Public Accounts — Issue No. 8 — Wednesday, April 9, 2014 (HTML)

Present: Bruce Ralston, MLA (Chair); Sam Sullivan, MLA (Deputy Chair); Kathy Corrigan, MLA; Marc Dalton, MLA; David Eby, MLA; George Heyman, MLA; Vicki Huntington, MLA; Greg Kyllo, MLA; Norm Letnick, MLA; Mike Morris, MLA; Linda Reimer, MLA; Selina Robinson, MLA; Shane Simpson, MLA; Laurie Throness, MLA

Others Present: Malcolm Gaston, Deputy Auditor General; Stuart Newton, Comptroller General

2. The following witness appeared before the Committee and answered questions regarding the Public Documents Committee Retention and Disposal Applications.

3. Resolved, that having examined the retention and disposal applications made by the Public Documents Committee, the Select Standing Committee on Public Accounts recommends Resolutions 1-4 to the Legislative Assembly, pursuant to section 3 of the Document Disposal Act. (Sam Sullivan, MLA)

4. Resolved, that the Committee approve and adopt the report on the retention and disposal of documents as amended today and further, pursuant to section 3 of the Document Disposal Act, the Committee authorize the Chair present the report to the Legislative Assembly at the earliest available opportunity. (Kathy Corrigan, MLA)

6. The following witnesses appeared before the Committee and answered questions relating to the Auditor General’s Report University Board Governance Examinations (February 2014).

• Claire Avison, Assistant Deputy Minister, Sector Strategy and Quality Assurance, Ministry of Advanced Education

• Bobbi Plecas, Assistant Deputy Minister, Institutions and Program, Ministry of Advanced Education

• Joe Thompson, Executive Financial Officer and Acting Assistant Deputy Minister, Ministry of Advanced Education

8. Resolved, that the Committee authorize the Chair and Deputy Chair to work with committee staff to finalize any minor editorial changes to the draft report titled Summary of Activities 2013-14, and then to approve and adopt the report on behalf of the Committee, and further that the Chair present the approved report to the Legislative Assembly at the earliest opportunity. (David Eby, MLA)

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

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
PUBLIC ACCOUNTS


CONTENTS
Page
Records Retention and Disposal	293
G. Mitchell
Auditor General Report: University Board Governance Examinations	297
M. Gaston
T. Anderson
B. Plecas
J. Shackell
J. Thompson
C. Avison
Draft Committee Report	309

B. Ralston (Chair): Good morning. I'd like to get the meeting underway, if I could. We have an agenda before us. Unless there are any suggested changes to the agenda, I'll take the agenda as approved. Any suggestions or amendments to the agenda?

Our first item of business is Mr. Mitchell, chair of the Public Documents Committee and the provincial archivist. Despite our bon voyage last time, he's back again. We'll see if we can outdo ourselves in terms of a new bon voyage, perhaps.

I'll turn it over to Mr. Mitchell. He has a report on the deferred item from last time and some new recommendations.

G. Mitchell: As you are aware, at the last meeting we had a discussion around the Riverview Hospital historical collection, and the committee had posed several questions. My colleagues in the line ministries have replied to your committee as of last week. So if there are any further issues relating to that….

With regards to the other four, we have before the committee, upon the recommendation of the Public Documents Committee, administrative records, which are fundamentally housekeeping records, of every government agency. We have retention and disposal schedules relating to general administration and the IT records of the ministry. More importantly is inclusion No. 2, which is relating to human resources personnel records for agencies outside of the executive government.

This is particularly important, since about five years ago the Public Service Agency changed some of the requirements around records-keeping and centralized records relating to the women and men of our public service. That change affected the retention period of those records.

But it's been unenforceable within the agencies — Crown corporations, etc. — that fall under the Document Disposal Act. Of course, these records relate to their employees — women and men that work directly for them and are hired directly by them, who fall under the Public Service Act but not necessarily under the executive government.

This schedule will allow them to process their personnel records and keep them and provide security to them in a manner that conforms with the requirements of both the Document Disposal Act and, of course, recommendation of the parliament.

The third resolution relates specifically to the central records-keeping unit, the government records services in Technology, Innovation and Citizens' Services. Now, with those changes, of course and the centralization of records-keeping and FOI services within the executive government, that whole area had to be reviewed. Our colleagues have done that, and they've come up with a streamlined and far more efficient schedule relating to corporate records-keeping from the corporate agency.

The last one is records relating to student loan contracts governed by the Ministry of Finance. This, too, was streamlined after a review of the original schedule that was put in.

The committee concurred that all of them are streamlined and are far more efficient for the records-keepers themselves, and it clarified some outstanding issues for the records-creators within the government offices.

Our committee recommends that Public Accounts recommend and pass these on to parliament for their final resolution.

B. Ralston (Chair): Yes, including the item that was held over from last time, the Riverview Hospital question.

D. Eby: My question is in relation to the additional notes we were provided on the Riverview Hospital historical collection. We were advised that the patient images that are recommended for destruction are 16-millimetre negatives with no patient identifiers. Under the motion we're being asked to approve, I read that what is proposed is: "Intake photographs of patients will be destroyed and not offered for other disposition."

It makes sense to me that if you've got a box of negatives and you don't know who is in the pictures and nobody could ever figure out who they are, that would be a record of dubious value to anyone. The motion we're being asked to approve says that intake photographs of patients will be destroyed, yet the notes say there are intake photographs of patients in their individual files, which would be very useful to historians and family members and so on. It's that gap between what we're being asked to approve in the motion and what's in the notes.

I'm not sure if I'm being totally clear here, Mr. Chair, for the witness. But what I would like to see is the motion to reflect that what we're approving for destruction is simply what is described to us as a box of unlabelled negatives versus all intake photographs of patients, which I see here on page….
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D. Eby: In the notes I'm referring to, they are titled: "Notes regarding the Riverview Hospital historical collection prepared by Mary McIntosh." I'm looking at the second-last page, which says: "In response to question 3." Then, in terms of the resolution, I'm looking at…

D. Eby: …the "Riverview Hospital historical collection," the second page of that resolution, marked "-20." Under "DE": "Intake photographs of patients will be destroyed and not offered for other disposition."

Mr. Chair, I've tried to make myself as clear as I can. I don't know if the witness is following where I'm headed there.

B. Ralston (Chair): Just to clarify, then, there's an extended draft record schedule that refers to the Riverview historical collection, and on page 2, you're referring to…. It's the top of the page: "Riverview Historical Collection Records for Destruction" then the reference is, in brackets, to photographs. Is that what you're…?

D. Eby: Yes, that's right. The brackets are: "Includes photographs taken of new patients upon intake to complement their patient care file."

G. Mitchell: Well, Chair, the way the destruction would be…. Our colleagues have looked at the files in their totality as well as the images and found that…. They felt there was not enough contextual information to provide long-term archival value or historical research value across that spectrum of research.

I understand what the member is saying — that there is a belief that individual families, if they found the patients, would be interested in the photographs for genealogical purposes.

B. Ralston (Chair): I was just discussing with the Clerk. I don't think it will be easy to craft a resolution here before the committee. What I'm going to suggest is perhaps that given the questions that have been raised, perhaps the Chair and the Deputy Chair…. We could meet with you and perhaps one of the researchers and see whether we can craft a resolution that would reflect some of the concerns, if they're supported, and bring a separate resolution back at a different time.

What I would suggest is that this resolution 5 of the group, being the last one, be simply deleted from our consideration today. We can deal with the others, assuming…. I don't see any questions on those just yet. Then we can perhaps….

I think it would be easier to resolve through a meeting rather than resolve it here at the committee at this time because there's a certain level of detail that I don't think is going to be easy to explore in this context.

If that's a suggestion that people are comfortable with, then perhaps we could entertain questions on the other proposed resolutions.

L. Throness: I just have one question. Are we talking about one box of photographs here? One box of negatives? Or are we talking like a stack of stuff?

G. Mitchell: Well, Chair, to be truthful, I think there is one box currently identified within that. But that's not to say that there wouldn't be others — the situation wouldn't be replicated in other boxes.

B. Ralston (Chair): The reference is to entry photographs for, I think, all people who were admitted, so that conceivably over the length of time that the institution has been in place could be a significant number of photographs.

V. Huntington: I agree with perhaps the way you're recommending we resolve it, and I wonder if I could ask another question regarding the notes. Or did you want to resolve this issue first?

V. Huntington: In the second paragraph under some context to the Riverview Hospital historical collection, I noticed bullet 2. It says that the records were collected by now-retired nursing staff. Was there no formal requirement for Riverview to maintain records and dispose of them properly before this issue came up — the transfer to Coquitlam?

G. Mitchell: Within British Columbia, the documents disposal act was passed in the second session of the 1936 parliament. It's had three significant amendments over that lifetime. Within the executive government, a formalized records management system began in 1982-83. Actually, the public service recognized that they had to begin managing their information like they managed all the other assets that they're accountable for.

Over the course of time from then till now, each ministry and agency has fulfilled its obligation by proposing schedules which identify the value of the record to the current creator and whether it has value over time to the corporate government and then, ultimately, for the society we serve.

Within that, British Columbia, even up to the present,
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has never had a public records legislation which would govern and direct public servants in creating, maintaining and making accessible the records under their purview.

That is by way of explaining. In the Riverview situation we have had significant issues relating to records-keeping prior to the mid-1980s, where often women and men of the public service, or other staff working under public service direction, would protect what they felt were historic records from destruction or, actually, just being left behind.

Now, these caches are coming up more and more as these individuals approach the end of their lifespan here. They want to make sure records are sent back into the system to be protected over time. That will continue probably for the next decade or so.

These records, most likely, would have been in that environment. When they were beginning to move buildings or shut down, they would just be left behind. So staff went and protected them, and now we're trying to further their long-term care by providing it to an institution where the local interests would be the greatest.

K. Corrigan: I think I'll wait till a further resolution. I was not sure whether we were asking on everything.

B. Ralston (Chair): There are five proposed resolutions. I'm suggesting the deletion of proposed resolution 5. Questions on the other four are in order, so go ahead.

K. Corrigan: Okay. I want to ask a general question about process since you're here, and unless we continue on again today, you're not going to be here again.

K. Corrigan: Okay. Recently I learned that something was described as transitory e-mails and were destroyed. I've been looking at the classification system and so on. I'm wondering if you could just give me a couple minutes about what the criteria would be, what would be acceptable to be called transitory and what would not be transitory — so what can be destroyed and what can't. Where would I find the rules for that?

G. Mitchell: The corporate records-keeping function is governed by my colleagues at the government records services. They would be able to update you on the current scheduling and also the current corporate policy relating to that.

So then to talk about the general. Under the Interpretation Act of British Columbia, a record is defined as information in any format or media. It does not differentiate between the value that information holds or even the format the information is held on. Under the Documents Disposal Act, all information created by the executive government has to be scheduled.

Early on in the formulation of the program it was decided to differentiate between records that have short-term value but are valueless to the ongoing administration of the government — i.e., to program, where it's created. For instance, an e-mail of a public servant inviting colleagues for a coffee or a lunch would be valued until the moment of the event, upon which time it is valueless, and therefore, it can be destroyed.

We call these records transitory to give them a sense that they have value for a limited period of time and then are valueless to the ongoing government. The little Post-it Notes that we put on little things to make corrections and everything should be, in the normal course of action, once the correction is made on the document, not to have any value. Just chatter back and forth — banter between colleagues in e-mail or even on telephone calls — would be transitory until post-event.

Now, the administration of that is solely upon each individual public servant — the women and men within the public service. They are informed that records that document or lead to decision-making, either a policy decision or a program change, have value and should be kept within the program files. Records that document adherence to or violation of policy or that lead to that event have value irrespective of the format.

To be candid, in the beginning, in the late 1980s, many people would write "Approved" on a Post-it Note for a policy statement. They'd simply write on the Post-it Note "Approved" and leave it like that. People would say Post-it Notes automatically are transitory, because the glue falls off after about five years, and they're all at the bottom of the filing box. So what we inform people is that what you have to do is photocopy that page with the "Approved" sticker on it, because that is a policy decision.

We've fundamentally moved away from that. Now you see more structure around that type of thing, which is good for all of the service. The most difficult thing about transitory: it's not format-based. It's just a transmittal of information asking people to do something or to make an error correction. But it does not have long-term value or doesn't substantiate a process that would change a program or a policy within the service.

Okay. I'm going to give you a specific example. I'm interested in the adherence to or violation of policy. An e-mail was sent on private e-mail from a minister — it was acknowledged publicly — when it should have been in the public e-mail system. The minister said publicly that she would return the e-mail, which had some damning
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political information attached to it, to the public system. Then an FOI request was done shortly thereafter — sometime after; I'm not sure exactly when the request was done — and it came back as: "Deleted. It's a transitory e-mail."

I don't want to put you in a position of passing judgment, but would this, at first blush, sound like something that was transitory, in my description of it?

B. Ralston (Chair): I don't think Mr. Mitchell is in a position to answer this specific question, but in broad policy terms.

G. Mitchell: A couple of things that I think have to be made aware, relating…. The records-keeping schedules and policies apply to all people appointed within the public service — i.e., the executive government of the province. That will include ministers of the Crown.

As you are aware, under our system, ministers are also members of our provincial parliament. The difficult thing becomes, of course, for the system, to be aware of the duality of that role. As a member of the assembly, you're covered by privilege, and as a minister of the Crown, of course, you're covered by the rules that apply to the executive government. Whenever something like this would come up, I would caution all parties to establish which vantage point the individual is speaking from and then run it from that lens.

To be candid, it's a delicate issue for people applying records-scheduling in those offices. As you said, there must be a strict awareness of the duality of the role of the individual — to all of the women and men that work in that office. That's the comment I would make. That's where I would first go, actually — to talk to them about how the office is structured and whether or not they are aware of their obligations both to parliament and under the Public Service Act. Then it's easier to find where the person was standing from.

G. Heyman: I would like to just explore the clarification of the transitory nature of transitory e-mails a bit further with the provincial archivist. I've listened carefully to your last response. Of course, in terms of whether or not something is required to be disclosed in terms of cabinet confidentiality, that's covered by one set of actions.

There are a number of situations where there appears to be either a grey area or a difference of opinion about the appropriate use of the term "transitory" to designate e-mails or briefing documents or anything else as satisfactory for destruction or deletion. The provincial commissioner for freedom of information and protection of privacy has in fact commented that there's been a significant increase in the use of the designation "transitory." I want to explore the example you gave in terms of short-term value.

If a meeting was being scheduled and the administrative details about who was coming to the meeting, where it would be held, how people would get there, what the setup of the meeting should look like…. That would clearly be transitory. But documents being provided as background to the meeting would, I’m thinking, not be transitory following the meeting if they had any bearing whatsoever on decision-making or policies or intergovernmental relations, simply because the meeting had already occurred.

G. Mitchell: If I was looking at a case like that, I would probably…. Depending on the nature of the meeting and the outcome of it, I may argue that the pre-meeting information is not transitory because it establishes a process of decision-making — who was invited, who was coming, etc.

In part, transitory…. In records-keeping within the provincial government, the rules are set out by the corporate records services — government records services people. Women and men are trained who manage the records offices, and each individual public servant is informed of these rules of transitory recordkeeping. Each of them is required, then, to use their professional judgment as to whether or not the record has short-term value or whether it is part of a longer process that leads to decision-making or changes in program or in benefits given to our citizens.

As in all systems, there is always a level of greyness — true. I think that when we talk about this in general parlance, it would be a mistake to look at the physical format of the record to make the decision on transitory or not without looking at the context of the meeting. I always advise people to do that.

G. Heyman: Just a very brief follow-up. Is there, in your opinion, sufficient clarity in either law or regulation to settle any reasonable dispute about whether an e-mail or communication is, in fact, genuinely transitory or not genuinely transitory? Or is there a large grey area that legislators may want to explore someday, if we were moved to do so?

M. Morris: I think this is off topic. It's not on the agenda, this discussion on transitory records and whatnot. I think we need to get back on topic here and talk about the resolutions that are before us.

B. Ralston (Chair): Thank you for that observation. I don't agree. The provincial archivist is here. There are
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resolutions that we're talking about on recordkeeping within government, and these are broad questions that arise out of the nature of what records should be preserved and what shouldn't be. These are basic principles that apply to recordkeeping and what is being kept and what is being deleted. So I don't agree. But I think, in any event, we've exhausted the questions. So I think that's where we'll leave it.

Seeing no further questions, what I have is…. I'm going to ask the Clerk to read the proposed draft resolution. What I'm suggesting is that proposed resolution 5 relating to the Riverview records be taken out of the motion, and we'll deal with the first four.

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): If the committee is ready to consider resolutions 1 through 4 that have been presented today, we have prepared two draft motions to facilitate your adoption of those four resolutions. Subsequent to that, if it is the will of the committee, there is a draft report on each member's desk which highlights those resolutions that had been agreed to at your previous meeting as well as the five that were put forward today.

I'd propose, then, that on that draft report the final resolution be amended to be deleted from that draft so that the resolutions that have been agreed to by the committee can be appropriately reported out to the Legislature. Then, pursuant to the provisions of the Documents Disposal Act, the documents can then be suitably disposed of, pursuant to your wishes.

With respect, I have provided the Deputy Chair with a copy of the two motions, and I'd be pleased to provide members of the opposition as well. I'll read it into the record, though, for clarity. The first draft motion is: Having examined the retention and disposal applications made by the Public Documents Committee, the Select Standing Committee on Public Accounts recommends resolutions 1 to 4 to the Legislative Assembly, pursuant to section 3 of the Documents Disposal Act.

Is there a mover and a seconder, just for the minutes? Okay, so it's moved and seconded. Any further discussion on resolutions 1 to 4? No further discussion.

K. Ryan-Lloyd (Clerk of Committees): The second proposed motion would be as follows: that the committee approve and adopt the report on the retention and disposal of documents as amended today — as noted earlier, the final resolution would be deleted — and further, pursuant to section 3 of the Public Documents Disposal Act, that the committee authorize the Chair to present the report to the Legislative Assembly at the earliest available opportunity.

B. Ralston (Chair): Just so we're clear, there is a draft report. In order for these to be acted upon, it has to be formally presented to the Legislature. If this is passed, then I would present that to the Legislature sometime before the House rises — probably sometime after we come back, two weeks from now, or maybe even as early as Thursday. I'm not sure if we can get that done.

B. Ralston (Chair): Okay, thanks very much, Mr. Mitchell. The Clerk will be in touch with you. The Deputy Chair and I probably will meet with you and maybe Mary McIntosh. We can, perhaps, sort that issue out.

Moving on, then, we'll just take a brief recess to set up for the consideration of the report University Board Governance Examinations, a report dating from this February.

B. Ralston (Chair): We're going to be in consideration of the Auditor General report University Board Governance Examinations, a report dating from February 2014.

With us are Malcolm Gaston, who is the Deputy Auditor General, and Tara Anderson, the director of performance audit.

First of all, the Auditor General, Russ Jones, has asked that I pass on his regrets for the fact that he is unable to attend today's session.

This examination is part of a stream of work that our office has undertaken in the area of board governance. In 2013 we examined school districts, and in 2012 we reviewed a range of Crown agencies.

This year we focused on universities — specifically, Capilano University, Thompson Rivers University and the University of Victoria. We carried out this examination to assess how well university board structures and activities are designed and how effectively they are operating. It also included an assessment of the Ministry of
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Advanced Education's oversight for board governance and accountability.

Universities make an important social and economic contribution to our province and local communities. Good governance is key to ensuring that public sector agencies such as universities achieve their objectives. Our report identified good governance practices at each of the universities, as well as areas for improvement.

As with our previous board governance examinations, our recommendations have application beyond the specific entities reviewed here. They are relevant to all university boards of governors and, to some extent, other Crown agencies in B.C.

With me today from the office is Tara Anderson, director and engagement leader for this examination. I will now turn it over to Tara to provide you with a brief overview of the report. Then we can take any questions you have.

University Board Governance Examinations is our third report in a series on board governance. This report focuses on board governance at universities, specifically Capilano University, Thompson Rivers University and the University of Victoria. It also examines the Ministry of Advanced Education in providing support for university governance and accountability.

Before we look at the results of this report, it's important to take a step back and briefly talk about governance: what is it, and why is it important? Governance refers to the structures and processes that direct, control and hold an organization to account. For most organizations, the governing body is a board of directors or, in the case of universities, board of governors.

The board of directors is comprised of people elected or appointed to provide organizational oversight. In the public sector, the Legislature, the responsible minister, government ministries, central government agencies and public stakeholders also play a role in governance.

Whether in the private or public sector, good governance is achieved when an organization's structures, processes and actions enable it to deliver goods, services or programs effectively and efficiently, and meet the requirements of the law, regulations, published standards, and community expectations of accountability and openness.

In the case of universities, good governance is necessary to ensure that universities deliver on their social and economic development objectives, specifically that they provide quality education and research relevant to the needs of students, local communities and the provincial economy.

Let's look at university governance in B.C. As set out in the University Act, B.C. universities are governed by two separate bodies — the senate and the board of governors. The senate is responsible for academic governance, including establishing admission and program prerequisites, assisting with university budget preparation, review and recommendation of courses and programs, granting degrees, and awarding scholarships and fellowships.

The board of governors' responsibilities include the power to make rules for the conduct of its business, and the management, administration and control of the property, revenue, business and affairs of the university. Under this bicameral structure, these bodies have responsibilities to each other, and the senate operates in an autonomous manner from government, due to its academic responsibilities.

The board of governors consists of 15 members with a mix of appointed, elected and ex officio members. This includes the university president and chancellor, two faculty members elected by faculty, two students elected by students, one employee elected by employees and eight members appointed by the B.C. government.

Our office has reviewed public sector board governance in the past. As mentioned, in 2012 we reviewed a mix of Crown agencies, and in 2013 we reviewed three school district boards. In both reports we identified areas of good practice and areas for improvement. As mentioned earlier, this year we selected Capilano University, Thompson Rivers University and the University of Victoria. All three universities were assessed using the same three objectives used in our prior board governance reports. These objectives are based on B.C. governance Best Practice Guidelines and other good-practice guidance.

The first objective, board structure, examined whether a board composition, size, term length and appointment process result in a board with members that have the capacity to fulfil their governance roles. The second objective, board governance practices, examined whether boards are taking the necessary steps to fulfil their roles and responsibilities, thereby providing effective governance for the university. The third objective, government's performance expectations, examined whether government made its performance expectations of the universities clear, monitors for compliance and works collaboratively with the universities to resolve any issues.

Our examinations found examples of good governance practices on the part of all three university boards. Two areas of good practice in particular were noted at each of the three institutions. These included oversight of risk management — all three university boards are overseeing a formal risk identification and mitigation process — and board evaluations. All three university boards conduct annual self-evaluations of board processes and board members. Overall, it was encouraging to observe that board members were engaged and dedicated to their public service role.

There was one shared key finding. University accountability reports, known as institutional accountability
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plans and reports, outlined the universities' goals, objectives, performance measures and annual performance. They are key documents that the ministry uses to assess whether the institutions are providing quality education relevant to student needs and the needs of the labour market.

Boards at each of the three universities examined did not review and approve these reports prior to their submission to the ministry for publication. Annual review and approval would ensure that boards are aware of and responsive to their institution's performance in key areas and whether the institution has met its public accountability obligations.

A number of additional areas for improvement were identified at Capilano University, including board member succession and continuity. Good-practice guidelines for governing boards state that appointments to boards should be staggered to achieve balance between continuity and fresh perspective. We found that in 2013 four of the board's 15 members, or four of the eight appointed members, either completed their terms or were not reappointed by government, impacting the board's continuity of knowledge and experience. This could again become a problem if the new appointees go on to serve full terms.

Another area for improvement was regarding roles and responsibilities. Board members elected by faculty, staff and students must act in the best interests of the university, as per legislation, while still representing the voice of their constituents. This means achieving what's called collective responsibility, where all board members support decisions of the board. That can be a challenge for university boards.

At Capilano University we found that, on occasion, elected members have publicly spoken against decisions of the board on contentious issues. We heard from members that the board would benefit from a better understanding of the roles, responsibilities and expectations of elected members in terms of balancing their responsibilities both as board members and as representatives of their respective constituencies. It is important that boards achieve collective responsibility. Otherwise, decisions can be undermined and the board's authority weakened.

Another area for improvement was monitoring of a strategic plan. While goals and strategies for the university are published on the university's website, we found that the board is not monitoring the university's progress towards the achievement of these goals. It is important for boards to fulfil this oversight function to hold management accountable for achieving the goals and strategies set out by the university.

Another area of improvement was the president's evaluation. We expected to find that the board has in place an annual performance evaluation of the president. However, we found that the board and president have not established performance expectations or assessed the performance of the president. Annual assessment of the president's performance is an important practice that supports the president's motivation and development as well as the performance of the university in achieving its strategic goals.

As mentioned, this examination also included the role of the Ministry of Advanced Education in providing support for university governance and accountability. We found both examples of good practice and areas for improvement.

In terms of the annual performance expectation review, we looked for evidence that the ministry annually reviews the government letters of expectation issued to universities to ensure that they stipulate the current level of performance expected of a post-secondary institution. We found that the ministry has an annual process in place to ensure that the letters reflect current priorities before submission to the institutions for consultation.

We also looked for evidence that the ministry annually consults with post-secondary institutions on annual performance expectations, and we found that the ministry does do so through various mechanisms, including the performance measures working group, which has institutional membership and university feedback on draft expectation letters.

In terms of an area for improvement, we found that the ministry communicates its performance expectations to institutions. Consultation and communication have occurred, though primarily between the ministry and the university president, who, in turn, is expected to provide and explain the information to the board.

We found that some board members would like to see more direct communication between the ministry and the board to reduce potential miscommunication and misunderstandings.

The audit report contains eight recommendations. We appreciate that they're very tightly displayed on this slide. However, we wanted to ensure that they were easily accessible on a single slide. I'm not going to read them out.

In future the office intends to continue addressing the area of governance in our future work, including governance of Crown agencies, and we will follow up with each of the universities and the ministry in one year to learn how they have addressed the recommendations in this report.

We would like to thank the three universities and the Ministry of Advanced Education for their cooperation and assistance with this work. We appreciate their professionalism and the services that they provide to the citizens of B.C.

B. Ralston (Chair): Thanks very much. We'll now turn to representatives of the Ministry of Advanced Education and some of the institutions concerned. So if we could
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just take a quick break to reshuffle there.

I have from the Ministry of Advanced Education Claire Avison, assistant deputy minister sector strategy and quality assurance; Bobbi Plecas, assistant deputy minister, institutions and programs; Kris Bulcroft, the president of Capilano University; Joe Thompson, who is the executive financial officer and acting assistant deputy minister in the Ministry of Advanced Education; and Jane Shackell, who is the chair of the board of governors of Capilano University.

B. Plecas: Thank you to the committee, and thank you, Chair, for introducing us. We have with us, from Capilano University, Jane Shackell, the chair of the board of governors, and Kris Bulcroft, the president of the institution. We thank them for coming over from Vancouver to be here to answer any of the specific questions you might have about their institution.

Representing the ministry, there are the three ADMs: Joe Thompson, the executive financial officer; Claire Avison, who's responsible for board governance; and I'm Bobbi Plecas. I have responsibility for programs and institutions.

To begin, the ministry appreciates the work undertaken by the Office of the Auditor General to examine governance at three British Columbia universities. The examination helps the ministry and the universities to continually improve our practice.

The institutions that were selected in this case include a long-established research university at UVic; a unique and innovative teaching university that specializes in open learning and is less than ten years old, Thompson Rivers; and one of our newest universities, Capilano, established in 2008, that's growing and maturing from its original roots as a college into one of our special teaching universities.

The OAG report contains a total of eight recommendations, some of which we've walked through, six of which are distinct recommendations to be reviewed. Work is underway to ensure each of the recommendations is adopted, and we're gratified to see the OAG has also netted areas of strength in university board governance, particularly in areas of oversight for risk management and board self-evaluation.

In response to earlier Auditor General board governance reviews, governments and universities have adopted previous recommendations with respect to board structure and composition. These include the competency matrices and succession plans, which have been helpful in the appointment process.

These tools have made university boards, which already attract strong and well-qualified candidates, more readily able to ensure board members collectively possess adequate skills and experience to fulfil governance responsibilities. The ministry is being proactive in communications with board chairs and the board resourcing and development office to ensure appointments are made in a timely way.

As noted by the Auditor General, there were concerns about succession and continuity at only one of the universities examined. At times it is difficult to ensure optimum succession of board members. Sometimes there are factors that are beyond government's control that affect turnover on the board.

That said, it's important that the ministry, board resourcing and development office and board chairs continue to work closely together to identify succession plans and, wherever possible, avoid significant turnovers of members at one time.

The second objective of the report was to examine the board's fulfilment of its roles and responsibilities. Again, the universities examined exhibited strengths in this regard.

As noted by the Auditor General, university boards are functioning professionally with members attending meetings and being well prepared to participate in discussions. Boards are aware of risk factors facing the organization, are monitoring the performance of the president and are evaluating their own performance in fulfilling government's responsibilities.

With the exception of UBC, boards are comprised of eight members appointed by the Lieutenant-Governor-in-Council. Five of them are elected from among employees, faculty members and students. Serving in an ex officio capacity are the president and the chancellor.

Amendments to the post-secondary legislation in 2012 added the express requirement that the members of the board act in the best interest of the university. To this end, it is critical that faculty, staff and students who serve on the board appropriately recognize their role as a board member and ensure that their actions and decisions as a board member are at all times made from the perspective of the institution as a whole. This has likely required a shift in thinking and approach for some elected board members who may not have understood their role in those terms previously.

The report recommends that Capilano University ensure its members understand the roles and responsibilities of elected members. The ministry and government strongly support this recommendation, and Capilano has identified activities already underway, including a written policy of board solidarity that supports this recommendation.

Most of the substantive recommendations of the Auditor General report relate to objective 3, performance monitoring.

Government's role in documenting boards' performances, expectations and accountabilities and reviewing the universities' corporate plans and reports for alignment with government expectations and guidelines is
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critical to the success of boards. It was recommended that all three university boards review and approve their respective institutional accountability plans and reports prior to submission to the ministry.

This report has served to highlight for us and the ministry that this requirement was being treated as an administrative task, to be handled by the president rather than by the board itself. The ministry has already acted on this recommendation by expressly including in the 2014-15 government letters of expectation the requirement for the board to review and approve these key accountability reports prior to their submission to the ministry.

The ministry is also working closely with the board of Capilano to ensure that it improves monitoring of progress towards its strategic plan objectives and that the board establishes and assesses performance expectations for the president. These are critical tasks for the board to perform. Capilano has put in place a policy to evaluate their annual priorities and expectations and has a process now and a plan for ensuring full board participation in a formal evaluation of their president.

The ministry has been clear in communicating its performance expectations for boards within the government letter of expectation, as the Office of the Auditor General report identifies, but communications between the universities and the ministry were primarily with the university president, who as CEO would provide and explain the information to the board. We understand that some board members would like more direct communication between the ministry and the board.

The report notes that the ministry has a thorough and comprehensive approach that includes substantial institutional involvement in the creation of the government letters of expectation, and consistent with the recommendation, beginning in '14-15 these government letters of expectation are now being sent to the board chairs. As well, other kinds of communication from the ministry, like core review documents, are also being sent to board chairs.

In summary, in the ministry's response to the report there is a commitment on the part of the ministry — and we believe on the universities — for continuous improvement. The changes to the government letters of expectation is one example of that. The ministry has discussed the recommendations pertaining to Capilano University with its board chair, and we will work to ensure that these specific recommendations continue to be addressed.

In response to the Auditor General's report on Crown agency governance, boards throughout the post-secondary sector were asked to adopt the practices recommended to UNBC and Camosun College.

Upon receipt of this report, the minister has again requested that all of the post-secondary institutions review and adopt the governance practices highlighted in the report. These practices will continue to be of assistance in maintaining high-quality governance.

The ministry appreciates the work conducted by the Office of the Auditor General and the opportunities it provides. We're committed to working with all of the universities as well as our colleges and institutes to implement good practices. There are many examples of good governance throughout our post-secondary system, and British Columbia's high-performing post-secondary system and the ministry look forward to continuing to work with post-secondary institutions to continue to build on our success.

B. Ralston (Chair): Thank you very much. I'll turn it over to the members for questions.

K. Corrigan: I appreciate that representation from Capilano University is here, because that is where…. I have a couple of questions. I'll either do them both or do the second one later.

I was interested in the comments in recommendation No. 2 with regard to Capilano University. I like the response from the university, particularly this sentence: "Both appointed and elected members of the board provide a wealth of perspectives and professional backgrounds that lead to mutual understanding and bigger-picture thinking about the university."

I'm pleased to hear about that approach. It's respecting the fact that it's good to have different voices around the table. I wanted to ask a couple of questions about this change in policy and contentious issues — that it can be difficult to have a collective voice and to speak with one voice. I guess I'd like just a little more information from the representatives of Capilano University on where the difficulties are and also offer a little bit of….

I guess I'm a bit concerned about the suggestion that when you have diverse voices around the table, which there should be, it's not appropriate to have a difference of opinion when you're speaking to the public. A specific question that I have is: are those board meetings public? Is the suggestion that because they're public, a difference of opinion cannot be expressed or that there's concern about that? Maybe a little more background on that. I think educational institutions, of all places, are concerned about freedom of speech and freedom of ideas, so it looks like a bit of a balancing act.

Thanks for the question, Ms. Corrigan. I agree with everything you've said. We do have a diversity of voices
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around our board table. Our meetings are all held in public. I'm going from memory here, but I believe they're required to be. They are, in any event.

You'll appreciate that most of our meetings don't draw a huge crowd, but we often do have faculty and staff and students at our board meetings. Those occasions are, generally, when we're discussing the budget. Our campus community is vitally interested in the decisions that are made around budget.

The elected members of our board — the staff representative, the two faculty representatives and the student representatives — have to fulfil a sort of additional layer of responsibility. I don't think any of them misunderstood their role before the legislative change that was referred to earlier. I think they are all very well aware that their obligation is to the best interests of the university as a whole.

I think there is a wide diversity of views as to what is in the best interests of the university on any particular question, and we welcome that. I expect it. I do not expect a student at our university to show up at a board meeting and vote in favour of a tuition increase. It's not their job, right? It's their responsibility to oppose that kind of thing, so I'm not troubled by that at all. I don't think anyone is.

The difficulty that we sometimes have is that once the board has made a decision, many people agree that the best thing for the institution after that point is for all board members to not necessarily publicly support the decision if they were in disagreement with it but to — rather than publicly express disagreement with it — explain the board's reasons for having made the decision or something like that.

That view is not shared by everyone universally. I don't know whether it's more widely shared in the governance community than it is by board members themselves. But that is, in any event, the policy that we've adopted. It was adopted after discussion with our governance committee and at the board. All members of the governance committee, which includes our two faculty representatives, agreed with it. It was unanimously approved by the board, and I don't foresee any problem with it.

There is often vigorous debate at our board about various issues, again, often relating to budget decisions. I think the elected members of the board operate during those debates under constraints that the rest of us don't have. Usually if we have an audience in the room, it is members of their constituency groups.

I think they do feel constrained in what they can say. But that is the role that they agreed to take on when they became elected, and I think they all contend with it and struggle with it. I think, in general, they resolve it very well. I fully support their right to speak freely. We try to support them in that. They do operate under some pressures that the rest of us don't have.

I'm going to ask a different question. I'm not sure whether some of my colleagues might want to follow up on that, but I appreciate that answer. This is a more general question about the fact that in all three institutions, the board had not consistently — or at all, it appears — reviewed the annual institutional accountability plan and report.

Given that, overall, I think this a pretty positive report that we have in front of us, I thought it was interesting that that had not been the case in any of the institutions. I'm wondering if either the Auditor General or a representative of the ministry would be interested in offering any comment on why that was.

Having been a school trustee for many years, those accountability reports…. Boy, we pored over them every year.

M. Gaston: My understanding is that the work that was conducted was really looking to see if that accountability mechanism had taken place.

I'm looking at my colleague here just to see…. Were there any particular reasons that we were provided during our work as to why that hadn't happened at each of these universities?

T. Anderson: It was often a matter of timing. It's generally during the summertime that it would need to be reviewed and approved before it goes to the ministry. Often the board members aren't available during the summertime.

Our suggestion was that they could schedule that into their calendars so that they could find ways around that. I'm also not sure if it was entirely clear, from the ministry's communication, that it needed to be the board as opposed to the president.

B. Plecas: I think we had suspected that…. We had believed it was happening. As I referenced in my speaking notes, there was some sense that the president was speaking on behalf of his board. Having had this issue raised, we agree that we think summer might have also been impacting that process.

Having raised this issue, we've now clarified this perspective. On a go-forward basis, it will be approved by the board in advance of coming to the ministry.

L. Throness: I want to go back to the disturbance on the board that we were talking about earlier. I just want to point out that we as MLAs on both sides of the House sometimes vote for things that some of our constituents might not like yet are in the best interests of the province. It really should be no different for a board as long as it is in the best interests of the university. That might include
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tuition increases at some point. There's no automatic rule that a student should oppose a tuition increase if it is in the best interest of the university to have it.

My question is: why was there a board protest at Capilano and not at other universities? Was there some kind of a different way that the student representatives were selected, a different process?

J. Shackell: I don't know the specific instance that you're referring to of public disagreement with a board decision. I think we are talking about faculty representatives as opposed to students.

J. Shackell: To my knowledge, the board doesn't participate in the process at all, but the faculty hold an election that is managed by the registrar's office. I believe that's similar across most institutions in the province, but I can't speak for any others.

The faculty representatives are elected. They serve for a term of three years. We're very fortunate in the representatives that have been sent to our board. They're excellent.

D. Eby: I'm not quite sure who can best answer this question. I read the report. I think it's an incredibly important area, and I really appreciate the Auditor General's work in this area. I think there's so much more to be done in terms of governance and accountability in universities and colleges. But I think, going back to first principles, if I were a board member…. And I'm very pleased that President Bulcroft is here, and Ms. Shackell, from Cap U because I think their university illustrates the challenge that I see for the whole system.

If I were a board member at Cap U and I knew that we had to deliver 5,450 full-time-equivalent students and that we had $37.7 million to do that, and that those were our objectives that we had to deliver to the province….

It leads to some very difficult decisions, and Cap U has been through those decisions. They cut very popular programs. They were popular with employers, they were popular with students, and they have faced the backlash from that. They're funded at two-thirds of what other schools are funded at. There's no clear explanation for why their funding is so different.

If I'm a board governor looking at this, I say: "Well, here's how we do it. We cut all of the programs that have…." And I'm not saying Cap did this, but this is what I would think: "We cut all the expensive programs, and we deliver programs that are cheaper to deliver, where we can put a stadium full of students in and then teach them with a TA."

This is the direction of the system, and I don't think that is a system that works. When I wonder about governance and metrics and a board member sitting down making a difficult budget decision, I wonder why the metric is full-time-equivalent students. I wonder why there are such radical differences in funding levels, and I wonder who is setting the mandate for these schools. "You are a regional university. You are a polytechnic university. This is what that means. You are a research university. This is what that means."

We've had huge turnover in the deputy minister position in the Ministry of Advanced Education and in the minister position of the Ministry of Education, and these schools are adrift. So when I read this report, I feel like, when we talk about staggering board member positions and so on, that those are really important issues, but we're also missing a really big picture.

It's, you know, I'm sitting here as a governor. What is our school supposed to do to serve the larger system? What are the metrics that we have to deliver to do that? Is the full-time-equivalent student model the best one to make sure that B.C.'s students are succeeding and graduating and doing programs that will employ them? Are those the metrics that we should be looking at instead of full-time-equivalent, which is meaningless? It could be a student from any province. It could be an international student. It could be a student in a stadium. It could be a student working with a very expensive piece of equipment.

I struggle with that larger governance question, and I wonder whether anyone has any thoughts on that.

J. Thompson: With respect to the funding question, I think what you're getting at is the operating dollars per FTE that we fund. I think it's important, in answering that question, to understand what's behind those numbers and what's behind the educational programming.

It's difficult to have an apples-to-apples comparison when we have one institution that may be delivering higher-cost programs like engineering and applied health versus arts or adult basic education, for example. I know some of the numbers have been thrown around in comparison to other institutions. You can't really do that. You need to go back and look at the funding in relation to the educational programs and the cost delivery around those programs, because it's significantly different, as you can appreciate, for allied health versus an arts program.

In terms of the measure of FTEs and looking at that, it's an important measure, but it's only one measure. We have a broader accountability framework that we would look at in terms of the number of graduates. We have student surveys that give us the information back from our students, around the quality of the education, etc. We have, I think, 15 various measures in our accountability framework, which really is an important piece. That doesn't focus just on the FTE, the funding by FTE, or the FTE delivery, if you will.

D. Eby: There are some very obvious metrics, with
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respect, that the ministry doesn't measure. They don't measure how B.C. students perform compared to students from other jurisdictions. They don't measure wait-lists for popular programs to see whether students are able to get into the programs that they desire. They don't measure people who drop out of programs. They only survey the graduates of programs, in terms of their experience within the university and college system. There are some metrics that are obvious metrics that are not being measured.

I think that the important issue and the focus for governance is to make rational to board members, make it obvious to them, why they are funded at the level that they are. I appreciate Mr. Thompson's comment, because I think it's the ideal: you are funded to provide these programs that cost this amount of money, and that's why you are getting this. So you can't cut fourth-year accounting, because you are funded to provide fourth-year accounting, even though it's cheaper to provide first-year English.

Could the ministry please, please release the formula that dictates this level of funding? I have asked personally, and I know that other people have asked for this formula. If governors had this formula, then they could say: "Oh, this is easy. We must deliver fourth-year accounting. We can't cut that and leave all the third-year accounting students in the dust and tell them to take it on line because we are expected to deliver this programming."

It seems very straightforward to me, and that formula would make life so much easier for everybody, because then they could come back to the ministry and say: "Hey, guess what? It costs this amount of money to deliver accounting and you don't give us enough money to do it, so now we have to renegotiate our letter of expectation." Is there a formula?

J. Thompson: We fund on what's called modified block basis. Since 2002-03 that's what the colleges were funded at. Since then Capilano has transitioned into a new university. That modified block is actually something that the sector, I think, appreciates, because what it does is it gives them the flexibility and the autonomy to make those decisions around their academic program within that funding envelope, if you will.

When I say modified block, I mean we do target certain funds for certain programs — primarily health, health-related programs and physicians. Then we have developmental programs where we target more the FTE side rather than the funding. It's a mechanism that we think provides flexibility to the institution and allows them to manage their financial affairs.

K. Corrigan: I was interested in recommendation 8: "We recommend that the Ministry of Advanced Education communicate directly with university boards to improve board members' understanding of performance expectations contained in the government letter of expectations." One of the reasons for that recommendation is in the paragraph above, where the finding of the audit was: "We found that some board members would like to see more direct communications between the ministry and the board to reduce potential miscommunication and misunderstandings."

It is also my understanding, from looking earlier in the document, that primarily it's expected that the ministry would communicate through the university president who, in turn, is expected to provide and explain the information to the board.

I'm wondering, from the board's perspective, whether that direct communication is now happening, whether that is an improvement and whether there’s any comment from the ministry as well.

K. Corrigan: Either one. Actually, both. I'd be interested in the board perspective as well as the ministry perspective.

B. Plecas: Given the seating arrangement, perhaps I'll start, and then we can play musical chairs.

As a result of the recommendation from the Auditor General, we've adopted a process whereby going forward and beginning with our 2014-15 government letter of expectation…. Those letters went from our minister to the board chairs. In response to that recommendation, we've changed our practice. That practice was at the conclusion of a series of interactions between the ministry and the institutions where we collaboratively worked on those letters of expectation. We work together at the CEO level and have good debate and interaction, and then the minister communicates directly to the board chair.

J. Shackell: I can confirm that I've received letters directly from the ministry, particularly the government letters of expectation, most recently, and before that, the letter concerning core review. I can also say, in Capilano's case, that the entire board has always received that information, in addition, directly from the president. So perhaps I don't share the concerns of some other board members about communication directly from the ministry. We've also had a number of meetings with the minister and senior staff on other occasions to talk about specific topics.

D. Eby: Just to pick up where I left off on the FTE funding. I'm sure that there are many in the sector that appreciate the block funding, because there is, frankly, a reduced level of accountability. You can cut a program that is expensive and replace it with a less expensive program and meet your FTE. And what we are seeing is that actually happening in the sector.
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UBC Okanagan yesterday announced cuts to accounting programs in fourth year. These students went through three years of an accounting program. Their fourth-year courses were cut, and they can't finish the program at the school. When students can't finish a four-year degree program that they sign up…. And this is not unique. When they cannot finish a four-year degree program in four years, that is not an acceptable situation. Yet, they will meet the FTE expectations.

When there is a declining number of British Columbia students on the UBC campus, despite a net increase in the number of students on the campus…. At our best university we have fewer B.C. students attending that school. That's not an acceptable situation.

So I wonder, in terms of governance and accountability for decisions to cut child care programs at school, to cut adult basic education, to cut English as a second language — basic building-block programs — in order to respond to ministry cuts…. There doesn't seem to be anybody saying: "No, you can't cut these programs. These are the essential programs. You're going to have look somewhere else."

I'm going to put this question to the Auditor General. What accountability mechanism did you find in your governance examination that would be a regulator on the decision of which programs are offered in terms of this particular funding model that we're operating under that does not serve, currently, in many institutions, students in programs that are more expensive to deliver?

M. Gaston: Just to confirm, we were looking at how the boards were operating, but we didn't actually audit individual decisions that were being taken by the board. So your particular question, unfortunately, wasn't covered within the scope of the work that we were undertaking. I would suggest that's probably a different piece of work. We'd need to cover that.

The use of in-camera sessions by boards — what regulation is there on that process? Did you see that in your examination of boards? Did you review what was discussed in camera to ensure that those were appropriate matters for in-camera discussions?

I can give you some context for this. I've been contacted by people from various universities complaining about areas that are discussed in camera that shouldn't be. They should be public, especially involving unpopular spending decisions. Can you advise on the use of that mechanism by boards and safeguards around that?

M. Gaston: I don't think that was an issue that was raised as part of the work we did at these three particular universities. So it's difficult to comment on that, given that it wasn't an issue that was raised during the work that we undertook.

D. Eby: Did you not read the minutes of board meetings or review what the boards were doing?

M. Gaston: We attended board meetings to see how the boards were operating. There was work undertaken looking at board minutes. But that wasn't a particular concern that came up as part of the work that we performed.

B. Ralston (Chair): Mr. Gaston, given that these reviews are ongoing, would there be any plan to take some of the suggestions from this session and incorporate them into the ongoing work of the office?

M. Gaston: Certainly, Chair. We were taking notes here of the discussions that are taking place, and the concerns that are being raised would certainly be fed into our planning process. I'm sure the committee appreciates, though, that there are many areas that are brought to our attention. The possibility of that work would have to compete with all of the other issues that are brought to our attention.

I had a question. Since Capilano University is here and more of the recommendations are addressed to Capilano…. I think it's probably not a sense of picking on Capilano but just wanting to understand the concerns that were raised in the audit.

I'm looking at recommendation No. 5, which was to ensure performance expectations for the president and formally assess the performance of the president. I'm wondering…. That would seem to me to be axiomatic in terms of…. Often it's said in board literature that, really, the board only has one employee, which is the CEO.

So was that a question of a gap between incoming board or a new president or…? Why was it felt necessary to make that kind of recommendation, which would seem to be a fairly straightforward one? I don't intend any personal criticism. I'm just interested in getting at the root of the recommendation.

J. Shackell: I think there was an element of a gap between board chairs. I also think there were some weaknesses in recordkeeping. Nonetheless, the board fully agrees with the Auditor General's recommendations, and we've taken steps to implement them by designing a somewhat more complicated process but one that we think will serve both the president and the institution as well as the needs of the board and the government.

B. Ralston (Chair): Is there any additional comment
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that the Auditor General wanted to offer on the basis of that recommendation?

T. Anderson: We didn't find an evaluation, so we don't have anything else to say there.

B. Ralston (Chair): Is there some form of follow-up process intended, then, to follow up on these in a year or two?

M. Gaston: Yes, all of our reports are followed up, usually within a year of the report being published. We continue to follow up on recommendations that haven't been implemented for a period after that as well.

B. Ralston (Chair): I had another question. On recommendation No. 1, which is a general recommendation but again, I think, directed more to Capilano University, was the issue of staggered terms. As you know, in other parts of the political world — say, city councils — there used to be, but there is no such thing now. One can understand and appreciate the logic of not having a complete 100 percent turnover at any given time. But other institutions seem to exist with that and don't have staggered terms.

So I'm wondering why it was felt important to recommend staggered terms — obviously, it's been implemented — and just the reaction of Capilano University to that recommendation. Maybe we could start with the Auditor General.

M. Gaston: This is a practice, I think, that the board resourcing and development office tries to follow in its own procedures to try and stagger appointment terms as far as possible. As you've mentioned, it reduces the amount of turnover. What we saw here at Capilano was a higher level of turnover than we would normally see in terms of appointed board members. Obviously, there are elected board members, as well, at universities. The degree of turnover there would obviously depend a lot more on what happens during elections.

We were really looking at what we would normally have expected to see in place, given the way that the board resourcing and development office tries to operate in trying to reduce the amount of turnover with appointed board members.

B. Ralston (Chair): Ms. Shackell, did you want to respond further? You don't have to.

J. Shackell: Sure. Committee members, I think, will appreciate that our board actually has very little input into this issue. Our role in the process is to recruit members from the community who would be willing to serve and whose qualifications and life experience might suit our board at any particular time. We provide those names to the board resourcing office, and in due course members are appointed to our board. We also, of course, have the student, faculty and staff elections periodically.

I can say with regard to last year's turnover…. We have a board of 15, as do other universities, other than UBC. Last year four of our 15 members turned over. It was four of our eight appointed members, and some might see that as more significant than other elements of the board. I personally don't.

I wasn't troubled by the fact that four board members turned over. There were some issues around the process, I think, that the board was somewhat interested in. But other than that…. We understand the recommendation, and we do try to maintain a good relationship with the board resourcing office. I think it would be fair to say that our board is not unduly concerned with the turnover issue.

B. Ralston (Chair): I think in previous audits — I'm thinking of UNBC — there was a concern that the board resourcing office wasn't always able to appoint new members, of the eight, in a timely way. Perhaps Mr. Gaston might correct me if I'm wrong on that recollection — and if there's any impact on ongoing board performance.

M. Gaston: We certainly raised issues in the past in relation to how timely appointments were. I think there was also an issue raised in relation to B.C. Transit around how long it took to appoint board members. That's not something that we picked up as part of this examination. It seemed that the board appointments through the board resourcing and development office were timely, and we didn't pick up any problems there.

K. Corrigan: I had a couple of questions with regard to appointments and what the process is. You said that the university develops a list. Then that list goes to the board resourcing office, and then appointments are made. Do you develop a list? Or did I get that wrong?

You say you recruit people to serve on the board. Does that mean that you develop a list that goes to the board appointments office, and then there are some or one or all chosen? What is the process? Are the people that are appointed always from the list of names that has been provided by the university?

J. Shackell: Sure. By "recruiting" I meant that we try to arm-twist our neighbours and colleagues and contacts who we think might have an interest and would be capable of serving. We are very aware of whose term limits are coming up and whether particular members are eligible for reappointment.

We maintain a matrix of the competencies and skills that we have on the board, based on the skills of our board members at a given moment. We try to have a look
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forward and say: "Well, we're going to be needing a chair of the audit committee. We should probably find someone who can read and understand financial statements." We try to focus our recruitment activity, such as it is, on the right kinds of people.

You're probably aware that the University Act requires a certain number of the appointed members to be drawn from among nominees of the alumni association. That's just another consideration that has to feed into the whole business. For our university, we have campuses in Squamish and in Sechelt, so we try to be aware of that when we're appointing members to the board as well.

That being said, we try to generate names of people that we'd be happy to have on the board and who would be happy to serve. We provide those names to the board resourcing office through the ministry. The board resourcing office makes appointments that it considers will meet our needs and serve the government's objectives.

I don't think I can answer the question whether the appointees are always drawn from names submitted by the university. I don't know. They don't have to be. In my own case, I was appointed six years ago now, and I don't think my name was put forward by anyone at the university. Mind you, they were very busy at that time becoming a university, so I think they probably had other things on their minds. But I was recruited directly by someone at the board resourcing office.

K. Corrigan: Well, sort of. I'm just trying to figure out how the appointments are made — and obviously, you would only know your experience — and whether or not, generally, appointments are ones that are recommended by the institution or whether they're ones that the board resourcing office comes up with by themselves or whether it's some mixture of the two. I don't know whether anybody else can answer that question.

J. Shackell: I guess all I can say is that they do actively solicit names from us. But other than that….

B. Ralston (Chair): Ms. Plecas, is there anything you could add to that, perhaps — or Ms. Avison?

C. Avison: There is quite a comprehensive review process conducted by the board resourcing and development office with respect to potential names that are put forward from the institutions as well as names that would have come from other places. So they do their own recruitment, as has been mentioned. Then there's a discussion with the minister, and the selection is made from there. Then names are recommended to cabinet, and cabinet ultimately makes decisions about who's appointed to the board.

K. Corrigan: Thank you, and I have one more question. I noticed that in the response from Capilano University it was pointed out that board members are not paid. I might have missed it, but I don't think there was anything about whether or not board members are paid with regard to Thompson Rivers or University of Victoria. Are board members generally paid or not paid, or does it vary?

D. Eby: This question is for the ministry and for the Auditor General. In the detailed report, under objective 2, the Auditor General looked for evidence that "board members have the knowledge and capacity to fulfil their governance responsibilities," and then on page 13, "that the board fulfils its accountability obligations to government and its external stakeholders." I note that boards can only be expected to fulfil the legal and governance responsibilities that they know about.

Did you find that boards were well informed in terms of their obligations to, for example, the Public Sector Employers Council? Under the Public Sector Employers Act they're responsible for hiring a president, for example. There are a set of rules and salary caps and so on. Did you find there was a high level of knowledge or that this was an area for improvement?

And to the ministry: what steps do you take to make sure the boards are aware of these obligations?

M. Gaston: If I can talk about the work that we did. We do look at how the board ensures that it has an appropriate mix of skills. We do talk with board members as well as look at the level of orientation and training that's provided to board members. We certainly didn't pick up any issues at the three universities that we were looking at.

I could maybe refer you to a report that we published recently, the second one we did on board use of information. That's a survey of all board members across the government reporting entity. In that, generally, the university sector comes out at about the middle of the pack.

I don't have the results in front of me around training, but a key issue that does come forward generally across all sectors, as well, is the need for new board members, in particular, to get good orientation. It's certainly an issue that's come through from the most recent one and the one we conducted three years before — that good training and orientation are an important part. I don't think we picked up any particular issues around the right information not being provided to boards, but I would certainly refer you to that report.

B. Ralston (Chair): A question, then. I'm looking at recommendation No. 8. This would be to the ministry,
[ Page 308 ]
representatives of the ministry. The recommendation is that the ministry communicate directly with university boards to improve board members' understanding of performance expectations. More in the vein of the previous question, what does that communication involve? Is there a face-to-face session?

I remember when I was first elected to a municipal council, there was a day of orientation to acquaint one with some of the arcane practices of municipal government. Is that what the recommendation is focused on? How is that being implemented?

I guess first to the Auditor General, and then to a representative of the ministry.

T. Anderson: The recommendation was around some board members who'd like to have more face-to-face communication before the performance expectation letter is finalized — I'm not sure if that came through clearly or not — and it wasn't with regard to orientation. I realize there are a number of institutions, though, and that it's generally the minister that meets directly with the board.

B. Ralston (Chair): Ms. Plecas, I think I may have inadvertently cut you off in responding to the last question, so perhaps if you wanted to combine an answer there. I apologize for that.

In response to the question of the member, the government letter of expectation has two explicit references to the Public Sector Employers Council, both explicitly to the remuneration policy that's outlined as well as to the economic stability mandate. There are two separate bullets that speak to the need of board chairs and institutions to respond and to be in compliance with the guidelines set out by the Public Sector Employers Council.

With respect to your question, Chair, around recommendation 8 and the communications between the ministry and the institutions, that communication concludes with a letter from our minister to institution chairs, but the process to come to the letter of expectation is a multi-month process that involves representatives of both the associations that represent the institutions as well as the institutions themselves.

Copies of draft government letters of accountability are shared with institutions. They have opportunities to respond in detail before the final letters go forward. That process is thorough and thoughtful, and it involves institutions in the debate about their accountability requirements.

D. Eby: This will be, certainly, my last set out, in deference to my colleagues. The question that I have is one about oversight of the expansion of the executive class at universities and colleges.

I hear more and more often about new vice-presidents and new assistant deans and various new excluded positions expanding at universities and colleges quite dramatically, at considerable cost. This is directly related to governance, in that I have the sense that these positions are being created to respond to demands for strategic plans and implementation and so on.

Can possibly the Auditor General, or maybe the ministry or both, distinguish between the growth of the executive class at universities and colleges and what is being called for in this report? Does one necessarily call for the other? Is there a connection between the two? In terms of what I am hearing about the need for these people, it's the increased demands of the ministry for reports on this and that, and, in particular, in response to documents like this.

When I read it, that's not what is called for, but that's what I hear. If you could clarify that, that would be helpful.

M. Gaston: The focus of this work was very much on the boards and how the boards are operating — the competencies that they have and then the interaction between the board and the ministry. The scope of this work didn't actually extend to looking at senior manager structures within universities.

As far as I'm aware, this was not a particular issue that was raised at any of the three universities that we conducted this work in.

B. Plecas: It is the responsibility of the board of governors to establish their executive suite through their president. That's not something that the ministry is involved in.

With respect to your question about reporting requirements of the ministry, we streamlined the process of our government letters of expectation and continue to try and refine them so that the administrative requirements of reporting to the ministry are as efficient, while appropriately rigorous, as can be.

B. Ralston (Chair): In school boards they sometimes speak of the management expense ratio as a percentage of the total budget of a given school board. Boards will often offer that publicly as a suggestion that management expense is relatively lean relative to the programs they're delivering.

Is there any such requirement in the letter of expectations or the financial formula that's put forward to boards
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to implement as part of their governance role? Is there any reference to that, or any monitoring of that by the ministry?

B. Ralston (Chair): I guess it begs the obvious question: why not? Is that a policy matter for the minister, then?

Thank you very much to the Auditor General — unless the Auditor General had any concluding remarks he wanted to make?

B. Ralston (Chair): Thank you. We'll just take a brief recess. We have one more item that I want to deal with before we adjourn. We're going to adjourn ahead of time here, it looks like.

B. Ralston (Chair): There's one remaining item. There's a draft report that was circulated. It's quite lengthy. What I'm going to suggest is that…. We have a proposed motion that would delegate myself and the vice-Chair to receive any comments that you have on it. It won't be in the motion, but my view would be that we try to present it after we return from the two-week break.

If you're looking for something to do during the two-week break and you want to pore through the report and give us a detailed list of editorial corrections, that would be open to you to do. Then the Deputy Chair and I will finalize the report. This report is then presented to the Legislature as a formal record and a summary of what we've done.

Really, I'm not looking for comments on the report now. I just want to draw it to your attention and give you the opportunity over the next couple of weeks, if you so choose, to look at it and make any suggestions.

I have a draft motion here, which perhaps I'll ask the Clerk to read, and then we can discuss the motion.

K. Ryan-Lloyd (Clerk of Committees): The draft motion would be that the committee authorize the Chair and the Deputy Chair to work with committee staff to finalize any minor editorial changes to the draft report titled Summary of Activities, 2013-14, and then to approve and adopt the report on behalf of the committee and, further, that the Chair present the approved report to the Legislative Assembly at the earliest opportunity.

B. Ralston (Chair): If there's a mover of that motion. Moved by David and seconded by Laurie.

D. Eby: Before we wrap this, Chair, I know we've moved on, but I just wanted to thank whoever wrote that report, because it looks very comprehensive and looks like a huge piece of effort. Certainly, I'm sure the rest of the committee shares that. Thank you.

B. Ralston (Chair): Ron Wall is stepping forward to accept your congratulations. Thanks, Ron. It is indeed a very comprehensive report. Thank you very much.

Unless there's any further business, we're adjourned. You can stay and continue informal discussion or conclude your lunch.

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Chair:	* Bruce Ralston (Surrey-Whalley NDP)
Deputy Chair:	* Sam Sullivan (Vancouver–False Creek BC Liberal)
Members:	* Kathy Corrigan (Burnaby–Deer Lake NDP)
	* Marc Dalton (Maple Ridge–Mission BC Liberal)
	* David Eby (Vancouver–Point Grey NDP)
	Simon Gibson (Abbotsford-Mission BC Liberal)
	* George Heyman (Vancouver-Fairview NDP)
	* Vicki Huntington (Delta South Ind.)
	* Greg Kyllo (Shuswap BC Liberal)
	* Norm Letnick (Kelowna–Lake Country BC Liberal)
	* Mike Morris (Prince George–Mackenzie BC Liberal)
	* Linda Reimer (Port Moody–Coquitlam BC Liberal)
	* Selina Robinson (Coquitlam-Maillardville NDP)
	* Shane Simpson (Vancouver-Hastings NDP)
	* Laurie Throness (Chilliwack-Hope BC Liberal)
	* denotes member present
Others Present:	Stuart Newton, Comptroller General
Clerk:	Kate Ryan-Lloyd
Committee Staff:	Ron Wall (Committee Researcher)

Witnesses:	Tara Anderson (Office of the Auditor General)
	Claire Avison (Ministry of Advanced Education)
	Kris Bulcroft (President, Capilano University)
	Malcolm Gaston (Deputy Auditor General)
	Gary Mitchell (Provincial Archivist)
	Bobbi Plecas (Ministry of Advanced Education)
	Jane Shackell (Chair, Board of Governors, Capilano University)
	Joseph Thompson (Ministry of Advanced Education)

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