Public Accounts — Issue No. 15 — Wednesday, February 4, 2015 (HTML)

Hearing Room 605, Labour Relations Board Office
1066 West Hastings Street, Vancouver, B.C.

Present: Bruce Ralston, MLA (Chair); Sam Sullivan, MLA (Deputy Chair); Kathy Corrigan, MLA; Marc Dalton, MLA; David Eby, MLA; Simon Gibson, MLA; George Heyman, MLA; Vicki Huntington, MLA; Greg Kyllo, MLA; Mike Morris, MLA; Lana Popham, MLA; Linda Reimer, MLA; Selina Robinson, MLA; Ralph Sultan, MLA; Laurie Throness, MLA

Others Present: Carol Bellringer, Auditor General; Matthew O’Rae, A/Executive Director, Financial Management Branch, Office of the Comptroller General

2. The following witnesses appeared before the Committee and answered questions regarding the Follow-Up Process for report of the Office of the Auditor General and proposals for reform:

3. The Committee recessed from 10:48 a.m. to 11:03 a.m. and from 11:59 a.m. to 1:01 p.m.

4. The following witnesses appeared before the Committee and answered questions on the Office of the Auditor General Reports: Follow-up Report: Updates on the Implementation of Recommendations from Recent Reports (October 2012); Follow-up Report: Update on the Implementation of Recommendations from Recent Reports (April 2013); and Follow-up Report: Update on the Implementation of Recommendations from Recent Reports (October 2013):

• Matthew O’Rae, A/Executive Director, Financial Management Branch, Office of the Comptroller General

• Paul Craven, Executive Director of Policy and Quality Assurance, Environmental Assessment Office, Ministry of Environment

6. The following witnesses appeared before the Committee and answered questions on the Office of the Auditor General Report: Public Sector Board Use of Information in British Columbia 2012: Progress Update since 2009 (April 2013):

• Sabine Feulgen, Associate Deputy Minister, Corporate Services, Ministry of Health

• Paige MacFarlane, Assistant Deputy Minister, Partner Relations Division, Ministry of Education

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
Follow-up Process for Office of the Auditor General Reports	564
C. Bellringer
R. Jones
G. Dubrow
Auditor General Report: Follow-up Reports: Updates on the Implementation of Recommendations from Recent Reports	584
C. Bellringer
R. Jones
P. Craven
M. Sydor
M. O’Rae
Auditor General Report: Public Sector Board Use of Information in British Columbia 2012: Progress Update Since 2009	604
M. Gaston
C. Wenezenki-Yolland
R. Jones
P. MacFarlane
C. Bellringer

The first item of business would just be…. I think members are aware that the House Leaders have met. John Yap has left the committee due to his health concerns. I’m sure I’ve got an update from someone. I hope he does well. It sounds fairly serious. And we’ll see him back in good time. But in the interim the House Leaders have decided that Ralph Sultan will rejoin the committee. [Applause.]

It seems to be an unusually popular choice. I’m not sure that bodes well for the committee. I’m just kidding. Ralph has always been a very keen questioner, so I’ll look forward to his participation.

B. Ralston (Chair): This is not a Liberal caucus meeting. We don’t need to have that degree of detail.

With that, then, we can turn to the agenda. What we’re going to deal with today is an issue that I consider a fairly important one in the process of audit and in the operation of the Public Accounts Committee. The Auditor General…. We’re going to deal with what we call the follow-up process.

As you know, typically on the performance-audit side, the audit office goes to great lengths to produce reports which then come before the committee. The audited department or agency presents their point of view, and the committee questions and comes to its own conclusions. The Auditor General has made, typically, recommendations. The practice has been recently not to pass or support those recommendations by motion here.

In many other jurisdictions — and you’ll hear from Carol Bellringer, as the Auditor General, but also from Geoff Dubrow, who’s very knowledgable about the operation of audit committees across the country — the follow-up process then kicks in. In order to, I think, get full value from effective audits, a rigorous follow-up process is important. Every jurisdiction, whether it’s Alberta, Manitoba, Ontario, Quebec or the federal parliament, has a follow-up process which is designed to make sure that the audited agency or department implements the recommendations that have been made or at least explains why they can’t or won’t implement them and comes before the committee to do that.

It’s a part of the process, I think, here in British Columbia that has…. We went to a self-assessment, and I think the general consensus is that that self-assessment process could use some tuning up and perhaps the substitution of a more robust process in some cases. That’s the reason for dealing with follow-up.

In the afternoon we have a number of follow-up reports. I expect we’ll deal with them, although there are not witnesses other than on, I believe, two reports. But I think the way in which we deal with those follow-up reports may well follow the discussion that we have this morning. We can decide, then, whether we want to simply deal with these reports today or whether members are of the view that maybe they want to call witnesses and ask more detailed questions of someone who is knowledgable about the implementation, or not, of the recommendations of the Auditor General.

That’s the agenda for today. Tomorrow, I think, is a bit more straightforward in the sense of…. I think it’s fairly self-explanatory. Maybe we can have a brief discussion at the end of the day.

With that, I’ll introduce the people who are here. You have Carol Bellringer, the Auditor General; Russ Jones, the Deputy Auditor General. Matthew O’Rae is the executive director of the office of the comptroller general. He’s standing in for Stuart Newton, who’s not able to be here. Geoff Dubrow, who I will introduce more later, is an independent consultant but who has worked with CCAF over a number of years and with many of the legislative audit committees across Canada and also, to some degree, internationally as well, because the British parliamentary system, of course, extends around the world, and there’s keen interest in effective public accounts committee and audit processes in many jurisdictions.

S. Sullivan (Deputy Chair): I wasn’t aware that Geoff Dubrow would be here today. I found out on Monday when I looked at the agenda.

I haven’t been able to talk to the caucus and make best use of your time. I know we heard from you in last year’s session. I did explain to Mr. Dubrow that I didn’t feel capable at this point of making any substantive changes, but we’re very interested in hearing his presentation again, and we will, hopefully, in the next session be able to have a fuller discussion about it.

B. Ralston (Chair): Great. I had understood — I’m just going to get the Clerk to confirm it, although I think it’s a minor matter — the agendas were circulated at least a week to ten days ago. I understand also that Mr. Dubrow met with you personally yesterday, as a courtesy, and let you know what he was going to say as well.

C. Bellringer: Thank you, Mr. Chair. I just moved over so that I can move the slides along. What I’ll be doing is just a quick presentation about what the current follow-up process is. I will introduce a few comments around the value of the follow-up process, and so on — not so much about the comparison across Canada. That’s something Geoff will do.

Most certainly, I’ve participated at the conference of legislative auditors and the annual meetings with the Canadian PAC groups for many years, and I’ve seen a lot of change across the country over those years. Also, I would say the principles behind all of this are consistent across the country, but the methodology used is very, very different from jurisdiction to jurisdiction. There are lots of options available to you.

What we’ve done is, on my last slide, just put out a proposal for you to consider around how we would recommend you proceed with this but, most certainly, not to limit the conversation or in any way suggest that’s the only solution. But we did put it out there.

Much of this…. In fact, the Chair has already said that there is already a recognition of the need to make some changes, so I appreciate that as a starting point. It’s not necessary to really get into the value, because I’ve seen it around this table, and I most certainly don’t think that you need to be sold on that.

But it is a way to enhance accountability and give you a way to follow the progress being made by management, in particular in the highest-risk areas, and also gives you an opportunity to call witnesses so that you can get a more in-depth understanding of what’s going on within an area and how changes are being implemented.

Also, on the positive side, successes and good-practice examples can be highlighted so that they can be brought forward in other areas.

Looking through the issues you may wish to consider in looking at the follow-up process, do you know what actions management will be taking and when? Going back to…. The original report will have been tabled with PAC. You should have already had the opportunity to bring them forward to the committee and ask questions. You may have chosen to or may have chosen not to. But do you now know what’s being taken as time goes on?

In terms of assurances, the one question that is behind the different options of how we do the follow-up is: what assurances are you wanting to have that appropriate action is being taken by management?

At the moment…. I’ll get into it a little bit more, but we are asking for self-assessments from ministries. They provide those to us, and we do not provide any assurance on those. We do not do additional audit work. We do not do even what we call a review level of assurance, which is lesser than audit but still something. We merely put them together in a binder. How much assurance are you looking for? That’s something that will be behind the process that you choose going forward. What are you asking us to do?

There is actually a section of the Auditor General Act that requires us to do audits that are requested of legislative committees. Unless they interfere with the normal course of our work, if we were to be asked to do a particular follow-up, we would actually be required. It wouldn’t be something we would just consider. We would be required to do that. That would be guidance we would actually welcome.

From the many, many follow-up reports that we are issuing, because they flow from every audit we’ve ever issued until the recommendations are resolved, which of those are of greatest interest to you, and what would you like us to do? That’s something we’d like to see.

Are there specific entities that you would like to have report back directly to the committee — calling the witnesses so that they can, firsthand, provide you with more current information about what’s going on?

Currently we are requesting a point-in-time self-assessment from management. We’re doing them. They’re done every year. We’re asking…. Here’s the list of recommendations. Tell us where it’s at. Is it implemented? Is it in progress? Have you chosen not to implement it, or is it no longer relevant?

We are then just not editing those, and we are publishing them. There is no assurance at all on that. There’s a risk with that, because we are issuing them with our letterhead. They’re showing up with our cover on them. I would suggest that there’s a perception in general that when we issue something, it has been checked, and that the minute we say, “This is what the status is,” by virtue of the fact that we are publishing it, it provides some assurance. That is just not the case with the self-assessments.

There’s a risk to you that the information, therefore, coming forward could be inaccurate. I’m not suggesting that management’s going out of its way to do so. But at the same time, there is a value from the assurance process, and that’s not something that we’re adding to the self-assessments.

In terms of the accountability relationship, this is something that I personally feel quite strongly about. The ministries are accountable to the assembly. They are not accountable to us. We’ve issued the reports to assist the assembly. Really, they should be reporting back to you on how things are going, not to us.

By having us do the self-assessments directly, and having us publish them, it is sort of muddling the accountability relationship by having it look like they are reporting to us rather than to you. Witnesses are not called to discuss the results in terms of any of the work that we are doing.

In June 2014 we decided…. In fact, I think it was on a report prior to that. That was the first one that was decided. As an example of some of the changes that we have
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brought to the current process, we decided to select some of those self-assessments and do some additional work.

We did audit a couple of the self-assessments to look at the reliability and accuracy. We did provide an audit level of assurance on those that we selected. We did then work with management to come to agreement on the progress. There were a number of places where what management had initially stated in their self-assessment we disagreed with when we started to look at it in more detail. Then, when it was published, the agreed-upon evaluation was what was in the publication. We’ve explained that in those reports.

The 2014 follow-up report is on the agenda for later in the day. You’ll see there are four reports covered in there where we did the additional work: the Agricultural Land Commission, enterprise risk management, timber management and the health benefits operations ASD and whether expected results are being achieved. Those were the ones we had selected just because we thought they were some of the higher-risk ones.

We’ll get into this later today, but it is just showing the dashboard of what the progress has been on each of the recommendations. It’s something, as I say, that was the self-assessment in this particular case. We did do some additional work.

I’m not sure why we’re going into this at this point, because this is getting into some of the other ones.

The Canadian follow-up. We just brought a few examples here of what’s done across the country. It’s not uncommon in other jurisdictions for those self assessments. They’re either self-assessments…. We’re going to get into the difference between that and action plans, but most of them are doing a verification of the actions.

It is a very time-consuming process. I’ve been through that. As soon as you start to do verification of the follow-ups, it consumes quite a bit of the resources of the office, and so our choice has been not to do that right across the board but rather to do the couple that we’re doing now.

Again, a couple of the challenges with the current process. The thing to focus on here is that the self-assessments are: “Yes, we’re doing it. Yes, we’ve made progress. Or no, we have not.” But there is not an action plan that’s provided to the Public Accounts Committee through our office through this process, which would provide you with more information about when it’s going to get done, who’s responsible for it, much more detail than just yes or no.

This is the last slide, and this is the proposal for going forward that we’re throwing out there. There’s one twist to it that I’ll just leave for Geoff to get into, but I can certainly speak more to it when the time comes. This is only around the follow-up approach. I’m not getting into any suggested changes around practice for when the original report is issued. There is an element of how you use the action plans at the time that the report is issued. That’s another aspect of this.

We’ve now issued the original report. You would continue to have the Public Accounts Committee process that you have today. The report would come before the Public Accounts Committee. You’d call witnesses. As a result of that process, you may choose to make your own recommendations. This is where the Public Accounts Committee would receive an action plan from the ministry as to how they would be proceeding with the recommendations. This is at the issuance of the report stage.

Annually there would be a reporting back from the ministry with progress. That’s the follow-up element. Then it’s that review of those progress reports, and it would be an update to the action plan at that time. What we would be doing is also looking at those progress reports and determining whether we would do nothing additional. We can just select some areas and do some limited work. Or we may go to a greater extreme and choose to do a new audit. It could be a complete new audit, or it could be an audit of the status.

Then the last point is that further work — that the committee would decide whether to now call witnesses to discuss that follow-up or even go forward and request us to do additional work. Those are the changes that we’re proposing. I can answer questions now or, of course, I’m here all day and tomorrow.

B. Ralston (Chair): Do members have questions now, or do you want to hear Mr. Dubrow and then ask questions on the whole thing?

S. Sullivan (Deputy Chair): I’ll ask maybe one question. You can do follow-up on any ministry that you want. Is that correct?

C. Bellringer: Yes, that’s correct. There are no access issues of any kind. Our act is quite open, and we’re able to choose to do anything we think needs to be done.

S. Sullivan (Deputy Chair): So you don’t need the endorsement of the committee to do those kind of things.

C. Bellringer: No, we don’t need endorsement, but…. It’s not for the reason that we would need endorsement in order to be able to do the audit. It would be for a different reason. The endorsement — it’s not so much endorsement but request from the committee — for us would be critical to know which of the many reports that are out there…. We might not have the same rationale for moving forward on one or the other.

I mean, you can slice and dice it any way you wish. There are many ways to choose which ones we’re going forward with, doing additional work. We would like to have the input from the committee to know what’s of importance to you. It’s for that reason.

M. Dalton: I’m wondering. Considering fiscal capacity, etc., do you see this as having an impact? Are you able to…? If it were to go along the ways that you’re suggesting, would you be stretched beyond your current limits?

C. Bellringer: Not stretched any more than we’re already stretched — shifted. The majority of the work that’s done right now is more administrative in nature. So that part we wouldn’t do anymore, but we would still need a more senior review, within the office, of the action plans and then decide which ones to do. We’re already making choices as to where to put the resources. It would just move it around for us a little bit.

If there were a number of requests from the committee — and, rather than selecting two or four, you said, “Well, there are six of these that are really critical to us” — yes, it would shift the time to that. We would either have to give up something else or we would, indeed, be stretched.

S. Gibson: Wouldn’t it be more productive and more efficient if you did somewhat less audits but added a full measure of follow-up so that the level of accountability would be more present, so that you’d have more of a full process right from beginning to end, which includes the follow-up? Right now that component, as you’ve noted from your chart, is missing in most instances. It would almost be a part of the process — so somewhat less audits, but more fulfilling, more complete. The process, for many people, is that level of accountability which you’re talking about.

C. Bellringer: If we’re both understanding that the same way, there’s an element of that that we’re already doing. The audit stuff that would work on an audit would continue discussions with the ministry even after the audit is finished. The part that this is focusing on is more the piece that ends up being in the public view.

C. Bellringer: If it were removed from the public view, it then doesn’t allow…. It comes out of this process. There would be implications. The amount of things we do behind the scenes probably wouldn’t change significantly whether we’re doing it this way or doing it the way we’re currently doing it.

S. Sullivan (Deputy Chair): You mentioned that it was either time-consuming or there were a lot of resources in the follow-up. Is that to the Office of the Auditor General, or is that to the committee?

C. Bellringer: Any of the references to resources I was thinking of were our office. Just as a general comment…. The ministries might disagree with this, but I think it’s an important distinction. In terms of the follow-up at the ministry end, we’re raising important issues that are part of the general management within the ministry that really should take place. It shouldn’t add any time to them to create an action plan.

They should be thinking through…. “We’ve heard recommendations. We buy into them. We’re going to implement them.” Knowing how and when and who, it’s just natural that you’re going to do that. We’re not suggesting anything other than what they would normally be doing.

The committee itself. Yes, somebody would have to take over the administrative practice that we’re currently going through — which is asking for the action plans, asking for the updates, putting them in a document and providing them to you.

K. Corrigan: I’m glad we’re having this discussion. One of the things about the present system that I like, that I wouldn’t want to see lost…. I like the proposal, but I think one of the values that we have right now with the progress audits is an element of surprise, which I think is useful across government. If ministries don’t know whether or not there is going to be an audit, then we have a way of assessing whether or not the whole process is working.

The thing I would be concerned about is if we, at the time the audit is produced and then the time the committee considers it, then say: “Well, this is one that we want to have more in-depth follow-up.” I’m getting the sense that’s what you’re saying, right — that we would choose some at the time, or not? Or would every audit be expected to do this action plan and so on?

At what point, then, I guess the question is, would we consider whether we want to have witnesses back and so on? I just want to make sure that we’re not losing the ability across the board to try to have ministries think that there’s going to be some kind of review, even if we don’t actually have them back.

C. Bellringer: The proposal would be that the action plan would be something that every ministry would produce on every audit, so it’s not a selective thing.

The point at which the committee could choose to ask for additional work could be at any point in the timeline — so at the issuance of the report, highly unlikely, because it’s fresh, it’s new, and it’s right before you. But it’s possible. I mean, you could decide this is one area we’d like you to get into a little bit more, but that’s no different from current practice.

Then, at the annual update period, would be another opportunity for the committee to choose to pull one out
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of there and say: “Now that time has passed, there’s been no progress. Could the Auditor go in and have a look and see what’s going on?” That kind of thing, or for another reason.

B. Ralston (Chair): I think, I believe, that in some rare cases there has been action and implementation before the report has been issued. That’s not been disclosed publicly because there are security concerns, say, with an IT system, I think, in a couple of reports I can think of over the years — one in a health authority and another in the Ministry of Attorney General or Solicitor General. That would be relatively rare, I would think.

G. Kyllo: You know, previously we’ve talked about the number of audits that are actually completed annually and, with the fixed amount of resources you have, any focus on the follow-ups would take away your ability to conduct additional audits. I think that having any kind of a carte blanche approach to follow up on all would take away from your ability to conduct further audits that are needed.

I think, too, some of the audit reports, the consequence of some of the action items are of little consequence and maybe don’t have the same degree of need. You currently have the ability to make your own determination on which ones you feel, as the Auditor General, are important to follow up on and which are not. As well, I just learned today — thank you very much, Carol, for sharing that — that we, as a committee, have the ability to make specific requests on which areas or items that we do want follow-ups on. It’s not for the Auditor General to make a determination whether you choose to follow up or not. You have to. I think that the process and the ability of this committee to actually require and request further follow-ups is already in place.

S. Robinson: I appreciate this direction as well. If I understand correctly, it’s not about the Auditor General’s office taking on more. It’s just different, in terms of how follow-up happens.

I guess what I just wanted to highlight or just confirm…. One of the follow-up approaches was: when the report is released, the management provides this committee with the action plan and timelines, not the Auditor General. It would come to this committee around what they would do with the recommendations. I have two questions. One is: would we get that? Would that be public, or would that come to this committee? Like, is that a public document, or does that come to the committee?

One of the things that I struggle with is that the Auditor General reports are made public, which is great, and then six months will go by before we actually have a chance to sit around and talk about it. It feels like the time lag is sort of challenged. It’s like, “Well, we’ve already done that. We’ve already done that. We’ve already done that,” which is great. But it becomes a challenge, I guess, for me around: so what’s my role in helping people to be accountable?

The other that I guess I’ll just make a comment on is the reason I like this direction. I think it will help to shift culture and culture of accountability so that there’s always continuous improvement, because I think that that’s what we’re trying to achieve here. Yes, it’s accountability, but this notion of continuous improvement — that the landscape is always changing, technology is always changing, opportunities are always changing, risks are always changing.

We ought not to wait for an Auditor General’s report to act when something comes up. That is how I am understanding it. Helping to shift that thinking about how we do things…. I see this recommendation helping to move that forward.

C. Bellringer: A couple of things. In terms of mechanics, I would see the action plans being submitted directly to the committee, but at the same time we would also get a copy, so we would have access to it. We wouldn’t have to wait for it to be brought together and however you choose to then distribute it.

The public part…. Geoff, I’ll ask you to speak to what happens elsewhere, but in my view they should all be available publicly. I think there is an edit process to get there, but it still would be a public document. The PAC role and the time lag — there are a number of interesting elements to that. Again, I’ll look down to the end of the table. The idea I saw was that there would be a regular follow-up meeting still held. The Public Accounts Committee would have an agenda on one of the meetings during the year that would consider the follow-ups, just as it is now.

R. Jones: Thank you, Chair. I just wanted to bring to the members’ attention that a number of years ago these action plans actually did come to this committee when we issued a report. We did a report back in the early- to mid-90s, I think, on the stumpage system in the province in the Ministry of Forests. At the time we tabled the report the ministry also tabled an action plan that set out, for each recommendation, what they planned on doing and when they planned on having it done by. It actually resulted in this committee taking a tour of the province to look at a number of areas where stumpage and scaling was done. So it’s not unheard of, and it is a good process.

Just in regards to the issue of whether the action plans become public or not, generally the practice across Canada is — and I’ll talk about this more when I make my presentation — that once they are formally tabled in committees…. If the committee is considering an action plan, let’s say, on an audit related to health care, once the action plan is tabled, of course it becomes a public document.

There is the practice in the federal House of Commons that the departmental action plans are actually posted on the PACP’s website. I often go to them when I’m showing examples of what action plans look like, what government responses look like. There is the practice also of providing that extra level of transparency by requiring that they be posted and public access be provided.

L. Throness: In determining whether your time should be spent on basic audits or follow-up — because it is a question of priority — do we have any reason to believe that ministries are less than forthright with their reporting back to us?

C. Bellringer: We definitely have seen differences of opinion between a ministry considering that the work that they’ve done was sufficient to resolve our recommendation, and in our opinion, it wasn’t sufficient. I don’t think it was a matter of…. I mean, they still were forthright in providing the information to us.

Sorry, there was something else I was going to say on that and it just slipped my mind.

R. Jones: There is sometimes a fine line between fully implemented and partially implemented. In some cases, they have taken alternative action to what was originally recommended by us. So they say, “fully implemented,” but actually it was alternative action and they’re doing something slightly different. When we go in and take a look, we actually…. And you’ll see that this afternoon when I go through three or four of the ones that we followed up on where there were some differences in opinion. We come to the same conclusion at the end, but there’s also a description of what that alternative action was and whether or not we’re happy with it.

L. Throness: I like the idea of Greg, which is that not all follow-up reports are of the same importance, and perhaps it should be decided on a case-by-case basis.

L. Reimer: I really like the idea of increased accountability and shifting some responsibility to the Public Accounts Committee for looking at this, but when I saw it, my first thought was that it’s going to increase the time for Public Accounts, for the Office of the Auditor General and for government.

I know you’ve looked at other jurisdictions where this is working well, and I’m just wondering what the timelines are in those other jurisdictions. For instance, how often do other Public Accounts committees meet? How much additional time is spent by government with respect to these action plans that come to Public Accounts and that sort of thing? That’s my first thought. While we all support increased accountability, we’re adding something that we haven’t been doing. Can you comment on that?

B. Ralston (Chair): I’m going to suggest, if I might, that probably Geoff will address a lot of those questions — those are important questions — in his presentation. Then we can go back to you, and then perhaps, based on what he’s said, you can focus the questions, because a lot of that is going to be touched on in his presentation — if that’s okay.

Anyone else at this point? No other questions? Okay, well, I’ll turn now to Geoff Dubrow, who conducted an orientation session for the committee back in 2013. I think he’s known to the committee, and he is here at the invitation of the Auditor General.

He is an independent governance consultant with a lot of experience in assisting Public Accounts committees across the country and also working for CCAF, which is the parent body which organizes the annual conference of Public Accounts committees as well. So he’s very knowledgable about the operation of Public Accounts committees, not only in Canada but, as I’ve said, internationally. I’ll turn it over to Geoff.

G. Dubrow: Thank you very much, Mr. Chairman. It’s always a tremendous pleasure to be back in Vancouver. Sitting here looking out the window, I always ask myself what on earth I’m doing living in Ottawa. I also should mention….

But I should mention also that when I left Ottawa on Tuesday, it was minus 33 degrees. I was standing outside putting gas in the car, and I said to myself, “This doesn’t feel like a minus-25 day,” and it wasn’t. It was minus 33. When I arrived here, it was plus 7, and people were look-
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ing at me very strangely because I was just so happy to be away from that horrible weather.

It’s always a pleasure to be here, and it’s a real pleasure to have been invited back to contribute to this important conversation.

For those of you who I haven’t had a chance to interact with before, for those elected members I haven’t had a chance to interact with before, I just wanted to remind you about the philosophy that I bring to the table and the philosophy that CCAF, the organization that I’m representing, brings, which is that we’re here to contribute to best practices, to identify best practices.

Certainly, there is not one way of doing things across Canada. There’s not one way of doing things internationally. I don’t come to the table with a prescribed model, but I can certainly share with you what other jurisdictions are doing and also talk, if I’m asked, about how solutions can be tailored to suit the model here in B.C.

I also want to note, just by the briefing note that was put together by the Clerk of Committees on the follow-up process for OAG audits, that there is a lot of prior practice here in British Columbia that can be drawn on, so this is not necessarily a matter of reinventing the wheel or coming up with something new.

I think I might just start by answering Mrs. Reimer’s questions regarding the number of meetings by Public Accounts committees. That’s not something that I’ll be touching on, so maybe I’ll just begin with that issue, if that’s okay, Mr. Chairman.

G. Dubrow: With regards to that, there are jurisdictions across Canada that have fixed meeting schedules. Alberta meets for an hour and a half once a week. Saskatchewan usually meets once a week for about two hours, but they also have meetings out of session for a couple of days where they’ll plow through reports over a lengthy period of time. Ontario meets for about three hours a week. The House of Commons meets twice a week for two hours. Quebec has some problems in terms of regular meetings, but usually they try to meet — it’s just because of room allocations — about every two hours per week.

My own personal observation is that there’s an inverse relationship between time and meeting. The more time that’s spent talking about meeting, the less the PAC actually meets. So the fixed meeting schedule tends to work very well. Then it’s clear to everybody when they’re supposed to be in the room. Otherwise, it can become very complicated. I hope that answers the member’s question with regard to meetings by public accounts committees.

With regard to the time spent on action plans by PACs, I think it was such a good question that I want to address it directly, even though I’m going to be making…. Part of my presentation will deal with that issue. I’ll be talking in a few minutes about the number of PACs across Canada that are requesting action plans, which is really considered to be a best practice in Canada.

In terms of the member’s specific question regarding time spent on action plans by public accounts committees, for those that do request them, the answer would be not enough. I believe — and I advocate this both in Canada and internationally — that there are really very good opportunities for members to use the action plans that are provided by departments in their questioning of government witnesses or of departmental witnesses. I’ll give some specific examples a little bit later. That’s not a practice that is really very much employed.

Often it’s an opportunity to go into some of the wording in the action plans. For example, if the department is…. I’m sure it never happens in British Columbia, but in other jurisdictions there’s a certain vagueness that can be associated with the government response in action plans. Typically, what would happen there is…. It gives an opportunity for the members to probe and go a little deeper. This doesn’t have to be a negative experience. It can be just a matter of clarification.

If the department says, “We’ve taken action on this issue with a study,” the members might ask: “Well, when will this study be concluded? When will the information be available? When can we have a copy of the study?” It allows for the basis of discussion to be very focused on implementing change. It’s not really happening very much across Canada.

The real benefit of the action plans at this point, I think, is the subtle pressure. This goes to a question that one of the members — I think it was…

G. Dubrow: …Mr. Throness — had posed about the purpose of the action plan. It really places a subtle pressure on the departments, and I mean that subtle pressure in a very polite, Canadian way. It puts a subtle pressure on the department.

The department knows that the Public Accounts Committee typically…. If you’ve been to previous Canadian Council of Public Accounts Committees meetings, you’ll hear…. Members who have an established follow-up process in their jurisdiction and have action plans will often say: “Prior to that process, the accounting officer or the deputy minister used to come before the PAC.” They’d have their two-hour hearing on a report. Once that was done, they’d go out and have a beer and celebrate. “We survived the Public Accounts Committee. We’re done.”

The requirement for the action plans and the requirement for a follow-up process really put the onus on the department to make sure that they’re continuing that process. It’s not that the department is necessarily lazy or dis-
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ingenuous — not at all. They have a lot of priorities, and sometimes implementing the Auditor’s recommendations can fall by the wayside, unless some subtle pressure is placed on it by the department. This sort of keeps everybody honest, with a small “h,” so to speak. That would just be a response to some of the excellent questions that have been posed.

If I can, what I’d like to do is…. We had some preparatory meetings yesterday, and I’d like to try to address Carol Bellringer’s comments, rather than dragging you through a 40 slide presentation. I suspect that would be something that’s appreciated — brevity — when working with elected officials. I’m going to try to tailor my comments a little bit more than you’ll see in this presentation. So I’ll be flipping through a series of slides.

I’d really like to talk to you about four issues. One will certainly be the action plans. I should mention, also, that my focus is more on the side of what PACs can do around these action plans, what they can do in follow-up hearings, what they can do in issuing recommendations. So about action plans. Certainly about the follow-up hearings themselves, what they could look like, and what the role of the PAC could potentially be and also the issue of the Public Accounts Committee issuing recommendations, which was mentioned in Carol’s presentation as well. I’m going to sort of attack that piece by piece.

Kate, I really appreciate your willingness to help me with bouncing around with the slides a little bit. If I could just take you very quickly through slide 3, just to sort of back up and give you a bit of an overview. On the way over here I tried to modernize this slide. It was looking a little old and stale, having used it for a number of years, so there are still a couple of tweaks I’d like to do to it.

Essentially, I just want to draw your attention…. I just wanted to talk about the relationship between the legislative Auditor, the Public Accounts Committee and the departments, agencies and Crowns. I’ll be very brief about this, but just to give a bit of an overview, here I’m only talking about different kinds of legislative audit reports — that is, the reports prepared by the Auditor General, by the legislative Auditor. I’ll just talk about, very briefly, performance audit, attest audit and follow-up audits.

Performance audit is known as value-for-money audit. In some jurisdictions it’s looking at whether departments have implemented their programs with due regard to economy, efficiency and effectiveness.

Attest audits, of course, are the audits of the financial statements, whether they are being represented fairly and accurately.

Some jurisdictions — and we’ll talk about this later — also conduct follow-up audits. And by follow-up audit, I mean that they’ll literally go back and look at a program that they audited previously at either a review or audit level of assurance. And they will review as to what the department has done to take action on implementing the recommendations of the original audit report.

I’ll be getting into all this in more detail in a few minutes. Those reports, of course, are going to the Public Accounts Committee. They’re going to the Legislature, and they’re permanently referred to the Public Accounts Committee. That’s pretty standard practice.

What I wanted to point out is that one of the practices that has been more of an emerging practice as of late is the fact that Public Accounts Committees are receiving action plans from the departments prior to their actual hearing with that department.

For example, if the Auditor General put out an audit related to health care, by the time that audit reached the Public Accounts Committee, the presumption is that the committee would have an action plan in front of them. And I’m going to show you some tangible examples of what those action plans look like in other jurisdictions. But they would have an action plan before them which would clearly spell out what the department is planning to do to implement the recommendations of the Auditor.

This isn’t necessarily designed to create extra work for the department, but rather, one has to assume that the department, if it is serious — it has already accepted the Auditor’s recommendation — it must have some type of plan in place to implement it. So all it’s really doing is sharing the documentation and information that it should be producing already. I’ll certainly talk to you more about that in a few moments.

Then just on the other side here, with regards to issuing recommendations, this is a practice, again, I’ll talk to you in more detail about. But generally in Canada, the public accounts committees either endorse the recommendations of the legislative Auditor or they both endorse the recommendations and add their own recommendations above and beyond what the legislative Auditor has recommended.

In my opinion, the reason they’re doing this is, as the audit committee of the Legislature, it’s one thing for the Auditor, as an advisor to the Legislature, as an officer of the Legislature, to inform the Legislature of an issue and recommendations. It’s a very different thing for the audit committee of the Legislature to say, “Yes, we take this seriously, and we endorse this.” This is sending a clear message to departments. And this is not a partisan issue in any way, shape or form, but it sends a very clear message to departments that there’s an expectation that these recommendations be implemented.

Another way to look at this also, though, is if the PAC is not voicing its endorsement or not voicing its opinion, it can be a little awkward to come back a couple years later. When the report came out and the AG’s recommendations came out, the PAC was silent. But then, a year later, they’re asking about follow up. But they’ve never sent the message to the department to state how important this is to them that this be done.
[ Page 571 ]

I’ll talk to you a bit more about some practices in Canada, but my understanding is that that’s one of the reasons why this is considered to be so important. I’m going to skip the issue of government response to recommendations. Then I’ll talk to you, as well, about some practices around follow-up hearings. That’s just a bit of an overview of the presentation.

Actually, I’m going to go to slide 9, and I’m going to show you a practical example right off the bat from neighbouring Alberta, which is east of here. As an Ontarian, they’re always west. I guess it depends what part of the country you’re sitting in. I’m still not used to people saying “down east” when they talk about Ottawa. I always think that they’re talking about the Maritimes. Anyway, forgive my irrelevant rambling.

With regards to Alberta, CCAF actually ran a workshop in Alberta a couple of years ago around the follow-up process, very similar to the kind of discussion that we’re having at the table here, at the invitation of the committee. One of the things they decided to do was to request a status report on Auditor General recommendations.

If you have a look at slide 10, you can actually see what form is being sent out to the departments. Templates are being sent out and attached to the committee’s formal correspondence with invitees. When the committee advises a department that they would like them to appear before them, they also send out this template and ask them to complete it and provide it back before the hearing takes place. This would be an example of an action plan template that was developed.

I’ll take you through another example as well. This is an interesting one. It’s got a bit of a….

B. Ralston (Chair): Geoff, can you just explain why the Alberta committee chose to do that?

G. Dubrow: Sure. Alberta has, prior to the new configuration of the PAC, which is now resulting from the change in membership of different political parties…. The PAC in Alberta made some changes that were viewed as very positive. Prior to the last election their way of doing things in Alberta was very different.

They were not necessarily focusing on the Auditor General’s report. Rather, they were calling departments in one by one and asking questions about their performance reports, the departmental performance reports. This was a practice which was viewed by some members as somewhat substandard in Alberta in terms of the quality of the information they were getting. So they started to prioritize the Auditor General’s reports, as best practice would dictate.

When they started prioritizing the Auditor General’s reports, calling chapters of the Auditor General’s reports first, the next thing they decided to do was…. They often felt that witnesses were not coming to the committee prepared and were not providing detailed information about what was being done to implement the recommendations of the audit report — partly because they hadn’t had that system in the past of scrutiny of the Auditor’s reports.

They figured that one way to change that would be to require that an action plan be submitted. The purpose behind that was that they could see right off the bat how sincere the department was or how well developed the intentions of the department were to implement the recommendations of the Auditor General.

S. Gibson: Why not just have it automatic? Why not just have: “Okay, you’ve got the recommendations. They’re specific. They’re very quantitative. Within one year we request your response”? We don’t have to have forms or anything. Just wait, and that particular department or ministry is required to make that submission automatically within a certain time frame. What would be wrong with that?

G. Dubrow: Well, just to clarify, I guess the issue would be that the government’s response to the audit report is usually contained in the report itself, right? I don’t know if that’s the case in….?

The action plans are designed to establish what the department’s plan is to actually implement the recommendations. It’s a much more detailed, focused discussion on the implementation plan. That is something that would be required of every department. This form would go out. In the case of Alberta, they’ll be sending this to every department that is appearing before them to talk about a chapter of the Auditor General’s report.

Maybe I could just provide another example: Nova Scotia, on slide 11. This had a bit of a cause and effect. The Auditor General in Nova Scotia found in his 2007-2010 follow-up report…. Now, this was a dedicated follow-up report, where he went back and looked at the implementation of previous recommendations.

He found that — I’m just reading right from section 1.5 — “only 41 percent of our performance audit recommendations from 2010 have been implemented.” The last sentence is: “Government senior management are failing to take action to correct known deficiencies in their programs.”
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First of all, one of the values of the follow-up audit is that they’re actually able to talk about what the actual implementation rate is of recommendations. But the Auditor General at the time went to the committee and said, “I think it’s important to start getting regular updates from the committee” — not to wait until after the follow-up audit, but rather to start having a dialogue with the committee as soon as the original audit report comes out about what’s being done to implement the recommendations.

The other thing I should mention, also, is I think that action plans…. Just one comment about that, which is that I think as part of the discussion, reviewing the action plans with the departmental witnesses can actually lower the partisanship in the committee.

If you’re focused on concrete actions that are to be taken, and you’re clarifying management paragraphs and the issues that management is raising, that’s not a blaming or shaming thing. That’s really focused on understanding management’s response and dealing with whether or not the committee is satisfied that management has articulated their intentions to implement the Auditor General’s recommendations sufficiently or whether they need to get back to the drawing board.

If the action plans are deliberately vague — and sometimes they are — then the committee can say politely: “We really think you need to go back to the drawing board and give us some more detail on this.” That keeps that subtle pressure going.

With regards to the template from Nova Scotia…. You see that there are various examples of what an action plan template can look like. I should mention that not all public accounts committees require a template. The House of Commons, for example, requires an action plan, but they leave it up to the individual departments to decide what that action plan is going to look like.

B. Ralston (Chair): Well, I’ve got a sense that Geoff’s presentation will be long. It’s probably better that members get their questions answered as the questions emerge. If that’s not too disjointed, that’s what I’m adopting. So go ahead.

K. Corrigan: I was just wondering whether or not having the action plan and us having a chance to take a look at it…. One of the things it might do is it might flush out when there is a true disagreement within the ministry about whether or not the recommendation is the appropriate recommendation.

I certainly have seen a lot of times in our follow-up reports that sometimes you’ll have something say “no action taken” or, like the forest one that we’re going to consider later, “partially implemented.” I don’t really know why it is sometimes, and I think it would be useful sometimes for us to see if there is a real difference of opinion about whether or not the recommendation is appropriate and for us to consider that.

G. Dubrow: Thank you very much for the question. The problem is, though, that by the time the discussion around the action plan is before the committee, it’s in a sense too late to discuss the appropriateness of the recommendations. The department has already accepted those recommendations in the Auditor General’s report in its written response.

Technically, if the department was saying at a PAC hearing that “we don’t think those recommendations are appropriate,” unless something has drastically changed, they probably shouldn’t have accepted the response in the first place.

The problem is — and we see this in many jurisdictions across Canada — if I can be colloquial about this, the departments will often accept the recommendations just to get the Auditor General off their back, without necessarily feeling that they want to actually go ahead and implement them.

In a sense, it’s easier to say, and I’ve seen this in question period in various legislatures: “Mr. Speaker, the department would like to thank the Auditor General for his or her excellent work. We accept the recommendations, and they were very helpful.” Publicly, they say that, without necessarily feeling that that’s the right course of action.

My own feeling is that the legislative auditors would actually prefer to have a more honest discussion with the departments, and if the departments feel that recommendations are not feasible, that should be discussed at the clearance level, when the reports are being cleared by the department.

I suspect the Auditor General may have something to say about that or have a comment on that issue.

M. Dalton: My question I had written down from 15 minutes ago, and that is…. As far as their recommendations go, they accept it, but really, if there’s going to be follow-up and implementation and much more vigour to it right there, there should not be more push-back if there are some recommendations, and how that would be handled.

Those are questions that are important as far as…. They could feel that the recommendation is maybe not…. It’s
[ Page 573 ]
too strong or that debate has to be there. It’s just basically reiterating what you’re saying, I suppose.

I think I was just about to add that some jurisdictions, like the House of Commons, do not require a template for the action plan. So that is an option. If PAC wants to request action plans from the departments, it is an option that for those action plans, each department has the ability to select the format that they prefer and the titles and headings that they prefer.

If I was asked for my opinion on that, I would say that I think members tend to prefer to have consistent information in a consistent format. It’s a lot easier to be an effective questioner, to ask good questions of a witness, when they’re used to the format that those templates come in.

If I could ask you just to go to slide 13 — you might be able to see this a little bit better on your slide deck — this is an actual sample action plan. This one happens to be from the House of Commons Public Accounts Committee. It gives you an idea of the extent of the…. Maybe I should try to remember next time to create this as a handout rather than a slide, because I know that it’s difficult to read such small print.

This is a good example of the detailed type of conversation that can happen between a committee and a department appearing before them.

Here you’ve got reference to the paragraph of the audit report in the first column so that if members want to access the full information, they could have a copy of that report in front of them. That would be a reminder of the OAG recommendation. This would be already in the Auditor General’s report, so it’s just a copy-and-paste job. The same thing with the departmental response. This response would already be in the Auditor General’s report.

This is mostly for reference for the members, because you’re not necessarily expected to remember each paragraph that’s in an Auditor General’s report.

Then they have a description of the current status of implementing that recommendation. For example, processing times have been reduced. That’s part of the status overview.

Again, typically, if members are going to utilize those action plans for the purposes of questioning witnesses appearing before them…. What might be a very good question? If you don’t mind — I realize that I’m not in workshop mode here — perhaps one of the members could just allude to what a good question would be around a statement that processing times have been reduced.

G. Dubrow: Right. There are opportunities to clarify and to deepen the understanding. Again, Mr. Chair, that’s certainly not a partisan, by any stretch of partisan, exercise.

Then there’s also the expected completion date. By when do you expect to have that recommendation fully implemented? What this does, what I would say, is it eliminates the wiggle room of the department. If you have a follow-up report…. This is happening during your actual PAC hearing into the Auditor General’s report.

If you fast forward one or two years, and the department comes before you and gives you an update and says: “Well, we haven’t really done very much….” Two years have passed.

One of the members on this side of the table, I think, mentioned the issue of real time, having information in real time. What this does is by the time the follow-up hearing takes place, let’s say a year or two down the road, if the department says, “Well, we haven’t really done anything,” then the PAC can go back and say: “Well, originally you had mentioned that you were going to make that change by Dec. 31, 2017. What happened? Why wasn’t that change implemented?”

Once or twice there might be an excuse that’s good enough to get through the committee. But if this starts happening frequently, then the committee might start to get a little bit more concerned and say: “Well, you’ve come before us before, and this implementation date continues to change.”

I know that Carol is very familiar with partially implemented recommendations, which often remain partially implemented for a very long period of time. They’re kind of in stasis. They don’t ever get fully implemented. This is a way of saying: “When do you expect to have finalized the implementation of the recommendations?”

C. Bellringer: I was just wondering. On the slide you can see some blue words with an underline. Are there all kinds of hyperlinks and links to things, or is that just the way it got reproduced? I just wondered if anyone was using a sort of a pretty electronically based action plan that you could then delve into other aspects of or not. I don’t know.

G. Dubrow: I honestly did not notice that, but these are off the House of Commons website, so it’s very possible.

C. Bellringer: I have a feeling that on the House of Commons ones that is the case, but I’m not sure.
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S. Gibson: How do you avoid a situation where a lot of these issues are dynamic? They don’t come to an end, so they’re in process. They may say they’ve been implemented, but right after they’ve been perused and reviewed, it’s back to business as usual. How do you avoid that?

For example, I work for a large company and my department reported through the CEO to the board. My boss at one point said to me: “Don’t worry. Just tell the board what you’re doing, and once the board approves it we can go back and it’ll be okay. Don’t worry about it.”

We were reporting in a cosmetic way. The board was happy with us and happy with me, but change was only cosmetic. It was largely superficial. How do you avoid that within a dynamic decision-making process?

G. Dubrow: I think that’s the importance of having those dates there, right? It makes it very clear that it’s our intention to complete the process by the end of 2017. If by 2018 the department…. I think this applies really, particularly, to recurring unimplemented recommendations.

I think federally about the Department of Indian Affairs and Northern Development. They’re constantly raked over the coals for a series of recommendations which have not been implemented, year in and year out.

In that particular case, the witnesses before the committee can get away. When I say “get away,” I mean they can be given the benefit of the doubt once or maybe twice, when those dates start to shift. But if it happens more often, then there’s a record, and members can say: “You’ve changed that date two times. Both times you’ve come here and given us your assurance that this is going to be done, and it hasn’t been, so why should we believe you this time?”

That’s a way of keeping the subtle pressure going. It’s not just enough to say: “We survived the meeting, and we’re done.”

Just on to slide 14. Some issues the committee may want to consider around the action plans is: what information would you like auditees to include in the action plans it submits? Would the committee like to have that each auditee submit a standardized template?

I’m sorry. I think the grammar on that second bullet is not very good. It must have been my 12-year-old that wrote that.

Thirdly, would the PAC like to have action plans posted on its website, which is a practice that is adopted elsewhere?

I guess on the issue of the follow-up — and, I think, maybe the Auditor General might want to comment on this…. If there’s going to be a follow-up…. If the committee is going to go in and conduct an audit level or review level of assurance on certain action plans a year out, essentially, there would have to be timeline where the department would be submitting its first action plan in time for the committee report, and then the committee would need to decide when it wants the updated action plan to be submitted.

One thing I find amazing about MLAs from British Columbia is that significant business experience and the understanding that these are sort of standard practices — that preparing an action plan to implementing recommendations is not something that’s necessarily unreasonable. But that updated document would have to be provided at some point, maybe a year out, a year after the original one.

B. Ralston (Chair): I see the Auditor General nodding her head, just for the record.

V. Huntington: In that regard, are you suggesting that PAC could basically be requiring the action plan to be submitted according to the PAC’s timetable, a year out? “We want you to have this action plan to us in six months. We’ll be meeting on X date. Please be there.” Is that the type of…?

G. Dubrow: That’s correct. But the key is that the submission of the first action plan coincide with the committee’s hearings so that that information is available to the committee at the meeting. Then the committee would need to decide if the Auditor General’s office is going to conduct assurance on some of those plans. As was discussed earlier, they would have to decide what’s the date for that action plan to be updated.

Now, one of the ways that the committee can flex its muscle, so to speak — and again, in more of a polite, Canadian sense — would be if the committee’s not satisfied with the response of the department. I’m sure there have been cases, just as there are elsewhere, where it seems like the witnesses are unprepared, haven’t done their homework. The committee might say: “Look, normally we ask for action plans one year after your appearance before the PAC. In this case we’d like to see one in three months. We want to know what progress you’re making.” That sends a very clear signal to departments that they have to be prepared for committee meetings and that they’ve got to have the answers available and right in front of them.

That’s the most lengthy part of the presentation — on the issue of action plans. How is my time, Mr. Chair?

Would members like to take a break — say, five minutes — at this point? Or would you rather…?

I think everyone’s nodding, so an electronic media break, I guess. Five minutes we’ll stand down.

G. Dubrow: Thank you very much, Mr. Chair. I think we’ve concluded the issue of action plans, and I’d like to move on to the actual follow-up hearings themselves.

B. Ralston (Chair): There was just one point that you, in response to a question, were talking about — requiring an action plan earlier in the cycle. I had understood that in the proposal that you’re making, the action plan would be submitted with the report in advance of the hearing of this committee on that report. And what you may have meant by another action plan would be to demonstrate progress on the plan that had been put to the committee. Am I understanding that correctly?

G. Dubrow: That’s correct, Mr. Chair. It would be an update of the existing plan.

At the break I had a very informal discussion with one of the members regarding what the existing practice is within departments in the production of the information that’s contained in the action plans. Again, if I was asked my opinion, I might say perhaps that would be the basis, if there is consensus at some point, to proceed with requiring action plans of departments. If the committee decides to develop a template, that’s a good basis for discussion with the departments regarding the type of information they may be able to provide. Just something to consider.

If I can just turn to the issue of follow-up. I don’t think this particular discussion will take very long. If I look at the follow-up process across Canada, if I look at the CCAF survey from 2013 that was conducted of all the public accounts committees in Canada — provincial, territorial and federal — eight of the PACs hold what I would refer to as dedicated follow-up hearings. That is, they have a report from the Auditor General that’s called a follow-up report that deals exclusively with previous reports and looks at the extent to which recommendations in the report have been implemented.

The other type of follow-up pertains to the review of progress in subsequent audit reports. For example, if you look at the practice in Saskatchewan, Saskatchewan doesn’t have a full performance audit or value-for-money audit mandate. Their audits tend to be more focused on the financial statements.

They tend to be auditing every department every year in terms of the financial statements. So if an issue comes up in the 2014 audit report, there is no dedicated follow-up report, but the following year the PAC could go back and say: “Do you remember that during the 2014 report we had a discussion on such-and-such a topic? Could you please let me know what’s been done to implement that recommendation?” They could go back in the subsequent report and ask questions.

Those are, essentially, the two styles of follow-up hearings, so to speak. If you go to slide 34, the dedicated follow-up hearings are usually based on the legislative auditor’s status report on the implementation of previous recommendations. The hearing is really focused. It’s a dedicated hearing focused exclusively on the issue of follow-up, as I mentioned earlier.

The other example would be — I think I just said this, so perhaps I’m repeating — reviewing the progress in subsequent hearings with the auditee. When an auditee is called before the PAC in the next year, the PAC can pose questions concerning the implementation of recommendations discussed during a previous hearing into a previous audit.

The challenge around the second type is: where is the institutional memory? If the committee is not…. For example, Saskatchewan does not have any research support at all. So who’s documenting the issues that come up in 2014 and making those available to the members in 2015? Are the members — as busy as they are, and as varied as their work is — going to remember, the next time that the Department of Justice comes before them, what was discussed a year ago?

It certainly sounds like this committee is going in the direction of dedicated…. Well, you do have a dedicated follow-up report, so to speak. So the committee is going in that direction.

I think it would be useful just to talk a bit about the planning of the follow-up process. I know that it’s always a very positive experience for me to be able to watch committee hearings in progress, so I’ll look forward to observing this afternoon in terms of the follow-up.

Partly, the question that the committee may choose to ask itself is: “What is our process going to look like the next year?” Certainly, I would base this discussion on the presentation that Carol made earlier, about the fact that at this point the plan is for the Auditor General’s office to select certain progress audit reports for review. Have I used the right terminology?

G. Dubrow: Let’s say for audit. I guess right now you’ve got these self-assessments, and there’s some talk
[ Page 576 ]
about, instead of the self-assessments, requiring an action plan or requiring an update to the action plan. Right?

G. Dubrow: Then the question becomes: how has the committee planned that hearing process? For example, if there’s a steering committee, there might be a discussion between the parties regarding specific audits that they want to call, specific progress reports that they want to call, progress audit reports. Presumably, they’re also going to want to look at the reports that the Auditor General has chosen, because they have that extra degree of assurance.

Audit committees work best when they’re dealing with independently verified information. That’s the purpose of the audit committee. It’s good to have the department’s point of view in a voluntary action plan, but it also is important for the audit committee to be looking at any independently verified information that’s at its disposal.

That process would have to be…. There would have to be some planning to decide, first of all: are we going to look at all the chapters that have been…? Are all the progress audit reports that are being audited by the Auditor General…? Are there any other action plans, updates, updated action plans that we want to review that haven’t been audited by the Auditor General?

At some point, the committee could also develop criteria for deciding, because one of the members made an interesting point, which is that they might not all be equal. There might be some that aren’t as important. What are the committee’s criteria for deciding what they want to look at? Is it based on risk? Is it based on materiality? Is it based on public interest — i.e., something, maybe, that’s of large public interest, like environment, for example?

I think the committee would want to consider defining a process in the future for how they’re going to make that selection. Of course, typically, the emphasis would be on reports that have an audit level of assurance, so the progress audit reports that the Auditor General has reviewed.

It’s certainly not for me to interfere in the committee’s relationship with the Auditor General, but certainly, from what I’ve heard, there may also be some room for dialogue if the committee were to theoretically express an interest, in the future, to say: “This is a particular report that we’d like to have reviewed.”

Let me provide an example. There might be an issue of public interest. You have a child and youth advocate, if I’m not mistaken. There might be something related to children’s right, environment, poverty — something that tends to get citizens very interested in the issues.

There might be findings in the Auditor General’s report that the committee is particularly concerned about, and they might feel, at the time of the first hearing, that they’re not getting the answers. They might very well, at that point, say to the Auditor General: “We’d like to consider…. One of the recommendations of the committee will be for the Auditor General to consider auditing their progress report. We really want to know if this is being implemented.”

That certainly would be something that the committee would have the power to do. I hope I’m not misspeaking in any way, Madam Auditor General.

I’m going to conclude. That’s all on follow-up. I’m happy to answer any questions.

K. Corrigan: It’s interesting, because, subject to what we’ve been told today, which is that committees of the Legislature can request — and, in fact, they have the right to demand, I guess — that certain subjects, things, be audited…. That would include this committee, I would assume, as well as other committees.

B. Ralston (Chair): But that’s by the committee, not by an individual member. It has to be a motion of the committee. Just so we’re clear about that.

K. Corrigan: No, not by an individual member — very clear on that. But for the most part, that has not been the practice. I don’t think we’ve ever, since I’ve been on for many years now, made a request as a committee. I’m not sure about other committees either.

It’s interesting that we’re talking now about a more proactive committee, and particularly to this very last comment about the possibility of saying that we want to follow up. We want an audit of this particular…. A follow-up audit done, or a progress audit done. But we don’t have the ability to decide, really, what is being audited in the first place. So it’s interesting that there’s a suggestion that we would have the right to say what follow-up audits are done. But we don’t direct in any way.

I understand the independence of the office. Is it because once it gets to PAC it sort of becomes a report of PAC as opposed to the Auditor General, and therefore we control the process?

C. Bellringer: A couple of things from that. The committee, at any time, can come forward with a request for us to do an audit of anything. It isn’t limited to this follow-up process, and it isn’t limited to anything that would come up in that context.

One thing we are moving more towards is sharing our performance…. It’s mostly on the performance audit side, because on the financial statement audit side it’s entrenched in legislation as to what we have to do.
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On the performance audit side, yes, we are selecting all of those audits, and we would continue to do that. But what we are wanting to do is have a greater dialogue with all of the members, and there are many areas that we’re having to….

I mean, we have a blank page, and we have to make that selection. We do use criteria, and we have a very mature process as to how we make the selection. But most certainly, the interest of the members is at the height of that criteria — so how best to do that but to share that plan with you and to get some feedback.

We’re just at the tail end of putting together a performance audit coverage plan, and as soon as we’ve got that, we are going to be out there and asking you your views on it. There’ll be some spots in there for: “If it was this or this, which one would you choose?” Also, we’ll make that a public document, and it can come before PAC for further discussion — as well as the group. There are lots of opportunities for that. We’re trying to do more of that.

At the end of the day, though, the independence of the office gives us that ability to make the final selection so that it is removing any potential politicization of the process.

K. Corrigan: You don’t see that risk to the independence and possible politicization in this committee then making requests about which reports are then audited as to progress? You don’t see it as an issue at that point?

C. Bellringer: No, I don’t. The best test for us is to hear the right-around-the-table discussion. It’s actually better than having individual members come to us with requests, because that does become political.

The one out for us…. If the Legislature or the committee asks us to do something, we must do it. But there is, within the act: as long as it doesn’t interfere with the normal course of business. If it became highly political and so voluminous that it meant that that was now going to drive our entire agenda, to me, that would interfere with the normal course of business, so we would decline some of those.

Maybe we can talk about the issue of issuing recommendations. Again, even though our focus is on follow-up today, issuing recommendations is the way the committee expresses at the outset, either by endorsing the Auditor’s report or by issuing its own recommendations, its desire to see those recommendations implemented.

I know there are some good questions that we can have a good discussion about — this issue around issuing recommendations. I think perhaps the vice-Chair will have — not to put the vice-Chair on the spot — maybe some questions on this issue, some good questions that we had in our discussion yesterday that he might choose to share.

The practice across Canada right now, as of the CCAF survey that was done in 2013…. We asked PACs: “Do you usually issue your own recommendations? Do you sometimes issue your own recommendations?”

Seven public accounts committees said that they usually issue their own recommendations. I’ll talk about what that means in a moment. Two public accounts committees sometimes issue their own recommendations.

Of the remaining public accounts committees, two usually endorse the legislative auditor’s recommendations, and there are two — I believe that, at this juncture, British Columbia would be one of those two — that don’t endorse either the AG’s recommendations or the legislative auditor’s recommendations. So one could make the determination, in this particular case, that that practice would be an outlier, vis-à-vis other practices across Canada.

If we could just take a look at slide 18. I’ve cut a lot of material on issuing recommendations, just in the interest of time — but just to look at, perhaps, some examples. One type of recommendation would be just endorsing the Auditor General’s recommendation.

If I can draw your attention to slide 20, here’s an example from a previous report in the British Columbia Public Accounts Committee. That was not actually deliberate. We do use this as a best practice, in terms of demonstrating these recommendations.

There was, I think, a practice in previous legislatures that the committee endorses the recommendations contained in the Auditor General’s report and recommends the same to the Legislative Assembly, or the committee endorses the recommendations contained in the Auditor General’s report entitled X. That would be a typical motion that the committee would adopt to endorse the recommendations of the legislative auditor. That would be one example.

If we go to the second type of recommendation, that would be endorsing the legislative auditor’s recommendation and adding some recommendations of its own. This is an important question. I think at this point…. What I noticed when we did our workshop in Alberta: they don’t issue recommendations at present. And it’s a big jump. It was viewed there as a big jump to go from not issuing recommendations to all of a sudden issuing substantive recommendations that go above and beyond what the Auditor General has said in his or her report.

What we talked about there was the issue of procedural recommendations. If you have a look on slide 18, 2(a),
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here’s an example of the committee issuing a recommendation, but it’s more of a procedural recommendation. It’s not substantive. It’s not related to the subject matter of the audit. That’s what I mean by substantive. Instead, it’s recommending that the auditee report back to the PAC on matters of concern to the committee. That would be 2(a), recommending that the auditee report back to PAC on matters of concern to the committee.

If I could draw your attention to slide 21, that would give an example — this is from Prince Edward Island — of that very thing: endorsing the AG’s recommendations but also placing particular emphasis on a particular recommendation.

In this particular recommendation there is a general endorsement of all the recommendations, but the PAC is also asking, essentially, the department to pay particular attention to recommendation 8.7 — in this case: “To ensure economic development initiatives are thoroughly assessed and monitored, there should be coordination among departments and agencies, keeping in mind their respective mandates and area of expertise.”

In my humble opinion, this would be a very clear message to the department that when they appear before the Public Accounts Committee next time, there’s a real expectation that they’re going to be able to address this issue and that they’ll need to be prepared to do so.

This is a way of the committee expressing its concern about an issue and saying: “We really are concerned about this recommendation.” Again, it could be something that really resonates with the health and safety of the population here in the province, and the committee says: “We’d really like to make sure that this recommendation is dealt with.” That would be an example of a specific procedural recommendation that could be issued.

I think I’m going to skip over 2(b), which is the substantive recommendations that supplement the recommendations contained in the Auditor General’s report. Again, my experience was that that might be perceived — or certainly was in Alberta — as a large leap from not issuing recommendations to all of a sudden putting on the table additional substantive recommendations that deal with the subject matter of the audit. But if there are any questions on that, I’ll be happy to answer them.

Then, of course — and this is something we have in all our presentations related to this topic — it can also be a request that the Auditor General conduct additional audit procedures.

G. Kyllo: If I may, with all due respect to the Office of the Auditor General, what would happen or what would be the process with respect to recommendations that may not be agreed with by the comptroller general or different members of PAC? How would those be addressed?

G. Dubrow: Well, first of all, the recommendations would have to be issued by the committee. There would be agreement by the committee that those recommendations be adopted, and that would be a normal procedural motion. I think the committee Clerk is here and can comment on that.

G. Kyllo: Just on how it would be dealt with. I don’t believe that we’ve ever gone to a specific vote within the PAC. So if there are areas where there are some members that might be concerned with a recommendation coming forward and were not in agreement with it, what would be the process that that would be handled? Would we end up with a lot of potential disagreement within the PAC committee as far as what recommendations are going to be recommended or moved forward on or which might be rejected or not included in an endorsement?

G. Dubrow: Okay. So we’re talking now about recommendations that are in the Auditor General’s report, in the original report?

G. Dubrow: This is a very important question, and I think I was talking with one of the members about this at the break.

There are often cases where the department disagrees with the recommendations of the Auditor. The problem is that the time to express those disagreements is when the audit process is still taking place — before the Auditor General has concluded her or his report.

Certainly, your Auditor General is more qualified to discuss this process that I am, but typically what will happen was that the Auditor General will meet with the most senior official in the department — the Deputy Minister — and actually go over the recommendations and at that point get comments as to whether the department agrees or disagrees with the recommendations.

If all the recommendations are accepted, it’s a little bit late to come before the committee six months later and say: “Well, we agreed six months ago, but now we disagree with your recommendations.” That creates the problem.

G. Kyllo: If I may, there’s two parts to that. One could be that the comptroller general just flatly does not agree with the Auditor General. The other portion could be that even if the comptroller general does agree with the recommendations of the Auditor General, there could be potential opportunities, I guess, or concerns of members that don’t agree with either. I’m just wondering in those two cases how those would be dealt with within this committee prior to or, I guess, as part of an endorsement.
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G. Dubrow: Well, the issue of the comptroller general — and I’m being very conscious that a representative of the comptroller general is sitting within arm’s length of myself; we’re not two sword-lengths apart, nor do we need to be, of course…. That is, in my opinion — and I’d be happy to have any clarification — an internal government matter.

Normally the department…. I know that typically — and this has nothing to do with B.C. — there’s always tension between the central agencies and the line ministries, right? The line ministries will always say: “This is my department. Why are you interfering as a central agency coming in?” But it’s an internal government matter to decide.

Typically, it’s the Deputy Minister who’s going to accept the recommendations. If the department accepts the recommendations and the comptroller general disagrees with them, then there’s a process that needs to be adjusted in order to make sure that they’re on side. Obviously, I would imagine, you wouldn’t want to have that kind of disagreement within the administration.

C. Bellringer: I’ll just throw in a couple of comments to add to what Geoff has said. He is quite correct in saying that the time to have that discussion is certainly while we’re conducting the audit and while we’re finalizing the audit, but it does happen that, for whatever reason, the feeling changes slightly. In many cases it’s: “Now we’re trying to implement this, and really, there are some practical obstacles for why we can’t proceed.” It’s fair enough that that comes back six months or a year later to say: “While we agreed with it, we’re realizing it’s not as easy as it looks, and here’s the discussion.”

I have in the past been encouraging that to be in the dynamic of how we’re finalizing reports. Again, easier said than done, but I like to have that disagreement so that we can work through the fine-tuning of the audit process and the actual…. You know, it’s that: what do you do the day we walk out the door? It shouldn’t be a matter of: “Well, phew, the audit’s over. Now we can go back to doing things the way we used to do it.” I mean, what we’re looking for is systemic change that’s in a positive way helping the public service. So how do you get at all of that?

I’d say yes, it’s in the context of that process that then gets reinforced through the work of the committee, and then it does give you those periodic times to step back and have that honest discussion. Hopefully, it all comes together and that’s the case.

One last little thing. In pushing for that kind of a thing in previous experiences that I’ve had, it would be the occasional recommendation, not all of them all the time. If that’s happening, then there’s a breakdown, and then we’ve got to figure out what’s going off the rails.

G. Kyllo: Just a quick follow-up, if I may. Having said that — Auditor General report is tabled. There are recommendations put forward. There’s disagreement, potentially, between the comptroller general’s office and the Office of the Auditor General. There are particular members that are sitting as part of PAC that also have a differing view and don’t necessarily entirely agree with all the recommendations. Procedurally, what would that look like? Are we then subject to a big debate within this room before there’s an agreement on endorsement of this particular report and the recommendations therein?

B. Ralston (Chair): I suppose that would be a test of the political maturity of the group and the skill of its leadership in order to fashion a consensus and a solution out of that kind of conflict.

G. Kyllo: So there would be debate within this committee and a potential motion and vote at the end?

B. Ralston (Chair): There’s always a potential for debate in this committee, but I think what you were talking about was where differences may be perceived as being difficult or irreconcilable and how that would be resolved. Ultimately, I suppose, it could be resolved by a vote of the committee, but the preferred course, I think, is to lower those differences and seek consensus where it can be found, if it can be found.

R. Jones: That is a good question, and it has happened in the past, years ago, when this committee did endorse the recommendations that we had in our reports. I remember one occasion where one was not agreed to, and the committee actually, in their report to the Legislative Assembly, said: “We agree with all of the recommendations except this one.” I can’t remember what we did about it.

K. Corrigan: Following on that discussion, I’m wondering, Geoff, if you, or anybody else that wants to speak to it, can give us a sense, for those seven PACs that usually issue their own substantive recommendations, of how much committee time and resources that takes. I could see that really adding to the workload, as worthwhile as it probably is. All the discussion about if we agree, fashioning it, and then staff resources, as well, because usually it falls to staff, and I know we have limited staff. I’m looking at Kate and Ron. How much resources would that take?
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G. Dubrow: Thank you very much for the question. It’s a very important question. If we go to slide 23, maybe I’ll just refer to that slide as a partial answer.

There are different ways to deal with the development of recommendations. Once again, if it’s a procedural recommendation, I don’t believe that that would take very much time. It would be more of a motion of the committee that would not necessarily take a lot of time — a.k.a. the committee wishes to endorse the recommendations of the Auditor General and wishes to draw attention to recommendation 16, or the committee endorses the recommendations of the Auditor General and asks for an updated action plan in six months rather than the usual one year. These are the kinds of statements that don’t take a long time to craft.

However, there are practices, and they happen to be in central Canada mostly — or at least from my vantage point, living in Ottawa, central Canada — just because of the size of the legislatures. The House of Commons, Ontario and Quebec would be the three that I would think of right off the bat where, essentially, the process is quite similar. I say that because they tend to have larger numbers of members, a larger number of seats, and therefore sometimes more resources.

Typically, what will happen will be that after the committee has completed its hearings on a particular topic — maybe it’s got two or three hearings on the same Auditor General’s report — the committee will meet in camera and provide instruction to the researcher to draft the report. The report will not just be the recommendations. There will be a background section. There’ll be something on the witnesses that were called, on the findings and then on the recommendations.

That report will then be reviewed again by the committee in camera, and once there’s consensus — consensus really is quite important when it comes to issuing reports; certainly what the committee wants to strive for is to have that consensus — then it could adopt the report, which would then go to the House to be adopted by way of concurrence motion. I don’t know if that’s the same procedure of how you adopt committee reports here.

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): That’s correct, Geoff. Committee reports are tabled, presented to the Legislature by the Chair, and they can be taken as read and received. That’s in response to the order that the committee report back out to the Legislature as a whole.

But subsequent to that there can be a second motion in the House, moved by leave, for concurrence in the report at an adoption motion. That is typically put forward on Public Accounts reports because it is the practice of this committee to essentially summarize in one annual report each year all of the activities. So that doesn’t tend to be a controversial report, and it’s usually adopted unanimously by the Legislature.

G. Dubrow: Sure. So there is certainly some time involved in that type of report writing. To be honest, that’s why I deliberately have avoided presenting that scenario. Again, I understand from the experience in Alberta that to make that leap in terms of time and resources at this point might be…. Because the committee is not currently in the process of endorsing recommendations or issuing its own, it might be too much of a leap. But there is a significant amount of time involved in those steps.

S. Gibson: If we could go back to slide 21. I don’t want to belabour this — this is from P.E.I., as I understand it — but if you look at the actual motion there, the underlined portion, I would have to say it’s quite vague, so my concern is that monitoring that is going to be a challenge.

“Coordination” is a dynamic word. It never begins or ends. And there’s a caveat at the end that says, “keeping in mind their respective mandates,” blah, blah, blah. So I’m glad, Geoff, that you brought that forward, because this is my lament, or my concern, that if I was a department head, I would say, “That looks pretty good. I’m happy with that,” because there’s really not much accountability in there.

For me, coming out of, for part of my life, the private sector, I would look at that and instead want to say, “Economic development coordination results in new, measurable investment in the province of Prince Edward Island” — right? That’s what I would want to say, because right now that doesn’t really say a whole lot. It’s nicely worded, but there’s not much accountability in there. So if I was a department head, I would kind of like that motion. “Yeah, we’re coordinating, and there’s no beginning or end, and we don’t know what we were doing before or after. What’s changed?” So thank you for sharing that.

C. Bellringer: The underlined wording in that example is something coming out of the audit report itself. That was a recommendation that was issued by the audit office. It’s an ongoing challenge for us to make sure that we write recommendations that we can actually check to see whether or not they’ve been implemented. We’re always struggling with how you keep it broad enough to be of significance but narrow enough that we can actually go back and do that follow-up. That isn’t something that’s impacted by the process. That’s something that we’re always trying to fine-tune.

G. Dubrow: I just want to emphasize the comment the Auditor General made, which is that that is part of the audit report, not a recommendation that was made by the Public Accounts Committee.

I just want to see if there’s anything else, stones that have been left unturned. Maybe just very quickly on slide 27. No, let’s skip that. Sorry. Let’s skip over it.
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Let’s talk about slide 29 just very, very quickly — the government response. So if the PAC is going to issue recommendations of any kind, including procedural recommendations, it’s important and it’s best practice that the government provide a response within a set period of time to whatever recommendation the PAC has issued. That would be very similar to…. In the Auditor General’s report, you’ve got the departmental response, so in the PAC report, there would be a government response.

Now, in the case of the type of recommendations we’re talking about, procedural recommendations, there really isn’t much to say. It would just simply be for the government to agree that “Yes, we are….” For example, if an action plan was to be requested within a period of six months, it would just be for the department to say, “We’ve heard, understood. We’ll see you there in six months.”

The example I give is sort of clapping with one hand. If the PAC is issuing a recommendation and nobody’s responding…. It’s just important to have that communication loop closed. That’s why making sure that there is a response makes it very clear that there is an understanding of how the government is going to proceed. Again, that applies, in a sense, more to substantive recommendations related to the actual subject matter of the audit, but typically, that will be within 120 or 150 days of the report of the Auditor General. The average would be 120. One jurisdiction has 150 days.

I think I’ll conclude there, but of course, I’d be more than happy to continue participating in the discussion or answering any questions.

What I’d like to do, maybe…. We could adjourn early, but I did want to just take it back to the proposed follow-up approach that the Auditor General had recommended at the conclusion of her remarks and, in light of the discussion and I think some of the clarification, perhaps just go through that process again so that people are clear as to what is being recommended by the Auditor General in terms of a follow-up approach.

Did you have any further comments? For example, I think that point 2 has been clarified. The options there would be the Public Accounts Committee to make procedural recommendations. Those would be, typically, to report back in a certain period of time or, perhaps more intensively, craft recommendations of the committee’s own, subject to staff resources. That doesn’t seem to be strongly recommended by Mr. Dubrow, just because that would seem to be a later refinement that the committee might want to adopt in the future.

I guess just in case…. This was presented at the outset. In light of the discussion, I just wonder if members have any further questions or if people are clear as to what’s being recommended here.

V. Huntington: I feel quite strongly that the committee has to reform some of its work methods. One of the things that continues to trouble me, and I know we’ve talked about it before, is that if we’re to do this, we have to start meeting regularly.

When we get three inches of reports that are up to three years old, there’s something not working in the committee’s efforts. A lot of these reports, the only viable question to be asking is: “What have you done in the last two years?” I don’t think that’s good work. I think it’s disrespectful to the work that has been done, both by agencies and by the Auditor General.

I really, really think that to be adequately addressing the issues at hand and the importance of some of the reports we do get, we have got to start meeting regularly. Whether it’s once a week, as apparently most committees do, or whether it’s twice a month, I think we have to start somewhere.

G. Kyllo: I think just with respect to fixed meeting schedules, I don’t have a problem with having those fixed. The challenge will be for those living outside the Lower Mainland meeting once a week. The cost and the impact of time and travel and all that sort of thing is just very difficult to deal with.

B. Ralston (Chair): Just for clarification. The meeting once a week would be only when the House is sitting. Then there is a discretion to meet, as we have done, when the House is not sitting. But it’s been difficult for this committee to get agreement on scheduling when the House is actually sitting, although other committees do meet.

G. Kyllo: Sure. If I may, I think the challenge of that is when the House is sitting, it’s so busy. It’s so hard to fill anything in, with other committee requirements and meeting schedules, that that’ll be challenging as well.

B. Ralston (Chair): Well, it is a question of priorities. I know members have the Whips and the House Leaders directing you, but this is an important committee — arguably, the most important committee — in terms of accountability in the Legislature. But we can have that debate at another time.

I think the point has been made. I think generally there’s agreement that the committee should meet more
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frequently, on a schedule. Hopefully, we can work on agreement there.

V. Huntington: Could I propose a subcommittee meet on this issue? I think it’s an extremely important one that has to be addressed by the committee. Other parliaments across the country manage it. There’s got to be a way that a subcommittee can come to some conclusion about the best direction to take on this and report back to the Chair and vice-Chair.

B. Ralston (Chair): The vice-Chair isn’t here at the moment. He had to, for personal reasons, leave a little bit early. I prefer to discuss it with him before making that kind of agreement. But I take your point.

K. Corrigan: I know it’s not what we’re talking about right now, but I would echo Vicki’s comments. I think that when we’re talking about effectiveness of this committee — and that’s what we’re talking when we’re talking about follow-up — you’ve got to get down to the very basic thing, which is that you do have to meet. So I absolutely support Vicki on that.

If it is an important committee…. I think it’s one of the most important — maybe the most important — things, I personally feel, that we do, but it could be more effective. Vicki’s absolutely right that if you’re not dealing with a report for two years, then you’re diminishing the effectiveness. So I would echo. All of these great recommendations in this discussion kind of lose their relevance almost if you’re actually not ever looking at the report till two years after it’s been written.

M. Morris: Just general comments. In my prior life we had a fairly rigorous audit program and compliance and review program in place, which mirrors pretty much what you’re talking about. We do need to put some more metrics around this whole system, so I agree with what I see on the screen there.

I also have to agree with Vicki as well. We’re very busy. Every single one of us in this room and on this committee are tied up with other work and other committees and process and whatnot, but perhaps we need to have a look at that and prioritize. This is a very important committee. I think a subcommittee should have a look at it and figure out how best we can be more effective down the road.

S. Robinson: I will echo what Mike and Vicki and Kathy have said. Also, in my prior life, certainly on city council, there were certainly requirements to hold the bureaucracy accountable for the direction of the leaders and making sure that things were being done in a way that we were expected to be done.

I also think that we have a responsibility as elected people to be accountable to our electorate — to be accountable to the Legislature and to be accountable to the electorate. I was quite shocked that we were seeing reports two, three years after they had been done. It felt like: “So why am I here, given that work had already progressed?” It just felt a bit redundant.

So I would echo the sentiment that we have a responsibility to meet regularly and in a timely manner in order to do our jobs effectively.

B. Ralston (Chair): There is some delay — just in, I suppose, explanation, for the record. There is some inevitable delay in follow-up reports because they are following up on the initial report. I would be more concerned…. I take the concern. I don’t dismiss it.

In terms of initial consideration of reports, I think I’ve tried to schedule the reports in a fairly timely way. I think, relatively speaking, we’re pretty current in terms of dealing with the first go at reports.

It’s the follow up, and that’s why I’ve wanted to have this discussion about retooling the follow-up process. It needs some rethinking and renovation. I don’t want to sound too defensive, because it’s a collective responsibility of the committee, but I think that is at least a partial explanation.

Is there anyone else who has comments? I take that as a consensus of the committee. The vice-Chair and I will have to talk about that, and I’ll take that as direction from the committee.

B. Ralston (Chair): Well, he and I will get together and see what we can come to agreement on in terms of a schedule and then recommend it to the committee as a whole.

V. Huntington: Is it not possible to set a subcommittee to work with you in the next year?

B. Ralston (Chair): We haven’t done that this session. We could constitute a subcommittee. I do want to have a further discussion with the vice-Chair. In the past it’s been simply him and myself.

I think a best-practice recommendation has been that it might include more members than just he and I. I think that’s something I haven’t had an opportunity to discuss with him. I think that’s probably a better practice. Mr. Dubrow has recommended or agreed with a proposal that the vice-Chair put forward, so I’m prepared to consider that. But I do want to have that discussion with him.

L. Throness: I believe, though, when the House is prorogued, the committee is dissolved. So it will have to be reconstituted. To set a subcommittee today might be a little redundant.
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B. Ralston (Chair): A committee constituted would be valid, would be empowered, for this session. I mean, when it’s prorogued, the whole committee is dissolved and any subcommittees, as a consequence, are dissolved. So we could create a subcommittee. As a courtesy and since he’s not here, I do want to talk to the vice-Chair about it.

G. Dubrow: May I just comment on the best-practice issue that you referred to? I guess the issue is that generally, in other legislatures where there is a subcommittee, there are more than two political parties that have official recognition in the legislatures. You’ll often see…. I think in Alberta, for example, they call it more of an informal working group, but essentially, they’re a subcommittee.

They would have all four recognized parties — I don’t know how that’s going to change with the changes that have happened there — so that was obviously Wildrose, Conservative, Liberal and NDP. That would be pretty standard.

There could be some complications in having a subcommittee of two. That’s perhaps why even though there are two officially recognized parties, having more than one member from each party might be something the committee wants to think about if it does look at a subcommittee approach. Just to fill in the blank on that issue.

B. Ralston (Chair): Yeah. And you may not know that Vicki Huntington is an independent member of the committee.

Okay, so just before we adjourn, then, the way we’re going to deal with some of the individual reports…. I think that consideration will probably be influenced — I hope — to some degree, by the discussion we’ve had this morning.

I’m not going to recommend that the committee vote on the proposed follow-up approach, but I think I would like to invite members to seriously consider adopting at our next meeting this approach and having some discussion among ourselves. I’ll certainly have some discussion with the vice-Chair, and if there’s a reconstituted administrative committee, then there as well.

I would like to recommend this general approach with probably some of the nuances and variations that we’ve heard presented today. I think that would make the process better — more efficient and more effective and, ultimately, more accountable and serve the Legislature better by implementing this approach. But I don’t think it would be appropriate to bring it to a vote today. I think people, legitimately, want time to consider that.

If I could leave the discussion there, with the invitation and the recommendation to all members that they consider seriously how we might move forward by implementing this approach with whatever variations members think appropriate. Okay?

K. Corrigan: In terms of next steps, my understanding is, then, the next time we meet, we come back and we reconsider the recommendations. Or would the Auditor General believe that as a result of the discussion so far, there might be some changes to the recommendations? For example, the proposed follow-up approach, one of them, is that PAC may make their own recommendations. So I’m not sure whether or not there would be any change, what the plan is then.

B. Ralston (Chair): If I might, just before the Auditor General answers. My hope is that committee will make this process its own. Certainly the Auditor General is welcome, and that’s why I’ve invited this process and these recommendations. We can certainly take the advice from the Auditor General, but I would like to see the committee take ownership of these recommendations and craft a proposal that is the property of and reflects the will of this committee.

C. Bellringer: I was going to say, in terms of decisions, I certainly think that’s up to you. In terms of administrative support, we’re happy to provide some updates. We can pull it together and say, yes, the wording that….

The one thing that…. For example, we had a recommendation around the annual plans. I think that was the phrase we used. What that would be is an update to the action plan, so we can clarify that, so that what you’re working with is the most up-to-date language.

I would add that on the ongoing basis we are still in a position to provide some level of administrative support to the process — for example, tracking to make sure that all the action plans are coming in. We’d be wanting to watch for that to make sure we’ve got them all, so you don’t need to duplicate that through the committee’s administrative support.

The devil’s going to be in the details on a few of those things, in terms of: what does this now look like in terms of ongoing practice? We can be part of that discussion, but it is your decision.

K. Ryan-Lloyd (Clerk of Committees): Perhaps, if I might, for the information of members, over the course of the last few years our office has been more proactive in uploading information related to the work of committee deliberations onto the committees’ public websites in support of meeting deliberations.

The kinds of meeting materials that are circulated to all members of this committee in terms of supporting public accounts discussions are also part of that process now. So materials, for example, provided to our office from gov-
[ Page 584 ]
ernment officials in support of their presentations are uploaded in a separate area of information, a committee submission portion of your website.

In looking at the opportunities that the Auditor General’s office has put forward, I think there are a lot of administrative techniques that we can undertake to support an enhanced process. For example, when a government body is invited to come to the committee to address an audit report, perhaps one opportunity in conjunction with that process would be to request from them an action plan at that time. Quite often the report is released, as you know, a number of months prior to their presentation formally before PAC, so it would present a natural length of time to pass for them to prepare an action plan. Then perhaps, in conjunction their initial appearance before you, they can have that as a supporting document.

We can also make that public, as you know and as I just mentioned, on the committee’s website. Then, based on whatever the committee decides with respect to ongoing discussions with that agency, that can be updated in conjunction with the Auditor’s proposal in due course with your forthcoming meetings.

I think there’s a natural opportunity that some of our new processes on the website will actually support, in terms of enhanced information from the agencies and supporting your ability to probe more into the implementation and status of recommendations.

S. Gibson: The Auditor General…. Of course, you have the surprise factor, where you suddenly arrive or announce that you’re going to be doing the two kinds of audits that you do.

Do you also keep what you might characterize as a thread? So ten years ago there was something problematic. Do you do audits based on previous anomalies or previous concerns you have? And do they form the foundation of your future analyses?

The follow-ups, it seems to me, must have some synergism with the original laments that you would have. Is there some process that you do that? So the subsequent audit…. It has been a decade out, but you go back to investigate a department, and you see that the same discrepancies or issues are still emerging. Does that form the basis of your new audit, and how does that relate to our work here in the Public Accounts Committee?

R. Jones: Thank you, Member. Yes, and I think a perfect example of that is the recent report that we released on earthquake preparedness. It was one that we had done many, many years ago, and we continue to always keep in touch with the ministries involved, just to let them know we care. We found that a number of the recommendations, if not most of them, hadn’t been acted on, so we decided to re-audit. We do that in a number of cases.

Forestry might be another area. We looked at stumpage 15 years ago, and there still are concerns in the stumpage area. So it’s one we would go back in and look at. But we keep in touch.

B. Ralston (Chair): In fact, one of the reports we’re considering tomorrow is an update of a 1996 report on government’s use of advertising. That’s a very specific reference.

B. Ralston (Chair): Recess. Pardon me. I have to use the right word. Thank you. One o’clock.

B. Ralston (Chair): The item on the agenda before the committee is review and consideration of the Office of the Auditor General follow-up reports, and there are a number of reports.

I will say that in the follow-up report dated October 2012, Paul Craven, who is the executive director of policy and quality assurance in the environmental assessment office, is here to answer questions on that report. It’s anticipated that there is some interest in that.

Public sector board use, the last item — there will be a separate presentation, and there are representatives of the government here who will be responding to questions and making a brief presentation as well.

With that, I’ll leave it to the Auditor General to introduce other staff that may be assisting. I’ll turn it over to the Auditor General.

Auditor General Report:
Follow-up Reports: Updates on the
Implementation of Recommendations
from Recent Reports

C. Bellringer: Thank you, Mr. Chair. I’m actually going to immediately turn it over to Russ Jones, and he’ll go through our general presentation and introduce the staff.

With me today is Malcolm Gaston, down here, and Morris Sydor, right here, because they were involved
[ Page 585 ]
in some of the follow-ups that we actually did progress audits on.

B. Ralston (Chair): Before you go any further, I just want to give a particular welcome to Malcolm Gaston. As many will know, he suffered an injury in a bicycle accident, and it’s great to see him back and looking in good form. I know he’s well on the way to recovery, and I think we’re all pretty happy to hear that. It’s good to see you, Malcolm.

R. Jones: In this presentation we’re going to take a look at, as the Chair mentioned, five different reports, and you’re going to get a different flavour from each one of them. There are a couple that are very, very short in terms of my remarks because they are just self-assessments, and you’ve heard what self-assessments are this morning. We won’t take too much time on those.

Before starting, I was just going to ask, Chair: would you like to have questions after each report or wait till the end?

B. Ralston (Chair): I think after the first one, in any event, I’d like to pause for questions because that’s the one for which Mr. Craven is here. Perhaps we could deal with that one, and then he would be able to go. I’m sure he would be grateful for that.

Then maybe we’ll see what the response of members is. If there’s a lot of interest in individual reports, then we can pause. If not, we’ll just plow through.

R. Jones: All right. Well, then, let’s start on the October 2012 follow-up, and I have very few remarks on this one. As you can see from the slide, there are 16 self-assessments, 86 recommendations. There were four initial follow-ups and 12 subsequent follow-ups. All I can say is that 31 percent of the recommendations, as you can see, were fully or substantially implemented, according to the auditees. Sixty-three percent were partially implemented, and six percent of them had no action taken.

Because this report is just self-assessments, we don’t have any audit level of assurance over these numbers. That’s all I have to say about it, so maybe we can go on to Mr. Craven and a question you might have for him.

B. Ralston (Chair): I don’t know whether he has a presentation, or is he simply here to…? I understood he’s simply here to answer questions. But if you had anything you wanted to say….

P. Craven: That’s correct. I just want to make sure that we’re all on the same page here, the same screen. We’ve conducted…. The EAO has provided three self-assessments since the original audit by the Auditor General — one in 2012, one in 2013 and one most recently in 2014. I’m not sure which ones, if any, the committee has before them.

Then we are also currently cooperating with the Auditor General on an official progress report on that audit that’s ongoing and nearing completion, on which they have come and asked for documentation related to all of the recommendations. They are six, all of which are important, all of which we think we’ve made substantial progress on. I’m pleased to go into a little bit of detail about what we’ve done on any of those that are of interest to the committee.

B. Ralston (Chair): I’m told that there are questions, so perhaps I’ll just leave it to the questioners.

I think the main issue in that report was that the office was considered to be pretty proficient at crafting what were, essentially, conditions for the issuance of the certificate. The concern of the Auditor General was the follow-up and compliance with any of the conditions and whether that was being done. I think that was the main focus of the Auditor General’s concern.

K. Corrigan: I think the environmental assessment office — I’m sure we all agree — is a really important function in government. I read this with interest.

There’s been a huge amount of interest, obviously, and concern about what happened at Mount Polley. So I wanted to get an understanding of the relationship of the different ministries when it comes to assessments. My understanding is that Mount Polley, the certificates and then the amended certificates…. It’s all Ministry of Mines or Forests, Lands — whatever that ministry is, the mining ministry.

My question is: in terms of this whole issue of compliance and enforcement in monitoring and re-evaluating and so on, what determines whether or not there’s going to be environmental assessment office involvement or whether it’s going to stay with the other ministry?

P. Craven: The environmental assessment process is generally at a higher level than the permitting process, right? That results, if the application is successful, in that certificate. That certificate then has a number of conditions. Our office is responsible for following up on those conditions. Then subsequent permits may have other conditions that may nest under those larger conditions, be more specific.

What we do is that we come up with a compliance management plan. The environmental assessment office
[ Page 586 ]
will address the conditions of most significance to us and address the ones that are better addressed at permitting.

Where you’re at a higher level and at a more minute level, then there are circumstances, particularly when we get into operations of these projects, that the expertise sits with the permitting ministry, as opposed to the environmental assessment office. But there are areas where those permits don’t cover. That’s where the environmental assessment office, in particular, will be interested — in general terms.

K. Corrigan: Can I follow up on that? Okay, so in the case of Mount Polley — I was taking a look at the certificates in the last couple of days — there’s reference to the Ministry of Environment early on, when you look at the original permits in the 1990s. But there’s no reference — at least, I couldn’t find it; I might have missed it — later.

What would the Ministry of Environment…? Specifically, in the case of Mount Polley, was there monitoring by the environmental assessment office or the Ministry of Environment? Was there monitoring in that particular case with your office? Or would your office have been involved with Mount Polley?

There’s no reference to it in anything that I saw. I’m trying to figure out what the involvement of the Ministry of Environment was in the case of Mount Polley more recently.

P. Craven: Unfortunately, I’m not in a position today to speak to specifics of particular projects and, in particular, Mount Polley. Our focus for the purposes of this is our report. I think that’s better directed elsewhere. I just don’t have the expertise or the knowledge of the file to provide you with information today.

B. Ralston (Chair): It’s also before the courts, I think, in some respects. There was a warrant issued yesterday for a search of the company’s offices.

K. Corrigan: I guess the more process question that I was trying to understand is how the decision is made that the Ministry of Environment is going to be involved and where it’s going to be involved, as opposed to the permitting ministry, which would be to do with mines in this case. How do the two ministries work together, then? There may not be a huge environmental impact — maybe I’m going to answer my own question — unless there’s a breach of the dam or potentially a breach.

So how does the Ministry of Environment make the decision whether or not they’re going to get involved, as opposed to the permitting ministry? That’s a more general question.

P. Craven: I’ll try and answer. Again, I want to make a distinction between the Ministry of Environment, which we — the environmental assessment office — nest in, and their permitting obligations as the Ministry of Environment through the Environmental Management Act, for example.

Our focus in the environmental assessment office is just on the conditions that exist in the certificate, right? But in general terms, when we have a certificate — and it’s going to vary from project to project — you’re going to have to look at what organization is best placed to address compliance and enforcement in those matters. We have that conversation after a certificate is granted, and we figure out where that is best placed. We come up with a compliance management plan to address that between the various ministries so that we’re not overlapping each other.

R. Jones: I was just going to say that we’re currently doing some work in this area. I thought maybe Morris might be able to — he’s in charge of that audit — give you some sense of not what we found but what we’re looking at.

B. Ralston (Chair): So is this on the re-audit, then, of the follow-up process that we sort of referenced earlier? Or perhaps we can just explain what exactly he’s doing.

M. Sydor: There are two separate things underway. One is that, as was indicated by Paul, we are carrying out an audit of their assessment as to the progress with regard to the recommendations. We are fairly far along. That will be published sometime this spring.

The other piece of work that we’re doing is we’re actually looking at compliance and enforcement in the mining sector. The question the committee member asked was…. The general response is that both bodies share responsibilities, based on what their legislation calls for. In terms of ensuring compliance with permit requirements, there will be permits that Mines issues under the Mines Act, and there are going to be permits that Environment issues under the Environmental Management Act. So we’re really looking at a responsibility that the ministries share. As Paul indicated, what they do is assess where the issue is going to fall.

I think one of the things that was reported by the independent panel was that there was a request before the ministry to release a lot of that water in the dam so that they could lower the levels. It was the Ministry of Environment that was looking at that, because the Ministry of Environment is responsible for the amount of effluent that goes into watercourses. The Ministry of Energy and Mines is responsible primarily for safety issues around mines and how they operate. They’re also responsible for environmental issues.
[ Page 587 ]

Both ministries have a responsibility for environmental matters in regard to mining operations, but they have to decide who issues the permit and what the environmental issue is actually related to. So that work is underway right now.

B. Ralston (Chair): Just for clarity, then, for an individual project, would it be possible for the Ministry of Environment to issue a certificate for some aspect of the project and the Ministry of Mines a certificate or permit for other aspects of it?

M. Sydor: Permits. Both would be issuing permits for different aspects of the operations.

S. Robinson: I just have a question about one of the recommendations where there has been some action taken. That’s recommendation 1. The environmental assessment office ensures “commitments are clearly written in a measureable and enforceable manner.”

B. Ralston (Chair): This is the recommendation in the October 2012 report, correct?

B. Ralston (Chair): Okay. Because Mr. Craven said that there are at least another two that are in the materials before us, I believe — subsequent follow-ups as well.

S. Robinson: The note was that the EAO has revised its policy for drafting EA certificate conditions to ensure they are consistently measurable and enforceable.

Is that just going forward, or was that with existing certificates — that you went back with existing certificates and were looking for measurables?

P. Craven: That’s going forward. The mechanism for changing a certificate under our act is through amendment. That amendment is based on application from the certificate holder.

There isn’t a mechanism for us to, ourselves, open up those certificates, although when we have an opportunity through an amendment…. Sometimes certificate holders themselves, because they also like clarity, will seek options to bring better clarity to those conditions when there is an opportunity.

P. Craven: I can’t give you numbers. I just know that there have been instances in the office where there have been amendments. Of course, any amendment that we do — we’re going to use those clear, enforceable objectives to do those amended conditions.

S. Robinson: Just as follow-up to this, if I might. Because this sort of came out, I’m guessing, October 2012, it’s really only been for a couple of years that we’ve been using this model for developing some really good conditions and having some measurement and enforceable criteria.

B. Ralston (Chair): Just to follow up on that, in your example, you give an example of a condition that’s vague and unenforceable. What you’re saying is that unless the agency or the company that receives the permit comes forward or seeks an amendment, it just stays vague and unenforceable, and there’s no mechanism to go back and rewrite that condition. Is that what you’re saying?

Now, some of those…. Conditions span the life of a project, right? An older certificate may have conditions dealing with pre-construction, construction, which now…. Those are spent. Those conditions are now spent. So you’re really talking about the conditions in relation to operation and decommissioning of a project, if that’s happening. It’s not like there’s….

There is a smaller subset of conditions that are out there that may not be crafted as well as new certificates, but they may have been crafted well, as well. I don’t want to put every certificate that was prior to the Auditor General’s report as necessarily bad, but we would have to look at those to determine that.

B. Ralston (Chair): Again, I’m just looking at recommendation No. 3, which I think you were touching on there — the post-certification monitoring responsibilities. The self-assessment is — this is on page 2 of 4 in the October 2012 report — “fully or substantially implemented.”

Can you explain what you mean by that? There’s talk there about a compliance management plan. It says: “As
[ Page 588 ]
of May ’12 these…are being developed for every proposed project….” Has that been completed? Maybe you could report on where that’s at.

P. Craven: For each project now going forward, we have…. First of all, what we do is…. In the actual conditions themselves, you will see various agencies referenced. It may be the environmental assessment office. It may be the Ministry of Mines. It may be the Ministry of Environment or other agencies with regulatory permitting requirements. That may mean that they have to approve something or they have to review something. That’s one way in which we clarify those obligations.

Secondly, we do these compliance management plans for each project so that we understand, with our sister agencies, who is going to be responsible for oversight.

B. Ralston (Chair): Just before I turn to Kathy, recommendation No. 5 is classified as “partially implemented.” The recommendation was that the office conduct post-certificate evaluations to determine whether environmental assessments are avoiding or mitigating the potentially significant adverse effects of certified projects. That’s “partially implemented.” I note in the one before that you have engaged staff to actually do the work. Previously there weren’t any dedicated compliance and enforcement staff, probably giving rise to the concern that the Auditor General expressed.

P. Craven: When we began this process, there were no compliance and enforcement staff at the environmental assessment office. Now, in addition to myself — I’m the executive director responsible for the program — we have a manager who is responsible for compliance enforcement. We now have three enforcement officers as well as admin assistants. So we now have a program that exists, and they’re responsible for our environmental assessment program.

In addition to that, we have used…. There are existing natural resource officers under the Ministry of Forests and Lands, more commonly known as FLNRO. Those officers — we also take advantage of their expertise, and they can act on our behalf. That obligation has now been reciprocated. Our compliance officers are now natural resources officers, under their act, so that we’re working together. If we are on site, then we can enforce provisions on both sides.

That’s part of our approach. This year alone we’ve done 27 inspections related to projects in the province. We set up an inspection plan at the beginning of the year. We’re doing our next one, for next year, now. Those have ramped up since this function became more part of the EAO’s mandate.

B. Ralston (Chair): Similarly, in recommendation No. 5, just to stay on that, there’s reference to developing an EAO’s effectiveness management program, which will “increase the frequency of effectiveness evaluations and provide better means of tracking evaluation results.”

This self-assessment is as of October 2012. Can you report on what’s happened since then?

P. Craven: Effectiveness management. Now, we were talking about the improvement in certificates. Since the improvement of certificates, what we’re now doing is looking at those improved certificates. Some of them aren’t through an entire life cycle yet. We’re looking at: how are those conditions and the approach taken in those certificates effective?

What we do is: through our inspections, we are identifying whether or not the conditions work on the ground. We are getting feedback from certificate holders themselves. We also do desk-based inspections, in which we go through all of our conditions, or a subset of those conditions, and evaluate how they are working. We get feedback through complaints and other means.

We’re constantly building an effectiveness regime so that we can test those so there’s a feedback loop. If a particular condition in a particular project isn’t working, we don’t want to replicate it for another project. We want to be continually learning. That is in progress, because these new certificates are working their way through our process.

Now, if we did it and evaluated it on an older certificate, you probably would get, maybe, a different response. But that’s the thrust of what we’re doing in terms of effectiveness.

B. Ralston (Chair): Okay. I have other questions, but I’ll turn over to someone else.

K. Corrigan: Well, on that, recommendation No. 5 and the answer that was just given. Again, to reiterate what Bruce was saying, it says specifically that there will be developed — and then it was capitalized, so it sounds like a program — an effectiveness management program.

Would it be fair to characterize what it is that you’ve just described? Is it a written program? Is it a structured program that is being used, or is it a little more ad hoc than that — simply that you’re aware of that? Or is there something formal that you’re using in order to evaluate whether the environmental assessments are avoiding or mitigating the potentially significant adverse effects of certified projects?

P. Craven: Those elements that I talked about are planks in an effectiveness program. I wouldn’t say that at this stage we’re with an effectiveness program that we have fully implemented or are fully happy with yet. I think it is still a work in progress.
[ Page 589 ]

B. Ralston (Chair): Just before you do. Is that the subject of your audit, then, Mr. Sydor — that part of the recommendation?

M. Sydor: What we’re doing at the office there is looking at all the recommendations. We’re looking at each recommendation and seeing whether in fact they’re as far along as they have indicated in their self-assessment and looking for the evidence to show that. So it’s not just one recommendation we’re looking at. We’re looking at all of them.

K. Corrigan: Then the last part of that sentence was that this will provide better means of tracking evaluation results. Are the evaluation results then being tracked in any formalized way? It sounds like you’ve kind of answered that. But just on that specific piece is there a tracking of the evaluation results?

P. Craven: Yeah. We’ve developed what we call inventory in a library of conditions for various projects going back. Then when — either through inspection, complaint or other activity in the office — we have feedback that relates to effectiveness, that will be put into that sort of library of conditions for the use of the office.

K. Corrigan: I know that’s a small office, and I know it’s challenging. Do you have staff, somebody, who is particularly responsible for this follow-up tracking and evaluation? I’m just trying to get a sense of whether or not you have the resources to do this as effectively as you would wish to do at this point.

P. Craven: Right now it’s more of a collective responsibility of a small group, so they work on it together. There are a couple of individuals that are more responsible for it than others. Would we take more resources? I think the answer on most of that — and if you asked most of my colleagues across government — is we would probably say yes.

We’re developing a program and trying to develop in steps that make it an effective way. Job number one really was to develop a program and have staff to be able to do compliance and enforcement. Job number one also was to improve our conditions. Those jobs, I think, are complete to the extent that we can. Now we’re starting to move some of the resources that we took to make sure that those were done in an effective manner to sort of the effectiveness strategy. We are trying to address it in a logical rollout as well.

V. Huntington: One of the things that’s troubled me from your comments and from my own observations over the years is the lack…. There’s an appearance, at least, of a lack of governing oversight on all of the permits issued by the various departments on a particular project.

You’ll say that the Ministry of FLNRO might be responsible for a permit and enforcing the conditions of that permit, and then another department might be responsible for permits it has issued. But does the EAO have any governing oversight responsibility? If you have tracked all of the conditions of each permit and certificate, have you got the authority to go to a ministry and say: “What is the state of that requirement on that and condition on that permit? Can you give us an update on it?” Have you any of that oversight role to play?

P. Craven: Well, our oversight role is in relation to our certificate and the conditions in our certificate, right? While we work very closely with all our ministry colleagues, because they provide a level of expertise that we rely on in conducting assessments and in follow-up of assessments, our first focus is on the certificate holder. So we’d be asking the certificate holder: “Have you met the conditions? Prove to us whether you have addressed those conditions in the certificate through various means.” Or when matters are brought to our attention, then we would look at those through complaints.

V. Huntington: But you don’t ask the certificate holder: “You have permit X, Y, Z from ministry A, B, C. What is the status of those conditions?” You don’t do that.

P. Craven: No. The permit would be the responsibility of the permitting agency, not the environmental assessment office.

V. Huntington: What I’m driving at is that there is no authority within government that monitors any particular project thoroughly and all of the conditions attached to it.

V. Huntington: Okay. Can you tell me what your understanding of the level of independence of the EAO is?

V. Huntington: How attached is the environmental assessment office to the Ministry of Environment? Are you
[ Page 590 ]
independent of the Ministry of Environment in terms of your decisions regarding conditions, requirements of certificates, commitments that you require? Do you operate independently, and have you independent authority on a certificate? Do you have any legal opinions, for instance, on the independence of the office?

P. Craven: The executive director under the act, not to be confused with my title as executive director — that’s governmentspeak — is an associate deputy minister, and that’s Doug Caul. We have a deputy minister for the Ministry of Environment, Wes Shoemaker. We are responsible to the minister for the environmental assessment office — the administration of the office and the act.

Conditions on a certificate are decided by two ministers — the Minister of Environment and the minister responsible for the sector — though the recommendations as to conditions are made by the environmental assessment office, with assistance from various subject matter experts, which may come from various ministries.

V. Huntington: I guess one of the things that concerned me as I was reading through the recommendations is the…. Tell me: how long has the environmental assessment office been in existence? Is it ten years? Twenty years?

V. Huntington: Less than that. A little less than that. Well, maybe my comment is a bit moot, then, but what troubled me was the lack of maturity in the systems that had been developed to monitor these projects and to determine compliance. Until recently you had no enforcement personnel, did you? It was all reliant upon other ministries.

P. Craven: That was the subject matter of the Auditor General’s report and our response. I think what we would say is that we’ve made great strides in these past three years to address that. We fully accepted the recommendations that were made by the Auditor General and made considerable strides in addressing those issues.

We also look forward to the results of the report that’s being conducted now for any further advice that the Auditor General would provide to us to improve what we’re doing. We are very committed to meeting the recommendations that were made by the Auditor General, and I think, by comparison to some of the statistics that you will see, it’s quite clear that the environmental assessment office is taking the matter very seriously.

V. Huntington: I hope so, because in some of the projects that I’ve seen, even in my own riding — vast projects where there are great gaps in enforcement and compliance…. I really feel that these issues have to be brought up to speed very, very quickly by the EAO and that the assessment office needs to establish its level of independence, because I don’t understand it. I’m not sure you understand my question and how independence is so important.

One of the issues, and this relates to some of my questions, is…. In recommendation 2 you comment that the policy and associated procedures have three intended audiences: provincial staff, proponents and decision-makers. And then again, in recommendation 4 there is a discussion about what elements are to be made public. Is there no consideration of the public interest in these certificates and determining what exactly is going on at any given time with your compliance and enforcement issues and reports? And why aren’t these immediately put on the website for people to follow?

P. Craven: We are looking at how we can be more transparent in providing materials on our website. There are inspection reports provided and on the website. We have compliance agreements that we’ve entered in recently that are also available on the website. We also have to do this consistently with our partners in compliance and enforcement across government.

Also, we have to respect administrative fairness requirements to the certificate holder, so standard practice across is that when we do an inspection report, we provide that to the certificate holder for an opportunity for them to correct any factual errors or for clarifications. That’s standard, and we do that. Also, if we are in the middle of an ongoing investigation or compliance activity, we won’t release those matters until that’s concluded — in general terms.

V. Huntington: Mr. Chair, I just have one comment I’d like to make, in a general sense. The EAO and its operations and its independence trouble me, obviously, but another element of what we’ve discussed today is the lack of general oversight of anybody in government monitoring any particular project and all of the permits and commitments and requirements across ministries on that project. There is a huge opportunity for mistakes and gaps in knowledge and enforcement and compliance with that situation.

If I were to make a recommendation or give a thought to you, I would be working very hard in government to create an oversight role so that a project is properly monitored within all of its permits and conditions across the board by one agency that can point to the agencies to ask for reports.

M. Morris: You made a comment that kind of piqued my curiosity here. You talked about a compliance agreement. What do you mean by a compliance agreement?

P. Craven: Under our act there’s a provision, when non-compliance has been found by various means, that we can enter into an agreement with the certificate holder to outline specific obligations that they will undertake to get themselves back into compliance. It’s a tool to get the project back into compliance in greater specificity than simply following a particular condition. We used that twice in the past year.

P. Craven: Well, we have our normal follow-up tools in terms of inspection and follow-up with the certificate holder. There may be mechanisms that are built right into the compliance agreement itself — for example, an independent monitor or those types of scenarios where we would get reports in greater specificity — so we can monitor that compliance.

M. Morris: Okay. Do you rely on…? We talk lots about the professional reliance model that we have out there. Does the EAO have a professional reliance program, or do they utilize that to any great degree to ensure compliance with their certificates?

P. Craven: There are certificates that do have independent monitors or require sign-off by a certified professional before they are completed, so in that sense, yes. We have involved, and we’ve contracted out in some instances, professionals to assist us in doing larger-scale review of a certificate, like looking at all the conditions. That’s just a matter of workload. We’ve done that in some instances as well, but we don’t…. We generally rely on our own professionals in terms of the conduct of inspections.

K. Corrigan: I want to get back to the responsibilities of various ministries. I just want to be clear, then. Even though the Ministry of Environment and the permitting ministry…. My understanding is that both would be involved in the original evaluation of what should be in the permit. If the permitting ministry is not the Ministry of Environment but is Energy and Mines, like in Mount Polley, then responsibility for all these things you’re talking about — the assessment and tracking and oversight and looking at whether you’ve got the compliance — would be with the Ministry of Energy and Mines, which surprises me.

Is that correct? Have I got that right: the Ministry of Environment or the environmental assessment office would no longer be involved in any way?

P. Craven: Again, we’re responsible for the certificate conditions under the certificate — responsible for compliance and enforcement of those conditions. And then there’s a permit that subsequently comes or concurrently comes, which also has obligations. Now, those obligations are usually a little bit in greater detail than you do have in environmental assessment, so in situations where there’s overlap or where we’re addressing the same issue, then that’s where we coordinate with the ministry so that we are using our resources effectively and using the subject matter expertise effectively to address those matters.

In broad terms, the certificate is the responsibility of the EAO regardless of whether or not there’s a permit in place.

K. Corrigan: Okay. So theoretically, then. You don’t have management of this file. There should have been with the Mount Polley case, then…. If there is reference in the permits — and there is — to Ministry of Environment, then Ministry of Environment would have involvement in monitoring?

B. Ralston (Chair): I don’t think he should, in this particular case, be asked to answer a theoretical question about something that’s before the courts.

K. Corrigan: Fair enough. Then, just generally, the question. Theoretically or in practice, both ministries would be involved, would continue to have responsibility — not for Mount Polley — I’m not talking about that — but any permit. Even though the permitting agency was Energy and Mines, if there is an environmental component, then the Ministry of Environment, the environmental assessment office or the ministry staff would also be involved and would also have a responsibility if there was some kind of environmental aspect to it.

P. Craven: The environmental assessment office is responsible for this compliance and enforcement with the certificate.

K. Corrigan: Okay. I have a different question. Under recommendation No. 3, the recommendation is: “The environmental assessment office clarify the post-certification monitoring responsibilities and compliance mechanisms for each commitment.” It says: “Compliance
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management plans will also be developed for previously certified projects.” Is that happening?

P. Craven: Yes, there are plans that we’ve developed now. When it’s a resource question, we have a suite of several projects. We’re focusing, of course, on projects that are coming through the system now, and when we have the opportunity to look at areas where that coordination will be helpful, we do.

Under recommendation No. 2, that the environmental assessment office continue to work with the Ministry of Environment to finalize a policy framework that will provide provincial guidance on environmental mitigation, the last paragraph says: “The Ministry of Environment and environmental assessment office are conducting trial applications of the policy and its procedures. During the trial period, which is expected to be complete at the end of 2012-13…an evaluation will be conducted to revise and refine the policy and procedures and inform options for future implementation.”

P. Craven: Right. Turning to the latest report, as of October 27, 2014, the policy has been developed — it’s available on the website — jointly by the Ministry of Environment and EAO, and we follow that policy.

B. Ralston (Chair): I just had a question. Go ahead, Vicki. I have one question that I’ll ask at the end.

V. Huntington: I just wanted to confirm something. Under the effectiveness management program — this is, I guess, the introduction portion: “The objectives of the program are to ensure EAO is independently confident: (1) in the credentials and expertise of the professionals who are evaluating the effectiveness of measures to prevent or reduce…adverse affects.”

Does that, then, imply that you do not employ the professionals? They are employed by whom — the applicant? So you just somehow…. How does your management program follow the applicant’s employees in determining whether you’re satisfied with their credentials and expertise? And/or has the EAO ever thought of requiring the applicant to cover the cost of EAO hiring the professionals so that they are independent and responsible to you, not to the applicant?

P. Craven: Right. We have, in instances, used independent environmental monitors who would be funded by the company but report to the environmental assessment office, not through the company.

P. Craven: It’s not a general rule. It’s used where we think it’s appropriate.

B. Ralston (Chair): If there are no other questions, I just have one question. MLA Huntington has just raised the issue of independence of the office. I don’t know whether that’s an issue or not, but certainly, that’s been raised. Can you tell me: is that particular topic the subject of your further audit of these conditions? It is mentioned in some of the responses.

M. Sydor: Our focus was on the ministry’s or the office’s assertions as to how they were dealing with their recommendations. I don’t remember that we raised a recommendation around independence, so the likelihood is that it’s not an issue we’re addressing through our review right now.

The sorts of actions that Paul has indicated they have taken — those are the sorts of things we are looking at to see whether, in fact, what he’s told you today is supportable by the evidence that we have available to us.

G. Kyllo: Just more of a comment. I think with the comments and, I guess, observations with respect to professional lines, we rely on professionals for lots of different things — like construction, for example.

When we talk about engineering…. We’re in a fairly large, substantial building that has huge concerns with respect to public safety, yet we have no problems or challenges relying on engineering professionals in order to certify and give their accreditation and confidence that the building is built to the current building codes.

We don’t have other people within government that
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necessarily know. There are building inspectors, but they don’t go and revisit and re-inspect and reconfirm all the different activities of professionals.

I just think the comment about concerns about, I guess, the confidence that we have within outside and the professional reliance…. There are lots of other aspects of our daily lives that we rely on all the time. I certainly don’t have any problem whatsoever with professional reliance.

B. Ralston (Chair): That’s really a subject of a separate debate. It’s not really…. I mean, I appreciate the comment, and it is in context and in response, but I don’t want to encourage a round of cross-debate on this topic, really. I think we’ve got other things. That’s why I’m saying we can’t do it.

C. Bellringer: It may be completely obvious, but I just wanted to say it out loud. The first of the two activities that Morris referred to was exactly what we were talking about this morning, about taking the self-assessments and then choosing to do additional work. This was an example of one of those, and that’s something that we’ll be issuing, as he mentioned, in the spring.

The second audit is a fulsome value-for-money or performance audit that is going to take quite a bit more time than that. It’s not about to be issued. I will say that if not, maybe, directly addressing governance issues, there are certainly elements of it that, just by virtue of the fact that it’s a broad audit, will be incorporated.

Were there any other questions, before we move on to the next one? I think you, Lana, had indicated some interest in this audit of the Agricultural Land Commission — although I know that it reappears in June 2014 and in October 2013. I don’t know whether we want to address it now or later.

L. Popham: Well, I could address it all the way along, or…. It just depends what you want to do.

I do have a specific question around the first report, so maybe I’ll just get that done.

L. Popham: Okay. In the first report there was a recommendation around fee review for applications. The idea was that there would be a review of the types of applications that go through — and, perhaps, the different types of fee structure — in order to make the commission more self-sufficient, in order for it to put its resources into different areas.

I don’t see that carrying along in the reports that come after that. I’m just wondering. Where is that recommendation now?

B. Ralston (Chair): You’re referring to page 24, I believe. I’m looking at it here.

B. Ralston (Chair): “Four potential funding sources” — second paragraph in the first coloured box there, page 24. Do you have that, then? It refers to service fees in the first paragraph. Then they talk about potential sources in the second paragraph.

R. Jones: I think the short answer is no, we probably haven’t looked at that, unless it was in one of our recommendations. That’s the preamble that the Agricultural Land Commission has given back to us. As I say, this is simply their self-assessment. We would not have looked at that.

When we went back in and did our progress audit later on, we would have addressed each one of the recommendations and their response to those recommendations to see whether or not they are, as they state, partially implemented, implemented or no action taken. We don’t usually audit preambles necessarily.

B. Ralston (Chair): This one seems to be more substantive that you’d ordinarily expect of a preamble.

So if there’s not an answer there, then this may be an example of where, if the procedures change, we might want to have someone from the commission come forward and respond.

K. Corrigan: Yes. Maybe I’ll direct them to the Auditor General, because I do have some questions on The Status of Enterprise Risk Management in the Government Ministries of British Columbia, which is very short. It’s only a couple of pages. It’s on page 13 of the October 2012 follow-up report.

There are a couple that…. Recommendation 2 is “enterprise risk management targets within deputy minister accountability letters” — that they be put in there, basically. Then it says: “No action taken.”

Then recommendation 10 is that ministries “require their program areas to maintain a risk management process that includes a risk register, as appropriate, which can be rolled up to a ministrywide risk register.” An alternative action was taken, and that’s the self-assessment. I’m wondering if I can get an explanation of those two — maybe I can; maybe I can’t because it was a self assessment — of why there was no action taken and what the alternative action taken was in No. 10.

B. Ralston (Chair): This is also one that recurs in April 2013 and June 2014. There are subsequent updates as well.
[ Page 594 ]

R. Jones: I was just going to say, Member, that we will deal with that when we get to the 2014 one.

K. Corrigan: Okay, good. Some of them I haven’t read yet, because we’re not dealing with them until tomorrow.

L. Popham: My question is around some recurring language that shows up in recommendations through each report, and that’s the language of encouraging farming. So some of the recommendations — the outcome would be to encourage farming.

I just wonder. How do you assess encouragement when you’re looking at it? That seems to be used quite a lot through this report, and I don’t see a measurement for that.

M. Sydor: I think it’s used a lot in the report because that’s part of the Agricultural Land Commission’s mandate. I mean, the big part, obviously, is protecting agricultural land, but another big component is encouraging farming. I think what the Agricultural Land Commission does is assess what resources it has, how much it needs to devote to protecting agricultural land and what it can do by way of encouraging farming.

If we were to look at that, we would basically have to send out a question to the Agricultural Land Commission as you’re asking us: how do you go about deciding what you need to do, and how do you measure whether you’ve been effective? The Agricultural Land Commission is obviously only one organization that’s trying to encourage farming. There are the industry associations. Government has their role, as well, in terms of assisting in marketing and such.

If we were going to look at that particular aspect, what we’d try to do is assess what the Agricultural Land Commission is doing and how it assesses whether its efforts have had an impact beyond other efforts.

L. Popham: The other question, for which there’s also a theme throughout each report, is around the working relationship with the Oil and Gas Commission. The first report was to develop an action plan and implement the recommendations of an audit.

Then, when I move through…. I’m going to skip ahead, Chair, at this point to a future report.

B. Ralston (Chair): It might be good to raise it here and then, I think, deal with it in the last version, the most recent in time. Otherwise it will get confused.

I appreciate the process here is not perfect, because some of these…. That one recurs, and the enterprise risk management recurs in three of the self-assessments. It is potentially confusing. I think what would be good would be to flag the concerns now but address them when we get to the final one, which is the June 2014 one, if that’s not too confusing to members.

B. Ralston (Chair): I don’t want to miss out any questions, but it doesn’t make a lot of sense to have detailed questions on self-assessments that are superseded by later ones — in my view, anyway.

K. Corrigan: I do. Now, the report on the B.C. Coroners Service — I believe there isn’t another one, right? I don’t think there is another one. My problem is, that I haven’t read the reports for tomorrow, so some of them I don’t even know what they are. I’ll be reading those all tonight. I don’t think there is another one.

K. Corrigan: Right, so there’s nothing. There’s no follow-up, so it’s appropriate to ask a question now about it.

Okay, I do have a couple of questions about the coroner’s report, Chair, which may or may not be answerable because the Coroners Service isn’t here. Maybe just to point out…. Maybe I won’t even bother asking the questions and simply say that I wanted to get some follow-up on progress with regard to recommendation No. 4, recommendation No. 3 and recommendation No. 6 — just basically an update.

It says there are plans to do various things. Maybe it’s a more general comment that I would like. There was a very serious and very well-done report with some really important recommendations. I guess I turn to the Chair to see how it is that I can ask questions. Should I put something in writing?

B. Ralston (Chair): Well, I think you can pose those questions, and then in the context of what we may develop in the future — in the immediate future, I hope — as a follow-up process, we can maybe address it.

I agree with you that the report on the Coroners Service was a very serious one. There was a new CEO,
[ Page 595 ]
basically, brought in concurrently with the issuance of the report. It would be, I think, important to know what success they’ve had in implementing some fairly ambitious recommendations.

C. Bellringer: Just to bring it into the more current report, it does show up in the October 2013 on pages 18 and 19. It’s not completely implemented, but there’s some progress from the 2012 one.

K. Corrigan: The October 2013 just says: “Fully or substantially implemented.” There’s not a lot of detail. That’s all right; I’ll leave it for now. Perhaps at a future date if I have questions, then I’ll pursue them another way.

B. Ralston (Chair): Okay, I think we can get these questions that are posed on the record flagged and have a list, and we can deal with it in the future.

R. Jones: April 2013 is similar to the 2012 report, except that we also did two progress audits.

B. Ralston (Chair): These are managing progress in the government and conservation of ecological integrity — those two — pages 50 and 52.

R. Jones: Right. The first slide, again, just sort of gives some statistics on what we found. Of the 17 self-assessments, 92 recommendations, 12 were initial follow-ups, five were subsequent — the same statistics you had from the previous report.

But yes, then we decided we’d take a look at two audits in more detail, in terms of doing a progress audit.

The first one is the ecological integrity audit. Conservation of Ecological Integrity in B.C. Parks and Protected Areas was the name of the audit we did. It assessed whether the Ministry of Environment was conserving ecological integrity in B.C. parks and protected areas. Conserving ecological integrity contributes to protecting both biodiversity, preserving wilderness and maintaining ecosystem services, such as water purification and erosion control.

The key findings we included in our audit were around that while the ministry had a clear goal, its plans were incomplete or dated, conservation policies were not being consistently upheld, and little action had been taken to ensure conservation. As well, the ministry was not reporting publicly on its progress. So we went and did a progress audit.

The initial assessment that came back from the ministry had three cases where they had shown things being fully implemented. By the time we did our progress audit and had discussions with them, we came to the conclusion that two of them actually had had alternative action taken, which is different than “fully implemented,” and for one no action was taken.

My slides here. There’s the scenario. This shows the state of the recommendations after we had done our progress audit and discussed it with the ministry.

As you can see, there are a number where there was alternative action taken. Number 3 is a good example there, where it says: “Obtain information for actions needed and develop a five-year conservation plan.” Instead of a five-year conservation plan, they’ve replace that by a new conservation policy. Therefore, we concluded alternative action had been taken. That’s where you can differ from the recommendation, but still there’s been alternative action taken that we were happy with.

The one that is still left on here is the bottom one, where it says: “Develop plan to address gaps in the parks and protected areas system.” They’ve decided not to take any action. The reason for that, they told us, was that initiating a governmentwide plan is not in their mandate. Therefore, this recommendation has no action taken.

B. Ralston (Chair): Does your office agree with that characterization of their jurisdiction, that they can’t do it? What other agency would implement such a policy — or mid-department?

M. Sydor: What we were looking for was for the ministry to identify what the gaps are. Certainly, they on their own don’t have the authority to go out and fill those gaps. But our view was that there was a need to identify what gaps exist.

I think our report indicates that while there is an extensive system of protected areas in the province, there are a number of them that are quite small. So they’re at risk of having their ecological integrity compromised. As well, there are a lot of parks that are isolated. That creates issues for the biodiversity that the parks are intended to maintain.

If we look at some other jurisdictions…. Costa Rica is an example. We have 13 percent of our land protected. They have over 20 percent. As well, they’ve gone about managing their system so there’s connectivity from north to south so that species can migrate during seasons or such. I think that’s the sort of thing we were getting at here. Where we’re talking about gaps, identify areas that need to fill in to make those ecological connectivity links more identifiable.

The first step is to identify what those are. Subsequently, we can talk about how many of those can we fill, based
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on other programs and priorities that government has. The ministry’s view was that that’s not their responsibility.

I think they also indicated in their report…. They threw in some figures as to what it might cost to start to meet some of these gaps. Again, their focus seemed to be on the idea that a lot of the filling would be through purchasing private land. Of course, most of British Columbia is public land. Our view is that there are still opportunities to identify public lands that may be suitable for additional protection.

G. Kyllo: You indicated that in a number of instances alternative actions were taken. Are those typically, I guess, in agreement with the Office of the Auditor General? Are you guys in agreement with the alternative actions? Are you guys consulted, or do they just, on their own, independently choose and elect to take an alternative action and not necessarily advise you?

M. Sydor: We weren’t involved in this particular case in consultations with the alternative actions. I think what the ministry did was look at the recommendations. As well, sometimes when policies are in place for some substantive period, a report like ours provides an opportunity to assess whether the policies are still effective or whether there needs to be a new approach.

My sense is that there are a number of areas here where we’ve identified alternative action and that the ministry looked at what was going on and decided there’s probably a better way of approaching it. One of the areas that is talked about here is annual plans. I think the ministry has come to the decision that from a policy standpoint it might be preferable to look at plans over a longer period. I think they talked about maybe reviewing them every three or five years, rather than updating them annually.

What we’ve done is report on the fact that, yeah, here’s what they’ve done, and it’s different than what we expected. But we haven’t gone to the extent of saying: is this a more effective approach than what we initially called for? It’s a change in how they want to manage their parks, and we accept that. At some point in the future we may come back, as we did with the Agricultural Land Commission, and say: “How are you doing now? We were in here ten years ago. Are you doing a better job with your new policies?”

G. Kyllo: If I may, Chair, just a bit of a follow-up. When the department actually accepts the recommendations and moves forward, are their efforts pretty much in isolation? Is there any kind of a procedure in place where they provide an annual update or feedback, or is it up to the Office of the Auditor General to go and ask questions in order to get an update? Is there any kind of procedural requirement for them to update you on their progress or alternative actions that they might be considering?

M. Sydor: The requirement comes in when we initiate the follow-up. Those vary from periods of six months to a year, depending on the project. If we carry out a project and we think that there’s a lot of interest and that they should have acted within six months, then we will initiate a follow-up earlier. In some cases we recognize that the recommendations may take substantially longer to get started, so we will give them a bit more time. That’s the trigger for us to get involved.

Now, it can be that the ministry on its own decides to come to us and say: “You’ve given us some recommendations here, and we want to discuss exactly what you’re trying to get at.” The Ministry of Forests is an example that we’ll talk about. I can address that later, but in this particular case I think that when the time came, we asked for a follow-up and they gave us the information. We did this report. I think it was published in 2011 or thereabouts. There were some follow-ups before we decided to do the progress report.

G. Kyllo: There is currently a reasonable follow-up process that’s in place, and you guys make a determination whether that’s six months or 12 months. So there already is a follow-up process in place that’s undertaken.

G. Kyllo: Yes. Just to ensure that at least they’re saying that they’re moving forward on it.

S. Robinson: I just have some questions about the audits of the two P3 projects in the Sea to Sky corridor in terms of some of the follow-up questions. I recall…. This is the report. It’s in April 2013. I just have some questions about….

B. Ralston (Chair): We’re on April 2013, are we not? Just so that no one is confused, we’re looking at page 14: “Audits of two 3P projects in the Sea to Sky corridor.” I think that’s where you’re….

V. Huntington: Can I just ask, then, where was the ecological integrity? It was in the previous report?

S. Robinson: The Auditor may not be able to answer this question, but perhaps we could ask for some…. If the Auditor knows, I’d be most grateful.

One of the actions taken for recommendation 1 is that the “ministry currently has a process in place whereby any future ownership changes are reviewed by the ministry’s legal counsel before approval and, if necessary, negotiate any changes to the P3 ownership.”

As before, I’m going to assume that we can’t go back and fix, so this is going forward. Is that how the Auditor understands that statement?

R. Jones: From what they’ve said, that’s how I would understand it. But without them here, I’m not quite sure what they mean by it.

B. Ralston (Chair): Okay. If we wanted an answer, we’d have to get it from someone from the ministry.

I’m assuming that that would be the case, but it would be helpful just to get confirmation, because I remember that discussion quite well.

The other one has to do…. Again, I think we just have to go back to the ministry.

They brought forward consideration of the HST-PST issue, and they talked about relatively small sums that were involved. Once they peeled out where there would be some potential recoverables, they said a small portion of the payment — 50 percent — relates to operating costs. They note that the cost-benefit analysis of such a negotiation to get any recoverables wouldn’t be worth it.

Well, I would like to know how much that is and how they determined that it wouldn’t be worth going back to see if there were some moneys owed back. If we could ask for some detail on that.

The last question. They reported out on the capacity issue — I remember there was some really great discussion around this table — in terms of measuring the capacity of the Sea to Sky Highway, in particular, and that we weren’t getting any measurables. I note here that the ministry has engaged a consultant in order to define the parameters and appropriate timeline for data collection on the capacity issue. I just would like some clarity about….

The onus to do this — is it on the ministry or is it on the private partner? My understanding was that the private partner was responsible for doing that data, and to find out that the ministry has hired somebody…. I just want to get some clarity on whose responsibility it is to develop that. I know the Auditor General won’t be able to answer that question, but I’d really like to hear back from the ministry on that.

B. Ralston (Chair): It does say on page 16 that the implementation date of that study would be December 2016. Presumably, it’s still in progress, unless it has been completed unusually early.

K. Corrigan: I recall the discussion that we had as well. In terms of measuring the amount of time it took or the improvements of time, we were all pretty surprised to hear that the system didn’t work. But there were performance payments of, it seems to me, around $4 million or $5 million a year that were based on measurements on how long it was going to take to get from point A to point B.

I notice that the comment here in the self-assessment is that the original process to measure delays on the highway proved to be unworkable. The audit report raised this as a concern. The ministry had already been talking to the concessionaire about changing the system and has now accelerated the process.

I really would like an update on that one — exactly what’s going on. How is it that those payments continued to be made, and there’s no apparent system to measure whether or not the thing that’s supposed to be done is actually happening? I think it’s important for us to get some answers about some of the real concerns that we had about the lack of accountability with regard to that P3 contract.

The other question I have…. I don’t think there has been, but there was a sale that was a concern, and the action taken with regard to future sales of the project was that the ministry currently has a process in place whereby any future ownership changes are reviewed by the ministry’s legal counsel before approval and, if necessary, negotiate any changes to the P3 ownership.

That doesn’t sound to me like the ministry has control. It sounds like it would have to be negotiated and probably a payment would have to take place, of some kind. I’d like more information about exactly what’s been achieved in that regard as well.

R. Jones: The second progress report that we did was around our report on managing fraud risks. It was a 2010 report that we put out about the aspects of financial…. It was called Aspects of Financial Management. It was looking at the fraud risks to government and how they’re managed. The report’s recommendation was that government adopt five fraud risk management principles as part of a comprehensive fraud risk management strategy in government.

These principles are summarized on this slide. In our view, there are three key elements here. The three key elements of the fraud principles are: having a central risk register, having a central fraud hotline and doing public reporting of the results of government’s fraud risk management activities.

These particular elements are not in place, and as a result, our assessment of government’s progress against the recommendation is partially implemented, as indicated with the yellow dot on the slide. The ministry had initially said that it was fully implemented.

One of the things that we were told is that lack of resources at OCG is hindering the progress in this area. The fraud risk management group has not met since December of 2011, when we did this progress report.

M. O’Rae: I think we’re happy to bring in the investigations unit and the risk group. It seems it’s of significant interest. We’re happy to bring them in, and we can talk about it in more detail, get all the answers that the committee would like to have.

B. Ralston (Chair): So you’re not disagreeing with the content of the report, then.

M. O’Rae: Not agreeing or disagreeing. I’m really not in a position, I would say, to comment. I know that there has been a lot of inroads in training and education, but it appears the Auditor General feels that they have not been met substantially. So I think it would be best to bring in those accountable, and they can speak to those specifically per our discussion this morning.

L. Throness: This might be an example of something that the committee might want to pursue. This would be really valuable in terms of savings to government if we could catch more fraud and find out why they’re not doing what I guess they said they would do.

B. Ralston (Chair): No, I think in the context of the discussion that we had this morning, I agree completely. It illustrates the point. You’re right. We have the offer of the office of the comptroller general to bring some people. That will be something we’ll add to our list of potential topics for future meetings, assuming that we develop a procedure.

K. Corrigan: I would echo the two comments that have both been made, and I was going to say the same thing. If there had been an action plan, then we wouldn’t be looking at this several years later and finding out that the fraud risk group has not met since December of 2011, which I find kind of astounding. Did I get that correct — that there’s a fraud risk management group for government, an overarching interministerial group of deputy ministers or something, that is supposed to be responsible for fraud risk management in government and that it hasn’t met since December of 2011?

M. O’Rae: And that’s what I just want to clarify with the experts. We obviously have a fraud investigations unit that you’ve all heard of in the media, obviously, so there’s a lot of work and effort that goes on, on some very topical items. We obviously have a whole risk management branch that covers a lot of different items as well.

I don’t want to say that the committee has or has not been meeting. I just want to make sure that whatever form it is or isn’t, before I make any statement…. So per our discussion this morning, I would suggest that you bring in those two groups, and then we can have a more comprehensive discussion with those that deal with it day in and day out.

R. Jones: I was just going to comment. Now, that was as of when we did this report, which was April 2013.

B. Ralston (Chair): The old defence counsel in me was going to mention that as well. There could have been subsequent action. We don’t know. There’s a reasonable doubt there.

V. Huntington: Just on the transit self-assessment, is there any indication that any of the recommendations have been fully implemented at this point, or is it still in limbo as far as you’re concerned?

I just bring it up because transit…. Although a different topic of transit, it’s covered in a future report. I just wanted to know whether we had come a long way in these recommendations or not.
[ Page 599 ]

R. Jones: Thank you, Member. In June of 2014 there’s another self-assessment on the same topic.

V. Huntington: You wouldn’t believe I’d read any of this. All right, thank you.

Anything further on this one — April 2013, subject to what follow-up we might do, based on questions members have raised?

R. Jones: Thank you, Chair. This follow-up report in October 2013 is similar to the one we looked at in 2012. We didn’t do any progress audits on this one, so again, you have a diagram that shows the results of the self-assessments for the October 2013 follow-up report. There may be some issues in there you wish to get answers to, and the ministries or whoever that are involved might be able to provide those answers.

Lana, there’s a further self-assessment of the Agricultural Land Commission. Did you…?

L. Popham: Okay. Recommendation 6, which is on page 27 — “Ensure that it has a sufficiently robust compliance and enforcement program” in place. This relates to soil dumping and anything that somebody may not be in compliance with as far as the ALC, and it’s mentioned that 38 officials could be appointed from FLNRO to help with this compliance and enforcement.

I’m just wondering if that was followed up on. I noticed that it’s partially implemented. I haven’t seen the numbers — how many people were actually brought over from that other ministry to help out.

M. Sydor: In the next year we actually did a progress on it. I think at that point, in 2014, we did report that there were a number of FLNRO officers who had been designated to work with the Agricultural Land Commission. There were 38 appointed.

B. Ralston (Chair): That’s in the June 2014 report? Okay. We’ll get to that.

Is there any different way in which this can be organized so that at least, if we’re coming into it a couple of years after the fact, we could organize all the audits of one agency together? Maybe I’m the only one having trouble keeping up here.

B. Ralston (Chair): No, people are jumping around. But I think it illustrates…

V. Huntington: Something’s wrong with what we’re doing here, is all I’m saying.

B. Ralston (Chair): …the point that the follow-up needs to be more timely, as some members have already mentioned.

K. Corrigan: I have a question on this, which is a second follow-up on the effectiveness of B.C. community corrections. This is on page 14 of the report; it starts on page 13, I believe. The question I have is with regard to recommendation 7 — the original recommendation 7: “We recommend that the community corrections and corporate programs division ensures offenders receive and complete the interventions required in their case management plans.” The report is now that it’s fully or substantially implemented.

One of the challenges I have is that I seem to recall from the original report that there was a number that says what the percentage of completion was, and it was shockingly low. It was somewhere in the range of about a third of the interventions that were required were actually completed.

When I get a subsequent assessment saying it’s fully or substantially implemented that has a subjective kind of description of what’s happened, it doesn’t help me nearly as much as if I could have had a number that said: “We are now 60. You know, we’re doubled. We’re two-thirds of the interventions.” That, to me, was a really important number — that community corrections offenders were not getting the interventions.

I’m not sure whether this is a request for more information or whether it’s more of a request in terms of how we can get the information in the first place without requiring, necessarily, that representatives of that ministry
[ Page 600 ]
be here to respond. But say when you have something like that, a number would really be a nice measurable to have. I guess I could put it either way. Either I’d like the information or, secondly, maybe in the future it can be required that when there’s a number that is a measurable, we get the new number.

R. Jones: Thank you, Member. It sounds like a good suggestion, and it may be something that could be worked into an action plan.

S. Gibson: Just a general observation. I notice that the term “fully implemented” is never used. I’m just wondering why that is. It’s either fully or substantially implemented, but I don’t ever see the term “fully implemented.” Why is that?

S. Gibson: If I give my students an assignment to work on a project, and at the end of the semester I say, “fully or substantially implemented,” it’s a bit debilitating. So I’m just wondering why, when I look through here, it’s never, ever used — “fully implemented.” Why is that? There must be a reason for that.

R. Jones: Thank you, Member, and I must admit I can’t answer why we have “fully or substantially,” other than maybe, when we were first sending out these assessments, there was some concern around: what if it’s closer to “fully” and not as close to “partially”? In some cases, “substantially” may have covered the recommendation that we had suggested.

S. Gibson: I’m not diminishing the incredible work that you do, but it’s either prescript or postscript, right?

R. Jones: Yeah. I can only think that possibly, in terms of…. If it was 97 percent implemented, that’s substantially, but it’s not fully. It’s not 100 percent, but it’s close enough to cover off our recommendation.

S. Gibson: I think my wife would be glad I don’t grade her meals that way. Thank you.

B. Ralston (Chair): What about her grading your meals, Simon? Just thought I’d point that out. Don’t answer that.

What I’m going to suggest is we take a recess now for five minutes, and then we’ll resume with June 2014 and public sector board use of information.

B. Ralston (Chair): We’re now going to deal with the June 2014 follow-up report. I’m going to turn it over to Russ.

R. Jones: This one should be a bit more exciting, as we’ve got five progress audits that we’ve taken a look at in this follow-up report. These audits we undertook to verify the action taken by the entity to address our recommendations, so we want to focus on those. I’ll do my obligatory slide at the beginning that shows what happened in the rest of them.

Now let’s get to the meat of the progress audits. We looked at five this time, and we found that most of the self-assessments were pretty accurate overall.

Of the 26 recommendations in these five reports we audited, eight were found to be partially implemented rather than the auditees saying they were fully/substantially implemented. In each case, when we discussed that with the agency, a better understanding was reached as to what we expected to see to get the fully/substantially implemented area. We came to the conclusion with the entities we looked at, “partially” was a better reflection of the progress to date.

Let’s look at each one of these individually. The first one is on FLNRO’s management of timber, and everybody knows what ministry that is: Forests, Lands and Natural Resource Operations.

The vast majority of B.C.’s Crown land is forested. “Today the management of forests is guided by the concept of sustainable forest management, which means maintaining the long-term health of forest ecosystems while providing environmental, economic, and social opportunities for present and future generations.”

Our 2012 audit assessed whether the Ministry of Forests, Lands and Natural Resource Operations is achieving its forest objectives for timber. The audit found that the ministry had not clearly defined its timber objectives, the ministry’s existing management practices were insufficient to address the trend of lower timber supply and reduced species diversity, forest inventory information was dated and the ministry was not appropriately monitoring and reporting its timber results.

FLNRO’s progress is generally consistent with our expectations and is on track for implementing five out of the six recommendations made in the report. The one exception is that the ministry does not plan to implement our recommendation to assess the adequacy of the oversight that it provides.

What you have here is showing what the state of each of the recommendations is. One of the things that both
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Morris and I, when we have chatted with the Ministry of Forests, recognize is the long-term nature of many of these recommendations. There wasn’t an expectation that they would be all fully implemented at this point in time, because a number of these do take a long time to implement.

I can go through each recommendation if you like, or we can take questions at this point in time.

B. Ralston (Chair): Let’s take questions, subject to what members may have to say. Any questions?

S. Robinson: I do have a question about what the rationale provided by the ministry was for not implementing recommendation No. 5. What was the oversight?

It’s on page 10 of the report if that would be helpful, under the summary. It says: “To date, the ministry has not completed an assessment of the sufficiency of the oversight framework for timber management, as per recommendation 5. Consequently, questions remain as to whether the combination of legislation, shared stewardship and ministry oversight are effective in achieving the province’s timber objectives.” Was there any rationale provided by the ministry as to what’s going on there?

M. Sydor: I think the ministry’s response, its view, was that in the context of what was expected in terms of public oversight of the timber industry, the framework was working, and they were going to continue to ensure that it’s sufficient.

What we were looking for. We presented a model in the report of what the framework looks like. Under the legislation, it’s a combination of having clear objectives — we indicated up front that we didn’t see those objectives for the timber portion — and, as well, making sure that the plan and practice requirements are being fulfilled, making sure that there’s an adequate compliance and enforcement program. Also, there’s a requirement for professional reliance in there, and then whether they evaluate effectiveness.

Throughout the report we’ve indicated that in each of these areas generally we have recommendations and they need to improve. Our view was that you need to look at where the significant shifts need to be made. I think the ministry’s perspective was that because it has all of these in place, it needs to just make sure it implements them appropriately. But some of them…. Earlier it was discussed — professional reliance. It’s not just our office. There have been other offices. The Forest Practices Board has raised issues around professional reliance in the forestry sector.

Our view is that you need to look at these things and see whether there need to be changes made to strengthen some components, do more work in other components. I think the ministry’s perspective was that these elements together, the way they’re working now, are sufficient. We feel that there’s probably more work that the ministry can do, particularly around the professional reliance aspect.

S. Robinson: If I could just ask another question. I didn’t go back and read the original report, so I do have a question. I wasn’t around then.

Are there key performance indicators that would tell the ministry that they are achieving these goals? Or are they just saying: “Well, because we have these three pieces, they should work together. Therefore, we’re assuming that they’re working together”? Or are there indicators that would suggest that they are, in fact, working well together?

M. Sydor: Well, our view was that the ministry needs to look at…. First of all, you set the objective. The ministry has now indicated that it did go back. It looked at what it could accomplish from a timber supply standpoint around the province. So it talks about having a goal for a mid-term timber supply of 50-odd-million cubic metres and, over the long term, 65.

To accomplish that, you’ve got to make sure you’ve got the right management actions in place — make sure that industry, which is doing the harvesting and replanting, which affects whether you’re going to get to those particular targets, is actually being carried out well. While the main components are in place, what we wanted to do was have the ministry really think about: “Are we doing enough work in those areas?”

Compliance and enforcement, for example. You may have a compliance and enforcement group. Do you understand whether they’re looking at the right areas, where the risk areas are? Are you doing enough of the work? If you’re not doing enough of it, then you could find you’re having problems. In fact, I think we do indicate in here that what we found during the course of the audit was that the diversity of the forest was diminishing so that there’s less resilience to factors like climate change, disease, etc.

That’s the sort of thing we were asking to look at. If you have this oversight framework, what are you actually doing with it? Are you looking at the right sorts of things, and is each of these elements strong enough, or do they need to be tweaked a bit so that you have a more effective approach?

S. Robinson: I have a procedural question. If we still have some concerns about this, could we ask them to come back and talk to us directly?

I’m mindful of the time. We have about an hour to go. I do want to get to the public sector board use. I’m not going to cut anyone off, but I’d just ask people to be mindful
[ Page 602 ]
of the time and try to make their questions and answers to the point, if we could. Thank you.

V. Huntington: This question is probably more properly answered if the ministry was present at some future time. On No. 3, where you’re talking about species diversity and they reply: “Well, we’re responding through outreach initiatives, but it’s not always cost-effective for the licensee to plant a variety of species and, unless the stewardship plan indicates you must, then so sad, too bad.” Is the ministry, then, saying that a stewardship plan cannot be reopened without the consent of the licensee if there is a problem that is developing in terms of how the licensee is responding to diversity requirements or no requirements?

M. Sydor: The licensee has the flexibility under the stocking standards for any particular area, probably, to select from a number of species. The difficulty has been that again — because there tends to be, obviously, a focus on the bottom line — we focus towards a common denominator, which means everybody plants the same species, which may cost less than getting more expensive species there.

What is happening is that now that they’ve started looking at what’s actually going on in the forest, the chief forester expressed concern — that the degree to which diversity is being affected is of concern to him. I think, at the time that we were doing the audit, the chief forester was going to consider what sorts of actions he might be able to undertake under his responsibilities to try to prompt industry to recognize that the direction that the forest is going in is a problem and that they have to help them come up with solutions.

There are a number of ways that the ministry can go about that. The chief forester can issue directives — be more direct about what’s going on.

You’re right: the ministry is really the one that should respond as to how they’re dealing with this particular problem. But it is a noticeable problem that the ministry has seen as starting to get to the point where they are concerned.

V. Huntington: I’d very much like to ask the ministry a bit more about it, because it’s the same issue, then, that we find — and I don’t like to refer to Mount Polley — in a lot of situations where the bottom line is what drives the decision-making and the decision-making is not often in the best interests of the province.

K. Corrigan: I would also like to have a chance to ask ministry representatives questions, because there are comments that there have been local targets or there should be local targets. Local timber targets and strategies need to be established, and I’d like to know the progress with that. I’d like to know how many trees have actually been planted, because there are lots of targets. I’m interested in what has actually happened — and echoing what Vicki and others have said is a concern about diversity and the fact that local plans could address the problem of diversity.

I would like to see them, but I also do have a more general sort of process question. It was interesting that the office’s expectation was that these would not be fully implemented, these recommendations, because they take a lot of commitment and changing of a ministry and long-term planning. Yet they were reported as substantially or fully implemented in most cases. Then it talks a little bit about the discussions that your office had with the ministry and that they’d finally agreed.

This goes back to one of the very first questions. What’s happening here? In this particular case, how is there this disconnect between your valuation of the level of implementation and what they were reporting?

M. Sydor: This was an interesting audit in that…. Going back to an earlier question about if we are part of the process, in this particular case the ministry did get in touch with us shortly after the audit to really try to understand how they could address these recommendations. To some extent, we were talking about a management framework within the forest sector that they weren’t that familiar with.

The audit team met with them several times over the first year to try to point out what we were trying to get at in these recommendations. That process has now tailed off, because they’re fairly far along. But the main difference was that in their view, if they started down the road of implementing the recommendation they thought they implemented….

Silviculture is a good example. They say: “Okay, we have a silviculture plan. We’ve implemented your recommendation.” Well, we also wanted to see that in fact there was actual planting going on and there’s a commitment over time. At some point we’ll say, “Okay, it looks like they’re committed to carrying out the plan, so they’re substantially there.”

In the forest sector, if we’re talking about a 60-year cycle, you can’t, at the end of one year, say: “We’re there.” Even to identify what your timber objectives are will probably take more than a year because, as they pointed out, you have to go to each local area and decide: “What is going on here. What capacity can we have to manage the forest and change its structure, going forward?”

There’s a lot of work that’s required to come up with some of the information we were asking for. Again, their sense was that because they had started down the road of doing the work, they’d implemented the recommendation. We just wanted to get more assurance that in fact things were going to go along this track.

We had those discussions. Once we did, it was a case of…. They understood why our view was different than their view.
[ Page 603 ]

R. Jones: The second one that we took a look at is one we’ve had a few questions on so far. That’s the Agricultural Land Commission.

In the 1970s, of course, there was concern over the loss of agricultural land to urban development. That led to the creation of the agricultural land reserve. Responsibility for administering the ALR, 4.7 million hectares of it, lies with the Agricultural Land Commission, an administrative tribunal that operates at arm’s length to government.

In 2010 we carried out an audit to determine whether the Agricultural Land Commission was effectively preserving agricultural land, encouraging farming in British Columbia, adequately protecting the ALR from damage through its compliance and enforcement activities, and adequately evaluating and reporting on its effectiveness. We found that the commission was challenged to effectively preserve agricultural land and encourage farming, and made nine recommendations to address those challenges.

Of the nine recommendations in our 2010 report, the commission reported seven as “partially implemented” and two as “fully implemented.” Our progress audit found that the commission’s self-assessment was valid for all but one recommendation. The commission self-assessed recommendation 4 as “fully or substantially implemented,” whereas we found that “partially implemented” was a more accurate representation, and the commission agreed with our assessment.

We’re pleased that the commission has moved and, with additional funding provided by government, has made significant progress in implementing these recommendations.

L. Popham: My first question is around the compliance and enforcement program, again, seeing that 33 FLNRO staff are now designated to help with that task. I think the comments are quite vague. I think the information would be very valuable to know how much time or how many incidents the staff are dealing with on the FLNRO side and the ALC side. I don’t see anywhere where we measure if that’s helped enforcement and compliance or not. Maybe there are more details there. I think that would be very useful. Maybe there’s information that I haven’t found yet.

My other question is around the Oil and Gas Commission. I think this is really important, given the note that’s in this report around Bill 24 coming into act last spring. The reason why I say that is although this recommendation of the Oil and Gas Commission and the ALC to work well together and develop best practices, I think that that is relevant for the 2010 report that the Auditor General did. We’re dealing with a completely different animal now, and I don’t believe that the 2010 Auditor General report is relevant anymore.

We now have two different zones in the ALR. We have absolutely different legislation. I think that it’s a matter of opinion whether or not we are actually encouraging and protecting farmland at this point. I believe that continuing the self-assessment…. I don’t think that we’re assessing the same thing anymore, so I think it becomes very irrelevant.

M. Sydor: Well, broadly speaking, the mandate is still the same. Certainly, the legislative framework has changed. Certainly, there’s a different way by which decisions will be made.

From an audit standpoint, one of the interesting things to me is, I guess, similar to what you’re getting at: what is going to be the story at the end of the first two or three years of this new model, compared to what had been going on just previously to it?

I would expect that, in terms of accountability, the Agricultural Land Commission should be able to show, after a couple of years, that in fact agricultural land is still being protected by showing, as a number of committee members have pointed out this morning, where the hard numbers are.

Right now the Agricultural Land Commission does provide an annual report. You can go in there and see what’s happened during the year, where the changes have been around the province. But this new model suggests that, as any business would do, you’d assess whether in fact it’s providing the results you expect.

At the end of the day, if we were to do another audit in four or five years, the questions we’d ask would probably be similar. They’re still there to protect agricultural land. They’re still there to encourage. It’s just the way they’re going about it has been changed. That may have an effect on the degree to which they’re successful in meeting their mandate.

L. Popham: I just have a follow-up to that. I understand what you’re saying completely, but because we have two different zones that are acting in two different ways now….

In zone 2, where there is the most threat for farmland to be used for situations other than farming, we now have an instance — given the regulations haven’t been brought forward yet, but will soon — where the decisions around that land use will not go through the Agricultural Land Commission in many ways.

When we’re looking at the long-term effects on regulation, I don’t think we’re going to be able to get a full picture unless we do an audit sooner than later, because we have a new starting point now. In five years from now I don’t know if we’ll be able to track what has actually happened, except for comparing it to a report that was
[ Page 604 ]
done prior to all of these changes, which I don’t think is relevant.

V. Huntington: Just a comment, especially with regard to recommendations 8 and 9, which you indicate are partially implemented. I personally think that these are extremely important recommendations in terms of the activity and the importance of the protection mandate of the ALC, where you found that they weren’t evaluating the broader policy implications of some of their activities, nor were they reporting on the effectiveness and the cumulative impact of some of their decisions.

Will the Auditor General be taking a closer look at how they intend to implement these recommendations? I think these are incredibly important, especially in light of the new legislation. Well, it doesn’t even…. The new legislation is irrelevant in terms of the mandate to protect farming. The fact that there were no evaluations and cumulative impact assessments coming out of the ALC is a bit troubling.

M. Sydor: I think the commission recognized that it needs to improve in this area. They do report on the results of their activities, but they tend to be the raw numbers, the change in hectares from area to area. What we were suggesting is: “You need to analyze what that means in terms of the capacity of the agricultural system to continue to produce food.”

Exchanging hectares in the Fraser Valley with hectares up near Smithers — that has an impact. The numbers may stay the same, but it has an impact in terms of the flexibility we have in terms of growing food, etc. That’s the sort of thing we were asking them to do: “Analyze what the results of your annual decisions mean in terms of the agricultural system in the province.”

B. Ralston (Chair): What I’m going to suggest — I don’t think there are any further questions on this progress audit — is that we truncate this process here. I’ve got witnesses on the other report. I’m anxious that we deal with that when the witnesses are here and don’t make them come back. What I’m going to suggest is we could continue with the rest of this tomorrow morning. I don’t know what Mr. Sydor’s availability is, but I think everyone else is going to be here.

R. Jones: I was just going to mention that, Chair. The last three, actually, Malcolm and I can handle. So we’re good.

B. Ralston (Chair): Okay. We can do without Morris, apparently. I find that hard to believe.

B. Ralston (Chair): Because there are people who have been waiting and I want to get them on, if we could end it there, thank you. Don’t go away. Don’t anyone get up. Let’s just get started on the other thing right away.

Auditor General Report:
Public Sector Board Use of Information
in British Columbia 2012:
Progress Update Since 2009

M. Gaston: Crown agencies deliver key public services, from electricity and education to car insurance and health care. Crown agency boards therefore have a high level of responsibility, and it is important that their members receive the information and support they need to make effective and timely decisions.

Six conditions should be met to ensure that boards can make fully informed decisions. We have those listed there. The board needs to know what information it requires. It must have access to that information. The information must be of high quality and be understood by board members. The information must be used as part of decision-making. And lastly, board members should periodically evaluate the quality and quantity of information that they’re receiving.

This was a follow-up survey based on our board use-of-information guidelines, which we published in 2009. Survey questions were distinct for corporate representatives, and additional questions were asked of board chairs. Both of these surveys, the full question suite, are available on our website.

Those invited to complete the survey were board members, board chairs and corporate representatives of virtually all public sector agencies that have boards and are in the government reporting entity. You can see the numbers there on the screen. They included the six key sectors listed there: commercial Crowns, service delivery Crowns, health organizations and then three separate education sectors.

A reminder that this was not an audit. It was a survey, and our findings are based on the information returned to us through the survey.

For all three survey groups — board members, board chairs and corporate representatives — the response rates were even higher than the already high rate of 2009, an overall response rate of 80 percent. We provided boards with further information about their own organizations’ survey results compared to the average for their sector.

For every board — and it was actually 97 percent of them where we got at least a 50 percent response rate — we provided them with the results of their own self-assessment against the average for their sector. Anecdotally, from what we understand, that information has been used by quite a few boards to have conversations on how they are doing.

The survey results showed the boards reported improvement in five of the six good-practice areas for
[ Page 605 ]
board information since the 2009 survey. In three of those areas the improvement was notable. The area of decrease was in the area supporting whether boards know what information they need.

While there are a number of areas of improvement since 2009, there are still gaps in fully meeting good-practice guidelines. Exhibit 4 on page 16 shows these gaps have a cumulative effect for different organizations.

The gap between the six sectors in good practices for board information has narrowed since 2009. On the positive side, this is because the three sectors that had the lowest results in 2009 have all improved, including the K-to-12 education sector, which is the largest of the six in terms of the number of board members. However, the narrowing is also due to a slight slippage in the scores for the sectors with the highest results for 2009.

Crown agency management believes from the results that the information provided to boards meets requirements. However, board members and board chairs reported more gaps and areas for improvement. This was similar to what we found in 2009, suggesting that there is still a perception difference between the providers of information and those receiving it. Also similar to our 2009 findings, first-year board members are less confident about the information they receive and how to use it. This applies across all sectors.

We also found that on average 80 percent of board members were open to additional guidance in at least one area of governance. Guidance on board governance was, in general, the area of greatest interest from our survey results. The openness to additional guidance could be a real opportunity to assess and meet needs in this area.

To conclude, organizations still need to monitor governance practices continuously, and we will continue to include board governance as a focus for our future work.

I want to welcome and introduce the respondents from the government — Cheryl Wenezenki-Yolland, associate deputy minister, Ministry of Finance; Sabine Feulgen, associate deputy minister, corporate services, Ministry of Health; and Paige MacFarlane, assistant deputy minister, open government and community partnerships division, Ministry of Education. I think Cheryl is leading the group. Yes.

C. Wenezenki-Yolland: Good afternoon. It’s good to be here with the committee. I found your conversations this morning very interesting, particularly given this topic of board use of information. That was a very prominent discussion that you had this morning about the information for this committee. So I’m happy to be here today with my colleagues from the Ministries of Health and Education. We have the presentation for you — just to kind of capture some of the highlights.

We’re certainly encouraged by the results of the survey that was conducted by the Auditor General’s office comparing the results from 2012 to the results of 2009. While the results are encouraging, it’s important for you to know that we believe strong corporate governance and board governance is critical to the effectiveness of our organizations, and it continues to be a very strong priority for my office, which is responsible for Crown governance, as well as other offices that are involved in governance with their organizations in the broader public sector.

Just an important point is that the primary responsibility for informed decision-making certainly rests with the individuals of the boards and their members. However, there is a lot of opportunity to support our boards in actually making those decisions, understanding the information they may need and ensuring that what they receive from the organizations assists them.

Also, because this was a survey by the Auditor General’s office, there were no specific recommendations for government. Irrespective, we still accept that the information is good information that will continue to help inform us as we continually improve our processes.

As noted earlier, overall, the performance was good. There were certainly improvements noticed. Four of the six sectors showed improvement, as was mentioned by the Auditor General. We did note the same areas as the Auditor General did when he was speaking to the report around where the slight decline was regarding boards knowing the information they need. We actually had some conversation with the Auditor General when they presented that observation to us about what the potential rationale might be.

When looking at the experience of the different board members, it was certainly noted that there was a very large percentage of new board members at the timing of this survey because of the election process, in particular around the K to 12. It’s quite reasonable to expect that a new board member who is new to a role may not yet be as comfortable in their role, may not yet know the extent of what kind of information they might need to ask questions. We certainly shared that observation with the Auditor General’s office.

We did provide a response at the time to the report even though there were no specific recommendations, because this is an area of importance to us in government. Just reiterating that we were encouraged by the progress.

There was a significant response rate from all of the Crown corporations, which really, in my opinion, exemplifies the interest of the board members. It was in the high 80s, the response rate, which was very good. It was actually a higher response rate, I believe, than the survey before. So it continues to be important for the boards and for government.

There have been a number of additional things that we have done, even since 2012. We continue to work in this
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area, around how we support our boards in good governance and in decision-making. We have been looking at and have strengthened orientation material for new board members, and that is certainly made available. There have been enhancements both to the on-line information available as well as the types of face-to-face meetings and opportunities available for board members.

Also, the government introduced the taxpayer accountability framework, which is really a decision-making framework. One of the nice things that that has afforded us is an opportunity for us to have greater interaction with all of our boards across all of our public sector organizations. There have been meetings with board members and with other members within the public sector organizations to talk about the importance of governance, of board governance, of decision-making, and how that framework and process works together.

We did note that the Auditor General did talk about some opportunities around decision-making frameworks as part of what might support good board governance. We are continuing to encourage that with the boards.

Also, there were improvements made in and around the strategic planning and reporting guidance that is provided to the public sector organizations. There was a commitment made around increased engagement and communication. There has been a series of training or information opportunities made available to boards in many different ways.

For example, I was here yesterday speaking to a group from various public sector organizations. It included some board members, it included some CEOs, and it included other executive from the organizations. We were talking about the importance of corporate governance, transparency and disclosure. We have a series of those types of training opportunities that we’re making available.

Again, it’s up to the boards and the organizations to engage in those opportunities, but we are supporting them in a way that we can.

I would say, also, with the individual reports that the Auditor General had made available to the boards, that we see those as an excellent learning opportunity for the board members to understand where their board may see differences.

For example, if the information that they are getting from their organization is not meeting the needs of the board, that report will highlight a perfect opportunity for the board and the executive of the organization to have a conversation about what is needed, what is missing, what would support the board in making better decisions — very similar to the conversation that you are having here this morning.

Also, there has been significant progress, in particular, in the K-to-12 sector. When we were here in 2009, we had suggested…. The Ministry of Education at that time was considering working with the B.C. School Trustees Association around some training opportunities and information. We can tell you that, in fact, that has happened, recognizing that are some unique differences, I would say, in the governance structure in regard to the K-to-12 system versus, say, a service delivery Crown, which has an appointed board for government. They have worked with that association and continue to work with that association.

The other aspect that they have been working on is an MOU in regard to co-governance with that association, which will also help in supporting ongoing strengthening of governance and effective delivery on K-to-12.

The Ministry of Health has also continued to put efforts into supporting their board members by enhancing their orientation material available to the board members. Specifically, they highlight the need for routine evaluation of board members and CEOs as part of their ongoing governance best practices. I would indicate that that is a best practice that we promote for all of our boards, and any members that may have sat on boards in the past would know that that is a practice that we continue to promote with the boards.

In summary, we are extremely grateful for the work that the Auditor General has done. We are absolutely aligned with the Auditor General’s commitment to good governance and good board governance and the role that information plays in supporting the decisions and effective organizations. We are happy for the information. We are committed to continually improving and strengthening the corporate governance framework, the information that we have and the strength of our boards.

We look forward to maintaining our role as a leader in this area. We have been acknowledged as one, and one of the ways to do that is to continually learn and continually improve.

L. Throness: You have broad experience across the public sector, I’m sure. Many, if not most, of the board members that you’ve surveyed would be LGIC appointments, I take it — Lieutenant-Governor-in-Council appointments. Sometimes these appointees can be criticized as being not up to snuff.

I wanted to ask: how do these folks compare with the senior levels of the public service in respect of a similar response rate, commitment to continuous improvement, understanding of information they received and the other things that you learned in this survey.

C. Wenezenki-Yolland: To be clear, we did not conduct the survey. The Auditor General did conduct the survey. When you look at the appointed boards versus the elected
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boards — you have to remember this is a self-assessment — they certainly assess much higher on all of the areas that the Auditor General had surveyed than the….

C. Wenezenki-Yolland: The appointed versus the elected. I think the nature by which government appoints board members…. We do have a very well-documented framework for the appointment of board members. There is a competency-based framework from which we are able to do that. You can imagine, as with any kind of recruitment process where you are able to assess and select the individuals that would give you a more robust set of skills across the board members, it’s much easier than in an elected process.

That is not to say anything that would be disparaging to elected members, because I believe all of those members are committed. They are quite willing to learn, and they are quite excited about any information that could be afforded to them to improve their capacity and their ability to do that.

In our experience with the elected boards, they bring a great breadth of business experience, typically, legal experience. They may have worked in corporations. They may have worked in education sectors in the case of post-secondary. It depends on the nature of what is required.

S. Robinson: Thank you for your response, because it’s a segue into some of my questions. When I think about the questions I have, it’s actually more for the Auditor General, because in the executive summary they make some sort of, what I’ll say, global statements about board members in comparison to 2009 — that “board members feel that their board chair takes responsibility for ensuring board members are properly briefed before meetings.”

Given the top-heaviness of our total number of school boards, I think that’s just going to change every four years, as long as school boards change over. So I think we need to be careful about some of those kinds of statements, because it’s such a snapshot. Given now it’s every four years, the turnover, that no longer exists, actually, because we’ve had an election. So we don’t know that.

The same thing is with “one in five boards may not have members with the right mix of education, skills,” etc. Again, the number is going to be weighted, because it’s elected boards that make up the bulk of these folks. I would just caution that we not read too much into that — or, perhaps, reporting out, just separate it out: this is for our elected boards, and these are for our other boards. I think that they’re very different beasts, and just want to be cautious about how we understand all of that.

R. Jones: I was just going to say that I attend a number of boards every year, from Crown corporations through the school districts. The school districts definitely are a challenge. Some school districts, the larger school districts, probably have a better mix of abilities on them than some of the smaller ones. So you’re right. It is tough. The whole orientation package and everything else is very critical.

One of the key things that we do with the school boards that we attend is offer to provide guidance — like to have someone like Malcolm come and talk about governance and what works and what doesn’t — to provide them with financial guidelines like how to read the financial statements so that they can better understand if they don’t have all that knowledge there. And I know government helps as well. It is a struggle with the school boards.

With the other boards, I’m quite impressed. The diversity of knowledge and the skills that are on those boards are very significant. They take their responsibilities — for the ones I attend, anyway — very, very seriously. It’s really good to see. They even send out questionnaires to us — for us to answer questions to make sure that we’re doing our job properly for them too. And a number of the board members, if you’re not aware, do go and take the directors course, which is a very good course.

M. Gaston: If I could maybe just add that there’s quite a bit of information broken down within the report, but we also provide on the website the results by sector. So there’s even more information provided on the website, as well as the information that goes back to each organization. But as far as possible, we’re keeping our statements consistent with what we were being told through the survey. So these aren’t our findings, if you like. By interpreting what’s coming back…. This is what we were told.

M. Dalton: Are the majority of the non-elected board members paid, or do they receive a stipend or what, as far as finances?

C. Wenezenki-Yolland: I can speak to that. Appointed board members are remunerated. There is a defined remuneration schedule for board members, depending on the nature of the board. I don’t have the specifics of it available right now, but it is publicly available.

M. Dalton: You mentioned that there’s a routine evaluation of the board members. Is that for reappointment, or can they be removed by the government, say, during the year for various reasons — performance?

C. Wenezenki-Yolland: There is an expectation that there will be an evaluation of the board members, conducted by the chair, and then in turn, a separate assessment of the chair. If there were concerns about board
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members’ participation as a result of that, it would typically be at the request of the chair that government may consider the continued appointment of a member.

M. Dalton: Chair, if I may, one more question. This kind of ties in with the report we’ll be looking at tomorrow morning. But Education is here now. So thinking of school boards, just the accountability to the Ministry of Education above and beyond a balanced budget and maybe some educational criteria…. I can think of one school district close to me and mentioned here that has had some real challenges with the school board. Part of it may be with skills. Essentially, the district office was pretty much gutted, and it led to a lot of challenges. They’ve been rebuilding.

I’m just wondering: is it primarily that they’re on their own just as long as they follow the financial guidelines as far as the budget? What are some other accountability issues here with the school boards?

P. MacFarlane: Well, as you can appreciate, as elected board members, of course, they are accountable to the public that they represent. That is their primary accountability mechanism. There is an existing accountability framework within the K-to-12 system, which to date has been primarily focused, admittedly, on financial accountability.

We are currently in the midst of a consultation process with all of our education partners — including, of course, trustees — around shifting that accountability focus, broadening that accountability focus. While certainly not losing the financial accountability, we’re also broadening that to accountability for outcomes for students.

So we are, as I say, in the midst of a consultative process with boards of education and other education partners currently in order to expand and shift the focus of that accountability framework.

K. Corrigan: I think it’s interesting that there is a bit of a disconnect sometimes between management and board members and board chairs.

It’s noted that management think that they’re providing good information to the boards, and then the board members say: “Well, maybe. Not necessarily.” And the board chair said that they thought that they were asking for the right information, and the management would say: “Well, they’re not asking for the right information.” So a bit of a disconnect, but you would expect that, I think.

I want to echo a little bit of what Selina said. I really think that it can be problematic to mix together evaluation of elected representatives on a board and those that are appointed. I mean, as an ex–school trustee, I almost would want to encourage school trustees not to answer the survey, because the reality is they are accountable to the people that elect them, and it’s like….

I would, frankly, be really concerned if I, as an MLA, was in some ways being evaluated for my effectiveness by way of a survey. Now, I know it’s not intended that way, but the reality is that these are supposed to be somewhat autonomous individuals who are there because the people of their community thought that they were good. And to talk about whether or not there’s an appropriate mix of people on a school board…. To me, it’s not our right to evaluate that. Those are people who have been locally elected, just like locally elected municipal councillors.

So I have some concerns about that. I understand it, and I know it’s to make things better, but the reality is that they’re elected, and that’s where their accountability is, not to us as the Public Accounts Committee or anybody else.

I was wondering if there has ever been any thought of trying to drill down and take a look at the impact of the fact that people are appointed. No, not that so much, but whether or not the board meetings are publicly attended or are private meetings that are not open to the public — what impact that has had on these survey questions. Has there been any thought of that? It could have an impact.

M. Gaston: That certainly isn’t something that was covered as part of the survey. I don’t think we particularly considered that when we were planning this, although, obviously, we have produced some reports looking at governance within school districts. We took a sample of three school districts as well as other sectors.

K. Corrigan: I do appreciate this, despite my qualms about some of it — the publicly elected people. But I do think it’s important to find out how boards are doing.

I’m wondering if there’s any intention to try to figure out why it is…. I know there was some reference in the report to the downturn with regard to the Crown corporations and Health, but is there any intention of trying to figure out more clearly why it was that the scoring went down in those particular areas?

C. Wenezenki-Yolland: We looked at it at the time at the high level. It did appear that we had a number of newer board members — they were in the first year — and that is a reasonable explanation. We didn’t go beyond that point because we were continuing to pursue efforts to help improve and support them in continually improving.

I think if we continued to see that downward trend, we would become very concerned. One of the things that we have looked at is…. Rather than relying on the Auditor General’s office to do that kind of survey of our board members, we’re looking at maybe doing some of
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that informal surveying ourselves so that we have interim measures around progress.

K. Corrigan: I’ve seen that reference to first-year board members. Having been an ex–board member, I certainly do understand that your abilities to ask the right questions, get the right information, evaluate the information, certainly improve as time goes on.

There was a reference in your presentation — I don’t think it’s in the report — about evaluations of board members. Are those evaluations public? I would assume they’re not, but even at a board level — those annual evaluations as a summary document?

C. Wenezenki-Yolland: For the individual evaluations, they are not. It’s considered like a personal record. Conversations happen between the chair of the board and the board members, and in the case of the chair, it would happen between the minister and the chair.

I know that the boards, the very good ones, also do evaluations of their performance as a collective board, and they seek feedback and input. They do a lot of that when they’re doing their strategic planning, and things like that. I don’t know that that’s…. It’s not a formal public record that is available anywhere.

V. Huntington: I was quite interested when you commented in your PowerPoint that there was a co-governance MOU being developed or negotiated with K to 12. I’m curious what co-governance means and what your intentions are in that regard.

P. MacFarlane: Sure. The MOU has been developed, in fact, and it was signed by the minister and the president of the BCSTA in December. It’s a public document, and it’s available on line. I can certainly provide it to the committee if there’s interest.

This is the latest iteration of a partnership agreement, if you will, that has seen a few iterations over the years. I believe the first one was in 2003, so it’s not a new concept, but it is a continual improvement, to use Cheryl’s phrase. It is a reiteration, a restatement of the commitment of the two levels of elected governance in the K-to-12 system to work effectively together. That’s what it is.

P. MacFarlane: Really, it is…. I think that the minister and the president of BCSTA framed it as a high-level aspirational document, but it is about intent to ensure that each party is informed and that they work together as effectively as possible. It’s to provide more clarity as to the roles and responsibilities of those two levels of elected representation in K to 12.

S. Gibson: One of the challenges of this is that in the study — and I think it’s good — we’re not really talking to the customers. When a company is going along, you don’t ask the board members how the company is doing, or the president. You ask the customers and the front-line workers, the people that actually deal with the customers.

I think this is laudable, and I found this interesting. This is an area I have a particular interest in, frankly. But of course the missing piece is — even though it doesn’t sound like a segue, it actually is — that the folks that are actually dealing with the board, the front line and then the people representing them, are the ones that are the real gauge of the success of the board and its assigned responsibilities.

I don’t mean to criticize the initiative. It’s a good one, and way to go. I like the way it’s worded. But the missing piece for me is: what are the customers saying and what are the front-line workers saying in reflecting the values of the board? I think that’s the missing component that perhaps is more interesting, in some ways, than this material.

I say that with respect, because clearly there is some good work being done here.

B. Ralston (Chair): Does anyone want to comment from the Auditor General’s office?

R. Jones: I was just going to say, Chair and Member, that in a lot of cases, organizations like B.C. Hydro and the larger Crowns do a user survey to find out whether or not they’re doing what they’re supposed to do, I guess.

V. Huntington: Is it within the Auditor General’s purview…? To follow up on the substance of Simon’s comments, is the Auditor General’s office able to undertake audits of the staff of an organization to find out whether they feel there is value for money in the performance of the…?

C. Bellringer: We most certainly can. I was asking if we had surveyed the senior management when we did this particular survey, and we hadn’t. I’ve seen some across the country where that was done, and there was that contrast. I mean, they’re designed from scratch, so they can be done from many different directions. I think that’s an interesting one.

I think, going forward, that I’d probably, myself, be leaning towards picking out one element within the governance area and doing an actual audit. It might be an audit of the appointment process. It might be an audit of remuneration, that kind of thing, but getting a little deeper than a survey for the next round. But we haven’t had that final discussion yet doing our coverage plan. We can bring that to you as well.

V. Huntington: I guess I’m thinking a little bit beyond governance also — whether a performance audit of an agency or a department or a section could actually look at how the employees feel their performance is measuring up.

C. Bellringer: Yes, that’s something that we can do. We have in the past, and we’re contemplating a couple of areas right now.

I’m going to suggest that we recess until 9:30 tomorrow morning. We’ll continue with the last follow-up report and finish that off, then go into the agenda. If that’s agreeable, I don’t know whether anyone….

B. Ralston (Chair): No, no, we finished that. We’re going to do the June 2014 follow-up report. We’re going to be continuing. We heard from the Auditor General on progress audits on page 10 and page 19 — the audit of the Forests, Lands and Natural Resources and the audit of the Agricultural Land Commission. There are three more there. We’ll continue with those and then any other questions on that, and then we’ll go into the agenda as it’s set out.

K. Ryan-Lloyd (Clerk of Committees): Yes, please be advised that we have binders for you all.

B. Ralston (Chair): We can adjourn now. We’re going to adjourn until tomorrow morning. We’re adjourned.

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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)
	Mike Morris (Prince George–Mackenzie BC Liberal)
	Lana Popham (Saanich South NDP)
	Linda Reimer (Port Moody–Coquitlam BC Liberal)
	Selina Robinson (Coquitlam-Maillardville NDP)
	Ralph Sultan (West Vancouver–Capilano BC Liberal)
	Laurie Throness (Chilliwack-Hope BC Liberal)
Clerk:	Kate Ryan-Lloyd

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