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Eugene Jones, the president and CEO of Toronto Community Housing, and Bud Purves, chairman of TCHC, at a board meeting at the TCHC offices on Feb. 6, 2013Fred Lu/The Globe and Mail

The head of Toronto's social housing agency, Eugene Jones, is keeping his job, but has been stripped of his bonus and ordered to take leadership lessons after an investigation into his conduct.

The board of Toronto Community Housing imposed the sanctions in a marathon closed-door meeting on Thursday. Exactly what Mr. Jones did remains a mystery, as are the details and the cost of the sanctions. An investigation by outside lawyers found Mr. Jones "failed to exercise proper management oversight and follow board processes and procedures," board chair Bud Purves said, reading a prepared statement.

The investigation centred on Mr. Jones's involvement in two recent personnel issues. Lawyers were called in after the abrupt departure of the agency's recently hired chief operating officer, Kathleen Llewellyn-Thomas, sources familiar with the matter say. As well, the pay records of Mr. Jones's executive assistant were under investigation, specifically that attempts were made to change them after her annual pay exceeded the $100,000 threshold for public disclosure.

Mr. Purves would not discuss details of the investigation, but said in the reporting of pay "oversight errors" were caught before any incorrect reporting "could go forward."

As for the departure of the COO, Mr. Purves said there was some misunderstanding between Mr. Jones and the board, but confirmed only that the board has the authority to hire and fire senior staff. "It was a matter of board procedures and policies that need an enhancement and a closer adherence by Gene Jones," he said.

As a condition of his continued employment, the board imposed sanctions on Mr. Jones, including not awarding his bonus for 2013, which represents 25 per cent of his $250,000 annual pay, Mr. Purves said. Mr. Jones must attend a university executive leadership program, work with a coach and agree to mentoring. Half his bonuses in the future will be linked to improvements in "managerial style and performance."

The decision was not unanimous, said Councillor Cesar Palacio, a member of the board, adding that the final vote was 12-1, although what was voted on is unclear.

Mayor Rob Ford, who was not at the board meeting, said at a news conference at city hall that Councillor Maria Augimeri was the only member to vote for the removal of Mr. Jones. The board chair would not comment on the in-camera vote after the meeting, but sources familiar with the discussions say the only vote taken was on the proposed sanctions.

Mr. Jones, who missed Thursday's board meeting and a major redevelopment announcement on Wednesday, was not available for comment. Staff would not explain his absence, telling reporters to file a freedom of information request.

Mr. Ford said he continues to support Mr. Jones "100 per cent." He backed the decision to cut his bonus, but characterized the training as a waste of money. "Him not getting a bonus, that's a big enough pounding," the mayor said. "But I think what they have done is going a little too far in sending him to school."

One councillor who is not on the board questioned why Mr. Jones remains on the job. "In my opinion, he should be let go," Councillor Giorgio Mammoliti said.

Councillor Adam Vaughan, also not a board member, said Mr. Jones, brought in from the United States to clean up the troubled agency, is "in over his head," but stopped short of calling for his departure.

Mr. Palacio called the decision a compromise. "We have a phenomenal CEO that will continue to have the trust of the board and will continue to move forward," he said.

‎Asked if she is happy with the board's decision, Ms. Augimeri responded, "I can say yes." Asked why, "That it's over," she said.

Although the board has jurisdiction over the hiring and firing of senior managers, members became aware of the COO's departure only after the fact, one source said. The source confirmed that she was given a settlement as part of her departure, noting that people who leave voluntarily do not usually receive a "large chunk of money."

Mr. Purves refused to discuss details of her settlement.

Mr. Jones was hired in 2012 and has 18 months remaining on his contract, Mr. Purves said.

As well as this latest investigation, the city's ombudsman is looking into the "recruitment, compensation and terms and conditions of employment" at the agency, with a report expected in May.