Finance and Government Services — Issue No. 92 — Wednesday, November 14, 2012 (HTML)

Present: Douglas Horne, MLA (Chair); Mable Elmore, MLA (Deputy Chair); Gary Coons, MLA; Marc Dalton, MLA; Dave S. Hayer, MLA; Pat Pimm, MLA; Bruce Ralston, MLA; Bill Routley, MLA; John Slater, MLA

2. Pursuant to its terms of reference, the Committee began its review of the three-year rolling service plans, annual reports and budget estimates of the statutory officers.

3. The following witnesses appeared before the Committee and answered questions:

The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES


CONTENTS
Page
Office of the Auditor General	2457
J. Doyle
M. LeFebvre
Office of the Merit Commissioner	2469
F. Spencer
Office of the Conflict of Interest Commissioner	2476
P. Fraser
Office of the Police Complaint Commissioner	2481
S. Lowe
S. Forrester

D. Horne (Chair): I want to start by thanking everyone for all of the work on the budget consultations, which we completed yesterday. I think that was great work. I want to especially thank the Deputy Chair, Mable Elmore, who worked very hard on this with myself, and I think we came to a great spot.

Today we're going to go through the service plans and budgets of the independent officers. We will begin with the Auditor General, which is probably a very good place to start. I want to welcome the Auditor General, John Doyle.

You have 40 minutes for a presentation followed by approximately 50 minutes of questions, if we require that. If you could introduce the people with you, as well, that would be great.

J. Doyle: Thank you, Chair, and good morning, Members. I have with me today on my left Russ Jones, an assistant Auditor General who's the CFO in the office. Closest to you is Marc LeFebvre, who's our director of corporate services and is responsible for all the human resources and finance and administration areas within the office. Next to him is Joel Adams. Joel is currently the finance manager within the office. His day job is a financial auditor, but he volunteered while the permanent finance manager went on leave. So he stepped in, and he's been in the role now for a little while. This is his first time here.

I don't think I'm going to take up the 40 minutes in making a presentation because my budget for this year and for the next couple of years is basically a continuation of much that I've been doing over the last few years as well. It's a continuation of those plans. What I'll do is provide an overview of those plans and how they flow forward and what that means for the office and also for British Columbia.

I'll start off with the strategic direction and then work through different aspects, and I'll give you the main heading each time I go into a new section.

As I said, the office continues to follow the long-term strategic direction that I've explained before — namely, to improve the competencies and capabilities of the office so that the work that we actually do is not only valued by MLAs and citizens but is also timely and relevant to them.

There are two major blocks of work that we do: the financial audit work, which culminates in an audit opinion on the summary financial statements, and the performance audit work, which looks right across the whole of government at different aspects of different entities and how they operate. We've broken that down into social sciences, education, environment, justice and other. We've been looking quite actively in each of those areas over the last year or two and will do going forward.

It's not normal for me to actually publish my coverage plan for the non-financial audit areas. I do publish a coverage plan, and it is available for anyone to have a look. It looks at how we're going to audit something like $50-odd billion, maybe more, worth of expenditure within the province. It constitutes the largest audit that is actually conducted in the province and probably across much of the provinces in Canada.

We've had a difficult year, which we predicted last year. The difficulty is not of our own making, and it's got nothing whatsoever to do with the talents or capabilities or competencies of the staff that I have in the office. It's got everything to do with changing standards and the implementation of those standards in the financial reporting area.

We've had IFRS come in for the first time for many of the government training organizations. Currently we've had some PSAB changes, which are the public sector accounting standards changes. The year before, every single audit standard converted over to the international audit standards.

Going forward, this year and the next year we have had changes in the SUCH sector, where they have converted over to PSAB, away from the not-for-profit accounting regime that they were previously in. The consequence of that has been that there was, first of all, a need to train a lot of the staff so that they could accommodate that level of difficulty, which is always worse in the first three years of any major change in accounting standards.

We also had to train them in the auditing standards. We're well into that, because we made a good job of it in the first year, which was a couple of years ago now.

Going forward, we also find that a lot of time is consumed by assisting different government agencies to actually do their transition. The audit teams do spend quite a bit of time — and it's detectable from our recordkeeping systems — actually providing assistance and help, an example of which would be the model financial statements which we published and then made available to the institute of chartered accountants for them to roll out across the country.

We also provided a copy of them to Quebec so that they could translate them into French and use the same standards. Basically, it was suitable for the public sector and was a useful exercise in, first of all, us getting to understand the standards and, secondly, to actually dem-
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onstrate to different government organizations how they can deal with those standards.

I'll just finalize this section by saying that one of the reasons that we have been so productive and capable of keeping up with all this change has been the support of this committee over the years, starting from the first time I presented to this committee, where there was an agreement that I could start to recruit younger staff and train them up. A lot of the staff were leaving the organization due to retirement, and we were losing a lot of knowledge quite quickly.

What happened was I was provided with additional funds at an early stage to actually build up our training programs for our staff. I'll mention them again in a little while, but in summary we now have 25 or so staff in training to become chartered accountants, some of which stay with us once they have qualified. Some others actually go into other areas within the public service, and therefore, we're a net contributor to the number and quality of accountants right across the province.

As a consequence of that, the average age has dropped down quite a bit. We've had quite a lot of retirements, particularly in the early years. What I'm looking forward to now is a degree of stability as we go forward so we can more accurately predict what our staffing costs are going to be.

In the past we simply couldn't spend the money that we were provided, and we actually underspent in those years where we couldn't spend. I think a point I need make is that I am frugal, I am a responsible money manager, and I won't spend anything if I can avoid it. If I do need to spend something, then I do need to spend it, and I will find ways of acquiring the funds that are required to carry out the function and duties.

One year we actually gave back more than $1 million, and another year I think it was well up into $700,000 or $800,000. Last year we achieved the miraculous. We got within about $8,000 of the budget target in our financial report.

Last year I asked for $16.58 million, and you gave me $15.75 million — big gap. Most of the gap, most of the difference, was all around a moving accommodation. We had a one-off opportunity to move into a new building at no cost to us when it came to the fact that the lease that we currently had still had a number of years to run. So by moving into the new building, we achieved all our objectives much earlier than we anticipated.

You'll see in this plan — and I'll come to it later — that accommodation is still an issue, but it's likely now that it's unavoidable. It's going to be not this year that we're looking at but the following year that it's likely to happen, because, first of all, there's an increase in price where we're staying. Secondly, they want us out to refurbish the building, so we'd have to go somewhere else anyway. Thirdly, going out and then coming back is quite a big disruption. Particularly, it's going to be a 12-month gap between the two. So we're seriously looking at some options and offering it up right at the end.

We have been quite careful in the way that we look at our funding and the way that we operate within the office. Whilst there was a real reduction in the funds last year — so the $15.75 million was actually a cutback in real terms from year to year — by delaying hiring when people have left, and there have been a few, mostly to go to other jobs in the public service, we've been able to make some savings in that delay window that occurs. And whenever we've had staff on maternity leave, we have not replaced them.

Now, I may have told you a little while ago that bringing lots of youngsters into the office was absolutely great not only for the office and the way that we did our work, but it came with a big expansion in the number of babies that were born in British Columbia. Currently we have three notice boards full of pictures of babies. It's sort of slowing down a bit, but we still have a number of staff who are on leave. I think it's about 8 percent of our staff that at some time during this period are going to be on leave.

What we're doing is trying to backfill behind them. The other thing is that when they come back, they don't want to necessarily always work full-time, so they work part-time. So we're having to juggle that, as well, when it comes to productivity. Even though there's a saving, it means there's an added cost for training of a new person to actually fill the gap.

What we've done is calculate what we actually need going forward. In order to do that properly and well, we've got an internal financial model that we use to look at the staffing levels in each area of business and to see how that plays out over the period of time. You see three years. We probably do it for a bit longer than that.

We've managed to squeeze travel expenses, as I'll mention. We've found ways of doing that. For example, on every one of our laptops, using software that's resident on our system, we can have video conferencing with other members of staff, so they don't have to actually get up and walk to a meeting. They could actually hold a meeting from their desktop, wherever it is. When you've got staff scattered right across the province, that's a very useful thing that we can do.

In addition, we've put video conferencing into one of our meeting rooms, and we're able to hold lots of interviews using that process, rather than to send people out. So we've used the technology to try and reduce cost as much as possible, but we simply can't avoid the fact that auditors mean that you have to actually be present at a client's site and conduct the work, hold the interviews and ask questions. We can do some, but we can't make it completely remote and separated.

This year we've got a reduced capital request. We're go-
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ing down from about $280,000 to about $200,000. This is to ensure that we can, first of all, go through our normal replacement program for all our laptops and other computer equipment that we need. I'm afraid ours is an IT-intensive operation. Without IT, we'd need an audit staff much, much larger than we've got, and we'd also need a lot more storage space to put all the boxes into. At this stage, we've got rid of most of the boxes, because we've gone digital for everything, so there are very few boxes left in storage.

Some of the challenges that we have as an office include maintaining this records management process. You'd be amazed how much paper — well, virtual paper — we collect and how much testing we do in the conduct of even straightforward audits in order to meet the standards. Because of that, we have a heavy demand on our electronic systems. Every member of staff is trained and is maintained in their training in regard to how to actually collect that information, store it properly and draw the right and proper conclusions from it.

A big issue for us, of course, as you'd appreciate, is confidentiality. It would not do for this laptop to be left behind in a taxi and for anyone to pick it up and then be able to read all of Joel's e-mails — not that they're that exciting anyway. In fact, all our computer systems are secured and protected. And if you managed to get that off him — and that would be very hard, because it's his baby — you couldn't use it because it's passworded in a way that you actually can't even switch it on properly.

For the casual user of computer technology we've done all we can to put the barriers in place. Even for some of the more sophisticated users we've put barriers in place, and we run tests on a regular basis to see whether or not we can be attacked and our information looked at inappropriately.

We unfortunately do need to continue to maintain two different sites. As a consequence, we have an additional cost of communicating between those two sites. It's more than just being in the field. It's a whole raft and array of things up to and including a photocopier, big printers and everything else. One by-product of actually moving into one office would actually be to reduce some of these marginal costs, because they will not be required.

Our training needs to be appropriate for the conduct of the work that we do. Every member of staff, regardless of their seniority — particularly if they're professionally qualified — has to go and do the appropriate training in order to be suitably prepared for the conduct of a financial audit and also a performance audit.

We're not just a group of chartered accountants. We have a couple of CMAs and a couple of CGAs as well. But also, maybe a third or more of the office are performance auditors, and not all of them are chartered accountants. We've got environmental scientists. We've got people with psych degrees. We've got lawyers. We've got an array of different people. One thing they all have is a master's degree, and that's the basic qualification to get into that line of work within my office.

We've had to redo the performance audit manual just to make sure that it's up to date. As with everything, there are changes afoot with performance audit as well. The current offering and draft is unacceptable to us. So we're currently making comments to the standards-setters to see if they can in fact make it usable and sensible. If they can't, then we'll have to look and see how we can actually deal with that as we go forward.

The training that we do. If we train one cohort, we can probably use the same material, with a few twists and turns, and train a second cohort and a third cohort. We've actually found that our training is asked for and utilized by other jurisdictions, particularly in the performance audit area. We're finding a very collegiate process going forward, where other jurisdictions are producing training which we can use. We produce training that they can use, and therefore we reduce costs in both places. That's proved to be a very successful strategy.

Marc tells me that roughly 50 percent of the workforce has been hired in the last three years. That means we have to spend a lot of time training and developing and getting the foundational pieces in place. They don't just come in from outside and assume they know what they're doing.

That investment has now been done. As we go forward, what we now need to do is take them to the next levels and also grow them through the ranks — as described about five years ago, I think, when I said that we were bringing youngsters in and were going to grow them, rather than try and pay seriously large sums of money to bring in qualified people from outside.

Now, sometimes a qualified person will turn up, and we take them on board. For example, we appointed a director in the performance audit area who was a forester a little while back. Occasionally, we get qualified chartered accountants who want to leave the big firms and either come back to the Island or want to join the public service for some reason.

Normally, we have to grow our own. We bring in the raw material, and then we build them up and grow them. Hence the need for the training. Hence the need to try and reduce the cost of training by actually leveraging off other jurisdictions' excellent training programs.

The average age for staff has come down, and what we're finding is that the vitality and the way that we're going around our training and developing staff are actually creating excellent teams that are producing excellent results.

I've already mentioned our maternity leave tsunami. It's absolutely fantastic that we have been able to increase the population by about 50 percent, I think, but I wish it was spread out a bit more. But you can't sort these things out. What we've got is that every one of those staff members has come back. Every one of them has gone into a
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training program to take them from where they were when they left, plus baby, now into the position where they can join in and actually be up to date with all our work that we're doing. Marc was responsible for building up that program and putting it into place, and it has been very successful.

As I said, most, particularly the performance audit staff, usually request four days a week or something like that when they come back. They will probably go to full-time, perhaps, at some time in the future, but for now we've got them for a considerable part of the week. Part-timers actually work quite hard, and they probably do more than the four days a week each week. They're a great contribution.

However, bringing them back in — we've now got a whole pile that came back — means that our salaries model needs to be careful, because it's not just the current-year effect. It's the full-year effect of someone returning from maternity leave that we have to take into account. So we've built that into our salary model to produce the figures that we have.

Value for money. There is a table in the report. It's on page 5. I don't know if you wanted to turn to that. What we've done is have a look at all the jurisdictions right across Canada. By the way, this document is now asked for by most of my colleagues across Canada, now that we've produced it, so that they can actually see where they are in the pecking order of resources. There's a fuller document right at the back of the…. There's one on page 10, if you want to see the whole situation for all the jurisdictions.

What we did was try to look at the mandate for each jurisdiction and then see what resources were made available. This province has got one of the broadest mandates that there is out there because we do all the performance and we do all the audit work, and we concentrate on both. Other provinces sometimes do a lot less performance audit work and a lot more financial audit, and then one province does a lot more performance audit and much less financial audit. So we've got a few differences in the mix. Direct comparisons you have to be cautious with.

If you look at the average, what you'll see on page 5 is that we're…. I should say that the amount of money that we're asking for this year is actually $16.1 million. We've got in our table here $16.3 million. I know you'll forgive that mistake. I'm trying desperately to remember why we adjusted it, but when we picked it up it was too late and we'd already released the document. So I do apologize. The figure in here should be $16.1 million.

You'll see there that if we were funded the same as our colleagues in other jurisdictions, we'd actually be at a quite significantly higher level of funding than we currently enjoy, anywhere between $5 million and $7 million. I've made that comment each year for the last few years.

I actually find myself in a position where I think we can cope and conduct the work that we have to conduct with the current funding level. Any new funding, if suddenly someone wanted to give us a whole pile of funds, would be for a particular purpose, more likely in the performance audit area, because I think we've already done the work for the financial management, the financial audit.

Basically, the approach that we follow is that we do the financial audit resource allocation, and then what's left over is available for performance audit. Do we cover everything in the government reporting entity? No. Could we do more? Well, only with the right resources and processes. Right now we do a fair bit more than any of my predecessors and more than any other jurisdiction, I think, in regard to producing performance audit reports that are relevant and acceptable to our clients.

Based on that kind of level of analysis, I would argue that the office provides value for money in that not only is it relevant and produces very good reports whereby all the recommendations are accepted and implemented or are implemented over time, but we're also cheaper than the average across the country.

Despite the fact that the act allows me to have an audit mandate which is broader than most — in fact, it's broader than everyone — the Audit Act here is very good in the level of authority that it passes on and the expectations that it provides in regard to what the Auditor General can actually do. So it's very, very broad indeed.

The request that we've got before you for $16.1 million is, however, in my view, adequate for us to continue with our work over the next particular year. I'll talk a little about the details when I get the recommendations to you in a moment.

If I can turn to the office, and if you look at page 7, what you've got there is basically a summary of the annual report. Our service plan is already published. It's in the annual report. It shows that we're doing pretty much the same as we did last year, although we expect….

Oh. No, it's pretty much the same, although some of the foci are slightly different as we go from year to year. Not to shortchange myself, I should be specific about how much we're actually asking for. You've all heard $16.1 million, but that was me summarizing it. It's actually $16.135 million, and the $35,000 is very important as well to actually fulfil the functions and carry on the duties of the Auditor General.

Some of the issues I've got or some of the reasons why I need that level of funds this year are that…. I'll just quickly dot-point them as I go through, because I've mentioned some of them already. We've got people coming back from leave, and therefore we're going to have their full salaries. We've got vacant positions that were vacant during last year but will be filled all this year.

We anticipate a reduced load, reduced turnover in our staff, although that may be challenging, as I'll explain in
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a moment. The benefit load is going up for everyone, and it's going up for us as well. It doesn't look like much when you actually see it on a piece of paper, but when you add it up for an office which is almost entirely made up of staff, it obviously rolls out to a decent few dollars.

We've got some increased expenses when it comes to professional services. We've had them for a little while, and we've been trying to manage them, but we're still struggling with them. The first one is for legal services. We have a few legal requirements that we need to keep a handle on, and they've created some pressure and strain to the point where I've had to not do a performance audit because the costs were allocated to a different purpose.

Subject-matter experts we need to bring in from time to time. Although we have master's level graduates across a range of different subjects and topics, we have to bring in subject-matter experts at some times to advise us on different aspects. One that I can think of at the moment is an audit that is particularly problematic, and we're spending a lot of time and energy on bringing in quality experts to give us the right advice to make sure that we're approaching things correctly.

Records management. We elected to go to a fully electronic system, and we need to bring that in and bed it down. We need to bring someone in to help us with that process. Lots of the time we can do that internally with our own resources, but this was a specific area where we needed to bring someone in from outside.

In information technology we're always updating the methodology. This is the audit methodology. It gets updated every year by the Institute of Chartered Accountants, so we need to bring in those changes. Sometimes it's only a light change. Sometimes it's quite a heavy change. When we do, there's obviously the knock-on effect of training and development. Also, our system's security is always changing, and our profile is always being worked on to make sure that our information is confidential and well protected.

Our professional training. This is financial auditing standards in the main, but not exclusively them. We also need to develop people so that they can lead teams and go out and conduct audits. You don't get that out of a textbook. You get that out of good, solid training and development and giving people opportunities to actually lift their skills. There is a small cost to that, both in the hours that they spend mentoring other people but also in the technical training and the soft skills training that they actually need.

I'm not of the view that training should be the first thing that's cut — not in my business. Training is something that you actually need, because you expect your staff to get it right when they go out and conduct these audits. They can't do that unless they've been set up to succeed in the first place.

We've got some increased costs because of change in taxation rules. So there are additional costs in regard to travel, IT and office expenses that are coming and plowing our way, where we can no longer claim the offsets that we used to claim. That's going to have an impact on some costs as well — probably about $90,000.

I come to the building now. The building is a nice old building. It's well located. It's a good position. Unfortunately, it's not seismically safe, but neither is this building. But it costs a lot less to repair ours than it costs to repair this one. There's no sprinkler system, which is a problem. The HVAC system is problematic, and occasionally we have to evacuate the building because of the seagulls doing the wrong thing upstairs. The ammonia comes right through the whole building, and we have to clear out. We didn't do it this year, but we had to do it last year.

There are lots of things that need to be fixed. Some of the windows — if they were at your house, you'd change them and fix them. They are all being put on a list waiting to be repaired by the landlord.

We have some interesting neighbours, some of whom create a bit of noise from time to time — I'm now familiar with many of the punk rock bands that are available — until we finally persuade them to turn down the sound. When you feel it vibrating in the floor, it's pretty hard to concentrate. We've got that fixed now, but again, if a new tenant comes in, we're going to have to retrain them. So we have difficulties with that.

Also, we're in two locations. That basically means people walking backwards and forwards and all those things. So even though we've got the technology where they can connect up…. When we do big training sessions, when we go out and meet people, we don't actually advertise where our second office is. There are no signs up or anything. The front office is the one in Bastion Square, and everyone goes there. We don't take people to the other side.

Now, we've been looking at economical solutions to our building problems, and we've come up with a number of different options. We've included a couple of scenarios or options in the document, and I'm happy to answer questions on any of those.

In summary, we have to move. It's not a question of if; it's a question of "we will." We've already been given notice that the landlords of our current building are going to refurbish it — make it seismically safe, change the HVAC, put a sprinkler system in and everything else. But you can't do that when you've got people sitting in the office.

One scenario is that we decamp from the office for 12 months and then go back into the new, refurbished office — which means two moves. Another option would be to find accommodation that's suitable at that time frame somewhere else.

Whatever happens, at our lease renewal date the cost of the office is going to go up to a higher figure — not as
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high as some of my colleagues, but a higher figure. When that happens, then we've got no flexibility in the budget to pay for it at all.

If we stayed where we were, the estimate is that it would cost an extra $165,000 just with that rent change that's likely to occur — no change to the actual facilities within the building. We've been fortunate for many years to have low-cost rent. There had to be an adjustment at some time, and in the next year or two is when the adjustment is going to be.

We did find another space we could move to, on Fort Street. The change of price to go there…. It's still more expensive, and it's built into our plan because we've elected to present this budget on the basis of Fort Street being the preferred option. So it's built in, and we've identified it as such.

It will have a couple of advantages for us. All of our staff can go into one space, and we'll still have a presence downtown so that we can be close to most of our clients, except the ones that we have to travel to anyway.

I've got no intention of starting an office on the Lower Mainland or anywhere else. The prices are…. The cost of that and the fact that most staff are actually based on Vancouver Island.... It just wouldn't be practical unless there was a fundamental reason why we needed to do that.

If we stayed at Bastion, moved out and went back, there is a promise that there will be more space when we move back. As a consequence of that, we would be able to accommodate everyone in the same building. We would be able to drop our secondary office and have everyone back in the same spot.

It is incredibly hard to find office accommodation in this town at the moment. It's particularly difficult when you've got a hard deadline to work within, where a major project is being considered or contemplated by the landlord, who basically needs us out at a certain date to fix things up.

We do need some support and assistance in regard to this. It's not this year; it's the following year. That's the issue, so I suspect I'll have this conversation again next year. But having said that, I need to at least get some assurance that, in fact, we're heading in the right direction and doing the right thing when it comes to office space.

Having said that it wouldn't take 40 minutes, I managed to take 41 minutes. So I'll stop at that point and be more than happy to answer any questions that you may have.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with our Deputy Chair, Mable.

M. Elmore (Deputy Chair): Thanks, Mr. Doyle, for your presentation. I certainly appreciate the challenges of transitioning to the different accounting and auditing practices and regimes and the training needed to not only bring the office up to speed but also support other government agencies in adjusting to those different systems.

My question. I'm quite concerned about the situation of the office space. I know you presented on that issue last year, and you've mentioned that the deadline is approaching when a decision has to be made. I appreciate that you've offered the three options here.

With your recommendation for the…. I agree and think that it would be an advantage to be able to consolidate your two offices and have your staff in one building, also noting the difficulty of securing that scale of office in the area, that it's a priority to identify and be able to have the office functioning.

With your proposal for option 1, 615 Fort Street, is that recommendation to move…? What's the time frame for making that move?

J. Doyle: Everything has to be organized, ready to move out of our current space and move into that space in November. So it's a while ahead, but no one ever accused me of not planning ahead.

J. Doyle: Yeah, without any commitments, other than agreeing to talk through it all. We've not signed any contracts, and we've not committed ourselves, but we have gone through some very detailed discussions to ensure that we understood the advantages, the pros and cons for moving into that particular building.

M. Elmore (Deputy Chair): I appreciate your presentation and, also, we'd be in favour of your first recommendation.

D. Horne (Chair): On that last issue, the $28 per square foot for Fort Street. Is that the asking price by the landlord, or is that a price that you believe is the…?

J. Doyle: Chair, it's the asking price, which is lower than some other comparable properties in the neighbourhood. Apparently we're seen as a good tenant, the way that we look after our accommodation and also the fact that we're regular payers of our lease space. So we're seen as a good, solid tenant. There's a limited amount of competition to actually get organizations like ours into it, and therefore they're willing to negotiate a little bit
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around price.

J. Doyle: Sorry, Chair. I've just been reminded that we've locked that price in, if indeed that is the way that we go. So there are going to be no price changes.

M. Dalton: Thank you, John, for the presentation. Just on the same topic, with the office occupancy costs, a rough calculation looks about a 40 percent, 45 percent increase — so a 40 percent increase next year and then moving up from there. It's pretty hefty, but I guess you've searched all the options, and you don't see any room or place to pull that down.

J. Doyle: Not really. If you look on page 11, in appendix B of our report, you can see the current rates for the two offices we've got come out at about $707,000. The new Bastion Square would be a $300,000 increase on that, and then the new Fort Street would be above that again. So if we stay in Bastion Square, it's going to be about a 56 percent increase in our costs, and we can't avoid it.

We did ask if there was any other free accommodation anywhere that was currently held or currently used by the public service. We've looked through some of the federal offices that have been emptied out. Not really — they didn't have enough space for us in one location. There were options where you could go to several locations, but then there were quite heavy expenses to actually fit them out and make sure that they were available and suitable for you.

Sorry, I can't see anyone at the moment because I have this amazingly bright sun coming, which I enjoy because it's Victoria.

We've had a seriously good look around, and we tried to keep to the default of us all being in the same place. But as you'll see in the table at the top of page 12, even with the new space at the new price, for the number of staff that we've got, we're still a lot lower than has been actually afforded in the past for other organizations that do similar work.

J. Slater: Just on the same issue. You mentioned earlier that you guys are in a lease currently. Are there any penalties for leaving the lease early?

J. Doyle: There are penalties, and one of the great opportunities we had last year was that there would be no penalty if we left last year and went into that other building. The landlord was prepared to ignore the penalty, make a deal, and then we could move over. They could then get their refurbishment done quicker, and they saw that as to their advantage.

Right now, though, we've got to stay until the end of the lease, or we just have to pay for it anyway.

D. Hayer: Mr. Doyle, thank you for doing all the research on this. I remember looking at it last year, but things might change between now and next year. It might have some other opportunities come in. You never know.

My question is actually going to be on page 10. I'm looking at Ontario's Auditor General's expenses, and it shows $16.224 million. Then on ours we're looking at $15.752 million. Is Ontario…? I mean, looking at the size of it, they don't have a very effective Auditor General? Or are they missing some stuff? How is it that such a large province, when we look at it…? The budget is almost the same as ours — what we're looking at this year. I'm just trying to understand. If somebody asked the question — so I can sort of give them a reasonable answer, because you have expertise in that — "Why so much of a difference, especially between Ontario and British Columbia…?"

J. Doyle: I just hope the Auditor General of Ontario is not listening. In Ontario they have a focus on performance audit rather than financial audit. So wherein in this jurisdiction we're at about the 60-40 sort of level — financial and performance — in Ontario I think they're about 80 or 90 percent performance. All the financial work except one component is actually undertaken by the private firms and therefore is not included in this figure.

If they were to have to do all the financial audit, even the same amount that we do, their budget would be substantially higher. This is one of the examples where you have to be careful about not only the different mandates between the jurisdictions but the way that those mandates are actually carried out and deployed.

If we wanted to go to the same level of performance audit work that was comparatively speaking, because Ontario is obviously a lot bigger, we would need every dollar of that additional money that I referred to before in order to be able to fund that level of work and actually lift the amount of performance audit work we're doing within the province.

D. Hayer: In other words, even looking at the different mandate they have, this cost of $16.224 million is not really real. The cost is a lot more because they're paying directly to the outside contractors. So this does not really reflect comparison — in other words, what you're saying. Even if we ignore the different methods used to do the auditing, it's just that the outside contract is not included. Therefore, this is not a realistic comparison — right?

J. Doyle: You'd be better off comparing it with Alberta and with Quebec. Those are both full-service jurisdictions that have not quite the same but similar mandates to British Columbia. So if you look at those two, you'll get a bit of a sense as to how they cope. Quebec also contracts out staff. Alberta — I think I'm right that the Auditor General there assigns all the opinions and therefore controls…. All the costs actually flow through the office.

Obviously, Canada is in a different league and a different place. The others are all quite small in comparison, but some of them reflect the fact that if you have a small office, you still have to have the minimum in place, the minimum of infrastructure, to actually conduct major audits. So you have to treat this with caution and understand the nuances that are there in regard to your mandate and practical application within each of the provinces.

D. Hayer: Yes. I was looking at this because when I saw British Columbia, $15.7 million, and then Alberta, a smaller population, $23.16 million…. Some people say that Alberta has a lot of money. It seems to justify it right here. They can afford to spend almost 50 percent more on the Auditor General.

Quebec — $27.28 million. Some people seem to say that Quebec gets a lot of money from transfer payments. They have funds to pay more for people than British Columbians. But in British Columbia we don't get transfer payments, but we're doing a good job. Thank you very much for providing us a comparison, even though it's sometimes difficult to compare because of the differences in how the methods are used.

B. Ralston: I appreciate that the proposal that you put for office space last year has disappeared. You did mention that there would be no penalty had you moved into that space. As I recall, the ongoing occupancy costs would have been, I think, cheaper than the alternatives that are presented here. That was a decision that this committee made last year, perhaps. I hesitate to question the wisdom of the committee's decisions, but that's certainly an opportunity that seems to have passed by and would have been a much more cost-effective one over the long term rather than the alternatives that are presented here.

My question, though, relates to the ongoing cost of legal services. You mentioned that you had to postpone a performance audit in order to pay legal costs. I appreciate this is difficult to estimate. Are you able to give an estimate of whether there will be an escalation in legal costs in the coming fiscal year or not?

J. Doyle: Normally, we have three types of legal costs that we need to spend each year. One is on the acquisition of resources of some kind or another, and they stay pretty flat. Sometimes there's a bit of a spike, but it's quite small. For example, in some work we were doing recently we had to negotiate with the institute of chartered accountants for copyright to put material on our website, which seemed to take roughly forever to do. So that tends to be fairly small but still important.

The second area is legal costs which are associated with human resources or the operations of the office. Traditionally, they've been small, but they've always got the capacity to jump up quickly for any particular reason. A few years ago we did a major leap in our legal costs because we had to conduct an investigation. You can't predict those in any way, shape or form. So we fund them at a flat level, and if they go up, then we have to scurry around to try and find additional funds.

The third area is to do with audit work. We've got different aspects within the audit work zone that we look at. For example, if for any reason an entity declines to provide me with information, then I have remedies within the act to go and ask them for that information, which includes asking the person to come to my office and provide me with documents and such like.

If that doesn't work, then my only remedy is to go to the Provincial Court and to ask for a remedy from the court. There is no other mechanism that's available to me.

What we're finding is that currently we have maybe three different areas for audit work where we're having difficulty getting information because the entity concerned either can't or won't comply with requests being made by my office. Therefore, we're working through the process. What we have is a very good relationship with the legal officers within government, who then explain to entities what they're supposed to do.

Normally, we get it all resolved at that level. At the moment, I see my legal bill as quite high, and I see it coming down, unless something comes up where an entity is no longer providing us with money. Normally, a performance audit would cost in the order of a quarter of a million dollars, and I don't want to postpone another one, but that is a possibility. I believe that it's a waste of money to do that.

But if I perceive that something is important or that an entity is not providing me with the funds…. I'm thinking about an audit that has not ever been declared on any of our websites at the moment as being the one I'm thinking of particularly. I think that needlessly I am being put to expense by an entity because of some kind of knee-jerk corporate immune response to me.

So I work through that. It takes a while. It takes legal people. It takes a lot of discussion, and we get there in the end. We do that for all our audits, but most of the time people are quite happy to provide us with the information that we want, on a simple request.

B. Ralston: A further question, just on the sort of tra-
[ Page 2465 ]
jectory of personnel recruitment. You mentioned that you set out to revitalize the office, and you recruited a number of more junior people who have been trained and are now able to do more senior work. I think that's been, judging from your report, very successful.

A couple questions related to that. I think you suggested that it's more stable, and the number of the intake of newer people in that fashion in the coming years will be diminished just because you're closer to capacity.

Secondly, I guess the question that sometimes arises is that people are reluctant to recruit and train because they then can't retain those people. People take advantage of an excellent training and go off other places. Are you satisfied that you've retained the bulk of the people or what you expected? Or is it a difficult measure to predict just how many of the newly trained people you will retain?

M. LeFebvre: Actually, we have a fairly sophisticated workforce model that we've worked on with an actuary. We've been plus or minus one person in terms of our turnover rates, in terms of our predictions. So we've been almost dead-on. For this year we've reached our anticipated turnover rate, but it's slowed, so we're still within plus one. We've been able to accurately predict the people staying, and we've actually been able to decrease our turnover significantly by about half in four years.

B. Ralston: I suppose, then, just as a value-for-money proposition, because training is an additional cost…. I know that Mr. Doyle has suggested — and I think this is right — that for an organization as sophisticated as yours, training is essential, not a frill. Are you able to…? I mean, are you satisfied with, if I can put it this way, the return on training, then, in terms of the number of people retained?

J. Doyle: We're very satisfied. What we've detected is that…. First of all, you need to understand the model. Everyone that joins us is not going to stay until retirement. It takes three years to train a chartered accountant. After that time…. I don't know why they wouldn't want to stay in auditing, but apparently, people move off into other areas, like financial accounting or management accounting or somewhere. The bulk of them go to the public sector. There have been a few that have gone back to family businesses.

We're expecting turnover at each level within the organization, and that's implicit within the model that Marc has. We haven't had any, I don't think — or if we have had some, not much; oh, we have had one or two — unexpected turnover, where someone that we were grooming for bigger and better things moved off to another job.

That is our biggest risk at the moment. We've got people hovering around the office, wanting to pick up fully trained chartered accountants or performance auditors with master's degrees and so on. They're offering much higher salaries than we can provide. Our strategic advantage, our competitive advantage, is the quality of the work that we do; the way that we actually do that work in a collegiate, team-building sort of approach that people enjoy; and the nature of the work, which is interesting and stimulating and has a good purpose.

As a result of that, we've kept people that would otherwise be attracted away to other organizations, because they actually wanted to be here and on the Island.

B. Ralston: Just give a sense of the disparity in salaries. It might be useful whether it's $20,000 a year or $30,000 a year. Something like that would be helpful.

Secondly, you mention that a number of your people that are recruited and then trained go off to work elsewhere in the public service. Is that simply the fact, or is there any informal relationship? Would it be possible in the future to develop some kind of revenue stream for the process of handing these people off? If you're serving the training function for the public service at large, it seems to me that that might be something that ought to be recognized and perhaps compensated for in some way.

M. LeFebvre: I think the last meeting I attended of the CFO council — that's all the ministries' chief financial officers — at least half of them articled at our office at one time or another.

We're the only ones who train CAs in government. We have active relationships with the ministries. To keep our people, we have a lot of secondment arrangements. So if our people want to try something else besides audit — they want to be a budget manager — we can facilitate temporary assignments between ministries, where people can try something different, but we keep them within the entity. We're quite a feeder group for that.

J. Doyle: I'd agree. We've developed a model where we're willing to share our staff, but we want them back for the busy periods when we conduct our audits. We actually seconded out two or three during the quiet period last year to different entities because they needed technical skills.

Indeed, we've got a…. One of my directors is actually seconded to the Legislative Assembly at the moment to work as the SFO.

You've got this situation where youngsters have been trained in one discipline, which is basically audit, and they do want to look at other things. One of the things that I value, particularly with my more senior people, is…. They've worked with us. They've done well in that they've learned their basic trade as an accountant or profession. Then they go elsewhere and get different experience, and then they come back.
[ Page 2466 ]

If you like, that's a deliberate strategy that we have. If you look at the executive, a number of the executive staff have actually done that. Russ did that. Bill did that. Mike has done that. So you've got this movement in and out of the office which is very, very healthy, and actually gives us a different perspective than someone who's just done audit all their lives.

D. Horne (Chair): I've got a couple of members who want to ask a second question, but I'll start maybe with a couple of my own.

I note your travel budget for this year is significantly less than for the previous year — as well, the information technology budget increasing. I'm wondering if there's any relation or correlation between those two or what's factoring into the decreased travel budget this year.

J. Doyle: When we go and do the WorkSafe audit, we basically pick up a group of people and position them in the Lower Mainland for weeks on end to conduct that work. We do a financial audit, and we also do their performance indicators under the B.C. reporting principles. The cost of that is quite high. We recover that, but all the money that we recover goes straight to the province. We don't actually see any of the $2½ million that we invoice each year. It goes straight into consolidated revenue.

Now that we don't have to incur that expense, we've actually adjusted the cost of that travel and taken it out of the calculation. That's why you see that big drop.

D. Horne (Chair): So there's no correlation. The information technology cost is basically just an increase and not different usage of information technologies.

J. Doyle: The information technology tends to reduce the rate of climb of travel expenses rather than to cut a lot of it out. For example, if we — as we have over the last few years — developed our performance audit function, and that involves going out and seeing people more frequently because we're doing more audits, that typically would have meant a lot of extra travel expenses. The technology allowed us to actually avoid some of those expenses going forward, and as a consequence, we were able to keep the costs down a little bit lower and to move people around a little bit.

We don't choose our clients based on the cost of travel. We choose our clients based on risk. It just so happens that WorkSafe is outside the government reporting entity. We've been doing that work for a number of years now, and we thought that, probably, it's now time to move on and allow one of the private firms to actually provide those services.

M. Dalton: Going back to Bruce's remarks, the salary and benefits — your comparisons for your CA and staff. When you compare it with those in the private sector with equal qualifications and years, what is the comparison? That's my first question.

Then the second one, kind of unrelated, is on the move back to the PST. Will that have any monetary impact with regards to your audits themselves or internally?

J. Doyle: Okay. The salary comparators. At the base level the trainees, if you like, the people we call associates — pretty much the same. We don't get them to do 90-hour weeks, you know, most of which is free for the firm. We have a sensible work regime where we do the work when we're busy, but it doesn't affect the costs. Pretty much the same.

As soon as they're qualified, what you see is — and it gets worse when you get to the manager level — a big gap opening up, which could be as big as $20,000. As you go further up the food chain, the gap that you see is $80,000 or $90,000. So a partner in a firm would earn what a deputy minister earns — over $200,000 — whereas an assistant Auditor General wouldn't be anywhere near that high.

As a consequence, it's very hard to attract people into the office, and also, there's always this problem where they might be attracted out, despite the quality of the work and the experience and everything else, to actually find these additional dollars that are out there.

I think that in my own office the squeezes that have been put into place — which are policy, which we are following — would probably mean that we will lose staff over the next period of time simply because we can't promote from within. We can't adjust. Quite frankly, in the way that we operate, that's really not practical. We're not a hierarchy. We're actually a team of professionals that do different work. Once you're up to that standard, you move into that work role. There's no fixed structure or what have you. It's very much a competency-based organization.

So we're going to have to have some conversations around why that would apply to us, given that we're a small office in the whole, bigger public service. Certainly, we don't promote someone just because they've been there a couple of years. We only promote by going through a rigorous assessment process where their work is assessed after each job and every year, and it's peer-reviewed. They're given information about how well or not well they're doing and also being given the access to training to get them to the right level.

I think it's a weakness that we can't pay at least to close some of the gap. When I first came here, I did manage to close some of the gap, but there's still a way to go yet. To have no flexibility at all in regard to that means that I'm even considering whether or not I should write for an exemption from that particular ruling to see if I can actually hold on to key members of staff, to make sure that they can stay within the office. I can't afford to lose
[ Page 2467 ]
some of the corporate knowledge.

The second question you had was about PST. About $90,000 is our estimate of the additional cost that would flow through our financial statements when PST comes back in.

G. Coons: Thank you, John and your colleagues, for doing the presentation. I'm concerned about you saying…. Again, going back to your occupancy and building issues, I understand that moving around 115 or so staff is a real dilemma, and we do have housing problems in the province. But last year you came in and said — just going through the report — that you were offered an opportunity to consolidate the two offices in the Dogwood Building on Wharf Street. I'm assuming that that offer has been pulled, for whatever reason.

Again, in your presentation to us, you say that you have a non-binding letter of intent with the builder of 615 Fort Street. Is this a new building? I hope that we as a committee can come to a decision on what's going to happen with your occupancy problems, because I can't foresee you coming back next year and saying: "We've lost that non-binding intent with 615 Fort Street, and we've got to move to a place for a year, then move back." I'm just wondering if you have concerns about 615 Fort Street and the non-binding letter.

J. Doyle: Okay, those two questions. The first one is that the space that we were going to occupy is now occupied by Microsoft, so we can't get in there, which is a shame. In many respects, it was a good location, but if it was an idea before its time, that's fine.

It's a new building at 615 Fort Street. They are building it at the moment. It will be built. It was going to be built anyway. It's due to be commissioned. The letter that we've got, fixing the rates, is to ensure that we continue to be engaged in the negotiations and discussions. I think that's the normal thing you do when you're building a building and you're looking for a quality tenant to occupy space in there. You give them some degree of comfort around what the likely costs are going to be for a set period of time.

D. Hayer: My question on this is a little different than what we've been discussing today. We just finished the Finance Committee hearings, and I was going through last year's report from the Finance Committee, from November 2011.

There was this recommendation. I needed your opinion on this, how this can be solved. It was on page 32 of the report, No. 37: "Review the application of accounting standards to universities and colleges in order to arrive at a satisfactory solution, since existing policy denies post-secondary institutions the opportunity to access outside capital and to manage their budgets, including surpluses."

They were talking about the accounting principles and how they have changed and how they can't go out. They provided input again this time. At almost every hearing we had, there was somebody from the institution saying the same type of thing.

Do you have any suggestions on how we can find some workable solutions so we can find a win-win solution on this?

J. Doyle: I didn't quite catch all of it. Was it that they were trying to access private funds?

D. Hayer: Yes. And they said, apparently, that accounting standards that applied to the universities and colleges were changed a number of years ago. That sort of restricts them from getting access to the funding from outside — doing partnership, private sector. How the surplus is accounted for — sometimes they have a surplus sitting from past years, and they can't utilize it.

J. Doyle: That's got absolutely nothing whatsoever to do with the accounting standards. What you're talking about is the balanced-budget legislation and how it traps cash in two organizations. An example is the school system, where there's $1.1 billion trapped in the system that can't be utilized unless there's some give somewhere.

Universities and colleges, by trying to access private funds…. The bookkeeping for that is really straightforward and quite simple, but it's a policy decision by the government as to whether or not they can go outside. Normally, they have to go through treasury.

D. Hayer: Do you have any opinions on that — how that can be solved, from your perspective as Auditor General? Do you think it would be a good thing to change it so they can access the surpluses from just sitting there, or as the Auditor General, would you be speaking against it? Or does it make any difference?

J. Doyle: I would always speak for good financial management, and what I see at the moment is not always good financial management. I have to careful, because I'm not allowed to talk about policy. But I've been asked a direct question, and I've always promised that I would answer those.

There are ways of ensuring good financial management which ensure that you keep your expenditure within the size of your pocketbook. It isn't necessarily a single, simplistic focus on the bottom line. It's a range of things to do with cash flow, to do with the way that you're looking after assets, to look at the difference between debt and leasing as options for, actually, acquisition of capital assets.

Those are all constrained and are not actually used very much in the foreground. I don't know what goes on in the background, but they don't seem to be used very much
[ Page 2468 ]
in the foreground. It would not be hard to sit down and to talk through and work through sensible solutions in regard to how to make sure that the province lives within its means and how that then plays out within different organizations and the way they do their business.

You're never going to get away from the fact that different composite organizations seem to forget the concept of risk when they want to do investments into different aspects of things. They just want to expand, expand, expand. That's part of a control mechanism that's required to make sure that they don't just go ahead and do that, because they will create risks. In other jurisdictions in the world universities have basically failed because they've gone out and expanded too quickly and not done it well enough.

I've suggested a couple of times now to treasury that we sit down and talk about these things to see what can be done. Certainly, I'm all in favour, as an Auditor General, of good financial management being deployed right across the system. At the moment there are some inflexible rules that cause a few problems.

A simple one — and this was shown to me by a school district trustee — was that we put aside money one year in order to pay for something next year. The way they did it, using not-for-profit accounting, meant that they could put it into a reserve or a provision, and then they could treat the money as income the following year and then utilize it.

Well, now that everyone's shifting to full PSAB and away from not-for-profit, that mechanism is no longer available. So what you're going to end up with is a profit one year and a loss the next, whereas, really, you should be looking at maybe flexing it — and one province in the country does this — where you look at a rolling three years to see what is the best condition to be in from a financial management and corporate financial health perspective. That's not the way that it's currently done.

D. Hayer: Has their treasurer sat down with you to try to find solutions for this? Or haven't they had the time to sit down with you to discuss how they can find some workable solution?

Thank you for your presentation. I note that you talk in the options of buildings about the fact that you want to get on it as soon as possible. You comment in the closing remarks that at this point it does not seem realistic that a suitable space will be found within the time required to negotiate the lease and complete a move. Obviously, your view is that the best course of action is your option 1.

It's not clear to me whether there's a drop-dead date. You seem to have flexibility with the building landlord at this point, but what's the potential date where they will require a firm decision, if you have one? I do see that you're still looking. At least, that's my understanding of what you mean in option 3. You're still potentially looking at other spaces, but am I correct that I heard that you don't feel, with the limited space that seems to be the situation that's developed here in Victoria, that it's likely? Is that what you're being told by realtors?

J. Doyle: To answer the second part of the question first, it is unlikely that there are other practical options at lower cost. The decision has to be made in December this year. It doesn't get acted on for a while, but we need to get the decision on track and in process.

D. Horne (Chair): One last question on the capital side. That is, the difference…. You're budgeting $200,000 this year and then going to $150,000. Now, is that an increase for the workstation program that you've been doing for the last few years? Or what's that $50,000?

J. Doyle: We do change a number of computers each year, so we have a rolling program. We're also hardening and updating our major servers. We do this every two years, so we don't need the money every year. We need it off cycle.

Also, we're doing some work in upgrading some software, particularly the records management and some software around SharePoint which will allow us to actually operate better within the office. Buying that, putting it in, making sure that the hardware is in place and is working and operating properly is quite a technical process.

I'm pleased to say that we have an IT team that are absolutely outstanding. To put this together, they're just a great group. Occasionally, someone manages to kidnap one and drag them off, but for the most part, we've managed to keep the team pretty stable within the office. In fact, one of them went on to become an IT auditor, and the others are very technically competent in what they do and are well used to the nuances of operating and managing an application suite that's suitable for auditors.

D. Horne (Chair): I think that brings us to the end of our questions, so I'll thank you for your presentation this morning.

I think we'll take a brief five-minute recess, and then we'll reconvene for the next presentation.

D. Horne (Chair): We'll move to our next presenter,
[ Page 2469 ]
who is the Merit Commissioner.

Welcome. You have about 45 minutes in total now — about 20 minutes to present, if you can, and then about 25 minutes for questions. If you could introduce Shelley as well.

F. Spencer: Yes, absolutely. Thanks for the opportunity to appear before the committee to speak about the accomplishments of the Office of the Merit Commissioner and to discuss with you our plans for future work and the details of our budget submission for the next three years.

As in the past, I'm accompanied by Shelley Forrester, who is the executive director of corporate services with the Ombudsperson's office. But she provides corporate services to my office and three other officers of the Legislature, so you'll be seeing her again.

Shelley acts as our chief financial officer, so she will be able to assist in responding to any questions that you may have directly related to budget requirements or to assist me in responding to those questions.

My mandate as defined in the Public Service Act is to oversee appointments to and from within the B.C. public service to ensure that they are based on the principle of merit by conducting random audits of appointments, to provide for final-level review of the application of merit in cases where employees request such a review, and to report annually to the Legislative Assembly on my findings and activities.

To fulfil this mandate, I'm currently supported by a staff of four, including one part-time employee, four contracted auditors who we engage on an as-and-when-required basis, and an external audit advisory committee which meets regularly to provide my office with advice and support. As you know, I'm a part-time appointee.

This morning I'd like to highlight the results of our work in the last year, most of which is contained in my annual report, and to speak to our workplans for the coming year and beyond, and to present you with the estimate of the budget I consider necessary to be able to meet my statutory obligations and maintain meaningful oversight activities into the future.

First, I'd like to give you an overview of our activities in the last fiscal year, including our findings related to merit-based hiring in the public service. In short, we conducted a merit performance audit of 2011 appointments, or appointments that were made in the 2011 calendar year; two special audits of corporate hiring pool processes; and we conducted 16 final-level reviews of staffing decisions.

The bulk of our work related to the merit performance audit of a random sample of appointments made in 2011. B.C. Stats assisted in the random identification of appointments for audit to ensure that an appropriate cross-section of appointments was included — that is, from various-size organizations, occupational groups and geographic locations. They also ensured that a sufficient sample size was maintained to enable us to confidently generalize the results of the audit to all appointments made within the 2011 calendar year. In this merit performance audit we examined 222 appointments.

I'm pleased to say that in all appointments audited, we found no evidence that any individual appointed was not qualified for the position to which he or she was appointed. I regret to say, however, that we did discover the highest incidence of appointments being made that were not merit-based than has ever been identified in past audits, at a rate more than double previous years.

Before I go into a little more detail on that, I'd just like to qualify that last statement. In the 2011 audit we introduced some refinements to our audit program, which affected findings in the audit. That is, we made changes to our standard which had the potential effect of more — what we call — adverse findings with respect to the 2011 audit than might have occurred had the same standard as previous years been applied.

The adjustments were discussed with both our audit advisory committee and B.C. Stats and considered to be an improvement to our practice. The effect of the changed standard has been noted throughout the annual report, and any comparison of year-to-year results must be made with this in mind.

Now, just a little bit of detail, which is contained in my annual report but which I believe warrants some mention here. What our merit performance audit found was that in 8.5 percent of all appointments audited, merit was not applied in the selection process. When B.C. Stats extrapolates these results to the general population, it means that 8.2 percent of all appointments made to and within the B.C. public service in 2011, or 324 appointments, were not merit-based.

For comparison purposes, this figure was 4.4 percent in the partial-year audit of 2010 appointments and 2.3 percent in the 2009 audit. Even without the refinements mentioned earlier, the result is still quite high. It would be 6.3 percent if we were still using the standard that we had applied previously — still well above any such findings in the past.

Also, looking at the results from a slightly different perspective, clear findings of merit have decreased from 80 percent in 2007 to a current low of 65.8 percent. I find this result somewhat alarming, and I find the trend discouraging.

Just to give you a sense of the practices that are of concern to me, I'll highlight a few issues we identified through our audits. We found evidence that hiring managers had inappropriately added individuals to competitive processes, and in some cases those individuals were eventually declared successful.

We found evidence of inconsistencies in short-listing
[ Page 2470 ]
and assessments which unfairly advantaged one candidate over others, and we found evidence of incorrect appointments being made due to errors or omissions with respect to calculation of test scores or the calculation of years of continuous service. Also, in some cases we were unable to draw conclusions with respect to the application of merit in the hiring process due to missing or incomplete documentation of appointment decisions.

All of these issues have been raised and discussed with the B.C. Public Service Agency, who assure me that efforts are being made to address these matters and improve practice in all areas.

These findings highlight for me the importance of the work that we do. Identifying areas of concern, bringing them to the attention of organization heads and the head of the BCPSA and making recommendations for improvement are essential if this downward trend in merit-based hiring practice is to be reversed.

We noted with interest that the new collective agreement between the employer and the B.C. Government and Service Employees Union, the BCGEU, contains a clause that calls for the creation of a subcommittee to address the recommendations contained in my 2010-2011 annual report.

I take this as an indication that our findings are not inconsistent with issues that are being raised by employees with their representatives and that the BCGEU considers the matter of sufficient concern to secure a commitment to action from the employer.

Last year we also conducted an in-depth audit of corporate hiring pool processes. You may know that corporate hiring pools involve a process of assessing and pre-qualifying individuals for further consideration for certain positions. Two such pools were active in the B.C. public service, one for clerical positions and one for employment assistance workers who were employed exclusively within the Ministry of Social Development.

We undertook these audits following our findings in 2010-2011 with respect to these processes and the concerns that we identified with respect to how these corporate hiring pools were being used and the impact that plans to increase their use might have on merit-based hiring in the public service.

Generally, at that time my concerns related to our observation that the principle of merit was being overlooked in favour of efficiency. Our in-depth audits identified some fundamental flaws with the conduct of these processes. Specifically, we found that all employees applying for consideration in either pool were not being given notice of appointments being made and, consequently, not being provided with their statutory rights of recourse. We also found inconsistencies in the treatment of applicants and issues related to referral of candidates.

Taken together, these findings led to the conclusion that all appointments arising from either of these hiring processes, while found to be based on merit, had exceptions to policy or legislative requirements.

Coincident with the conclusion of these two special audits, the BCPSA and the ministry advised that they had suspended use of these corporate hiring pool processes until revisions to the processes could be introduced. We consider this to be additional evidence of the value of the work that we do in improving merit-based hiring in the public service.

In 2011-12 we received 21 requests for review of staffing decisions. Sixteen of these requests were eligible for consideration, and in-depth reviews were conducted. In three cases the deputy minister was directed to reconsider the appointment decision, as I did not find that merit had been clearly applied in the appointment process.

This number of reviews is significantly higher than in previous years, unexpectedly adding to the workload of the office. We are encouraged, however, by what would seem to be willingness on the part of employees to express their dissatisfaction with hiring decisions and bring their concerns forward. Openness and transparency in hiring decisions are key components of merit-based hiring. We see this as a positive indicator that employees are seeking further insight into, and information related to, appointment decisions.

In terms of priorities, in the current and next fiscal year we will complete our merit performance audit of 2012 appointments, which is currently underway, and undertake an audit of appointments in 2013. Due to the high volume of appointment activity in 2012, in order to maintain a manageable sample size for audit purposes, it was necessary for us to accept a sample size which resulted in a confidence interval of 90 percent, rather than the 95 percent confidence interval we've maintained in the past.

While not ideal, this rate still allows us to extrapolate results and make comparisons to past years. If manageable, a larger sample size not only increases the confidence level in the results but also permits more feedback to organizations with respect to their hiring practices. Therefore, depending on appointment activity, we anticipate being able to return to a merit performance audit of 2013 appointments which will have results at a statistically higher confidence level.

For the remainder of this fiscal year and next fiscal year, we've identified three areas of special audit or study.

The first audit relates to temporary appointments which are intended to be for less than seven months' duration but which at the start of the audit had exceeded that time frame and were still ongoing. As of the end of September, when we collected the data for audit, there were 893 of these appointments ongoing.

We first looked at this appointment type in 2009, when we found that there were potentially a large number of employees who, by virtue of their lengthy service, had essentially been promoted without going through a merit-
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based competition and/or had been given a significant and unfair advantage when competitions for permanent positions were held. We'll be looking to see if this practice has improved and whether this appointment option is being used appropriately.

The second study on our workplan is an examination of the assessment tool referred to as behavioural event interviewing, or BEI. BEI involves a requirement for a candidate to relate in an interview an event in their work history which required them to demonstrate certain competencies or qualities necessary for the job for which they're applying. It is an interview technique that requires trained assessors if it is to be considered fair and balanced.

The BEI interview is often identified by employees in their requests for review as being unfair. We often hear that what is being assessed is an individual's ability to tell a story, as opposed to their ability to do a job. We also see in our audits many occasions where BEI techniques are used in a questionable manner or relied on so heavily that a candidate's response to one question is used to assess almost all the qualifications required for a position.

Given that BEI is so widely used in the B.C. public service and has been found at times to be a primary interview assessment method, if misused it has the potential to greatly affect the quality of merit-based hiring. Therefore, we consider its use warrants some examination.

The third special study that we would like to undertake relates to the practice of direct recruitment, which refers to the permanent appointment of individuals from outside the public service directly into entry-level positions without an assessment of relative merit. Through our audit activity, we have observed this practice almost exclusively for entry-level administrative positions and have noted that frequently there has been no public notification of a vacancy being filled, no evidence of more than one candidate being considered and no indication of how candidates are identified.

This hiring practice seems to have evolved over time without the benefit of policy or guidelines. Given the potential for misuse, we considered that it also warrants special study or audit.

The future work of the office is driven by such factors as our observations from our annual merit performance audits, changes introduced to staffing policy or hiring processes and changes to the public service environment. Possible future work includes follow-up audits of lateral transfers and auxiliary appointment processes, a study of standard assessment tools and tests, addressing diversity within a merit-based hiring context and the impact of narrowly restricted competitive processes on open competition for appointments.

To accomplish this work, I've put forward the budget requests that you have before you.

You will note that in 2011-2012 our budget of $1.062 million was underspent. Last year, based on what I expected to be our expenditure in this fiscal year, I offered to accept a 4 percent reduction to my budget and was allocated $1.024 million.

I anticipate spending close to 95 percent of that budget in this fiscal year. A large portion — about 70 percent — is used for salaries, benefits and contracted auditors to carry out the business of the office. Another approximately 20 percent is non-discretionary spending on such things as rent and amortization costs.

I now propose a minor increase to our operating budget for 2013-2014 of just under 3 percent, to be able to accommodate the return on a part-time basis of one of my staff from maternity leave and to cover increases to salary and employee benefits cost. If approved, this overall budget for the Office of the Merit Commissioner in the amount of $1.054 million for 2013-2014 would still remain below my 2011-2012 budget.

I consider this a reasonable and fiscally responsible budget request and would be pleased to respond to any questions that you may have.

D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Marc.

M. Dalton: Thank you very much, Fiona, for your work and the work of the office.

Just looking at your figures, it's 8.5 percent that you'd say are inappropriate appointments.

M. Dalton: That was based upon 222 audits. I'm just wondering: for those audits that you did do, did you proceed with them because there were already some issues that you felt needed to be looked into? Were they red-flagged?

In asking this question, I'm wondering if, by extrapolating the figures that you have from there, it maybe skews it a little bit overall as far as the hires. Were the audits that you did do just kind of random, or were they red-flagged from the beginning?

F. Spencer: How we conduct our audits is through a random sample of appointments. At the beginning of the audit period we receive from the B.C. Public Service Agency a complete list of all appointments that are made within a calendar year or within the sample period.

We sample, sometimes, on a six-month or a four-month basis. If we're looking at the first six months of a year, let's say, we would, in August or September, ask for appointments that were made in the first six months of the year. When we get that list of appointments, we, first of all, remove appointments that are not within my juris-
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diction — for instance, lateral transfers. Then we send the complete list to B.C. Stats. Then B.C. Stats pulls for us a random sample of appointments. We try to balance the number of appointments that we look at with the confidence level that we want to achieve in the results and just the workload that we can accommodate in the office.

Then they stratify that sample to make sure that we have a good sample from all different sizes of organizations, so they pull a random sample. If it's going to be, say, 5 percent of appointments, they look at that. They make sure that we're covering small, medium and large organizations. They make sure that we have a good cross-section of occupational groups, and then they send us the list of appointments for audits.

Then when we get the list of appointments, we call to the deputy ministers for the files that support those appointment decisions. It's a totally random selection of appointments. And because we use B.C. Stats to help us with that random section, and because we have a certain confidence interval — and in our last audit it was a 90 percent confidence interval — we're able to extrapolate the results of our audit sample to all appointments that were made within that audit period.

B.C. Stats helps us with that. Their report is in the back of the annual report, but they tell us that this is correct for certain percentages. When they extrapolate our results…. On page 17 of my report you'll see the extrapolated results as they show them, and it's 8.2 percent for appointments. That's how we come up with those numbers. They're not red-flagged to start with.

M. Dalton: Well, just the 20 that were complaints — is that part of that figure? You mentioned there were 21 that were complaints. So what I'm wondering is, if they were complaints, if that's added to it so that's impacting the percentage.

F. Spencer: Oh, okay. No, they're not. They're completely separate. When we do the random audit of appointments, we're looking back at appointments that have already been made. The request for a review of appointment decisions comes from employees who are unsuccessful candidates in selection processes. So when an employee, first of all, goes to the hiring manager — and then the next step is to go to the deputy minister — the appointment that they are asking to be reviewed is put on hold. So they can then choose as a third and final step, if they're within bargaining unit positions, to come to me for review, and the position or the appointment remains on hold until our review is complete and we render a decision.

Then there are two outcomes. Obviously, we upheld the appointment decision, or if we ask the deputy minister to reconsider, then they do that and it progresses.

These would be appointments in 2012 that we're being asked to review. Sometimes when we get a random audit the following year, we see appointments that actually came forward to us for review, and we're auditing those on a different basis.

D. Horne (Chair): Great. Next we'll move to our Deputy Chair, Mable. Or do you want to spend a second, and I'll go to Bill?

Thanks for your presentation. Just to follow up in terms of your finding with regards…. Again, following up on Marc's comment with regards to the 8.5 percent that were not merit-based. In terms of your investigations into that, is it correct…? You mentioned that this selection was characterized by a lack of a public posting, a lack of more than one person applying. Is that what characterizes these to be identified as…?

F. Spencer: There are a variety of reasons. For instance, we found that candidates had been added to a competitive process who perhaps either hadn't applied on a competition or hadn't been part of one of those pool processes. For instance, if they were part of a pool process, the Public Service Agency would have referred them to a manager. We found some instances where a manager asked for a specific individual to be added to that process. Unfortunately, those people moved forward and did become successful in the competition, so obviously, there was a lack of fairness there.

Some cases we found where errors had been made when test scores had been added…. They had been added incorrectly, so a candidate who wasn't necessarily the one who should've been successful was appointed, and the person who actually scored better in the assessment process did not receive an appointment.

We found instances where years of continuous service were calculated incorrectly, and that is a factor in merit, as you know, in the act. Again, someone did not receive or perhaps received an appointment sometime after the person who had been declared successful.

Sometimes we found errors in shortlisting. For example, it could have been that it was a requirement that somebody have a certain degree or a certain education requirement and they were screened out of a process for not having that when in fact they did have that experience or education — those kinds of errors.

M. Elmore (Deputy Chair): In terms of determining the 8.5 percent not merit-based, are there repercussions, or is it that you're just reporting the findings?
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F. Spencer: Basically, we are reporting the findings, because of course, we're looking at things retroactively. We report whenever there's a finding of merit not being applied. We provide our audit report to the deputy minister and ask for them to look into it and provide comment. They do do that, and we put a ministerial response into our audit report.

When these findings do go back to the deputy ministers, we're asking them to do a number of things. One, share them with the hiring manager so that that individual realizes what error had been made, and use them for learning or training purposes. We also provide the B.C. Public Service Agency with a rollup of the results not just for their organization but for the whole public service so they can see where there may be systemic errors and that they can take some steps to address those either through changes to policy or practice or some training for hiring managers.

M. Elmore (Deputy Chair): So it's basically going forward as a kind of learning opportunity and doesn't necessarily impact the person hired.

M. Elmore (Deputy Chair): I just had one quick thing. You mentioned that you were looking at a study of diversity — appointments of diversity in a context of merit-based criteria.

F. Spencer: We sort of have it on our radar for future possible studies. As you likely know, if there's any sort of policy to be put in place to increase representation within the B.C. Public Service, depending on what the policy is and how that would impact on hiring, there may be some issues related to merit-based hiring, so we would want to ensure that we'd be involved in that kind of a study.

D. Horne (Chair): We have about 15 minutes left, and we have five people on the speaking order.

D. Hayer: Thank you very much for your report. My question is also with this 8.5 percent — the audit that shows that they were not hired on the merit-applied basis. Was it purposely done in some cases, or was it just a genuine mistake? I had some people come talk to me who work in the government service. They said they were looked over. What they had said was that it was not fair and done purposely. I tried to say to go through the process. I referred them to your office. Can you tell me if…?

F. Spencer: Well, I would say that the majority are errors — things like when people are adding wrong or in screening and that sort of thing. There are just genuine mistakes, but clearly, when someone asks to have an individual included in a competitive process who hadn't either applied in the process, that's something that's done on purpose. They've purposely asked for this individual, for whatever reason — because they may think that they're well qualified or that they perhaps didn't see the posting and put their name forward — but that's clearly something that is done on purpose, yes.

So there are some instances but not all. I would say most of the things where we find that merit has not been applied…. It's difficult to tell, but it would seem that they are mistakes and errors that are made by people who aren't fully aware of what the policies are or have just incorrectly applied them.

D. Hayer: The other question I've been asked often is: "Does the workforce of the province — all the staff, whether union, non-union — reflect the diversity of the population we have in British Columbia, based on the merit basis?" From your experience of working here, do you see when you generally take a look at it that that is reflected in the people working for the provincial government directly or indirectly? I think one in five people is of immigrant background and diverse background. Is that what's reflected in the provincial workforce?

F. Spencer: The information that we receive about appointments and competitive processes doesn't include any information on whether or not the people who are involved in either the selection process or who are being considered for appointment…. We have no information with respect to their background or whether or not they're part of any minority group in the province.

I would say, though, that we have found no evidence through our audits of any form of discrimination. That's the only thing that I could speak to in that respect. But I don't look at numbers with respect to representation in the B.C. public service, so I couldn't really give you a good answer about whether or not the public service is representative of the population.

B. Routley: It appears that the numbers reflect a growing insincerity on the part of whoever is doing the hiring to actually follow the practice. Given that you've gone from 2.3 percent in 2009, 4.4 percent in 2010, and now you're at 8.2 percent, that clearly shows a pattern of…. Essentially, there are no consequences. So I would suggest that folks are on to the fact that they can use favouritism or nepotism or any other form of hiring practice because there are no consequences — right? In fact, there are no consequences in the sense that someone that is preferred and hired directly for some criteria other than merit….

I guess question 1 is: do you know what other kinds of criteria they're using? I would hope that it's some kind of qualifications, but I do worry about whether it's favouritism or nepotism or even some kind of political jiggery-pokery, so to speak. We would hate to think that such a
[ Page 2474 ]
thing would apply.

Do you have any suggestions — the second part — on how to correct this trend?

F. Spencer: I am concerned as well about the trend. I'd have to say that that is certainly true. We see no evidence of any political jiggery-pokery. That's a good thing.

F. Spencer: Somebody might be good at jiggery-pokery. I'm not sure of the audit criteria we'd use for jiggery-pokery. I could look into that, I suppose, but we see no evidence of that. I think that that's a good thing.

The other thing I think is a very positive thing is that when we do look at appointments, we look at how people get appointed, but we also look at the person that's appointed to make sure that they are, in fact, qualified for the position to which they've been appointed.

Despite whatever process has led to that appointment, as I said, I'm pleased to say that we've never found any incidence of where somebody has been appointed who's not qualified for the job. I think that's reassuring for the public.

How they got there and the fact that there has been some error in the process is of concern to me. Is it because people are not as concerned as they were? I suspect that may be part of it. I think a number of other factors come into play that I hear quite often — that managers are very busy, that they're involved with other things and keeping track of some of these appointment decisions is time-consuming.

They just want somebody to come in and get the job done. So they often look to the quickest way to do this, and that's a continued concern of mine — that we look for ways to efficiently staff and put aside those issues that should be of concern to us in terms of merit-based hiring. I think that's part of it.

Another part is that there is a lot of turnover in the management ranks. So when we bring new managers in, they perhaps have never gone through a hiring process before. They're not trained in what needs to be done. It used to be that there were a lot of folks within the ministries that assisted managers in these hiring processes. Those people have been moved out of the ministry. Some of them have been centralized into the Public Service Agency, and some of them have just gone and the resources used elsewhere. They don't have the on-site help to assist them with some of these things. I think that that's the combination of things.

What do I think could be done about it? Well, I continue to make recommendations in my annual report to the agency, specifically. As I say, I'm encouraged to see that the BCGEU has asked that there be a subcommittee struck to address how the employer is planning to implement some of the recommendations that we've been making. And those do go around — things like training and process and making sure that people are aware of what needs to be done. So I'm hopeful that if some of that goes forward, we'll see some improvement.

P. Pimm: A couple of things. I'm kind of following up on the merit qualification guide. I couldn't see that. Is it included in here somewhere — what all falls into a merit qualification guide? I see it's part of an act here, but I haven't researched that.

I'm curious. Just explain this to me. You lose the merit if somebody finds an applicant that hasn't applied who they think may be eligible, and they ask them to apply, but then they still have to go through the entire process. So just follow up on that for me.

The other thought is…. I know this is strictly public service unions. Has there been any thought of this being expanded to other unions that have government funds attached to them — i.e., teachers, doctors, nurses? Any thought of that?

F. Spencer: No, there is no…. I'm not sure what merit guide you might refer to, but listed in the legislation there are what they call factors of merit that are to be considered when a process is being made. Those are education, skills, knowledge, experience, past work performance and years of service. The other thing that's stated about merit is that there are two aspects of it. One is competence — ability to do the job — and the other is that it be non-partisan. So those are sort of spelled out.

When you see those definitions of merit, the other thing it says is that in certain cases there is a process that's required to determine whether or not somebody meets those factors of merit. That's where we get into the competitive process where what we call relative merit is assessed — one person's merit versus the other. So that's all I have.

Now, I should say that the Public Service Agency does help managers set up rating guides and competency levels. There's a lot more detail that's provided by the Public Service Agency to managers to help them determine merit and assess competence in the process. But that's not part of my mandate or part of the work that I do.

P. Pimm: Does that actually disqualify that person from being part of the merit process?

F. Spencer: Why we find that merit is not applied in those cases is that somebody has been favoured by being included in a competitive process. The rules and the policy state that if you're going to be considered, there are a number of ways to put your name forward to be considered. One of them is that you respond to an ad that's put out on the Internet that says: "Anybody who wants to be considered, put your name forward within a certain time frame." And so there's a time frame established. People put their names in, and then they're screened, and sometimes there's a pool of candidates that are referred to a manager for consideration.

What was of concern to us was when either this group of people applied or people were referred to a manager, and the manager looked at that group and said, "Oh, Shelley's not in there. Would you mind…? I want to consider Shelley," and unfairly would inject somebody into the process who hadn't been part of the original pool.

Then what was more alarming for us was when that individual that they had added — and we have no way of knowing why they were added or favoured in that way — was the successful candidate. So we just considered that to be unfair. They were assessed as part of the process on a merit basis, but it's the inclusion of them in the competition that was of concern to us, because we saw that as favouritism.

P. Pimm: Well, I'm having a hard time getting my head wrapped around that. If they have to go through the entire process anyhow, why would that be favouritism?

F. Spencer: Because you might have been adding your neighbour's name or your….

F. Spencer: Well, when they go through the process and that determines whether or not they're qualified, which…. As I said, we found that there weren't unqualified people being appointed, but it's whether or not the process by which they were appointed was fair. Others in the process might not see it that way when all of a sudden someone is parachuted in to be considered and appointed into a position when they hadn't previously applied. So it's the fairness of the process that causes us concern.

B. Ralston: I just had one question. Under section 3 of your act, you don't have purview over Crown corporations. Is that correct?

B. Ralston: If there were approval of additional resources and there was an amendment to the act, would you welcome that opportunity?

F. Spencer: Well, that's putting me on the spot. Clearly, if there was an amendment to the act, I'd have to consider that. But I really wouldn't have a sense of what we were talking about in terms of workload and what resources would be required. We just cover…. My mandate is very narrow, as you know, and defined by those people who are appointed under the Public Service Act and who are employees of the B.C. public service.

D. Horne (Chair): Thanks so much. One last question just before I let you go, and that has to do with the salaries — the increase of $50,000, which has to do with the new collective agreement under the BCGEU, I believe. Does that include management positions as well, or is that strictly non-management positions?

F. Spencer: The increase, actually, in the $50,000 in salary…. I only have one employee who is impacted by the change in the BCGEU collective agreement. That is to accommodate the return of one of my employees on a part-time basis. She's returning from maternity leave. I've just moved some money from the professional services and moved it into salary so that when she returns we can accommodate that. She is an excluded employee, but she's not a management employee.

F. Spencer: It's related to increases in employee benefits that are, I guess, part of the ongoing costs that are associated with salaries.

We'll now move to our next presenter. We'll take a brief recess of about three minutes.

D. Horne (Chair): Paul, welcome to the committee.
[ Page 2476 ]
It's great that you're here today. We have about 45 minutes for presentations — about 20 minutes for the presentation and about 25 for questions after. Basically, you're welcome to begin anytime.

P. Fraser: I'm very pleased to be here today. With me on my immediate left is Daphne Thompson, our executive coordinator, who is retiring in less than a week after years of service — since 1994 — in the office. This is her last hurrah, and because she knows that this is a pivotal moment in our year, she wanted to be here for it.

On my right is Linda Pink, who is Daphne's successor. Some of you may remember her when she was in the Ombudsperson's office some years ago. Most recently she has been the executive coordinator to the deputy minister in the Premier's office.

Behind me are three other people that I'd like to introduce: Alyne Mochan, who is our legal officer; Corey Ulmer, who is our project officer; and Amber Derricourt, who is our administrative assistant. You may wonder why, when I'm here asking for more money for salaries, I would be foolish enough to bring a group this large. The answer to that is that I am the only officer of the Legislative Assembly who could bring his entire staff to our session here today. So everybody you see is…. This is it.

P. Fraser: The door is locked. The kind of week it's been for us, they were delighted to be able to get out of the office.

In any event, I'm pleased to present our budget proposal for the forthcoming year. I know that you've had the material and an opportunity to take a look at it. I agree, if I may say so, with the division of time that's been suggested. I think that it's most important, from at least our office's point of view, that we hear what you have to say. Much of what's in the introductory portion of the submission that I've made in writing is well known to you.

The only thing that I would ask you to take a look at quickly, on page 2, is the structure of the office. It hasn't changed. The reporting responsibilities, I think, are clear. We still have the two offices that we maintain — one in the red brick buildings and the other small office over in Surrey, which is an unstaffed office.

We have five people in the staff. My appointment is for 75 percent of my time. We have at the moment one full-time employee, who is Daphne, the executive coordinator. All of the other members of our staff are part-time, and at the moment all of them are on contract and are not FTE employees.

We do a variety of things. Most of them, I think, you're familiar with, so I needn't spend any time on what is page 3 and will move completely and quickly to what is the history of our spending and spending request over the last five years.

You will see there that since 2008-2009 and up to the present time we have in every year returned an amount of money to the committee. I'm saying to the treasury, I suppose, through the committee. There are reasons why the amounts returned are as large as they are in some years, and I certainly don't want to have the impression that there's a pattern of us asking for too much, only to have to give back at the end of the year.

The why in terms of these amounts is that in 2009 and 2010 some of my time was spent as the acting Privacy Commissioner, and in those circumstances the salary that I otherwise would have been paid by the conflict-of-interest office was picked up by that office. That would account for about $25,000 of the $57,000 that was returned.

Similarly, in 2010 and '11, I was also, for part of that time, in the privacy office, and again, there was an amount of savings to the conflict-of-interest office as a result. Those savings in 2010, for example, amounted to about $36,500, $7,000 of other lesser expenses. So I think you can see that in both of those years it wasn't that our ask was wrong. It was just that circumstances which were beyond our control ultimately had an effect on the bottom line.

We then move to 2011 and 2012. That is the year that we moved from our old premises into our new premises, and that is also the year that we made some significant IT upgrades in our recordkeeping and disclosure system. In 2011 and 2012 we turned back $20,000, which was about 4.16 percent of the budget request and approval that we had received.

It's important, if not somewhat self-serving — but important, in my view — for you to know that with that $20,000, we were able to turn the money back because we were, in part, able to effect our move from our smaller premises to our larger premises for significantly less than we had thought. In fact, the move into premises that are twice as large but for the same rent cost the office, in the result, only about $10,000.

The reason for that was that we went and found, at various places and at various times of day and night, recycled furniture or furniture to be recycled. None of the furniture, literally, in our new office that was new had to be purchased new. The only new piece of furniture-related equipment happens to be the reception desk.

I say that not just to indulge myself in a self-glorification — or the staff, whose responsibility is basically translated into this saving — but to indicate to you, if I may, that we try to behave in this small office, providing as it does an essential service, in a way that would be consistent with the ordinary principles of careful spending and careful planning.
[ Page 2477 ]

Without putting too fine a point to that, what we have come up with over the years in terms of budget request — and, again, I'm proud to say, this year — is essentially what we think is a minimum investment in order to properly render the service that we do.

I ask you to accept that at its face. I want to assure you that inasmuch as we have this year, unfortunately, no opportunity to turn money back — as I think we're going to see in a moment, instead we're going to be looking at an overrun of about 10 percent in terms of the budgetary allotment that was given to us last year — you should, I hope, on the basis of what I'm going to tell, you be confident in the notion that we have nevertheless lived within our means and practised thriftiness and caution.

So why, coming to page 5 in the operating results, are we going to be over budget? As we indicate on that page, the Ministry of Finance, which gives us monthly predictions as to what the final result of the year-end will be, has said to us that we're likely to be over budget in spending by $20,000. Our internal full-year spending forecast for the current fiscal year is that we will be $50,000 over our budgetary allocation. The reasons are these.

In this current year we were advised before the budget was struck that the Select Standing Committee on Parliamentary Reform would take up what I think is the most important work that has touched the office for the last ten years, certainly since 1999, when the last review was conducted by the committee — a complete review of our act for the purpose of determining whether there should be any amendments.

That task that the committee undertook was one that we had been asking for, for at least five years and had been featured in a variety of annual reports from my predecessors. So we were delighted, of course, when the news reached us.

The impact that it had on us was that it was appropriate, in our view, to assist in the expenses that that committee had to bear by funding that committee and informing that committee with a variety of research documentation and other information which we had carefully assembled over some time, in the hope that that contribution would save them some of the research that they would otherwise have had to expend.

It had an impact in the sense that our staff, as I indicated to you at the beginning, is contract, except for the one FTE that we have, who is the executive coordinator. The hours vary, of course, from month to month, although they're fixed and capped. That work caused us, obviously, to expend more funds in that dimension of our available budget than we had been able to predict. That result was not one that we were likely to have planned for, because we didn't know that the committee would undertake its work.

Second, in this current fiscal year, as I mentioned earlier, our executive coordinator made the decision to retire. That, I can assure you, was not a decision that was forced upon her, and it's a decision that, looking at her, you'd be amazed with, given her youthful appearance and indeed her youthful age. I won't tell you that she started working in the office when she was 12, but it was close to that.

In any event, that decision, which is a normal decision, was one that somehow over the years my predecessors and I had thought would never be made and would never come. It did come unexpectedly, and it carries with it certain benefits and related expenses that we have to bear in this fiscal year. Also, there has been a transitional period, as Linda has come in, and she and Daphne have worked exceptionally well in order to make sure that there will be a seamless transition.

Third, in order to retain valuable administrative support in our office and in order to be able to plan for succession, we have over the last couple of years deliberately hired folks to come and work with us who we thought might well fit into our future plans. We have been able to use the contract route as a way of living within our means in terms of the budgetary allocations that have been given to us.

This year we have come upon and have in our midst a person that we now want to move from a contract position into a 0.6 FTE position — Amber Derricourt, whose work and whose involvement in the office has recommended her to us as part of what we want to have as a stable and continuing workforce so that we give to the people who can provide that the kinds of benefits and so on that people expect if they want to continue in their careers.

We understand the reality, as I expect you do as well, that given the confidential nature of the work we do, we can't have a revolving-door situation. What we need is continuity and stability.

That decision, which won't actually hit us until the final quarter of the year, will also contribute to this $50,000 overrun.

Finally, one of the other causes for the overrun is that the IT work that we have done to make the life of the members a little bit easier — some of you say very much easier — involving filling in the forms for the disclosure, has come at a labour cost.

As you can tell, looking at the pie chart, fully 74 percent of our budget is for salaries and benefits. When you have that kind of nut to crack, if I can put it that way, how can you hope, on an ongoing basis, to reduce your costs, given that benefits don't change — they usually increase to some extent — and salaries can't remain static forever?

Confronted with that, we decided that the way to do it — in part, at least — was to make sure that the labour-intensive paper-gathering of information and then the collating and reporting function were transferred, so far as we could, into some kind of technological ability that would be ultimately cheaper in terms of the labour
[ Page 2478 ]
costs that are involved to work that kind of technology. It would be an investment, going forward, not only in our office but in the way in which members' time is preserved.

To that end, what we have done is have our project director — Corey Ulmer, who's here today — work at filling in the existing forms. So this year, as you all know, when your disclosure forms came to you to be filled in, you found that they had been filled in for you based on last year's information, and the process, I think, went much better.

I'm not sure that the IT department of the Leg., which is housed in our same red building complex, ever gets the credit it deserves, but I have to say that one of the things that has put us in the situation where we can come here today and ask for only a modest increase to cover costs is that we have received from them tremendous cooperation. They have a keen sense of what their capacity is and the extent to which they can assist. They have provided for us the software advice literally for no cost.

Our cost has been to take our person with the information and fill it into the forms literally by hand. Frankly, to take the next step and get software where we wouldn't need to do it manually in our office is likely to cost, we are advised, somewhere around $100,000, which we've no intention of asking you for.

We can carry on with the way in which we've been going, but it's been an incremental assistance in terms of the information flow. At the same time, what we've done is put in place some kind of a legacy of saving going forward.

The budget request is at page 6. I've indicated to you what the reasons are for the overrun in this current year. We have in this period of time the ability to be able to look into the future to some extent and realize that for the fiscal period which is about to begin on April 1, there are expensive items, at least on the horizon.

Very recently we've received a request for a formal opinion that will clearly impact on our ability to keep ourselves within, if you like, the boundaries of salary and benefit compensation that we have been discussing in the past. I don't know how much and how expensive that process will be, but we have to consider that when we come to think about how we're going to fund it.

Those of you who have skipped ahead to see that one of the line items on page 8 in the proposed budget, STOB No. 85, is called "Other expenses" and is $50,000 will say — as any member of a finance committee would say: "That's a lot of money to be putting, basically, in an unattributable situation." But that $50,000 is part of what I think the contingent expenses are to be covered.

Secondly, the committee that has reviewed our act is expected, as I understand it, to issue its report sometime within either this fiscal year or next. I anticipate that there will be some related additional expenses that will fall to us in terms of being of some assistance, perhaps, in the implementation of some of the recommendations that may be made or some of the legislative drafting that may or may not result. That expense is less likely. The expense that I mentioned a moment ago is certain.

Then we get into paragraph 3, where one of the items of expense that is not only potential but is likely is that the salary of the commissioner is tied to the salary of the chief judge of the Provincial Court. That whole issue of judicial salaries has been in litigation. It is now back, as I understand it, on the government's desk to consider.

There hasn't been an increase in the last, I think, two or three years. At some stage, if that issue gets resolved, like it or not — some of us will like it more than others — there will be an additional expense that will arise.

We'll also have in the next fiscal period a disclosure that will have to deal with at least 22 new Members of the Legislative Assembly who will be among us after May 14 of next year. That means that all of the new people will be providing, for the first time, information on the disclosure statement — either by hand, presumably, or they can type it in.

But we will have to do what we have traditionally done, insofar as those people are concerned, to work that information up and to fill it in for succeeding years, if you understand. That is an expense that has an impact from our point of view.

A realistic assessment of all of those potential costs is what you see in the line item that calls for a $50,000 amount to be placed in the "Other expenses" category. It's clear, of course, that what we could do is wait for all of that to happen and then come back to the Finance Committee pro tem that then exists and try to get money at that stage in order to cover expense. The better practice, we think, is to ask for it in advance, knowing that we have a credible history, where we have not used the money, of refunding it to you.

What we're looking for in this budget request, taking into account that this year we are going to wind up spending, we think…. Based on all of the projections that we have made within the office, we expect to spend $520,000, which is $40,000 more than we have been allocated. That amounts to, I think, about 7 percent more than our budgetary allocation.

What we're asking you to do is to take that $520,000, which we say has been carefully spent and does not include any item of extravagance or bloating, and add to it 7 percent, with the result that we'd wind up with an operating budget for the coming fiscal year of $560,000.

That's very much a bottom-line approach. The detail, I think, is reasonably easy to embrace, but if there's any assistance that I can give you in questions, I'd be happy to do so.

D. Horne (Chair): Maybe we should move to questions. We're actually over time now, so if you wouldn't
[ Page 2479 ]
mind.

Actually, I wouldn't mind starting with just one question. In the presentation you talk about the budgetary price pressures that you're facing. There seems to be, in the increases to a number of the budget items…. Some of those items that were included in the pressures we're seeing this year are already, basically, included in increases on specific budget items. Then again, the $50,000 in other expenses is showing up at the bottom, almost redundant to the increases on the line items above.

P. Fraser: All right. Dealing with apples and apples, in the current year our budget is $395,000 for salaries and benefits. We expect to spend, in fact, for the reasons that I have mentioned, on salaries and benefits $420,000.

The amount that we're looking for in salary and benefits in the new budget, or the budget for 2013-14, is $416,000, which is in fact $4,000 less than we anticipate we're going to be having to spend on salary and benefits in this current fiscal year.

P. Fraser: Yes, and that number is achieved by adding together STOBs 50, 52, 54 and 60. That comes out to $419,000.

Now, where there is some confusion in the reporting — and this is a result of the fact that the STOB lines are frozen in language that's generated by the Ministry of Finance — is when we come to deal with an item which has been called "Professional services." That item, for us, has included those people who are contracted employees who are rendering legal service — that is to say, our legal director.

That's a condensation, given that it's 74 percent of our budget, of what the hard core of operating cost is. The rest of it — the $50,000 — is the material that appears on page 6, which I think I've already described.

D. Horne (Chair): On page 10, in the notes, it talks about the shortfall of the $50,000 and then basically outlines what it is. Then page 6 talks about the ongoing costs. On page 10, when it talks about the $50,000 shortfall, it talks about legal services, and $25,000, or half of it, is salary and benefits; then, basically, additional contract salary, an additional five; and then travel and employee expenses.

I do note in the travel expenses on this year's budget that you're actually at about 17 or not even quite 17…. You're at $16,000-some-hundred in current year travel expenses. The budget was $20,000, and it's looking to move to $24,000. Is there a reason for that as well?

P. Fraser: Yes, the travel expenses are…. Again, it's kind of a misleading description or misleading banner. Those amounts include the cost of my expenses for commuting from the Lower Mainland to Victoria, which was part of the terms and conditions of my appointment. All of that travel is typically done by ferry; none of it by helicopter; occasionally by seaplane.

If it's important for me to be here, I have to be here, so that part of the travel cost is up slightly over years past. What exactly that percentage of the total amounts to, I'm not sure. The rest of it includes one conference a year of Conflict of Interest Commissioners from across the country. Typically, two of us will go. That conference is important in the sense that it gives us an opportunity to do what anybody would say in my circumstances — to basically discuss with our colleagues new and important developments in their area.

Sometimes, every eight years or ten years or so, it happens that the conference is closer, in Victoria or British Columbia. Other times it's farther away. This year it was in Fredericton, so that would account for a slight increase.

Last year we didn't have CCOIN travel, because last year was when we had it here in Victoria. That said, we knew that the conference was going to be in Fredericton, so we're going to be slightly above in that area.

Without being defensive, because your question doesn't anticipate that that would be required, I think it should be noted that we had predicted that it was going to cost somewhere between $25,000 and more to effect our move — and we had to move because, when we were in the office, not everybody could sit down — and it cost us $10,000. That's gratuitous on my part, but I just want you to know that we're out there trying.

D. Horne (Chair): I understand. I've got a couple of questions. I've got Dave on the list. Does anyone else have any questions?

D. Hayer: Thank you very much. I really appreciate your detailed breakdown on page 10 that explains where all the changes are. I'm going back to your page 6 that you talked about: "We have very recently received a request for a formal opinion that will impact on our existing human resources."

Now, for the current year you still have 4½ months left — right? So is that change going to occur in this area? Is there a budget for that, or are you expecting needing that request maybe after next March — you will need the money after that? I'm trying to find out the person you're finding to bring from outside — what we heard in the media. Where would those funds be paid from?

P. Fraser: Well, this request was prepared at a time when the request for an opinion had just arrived, and only a part of the information that ultimately came with the request was available to me. I was of the view then
[ Page 2480 ]
that it appeared that we would be able to do all of this in this current fiscal year.

I don't know now, of course, what will happen, since all bets are off and it's for somebody else to make that decision. So the answer to your question, I think, is that this could spill over into the next fiscal year and be part of the $50,000, as I've predicted. Clearly, there's going to be an additional cost involved, given that someone else is going to be using their time to do the work.

So I expect that we should think in terms of not being confident that the work will be done by the end of this fiscal year. But I don't want, in saying that, to impart any information that I have, because I have none. That's entirely for Mr. Gerrand to decide.

D. Hayer: So some costs might be next year, some might be this, and you might come back once you find out what those costs are, because you have no idea how much it's going to really cost for this extra work.

P. Fraser: Certainly, in this year, and partially responsible for the overrun that we're predicting, is an amount of work that has been done on that file by our staff and by me — not, I'm bound to say, an enormous amount, but quantifiable.

B. Ralston: You mentioned the forthcoming election and the prospect of at least, I think you said, 22 MLAs, given the number that are retiring, and that that requires some workup of their conflict-of-interest disclosures.

Are you also including in the budget the possibility that those departing will be seeking advice on positions that they might take in relation to their former duties — in other words, they would want to be sure they weren't in conflict — and if there's any turnover at the senior levels of the public service as well? I don't think that falls within your purview. Have you anticipated those kinds of changes in your budget?

P. Fraser: Yes. The largest part of that cost, of course, would be coming from my salary, but there is support that I would need in expressing some of those opinions. So it's covered.

G. Coons: I just have two quick questions. In advertising, it looks like there's an increase of up to $4,000, and in 2011-2012 it was $336, with a budget of $1,000. I'm just wondering what you see coming up in the years where the statutory advertising is going to be $4,000.

Just a question about the unstaffed satellite office. How often is it used? What's the cost of that, and is it useful?

P. Fraser: Yes. Let me deal with that last one first. The satellite office, as we call it, was introduced, I guess, in spring of 2008. It sits in Surrey. Two, at least, of our members here today will know that that's the fastest-growing and one of the most delightful places to be.

That being the case, many of the members who live on the Mainland have found that it's attractive for travel to come to the office. So that office is available for disclosure meetings. It's available for other meetings from time to time that are necessary.

It's wired-in technology in terms of my ability to communicate on a complete basis with the office here in Victoria. The reason for the office in the first place was to try to cut down on the travelling costs. Over time I think it has become clear that it has been a savings. In this particular year there's been a necessity to be physically present more often than perhaps at some times in the past.

The office is unstaffed, as I've said. The total cost of it is, I think, about $14,000 a year. It's in one of those charming situations where there is a professional office complex. I have one 10-by-10 office, and there's somebody at the front door to let everybody in. But it's all I need. It's exactly what I need in order to be able to do my work from there, given that I don't want a home office. I'm not capable of working effectively from home.

On the first question, the statutory advertising and publications is, in part, the annual report, but we produce that in the office. You can go out and hire people to produce reports, and I'm sure that with a huge operation, you would want to do that. But we do it all in-house, and that seems to have been satisfactory up to this point. That, of course, involves staff time and so on.

I don't know what particularly falls into that item. Daphne, can you tell me? Why are we going up to $4,000 from $1,000?

Daphne, the perfect public servant, says to me: "Because I thought you said you might want to hire somebody from outside this year to give us some advice." And she's right. We've never done it in the past. We may have to do it in the future. Now she brings that to my mind.

The reason for that, I remember, is this. Alyne, who is sitting behind me, typically does the annual report. Alyne may be very busy with some other stuff when the report has to be produced this year, so we may have to go outside. If not, we won't.

D. Horne (Chair): Thank you so much for being with us here today. That brings us to a close. I want to thank you for your presentation.

D. Horne (Chair): The committee will take a brief recess for about 25 minutes, and we'll reconvene at noon sharp so that we can continue.

D. Horne (Chair): We'll now hear from our next presenter, the Police Complaint Commissioner.

Stan, welcome to the committee. We have a total of about 90 minutes. We have to conclude today at 1:30, so we have slightly less than that at this point. I'm sorry about that. I thought somewhere between 30 and 40 minutes for your presentation and then questions following that. You're welcome to begin anytime.

S. Lowe: Thank you, Mr. Horne. I can advise you that I'll probably be in on the lower of that range, around 30 minutes, in my submission to this committee.

Hon. Chair, Deputy Chair and hon. members of the committee, this will be the fourth occasion that I have appeared before this committee. I recognize some familiar faces who have served on this committee in the past and some new faces whom I will be addressing for the first time.

I welcome this opportunity to address you, and I thank you in advance for your time and consideration. With me today…. You've met Rollie Woods, Deputy Police Complaint Commissioner beside me; Cindy Dyck, director of planning and information management; and Shelley Forrester, executive director of shared services, to my right. Tamara, who is behind us, has also worked in our finance department and provided valuable assistance.

In terms of my submissions today, I intend to begin by providing the committee with a background briefing regarding the landscape of the complaints system to provide those members less familiar with our work with some context in which to assess our submissions. I will then summarize the relevant portions of my formal budget submission, bearing in mind that the committee has had the opportunity to read the submissions and the service plan over the weekend. I'm sure it was something that was at the top of your list. This will certainly, in my view, allow us ample time for any questions that you may have of me.

I will preface my submissions by advising the committee that this current budget year I fully expect our office to come within the budget approved by the previous committee. Despite a challenging workload, the past assistance this committee has provided our office in terms of funding has allowed us to staff appropriately and address the caseload that we have.

In the upcoming 2013-2014 fiscal year I am requesting a modest increase to my budget to offset two non-discretionary costs: an anticipated increase of $17,000 in operating costs related to my lease space, which is under the building occupancy tab; and $11,000 to address an increase in the cost of employee benefits for office staff. I believe it's 0.7 percent across the board in government next year.

I also ask the committee to note, importantly, that 84 percent of our operating budget is made up of fixed or non-discretionary costs.

The Office of the Police Complaint Commissioner provides impartial civilian oversight of police complaints related to allegations of professional misconduct against municipal police officers in British Columbia. Our jurisdiction is defined by statute in the Police Act of British Columbia. It's important to note that this act underwent substantial revision some 2½ years ago as a result of an audit commissioned by government. This audit was conducted by then retired justice of the appellate court Josiah Wood. I will return to this audit in a moment because it's important to provide context as to our work.

I think it's important at this time that I take time to distinguish the jurisdiction of the OPCC from that of the independent investigation office which opened this past September, as there appears to be some confusion as to our roles. The IIO conducts criminal investigations regarding police-related incidents that result in death or serious harm. The IIO has jurisdiction over both the RCMP and municipal police officers.

In terms of the OPCC, we ensure thorough and competent investigations of police complaints and fair adjudication amongst all the parties. Our jurisdiction is confined to municipal police officers in this province. Our goal is to facilitate quality policing and public trust in law enforcement through effective, transparent civilian oversight of the complaint process. We strive to be impartial and fair to all stakeholders in the complaint process.

Now, returning back to the audit of this system which took place previously. In 2007 Josiah Wood released his Report on the Review of the Police Complaint Process in British Columbia. As I said, this report was commissioned by the government in response to concerns expressed by many stakeholders in the complaint process. This report included a comprehensive audit of police complaints and made many recommendations for change in the Police Act process, which included strengthening the oversight powers of this office.

Josiah Wood recommended that a further administrative and investigative audit take place three years after implementation of the recommendations. On March 31, 2010, the House unanimously passed into law sweeping changes to the Police Act which incorporated the majority of the recommendations of Josiah Wood.

I can advise the committee that most recently an administrative and investigative audit, as required by the legislation, has been completed by the Auditor General's office, and the Auditor General enjoyed the full cooperation of my office in undertaking the audit. I am confident that the findings of this legislative audit at this developmental stage of the complaint process will be
[ Page 2482 ]
positive. I believe it will reflect the fundamental change that the OPCC has undergone in the past three years.

At this juncture I pause to read a quote in the conclusion to that report from Justice Josiah Wood in relation to the concept of civilian oversight.

"Acceptance of civilian oversight by the police is not something that can be legislated. But what can be legislated is an entirely different model for processing complaints against the police, one that removes that process in its entirety from their control, placing the responsibility for investigation in the hands of a completely independent investigative force and the responsibility for adjudicating the results of those investigations and imposing discipline in the hands of an independent civilian agency.

"While there is a strong argument to be made that the processing of complaints against the police is an essential element of the entire discipline structure which is so essential to the day-to-day operation of an effective police service and that, as such, the complaint process should therefore remain the responsibility of police management, that argument can prevail only so long as there exists a demonstrated willingness on the part of such management, and all who serve below, to fully accept the authority of civilian oversight."

To provide you some context for that quotation, Josiah Wood was looking at different models of oversight. His recommendation was for this what I would call interim model, where the police still investigated the police but the powers of the civilian oversight agencies to perform oversight were strengthened significantly.

The next step is what he would envision in that quote — having the entirety of the investigative and adjudicative process being taken over by an independent civilian oversight agency.

I can confidently advise the committee today that the acceptance of civilian oversight by the policing community has vastly improved in the past three years. I believe this improvement has been the result of strong leadership at the executive level of police agencies as well as at the executive levels of police unions and associations in this province. Leadership has supported the new legislation, and they have actively engaged in promoting legislative improvements to the system.

Police acceptance of civilian oversight has probably been best exemplified by the creation of memorandums of understanding between municipal police agencies and the RCMP with our office to provide interim oversight of death and serious harm cases pending the operational status of the IIO. This request for civilian oversight by our office represents what I say is a shift in culture and attitude amongst the policing community in terms of our acceptance as an oversight body, and I believe it clearly addresses the concerns expressed by Josiah Wood.

Another shift in attitude has been with the professional standards sections of police agencies in this province. There has developed between the OPCC and these professional standards sections a collaborative approach in terms of contemporaneous oversight of investigations in which there is an ongoing dialogue between investigators and analysts in our office.

This collaborative approach has significantly improved the quality of police complaint investigations. Furthermore, we as an oversight agency have exceeded the expectation of Josiah Wood, as all complaints that are admissible are contemporaneously reviewed by our office.

I am also mindful of the fact that confidence in the police complaint system is also influenced by the level of confidence stakeholders have in the professionalism of our office. We must continue to improve professionally so that we may continue to earn the confidence of the stakeholder community that complaints will be treated fairly, impartially and in a principled way. We must continue a fair and impartial evidentiary-based approach in order to arrive at a consistent, principled decision.

Our office has worked very hard to develop and maintain relationships with all stakeholders in the complaint process. We have established professional working relationships with the executive management of police agencies, police unions, B.C. Civil Liberties, Pivot Legal Society and other special interest stakeholders.

We have also developed an impressive array of support agencies who have come on board to provide support services to clients in the complaint process. These support agencies now provide assistance to First Nations and new immigrants as well as members of our marginalized communities. The list continues to grow as we approach many more organizations in our outreach activities.

Briefly, in describing the nature of our work…. The nature of our work at the OPCC is primarily a gatekeeping function. We work in a quasi-judicial environment where we oversee the investigation of police complaints by police agencies. We determine whether a complaint is admissible, applying the criteria under the act.

Where an issue arises regarding a decision made in the disciplinary process, as part of our gatekeeping function we can refer the matter to be reviewed by a retired judge who will make a determination.

We have been afforded significant oversight powers in terms of our gatekeeping role through the legislation and in being able to refer matters to a retired judge through three different avenues of adjudicative review. Previously there was only one.

Our role does not include the determination of whether misconduct has occurred or not. That is the role of an adjudicator, should we decide that a review is warranted in the circumstances.

I'll now turn to our formal budget submission that I have and direct your attention to page 3, under the heading "Summary of our workload." Page 3 is basically two types of graphs and charts to just break down the nature of our oversight work. The pie chart at the top reflects the cumulative aspect of our work since the introduction of the legislation to September 30 of this year — so approximately 2½ years.

If you look at the pie chart as well as the accompanying chart, you'll see that approximately 51 percent of our
[ Page 2483 ]
work is registered complaints from the public. Another 23 percent that we review come in the form of non-registered complaints. Those are complaints in which a citizen does not wish to make a formal complaint, to go through the formal process, but documentation and a report of that complaint is made by a police agency. It's our role that we must review all of the non-registered complaints.

Nineteen percent of our work involved monitored files, which include reportable injuries. Reportable injuries are where an individual, through a police incident, is required to attend to hospital. We review those incidents to determine if an investigation is necessary in the circumstances.

Ordered investigations are those that I can order on my own initiative. However, the overwhelming majority are usually at the request of police chiefs. And 3 percent are the internal discipline files that do not engage the public. We review those to ensure that those are properly categorized and properly dealt with under the Police Act.

Altogether, though, this new legislation resulted in an increase of approximately 200 percent in the number of files that are opened each year and that we must conduct oversight on. It engaged, really, a doubling of our workload. Our current projections, which are set out in the graph at the bottom, reflect still an upward trend, as we expect an improvement in the reporting of internal discipline and non-registered complaints amongst the policing community.

Turning over to page 4, I want to discuss with you a key gatekeeping function that's set out on page 4. Under the old act, the determination of admissibility was undertaken by police agencies. Pursuant to Joe Wood's recommendations in his report, that assessment has now been delegated to our civilian agency. It is a front-end process which is laborious and labour-intensive and comprehensive.

This gatekeeping function is crucial because at that juncture it determines whether or not a complaint will enter into the police complaint system. A complaint that enters into that system has a number of stops and turns and checks that can be applied. But at this stage, for those that are ruled out or inadmissible, the matter ends. So it's really important that we apply principled decision-making and apply the legislation in order to ensure that we're making appropriate determinations at the front end.

We have seen a reduction in the number of complaints that are made admissible in our system. Generally speaking, if we look over the past 2½ years cumulatively, approximately 47 percent of complaints are made admissible. The range goes anywhere between 46 to 49 percent.

Where that fits in the Canadian landscape. My colleague in Ontario, who oversees 27,000 police officers — his average admissibility rate over the past few years has been around 49 percent. We are slightly lower. If you look at the chart at the very bottom of the page, for the 2011-2012 calendar year we were quite low, at 41 percent. But I believe that this number will eventually plateau and remain between 46 and 49 percent.

Initially we had not provided the appropriate screening at the outset and were making too many complaints admissible which eventually would be discontinued, once a preliminary investigation had been undertaken.

Turning over to page 5, the chart to your left is really our projections. When the act first came in, you'll see that the amount of admissible complaints were quite high. You'll see a downward trending. Then in the last quarter, or the last three quarters, of this graph, you'll see that it's starting to plateau now and to moderate and become a more consistent rate.

The pie chart at the bottom describes, I think, an important feature. If we begin with the premise that approximately 47 percent are made admissible, of those that are made admissible, how are they concluded in our system? The pie chart sets out the six different ways that a file can be concluded.

During the investigation process a file can be discontinued, pursuant to the criteria set out in the act. As you'll see, of the 47 percent that are made admissible, approximately 51 percent, cumulatively, have been not substantiated; 9 percent have been substantiated; 14 percent have been discontinued; 16 percent have been informally resolved, which I'll return to in more detail later; 8 percent have been withdrawn; and 2 percent have been mediated.

If you look at those matters that did not go to a decision, and if you take away the non-substantiated and the substantiated, you will see that approximately 40 percent of those matters that are made admissible through other means, including informal resolution, are not required to be investigated. So approximately 30 percent of all complaints are actually investigated by these agencies.

If you could turn to page 6, probably an easier chart to follow is at the top, which sets out the years since the act has been in — 2010-2011, '11-12 and then this year — then you'll see the cumulative rankings. Again, 40 percent are dealt with without an investigation.

This is an important segue into informal resolution or alternative dispute resolution. When I first began my appointment, one of the areas that I immediately targeted and determined was an important area to develop was alternative dispute resolution. In my view, it is a critical component of any type of complaint system or complaint process. It's not a secret in my office that alternative dispute resolution has been tasked as a legacy project for the term of my appointment.

In the formal complaint process, with the less serious matters, there is very little satisfaction for the participants, given that the scenario is winner versus loser in terms of outcome. The victories ring hollow for those participants that are winners in the process, and the losses can leave a participant dissatisfied and absolutely bitter.

ADR has been described by my deputy as a win-win solution with no one keeping score. The reparation of a relationship between the public and the policing community, one relationship at a time, has had a positive impact on the attitudes. Recidivism for both officers and complainants is extremely low. Individuals learn to modify their behaviours to avoid incidents in the future.

We have received the support of executive management and police unions in expanding the use of ADR within the police complaint process. It is our collective goal to someday lead the country in the voluntary ADR of police complaints. Our office has partnered in four training sessions so far, in the area of informal resolution, to provide professional standards officers and union representatives, as well as duty officers, with training in how to informally resolve complaints and to prevent complaints.

Page 7. We have also partnered with the Vancouver police department and the Vancouver Police Union in the production of a roll-call video, which is due out in December. The roll-call video is a training video in which blocks of police officers can conveniently take some time, approximately 20 minutes, and view this video. This video is intended to acquaint members with the informal resolution process.

Furthermore, the Vancouver police department, which accounts for slightly over half the complaints in our complaints system, has put into place a quick-response team focused on informal resolution. This has significantly reduced the caseload of their professional standards section. Their goal is to become a leader in Canada in terms of informal resolution of complaints.

Turning to the graph on page 7, you'll note that it sets out the actual and projected matters completed pursuant to informal resolution. You'll note that in 2008 and '09, when I first began my appointment, we had 55 matters that were dealt with by way of informal resolution. This year we expect over 200 matters to be dealt with through informal resolution, which is a fourfold increase.

With our projections, we're hoping that by 2015 and '16 that number will increase by another 120 or so, so that we'll reach a level of over 300 matters dealt with through informal resolution. We hope that it'll account for approximately 30 percent of admissible complaints in our system. That would constitute a doubling of matters that are currently being dealt with by way of informal resolution.

Page 8, I wish to draw to the committee's attention. What I alluded to earlier was the memorandum of understanding between the OPCC and the RCMP. On November 9, 2011, we entered into a memorandum of understanding with the RCMP which was similar to an agreement we had already reached with the municipal forces in this province. The MOU provided that the OPCC would conduct reviews of investigations involving police incidents involving death and serious harm.

There was an oversight gap which we were prepared to fill, pending the operational status of the IIO. I can report back to the committee that what we understood would be perhaps half a dozen cases have morphed into what is now over 30 cases that we are reviewing and completing. It's hoped that by the end of this fiscal year we will have completed our role in that regard and that the IIO will have the lion's share of what is required for oversight.

In terms of civilianization of the OPCC, one of my targets was to make our organization reflect more of the civilian nature of our oversight. So what we have done was to create a strategy where we would hire and provide an intensive in-house training program for entry-level analysts with civilian backgrounds. They would be advanced through our organization based on merit and, we hope, would enjoy long careers in public service.

I'm pleased to advise the committee that over 60 percent of our staff in decision-making positions now come from civilian backgrounds. This is in keeping with the recommendations of the Braidwood Commission and the Davies Commission with respect to the civilianization of oversight agencies. It is our hope with these young people that with a horizon of approximately six to eight years, they will be able to provide comprehensive oversight of complex investigations.

An area, if I may turn to page 9, "Budget Expenditure on Adjudications and Legal Expenses"…. You may have received our most recent cumulative numbers with respect to our expenditures on the three avenues of adjudication. I am pleased to report that we should come in on budget, and I'm thankful that the committee this past year approved dedicated funding for that result. I just want to draw your attention to where we're at so far this year. I intend to continue to provide this committee with quarterly reports in this particular area.

I want to take you at this point in time to our page 12, and I'll go directly to our proposed budget request. Set out on page 12, you'll see it's STOB 52. It reflects the request that we have in terms of employee benefits. The 0.7 percent across the board is reflected in the $11,000 that we're asking for, for the next three fiscal years. STOB 75 is the building occupancy request.

We were able to, in our current year, make up that $17,000 difference through a recent retirement and a bit of a salary envelope that has been created to cover that off. But we are asking in the next fiscal year and continuing, as we proceed on with the projected status, for a further increase of $17,000 next year to cover off increased costs in building occupancy.

Again, I wish to remind the committee that there is not a lot of discretionary spending in this budget. Eighty-four percent of our budget is accounted for in fixed costs. I'll take you back to page 14. It provides you with the proposed budget by business area. Probably most important is the pie chart at the bottom, "Proposed budget by
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expenditure type." As you'll see, we've broken down our fixed costs versus discretionary costs. Through simple addition it demonstrates, as was the case last year and this year, that 84 percent of our costs are fixed costs and non-discretionary.

I note that I am right on the 30-minute mark. Those are my submissions, and I'm more than happy to answer any questions from the committee.

D. Horne (Chair): Thank you so much for your presentation. I'll actually start with a question from myself, and that has to do with…. On the capital side you have $25,000 a year. I looked at it, and it seemed to be slightly volatile, or it's a little bit less than the $25,000 on average over the last couple of years.

The question I had is on the flatlined amortization. Obviously, the flatline amortization would be consistent with spending the entire budget each year. But given the budgets of previous years and the spending in previous years, it didn't quite jibe for me, so I was just trying to figure that out.

S. Lowe: Well, by way of background, the $25,000 capital budget has been in place since 1998. I hope I can address your question directly. Even though we have had, through the assistance of funding from this committee, an increase in our staffing of five people or five full-time positions, we've not asked for an increase in capital budget. But contained within that capital budget are, obviously, those larger office expenses that are encapsulated for the FTEs, as well as an ongoing IT plan in which we refresh our computers and our servers and pay our quotient.

Included this year in that capital plan is also the need for a fire suppression system for our servers that we thought, in terms of risk management, was quite expensive. We've paid a portion, since we're in a shared services agreement and share tenancy with other officers of the Legislature.

I think this year our portion was around $5,000 of the capital expenditure that would normally go towards…. Capital expenses in our office went towards this fire suppression system, so that would preserve the servers if there was a fire in the area. But if I could say, this is a budgeted amount that's been in place since 1998. Probably it doesn't reflect the increase in costs of capital since that time.

You've asked for an additional $28,000, basically, in the budget. The main piece of the $17,000 for the building occupancy — what does that account for?

S. Lowe: I think Ms. Forrester could probably break it down more, drill down further for you.

S. Forrester: It's for building occupancy. We're in a building with four other independent offices, and the cost in building occupancy includes two things, really. It's base rent, and the second thing is operating costs. Last year the commissioner asked for $17,000 in that STOB, and it was to cover an increase in rent — the base rent and operating costs that he pays on a monthly basis.

That was not approved. This year…. It's from the past year. It's a cost that the officer is bearing this year by underspending in other STOBs. But we consider that to be an obligation and a fixed cost, so he's requesting it for the next budget year.

S. Lowe: In terms of operating costs, it's your light, your air-conditioning, your electricity. Those types of things have risen for all the tenants in the building, through the landlord.

M. Elmore (Deputy Chair): I just had a quick question about your alternative dispute resolution — sounds very interesting — as well as in terms of your projection to increase the proportion of the total complaints resolved by that process. How does that compare to other jurisdictions?

S. Lowe: If we look at voluntary jurisdictions, I think we're starting to take a leadership role. In Quebec it's mandatory. But then the process itself is not necessarily…. Because it's mandatory you're not getting, perhaps, the most meaningful results or satisfaction.

I know that my colleague in Ontario is very interested in what we're doing here, because in rolling this legacy project out, it would amount to what constitutes a pilot project in Ontario with 27,000 officers. But we are taking a leadership role. A lot of other jurisdictions simply do not keep statistics on informal resolution.

I think at this juncture Alberta is very interested in our ADR project, but I think we lead in some respects. In the next two years, if we can increase our numbers, I want to be in a position to be able to tell this committee that we actually lead the country. I'm just not satisfied at this juncture that we're that far ahead. It's still in its infancy stages, but it is really taking off. It's such a better way to address less serious complaints.

M. Elmore (Deputy Chair): It's a voluntary entry into that. Is it the complainant?

S. Lowe: Yes. It is all voluntary. At the end of the day, through the informal means, they sign an agreement. They have ten days to revoke their consent to that agree-
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ment. But the best part of it is that we have an oversight role in that informal resolution so that if the resolution is not what we see as meaningful — what's proposed — we can reject it, and it can continue down the investigation path.

M. Dalton: I'm just wondering if the new IIO has impacted the number and the complexity of your files and overall costs.

S. Lowe: No. The IIO — since they're engaged in primarily criminal misconduct, they are actually assisting police agencies. They no longer have to find…. What they had in place was external police agencies. For example, if it was an officer-involved shooting in Vancouver, they would often have to go to another agency like Delta to do the investigation. Now the IIO is filling that gap and being able to do the investigation. Under our legislation, there's still our professional misconduct concerns. So under our legislation we would still be ordering an external investigation, but there's the flow-down of evidence that comes from a civilian agency.

I think it has lessened the load, generally, for all of us concerned. Still, these are matters that have to be reviewed by us from a professional misconduct standpoint — training and things along those lines. It hasn't changed the number of complaints at all, because they're just a different subject matter.

Just a clarification, again, on the building occupancy. It seems in this year, in the coming years, to be — I wouldn't say it's a significant amount — 5 percent, then 3 percent and then 3 percent. I'm just sort of…. This year it's $17,000, next year it's $10,000, and then the next year it's projected to be $11,000. Is that all stemming back to previous decisions that were made at this committee? Maybe you could just clarify that.

S. Forrester: A good portion of it is. I'll just clarify. In building occupancy the major part of that is base rent, and it's at $30 a square foot for the first five years. It also pays for the officer's share of storage space in the building, as well as the variable portion which is for operating costs. Operating costs tend to go up.

Stan touched on a few things. It's elevator maintenance. It's hydro for the shared space. It's janitorial. The biggest one is taxes on the building. So as tenants, we pay our portion of taxes, insurance on the building. Those are some of the things in that variable portion, which is the operating costs.

So when the officer pays his monthly rent bill, it's including base rent, operating costs and his share of the storage space.

I would just say, projecting ahead, that is very much a projection. We don't always know how much taxes will go up for the building. The landlord doesn't know. We take our guidance from the landlord who provides us his best estimate once each year so we can look forward and look ahead year by year. So those are projections.

The current ask for $17,000, as I had mentioned, is reflective of the officer's request for funds last year, because we were anticipating that he would need that to cover his rent payment. And indeed, we are projecting in the current year that the shortfall in that STOB will be in that amount.

S. Lowe: I should clarify that. In the current year I'm able to absorb that because I've developed a small salary envelope with a retirement in it. I haven't refilled the position as of yet. It's the next fiscal year that I have some difficulty.

G. Coons: One other question. I notice on page 9, with your priorities: "Promote alternative dispute resolution of police complaints through training and educational campaigns."

I'm just wondering if you can expand on that. Where is that in the budget? How much do you project spending?

S. Lowe: That comes out of our office expenses, but probably the most expensive aspect is the participation of my staff as salaried individuals that devote a portion of their time to the training and the development.

Under my jurisdiction, under the Police Act, to provide advice and to consult with stakeholders, I've taken on a leadership role in terms of ADR to be more of an organizer in putting together the right people and setting up the right training programs.

The training programs that we've done so far are paid for by police. What we have to do is organize it, as such, so that through a third party, Mediate B.C., they receive the sums. They only receive as much as needed to cover the costs of the training.

We basically are coordinators. What the cost is to B.C. taxpayers is some of the time of our salaried employees.

D. Hayer: Thank you very much, Stan, and thank you to the Office of the Police Complaint Commissioner staff.

My question is on page 6, where it talks about mediation. In 2010-11 they had 26, and in 2011-12 they had 11. In 2012-13 it shows zero in there, in the chart.

S. Lowe: What is happening.... None so far this year. Let me tell you a bit of our experience with mediation. Mediation is a cost that's borne by police agencies. On
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average, the costs are approximately $3,000, if I can use that term.

We have very limited oversight powers under the act in terms of mediation. That's one of the asks that we have of government in the legislation — to allow us to open up these mediations and look at it confidentially to ensure that they're meaningful mediations.

We were finding, on average, only about 50 percent of mediations were successful. Even though the participants on exit surveys really enjoyed the process and thought it was a great process, success at a mediated resolution was at approximately 50 percent. What we saw is a shift of executive management and policing to informal resolutions conducted by their own professional standards staff or staff members.

Where we helped in that shift was to provide them with training, through experts — Mediate B.C. — to do informal resolutions, which only involve, as a cost to the police agencies, salaries of their current employees. So there wasn't that $3,000 hit. We're having much higher success, and from an oversight perspective, we're having more meaningful oversight. I think what we've seen is a move away from mediation and a move towards informal resolution.

D. Hayer: The second part is…. You talked about the roll-call videos. Then we also talked about the IIO and that you were at the Surrey office they opened up there — an independent investigation office for the police.

Because of those two, do you think that maybe over the long term total complaints will go down because the public has more confidence in the IIO office? Also, will the police be dealing with it differently because you have this roll-call video and other programs you're using to maybe deal with some of the issues that otherwise might go into complaints from the public? They might be able to deal with it differently. You might not get a complaint because of how they dealt with the person who they were trying to investigate or charge — or issues rising from that.

S. Lowe: That's a good question. In terms of the IIO, I think they will always have…. It's a learning curve. They'll have to establish over the first two years, on average, how many incidents they're going to have to attend to. But those involve serious harm or death. So there is always…. It can spike. It can go up and go down. There'll always be a static amount.

But you hit the nail perfectly on the head, I think, with informal resolutions. We are already seeing the number of registered complaints dropping. That's part of the incentive to police agencies. It takes so much of a period of time to do an investigation and so much labour, where if you informally resolve that matter, it takes a very short period of time.

I'll give you just an anecdotal example. When I first started with the Vancouver police department, the average investigator was investigating about 25 Police Act complaints, which is very burdensome. Now, with the introduction of the new act, executive management put more staff into their professional standards section, but creating this quick-response team for informal resolutions also reduced substantially the number of matters that needed to be investigated.

On average now, an investigator has approximately ten cases, and they're the more serious ones, which are more time-consuming. In the future it's my hope that if we can increase…. Currently it's around 20 percent — the amount. We take that 47 percent that we make admissible, and then we look at how it's broken down. I think it comes in to be about 16 percent informally resolved.

If we move that up to 26 percent or even 30 percent, it reduces the amount that has to be investigated by that commensurate amount — from 40 down to 26 or 28 percent. Every case that's not informally resolved has to be investigated. Those are the options. I really believe that what sells it from the perspective of economic efficiencies — and the more important aspect — is the outcome. Two people walk away with something that they both participated in and constructed, and they both believed in that situation. They have both won. It's a positive feeling.

I know I glazed over it very quickly, but the recidivism amongst police officers is very low. For those who have launched complaints, the likelihood of them launching another complaint is very low. What we have is a shift in attitudes. Next time, when it comes to friction or a situation where there is an encounter, people modify their behaviours.

It sounds a little cheesy. But what we are doing is…. You look at the big global picture. It's really repairing relationships between the public and the policing community, one relationship at a time. I think that's very important, and that's what needs to be done in the system. I'm a huge proponent, and it is a legacy project.

I can tell you that in terms of staffing, we've created job responsibilities and duties for specific staff that are strong in this area to continue to do it. So when I'm done my time, there will still be a staff member beyond me who is dedicated to alternative dispute resolution.

D. Hayer: What about the video cameras some of the police are using and perhaps another one they're looking at? Will that help getting the extra evidence? Maybe that means search on…. What he said or she said — right?

S. Lowe: Yes, I think that makes…. It's being looked at because it does open a large can of worms. It brings in B.C. Civil Liberties and privacy issues. I know that a local police chief is more than happy to experiment and have those cameras on the lapels and so forth. I think that would be slower in coming.
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But I think that something that we can enact and relatively work, if I could use, in the mid-term is ADR. That's what has the most pronounced effect. From an evidentiary standpoint, yes, cameras. As we can see in day to day, cameras are becoming more and more important if they capture incidents.

I'll give you another anecdotal story. There was an incident that involved a use of force between an officer and a cyclist. The end result was that in an ADR session the two of them determined that they respected each other's viewpoints. But perhaps, if I could use the term, a legacy from that is, I think, the officer became a co-coach on a baseball team through this interaction, and now the two of them coach together. These things happen, and they're good-news stories, and these are things that we want to strive for as far as relationship-building in the community.

B. Ralston: In years gone by the issue of the legal expense was something that we discussed. I know that at STOB 60 in the current budget there is $300,000. Obviously, this is an expense that is variable and unpredictable. On page 9 you have a total in the current fiscal year up to October 12 — $136,000. Are you able to give an update on that and maybe project to year-end as to where you'll be in terms of the total?

S. Lowe: Mr. Ralston, that's a good question. These are based on our estimates with oncoming adjudicative reviews. At this juncture those are what we've paid out so far in our billables, if I could put it that way, for what's been set out. We're at about $280,000, and we have a bit of a fiscal period to go through. Fortuitously, I believe that the next matter that we have will be in the early new year, and I don't believe that that will completely come billable until the next fiscal cycle. So I'm of the view that this amount is adequate, and any overage in that area can be covered in our existing budget.

B. Ralston: The other question I had was just on the issue of the acceleration of the lease payments. One of the arguments that was put when the committee agreed to enter into the lease for the present premises…. And it's shared by a number of independent officers. It was, I think, a LEED gold building, and the argument was that because it was LEED gold, operating expenses would not rise as rapidly. Given a 5 percent annual increase…. And I appreciate that it's other elements as well, including taxes. But where's the dividend from having a LEED gold building? That's my question, I guess.

S. Lowe: It's a fair question. What I can do is this. I can provide to the committee probably a more detailed breakdown on the increases that come for that. You're absolutely correct. It's something that I've come into. This building is at the start of my appointment. One would expect with a LEED gold building that that would be efficient, energy-wise.

But I think that perhaps what would assist the committee is if I could get a breakdown over the last two years of the increases in the specific areas. I'm not certain what proportion is that of taxes, which I think is probably a good share of that increase. I guess when there are hikes in natural gas prices and so forth, and electrical hikes, we're at the whim of those commissions that approve those, and we have to pay those.

There are other officers who share the same premises who are coming forward, I believe, next week. Rather than endeavour to get that to us, perhaps Ms. Forrester could just bring that. I think the Information and Privacy Commissioner is coming next week, and the Ombudsperson — so same premise, the same question.

J. Slater: What percentage of your service that you provide is actually outside the city of Vancouver when you're going to do investigations?

S. Lowe: The nature of our work is that we look at police agencies that…. They do the investigations. So what we do is, contemporaneously, as these investigations unfold, we look at the investigative plan, what evidence they intend to gather, what witnesses they intend to interview. We oversee the investigative steps. We look for deficiencies in the manner in which the investigation takes place.

J. Slater: How many times do you deal with the city of Victoria or Saanich or RCMP and all the rest of it?

S. Lowe: We don't deal with any of the RCMP. All the municipal agencies, which amount to 14…. We have Abbotsford; Central Saanich; Delta; Nelson, which falls under our jurisdiction; New Westminster; Oak Bay; Port Moody; Saanich; transit, GVTAPS; St'at'imc, the only First Nations; Victoria; and West Vancouver.

J. Slater: So when you talk about doing training for officers and staff, they come from those other agencies, come into your facility, get trained and then go back to their communities.

S. Lowe: We go there. We go to a central point. For example, Delta has been very helpful on the Lower Mainland. We hold them all at a facility that the Delta police department has. And we've held it once on the Island, here in our facilities at the OPCC. The training's taken place four times — three times off the Island and one time here.
[ Page 2489 ]

J. Slater: That's on a fairly regular basis, or it depends on staffing levels and budget and all the rest of it…?

S. Lowe: Yes. We're starting with the professional standards, but we want to move to the road sergeants, for those that come into these incidents shortly after they occur to apply informal resolution so that it doesn't even engage a complaint. Through being able to explain better, speak to the people and avoid…. It's really complaint avoidance.

As far as other training, we also train discipline authorities, which are normally either the chiefs, deputy chiefs or officers that sit through the disciplinary process as hearing officers or decision-makers. We've hosted one training session with the Justice Institute of British Columbia last year to assist them with the act, because it increased their role in a quasi-judicial manner substantially. They've had to become more familiar with legal concepts, legal issues and principles.

D. Hayer: Yes, my final question is on the RCMP. Remember you had signed a memo of understanding and…? Is the IIO doing some investigation?

The other one…. You were saying you might have to do some extra work which falls outside IIO's mandate. You said you don't need any extra funding. Will you have any estimate how many cases per year you might have to look at for that?

S. Lowe: What we've done is this. We've spoken with the director of police services, and we've advised him that currently we have — I think most recently — about 16 left that were from that lag. The question remains whether we can still fill a gap for both municipal police departments and the RCMP in terms of other matters that don't involve serious harm or death.

Now, I believe that we can to a limited extent because of the size of our office. Including everyone, we're only an office of 17, and those in decision-making positions are 14. Currently we're able to help out. Let me put it this way: we're not looking for new work with the RCMP at all, but we're there to try to provide a service and assist.

There may come a time, if those discussions…. If we're approached by government and we can raise and discuss with government those issues, perhaps we can assist some more. But it will always be in a very small capacity, given the size of our office. So I don't anticipate….

As I was speaking with my deputy, I can't imagine doing more than perhaps a dozen a year, because they are very labour-intensive. And many of those require that I do the complete review, which really does take up a lot of my time from my other duties. So I'll leave that for government. If we can fill a void…. But again, I'm not…. There are a lot of logistics that could come from that that I think we're…. It's speculative at this point.

D. Horne (Chair): Stan, thank you for your presentation and for being with us today. That brings us to the conclusion, so I thank you.

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Chair:	* Douglas Horne (Coquitlam–Burke Mountain BC Liberal)
Deputy Chair:	* Mable Elmore (Vancouver-Kensington NDP)
Members:	* Gary Coons (North Coast NDP)
	* Marc Dalton (Maple Ridge–Mission BC Liberal)
	* Dave S. Hayer (Surrey-Tynehead BC Liberal)
	John Les (Chilliwack BC Liberal)
	* Pat Pimm (Peace River North BC Liberal)
	* Bruce Ralston (Surrey-Whalley NDP)
	* Bill Routley (Cowichan Valley NDP)
	* John Slater (Boundary-Similkameen BC Liberal)
	* denotes member present
Clerk:	Kate Ryan-Lloyd
Committee Staff:	Josie Schofield (Manager, Committee Research Services)
	Byron Plant (Committee Research Analyst)

Witnesses:	Joel Adams (Office of the Auditor General)
	John Doyle (Auditor General)
	Cynthia Dyck (Office of the Police Complaint Commissioner)
	Shelley Forrester (Office of the Ombudsperson)
	Paul Fraser (Conflict of Interest Commissioner)
	Russ Jones (Office of the Auditor General)
	Marc LeFebvre (Office of the Auditor General)
	Stan Lowe (Police Complaint Commissioner)
	Linda Pink (Office of the Conflict of Interest Commissioner)
	Fiona Spencer (Merit Commissioner)
	Daphne Thompson (Office of the Conflict of Interest Commissioner)
	Rollie Woods (Deputy Police Complaint Commissioner)

REPORT OF PROCEEDINGS (Hansard)

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