensive, intensive care in an institution,” according to McGreevy.
FACS currently is waiting for a response from the Ministry of Children and Youth Services after filing a “Section 14” appeal, McGreevy noted.
This appeals process is one where an agency can make its case to the ministry for funding adjustments if it feels it is operating under “extraordinary circumstances” and isn’t being funded, he explained.
“We went through that process in the beginning of November, and we hope to hear a response within a week or two of the most,” McGreevy said, adding this appeal process might mean enough money from the ministry for FACS to make it to March 31, which marks the end of its fiscal year.
“Right now, our cash flow projections indicate we should be able to continue to operate to the end of February to the first week of March,” he indicated. “And after that, I’m not sure what we’ll do if we haven’t been given any extra support.”
Because the ministry was the one to request that FACS use a line of credit, McGreevy reasoned that by following their request, the FACS board hopes the ministry will be more willing to give them additional funding support following the Section 14 appeal.
“Which they may or may not do—we took a chance,” he admitted.
In the meantime, FACS has been implementing various cost-saving measures.
“We’re trying very hard to stretch all of our dollars, and to continue to provide service for families and kids who need help and need support and need protection,” McGreevy stressed.
“That’s the key for us.”
Looking for “all kinds of way to save money,” cutbacks at FACS so far include a “no-travel” restriction on staff and no non-essential training, said McGreevy, noting there are several positions at FACS which have become vacant and not filled.
“We haven’t laid off any of our child protection staff because our staffing levels are already so small that we felt, as a board, that we would be compromising our obligations to guarantee protection if we laid off child protection staff,” he explained.
“So we haven’t done that, and I don’t see us doing that, but it’s still going to be a cash crunch as we get to March of next year,” he warned.
Across Ontario, 49 Children’s Aid Societies are facing an overall funding shortfall of $67 million, according to the Ontario Association of Children’s Aid Societies, which also noted agencies in Northern Ontario have “received some of the largest cutbacks” and are facing a collective shortfall of $16.9 million.
More than three dozen Children’s Aid Societies, including FACS, have filed for Section 14 reviews, and many already have been making cutbacks to staffing and programs.
The Children’s Aid Society in York Region, for instance, laid off 18 workers while the Windsor-Essex Children’s Aid Society has cut certain programs and will be laying off 12 people in February.
Having already cut 7.5 staff positions, the Peel Children’s Aid Society estimated it will have to cut 24 more to eliminate its 2.1-million deficit.
Along with reviewing these Section 14 appeals, the Ministry of Children and Youth Services announced the formation of “The Commission to Promote Sustainable Child Welfare” back in June to work “in partnership with Children’s Aid Societies and the government to find the most efficient ways to improve outcomes for children and youth in care.”
Appointments of who would sit on the commission were made in November, with Ene Underwood, Barry Lewis, and Dr. Wendy Thomson selected.
But both NDP and Conservative MPPs have continued to slam the Ontario government’s actions during question period at Queen’s Park when it comes to the funding of Children’s Aid Societies across the province.
“The children of this province do not need another commission,” argued Ontario NDP leader Andrea Horwath. “They need their Children’s Aid Societies to be there for them when they need them.
“The only pathway this government is preparing is a pathway to bankruptcy and closure of Children’s Aid Societies,” she charged.