The committee met at 10:05 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Today we are hearing the Annual Review of Statutory Offices of British Columbia: three-year rolling service plans, annual reports and budgetary estimates for fiscal 2018-19.

First up we have the Office of the Auditor General. I’ll turn it over to you, Carol.

Review of Statutory Officers

OFFICE OF THE AUDITOR GENERAL

C. Bellringer: Thank you very much. A pleasure to be here again. I’m now in the fourth year of my eight-year term, so we’ve had quite a bit of time in the office to really step back and do some comprehensive planning. At the beginning of first meeting with this committee, we spoke about entering into a strategic planning process, and now we’re well into it.

I’ll speak to some of the details here, and I will provide you with some additional information on the increase that we’re requesting, because, going through it, we realized that we really had put in a global number. We’ll break that down for you.

The work of the office. We do two types of work. We do financial statement audits, and we do performance audits. For each of those lines of business, we issue a coverage plan, and we actually have to go through a rather intensive internal planning process to reach a list of what we determine to be the audits that we can conduct.

I’m going to introduce the folks that are here with me today. Russ Jones is the Deputy Auditor General. Russ is in charge of our financial statement audit group. Katrina Hall is our comptroller, who also put together the documents that are here today, and keeps us in line within the office. Stephen Kearsey keeps our HR area in check. And I look at all of it, so if you have questions on the performance audit side, I can certainly answer those as well.

For each of those lines, we do the coverage plan. At the moment, we’re in the process of finalizing our performance audit coverage plan. That’s the one that takes the most planning, from our perspective. It isn’t something that we’re required to circulate publicly, but we’ve chosen to do so now for…. It’ll be the third year that we’ll be releasing that publicly.

It takes quite a bit of work to determine, within each of the sectors across government, what we are going to look at. Performance audits can pretty much cover any aspect of any operation, so it’s very much a blank page.

We start out by identifying…. First of all, we do a lot of resource determination within our office. How much time have we got? What can we look at? What’s of high risk? What’s of significance? Where can we add some value to the discussion? We cannot enter into the conversation around the merit of policy, but it is of critical importance to us that when you are having those policy discussions, the information you have is accurate and complete. So we do always have to determine where that line is between only looking at administrative practice and good public service and not looking at what the policy itself is.

We circulated, in the documents, last year’s plan, because we haven’t yet released the current one publicly. We do discuss it with a number of stakeholders. We do actually have conversations with each of the deputy ministers, and we’ll be providing the current draft with them on Friday, just to get their further input.

We have 20 projects that are on the go right now. It’s a three-year plan. There are 35 new projects that we’ve put into the plan to start between now and March of 2020. We identified 27 as critical, very high-risk areas that we felt we should look at, but we have not included those in the plan at all because it just doesn’t fit within our resource constraints.

I don’t look at that to say that I think you should fund another 27. It’s basically doubling the size of the office. We just point it out as an indication of…. It isn’t like we’re providing the only things we could look at. It is an infinite pool of areas we could look at. We’ve selected those we think to be of critical importance. That’s what gets puts into the performance audit coverage plan.

[10:10 a.m.]

The financial statement coverage plan. It’s actually required by legislation for us to present it to the Public Accounts Committee. There was a Public Accounts Committee meeting last week, and we did provide them with the proposed coverage plan for financial statements. The Public Accounts Committee is required to actually approve that plan.

At the meeting on November 6, they approved the plan, but they recognized that there were budget implications to what we had brought forward. So there was a bit of a…. Well, there was quite a good discussion around how they could approve the plan before the budget was approved. But they did tentatively approve it, pending discussion here.

They made it very clear that they couldn’t take over the role of the budget committee, but at the same time, if there were any issues that arose as a result of the budget, we were to go back to have a further discussion with them. At the moment, they’ve accepted that plan as presented, and that plan is included in the package.

The plan shows…. I don’t have the exact number in front of me. There are about 150 Crowns, agencies, boards, commissions and organizations within the government reporting entity, which is all of the organizations that are part of government and then flow into the public accounts, which we do audit.

Of those, we do 20 of them directly. So our staff are actually doing the financial statement audits for about 20 of those. And another 25…. We do quite a lot of work to make sure that the organizations that are being audited by an external firm of accountants — that we are attending audit committee meetings, for example…. We’re reviewing the plan that they put forward, having discussions on critical audit areas and looking at the final results. We call that oversight work.

Together, the direct audits and oversight work represents 84 percent of government’s total revenue and expenditures. We need to depend on that process in order to sign off on the public accounts.

The big change…. It’s a significant one. It’s not something that we’ve previously brought forward to this committee or to the Public Accounts Committee. As a result of our planning, we decided that it would be appropriate for our office to audit directly B.C. Hydro, starting in their fiscal year ending March 31, 2020. That requires additional resources. It’s a significant change to the operations of the office, to the extent that it’s a large audit. The accounting policies and the type of work that it would require our office to do is something we’re quite familiar with, so it’s not a change in terms of the nature of the work. It’s just a volume discussion.

We had a very lengthy discussion at the Public Accounts Committee specifically on that, because they were asking a lot of questions around the risks. We did point out that there have been some persistent accounting issues that we feel we need to be involved with earlier so that it’s something we’re much closer to, prior to signing off on the public accounts.

In terms of the budget request, the request does include a 6.8 percent increase from last fiscal, so it’s a large increase. A great deal of that is because of the Hydro proposal.

The total budget for ’18-19 and ’19-20 is also an increase over that. We have a table that we’ve prepared that we could circulate, if you’d find it useful, but I can tell you how that breaks down.

For 2019, the increase that we’re requesting is $1.2 million. That breaks down to $480,000 for Hydro. It’s proposing that we would not hire all of the additional staff that we would need to do that audit in the first year. We wouldn’t actually do the audit in the first year. We would hire half of them, get them trained and ready to go to take it over fully in the next year. So for ’20 and ’21, the total for Hydro is $750,000. That’s representing four staff years in the first year and seven staff years for the two following years — not seven additional, seven in total.

[10:15 a.m.]

The rest of the $1.2 million is made up of a request for an additional IT auditor. We are having more and more audits within the IT area. We’re seeing some really high risks where we’re just not able to get around and do enough coverage. It really barely scratches the surface to have one more, but it’s what we’ve proposed to try to get at some of those higher-risk areas. It’s one position in ’19 and two in ’20 and ’21; again, in total, $75,000 for 2019 and $150,000 for the other two years.

IT support. We just did an internal risk assessment in our internal IT area. We do keep all of our records ourselves. We have our own servers, and everything is kept within our office, for confidentiality issues. The risk assessment is showing that we haven’t deteriorated, but in areas where we felt we needed to improve, we’ve not been able to. It’s a pure staffing volume issue, so we’re proposing another position in that area as well. That would be one staff position, the same position over the three years, $75,000.

There’s an additional $500,000 sitting in the budget. Now, this is a whole different conversation. There’s $500,000 in the budget, with respect to…. If everybody in the office stayed all year, we would need the $500,000 to cover the salary costs. We know from previous years that that isn’t going to be the case. We did put it into the budget as a budget request, because what we’ve also seen — and those of you who saw the budgets in previous years would know this — is that we were lapsing significant funds. We were actually at about $1 million that we weren’t able to spend because of vacancies, because of people leaving whom we didn’t expect to leave and the inability to recruit very quickly.

We’ve turned that around. We decided last year…. Certainly, the objective is for us to hire enough people to get all the audits done, so we managed it by overhiring at the start of the year. We decided that that risk was a reasonable one to take, that the only way to cure the lapse was to hire in advance of people leaving and not wait for them to go. So we did that. Now, the catch is that if, going forward, now nobody leaves and we’ve really cured it, then we’re going to be $500,000 short. We would not use that money for something else in the event that we don’t need it. So if people did, we could vacancy-manage around that amount, to the extent that it’s possible.

There’s one more position in performance audit, at $51,000. I think it’s a co-op position. There are a couple of co-op programs that we’ve been participating in. It’s a small amount, and we could certainly work within the current budget and make that one work.

I’ve got the breakdown for all three years. Probably the easiest thing for me to do would be to circulate that to the members, rather than going through all three columns.

Back to just a couple of general comments about the budget. There was the $500,000 to support the full staffing of the base positions that were approved last fiscal, then the comment around it being as a result, in the past, of recruitment delays, and then the $680,000 for new employees — $480,000 of that specifically for B.C. Hydro.

Technically…. We can’t narrow it down to a precise number, but government is already paying an outside auditor for Hydro, so it’s a replacement of that charge. Rather than Hydro paying an external auditor, the cost would be borne by our office. So it’s not an additional cost to government. It is an estimate at this point. We’ve started some preliminary planning, in the event that it goes forward, but we don’t have it down to a detail yet.

I’ll just pass it over to the rest of you, if there’s anything that you want to mention.

Also, we have to look at whether we would do all of it ourselves or whether we would actually contract some parts of it out. We know that we would need some specialized assistance in certain areas.

[10:20 a.m.]

We currently are doing an audit of rate-regulated accounting. It’s a performance audit. It’s outside of our financial statement work, and we’ve had to hire a specialist to assist us with that. They are available. They are very expensive, so to the extent that we can do the work in-house, we will. But we also know when we need to ask for subject-matter expertise.

Anything on that…?

R. Jones: Yeah, I can just add. I currently know, with the current auditors of B.C. Hydro, that they do require specialist work. As you can imagine, Powerex is one of the companies that B.C. Hydro has with a lot of derivatives and financial instrument work that’s required and U.S. tax. Each of the major public accounting firms have specialists, whether they’re in Vancouver or Toronto or whatever, that they bring in on the team to supplement the regular audit. That’s not an unusual thing to expect to have. I think any firm would be willing to provide us with that specialist help if we needed it, which we would if it came to U.S. tax and whatnot.

As far as an understanding of IFRS, international financial reporting standards…. I have five clients that follow IFRS. I was involved in the changeover of one of B.C. Hydro’s subsidiaries a number of years ago — B.C. Transmission Corporation — when they had to change over to international financial reporting standards, so we do have the expertise in-house to do this audit.

C. Bellringer: Thank you, Russ.

The only other area…. There have been a few increases in the travel. The travel line is specifically related to B.C. Hydro. We also take on the audit of, if you look at the financial statement coverage plan…. Over a three-year period, we cycle through various organizations. We do them for a total of five years, and then we are no longer the direct auditor. We may choose to still continue to look at it from an oversight perspective, but we move on to something else.

We would be moving off of the University of Victoria audit and moving on to UBC next year. That one’s in Vancouver, as opposed to Victoria. Our staff are primarily located in Victoria, so there’s an additional travel cost attached to that one.

The other part of the budget that I’ll just throw a bit of colour around. On the capital side, there’s an $85,000 increase in the capital budget. It is normal operations — furniture, IT equipment, new data storage and servers supporting the audit teams, maintaining the secure network.

We had, in last year’s budget, included something for a replacement of our audit methodology. It was a large amount. It was a new initiative. There’s quite a bit of discussion in the audit community. It’s referred to as data analytics. It’s looking at just how to…. The ultimate is to be able to audit 100 percent. You have all the data, and you’re able to look at things. It’s not quite that. It’s used more specifically on certain accounts. You don’t do 100 percent audit.

That methodology is something that all of the accounting firms are starting to come out with, but it’s proprietary software. So the legislative audit community is trying to figure out how we can match that, and there are some national projects going on through Auditor General of Canada. Some of the software distributors are also coming up now with products for smaller firms, for example.

We’re looking at that. It isn’t going to be as expensive as we thought it was going to be, because, again, it’s starting to be something we’re all talking about and there are some options we can use.

Katrina, do we have the numbers for this year?

K. Hall: For the current fiscal that we’re in, that was $225,000 that was sitting in the budget for that type of change. For the FY ’19, we’re looking at only $100,000.

C. Bellringer: And we won’t be spending the remainder on anything else.

K. Hall: No.

C. Bellringer: That one would just lapse.

Some of the budget pressures for ’18-19 that are not in this submission…. One would be if there’s any general wage increase for the staff. Again, it’s something that we follow….

[10:25 a.m.]

Our staff are public servants, so if there’s a restraint, then we follow that as well. If there’s a wage increase approved, we would apply that for the staff. For our staff, a 2 percent wage increase would cost about $150,000, and we’ve not included anything for that for next year.

There has also been a Judicial Compensation Commission recommendation, and my salary, as with the other independent officers, is locked into that. That increase is not included in here as well.

The public service did apply a new framework for classifying all of the positions within government. It’s called the management compensation and classification framework, or MCCF. We did recently implement that. We’ve taken all of the…. It was a system of putting people in various bands, and those bands from before are now a new set of bands, so you had to figure out where to put everybody. We’ve done that. There has been no impact to the salaries by doing that, but we do recognize we’ve got a problem with recruitment and retention in the financial audit area.

We did a survey last year to determine whether or not we were well below market. We found out that we were not. But we’re still yet unable to find people to come and work in the office at a middle management level. We can still recruit on campus and people that come in and get their designation through the training in our office. But we’re missing people at a management level and a more senior level. We’re having difficulty attracting them.

There has been a fair bit of pointing to the cost of living, so we’re trying to determine whether or not we do actually have an issue there and if our classifications are appropriate. For the moment, we’re not doing any further changes in that area, but it’s a risk going forward.

With all of that, the recommendation that we’re requesting is, for ’18-19, a budget of $18.52 million to fund the operations of the office for the year ending March 31, 2019, and $435,000 for the capital expenditures for that year.

B. D’Eith (Chair): Okay. Thank you very much for the presentation.

P. Milobar: Thanks for the presentation and the update. One question around staffing, and it’s a bit of a fine point, but you guys are auditors. You’re probably used to this.

On page 11, the chart, figure 1, you show the proposed staffing portfolio. Basically, you have 122 FTEs right now. You’re talking about going up to 133. Two things. That’s 11 more FTEs, but on page 7, you speak to ten FTEs. That’s probably just a moving over of information.

I guess the bigger question is: if you’re adding essentially 10 percent physical staff, why is there zero increase to building occupancy costs or anything else? Where are you going to fit 10 percent more people into your building, and where are the operational costs of what they would require to actually do their job?

C. Bellringer: We actually have answers to both of those. I’m going to ask Katrina to answer the one on the numbers, because I asked her the same thing. She told me the answer, and I actually can’t remember.

K. Hall: Part of that is we’re not adding extra people, but some of those staff have come from part-time and they’re going back up to full-time, so it’s an additional FTE but not an additional person. That’s some of the change there.

As well, we’ve been lucky enough to have staff that have been off on mat leave. They’ve come back from mat leave, so we’re not adding, necessarily, new people. They’re FTEs. They’re now active. They’re back in the office. That’s where some of the changes are in the actual numbers.

P. Milobar: So you’re saying that when someone goes away on mat leave, you don’t keep carrying their wage cost in case they come back early from mat leave?

K. Hall: We pay a portion of their wages, but they don’t actually burn a full-time equivalent during that period of time, so we do have a provision in our budget for people that may go off on maternity leave or other things. In terms of actual FTEs that are active working in the office, they’re not counted in that figure.

B. D’Eith (Chair): And what about the space?

C. Bellringer: On the space. The space in our office has been a discussion at this committee for a couple years now.

[10:30 a.m.]

I’m thinking that I started on September 15. In November, we moved into a new office space on Fort Street. That decision and the build had already taken place before I got there. I’m not blaming the past. It’s just one of those realities around the timing.

The design around it was very much a traditional design. Senior people have office space, and more junior people have an open workspace. There are some cubicles and things like that. We didn’t design it around shared office space, people working from home, some flexible work arrangements.

We need people out of the office. We need to be more flexible in the way we use that space. At the same time, the complication became…. Because it had been designed a certain way, to suddenly shift it over is an expensive process. You basically have to redo the whole thing because it’s not set up to accommodate it. So it was certainly something….

We’ve been looking for ways to use the space better. We have a large meeting room that we make available to anybody in government at no cost — the other independent officers, in particular — if we can.

The problem with sharing space within the office area is that all of our information that we have protected…. We have all kinds of security even to get in but also just the information itself. We can’t just offer that space up to somebody else because of needing to protect the information within the office.

We’ve looked for ways we can absorb additional staff within the existing space. I think, perhaps, Member Ashton was, maybe, one of the few that had actually toured the office. We had a kitchen space on every floor. We have now removed two of those to accommodate the increase in the numbers last year. The eating areas have been turned into office cubicles, and we have the ability to do the same for people coming in.

Probably it will move now to shared space, where they wouldn’t go to the same spot every day. It would be some sort of hoteling or other shared arrangement.

M. Dean: Thanks, Carol.

My question is about revenue. You’ve got total operating appropriation. I’m interested in how you’re thinking you’re going to phase in revenues from B.C. Hydro. I’m particularly interested in the transition from B.C. Hydro paying their external auditor and, then, your building of capacity and how you think that your office is going to be able to bill B.C. Hydro for that.

C. Bellringer: In terms of the mechanism, we don’t spend any of the revenue coming in. It goes directly to the consolidated fund. It isn’t additional money for us to use. The number would go up, but then it would just be handed over in total.

M. Dean: It doesn’t affect your bottom…. You haven’t got a….

C. Bellringer: No.

Sorry. Go ahead.

R. Jones: I was just going to say a quick history of why this happened. A number of years ago we used to bill and keep the revenue as part of our operating revenue. Then it was decided that didn’t work overly well. We went back to just charging the clients, and then the money goes back in to government.

The reason we charged the clients was because, at the time…. If, say, we went in to do one of the health authorities and they got it basically for nothing and all the others were paying the public accounting firms, that wasn’t seen as fair. So what we try and do is make sure we charge the same amount — as if they were going to pay an outside, external, agency.

As far as B.C. Hydro goes, one of the ways we were going to ensure a smooth transition — and we’ve done this before — is to put a couple of our more senior people on the audit team, with the current firm, for the last year that they do the audit so that there’s a smoother transition. It’s not going to be totally smooth but….

I’ve been attending their audit committee meetings for the last ten years as well. So we’ve been looking at the files and know what’s going on.

M. Dean: In building up that capacity…. Sorry, just to be clear. Taking on the responsibility for the audit is happening in 2020, but you’re building your capacity from 2019, which is a smart thing to do. Those costs will be part of what, originally, B.C. Hydro would have been budgeting as part of their overall audit package. Or do we not know that yet?

[10:35 a.m.]

C. Bellringer: We know for sure that for the first year, when we’re not yet doing the audit, the cost to our office would be an add-on. It’s an additional cost, completely. There’s no recovering in the first year.

In the second year, we are still doing the detailed planning, but the initial information is showing we probably will need to hire more people than we need the hours for the job just because of the flow for the year. We’re hiring people for a 12-month period. They’re not going to be working on Hydro for all 12 months.

The other area, which we pointed out from our planning, was that we’re getting more requests in than we can handle. So we do have a group that we’ve created. It’s called the compliance control and research area. What they’re doing is helping us use our time better. When the auditors aren’t working on the financial statement audits, they have small chunks of time available to do something else. So they’re putting together smaller projects to look at small control audits and compliance audits.

We would have the same thing happening with the folks hired to do the Hydro work. They would still have some off-season time, and they would need to do something else. We think that additional staff time would be sufficient to cover off the areas where…. We currently have quite a bit of a backlog in smaller matters that have come to our attention that we need to get in and have a look at.

T. Redies: Just curious. Carol, can you talk to us a bit about…? What’s the advantage of having the Auditor General do the audit, say, of a B.C. Hydro versus a KPMG, who already has the expertise and access to resources? We are talking about an increase in your resources in order to do this. What is the advantage?

C. Bellringer: There are a number of different dimensions to that. Just in terms of timing, the current auditors of Hydro are on an extension currently. They’ve already reached the maximum from the original contract. Presumably, Hydro would be seeking either a renewal or new auditors over that period anyway.

In terms of our having enough…. We do need to assess all of the organizations of high risk that flow into the public accounts and do enough work directly so that we have the confidence to be able to sign off on the public accounts. We talk about it in terms of high risk, yet there are some large audits that we don’t do.

B.C. Hydro isn’t the only one. There are others that we’re having to rely on external auditors. We’ve managed to do it by making sure that the oversight work that we do is sufficient. But it’s still not the same as doing it yourself. There is a lot of…. You get into the details on a more sustained basis to better understand it.

In the last audit opinion on the public accounts, I did issue a qualification on rate-regulated accounting as it impacts the public accounts. I think we should have had that information sooner. I don’t think…. It was as a result of doing the rate-regulated accounting project. I think if we had been the auditors, we would have known that sooner. I do think it was a fundamental risk area that we were not addressing adequately.

T. Redies: The $480,000 which is going to run to $750,000 — that’s relating to B.C. Hydro. How many years do you expect to do the audit, and what happens after…? Are these resources now baked in forever, or do they drop off once you are no longer the auditor for Hydro?

C. Bellringer: The way the legislation is written currently we take the audit on for five years. After that five-year period, we can go back to the Public Accounts Committee and request that we continue on an audit past the five-year period. We would, at the end of the five years, have to determine whether or not we feel we can now move back to an oversight role and then move on to something else.

When I say there are other large ones as well…. I’m just going to give Russ the heads-up. I’m going to ask him to rattle off what some of those are.

[10:40 a.m.]

If you go back in time in our office, we did a lot of those large ones ourselves. Over time, it’s moved towards not doing them. There are others not equally as high, but they’re also high risk. I would say, after the five years, we would consider whether or not we would move off of Hydro and move on to one of those. We also may decide we need to do Hydro and one of those. That would be a rather dramatic impact to our office.

The one thing that we also…. When we look back at why we were able to do some of these high-risk areas purely through oversight, some of it was a determination that we, at that point, didn’t have the capacity to take it on. So we’re reversing that now and saying that no, we don’t have the capacity to take it on now, but we’re requesting to build up that capacity so that we can.

Some of the big ones, though, that we would consider as well….

R. Jones: I’m sure the committee would probably wonder why we picked Hydro over the Lottery Corporation or ICBC. We currently do the Liquor Distribution Branch. We did the Liquor Distribution Branch for years and years as a direct audit. Now we employ one of the big firms to do it for us, but we still sign the opinion. So that’s another one.

Those are the three other really big ones. They each have their own risks and uniqueness, but they’re all international financial reporting standards audits. Yeah, ICBC might be one we would decide to look at in the future.

We do have, as Carol mentioned, a number of mechanisms. We may find, when we start looking at taking on Hydro, that Powerex would be better done if we hired one of the firms to do it for us and just put one of our senior executive directors or myself on the audit as overseeing it, and have them do the work for us. We haven’t come to that decision yet. But it would still require the funding, regardless of how.

C. Bellringer: In terms of that, we’re reasonably comfortable that the total would be about the right number. If we hired the person to do it for us within our office, and we’re doing it directly, or a subsidiary, and Russ mentioned the one…. If we hired a firm to do the Powerex, we’d still be able to do it within the same bundle of funding.

T. Redies: You’d have more flexibility if, for example, you didn’t pursue Hydro or any other…. You’d have more flexibility in order to take your costs down if you weren’t doing those audits any further. What I’m trying to say is: if you were contracting out that labour.

C. Bellringer: If we contracted out, then, for us, we still have to pay the bill.

T. Redies: I get that. But when the work is over, the contract goes away. When you hire people, they become permanent, and either you have to let them go or you find other work for them, right?

C. Bellringer: Correct.

Some of the other considerations that we…. We do want to do some of it directly. Some of it is, yes, the internal knowledge. That gets shared within not just that group but also the Public Accounts, who will better understand some of the implications.

We do believe it will help us with recruitment. We’ll be able to demonstrate to people coming into the office that it’s a large office. We do, currently, the largest audit in British Columbia — public accounts — but it’s not necessarily seen that way because it’s not an IFRS client.

B. D’Eith (Chair): I’m going to ask a couple of questions. Then, Ronna-Rae, Peter and Jagrup. Does anyone else want to be on the list? Okay.

A couple of questions. Could you explain the office and business expenses increase? Also, if you could explain a bit about grants, because I’m not sure what that is. If you could explain those two line items to me, I’d appreciate that.

I’m on page 13, and it’s an increase from $710,000 to $760,000 under office and business expenses. Then the other one is just grants and what that means in terms of your offices.

K. Hall: The increase in office and business expenses is primarily related to training — again, keeping our employees current in their knowledge of the different subject matter areas and the standards. So it’s a request for training for additional staff.

In grants, that is our fees that we pay to the legislative audit office, which all of the different provinces pay annually — a cost-sharing agreement with them.

[10:45 a.m.]

C. Bellringer: On that last one, we are part of what’s called the Canadian Council of Legislative Auditors, CCOLA. We have an actual secretariat through the Office of the Auditor General of Canada, and there are common shared costs. We have meetings. We have some technical matters that we ask them for assistance with. We use them as the equivalent of a professional practice office that a firm would have. We use the Office of the Auditor General of Canada for some of that.

B. D’Eith (Chair): Just a third question in regards to…. It’s tough. I’m trying to get my head around the fact that in 2016 and 2017, there was nearly $1 million in unused appropriation. Yet, we’re talking about getting up to, you know, $19 million for years ’19 and 2020. I’m just having a hard time getting my head around such a dramatic increase from the actuals to increasing these budgets when the actual expenditures have actually not happened, year after year.

I appreciate that…. Maybe you could just talk a little bit more. So you’ve over-hired? Is that what you’ve done right now? To anticipate…. So you’re planning to hit the actual number in terms of your salary budget right now? Is that correct for the fiscal?

C. Bellringer: Yes, for the year that we’re in now, our forecasts at this point are that it will break even. We’ll probably have a little bit of a lapse but not anywhere close to where it was before.

Are we about 100 now? Oh, we’re not under yet.

K. Hall: Like underspent projected out…? We are within, I don’t know, $10,000 of breaking even. It’s totally different.

B. D’Eith (Chair): Oh, okay. So this is going to be a different year in terms of…. The two years previous were $1 million each, but this year you’re hitting your targets? Is that in terms of…?

C. Bellringer: Yes, correct. We started the year saying: “Okay. What isn’t happening here?” It all went down to knowing that there would be vacancies occurring and looking at the timeline that ends up happening from the time somebody leaves till the time we replace that. So we did a better job at anticipating some retirements, some leaves. We just took a good guess, to be honest.

We started the year with $300,000. We internally said: “Okay. Let’s spend 300 over budget because it’s going to get used up.” It’s a safe over-budgeting. And, I believe, in last year’s submission, we said it in a general way that we’re going to try to overspend it, but it was an additional risk.

That got used up so fast that we did it again. We reassessed, and we had another $300,000 over budget. So we ended up, basically, 600 over budget in terms of internal management. That got used up. So then we slowed down because we’re getting closer to the end of the year. We said: “Okay, now we’ll just…. If there’s one or two things, we might absorb it.” But we’ve stopped doing that.

Our retentions increased. Our vacancies have decreased. So we’re probably comparing $1 million from those previous years to about 600 now — that had we not done anything, we would be lapsing again.

R. Leonard: Thank you very much for your presentation. It’s very clear. I really appreciate that.

I wanted to say that public confidence is a very precious thing, and when a qualification is issued by an auditor, it really perks people’s interest. I think taking a bold step to look at B.C. Hydro is probably not a bad thing, in terms of the public’s interests being well served. So thank you for taking this on.

I was going to ask you some questions about staffing and the ability to recruit and retain people, but it sounds like things are starting to settle out. I was a little bit unclear. You’re not below market, but there are issues around cost of living. I was wondering if you could clarify that a little bit more.

I know it’s not just with accountants where this is a struggle. It happens with the RCMP. It happens with engineering and different public sectors. If you could just, maybe, help us understand a little bit better how we can make sure that your office is well staffed in a less risky way.

[10:50 a.m.]

C. Bellringer: Absolutely. There are three buckets of employment groups, if you will. The corporate services, the administrative team — we had quite a few vacancies in that area last year. It’s not an issue of there being a shortage. When we have an application in that area, we get hundreds of people applying for those positions, many of whom are well qualified to come into the office.

What we’re finding there is it’s a more, if you will, transient employment group. They stay for a while and then they leave. In the corporate service area, the real risk was that if someone does leave, it’s going to take us a while to go through, because we do follow a competitive process. We have all of our jobs posted. We get all the applications in. We have a panel to interview people, so it takes some time. On that one, we were anticipating the numbers as the risk, not an issue of not being able to attract anybody.

Performance audit isn’t too far off from that, as well. We don’t use accountants in performance audit. We have people with PhDs, master’s degrees and other experience that come in. And again, the market is fairly healthy. When we post a job in performance audit, we’re able to find people. What they don’t often have is audit experience. We tend to hire at a more junior level and train them. So they’ve got subject matter expertise, but they don’t have audit expertise. We teach them the audit.

We had to put a push on to get some of the positions hired this year because, again, of the volume of those vacancies from last year. I’m sure that Stephen could attest to the fact that if he didn’t hear me say, “Hire, hire, hire” every day, then I missed a day. It was keeping a focus on we’ve got to get the people in the door.

Financial audit is now the risk area. It’s an unfortunate correlation between what we’re asking for additional funds for and where we’re having the greatest risks. Currently we have five vacancies for auditor positions, and we have one vacancy for an executive director position within financial audit.

We had a vacancy within our professional practices area, which was also financial audit–related. I believe we’re reaching a conclusion on one of those, but six out of the seven, we’re not there yet. We still have some work to do.

We have had, in some of those senior positions, people specifically say: “I can’t afford to move to Victoria.” We actually ended up using an executive search firm for one of them because we thought: “Well, that will help.” It actually didn’t. So we’re going to have to go back and figure out another strategy.

There have been years where we’ve recruited overseas. There are some people that worked in the office that came in from South Africa, at one point. We have individuals from Scotland. One of our assistant Auditor Generals came in from Scotland.

Some of it is looking at the market outside of British Columbia. We have had some applications from Alberta, from Saskatchewan, where the economic conditions are such that they’re interested in the jobs here. Sometimes, it’s because of a spouse who’s unable to also move.

P. Milobar: That’s a problem shared across the board, too, private and public sector. There are lots of private firms that always bemoan that they train people up and then they get poached away by government. I know a couple that have firms that are always grumbling about that.

I guess my question, though, is: if this increase is not approved, what’s plan B?

C. Bellringer: The obvious implication would be that we would not be doing Hydro. We’d continue to do it the way we’re doing it with an oversight role. Having said that, we need, now, to go back to the Public Accounts Committee to explore how that will impact the plan itself. We could continue to keep Hydro on there and choose to not do some performance audits. There is some flexibility within it.

[10:55 a.m.]

In order to do that…. I still feel comfortable going back to the Public Accounts Committee and saying that in doing this, we’re taking away work in another area. Those are the two options I can think of.

J. Brar: I just want to understand, in a broader perspective, where we are as a province in terms of our capacity to conduct audits. What percentage of your audit is direct audit, and what percentage is oversight? And how do we compare with the other provinces?

C. Bellringer: We actually tried, I think two years ago, to do a comparison across Canada. The setups are very different province by province. Some provinces actually have all of the financial statement audits flowing through the Auditor General’s office. Then they decide which ones are…. They hire a firm to do the work for them. Alberta, I believe, does all of them.

Then other provinces do a lot of performance audit work and very little financial statement work. Ontario would be one. Primarily, their work is performance audit. We’re in about the middle. We’re a little over half of the time in financial audit, so closer to 60-40 than 50-50. That would be at the high end of performance audit across Canada, but not the highest. I’m sorry it’s not specifically answering the question, but that’s really as best as we could figure out.

J. Brar: My second question is as asked by the member before. My understanding is that you have a given budget, which is $18 million plus, and then you set up your own priorities. If B.C. Hydro is one of the top priorities, why would you not pick within that budget? I understand that you need additional money to do this. But if B.C. Hydro is one of the top priorities you have given…. Is it hard to drop some of the audits which are midway or something like that? If this is a top priority — in my view, it should be a top priority, by the way — why would you not, even if it’s not approved? Like, B.C. Hydro will not cut back the list.

C. Bellringer: It is another option. Some of the implications would be that it would take several to make it up. We’ve designed the coverage for a number of reasons, some of which are to train staff. We’ve got some that are progressive, some pretty small ones. So they come in and start with those, and they move up and do the bigger ones. We’d have to consider: how does that work?

For example, we do five of the school districts. It’s only five out of 60, so we’re not doing it for the sake of coverage, but we’re doing it so that we have a good understanding of what’s going on, generally speaking, in the school districts. The way we assign the audit work for financial audit is giving us some idea of where all the other risk areas are that we should take into consideration in going in to do a performance audit.

It sort of shatters the whole framework. It doesn’t mean that can’t be done. I’m not suggesting that it’s untouchable, but it is a more complicated solution.

M. Dean: Carol, it sounds as though you’re handling your slippage, so you’re actually going to end up with a balanced budget at the end of this year. So what if, then, you do get hit with increases in salary? Where’s that money going to come from? There are going to be retro payments, and then your budget is 1 or 2 percent or 3 percent or whatever out of shape for the years ahead.

C. Bellringer: Will we have retro?

K. Hall: It all depends on what would come forward as direction for that. Likely not retro, but that could be an option. It would be a risk to manage.

R. Jones: The interesting part is, as has happened in previous years when all of a sudden there has been an increase in salaries to various ministries and whatnot, government makes the decision on whether or not they will fund it, or the ministries and the independent offices have to fund it. So in some cases, it comes out of the contingency vote the government has; in other cases, the offices are asked to absorb it. You have to manage it that way.

[11:00 a.m.]

C. Bellringer: The risk that we’re aware of going into this budget is about $150,000 for next year. Again, we would weigh that against the extent to which….

The 500 that we’ve identified is the amount we would need if we didn’t have to worry about vacancy management. So those two pieces kind of go together. If we didn’t get the 500 and we didn’t get the 150…. Now we’ve got a 650 pot to manage to make sure we can come up with it somehow. That’s not impossible, because that’s about the number we were at this year. It’s at the high end. If 150 was the only number out there that we might have to find somewhere, given the history, we could.

B. D’Eith (Chair): Okay. We’re out of…. Last, last thing, Russ.

R. Jones: Just one quick message for you. If we were to get the funding for the additional staff to do B.C. Hydro…. One of the other areas that is a key risk right now — we think, anyway — is out in the school districts. Those audits are done at a different time than what most of the Crown corporations are done. Crowns have a March year-end. The school districts have a June year-end.

We would easily be able to absorb the extra hours from the staff that we get for Hydro by taking on some of those audits, because there are some key risks out there. In doing so, the fees that are currently being paid to the private sector would then be paid through us. It’s a net-zero sum gain, when it comes to that. I mean, we can always manage it that way, and government is kept whole.

B. D’Eith (Chair): Thanks, Carol. Thanks, Russ. Thank you very much for your application.

A short five-minute recess.

The committee recessed from 11:01 a.m. to 11:06 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Next up we have the Office of the Conflict of Interest Commissioner — Paul Fraser. The floor is yours.

OFFICE OF THE CONFLICT
OF INTEREST COMMISSIONER

P. Fraser: Thank you, sir. You’ve seen some of the good news already. The rest of the good news is that I don’t expect to have to be here for an entire hour, if you have other things that you wish to do. It’s the equivalent, in metaphorical terms, from what you’ve just heard, of the minnow escaping after the whale. The Auditor General’s report is obviously much longer than mine is going to be.

I want to introduce my colleague, Linda Pink — who, as most of you know, is the executive coordinator of the office. Linda has been with us since October of 2012. To the extent that credit is due for how well we do operationally, Linda deserves it all. I’m pleased to say, actually, on that front — given that our primary expenditures, as you will have seen, have to do with the sort of non-discretionary aspects of salary and so on — that we have, for the last five years, had a completely stable workforce. Nobody coming; nobody going.

That’s important for a lot of reasons, not least of which is that the information that we keep and the job that we do is one that is personal to all of the members. There’s nothing you can do about the fact that we get to know certain things, but it’s always seemed to me that if we can keep the group of people who are privy to all of that to a minimum, that is to be desired.

We report, really, to the Legislative Assembly, to whom we are accountable through this committee and in other ways. This committee is the most interactive and interesting way, if I can put it that way, that we report our activities, albeit in the context of looking to explain the past or predict the future. In the exercise of our independent functions and powers….

[11:10 a.m.]

I don’t want this to sound too grand, but we do have fidelity to what Aristotle called practical wisdom. That means that we’re realistic. It doesn’t mean that we cut corners, but it means that we understand the human condition and the human predicament. That’s important in terms of the kind of work that our office does, both with respect to dealing with the members and with respect to dealing with the public.

Unlike all provinces in Canada, except for Alberta and New Brunswick, British Columbia is the only jurisdiction where members of the public have direct access to our process. So every British Columbian can ask our office for an opinion, or make a complaint, as it’s characterized not in the legislation but by people in the media. Every British Columbian has an opportunity to deal with our office and get answers to the questions that they properly think should be asked.

In that sense, we are at the crossroads of the public’s interest in what we do and the members’ obligations in terms of their duties and responsibilities. It’s a unique position that we have and unique work that we do.

In saying all of that and understanding that the results that get achieved in the office can be horrific for members in some circumstances, it can be very serious in terms of careers and everything else. I always tell people, when we explain the office to the outside world, that the work we do is intended to be a service to the members and to the public, and do not dominion. That’s, it seems to me, an important understanding for all of us to have. We’re pleased to do the work but to do it in a way that’s fair, a way that has to do with the rule of justice, if you like, if not the rule of law.

You have some information from us, and we have provided some information to you that I hope will be helpful in terms of explaining our situation, financially. The bottom line, in terms of what we’re asking for this year — and the performance over the years is to give it some context — is that in 2014-15, we asked for and received $567,000, and we turned back $39,000 at the end of the operating year. In the next year, 2015-16, we received $639,000 from the committee, and we spent it all. In 2016-17, we received $701,000, and we turned back $9,000. In the current year, we will have received, at the end, $743,000, and we expect to spend it all.

For the forthcoming year, ’18-19, we are asking for $687,000, which effectively is 8 percent less than we are operating with at the moment. There are a couple of historical reasons that I can get out of the way to explain how that can be so, especially if you have to explain that in the context of whether you’ve lost your mind or not, coming to the funder.

There are a couple of things. The first is that when I started this job, I was at 75 percent, and ultimately, in April of 2015, I was moved up from 75 to 100 percent. The impact of that in an office our size is fairly considerable, and that accounted for the blip upwards in terms of the non-discretionary amounts that we pay out in the salary.

[11:15 a.m.]

The other historical fact is that, for reasons that I won’t take your time to explain, I was given a payment in lieu of a pension benefit simply because I was not able, for reasons of age, to continue in a pension situation, and a pension had been promised as part of my terms and conditions of employment.

In those circumstances, what happened was that the present value of what I’d lost by not being able to contribute to a pension was translated into a payment, which was ultimately, in LAMC’s decision, a burden that the office would have to bear. It didn’t just come from the Legislative Assembly. It had to come out of this office’s budget. So that caused a certain amount of distortion, because the amounts were fairly high. There were three payments — one of $80,000, one of $79,000, which is being paid periodically, and one of $900, which will be the stub part of the forthcoming fiscal year.

A counterbalance to that — those numbers seem large and are large — is, of course, the fact that along the way the office has not had to pay a pension benefit, in terms of making a contribution for the office. What exactly that is, in terms of monetizing it, I can’t tell you, but I expect it’s considerable.

That’s historical information that accounts for some of the reasons why we’ve been up and we’ve been down and some of the payments that you’ll have seen in the grid that may not otherwise have made sense.

In the material that we provided, we’ve given you some background information about the office. That’s largely information that you already have, I’m sure, and I needn’t repeat. But as I say, this is an opportunity and a requirement that the office considers it has to effectively report to the Legislative Assembly, through this committee.

The things that we’ve done, in terms of outreach and so on, are also described briefly in the material and the structure of the office, in terms of the fact that we have five employees. Two of us are full-time, Linda and me. We have two other employees who are at 0.6, and then we have a contract employee, a receptionist who’s there as the demand in the course of the calendar year fluctuates, who is also at 0.6.

As I indicated, the workforce, fortunately, has remained stable and is talented and, I think, well appreciated by everyone. By “everyone,” I include the people who phone from all over the province, many of them desperate, wanting to find out who they need to contact. They know it’s probably not going to be us, although the term “conflict” covers a pretty wide field. But when they find out that it has nothing to do with pugilism or anything else, we try to find a place for them to go so that the office is not heard to say, “We can’t help you, and goodbye,” but: “We can’t help you, but perhaps you might try some other independent officer.”

My friend the Ombudsperson is, I gather, next on your hit parade today, and I’ll try to get out of here before he arrives because it’s to him and his office that we refer most people, and I have to say: “God bless them.” All of the feedback that we get — and we do get people who phone and thank us and so on — is that they’re treated there well and, again, informed properly and given every assistance.

We have a record, as I’ve indicated, and I hope a reputation, of living within our means and, in some years, turning back funds. We’re asking for an 8 percent reduction this year. The reason that it isn’t more of a reduction is because we have had increases in potential spending with respect to life insurance benefits and because we need to spend some money to renovate our website. The website is what most members of the public rely upon and need, and we need to keep it up to date.

[11:20 a.m.]

Together, those two items account for about, I think, $22,000, which we would otherwise not be asking you for. But we are asking you for that, leaving the difference between what we got last year and what we got this year, a reduction by 8 percent.

I think everybody in your position, and if I may say so, needs to know right off the top of anything that constitutes a slush fund or a contingency fund in our items. They’re all direct and labelled and can be explained. We don’t have a well of hoped-for change that we could draw upon.

Because we are involved in a complaint-driven situation and can’t control the intake, it happens from time to time that we have to come back to this committee because of unexpected expenditures that arise. To the extent that we can, we accommodate those events. To the extent that we can’t, we issue the caveat that it may be we have to come back to this committee at some time before your life cycle is over.

One such event occurred in 2016-17 and spilled over into 2017-18, involving an attempt to have decisions that I had made reviewed by the Supreme Court of British Columbia. The office has had the benefit, over many years, of a decision ultimately made by the Court of Appeal in 1998 that the decisions of our office are not reviewable in the courts. The reason for that is that the office is vested with the privilege that the Legislative Assembly, effectively, has delegated to it to deal with disciplinary matters.

The courts have decided that the office can make a decision, having been delegated to do so, or recommendations, having been delegated by the Legislative Assembly to do so. It’s for the assembly, ultimately, to decide what it will do with that recommendation.

We have no power to come in and impose a sanction on any member. The Legislative Assembly has the exclusive jurisdiction to do that. If we have recommended what a sanction should be and the assembly decides that there should be a sanction, the act provides that it would have to be the sanction we’ve recommended, not a new one. But if the assembly decides that there shall be no sanction, that’s the end of it.

While that seems harsh in the context of today’s understanding of transparency, due process and all of those sorts of things, you can imagine for a moment that if you have administrative decisions being made in offices like ours that are open to attack in the courts, we would be spending all of our lives in the courts. That’s fair to say, even though it’s perhaps a bit of an exaggeration. But you understand what I’m saying.

What’s the monetized result of all of that? Well, in this case, when the attack was launched in the Supreme Court of British Columbia, we were successful in having the proceedings dismissed on the basis that this 1998 decision of the Court of Appeal was still good law and, therefore, there could be no judicial review. Then that decision was appealed to the Court of Appeal by an organization called Democracy Watch. Just late last month the appeal was dismissed.

[11:25 a.m.]

So the Tafler case, the decision of the Court of Appeal, remains good law. In terms of what and how we spend money, through this committee, on folks like me and others who are making administrative decisions, that is huge in terms of what it would otherwise cost to defend proceedings in court.

More than anything, in my respectful view, what it does is confirm what actually is happening in this building and in the process that you are elected to scrutinize and be part of. That is that the Legislature has the power — not unlimited, not without boundaries — through its elected officials, to make decisions, typically in circumstances that resulted in them being elected in the first place. Those decisions should not ultimately be made, all things being equal, in the courts. They should be made by the Legislative Assembly.

The result of all of that proceeding was the expenditure by this office of $42,000. We sought costs against the applicants on the basis that the case was clearly without merit, given the decision of the Court of Appeal back in ’98. We did not succeed in getting costs. The court did not explain why not, except to say that some of the points that had been raised by Democracy Watch were novel — a comment that I respectfully disagree with.

In any event, we face that sort of problem. But hopefully, we’ve faced it down, without being melodramatic, and we will not have that to worry about for a while — neither ourselves nor other offices that may find themselves in the same situation.

I think I’ve given you as much of an overview as you probably require or want. I’ve explained — in general terms, anyway — why we’re where we are. I realize that you’re in the happy position now in your process of being able to say to yourselves that you’re not just further from the beginning, but you’re closer to the end. I won’t take any more of your time, unless you have questions that you wish to ask. I’d be very pleased to respond to them.

B. D’Eith (Chair): Thank you for all your work. We really appreciate it.

M. Dean: Thanks for your time. Just going back to the liability around the pension, an agreement was reached?

P. Fraser: Yes.

M. Dean: Is there any ongoing liability being accrued? Or was that an agreement for how…? Say you continue in your position for another ten years. Are there any other liabilities being accrued, or is it just dealt with in that one-off?

P. Fraser: Yes. It will be completed when the final sum of $900 is paid in the beginning of the next fiscal year.

B. D’Eith (Chair): So it’s sort of a lump sum? Is that what it was?

P. Fraser: Yes.

M. Dean: And it doesn’t matter how long you stay in the job. It’s done.

P. Fraser: Well, if I’m reappointed to this position, the terms and conditions of that reappointment would, of course, have to be discussed at that time, and presumably, all issues would be on the table. But it would be for….

B. D’Eith (Chair): Subject to negotiation, basically.

M. Dean: Okay. That answers my question.

P. Fraser: This aspect of things is over as of early April of next year.

R. Leonard: Your comments regarding the legal case jogged me in my thoughts around…. I believe you said that you want to spend $22,000 on improving your website?

P. Fraser: No.

[11:30 a.m.]

R. Leonard: No. I couldn’t find in the actual budget, on page 8, any reference to a website. Maybe you could direct me to which one it is that relates to improving the website.

My point is that in terms of public interest in your office — and you do some educational outreach — these are opportunities, of course, to help mitigate the possibility of people taking actions like taking your decisions to the courts. So I just wanted to get clarification around the budget item and where it is, in terms of website improvements.

P. Fraser: The contractor STOB — what is it?

L. Pink: STOB 60.

P. Fraser: STOB 60. Have you got that? It’s in appendix A, table 1. It’s in that STOB, which you will see has gone up to $25,000, as an ask, from the current $22,000.

L. Pink: That’s the wrong one.

P. Fraser: That’s wrong?

B. D’Eith (Chair): That’s the one underneath. So $45,000 to $55,000, is it?

P. Fraser: I’m sorry….

R. Leonard: It looks like it’s gone up $10,000.

B. D’Eith (Chair): Any other questions? Seeing none, thank you very much, Paul and Linda. We really appreciate the presentation and all the work that you do for British Columbia and for the members. We really appreciate it.

P. Fraser: Thank you all. Nice to see you.

B. D’Eith (Chair): Recess? Five minutes. Thanks.

The committee recessed from 11:31 a.m. to 11:38 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Calling the Office of the Ombudsperson. Jay Chalke, the floor is yours.

OFFICE OF THE OMBUDSPERSON

J. Chalke: Thank you, Chair. Good morning, Chair, Deputy Chair, and good morning, members of the committee. With me today is Deputy Ombudsperson David Paradiso and the executive director of corporate services in our office, Dave Van Swieten.

The latter Dave is, as you know, already familiar to you, since corporate shared services, which is part of the Office of the Ombudsperson, also provides support to three other officers of the Legislature, one of whom was in front of you yesterday. You saw Dave 2, who will follow next week. So you’ll see more of Dave.

I’m very pleased to take this opportunity this morning to talk to you about our budget for 2018-19. I’m going to make a few opening remarks, and then I’m going to direct your attention to a few PowerPoint slides that we have this morning.

In front of you, in terms of documents, is our budget request, a three-year service plan and a letter to the Chair and the Deputy Chair on the cost of the investigation this committee referred to us in 2015, as well as the report that relates to that letter in the 2015 referral. That report, titled Misfire, was tabled in the Legislature earlier this year.

[11:40 a.m.]

In recent years, this committee has established a second round of meetings each year with each of our offices, the purpose of which is to provide a substantive briefing about the services we deliver, as opposed to our budget request, to allow this opportunity to focus more exclusively about our fiscal challenges. Thus today I’m going to spend most of our time talking about and focusing on our budget.

Having said that…. Because all of the members, save for the Deputy Chair, are new to this committee and have not yet really heard in-depth what it is that an Office of the Ombudsperson does, there’s some risk that we’re putting the budget cart before the orientation horse. So while I’ll expedite my comments about our mandate and services, I’m not going to eliminate them entirely. I don’t think that would be fair to you. I think it’s important that you have the opportunity to put this budget request into a proper context.

Also, much of the attention that’s been paid to our office over the past few years, including by this committee, related to a single investigation. That was the one that was referred to us by this committee. As I said, we completed that investigation and tabled our report earlier this year.

There’s a natural tendency, whether because of the recency effect or just because of the prominence of that matter or a bit of both, to view our office exclusively from that perspective. That would be a mistake. We receive 8,000 requests a year from British Columbians for assistance, and we open over 1,500 investigation files every year.

It’s essential, notwithstanding the amount of attention that was paid to that one matter, that you consider our budget request in the broader complexity of our entire statutory mandate and the service that we deliver to British Columbians, many of whom are vulnerable and need our assistance.

With those caveats in mind, I’m going to provide you with a bit of a high-level orientation to the work that our team and I perform and then turn to our budget request for the upcoming year.

My office has served legislators and the people of British Columbia for almost 40 years. The Ombudsman Act, as it was then called, was passed in 1977 and came into force in 1979. When the legislation was being considered on second reading 40 years ago in this building, then Attorney General Garde Gardom described the purpose of the Ombudsman as follows:

“…with the establishment of an ombudsman in British Columbia we will have a person who can represent the conscience of the state and provide additional service for our citizens, move aside the bureaucratic roadblocks, wade through the red tape, approach the unapproachable and recommend improvements to administrative practice and administrative procedure.

“Government and regulation, order and edict, law and bylaw, and the rules and the roadmaps that are constantly being imposed upon society today, obviously illustrate the need for a citizen champion independent of the civil service, independent of the system, independent of the administrator and independent of politics, to wade through administrative hurtles, to cope with crises and to recommend betterment, as well as to defend against unjustified and uncalled-for criticism….”

Simply put, we’re the fairness office. It’s our role to see that public bodies act fairly and reasonably when they deal with ordinary members of the public.

The organizations about which the public can seek our assistance are very broad. They include every provincial government ministry; the Crown corporations; agencies, boards and commissions; the health authorities; local governments across the province; the public K-to-12 and post-secondary education sectors; and regulatory bodies of self-governing professions.

To give you a bit more flavour for that breadth, here are a few examples of public bodies whose decisions, acts or omissions the public can, every day, complain to us about and, as a result, that we can and do investigate: B.C. Hydro; ICBC; WorkSafe B.C.; the Law Society; all shapes and sizes of local governments, as MLA Milobar will know, from the city of Vancouver to the village of Zeballos; the University of British Columbia; the Fernie Public Library, for example; over 2,000 elementary and high schools; the College of Physicians and Surgeons; B.C. Housing; Surrey Memorial Hospital, to pick one; and the Ministry of Social Development and Poverty Reduction.

The positive side to breadth like that is obvious. The public has a one-stop shop for concerns about administrative fairness arising from virtually any provincial or local public body. That’s some 2,800 entities in British Columbia. Just think about that number for a moment. It’s pretty incredible.

In many other jurisdictions that have an ombuds office, some or all of the school systems, municipalities, universities, self-governing professions or the health system, to name a few, are outside the ombudsperson’s mandate. In those circumstances, people don’t have someone to turn to, to address administrative fairness concerns.

[11:45 a.m.]

While the positive aspect of the breadth of our jurisdiction is obvious, it does, at the same time, present some significant challenges. There are issues that this breadth presents in terms of staff expertise, staying current in trends across so many sectors and relationship-building with public bodies.

The greatest challenge for us relates to resources. There are risks with limited resources in very broad jurisdictions that the office can only provide limited assistance or that investigations will take too long or that any one area will be the subject of systemic reporting only rarely because there are too many resources chasing too many important issues. I’m going to return to that last point later — too few resources chasing too many important issues — because it forms a central feature of our current budget request.

We’re a highly efficient organization, in my view. We have already and are continuing to review much of the organization’s operations to determine if we can improve our service from within in any way, shape or form. This internal continuous improvement work never ends, so that we maximize our outputs and our outcomes from the resources this committee approves for our organization.

While we’re always looking for ways to improve service from within our funding allocation, it is apparent to me that further internal efficiencies will be limited. From our aggressive triaging of initial public inquiries to our streamlined corporate shared services model that provides common support to three other officers, we have, for a number of years, operated a lean organization.

Turning to our substantive work, we perform our work three different ways. The first, our main stock-in-trade, is the investigation of complaints from individuals. We conduct between 1,500 and 2,000 investigations every year. If I can ask you to turn to the first slide, this is a quick overview of who we receive complaints about.

About half relate to provincial government ministries, about a quarter are Crown corporations and agencies, boards and commissions, taken all together, about 1/10 are local governments, and roughly the same number for health authorities, and then all of the others are in the remaining 5 percent.

Here, the next slide, are the ten specific authorities about whom we receive the most complaints. I always hasten to say that being on that list doesn’t necessarily reflect the quality of administration.

One thing that these ten…. Well, there are really two things that these ten organizations share in common. The first is that they’re large volume public service organizations. To take an example, ICBC completes over five million transactions with customers every year. Any one of those transactions could, if it went awry, result in a complaint to our office.

Of critical importance and, really, the second thing that ties many of these agencies together is that many of these public bodies are delivering public services that are vital to the health or safety of the individual, where the capacity of the member of the public to withstand a potentially unfair or even a slow decision is very limited. Many of the people who come into contact with these agencies are vulnerable. Typically, we’re talking about the social welfare system, the health system and other income support programs.

In carrying out investigations into individual complaints, we are impartial investigators. As is often said in our line of work, an ombudsperson is neither an advocate for the complainant nor an apologist for the public body. If you prefer to think in sports terms, like baseball, we don’t have a team on the field. We’re the umpire, calling balls and strikes.

In determining whether a complaint is substantiated, we apply a number of tests that are set out in the Ombudsperson Act. These go beyond traditional legal concepts, such as negligence, although that’s included in our act, to include other concepts, such as whether the public authority acted in a manner that’s unjust, oppressive, based on irrelevant grounds, done for an improper purpose or even the very general “otherwise wrong.”

At the end of an investigation, we determine whether the public body acted fairly. If we determine that the public member has been treated unfairly, we can recommend to the public body a resolution of the complaint. We do not have the power to order public bodies to do so.

As the Supreme Court of Canada recognized in the leading case on the role of ombudspersons in Canada:

“It is important to note that the Ombudsman has no power directly to force any governmental authority to remedy a wrong he uncovers. The act does, however, create a variety of mechanisms whereby the Ombudsman may move the government to implement any decision he reaches after an investigation.

[11:50 a.m.]

“He may recommend corrective action to an authority, who must then notify him of what action will be taken, if any, and where no action is planned, the reasons why. If the Ombudsman remains unsatisfied, he may report the matter to the Lieutenant-Governor-in-Council and to the Legislative Assembly. And he may comment publicly on any case where he deems it appropriate.

“It is these sections that ultimately give persuasive force to the Ombudsman’s conclusions. They create the possibility of dialogue between governmental authorities and the Ombudsman. They facilitate legislative oversight of the workings of various government departments and other subordinate bodies. And they allow the Ombudsman to marshal public opinion behind appropriate causes.”

While this soft power, the ability to propose rather than impose, concerns some — some people describe it as sort of a weak approach — I find much to like in the views of former Ombudsman Stephen Owen, who once wrote: “The inability to force change may be the central strength of the office.”

I’m going to say that again: “The inability to force change may be the central strength of the office…. It requires that its recommendations…be based on a thorough investigation of all facts, scrupulous consideration of all perspectives and vigorous analysis of all issues.”

The application of reason produces results that are more powerful than could be achieved through coercion. Of course, the process may produce reluctant change in a particular instance, but it creates a loser who will be unlikely to embrace change in the future. By contrast, change that results from a reasoning process changes a way of thinking, and the result endures to the benefit of future users.

The second type of ombudsperson investigations are systemic investigations and reports. Over the past decade, we’ve developed a practice of releasing one or two of these reports a year. These are the subject of careful and rigorous selection and involve a significant commitment of our resources. The purpose is to identify systemic administrative unfairness and propose solutions that potentially could benefit all British Columbians who encounter a recurring problem or issue with a public authority.

Our office has produced important systemic reports over the past decade, including the use of professional reliance approaches in environmental decision-making, the protection of students attending private career training institutions, drinking water quality, delays in social assistance and disability assistance reconsiderations, local government fairness in the areas of open and closed meetings and bylaw enforcement, and seniors care in residential, assisted living and community care.

We publish monitoring reports concerning implementation of systemic investigation reports for five years following the release of our initial report. In this way, legislators and the public can see how public bodies are living up to their commitments to implement our recommendations.

It is valuable work, and each report has led to significant improvement in public administration. But unfortunately, we simply do not have the ability, within our past and existing level of resource allocation, to do more of it. We’ve been releasing these reports for about a decade, and here are the areas covered over that time.

The next slide kind of gives you a bit of a sense of the topics that we’ve covered over the past decade. You see the range of what we’ve done. But then, equally important, on the next slide are some of the areas of public services where we’ve had no systemic reporting over the past decade. The K-to-12 public education sector. Universities and colleges. Crown corporations — the highest, in terms of volume for us, are ICBC, B.C. Hydro. Agencies, boards and commissions — workers compensation, for example. Financial assistance other than Social Development and Poverty Reduction income and disability assessments — so other programs, such as StudentAid B.C. And regulatory bodies and professions.

So lots of sectors that we have interest in doing systemic investigations about, but given our resource level, we’re able to do a few a year, and we’ve tended to focus on the areas that I talked about above. I’m going to return to this issue, this question of systemic reporting, in the context of this year’s budget request later.

The third type of ombudsperson work is in the area of prevention. This involves applying our expertise in administrative fairness to assist public authorities proactively address fairness issues. The idea is to prevent problems from arising in the first place.

This has great potential for benefit to members of the public, since their dealings will look, feel and be more fair. It benefits the public body because a more harmonious relationship with clients and customers can be more efficient and satisfying than an acrimonious one. It can benefit our office by addressing common problems of unfairness once and for all. Thus, in the long run, should allow us to reallocate resources to serve people facing other problems.

Last year this committee supported a three-year pilot project in preventative ombudship. We’re a half-year into that three years at this point in time, and the project will be subject to an evaluation. I’ll be returning to this committee in two years’ time with evaluation results. We’re very excited about this work and making the old adage, an ounce of prevention is worth a pound of cure, come to life.

[11:55 a.m.]

With those high-level observations about what we do, I’m going to now turn to our fiscal picture and our budget request. The big picture on our fiscal structure is that we’re a people organization. By that, I mean our budget is almost entirely devoted to the costs of our staff — their salaries, office rent and supplies and some systems costs to manage our information for staff to use. We don’t have transfer payments or grants. Our capital costs are mostly devoted to replacing existing IT infrastructure as required.

We prudently budget through the year to come in under budget by 1 or 2 percentage points each year, with respect to our allocation. Any unspent funds are then returned each year to the provincial treasury. Last year we came in at 99.5 percent of our budget.

I first want to touch briefly on our budget situation for the 2016-17 fiscal year, the year that we’re currently in the middle of. If I can direct you to one of the documents in your package — namely, a letter from me to the Chair and the Deputy Chair of the committee, dated November 14.

That letter fulfils a commitment I made to the committee, at their request, in 2015 that following the completion of the Health firings investigation, we would provide a report on the costs of the investigation. The committee was interested in this information because it was the first time the Legislative Assembly or one of its committees referred a matter to my office for investigation and report, as they are entitled to do under the Ombudsperson Act.

As the letter indicates, we were allocated a budget over two fiscal years, namely 2015-16 — where we received a supplementary request partway through the year — and 2016-17, to carry out the investigation. But as it transpired, due to the fact that the investigation took several months longer than originally anticipated, we incurred costs over three fiscal years, including into the current fiscal year. This year’s costs were approximately $122,000, none of which we were funded for.

We’ve worked hard to manage this expenditure pressure in ways that do not impact our other services. I’m pleased to say we’ve mitigated about 40 percent of this pressure, but we’re still facing an end-year budgetary issue of approximately $75,000. Thus, I’m requesting that this committee approve a supplementary request for 2016-17 of $75,000, which is attributable to the one-time cost we incurred in 2017-18 on the investigation referred to us by this committee.

Turning to the main point of our budget request, that for the upcoming three future years. Our overall budget request for 2018-19 is for $7.474 million. I want to spend the next few minutes describing the nature of this request and its rationale.

As we look at the next three years, I want to focus on four matters — namely, the budget treatment of two time-limited projects, the funding for which has already been started by this committee in the past year on two, and two ongoing requests for funding to start in 2018-19. The net effect of these four matters is, when comparing our budget this year with three years out — 2020-2021, the last year of the service plan — a 1.6 percent increase. But there are greater swings in the intermediate years arising from the program start and end dates of the time-limited projects and initiatives that have been previously approved.

The first time-limited project is a three-year project to reduce our “file awaiting assignment” list. As I advised this committee in the fall of 2015, the “file awaiting assignment” list is a list that puts matters that have been accepted for investigation into a queue until the particular matter can be assigned to one of our investigators, based on investigator workload.

As I said to the committee in 2015, in my view, good service by my office demands that time in such queue should be in the range of one to two weeks, which equates to a list of about 50 files. That’s the rate at which we assign investigations to our investigators. Unfortunately, it was and is in excess of that. So I advised the committee that a combination of incremental resource and some business process changes at our end would reduce that to our goal but over a three-year period. This committee agreed and funded that project.

On the next slide, you’ll see the blue line. You’ll be glad you weren’t here in 2015; there were about six different lines at that time, with various different scenarios. This was the scenario the committee approved in terms of adopting the funding and business process changes we wanted to introduce. The blue line was our anticipation as to what would happen to the “file awaiting assignment” list when we were in front of this committee in October or November of 2015.

[12:00 p.m.]

When I was here at that time, our “file awaiting assignment” list stood at about 550 files. Then a year later, at the end of September 2016, we had reduced it to 339. Then a few months ago, at the end of September of this year, we were at 270. So we’re bang on, in terms of what we were projected to do.

If we’re down and to the left, if I can put it that way, of that line, then we’re ahead of schedule. If we’re up and to the right, we’re running behind schedule. The last place, where we want to be by the end of the project, which is at March 31, 2019, is our goal of the 50 files — which, as I said, represents a one- to two-week intake.

Next year, 2018-19, is the final year of that three-year project. We’re doing well. I’m quite pleased with how we’re working on that.

The second time-limited project is the preventative ombudship initiative I spoke of earlier. This project is directed at helping public bodies improve their administration and thus prevent fairness problems from arising in the first place. The committee funded the pilot project for three years, and I’ve committed to returning in the fall of 2020 with an evaluation of the project. We completed a competitive process for that evaluation, and I’m pleased to advise that we have an evaluator in place. We’re still in the first year of the three-year project, so funding is included, in this request, for the remaining two years, 2018-19 and 2019-20.

Turning now to our incremental funding requests for 2018-19: adjustments primarily related to inflation, adjustments to corporate shared-services costs and the introduction of a new employee classification and compensation system across the entire public service — a total of $209,000. That adjustment allows us, basically, to preserve status quo services.

The first of the truly incremental budget requests relates to our office’s services to Indigenous people, including members of First Nations and the broader Aboriginal communities. Our 2016-2021 five-year strategic plan identifies improving the accessibility of our services, to people who need us, as one of our strategic goals.

It’s apparent to us that our services are underaccessed by Aboriginal people. We need to address that, but first, we need to learn. We need to understand better the context in which our services are understood in Aboriginal communities and what approaches we can take that would be effective, while remaining impartial and independent, as mandated by the Ombudsperson Act.

To support that learning, I’m requesting that this committee support the addition of one staff person to be an Aboriginal liaison officer to work in partnership with communities, First Nations and others in a respectful manner in developing an Aboriginal community service plan, which I would intend to return with to this committee in the fall of 2020. There may or may not be budget implications for that plan, but that’s for another day. At this time, we’re simply requesting funding for one person, plus some modest associated travel and planning costs, totalling $125,000.

The second incremental request relates to our capacity to carry out the systemic reporting line of work I described earlier. These reports bring a broader perspective than we are able to in individual complaint investigations. We report on the fairness of an entire program, following an investigation that’s both broad and deep. These investigations have significant impact for a number of reasons.

One, because our recommendations relate to program change, systemic reports can assist all members of the public who receive, or should receive, a particular public service — not just those who complain to us, where the remedy may relate only to that person.

Secondly, systemic reports can bring forward an area of concern that we see happening on the front lines of public administration and ensure it receives serious public administration attention. Think of us as sort of the canary in the coal mine.

Third, systemic reports, if implemented by public authorities, can and do remedy problems once and for all. We’re thereby getting the pebble out of the shoe — rather than the public, and public officials who serve the public, continuously experiencing ongoing unfairness, with all the attendant frustration and inefficiency.

Lastly and importantly, systemic reports promote respect for the values of administrative fairness and the rule of law, where an investigation reveals that actual practice has moved away from original program goals and principles.

We currently produce such reports at a rate of about 1½ reports a year. These reports have great impact in improving public administration, and they provide appropriate oversight to public bodies — an assurance to you, as legislators, that shortcomings in the fairness of provincial or local public administration are being addressed. The problem is that we simply cannot produce a sufficient quantity, given our current systemic complement of two investigators and a manager.

[12:05 p.m.]

Our experience tells us that an investigation team of six investigators is an optimal size. Our three individual investigation teams are that size. I’m of the view that normalizing the size of our systemic team to six investigators, as well, will greatly enhance our systemic capacity and, in turn, our utility to you as legislators and to the public. Furthermore, adding four systemic investigators will reduce our management cost ratio because we will not be adding any management positions to that team. Rather, we would be adding front-line investigators only.

With that increase, we will generate five to six systemic reports a year, depending on the scope and breadth of each project. This will allow us to provide appropriate oversight and cycle time for all the various sectors of public administration under our jurisdiction. The cost of this request is $487,000 next year.

To sum up, my team and I have six priorities for our budget next year. The first four are matters that require budgetary support for us to accomplish and about which I’ve spoken already: complete the “files awaiting assignment” backlog project, continue with year 2 of our prevention project, improve the accessibility of our service with Aboriginal communities and address our systemic investigation capacity.

The other two of our six priorities we will accomplish within our existing budget and thus require no additional allocation. They are to reduce the duration of our individual complaint investigations. For 2018-19, we have a performance target of completing 80 percent of investigated matters within 180 days. We’re not there yet. There are many reasons for investigations to go long. Some relate to us, while others relate to public authorities, and others relate to members of the public. We’re conducting a process review of our investigation function this year, and I’ll be looking to implement changes next year.

Lastly, I want to work with legislators on bringing to fruition a request that goes back a number of years with both myself and my predecessor in this role — that is, enhancing legislators consideration of our investigatory reports. The reports of two other officers — namely, the Representative for Children and Youth and the Auditor General — receive much more in-depth consideration by legislative committees, whereas our reports are simply tabled in the House. I believe it would be an important contribution to good public administration and good governance for reports of my office to also receive such committee consideration.

My hope is that in the spring of next year, we’ll provide some opportunities for the Legislature to think more openly about new committees’ assignments or activation than has been the case during the circumstances of the session this fall. More to come on this in the new year.

So how do all those various additions and subtractions add up? If I can direct your attention to the next slide, which is also set out at page 8 of our budget submission. You’ll see the dark blue line is our existing operation, and that continues over all the years and covers our individual complaint investigations as well as intake, early resolution and corporate shared services. The inflation cost I referenced before is built into that line as well.

You’ll see our total budget is less this year than last, mostly due to the elimination of the funding related to the health firings referral, which is shown in light grey in 2016-17.

The narrow pale-blue band is a little hard to see. It’s quite a tight little thin band sitting on top of the dark blue bar. It represents the three years of our “file awaiting assignment” reduction project. You’ll see that that band ends after next year.

The dark grey is the three-year prevention pilot project. The three-year funding ends in 2019-20. As you’ll see, there’s no dark grey as of 2020-2021.

The orange is our systemic investigation funding. We have some funding already, but you’ll note there’s more orange starting next year, which represents the impact of our request to normalize the size of our systemic investigation team.

Finally, the thin gold band at the top is our Aboriginal liaison officer position.

When you put all of that together, our budget goes up next year by $821,000, followed by decreases of $86,000 and $613,000 the following two years, to arrive at, what I indicated earlier, a 1.6 percent increase in 2020-2021 when compared with the year we’re currently in now.

That completes my remarks. Thank you for your attention. My team and I would be happy to answer any questions you have.

B. D’Eith (Chair): Great. Thank you very much.

P. Milobar: Thank you for the presentation. I just want to get a better sense of the Aboriginal liaison piece.

If a complaint comes in around a municipal government, which I’m familiar with, there’s not really an optional response by the local government to you. There are documents that would need to be provided, background, all of that. We don’t have a choice. You have to comply.

Do you have that same legislative clout with First Nations communities? Or is this more that it would be a voluntary compliance on their part, band by band, and those relationships need to be built up?

J. Chalke: I want to be clear about what the purpose of this project is.

[12:10 p.m.]

This is to ensure that members of Aboriginal communities are coming to us, in proportionate terms, with respect to our existing jurisdictions. We’re not suggesting any change to our jurisdiction, and to the degree that a community is under our jurisdiction currently, they’re subject to the same obligations under the Ombudsperson Act as the local government you’re speaking about.

This isn’t about changing our jurisdiction with respect to Aboriginal communities. This is ensuring that…. For example, as the representative who was here yesterday I think indicated, half the kids in care in British Columbia are, as you know, of Aboriginal descent. Nowhere near that is…. You can’t see that in our complainant clientele.

There are possible reasons for that, but we’re not sure what, really, that represents — why that’s the case. So we need to spend some time really reaching out to Aboriginal communities and understanding that better to ensure that all British Columbians have an opportunity to make sure that public bodies, provincial and local, are treating all their citizens fairly.

We’re reliant on people coming to us, and if people, for whatever reason, are not coming to us, that’s a concern to us. So we want to find out what the reasons are. I think, to be candid, we don’t know what the reasons are for that underrepresentation in terms of our clientele at this point in time, and we want to know more.

P. Milobar: Just to be clear, then, you’re talking about billing capacity so that First Nations peoples, on or off reserve, feel comfortable coming forward if they’re dealing with a provincial government agency or those matters. You’re not talking about trying to do investigations around conduct of a chief in council that may come forward from Aboriginal communities.

J. Chalke: Right. Our jurisdiction is statutory. It’s set out in the Ombudsperson Act, so that’s not changing under this project. That’s exactly the same.

R. Leonard: Thank you very much for your presentation. Just to let you know, I did actually work for Karl Freidmann, the first Ombudsperson, when it was an ombudsman. So I think it’s kind of interesting that one of the findings is that there’s been undue delay, and suddenly — not suddenly, I’m sure — the Ombudsman’s office is faced with the same kinds of challenges when it comes to budgets.

In terms of the big investigation — this one here, the misfirings — were you given extra funding to do that? What caused the backlog?

I actually have another question for you, but I’ll ask that one first.

J. Chalke: Absolutely.

Yes, this committee was heavily involved in all matters with respect to the referral back in 2015 and 2016. The committee recognized that, in referring a matter to us — and it was the first time that it had ever happened in the history of our office — they were imposing, unlike every other investigation that comes to us, a mandatory duty on our office to investigate and report. Because that’s what the Ombudsperson Act provides — that you, as legislators, can require my office to conduct an investigation.

By referring it, there was no question that we were going to do that. That would have displaced about a third of our individual investigation work. So the committee, I think very readily and quite immediately, recognized that that was an untenable outcome. It really was never even up for discussion, frankly. This committee was quite open to ensuring that we had the adequate resources to do that work — which, as I said we would have done anyway — in a manner that didn’t unduly impact our services to ordinary British Columbians.

You’ll note that, in the letter to the Chair and the Deputy Chair, I said that was all our intention. That had been our intention. I think, in the end, we really saw two ways that it did actually impact our services.

One was that we squeezed our systemic reporting during that period of time — systemic investigations and reports take a fair bit of senior personnel time in my office — as well as monitoring older, previously issued systemic reports. So we actually did sharply reduce that over the period of time that we were conducting the referred investigation.

[12:15 p.m.]

The second was that we had intended, and this committee in its funding had intended, that we would have a short period of transition after we completed that report last fiscal year in which we were able to return to normal operations, because we had moved some investigators quite immediately to start that investigation. So we were, in essence, being paid back for that subsidy that the ordinary operations had provided.

As it turned out, given the volume of documents that we had to get through, we weren’t able to do that last year. So all of that happened this year, and that’s what resulted in the $122,000 — that and printing costs, etc. That really didn’t happen last year, and that’s why I’m in front of you this year.

R. Leonard: Okay. Thank you.

You’re requesting an increase to your investigator team for the systemic investigations from two to six. Is that correct?

J. Chalke: Right.

R. Leonard: It goes from having about one systemic investigation per year to five or six.

J. Chalke: Yes.

R. Leonard: Given that it looks like sort of one-for-one — one staff person…. It’s going up incrementally per staff. What is your justification for wanting to do that many more investigations over what you currently do? Also, how would you be prioritizing what investigations you will be doing?

J. Chalke: A couple of answers to that. Those are great questions and things that we talk about a lot.

I really think a model of a systemic report every couple of months…. It will allow us to provide oversight to all of the sectors, all of the public authorities that the Legislature has charged us with investigating, and obviously, there are certain authorities where we receive a lot more complaints than others. We are always going to overweight those areas. It would be our intention to overweight them in our systemic reporting because the potential for remedying unfairness is obviously bigger where there’s clearly an area where a lot of people are concerned and complaining to us. At the same time, we don’t want to neglect other areas where we receive a lower volume of complaints.

Part of it is kind of thinking about cycle time in terms of how often we return to a particular sector. It also relates to…. Because we’re only adding investigators, and these systemic investigations have a significant impact on our existing senior infrastructure, which is pretty much myself and the deputy and a couple of other people, we have to be able to make decisions about those investigations and really provide leadership around how those play out and make decisions about recommendations. So our capacity…. In addition to ensuring that 1,500 individual investigations happen a year, that seems to be about the right number.

In terms of your comment about: “Well, it’s sort of one person, one report.” That’s kind of a rough marker. It’s not necessarily how we would allocate them. Some investigations may be bigger. Some may be smaller. Some may involve teams. Some may involve a single person, so it wouldn’t be necessarily true that on April 1, we assign six investigations to six individual investigators and say: “Off you go.” We’d be looking at it in a model that created a proper cycle time and that is responsive to issues as they emerge.

M. Dean: Just following on from that, what’s the difference between your systemic investigation and the Auditor General’s performance audit?

J. Chalke: Right. Typically, they’re interested in value for money. I don’t want to generalize too much, but that’s really their purpose. Their job is to ensure probity and financial expenditure. That’s really their focus. Ours is about fairness. It’s about administrative fairness, legal compliance — much more about those sorts of issues than you would see necessarily with their investigations.

Ours are often quite fact-specific, related to a particular phenomena — so more interested in those areas. Plus we are interested…. Our jurisdiction covers areas that are not covered by the Auditor General, obviously, so we’re different in that regard.

We communicate with them, as with the other officers, to make sure that we’re not overlapping. There’s not much value in that, unless we see some synergy. Sometimes there is some synergy by adopting a common approach or a similar approach over a period of time. But generally, our goal is to be working on different things at any given point in time, so we ensure that we’re communicating well back and forth.

[12:20 p.m.]

M. Dean: I’m looking at your table and the top of your budget lines on this slide, and I don’t see them lining up with the numbers that we have on your table 1, with your three-year budget plan.

J. Chalke: It should.

M. Dean: I can see how 2017-18…. Even with the preventative initiative, it goes above $600,000. I’m just looking at salaries. Should I be looking at it a different way?

B. D’Eith (Chair): Is that the total appropriation?

M. Dean: It goes up to total, does it? So you’ve actually put all of your overheads on top of this as well. It’s not just salaries.

J. Chalke: That represents our total allocation — correct. In the blue band — or the blue bar, as I try to describe it — we have put a number of our common costs, as it were. That’s also where, for example, we put the inflation adjustment. We put that in the blue band. We simplified it a little bit in that regard, but the top of the bar should represent our total allocation each year.

M. Dean: So your orange systemic investigations, under 2017-18, is your two FTEs, and then 2018-19, it goes up to six.

J. Chalke: Two investigators and a manager, and we’ll go to six investigators and the same manager.

M. Dean: The same manager. Okay.

J. Brar: I’m pleased to see that you are actually trying to reach out to the First Nations community. In that light, we have sizable ethnic communities in the province: the South Asian community, the Chinese community, the Filipino community. I just want to understand. Do you receive complaints from them that reflect the numbers of the ethnic communities? Secondly, does your staff reflect the capacity to serve them?

J. Chalke: In terms of our complainants, we don’t actually collect the ethnic background of our complainants. I think, at least impressionistically, we would say that our reach into ethnic communities is, while perhaps not representative, maybe less unrepresentative than with respect to Aboriginal communities.

We did some demographic work last year. We worked with Statistics Canada to try and delve into that a little bit. So far, we haven’t really been able to…. Because, of course, it really relates to people who complain to us, not people who access government services. It’s that distinction. It’s kind of a subtle point that we’re trying to determine,

We’re very interested in that. Our five-year plan actually is more general than just dealing with Aboriginal communities. It really says that we want to make sure we’re accessible to any British Columbian who needs us. Obviously, that reaching in to ethnically diverse communities is important as well.

Right now, in terms of our budget implications, it’s really Aboriginal communities that we’re, I think, setting as a priority. But certainly better reaching into ethnic communities is something that we’re interested in as well. That’s part of our five-year strategic plan. I expect it’s something that will be back in future years.

J. Brar: The second question I want to ask you is that I have historically…. We deal with people in our office. When we hit a roadblock, we do send people to your office. I’ve sent some, not many, but almost all of them were rejected. I just want to ask you what your rejection rate is. How many complaints come to you, and what percentage is that?

J. Chalke: About 8,000 people come to us every year. When we receive a request or a complaint from somebody, the first thing we do is try and figure out what public body they’re complaining about. Is it a public body that’s in our jurisdiction?

We have jurisdiction over, as I said, very broad provincial and local. But there are lots of things we don’t have jurisdiction over. People aren’t happy with a court decision or the conduct of a judge or the conduct of a municipal police force or the government of Canada, veterans benefits or something. There are lots of times when people come to us because they don’t know where to turn but it’s not something we have jurisdiction over.

We don’t just turn them away. We help those individuals. We link them up. We’ve been doing this for 40 years, so we have a quite well-developed referral network that we can send people to in terms of supporting them to make sure they get a right answer. So if somebody has a concern about a veterans benefit that they’re not getting, we link them up with the Veterans Ombudsman in Ottawa to make sure that someone’s helping them. There are networks that we can access there.

[12:25 p.m.]

Assuming it is a public body that we have jurisdiction over, the second big question we ask them is what they have done to remedy the problem themselves. We expect people, if they’re able and capable of doing so, to access whatever review or appeal process that that public body has. Most public bodies have such a thing. We expect them to go through that process and come to us when they’ve completed all those reviews and appeals.

A lot of people turn to us. They’re frustrated. They call us. They reach out to us, and they haven’t yet…. Or didn’t know about, sometimes, a particular appeal. So we say: “Off you go and access that, and if you’re still unhappy when you’ve done that, please come back to us.”

We have other ways that we look at complaints, but those are the big two. That really takes us from around 8,000 complaints a year to about 2,000. So, really, about 75 percent of those complaints or contacts end up being some other thing. Sometimes people are just asking for information because they don’t know where to turn and government’s a big and confusing place, so it’s not even really a complaint at the end of the day.

If you look across ombuds offices across Canada, that’s a pretty consistent rate of contacts versus: “Yes, we’re going to take this on as something we’re going to investigate.” If it’s a public body that we can investigate and the person has done what they can to exercise whatever their appeal rights are, we then look at how quickly we think this can be dealt with.

We have an early resolution program that, where we think that…. It’s really about a breakdown in communication problem, which does happen, particularly in the health and social service field. If this is something we think that, with our investigation, we can wrap up in ten days or less, it goes to an early resolution process. We have early resolution officers, too, who focus on that. That’s about 300 times a year. Then the remaining go to our investigators. First they go to that queue that I talked about, and then they get assigned to one of our investigators for investigation and report.

B. D’Eith (Chair): Great. Are there any…?

R. Leonard: I just have one follow-up question on the team. You said that the optimal number is six investigators. In those numbers, there isn’t an exponential growth in terms of the number of systemic investigations that you can do. Could you do with three investigators instead of six?

The other question I have is that presumably, doing systemic investigations will result in better operations of the various agencies, and that should result in less complaints to your office. Is there any way of measuring that?

So those two questions.

J. Chalke: In terms of measuring the volume of complaints to our office, absolutely, we track that annually. I’m happy to report back as that happens. That’s always a long-term aspiration of, I think, any ombuds office, but I think there’s also the continuing challenge day to day that runs in the other direction.

In terms of your question about, if I can describe it this way, how many reports you get per person, you pointed out that we average about one and a half per year. We have two investigators. I’ve said we’d be looking at five or six. If we had six investigators, that’s really the number that I think reduces our management ratio to the level that is tenable — our cost ratio in terms of managers to investigators.

I think it allows us to have an appropriate cycle time through all of the areas of jurisdiction that we have as an organization and to make sure that we’re looking under the rocks across public administration to make sure that things are being dealt with fairly and responding to areas where we see concerns raised time and again in individual complaints, but we don’t have the resources to say: “Okay, let’s take a bigger, broader look at this area.”

With fewer investigators, but more than we have currently, could we do more investigations? Yes, but not much more. In my view, I think that the right approach is to take a step here and make a real difference in terms of how we can assure the public and you that public administration is being conducted fairly across the province and, yes, hopefully do systemic reports that ultimately solve problems once and for all. That, combined with our prevention program, should ultimately, in the long run, result in fewer complaints to us.

Fewer complaints to us is kind of the end of it. What’s really much more important is that public bodies are acting more harmoniously, which is more efficient for them, less frustration for the public servants who work in those organizations and better, most importantly, for the public, where they’re not frustrated by improper public service or unfair — or difficulties that they have, for whatever reason.

Really, the idea with the systemic report is: “Let’s fix a problem once and for all, and hopefully, it works better for everybody.”

R. Leonard: Thank you very much.

B. D’Eith (Chair): Great. I think those are all the questions. Thank you very much, Mr. Chalke. David, thank you so much. That’s it, unless there was anything else you wanted to add.

We’ll adjourn for five minutes.

The committee recessed from 12:30 p.m. to 12:36 p.m.

[B. D’Eith in the chair.]

Deliberations

B. D’Eith (Chair): I’d like a motion to go in camera.

Dan, Jagrup.

Motion approved.

The committee continued in camera from 12:36 p.m. to 12:57 p.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Okay. Move to adjourn?

The committee adjourned at 12:57 p.m.