2008 Legislative Session: Fourth Session, 38th Parliament

SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS

MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS

Tuesday, November 25, 2008

8:30 a.m.

Douglas Fir Committee Room

Parliament Buildings, Victoria, B.C.

Present: Rob Fleming, MLA (Chair); Rick Thorpe, MLA (Deputy Chair); Harry Bains, MLA; Randy Hawes, MLA; Bruce Ralston, MLA; Claude Richmond, MLA; John Rustad, MLA; Ralph Sultan, MLA; Claire Trevena, MLA; John Yap, MLA

Unavoidably Absent: Olga Ilich, MLA; Bob Simpson, MLA

Others Present: Cheryl Wenezenki-Yolland, Comptroller General; John Doyle, Auditor General; Josie Schofield, Committee Research Analyst

1. John Doyle, Auditor General, provided the Committee with a briefing and answered questions on the Follow-up Process.

2. The Committee considered the following Reports arising out of its review of the follow-up process and agreed that no further action by the Committee was necessary at this time:

3. The Committee adjourned at 9:26 a.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Public Accounts

Tuesday, November 25, 2008

Issue No. 24

ISSN 1499-4259

[ Page 469 ]

TUESDAY, NOVEMBER 25, 2008

The committee met at 8:34 a.m.

[R. Fleming in the chair.]

R. Fleming (Chair): Good morning, Members, Auditor General. We have an agenda before us for the Public Accounts Committee this morning, and it's two items.

One is a description and overview from something that the committee tasked the Auditor General to give thoughts to the committee on, which is how Public Accounts does the follow-up process. We've had varying practices over a number of years. John, of course, has experience in other jurisdictions, and his office has many thoughts on the matter. So we're going to begin there.

Then the second item of business is to consider reports varying in degree of antiquity that for one reason or another haven't been considered to date by Public Accounts. Some of these date back to the last parliament. I think the way we'll proceed through items 2(a) through (f) is to ask our Auditor General to introduce and give brief comments on each report, see if members have questions, look for resolution and then proceed to the next item.

[0835]

If there's no other business that members have, I would ask that the agenda be adopted.

One moment, though. Deputy Chair.

R. Thorpe (Deputy Chair): Yes, with respect to members asking questions, I hope they are of a general nature, because it's my understanding that the comptroller general, I guess, who coordinates government responses, was advised that no witnesses would be required.

I actually thought our discussion said that this was housecleaning to get these things off, because I note that three, I think, out of the five are linked to upcoming reports, and two clearly state that they're outdated. Some of them go back to 2004, I think.

R. Fleming (Chair): Yeah. I anticipate members' questions would be not so much about the original recommendations but how it will relate to future reports coming from the office.

R. Thorpe (Deputy Chair): Okay, as long as we understand that.

R. Fleming (Chair): Members, a motion is in order to adopt the agenda.

Meeting agenda approved.

R. Fleming (Chair): Mr. Doyle, over to you to begin this morning on thoughts on the follow-up process.

Auditor General Follow-up Reports

J. Doyle: Thank you, Chair. Good morning, Deputy Chair. Good morning, members.

Follow-up is a critical part of the work of the Office of the Auditor General. What typically happens is that a report or an investigation or an audit is conducted. A situation is revealed and explained. Recommendations are made in conjunction with feedback from management regarding the quality of the evidence and the quality of the work that has been undertaken.

Those recommendations and their acceptance then form, if you will, an agreement to undertake work to deal with the risks that have been identified during the conduct of the audit. Typically, auditors would go back at some time in the future and ask questions regarding the progress of the implementation of those recommendations.

That process, which I've described very simply there, presupposes, first of all, good-quality recommendations that actually deal with the important issues rather than a series of minutiae that are perhaps not really all that important, and it's critical that the recommendations are of good quality. It also presupposes that the organization that's the subject of the review has properly regarded the recommendations and has either accepted or rejected them.

It also presupposes that the organization has the flexibility and the capability over time to bring in alternative approaches to actually dealing with the issue rather than just slavishly implementing the recommendation.

That's an important point. Issues, situations, risks do change over time, and the response from an agency could be: "We'll take on the risk." It could be: "We've found an alternative way of dealing with the risk." Or it could be: "We've implemented the recommendation." But it should never be: "We're going to ignore you and do nothing and not explain our actions."

So the follow-up process is, if you like, the closing of the loop that exists following on from an audit or a review or an investigation and permits, if you like, closure of the whole report and also documentation regarding the actions that flowed from that report.

An important issue for me is also that whilst my teams may look at something that's very important to them, they've looked at an area or an activity within a very large organization. For local management, that actually could be a very small part of their business, a very small part of what they do.

It is important for auditors to recognize and understand that we're not the beginning and the end of the world, that, in fact, we fit into a process which says: "If something needs to be done, then it needs to be done." But frequently management can be distracted, and they can be doing other things at the same time which they may perceive to be more important.
[ Page 470 ]

They don't have to defend that decision with me. They merely need to present it in this process that I'm going to describe at the moment, and then you can form your own views as to whether or not you feel that that approach is appropriate or relevant. And it's on the record.

[0840]

But as I say, ignoring recommendations shouldn't be an option. There should always be an explanation as to why they have not been implemented or how they are being implemented.

The process that I would like my office to adopt into the future is one which I think will utilize our skills and resources in the best way. It is not a 100 percent review of every recommendation that has been made. Nor is it a 100 percent review of all action that has been taken by agencies in regard to those recommendations.

It's a risk-based process which permits agencies to present the work that they have undertaken in respect to any recommendation and to express that without any adjustment of any words by my office. We publish what we receive from them. It's a management assertion regarding progress.

This is how I propose that we go forward. Whenever my office publishes a report, we will notify the agency concerned when we will follow up action on the recommendations. We will do that in writing, and we will also identify any further information that is necessary or required.

For example, there is a report that I am going to publish tomorrow. Part of that report is a comment from the agency, which says: "Within a certain period of time we will present to you an action plan in regard to how we're going to implement the recommendations." So we would actually get that action plan, and that would be part of the original letter that goes out to the agency.

The action plan will inform us in regard to how these recommendations are going to be dealt with or implemented over time. Now, contrast that with the work on CORNET, where 96 percent of the recommendations were already implemented by the time we actually published the report.

We need to be flexible around exactly what that communication says, but the issue is really: what is it that you're going to do, and when are you going to do it? And setting a date when we're going to come back and ask: please tell us what you've done?

I propose to produce a document, similar to the one that was published quite recently on follow-up, twice a year — April and October. Inside that document there will be three sections.

The third section, which is what this report is in its entirety, is the responses, or the management assertions, from agencies regarding progress, broken down into each report and broken down into each recommendation. What we do with that information is that once we receive it, we do a preliminary assessment in regard to our own known knowledge about the situation. If we find anything major that we feel uncomfortable about, we will return the documentation and ask for them to reconsider what it is they have said. We did that on one occasion during this cycle.

Usually, however, the responses from management are all entirely reasonable and appropriate but untested. We will publish them as is into this document.

The two other sections of the report are — and they're not included in the current report, but they will be included in the one that gets published in April next year — some statistics around what recommendations are out there at the moment and how they're being dealt with. That will involve some more work being done by my office regarding timing of implementation of recommendations and a few other things.

It may take a couple of reports to get that up to the level of comprehensive detail that I would like, but certainly, we can give you an overview as to what the current state of the recommendations out there at the moment actually is.

The second part is details of any work we have undertaken, where we're drilling down deeper into these management assertions that we've received. Now, the process of drilling down deeper is obviously something that you'll be familiar with. We have done it on several occasions in the past, where we've done detailed follow-ups in regard to different reports. Some examples would be the diabetes follow-ups that we did.

[0845]

We can do the same and continue to do the same into the future. However, we would only look at those which we perceive to be of concern or of high public interest — basically marshalling our resources so that we can deal with other issues as well.

I would welcome feedback, both from the committee and from any others that would like to make comment in regard to what our detailed follow-up should be. So if there was one, in regard to this particular report, I would expect that the work would be completed and be in a publishable form for the next iteration, so by next April.

Having gone through that process of determining what the response is, basically I'm putting the onus on management to account for their own actions, which I think is where they'd like to be rather than having someone coming in all the time and doing a re-audit of the whole process. I'm hoping to keep the committee apprised of not only how management have dealt with these issues but also what the current state of play is in regard to all recommendations.

I need to emphasize that I am comfortable with the thought that even though someone has initially accepted a recommendation, that later on they find alternative ways of dealing with that recommendation or rather the risks that are involved with it. I also am comfortable
[ Page 471 ]
with the view that sometimes, for all the right reasons, a recommendation at one point of time may not be appropriate at another point of time.

But I would say that that process of not implementing, or implementing in a different way, should be an open exercise in the same way that the report publication in the first place was an open exercise, and through the mechanism I've just described it is possible for agencies to actually describe how, why and when they'll be doing something different.

I'm not sure how to deal with recommendations that have been rejected by an agency. They are still, in my view, firm recommendations, and they were there for a reason. I'll need, probably, to do some further thinking about how to deal with those. These are recommendations that have been rejected at the outset. They are few and far between. However, they do occur from time to time.

I actually can't remember one at the moment, but they must occur. I think it would be clear to me that I need to go back and perhaps do some work on those over time to see what can be done in the future in regard to those particular items.

I think, Chair, that's my overview of how I'd like to proceed and how I am proceeding at the moment. I'll be more than happy to answer any questions about further detail.

R. Fleming (Chair): Thanks very much, John. The Deputy Chair wanted to comment, and then other members may wish to as well.

R. Thorpe (Deputy Chair): First of all, thank you, John, for sharing this with us.

The actual follow-up process initiated at this committee back in either the fall of 2000 or the spring of 2001 — those involved's memories seem to be having difficulty recalling exactly when that was…. You did say something at the beginning about the quality of some of the recommendations. I don't know what you were alluding to there. I think you used the words "we assume they're good recommendations" or something like that. I can't remember exactly the words, but I just took a note here.

The other thing I would ask that we think about is, as this process has unfolded…. I'm pleased to see the overall direction. It seems to me to be one of streamlining and simplifying, so I support the overall thrust.

But I was wondering, as I get back into some of this stuff and having spent now the time in government that I have spent, if we shouldn't be categorizing the recommendations that require legislative changes. Because legislative changes, as some folks will know, don't necessarily happen like that — point and…. A good example is the Auditor General Act taking ten years for legislative action.

So I'm just wondering if we shouldn't be somehow identifying and understanding the recommendations that are coming forward with respect to how governments proceed. I would ask you to think about that.

[0850]

I would also wonder, and I don't know whether you've ever done this in the past…. Working on some of the recommendations, putting some kind of an — the word that comes to my mind is qualifier, but that's probably not the right word — understanding of possible financial ramifications to a recommendation, especially given the times we're living in right now…. It may be nice to have a recommendation, but if it's going to cost $100 million, somebody should actually have thought about that as it comes forward to whoever is going to be in Public Accounts when this happens.

The other thing I would ask — and I don't know whether you've had consultation…. I know you're big on consultation. So I don't know whether you've had consultation with the comptroller general on this, but actually understanding the time lines for government planning and fitting into the cycles of government planning…. I'm not sure that April and October fit into the cycles for the planning that takes place with respect to fiscal ramifications especially.

I know that when I was a minister, we were starting to work on the following year's budget in August. So to get a report with updates in October, that kind of puts us — I'm thinking it might — out of sync with the cycle. I think we should perhaps understand that.

With respect to the recommendations, I was wondering if you could just walk through…. I think you alluded to, in the change, how the reports will come forward in the future — about ministries agreeing or disagreeing in their feedback in the initial publication, and then a time line for action. Do you envisage that in whatever report you're going to be issuing, starting whenever this is adopted? I would ask that question just so I understand.

J. Doyle: First of all, quality of recommendations. It is a problem in a number of places. Obviously, it never happened here, but it's a problem.

R. Thorpe (Deputy Chair): It's hard to be humble.

J. Doyle: At least during my time.

Recommendations can be too precise, too prescriptive and not really deal with the actual underlying cause, but they deal with the symptom. That's what I mean by quality of recommendations. I think that there is an earnest responsibility on my office to make sure that the recommendations are not there to frustrate but are there to actually bring about change or a difference or an improvement — or addressing a risk that may exist. That's what I mean about quality.
[ Page 472 ]

R. Thorpe (Deputy Chair): Okay.

J. Doyle: Now, I'm not suggesting for a moment that any of the recommendations that have been done in the past are wrong, but I'm open to be the suggestion that there are other ways of dealing with them. Therefore, as we move forward, I'm hoping to see that situation improve.

As far as categorization, I'm working within the office at looking at…. Can we put risk factors against recommendations? Can we put issues that we're trying to resolve so that they become not a prescriptive list of things that need to be done but "here is a problem that needs to be addressed by management"? Management need to be able to deal with the root cause of the issue rather than a few symptoms that may be there. I think we have all heard the expression of motherhood statements and what have you. I want to get away from that.

Now, you'll find sometimes — and I think computer-based systems are an example — where we go into incredible detail in regard to recommendations, but then we band them into themes. If you like, underneath every themed recommendation is a whole lot of detail, which we do share with the agencies. Therefore, we have that kind of approach, which has application, perhaps, in other areas — not just in the IT area. What I've been pleased about with that particular approach is that there has been very, very good response from government CIOs in regard to how to bring about those changes.

I, personally, would like to see from an agency a time line as to when they think they can deal with recommendations. I won't go as far as to prescribe a date, but certainly the agencies could receive our reports. They could give the initial….

[0855]

This has happened a few times, by the way. The Children and Family Development Ministry did this. What they did was they got our report and said: "Yes, we think the recommendations are right." They went away, and they did some detailed work to produce an action plan to actually make those recommendations a reality.

They then gave us that action plan, which we published and made available. They also put it on their own website. Then we can track how they deal with those recommendations over time. I thought that was a very constructive engagement process where it's quite clear that these issues were being dealt with in a serious way.

In some respects, the work that is being done in Health is very similar. They have detailed action plans in regard to how to deal with this. That would include dollars, time, people involved in the whole process and a feedback loop to make sure that they're done in a timely way. I think that's a very constructive end-game for a particular report.

I'm not sure this should link into financial planning, because this is really a statement around what is already being done. It's about what agencies themselves already know about. So they would have already fed or built in to any requests for additional resources or anything else. They would've already done that in their own corporate planning processes. So if you like, this is just an output that is on the side.

I suppose it doesn't really matter what times we choose to do them. They've just been done at a time when…. If you like, it's before the very, very busy season, and it's just twice per year. I mean, we could have done it four times a year, but I didn't think that was worth the effort.

I think I answered all your questions. May I emphasize that I found it very, very healthy that agencies have come back with action plans in regard to how they're going to deal with a lot of the recommendations. In doing so, they've got the opportunity to demonstrate through this process how they're dealing with things that have been raised by my office.

What I need to do is make sure that in the future, as we go forward, the recommendations are the right recommendations, there's good discussion around how the risks are being managed within different ministries and agencies, and there's continuous improvement, as we move forward, with proper assessment of costs, risks and rewards that are associated with those recommendations and the implementation of them.

R. Thorpe (Deputy Chair): If I could just follow up. With respect to the recommendations, whatever they may be, and whatever report it may be, do you think — even if it's within the categories and the IT ones you talked about — it would be appropriate to rank them in order of priority as deemed by your office? Do you think that would be an approach?

J. Doyle: By definition, if we make a recommendation and it's public, then it's important.

R. Thorpe (Deputy Chair): But if a report has 82 recommendations, something has to be the most important.

J. Doyle: Yes, logically, but not always. You could come up with two recommendations at a time. I will have a look at whether or not we can rank them. The danger about ranking is that the lower ranks then get ignored, and it's only the higher ranks that get dealt with.

If I can somehow build a risk matrix, which informs management in regard to my expected time frames for these changes to occur, that perhaps would be a welcomed approach. Now, I usually do that in the background rather than in the public report itself.

R. Thorpe (Deputy Chair): But as we know, from time to time, people don't go into the background. Those are for the folks that are extremely orientated to detail.
[ Page 473 ]

I would ask you to…. You may not think that something should be part of the financial cycle. In fact, it's not just a financial cycle; it's a strategic cycle. Yesterday — I think it was yesterday — we talked about strategic importance of some things. I think it would be very prudent and a good management tool to make sure that whenever the updates are coming out, they fit in with the strategic and financial planning of the government. I think that would be a further helpful tool to government and to ministries and Crowns in discharging their strategic and financial planning.

J. Doyle: I didn't say that I didn't think it was helpful. What I said was that the information is already in the hands of the agencies, and they've already built it into their planning.

[0900]

Not a single word in this document after the foreword comes from me. It comes from the actual agencies themselves, and they should be building that into their future plans and how they're operating. They're in a better place to do that, so I would argue that they already know what that information is and where they're tracking.

R. Fleming (Chair): I'd just like to make some comments, John, because we had discussions behind the scenes from this committee on gathering some thoughts on how this committee can add value to the reports of your office and to the oversight process.

We sort of, even with the previous Auditor General, described a somewhat unsatisfactory situation where we deal with audit findings at this committee. We consider them then, and what had been past practice, what is current practice, is to issue follow-up reports — sometimes two years later, sometimes three years later, sometimes more frequently. But many times those sporadic follow-up reports were not being properly considered again at Public Accounts.

So definitely useful between the ministry and your office, and I think we should state, and it has been stated, that typically within the province, your office — the recommendations — are taken very seriously. Often, as we see at this committee, in the comments from the ministry, most of them have already been adopted or are well underway to being implemented, even within the space of a few months. That's very good.

What I want to thank you for today is that I think we're finding a better way for this committee and for your office to keep on top of recommendations that remain outstanding — those few that do remain outstanding. I think a biannual compendium for legislators is probably a useful product from your office.

What I do think we probably want to do is to have committee members have the ability…. I know they have a relationship individually with your office and that your office is always open to them, but I think it may be useful, when we get into the swing of things, to have space on the agenda for members to be able to give notice and ask questions about particular recommendations that may be hanging out there. Those will come up from time to time.

I mean, I can think of a hypothetical example. We dealt with the CORNET software system — if something were to occur, like a privacy breach in that information system. A member recalled that our committee had heard quite seriously from both the ministry and from your office that that system was being tightened up, and yet something had occurred which was supposedly being risk-managed. In between reporting, I think this would be an appropriate place for those kind of discussions to happen.

One other comment I want to make is just on something you touched on briefly, which was what do you do when you and your office and the government don't agree on a particular recommendation. Obviously, it's not good enough just to pretend to agree to disagree. There has to be some determination and some course of action.

I appreciate that it happens, in your words, "so rarely" that you couldn't even think of an example this morning. But I do recall one that's fairly recent, and that was in the management letter that you wrote on the public accounts last year. There was one note on contractual obligations where it was observed by the government that those obligations have grown from $23 billion to $55 billion.

Your office suggested that according to the proper PSAB accounting standards, there should be a schedule and much more detail and disclosure on that area. The government disagreed. That disagreement continues.

It seems to me that legislators and taxpayers don't really have any benefit if the status quo persists and there is no change from that disagreement. Again, that's the example I could think of this morning. But if you have any additional comments on how we might resolve those kind of situations better, I'd appreciate any suggested course of action that you might offer.

[0905]

J. Doyle: In that particular example our disagreement is with the presentation. We wanted it split between the operating expenses and interest, and it was decided not to do that.

If you actually look at that presentation, which is in compliance with PSAB — or close to compliance with PSAB — parts of it…. It actually isn't a very useful table. What it talks about is actual contracts that have been signed and contractual liabilities that are in place. For example, if there is a major contract that's due to be renegotiated the following year, it's not included. The following year's expense is not included. So it actually understates potential contractual liabilities into the future, which is entirely in line with what PSAB states.
[ Page 474 ]

So whilst we were having a technical difference of opinion, it's the functionality of the information, as well, that concerns me. What is the view into the future of what commitments are likely to be made? What contracts are likely to be in place?

One of the contracts in that particular one, from memory, was the contract the province has with the RCMP. It's there for a couple of years, and then it's not in the table afterwards. Therefore, the $54 billion actually understates the total.

What it says in the standard is that it's contracts that have been signed and are in place, and that's what that table shows. But from my perspective, knowing that — and I know that — it still doesn't give me a great deal of information, if I was a user of the financial statements, to see what ongoing commitments actually are.

I think we've got a lot of areas to talk through about the functionality of information, not just compliance with a series of standards that are there at the moment. But I'm not sure that the financial statements are necessarily the best vehicle to provide that information. They're a technical legal document that's done in a certain way.

To actually interpret what's in the financial statements requires a different piece which explains what's going on in a way that's quite different from the rigidity, if I use that phrase, of the way that you're required to present things in a set of financial statements.

R. Fleming (Chair): Fair enough. Members, we've had some thoughts on the follow-up process this morning. There's something….

Sorry, Mr. Hawes. Did you want to…?

R. Hawes: I did want to ask a question, just to follow through with what the Chair was just asking, where there isn't agreement between a particular ministry and your recommendations. I think I'm talking more on performance audits, certainly not on the financial statement stuff. And that does happen from time to time, where there are disagreements.

J. Doyle: Yes.

R. Hawes: It seems to me that the driver here needs to be management in the ministry, obviously. I think you said earlier that the world doesn't stop and start with…. I can't remember your exact words. The auditor's function isn't the end-all and the be-all.

The people who are taxed with actually operating government have to have the ability to operate government. So it seems to me that where there are disagreements, if the ministry is able to explain why they disagree, surely that, I think, should be the end of it — I don't understand — unless the problem you've seen persists.

But sometimes you see a problem where the ministry is saying: "Well, it isn't a problem." Sometimes, even in presentation, there are differences that are never going to go away. I don't think that the ministry is ever going to…. I can think of a few. I don't want to get into a prolonged discussion about it.

[0910]

The Olympic station on the Canada line as being part of the cost of the Olympics, for example, when there isn't an athlete ever going to get on the train. They don't travel that way. It's called the Olympic village because that's kind of where they're going to live. While the Olympics are on, that's where the athletes will be housed, but they're not going to take the transportation system. They're never going to walk into that station. I don't understand why it would be…. I think the ministry even says: "Why would that be part of the cost of the Olympics?"

So we don't agree, and we aren't going to agree. At what stage, then, do you just say: "Okay, fine. You didn't agree. Let's just drop it and move on"?

J. Doyle: I'll address it from a generic perspective. Yes, there are times when the recommendation is made, and the agency does not believe that that is the most appropriate way to manage that risk. I think that the issue around the recommendations, which I addressed earlier on, was that we should make the recommendation so that we can identify risk and, basically, request that management do something about that risk. How are they going to handle that risk?

Now, if they come up with an alternative approach outside of the recommendation that still addresses the risk, then that's fine. What we're talking about in the example you gave was more to do with disclosure, rather than managing a risk, which is more of a financial audit concept than a performance audit concept.

I'm actually very comfortable with agencies saying: "We believe that we can handle this risk in this certain way or that we'll take on that risk and not deal with it because, budgetary-wise, it makes sense." All I'm saying is that that process…. I make the recommendations the way that I see it. They can make their responses in the way that they see it. It's in the open. That's all I'm saying.

R. Hawes: So John, can I just ask one last question? From the time, then, that you…. I just want to understand the flow here. So you do your audit. You're ready to publish. You present what you're going to publish to the relevant ministry and give them some time to respond.

I'm just curious about the time that you are allowing them then to respond, because sometimes your assessment can be pretty complex, and the ministry may need time to…. I can think of a couple of times where there was no response from the ministry. I don't know why there wasn't a response, unless it was that they just didn't have time to prepare…. And you published before they had time. I'm not sure if that happens.
[ Page 475 ]

J. Doyle: No, sorry. It's never happened.

R. Hawes: So they would always have adequate time to make their response?

J. Doyle: The only time we have published a report without a response from the ministry was when the ministry has declined to provide a response.

There's a process. The process is that during the conduct of the audit, there's connection with the agency concerned, whatever agency that's being dealt with. That doesn't necessarily give an agency a full overview as to what the report is going to say, but it gives you a bit of an idea of what's been found as you've been going along.

Then a draft report…. A process is gone through which talks about…. Are the facts correct and the conclusions…? The tone of the report, if you like. There's that kind of process that goes on, particularly if it's in regard to a particular agency. It's about their operations. It's been a detailed overview about that particular agency. We want to make sure that we've got the facts right and that the tone of the report is appropriate. And we do get requests to change the way we have written the report itself.

Then there's a nearly complete report produced, and then the agency is asked to provide a formal response to that particular report. Sometimes a few words are changed in regard to that report, as that sort of final process takes place. But usually it comes to closure at some point before the response is received from the agency about what the actual report says, and they have that report before they actually respond.

We put that in with the rest of the report. I then append my Auditor General's comments and make the whole document available to the minister before the report is actually published. We try to make that seven days before, but we don't always make it. If we can't make it, we do ask for indulgence. We have been afforded, on a number of occasions, the capacity to provide that report less than seven days before we actually publish.

R. Hawes: So the ministries and Crowns are given sufficient time?

J. Doyle: Yeah.

[0915]

R. Fleming (Chair): Thank you, Members.

Auditor General, I think what might be most useful in terms of proceeding further on changes to the follow-up process, given the historic relationship and even ownership of the process at this committee, would be to put some of the elements that were outlined today into a proposal of sorts that we can consider again at this committee and that the subcommittee on agenda and planning can look at as well. Then I think members have some things to think about going away from this meeting today, and we can revisit this fairly soon into the near future for a look at again. Is that fair, members? Okay.

Then we'll move on to item 2, which are reports that we're going to consider simultaneously. These are reports on a number of topics and date varyingly to many years ago, in some cases that the Auditor General is going to describe, and we'll see if members do have questions about how we might dispense with the reports.

Maybe what I'll do is ask John to begin with the Managing Interface Fire Risks report from 2005. I just have a question from Mr. Rustad first.

J. Rustad: This is probably more to you, Chairperson, with regard to these reports. I mean, four of the six reports that we have considered here are linked to upcoming reports, and two are outdated. I am just wondering, given that it's twenty after nine and we have about ten minutes left in the scheduled meeting, whether or not it'd be appropriate if we just move a motion just to receive the reports as tabled.

R. Fleming (Chair): I think it would be a fair…. What the Auditor General has come with today is to talk about how the content of these reports links to the upcoming work plan and how they may appear before the committee again. I anticipate that it will proceed quite quickly.

J. Doyle: We issued the original report in June 2001 with 38 recommendations, and the Public Accounts Committee reviewed it in December 2001. Since then, we've issued three follow-up reports: one in January 2003, one in April 2004 and a third in May 2005.

The first two follow-ups looked at our original report, but the third follow-up looked primarily at the Firestorm 2003 Provincial Review. So 2003 was the worst year ever in B.C. for forest fires. There were over 2,500 wildfires, and interface fires destroyed 334 homes. The fire season was estimated to cost government about $700 million.

In October 2003 the government appointed Gary Filmon to conduct an independent review, and his report, the British Columbia Firestorm 2003 Provincial Review, was issued in February 2004 and contained 60 recommendations.

When we did our third follow-up, we looked at these recommendations, as well as the outstanding ones from our original report. We found that most recommendations have been implemented, but 13 still required further action. We have not done any further work, but do have interface fires as a potential topic in our future workplan.

R. Fleming (Chair): Thank you, Auditor General. If members don't have any questions on that report, I will ask you to proceed with a description of work undertaken on the Earthquake Preparedness, Performance Audit.
[ Page 476 ]

J. Doyle: We issued our initial report in December '97, and it contained nine strategic recommendations and 51 operational recommendations. The topic was one that the Public Accounts Committee felt members of the public may wish to express their views and ideas about, so the committee held two public meetings in October 1998 to hear from those interested members of the community.

Subsequently, we issued a follow-up report which looked at the nine strategic recommendations. While this work was underway, PAC considered its report, and following further committee meetings in the spring of '99, PAC issued its own report to the Legislative Assembly in July 1999. PAC endorsed the 60 recommendations in the Auditor General's report and made an additional 23 recommendations.

We have since issued two follow-ups of the committee's report, the first in July 2002 and the second in May 2005. At that time, ten recommendations still needed further work. In that report we noted that government was moving from a hazards-based approach to an integrated all-hazards approach — a welcome move.

[0920]

As a result, we felt it was not necessary to do further follow-up work on our 1997 recommendations. We intended to shift our focus to examining government's performance reports on its achievements in improving emergency preparedness in the province.

We are currently completing an examination of seismic safety in schools, with a report to be issued shortly. We are also considering how emergency preparedness would fit into our future workplans.

R. Fleming (Chair): Thank you.

Members?

I'll ask you to keep going, onto the next one, which is regarding managing contaminated sites on provincial lands.

J. Doyle: Our original report was issued in December 2002 and contained three recommendations. The PAC reviewed the report in October 2003. In our follow-up report issued November 2004 it showed that the three recommendations had been implemented and that no further follow-up work was required.

We are currently revisiting contaminated sites, and we are about to start an audit looking at the management of contaminated sites in the oil and gas sector. This will focus on the role of the Oil and Gas Commission and other ministries and agencies involved.

R. Fleming (Chair): Members?

And the next item, on two health risks reports.

J. Doyle: The review of the performance agreement between the Ministry of Health and the health authorities. The original report was issued in May 2003 and had 20 recommendations. It was reviewed by the PAC in September 2003. The follow-up report was issued in November 2004.

Of the 20 recommendations, eight required further work. We acknowledged at the time that some recommendations would take more time to implement. We are not considering a further follow-up. Our broader interest now is in the governance and accountability relationships between health authorities and the ministry.

The information used by the Ministry of Health in resource allocation decisions was another report that was issued in March 2002, with 16 recommendations. PAC reviewed it in June of 2002. We've done two follow-ups. The first reported in August 2003, and the second in December 2004. All recommendations had been implemented by then, and we reported that no further follow-up was required.

We continue to have a focus on the health sector, and recently issued reports on access to surgical services and on home and community care services. We are just getting started on an examination of how the Ministry of Health is progressing towards the use of electronic health records.

R. Fleming (Chair): Thank you.

Members?

I'll ask you to keep going, Auditor General, on the consulting engagements in government report.

J. Doyle: The original report was issued in March 2001 and contained 12 recommendations — three to government and nine to ministries. We had included five ministries in the audit.

The report was reviewed by the Public Accounts Committee in December 2001. We have conducted three follow-ups on this report: June 2002; August 2003; and this one, which was reported in March 2005.

After three follow-ups all but two recommendations had been fully or substantially implemented, one had been partially implemented, and one ministry chose to address our concerns in a different way.

We do not intend to do any more follow-up work on this audit, but we do currently have an audit underway that is looking at contract management practices in the Ministry of Forests, and we will be reporting on this audit in the new year.

R. Fleming (Chair): Members?

Thank you. And then, finally, improving financial reporting for British Columbians, the '07-08 report.

J. Doyle: We will be publishing the next version or edition of that report. So we suggest that that particular report be put to one side and that the committee focus its attention on the latest version.
[ Page 477 ]

R. Fleming (Chair): Okay.

Members, any discussion on item 2(f)?

[0925]

Okay, seeing none, then, I want to thank the Auditor General for bringing these reports and linking them to upcoming elements of your office's workplan. I know that members will look forward to looking afresh at these issues and new and additional recommendations on this work.

With that, I see no other business before the committee.

J. Rustad: Just a motion to adjourn.

R. Fleming (Chair): As usual, he's way ahead of us all. A motion to adjourn?

The committee adjourned at 9:26 a.m.

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