The committee met at 9:04 a.m.

[S. Bond in the chair.]

S. Bond (Chair): Good morning. I want to welcome all of you this morning to day 2. Kate has also just informed me — and I want to let the committee know and thank them very much — that looking at the reports that we’ve had waiting…. I’m sure the Auditor General will be interested in knowing that practically all of them will now have been scheduled at some point or other. We have done a really great job.

To the committee, thank you. I know it has been a lot of homework for these two days, and we have two more in the not too distant future.

[9:05 a.m.]

Our first item this morning is consideration of the Office of the Auditor General’s report: An Audit of the Contract for the Family Maintenance Enforcement Program. That was provided in August of 2017. We’re very pleased to have the Auditor General here again today with us, with her staff. I know they’ve made arrangements in their schedules for both days, and we very much appreciate that. We also have representatives, obviously, from Ministry of Attorney General, and we will introduce them shortly.

We will begin, as is normal practice, with some comments from the Auditor General and then the PowerPoint presentation by her staff.

Consideration of
Auditor General Reports

An Audit of the Contract
for the Family Maintenance
Enforcement Program

C. Bellringer: Thank you very much. Good morning again, Members.

The family maintenance enforcement program — or the FMEP, as it’s often referred to — collects and issues payments for child and spousal support. Government first outsourced the FMEP back in 1988 when it expanded its pilot maintenance enforcement program. The service provider who was awarded the original FMEP contract has held the contract for 29 years.

The purpose of our audit was to determine whether the ministry procured and managed the current contract for the FMEP in accordance with government policy and guidance to achieve best value for money. In the public sector, procurement is important because it involves significant public investment in contracts that support the delivery of public services.

The government policy and guidance is based on the principles of fair and open public sector procurement, competition, demand aggregation, bringing together government organizations to take advantage of savings from group purchasing, value for money, transparency and accountability.

I’m joined this morning for this report by Sheila Dodds, assistant Auditor General; and Paul Nyquist and Jessica Schafer, who are the audit team. Jessica will take you through the report.

J. Schafer: Good morning, Members. In this audit, we looked at how the Ministry of Justice managed the contract for the family maintenance enforcement program, which we’ll refer to as FMEP.

The FMEP collects and issues payments for child and spousal support. The ministry first outsourced the program in 1988 to a private sector contractor. Twenty-nine years later, the same service provider still holds the contract. Between 2006 and 2016, which was the period of our audit, government paid them $160 million to deliver the program.

Our audit looked at the ministry’s procurement and management of this contract and whether it did so in accordance with government’s policy and guidance. We did not look at the quality of service that the program provides.

We found that, with a few exceptions, the ministry complied with government policy. However, during the most recent procurement, in 2006, we found that the ministry’s choices weren’t consistent with government guidance and good procurement practices. The procurement didn’t achieve competition for the contract. We also identified challenges with contract management that should have triggered stronger ministry oversight.

We observed several factors that may help to explain why the ministry experienced these challenges with the FMEP contract. The first contract was outsourced in the 1980s as part of a broader government privatization initiative. The initiative encouraged government employees to bid on contracts for services they previously delivered as public sector employees.

The original contracts were set up in a way that could have made it difficult for other private sector bidders to compete in later competitions. In addition, the cost-plus contract structure, which was set during the original outsourcing of the program has made it difficult for the ministry to get assurance over best value for money. With a cost-plus contract structure, government retains the financial risks for the service delivery but doesn’t have all the levers to ensure services are delivered at the best price possible.

A third factor was the importance of ensuring that the family maintenance enforcement services were delivered without interruption during any procurement process. Competitive procurement is intended to allow for a new service provider to take on an existing contract, but moving to a new service provider could also be seen to create a risk of disrupting service delivery.

The Ministry of Justice renewed the original contract with the service provider several times during the 1990s. The ministry then opened the contract to new bidders in both 2000 and in 2006. Both times, it directly awarded the contract to the incumbent service provider.

[9:10 a.m.]

When the contract was most recently up for tender in 2006, we found that the ministry’s procurement choices were not consistent with government guidance and good procurement practices. The ministry chose a procurement strategy that’s designed to identify and prequalify a small number of vendors from a much larger pool, even though it had no evidence that there was a large market of potential vendors for the contract. In the end, only the incumbent applied.

To encourage competition, the ministry should have done more to ensure a level playing field for all potential bidders. Vendors that didn’t have the service provider’s knowledge of the program could have seen the opportunity as risky. Despite awarding the contract to the same service provider, over ten years the ministry was not then able to negotiate a new contract with them.

Another contributing factor was oversight. During our audit, we noticed several factors that indicated challenges with the contract and should have triggered stronger ministry oversight. These included things such as the service provider regularly requesting and receiving additional funding to cover cost pressures; multiple external assessments of the program that offered recommendations for contract improvements, most of which are still outstanding; and, as explained, a history of procurements failing to achieve competition, resulting in direct awards to the same service provider, who has now had this contract for 29 years.

We found evidence of ongoing ministry oversight of the FMEP’s program costs, but we didn’t see evidence that ministry executive received complete information about financial, legal and program delivery risks. This type of information is essential to effectively carry out their oversight responsibilities.

Our audit shows that ministries have to do more than simply follow the requirements of government procurement policy. Although the ministry’s procurement choices were largely within policy, they did not generate competition, and the design and management of the contract did not mitigate known risks.

We made five recommendations to the ministry to support improved procurement and contract management. First, get the right people involved. Procurement is a complex area, so specialist expertise is important. Second, address risks identified in previous reports when looking at future options for the program. Third, ensure ministry experts review contracts to confirm the terms are consistent with policy. Fourth, develop ministry guidance on the timing of contractor performance evaluation. And fifth, ensure executive oversight of significant contract risks.

Although this audit focused on one contract, the lessons learned may have broader application. We encourage the office of the comptroller general and procurement services branch to consider whether the audit findings may be relevant to other contracts and whether additional procurement guidance would help all ministries.

S. Bond (Chair): Thank you very much. We will take just a brief moment and shift the seats, if that’s all right with the participants. Whoever is presenting on behalf of the ministry can sit beside the Auditor General. The rest of the staff can speak from their seats.

R. Fyfe: Chair, I’d like to just take the opportunity to make a few remarks before turning it over for the presentation. With me this morning is Chris Beresford, who will be doing the presentation, and David Hoadley.

I’d like to start by just thanking the Auditor General and her staff for the work that they did on this audit. The results will assist us both directly, with respect to the tendering process of the contract for the family maintenance enforcement program, and indirectly, by looking at our processes with other contracts.

Even before the release of the audit, the ministry had the benefit of the Auditor General’s views on steps that could be taken to improve processes. We started almost a year ago to implement the recommendations that are contained in the final report.

[9:15 a.m.]

The services of the family maintenance enforcement program are very important to many families that live in B.C., elsewhere in Canada or in a country with which we have a reciprocity agreement. Year after year, the program has recovered more support for families and is on track this year to exceed $215 million in payments on a caseload that is slightly smaller than in previous years.

The ministry wants to ensure that there is continuity of service to these families as we reach the end of the current contract period. We’re well into the process of evaluating the risks and benefits of the various service delivery options, and that process has benefited from the recommendations that have already been implemented. We will have implemented all of the recommendations contained in the audit by the end of this fiscal year.

With that, I’d like to just turn it over to Chris Beresford to take you through a PowerPoint presentation.

C. Beresford: This will be a fairly brief presentation here. As you know, the recommendations had been made, five of them. Three of them we have completed the implementation of, although, as I will speak, two of those are continuing over time. Those recommendations were to obtain some independent expertise on contract procurement, as well as looking at other service delivery options. The two remaining recommendations are being worked on at this point, and we anticipate that they will have been implemented by the end of this fiscal year.

I won’t go over the key findings, because Jessica did an excellent job in going through the report and the findings and the basis behind them. The report is accepted. The audit findings are accepted. All of the recommendations are accepted and, as I say, are being implemented.

The recommendations to develop guidance for program managers and assure the executive oversight — those are the recommendations that are still being worked on in the ministry. We anticipate they will be completed by the end of March.

We have sought and used a procurement specialist. That specialist is not only looking at the service delivery options — in particular, the work that would be required should we continue to tender and use a contracted service for this service delivery option — but that expert has also looked at previous audit recommendations that Jessica referred to in there. Those recommendations dealt in some measure with the form of the contract that would be provided. I think she spoke of the current contract as being a cost-plus contract, and recommendations had been made to look at other forms of contract in there.

The FMEP is a valuable program for British Columbia families. Slightly under half of the support orders that exist at this time are enrolled in the program for enforcement. British Columbia has contributed on the national scene to support enforcement, and we work with the other 12 jurisdictions in Canada. As a point of reference, about one case in four has a parent that lives in another province or another country. So the work — while three-quarters of it is exclusive to British Columbia, one quarter of it is not.

This audit report reminds us that in addition to service delivery, we need to look at the contract provisions and make sure that we have a robust contract management process in there. In that sense, it’s very helpful to us.

We will be implementing all of these recommendations, and they will form a part of whatever service delivery option goes forward in the future. In doing our due diligence, we are not yet at a point of determining exactly what form is to proceed with this, but we hope to have that happen shortly.

S. Bond (Chair): Thank you very much, Chris. I appreciate that.

I also, just on behalf of the committee, want to thank the Deputy Attorney General for being here. It’s not often that we get to have a deputy with us, so we’re very pleased that you took the time. I think it reflects how seriously you have taken this report. We do appreciate that.

Thank you for those presentations.

We’re going to start the speaking list this morning.

J. Yap: Thank you for the presentations from both the Auditor General and the ministry.

[9:20 a.m.]

I’m wondering. On the issue of the quality of service, mention was made that this was not a part of the audit. I’m curious. Is that part of the terms of reference for the contractor — to provide a certain level of quality of service for the recipients? I mean, we are talking about 41,000-plus families, British Columbians, or more than 41,000 individuals. Would we not want to ensure that those families, often in crisis mode or in difficulty when they’re going through this process, are receiving at least a good level or a reasonable level of service from the program?

I guess it’s a question for the ministry. Do you track, or is the provider responsible for maintaining a level of service? I’m curious why the audit did not include quality of service.

C. Beresford: In terms of tracking services, the ministry and the service provider track services very, very carefully. They do it in all aspects of the service from enrolment, case management, payment processing, the legal services and any of the activities that go with this such as communication, down to the point of how long people have to wait for the phone to be answered and how many people go into the website.

There is a schedule of services attached to the contract. This is a very old contract. The schedule of services was probably status quo or reflective of what contracts were like ten, 15 years ago in terms of things. As the Auditor General noted to us, a number of the measures in there are to deliver services to the satisfaction of the ministry. While the ministry is satisfied with those services, they’re not articulated in a way that gives good, hard-core measures and that they should be improved upon.

We’re comfortable that the services delivered are good and that people receive the type of service that they wish to get and that the results are good.

The program does a lot of different elements. Collecting funds is the most important one of them. The program, year over year, has collected more money, and it has recently collected more money on a per-case basis than it has in the past. The payment rate in the program is now well over 90 percent, and it will probably be about 93 percent this year. In part, that’s because of the way the program has been delivered. I suspect in part, it’s because the nature of paying child support as a cultural matter has changed somewhat over the last 15, 20 or 25 years in there.

I think what the Auditor General’s staff has helped us with is articulating those levels of services as we move forward in any type of new contract in there.

C. Bellringer: To answer the question around why we did not include that in the audit scope, it wasn’t because we didn’t think it was important. Our choice was to follow up on the contract itself. We had started something in ’09-10, I believe it was, to look at the contract at that point. There were these other reviews that were either underway or had been completed prior to then and subsequently. But this was a follow-up to make sure that we completed that work.

It was just merely a choice. We’re always scoping with and doing planning with all of our audits to put the boundary around it, because it really can become infinite. In this case, we just chose not to look at the quality of the delivery of the service.

J. Yap: Thank you. If I may, one quick follow-up.

You mentioned that you do track quality of service. Are there things like surveys that are done of the clients — that type of thing?

C. Beresford: From time to time, we do surveys. Surveys have become somewhat more difficult to do in recent years. But we’ve done comprehensive surveys of both parents who pay and parents who receive support, and that’s given us a great deal of direction.

We do fairly constant seeking of feedback on the individual components of the service. Does the web service work? Does the website work? Is the phone system working? Are they getting satisfaction with that? Those have helped us in terms of developing the service out there.

[9:25 a.m.]

We also get our share of letters that come into my office. I get about 120 letters, phone calls or emails per year from parents — not 120 separate parents, but 120 pieces of correspondence of some nature — commenting on the service. I’d call them mostly all complaints in there. That helps us also to design that.

So 120 letters out of 70-some-odd-thousand parents may sound insignificant, but it’s not. I know behind every one of those letters, there are dozens, perhaps hundreds, of others that experienced something similar. So we’re very attuned to how the parents that are in this program are receiving the service and whether they’re satisfied or not.

B. Ma: Thank you so much for your presentation, both the presentation from the Auditor General and the ministry as well. There was a lot about this report that concerned me when I was reading it. To be quite honest, I’m not entirely sure where to begin.

My concerns are not to say that this isn’t a very, very important program. Of course, as MLA Yap had previously asked about, the report wasn’t about the quality of the service or the importance of this family maintenance enforcement program. It felt to me, when I was reading through this very thorough report, that the Auditor General’s statement in the summary that the branch did not follow good procurement practices seems like an enormous understatement.

One of the primary reasons a service is contracted out is to manage legal and financial risk, and this contract seemed to do none of that. It struck me like a case of the tail wagging the dog — government budget extensions being driven by the service provider as opposed to perhaps ensuring that the service provider was meeting budget. There was no maximum contract price, no security and privacy schedules, inadequate performance measures and evaluations, invoices being paid out without signed contracts, changes to scope being driven by the service provider without approval from the branch. The list seemed to go on.

It’s something that for me…. As somebody who has had experience managing contracts, and quite complex contracts, in the past myself, these are very basic requirements of a proper contract-management regime that seemed to not be in place, and I’m very surprised about that. So I really appreciate that there are improvements underway, that the recommendations are being taken seriously.

Now, my question for you is…. At the time of the Auditor General’s report, I believe the branch was still in the process of contract negotiations that have been ongoing since at least 2008. That is almost ten years ago now. I’m wondering what the current status of that contract and those contract negotiations is at this moment in time.

C. Beresford: There are a couple of important issues that we’re still working with the contractor on that we would like to finish up, but our efforts at this point are really directed to the next stage and if we do tender a new contract, to develop that new contract in there. That’s pretty much where the stage of negotiations is at this point.

B. Ma: So there will be another round of procurement to produce what will, hopefully, be a fresh contract for the services? Is that correct?

C. Beresford: If the decision is to continue with service delivery under contract, absolutely, yes. There would be an entire procurement process underway.

B. Ma: Is the branch considering moving away from a cost-plus measure, or are those decisions not yet decided?

C. Beresford: Those are not yet decided, but that’s part of the independent advice that we have received.

B. Ma: All right.

Madam Chair, is it possible for us to get an update on what happens after, once all of these decisions have been made on this contract?

S. Bond (Chair): I think that is an acceptable request. We can sort out what format that would take and what venue that would occur in, but I think that we could ask for an update in terms of the upcoming negotiation.

If other members agree that would be something that they’d be interested in, I think we can. I see a lot of heads nodding.

Why don’t you continue, Bowinn. We’ll add that to our list and make sure that as we summarize, we’ll include that in our comments.

B. Ma: I think most of my questions are relating to exactly what we can expect moving forward. Given that you don’t have those answers here today, I look forward to the updates when they are available. Thank you so much.

[9:30 a.m.]

R. Sultan: I’d like to associate myself strongly with Bowinn Ma’s remarks. I think contract administration seems to be a rather foreign concept in some elements of your ministry. If I was the deputy appearing to respond to this report, I’d be embarrassed and perhaps even ashamed.

We are, in fact, the representatives of the taxpayers. We represent the people who pay the bills, and we expect a higher degree of rigour and discipline.

Now, the good news is there’s no evidence that money has been stolen. Indeed, there’s the general feeling that in what must be one of the toughest assignments I could imagine…. I certainly would not bid for this contract — chasing deadbeat dads from one end of the province or one end of the country or one end of the continent to the other trying to collect some money so it can support their children. It’s an unenviable assignment, and the evidence is: you’re doing a pretty good job of that.

We’re not quibbling here — there’s no evidence that we should — about contract performance and quality of service — although, as the Auditor General says, that was not really part of the assessment. I think, nevertheless, there is a very large issue here in the attitude of a justice when it comes to such tiresome things as budgets and money. After all, one might perceive…. The feeling seems to be that we represent the justice system, and we’re above all of that niggling, penny-counting stuff that goes on in the Legislature.

In defence of you faithful civil servants — and excellent civil servants, I might say, from my experience — it all starts at the top, of course, with the justice system feeling it’s really above any legislative oversight whatsoever: “We can set our salaries at whatever we choose, and if you don’t like it, you can go to court. And by the way, we run the courts, so good luck.”

I think it’s a striking example. I suppose one needs to go no further than page 15 of the Auditor General’s report to sort of second guess the psychology of the number crunching that has gone on since 2007, a mere decade ago.

Initially, as we looked at the annual budgets for FMEP, the total payments for FMEP and the MELS budget, it would seem that there seemed to be an honest attempt to sort of track one another. Somewhere along the line, maybe starting five years or so ago, the budget line still existed, but it was, it seems, irrelevant, because the actual expenditure took off and had no resemblance to what was actually going on.

I think that’s shameful, and I criticize you strongly for it. You should not expose yourself to such carelessness with taxpayer money.

Now, you might say: “Well, this is old process, and the job got done. We didn’t really spend a huge amount of money, and we did, in fact, work beneficially for all of those families.” All of that’s true, but nevertheless, I think the process and the attitude represented is as important in running this government as the actual numbers. So I urge you to do better next time.

M. Dean (Deputy Chair): I concur with the general consensus, I think, that’s in the committee of grave concern about how this contract has been handled over a long period of time, and with a lot of money flowing through it as well.

[9:35 a.m.]

The concern that I have that I don’t feel that I have been reassured on, with either the report or with the plan in response to the report, is more around the culture of how this happened.

I’m concerned, and I would like to hear some better understanding of whether this is something for us to be really concerned about or not, that there’s movement from people who kind of understood government and how government worked into becoming service providers and gaining contracts, how much of this was actually about those relationships, and how many of those relationships might be existing elsewhere amongst government departments.

If I can be reassured that that’s just a red herring and that it’s not an elephant in the room for us to be talking about, then that would be a real benefit for me today in this committee, and we can go back to focusing on the numbers, the contracts and the tangibles — the nuts and bolts of contracting. But what I really feel that I haven’t had that reassurance on is that culture that allowed for this practice, which committee members are rightly concerned about, to actually happen, to happen for such a long time and without questioning as well.

C. Beresford: I’m not sure if this will answer that, but let me make an effort in that. I speak of things that I’ve only been told, because they were long before my time in the program.

Prior to 1988, there’s wasn’t a support enforcement program in British Columbia, and in most of Canada there wasn’t. In the mid-1980s, the Premiers of the day decided that there would be a national initiative to undertake to enforce support orders, primarily child support orders.

In British Columbia, prior to this program, if a parent wasn’t receiving support, they returned to the court that made the court order and asked for some form of an enforcement order on that. This program was designed to address that situation.

The principals behind the company that got the first contract were employees of government. I could be wrong, but I believe there were two of the primary employees who formed a company and put a bid in on this contract. One of those left the company, I think approximately three or four years after the first contract, and the second one left after that. As far as I know, there were not any other employees of government that became associated with this company or held positions within this company.

I’m not sure if this answers your question, but this was not ten, 20, 30, 50 or 200 people who were government employees who went out to the private sector in there.

At the time that the Auditor General looked at this tendering process, in 2006 and thereon, anybody who had been associated with that first or second or even the decade of service in the first time had left the company, and the company had in fact been purchased by other owners. I know of nothing in this contract where a relationship between the vendors and government played any role whatsoever in their maintenance or obtaining of a contract in that. I don’t know if that addresses your point or not.

C. Bellringer: A lot of it from the report, that last section of the report…. When we put the section in on what contributed to the contract challenges, we didn’t actually aim the report. It wasn’t one of the objectives of the audit to determine exactly what was behind that. But as we’ve done all of this work, it becomes evident, so we tried to draw in the root causes of the challenges as we saw them.

One of the questions I had early on in the audit was that I did not understand this notion of the contract being awarded in the first place to an employee of the government. That worried me at the start. Having said that, it was then brought to my attention — and I didn’t know the history of it — around how it was part of an initiative at the time. That was an important element.

It was important to know that it wasn’t just an employee randomly going off and choosing to take a government program with them. Rather, it was encouraged. There was a competitive process in place that benefited any previous employees. It wasn’t the only program that that was done with. So I was satisfied that that starting point was a legitimate one, but at the same time, it definitely started the cycle that we saw things move on to.

[9:40 a.m.]

The other element of it that I believe the ministry has brought up here or, if not, certainly with us — and we built it into this audit report — is just the fact that it is not common across Canada. In fact, British Columbia is the only jurisdiction where it is an outsourcing activity. So it does get easier, when you’re looking for competition within Canada, if every jurisdiction is doing it the same way so you can look to another one for a competitive price.

We understood the complexity of going for competition, which became again, for us, one of the elements of this that we thought was quite important. The fact is that just because the steps are followed along the way around policy, it’s important that there be a really deep understanding of whether or not the policy objectives are being met. I’m talking on the procurement side. That’s where we do think additional guidance through the procurement folks and the office of the comptroller general would be very useful right across the system, especially for those people who aren’t in the business of delivering contract procurement. They’re not contract procurers. That’s not their day-to-day business activity.

We did draw out the fact that there is a competing stress on those that are delivering the program. We think it should be a separated activity. Those that are putting the contracts in place should not be the same people who are actually delivering on the program objectives, because, at that point, you are conflicted. You need to keep things rolling — appropriately so. At the same time, you need to pay attention to the day-to-day and what’s required in putting a contract together.

The oversight piece, then, we drew into that conversation. There’s a role for the financial officers within the ministry to take a stronger role. We noted in here that prior to 2010 it was very much a decentralized activity, and it wasn’t taking advantage of the expertise of a central financial officer who could provide greater support to the ministry.

You combine all of those things, and it does indeed contribute to a culture where it was not the primary priority. As such, it really has fallen short of what one would expect of the ministry.

A. Olsen: Good morning to everybody. Thank you to the Auditor and to the ministry for this report and for the response. It is the response that I’d like to, I guess, focus on initially.

Even though the Auditor is quite clear in that this is not an audit on the quality of the program, it appears the response from the ministry is largely focused on, “We’ve got a great program; look at all the amazing things that this program does,” rather than actually addressing the significant challenge, which was pointed out by the Auditor — that the procurement process has got some substantive gaps and problems with it.

I guess it felt, to me, when I’m reading this, that if the ministry just kind of puts words on a page and distracts from…. It almost speaks to the culture that’s been raised here that the importance of this…. It says, “We accept and welcome the Auditor’s comments,” and at the end of it, it says: “All of that said” — so all of these lots and lots of words said — “we affirm that we’re going to avail ourselves of the five things that the ministry says.”

I’m wondering why it is we go through this whole thing that this was not about the quality, yet seemingly the biggest, strongest argument for not following the procurement process — or at least going through the steps appropriately but not achieving the kind of competition that we would like to see…. There seems to be a disconnect there. I’m just wondering if maybe the ministry can speak a little bit to that — if the actual point of this audit was really captured by the ministry, rather than what it seems to be. Just look at how quality the service is.

[9:45 a.m.]

C. Beresford: If I have suggested in any way that the ministry is not cognizant or aware of what the issues are, I apologize for that. The ministry absolutely is.

Since the initial findings were provided to the ministry well before the release of this, the ministry immediately contracted with an independent procurement specialist to start to build on the options out there. That work has been completed to a point where, if the decision is made to go to tender, we have an active plan on, at least, a three-stage process of going there.

Since those decisions have not been confirmed to us, I don’t wish to be ahead of our minister or government in terms of those. But I can assure you that the tendering process would look radically different if the approval is to go ahead and do it.

There is independence from the program area. That was stressed time and again by the Auditor General, and that has been achieved.

The use of procurement specialists, not just independently but within government through the purchasing services that we have in the strategic partnerships office, have been fully engaged in the process of moving forward. If a decision is made to tender this, it will look radically different than what it looked like in 2006, and I want to assure the committee as well as the Auditor General that that’s what the recommendations were, that’s what we’ve accepted, and that’s what we’re going to do.

R. Fyfe: If I can just add to that, I think that what you’re seeing is that there is complete acceptance of the recommendations from the Auditor. So there is nothing where we’re saying that we need to discuss that further, because we’ve accepted those recommendations. We’re in the process of implementing them.

As Mr. Beresford indicated earlier — and actually as was acknowledged by Jessica in her presentation — the challenge is maintaining the continuity of services while dealing with the underlying contract issues, procurement issues.

That, I think, is the reason for discussing the success of the program, because if the program was not successful in the integrative form, which is what this is dealing with, and needed to be dealt with in a different way, then we would want to look at that as well. But what we’re saying is that the program as it currently exists is very effective in delivering the service.

However, what has been identified is a number of, first of all, procurement issues that resulted from the initial procurement in 2006 and the lack of competition and an ongoing inability to get a contract in place to deal with that — so flowing from that 2006 issue.

I want to come back to a point that was raised earlier, which is: is this a broader problem across the ministry? In fact, the response, internally, that we had to this was a direction from our minister to look throughout the ministry at all of our contracts to see if there are any other similar issues. So not waiting for the Auditor General to come and find them and tell us that we need to fix them, but actually learn from the report here and figure out what we need to do to fix anything else.

That’s ongoing work that we’re doing. As Chris has indicated, we do have ongoing work in terms of moving towards the measures that were recommended on the procurement process.

I do want to, just because we did talk about page 15 of the report earlier…. One observation I wanted to make, and this, I think, goes to MLA Sultan’s comments about that as the deputy, I should be embarrassed and ashamed of this.

The budget, specifically the annual budget for FMEP…. If you look at that chart, the payments were exceeding the budget. I became the deputy in 2012-13. There was a large jump in that year, which was reflected in a budget. Beyond ’12-13, the chart shows that the budget has not been exceeded. I think that makes the point that even before the report….

When I became the deputy minister, I became aware of the need to get this contract to a procurement process, and I can specifically recall at some point having a discussion in which the question was: can we continue to extend the contract? And I said: “No, I don’t want to extend this contract.”

Well, we need time to develop a procurement process, so we extended it in order to allow time to develop a procurement process. Meanwhile, the audit report came in. So this is something that has been in the works certainly during my time as deputy.

[9:50 a.m.]

I wanted to address specifically the question about the culture of the ministry, because I don’t want to leave this committee with the impression that this ministry, somehow, as MLA Sultan suggested, thinks itself above those sorts of requirements. We take those requirements very seriously, and actually, it borders on offensive to suggest that we think we are somehow above them. We don’t.

A. Olsen: If I may continue….

S. Bond (Chair): Adam, please continue.

A. Olsen: I think what I’m kind of uncovering in this is that the corporation, the company that’s delivering the service, has it pretty good. It’s unique across the country, in the sense that we contract it out. There may be very little competition, in the sense that other companies have defined themselves in this business space.

Because the ministry finds that the service is actually pretty good, perhaps it has been the culture of the ministry, to the point…. It’s not the culture of the corporation that I’m necessarily focused on, or how it started, or how we got to this contract.

It’s more the culture that I see in the government is that…. This is what I was trying to point out in the response. It highlights for me, or it opens a window for me, into the kind of decision-making that says, “This is good. The service that we’re receiving is good. It’s quality. Look at all the payments that have been processed. We get very few complaints to the process in a pretty sensitive area, so it’s better for us just to continue with this 29-year-old contract” — to the point even where we have a decade where they don’t have a contract. To me, I think the corporation has us in a position where we don’t have any negotiating power, really.

At least that’s the sense that I’m getting. I guess what I want to highlight as part of this report that I’m feeling is that we need to take back control of this contract. We need to take back control of this procurement to say it’s not just a foregone conclusion, and to me, continuity of service is important, but it is not reason, in and of itself, to not have a very high-quality procurement process and assurance that the people of British Columbia are getting the best value for their money.

If we were to use that excuse, we could think of all of the very important contracts that the government has in every ministry and say: “Wow, that’s a very….” I mean, we had PRIME in here yesterday, PRIMECorp. We had others, and maybe I’m using bad examples here, but just think of all of the examples where we could say: “Continuity of service here is incredibly important, and therefore we are just going to continue to go with who is delivering the service. Rather than negotiate a new contract, we’ll just keep the one that we have that’s a decade old because it’s easier, frankly, for us to just continue that.”

If there’s anything that’s exposed here, for me, it is that we need, I think, to have a situation in which we do step back from the business as usual and say: “Oh, okay. Where are we at here?” The argument, generally, that it’s important that continuity is at the top of the list here will actually put us in a lot of trouble, not just with this contract but with every contract.

Think of the services that we receive. If that’s the message we’re sending to the corporate world, that continuity is what’s most important for us, then I suggest that the province of British Columbia is putting itself into a very, very poor negotiating position with the current vendors that we have. They’re going to say: “Oh, that’s you know….” A bit of editorializing, but I’ll stop now.

R. Fyfe: I’d like to just respond. I agree with your point that we are not in a strong bargaining position. I think that is reflected in the single bid that was received in 2006.

[9:55 a.m.]

The purpose of the recommendations from the Auditor General is to take measures to enhance the attractiveness of the contract for bidders so that there would be more competition.

In addition to that, one of the options that we are taking a very close look at is whether this is appropriately a contracted service. The reason for that is that if you are not able to attract bidders and if you are in a situation where you’re finding yourself going for this long because of the obligation to have the continuity of service, maybe you need to rethink the approach that you take to providing that service.

The provision of the service is not negotiable. The issue of whether we can attract the level of necessary competition for this contract or not is something that we need to look closely at. That is part of the work that we’re undertaking now. There’s no definitive procurement at this point, because that is being brought along with the other options as to whether this is even appropriately a contracted service.

A. Olsen: If I may, that, to me, is probably the most significant thing that’s been said in this response. And that is that perhaps this is a service that could be brought back into government and just be delivered as part of a government service.

S. Bond (Chair): Bowinn has a follow-up.

B. Ma: I’m very grateful that MLA Olsen has managed to tease that out. I’m glad to hear that perhaps bringing the service back in-house is an option that is on the table and being considered. I’m also pleased to hear that this report by the Auditor General has triggered the ministry to look at all of their other contracts. I think that’s exactly the response that I would have hoped for. It also highlights the value of the report that the Auditor General’s office has produced.

I’d like to go back to something that the Auditor General had previously said, and I highlighted it. It’s on page 6 of the report, saying: “This outsourcing was part of a broader government initiative to privatize public services and offer incentives to encourage government employees to bid on contracts.” I’m wondering whether there were any other contracts within the ministry that fell into that category — that were contracted out as part of this initiative.

R. Fyfe: Not that I’m aware of.

I don’t know, Chris, if you are.

C. Beresford: It’s a long time ago. No, I don’t think so.

R. Fyfe: I don’t think so. I know other ministries where similar contracting processes were followed, and I think that was what the Auditor was referring to. Road and bridge maintenance contracts within the Ministry of Transportation is a good example, where a number of employees became contractors, and the service was provided on a contracted basis. Throughout government, that was the case. But that was, as Chris says, a very long time ago. That process was motivated by, possibly, accounting rules that no longer apply to government.

B. Ma: How long was that initiative in place? It started somewhere around 1988?

R. Fyfe: The late 1980s. I started with government in 1990, and at that point, for example, we were moving into the second round of road and bridge maintenance contracts, privatized. So yes, I think it was in sort of the mid- to late ’80s that it was happening.

B. Ma: When did it conclude? Did that initiative kind of…? Like, “This is no longer a broader government initiative” — did that ever happen?

R. Fyfe: It doesn’t happen anymore. I don’t know exactly when it concluded, but it was a fairly narrowly defined period of time. My understanding of it was that it was motivated by a desire to reduce the number of what are called FTEs, or full-time employees, within government, through the use of contracting. So the services that were previously provided by government employees were then provided by contractors, resulting in a reduction in the number of FTEs in government.

C. Bellringer: Just as we were looking at that when we were doing the audit…. We didn’t come across a large number of them. I believe the Queen’s Printer was one at the time, and I think one of the labs. There were a couple of labs.

[10:00 a.m.]

Again, differentiating this from general contracting, it was very specifically something that was being done within a ministry. As you say, it was shifted out, and there was a 5 percent benefit given to former employees who made proposals on it, in terms of comparing their price against other suppliers who were also bidding for those same contracts. So there was a competitive process at the time, but it did benefit employees who were leaving the government in order to bid on them.

G. Begg: Thank you to the Auditor General for the report, which is very comprehensive and, obviously, very revelatory to all of us. I think part of the process, of course, is that when you bring a little bit of light, you also bring a little bit of heat. That is by design, and that’s helpful. We see the results of that here today.

Many of my comments will be observational — certainly I don’t mean them to be accusatory — but I hope that they are helpful as we concentrate on a go-forward basis. I think it’s well settled, as a result of the work of the Auditor General, that there are a myriad of issues in the past performance that are challenging and that, on a go-forward basis, have to be remedied.

The work that is being done in this group is tremendously important, and we all acknowledge that. It is necessary work. It is work that perhaps is not the greatest work to be doing if you’re involved in it, but the importance of it can’t be overstated.

As well, I think it’s important that we commit ourselves on a go-forward basis. I’m heartened by the comments of the deputy that perhaps there is a better way to do this outside the process of procurement and that, in any event, if a decision is made for it to be a continuation of the present system, we be guided by the principles and challenges that have been outlined here today.

I don’t wish this to be an exercise in hyperbole or semantics. I think it’s appropriate that it be, as I said, forward-thinking.

I do have some concerns about some of the issues that have been raised in regards to a culture that may have been created. I say that only to suggest — and this is a process that we went through, certainly, in my involvement with the federal government — that sometimes we have a tendency in large organizations to focus on process rather than output. That, in itself, of course, can become an encumbrance to the entire process.

There are very clear and articulable goals of the family maintenance enforcement program that I think, on a go-forward basis, must be what we use as criteria to judge the value of the program. We can’t lose focus on that. Output is tremendously important because of the value of the service that is being provided. How we get there is as important because of the cultural implications that can develop inside a program like this.

Those are my observations. My challenge, of course, to the ministry is to ensure that…. You know, we have to regard this as an ongoing process that cannot be interrupted. It must be a seamless transition, if a transition is to take place, and in any event, be guided by the principle that metrics are important. As much as we sometimes like to disregard the measurables, it is the measurables that make this program important.

I’m sure the Auditor General speaks much of the same language about output versus process. Let’s not be overcome by process. Process is important, but the output, in this case particularly, is of tremendous importance.

S. Bond (Chair): Thank you for those comments.

Mitzi has a follow-up.

[10:05 a.m.]

M. Dean (Deputy Chair): I had a quick question. Given that there may be some precedents set here of a pattern of expectation of the contract holders, the service providers, have you done an evaluation of any legal liability given that you are going to take things in a different direction?

You’re either going to bring the service into government or go through a new procurement process. Have you assessed whether there’s any risk at all that this service, the agency, might have some recourse given the pattern that they will be able to document and demonstrate of the way the contract has been managed?

C. Beresford: Yes. The repercussions or the anticipated outcomes of any service delivery option, whether it’s contracted or not contracted, are being looked at from a legal perspective as well as all the other perspectives in there. That’s part of the process that’s underway right now.

M. Dean (Deputy Chair): Okay.

S. Bond (Chair): Thank you, Mitzi, and thank you to the members.

I have a few questions, too, although I almost feel like now that they’re at the end of the list, we’re sort of talking about how we move forward. But I do have some questions about a couple of the things that happened.

I want to really agree with what Garry said. Outcomes matter. But if you’re going to have the integrity of those outcomes, the process matters too. I think what happened, and rightfully so…. The ministry is very proud of this program. As an MLA for many years, I have had constituents who have come to tell me the benefits of this program and how it’s made a difference for them. In fact, just in the last few days, I’ve had a young mom with two kids who I advised to join this program because I know that it will help her.

Outcomes do matter, but process, as Garry points out…. You can’t tip the scale on either end. What happened here was the scale; somehow we missed the scale on the process side. We don’t want to see an overarching decision, but it does matter.

Maybe I should just say this. I know that now I have to admit that I have a bit of angst as I hear: “If the decision is to go tender.” I’m not anxious about whether it’s in or out of government. What I’m anxious about is why that would happen and that the process for either decision is done in an appropriate way. It shouldn’t be that: “Okay, we’ve had problems out there with the procurement, so let’s just take it back.” That’s not the approach, and I see the deputy nodding or indicating that wouldn’t happen.

It is a temptation to think: “Okay, that didn’t work so well for all these years. Let’s just do it a different way.” It needs to be a meticulous and thoughtful process that considers both options, because government doesn’t do everything really well either. The assumption that we can just take it back and fix it all is not an answer either.

I think the point that has been made over and over by my colleagues today, and rightly so, is that the Auditor General’s report caused us a great deal of concern. It isn’t about a deputy. This is since 1988. Many of us have made our way through this ministry during that period of time, so there are lots of people who’ve been involved in this process.

I do think, though, it is important to highlight a couple of things. If a procurement is considered, the Auditor General’s report highlights some very specific things. I, like others, am concerned about some specifics.

For example, and maybe the Auditor could speak to this or the auditors that did the work, when there is a suggestion that the executive may not have been provided complete information, that’s a concern. I’m wondering if someone wants to explain what that means and how that could have happened because, obviously, if the executive of the ministry doesn’t have all the information, it’s pretty hard to make an appropriate decision about what moves forward.

Was there something specific, either from the Auditor General’s team or from the ministry’s perspective? It’s referenced on page 37 of the report of the Auditor. The assumption is made that you can’t provide proper oversight if you don’t have all the information. Was there a reason that the Auditor General’s report points that out? Was there a gap in information getting up to the ministry?

S. Dodds: What we found was the focus was on the service delivery and monitoring the dollars, monitoring the spending against the budget. There was a lot of work that had been done through various reviews, like the legal review of contract terms.

[10:10 a.m.]

They were risks that were identified with respect to aspects of the contract through those negotiations. The information on those risks was not being elevated on a number of occasions, so there wasn’t the ability to question what the ministry’s response was or the program’s response was to the risks that were being identified — for example, from the internal audit that had been done and previous work we had done.

So it was that risk management. The information on some of those risks that were being identified and known were not always being elevated so that there was the ability to question whether the response was appropriate.

S. Bond (Chair): And not only that. Influence decisions in terms of how the contractor and the ministry work together. So obviously, if the ministry does pursue another procurement process, those kinds of things need to be fixed in the system so that information is escalated when it needs to be and moved up.

My next question actually relates to the chart on page 14. Ralph and I are both drawn to charts, I suppose. I think not only have we referenced the fact that…. I mean, there could be a lot of discussion about a cost-plus contract — and I have one question about that in a moment — but what’s interesting to me is costs continued to climb while enrolment dropped. The report points out on page 14 in the Auditor General’s comments that cases enrolled dropped by 20 percent, yet the budget kept going up.

One thing that was noted: the amount of the awards was increasing, but the number of enrollees was dropping. Did the ministry grapple or look at why the number of people…? I mean, when we see this beginning, it’s got 52,000 people — more than that — enrolled, and by 2015-2016 we’re down to 41,558. You did speak about, and I would perhaps concur, that the culture is somewhat different, and perhaps that’s one of the reason there are fewer enrollees. I don’t know the reason.

But the point is: the budget line went one way, and the enrolment numbers went the other. Would that not have signalled, somewhere along that path, that maybe the service delivery model itself was a bit of a challenge?

C. Beresford: Yes, and in fact, it did. The largest single reason behind that drop were cases that are referred to as default fee collection cases. In the life cycle of a case within the program, the program collects the child support or spousal support that’s due, and it collects any overdue maintenance, and virtually every case in the program has overdue maintenance.

There is a penalty levied once a year if a paying parent misses two payments. It’s called a default fee, and it can be up to $400. We had a number of cases, and I think at one point there were about 10,000 cases that had default fees only owing. That could range from an amount of $500 to potentially $5,000 in there.

We put a major initiative into resolving those cases, and in fact, legislative reforms were made that allowed us to collect on those cases much more quickly. As a result, there was a very significant drop in the caseload from well over 50,000 to closer to around the 40,000 mark that we’ve got. Those cases that were closed were not cases of two parents, one paying the other. They were cases of fees that were owed to government. So that may explain, or that did in fact explain, the large caseload drop.

However, there’s been a continuing caseload reduction in there; 300, 400, 500 cases per year, although two years ago, there was a bigger drop than that, which may have been a result of another initiative that happened out there. What that allowed us to do was to reduce the caseloads for each of the individual enforcement officers, and those caseloads had got, up to one point, to around 725 to 730 cases per enforcement officer. They’ve now been reduced, and in fact, they’re down to below 600 cases, about 610, which, in this program, with its technology support and with its experienced staff, is actually a manageable number — a very manageable number — and I think the results are showing that.

On the one hand, the caseload came down because of the closure of those cases, and the caseload continues to drop slightly. The costs went up, on the other hand, because the costs were driven largely by employees. Most of the employees of this company are members of the B.C. Government Employees Union — a different component than direct government. Some of them are members of the Professional Employees Association, which have collective agreements.

[10:15 a.m.]

As you all know, and as we all wrestle with, those costs tend to go up, not down. The other drivers for costs were largely in facilities. We house 200 people within this program. They’re in facilities in three different locations in the province, and the costs for lease on those have gone up. So those are our major drivers on cost — staff and facilities.

S. Bond (Chair): Thanks for that explanation, Chris.

I want to know if…. Since we’ve been apparently dealing with this contract for more than ten years, with 40-plus modifications to it yet not actually signing off the deal, during that period of time, have we been assessing…? Because as you decide — or the minister or ministry or somebody decides — whether or not this will go out to a procurement process or be taken back into government, has anyone been busy doing the homework to look at whether or not there is actually capacity in the market?

The biggest issue here is that we went through a process that, instead of looking at a request for expressions of interest, jumped straight into the procurement process, which is one of the significant criticisms of the Auditor’s report. Has anybody been actually testing the market in the meantime so that we don’t find ourselves on the doorstep of a potential procurement, and then: “Oops. Well, no. We don’t know if there’s anyone else who can do this work”?

C. Beresford: Yes, they have. Again, that goes back to — thanks to the audit in here — the independent body that we’re using on that front. It has, in fact, reached out to existing service providers — there are three of them in North America, as well as other interested parties that may be looking out there — and has built that into the framework of the next procurement.

It’s fairly common, I think, to use a request for information as a first step in that. Should that process be followed, those inquiries have been made, and we’re optimistic that there would be interest.

S. Bond (Chair): That’s encouraging — that the procurement specialist has gone out, checked the market, and lo and behold, there might be people who are interested. What’s critical now is that the procurement documents, all of those things, do not overly restrict, by the way that the contract is provided, so that people think: “Oh, well, I’ll never win that contract, so why would I try?” That’s sort of the implication in the Auditor’s report — that the way this was done, in essence, and no one’s suggesting anything nefarious here, precluded other entrants from the market. I think that will obviously be something that you would be looking at.

I guess my last…. My colleagues covered off many of the issues that I was going to raise. We talked about this yesterday, when it came to cybersecurity. Today we’re talking about procurement, and I think one of the benefits…. There are many benefits, but one of the important ones of an Auditor’s report is lessons learned and how it impacts other parts of government.

We’re very pleased that Carl Fischer, the comptroller general, is with us. This report actually reflected that perhaps the comptroller general would be taking a look at this procurement. I guess I’m going to put the comptroller general on the spot for a moment. What lessons have we learned as a broader organization? How are we taking what happened here? Looking at other contracts, what lessons have we learned?

The final part of that question is that this contract was cost plus, and in fact, had an 8 percent management fee built into it. I’m wondering: is that common across government, or was that fairly unique, and would that be something that your office is looking at?

C. Fischer: We are working with the procurement services organization in the province now, and it’s actually very timely because they’re looking at the strategy for government developing a revised set of principles guiding procurement in the province. A lot of it has to do with size and reissuing contracts and looking to provide the best access to the people who will benefit the province the most, so there’s a lot of alignment.

[10:20 a.m.]

The Auditor General’s report noted that the contract process was implemented in accordance with policy. We have looked, and we have agreed with that. We also identified that there is opportunity beyond the policy framework to develop guidance or support for ministries to ensure that the intended outcomes of the contract are achieved, rather than just ticking the box on ensuring that process is involved.

Procurement is an interesting area because it continually evolves. It isn’t controlled solely by the policy choices of government or another organization. It is influenced greatly by changes or trends within the environment that you’re operating in.

The other thing that I’m starting to learn now in this role is that different areas — for example, information technology contracts versus administrative services contracts versus capital construction contracts — all evolve at different paces.

Our objective is to try to leverage the advice and recommendations or the potential improvements identified not just in this audit but in other audits that have a procurement lens to inform the thinking for the province’s approach to policy and process and form of procurement actions, as well as being responsive to the unique circumstances or changes within those different areas.

Bobbi Sadler, who is the ADM responsible for the procurement services, was here last month to talk about another procurement issue. She provided an outline of their strategy or approach to looking at a new principle or a new direction for procurement. This audit certainly falls into that process as well. So it looks very positive, but as Bobbi described at the time, it will take time to learn lessons and develop strategies.

In terms of the cost-plus element, I can’t comment on whether cost plus 8 percent is reasonable or usual in this type of contract. It is rather a unique contract. While we can make general comments about administrative services contracts, in my experience we’re not able to say that cost plus or cost plus a certain amount is usual. Contracts have many different forms in the area of administrative services, and I don’t think you can say this is the usual or average way that they play out.

S. Bond (Chair): Well, thank you for those comments. We appreciate it. I’m assuming that as you and others explore a new approach to procurement that the basic principles outlined by the Auditor General of open, transparent, level playing field, testing the market — all of those things — would remain part of that process, because they’re pretty fundamental to procurement.

I wanted to just end this section of our meeting with a follow-up, as a result of Bowinn’s request. Could the Auditor General’s team perhaps let us know if there is ongoing follow up on this audit? Are there reports back? Is there anything we could expect to hear back from you about the status of this audit? I don’t know if you have continued reports or work planned. And then how we might facilitate an update on the procurement, perhaps from the ministry perspective.

I don’t know if the Auditor has anything else planned or if there are regular follow-ups. There is an action plan. I assume the Auditor monitors that or looks at the action plan. Could you perhaps articulate what we could expect as a follow-up?

C. Bellringer: Indeed. The process that was started with the previous Public Accounts Committee, about two years ago now, is that the organizations we’re auditing are providing you with an action plan at the time that they come before the committee. Then there’s an annual update to that action plan, and it’s facilitated through the office of the comptroller general — the request. It comes back to ourselves as well as, through them, to the committee.

[10:25 a.m.]

We take a look at all of them. There are usually quite a few on the list — maybe 20 at a time. It changes, of course, from year to year. They stay on the action plan list until such time as all of the recommendations have been implemented or otherwise disposed of.

We then go through a risk assessment process within our office to select between…. Two to four is about the…. I mean, it can be more. It can be less. But we have tended to look at from two to four of them each year for a follow-up.

It’s not a full re-audit. But we do sometimes stick straight to whether or not the recommendations that we’ve made, the action plan associated with that…. Can we rely on the information being provided by the organization in terms of what they’ve put on the action plan?

We’ll sometimes go a little bit beyond that to say: “There’s an aspect of it. We’ll really look into it in more detail.” If it was a direct outcome, for example, has the outcome changed?

For that, there’s been a recent request for the action plans. I think it was November through December that they all came in. We did our review. We’d actually like some time with the committee to go through the whole process, so that we can revisit that.

This one is not on that list. Or has there been an update from that? Maybe, given the timing, there’s been an update. But it’s now been provided to the committee, so you are up to date on the action plans. It’s not on our list for a re-audit at this point. We tend to select them also when the organization indicates everything is done. We’ll go in to determine whether or not that’s the case. This one is currently not on there. We may or may not in the future select it for a more detailed follow-up.

I think where the program ends up landing would be an important starting point for yourselves. It would also guide us in whether we’d go back in. I’m seeing a number of associated…. Not necessarily going on to the audit plan very specifically, but looking at the broader procurement issue is something that’s of interest to us — looking at the broader issue of what kind of contracts are out there. So that’s definitely in our thinking as we’re putting our performance audit coverage plan forward. There is nothing very specific to it that you’ll see in there.

S. Bond (Chair): Thank you for those comments. We certainly, as a committee, will continue to review the action plans and the updates that we’re presented with. I think the fact that the deputy was here today as well…. I think you’ve heard the interest at the Public Accounts Committee to receive an update, especially since the procurement path does not seem clear at this point in time, that there is some discussion going on about how that might evolve. I think it would be important for us to reference that at some future meeting.

With that, we thank you very much for being here today for the work. It was not an easy discussion, and I’m sure it wasn’t from your perspective either. But I think all of us appreciate the candour that you brought to the table. The importance of this program is not underestimated by any of us around this table, to the points that many people made. But just a reminder that process does matter and that that needs to be a focus of the ministry’s attention.

Thank you very much. We’re going to take a quick break, and then we’ll move on to our second report after you grab some water or coffee.

[10:30 a.m. - 10:35 a.m.]

I appreciate everyone being so prompt in getting a coffee or water and coming back to us. On the heels of a very good discussion with our first report, we are going to now consider the Office of the Auditor General’s report, a progress audit on the integrated case management system, which was completed in February of 2017.

We have the Auditor General here and members of her team. We also have representatives from the Ministry of Social Development and Poverty Reduction. We look forward to the presentation. We’ll ask the Auditor General to open the meeting with her comments and then have her team walk us through the PowerPoint.

Progress Audit:
Integrated Case Management System

C. Bellringer: Thank you, Chair. Actually, we had a very interesting and appropriate segue from the last report into this one. I was going to start with a description of the whole follow-up process, but I seem to have already done that.

I’ll first introduce the staff that are with me for this report — Cornell Dover, assistant Auditor General, who was here yesterday, and Ada Chiang, director of IT audit, who also was here yesterday.

This is a follow-up report along the lines of what I was describing previously, where action plans are provided each year. From that, we make a selection as to which of them we’re going to do some more detailed work on to verify the actions that have been brought forward by the organization we’ve audited, as to whether or not we agree with their comments.

This is an example of the progress audit that we did on the integrated case management system. We had originally issued the report in March of 2015, so a couple of years have now passed. It included eight recommendations. The ministry names have changed, but otherwise, the lead responsibility is now with the Ministry of Social Development and Poverty Reduction, previously the Ministry of Social Development and Social Innovation. The action plan was submitted to the Public Accounts Committee in May of 2016, and that formed the basis of the report that you see before you.

[10:40 a.m.]

We do note there’s a more recent action plan which has been prepared by the organization, by the ministry. Ada’s going to go through the results.

I’m going to end up repeating something that I know that she’ll be getting into. It was really, actually, very encouraging to see the update. One of the things that we had commented on — and it will be the theme throughout the presentation — was that we disagreed on the way that the assessment that had been provided at the time of the original update…. But we’ve seen that that’s been modified for the more current one, more along the way that we’re now in agreement in terms of how we’re thinking on that. So Ada can explain that further.

A. Chiang: Thank you, Carol.

Good morning, Members. I will provide a brief overview of our ICM progress audit.

The ICM project was launched in 2008 to integrate IT systems across two social sector ministries — the Ministry of Social Development and Poverty Reduction and the Ministry of Children and Family Development. The ministries announced completion of the ICM project in November 2014. They reported that the project had been completed on time and on budget at a total capital cost of $182 million. We conducted our original audit while the project was still being implemented and released our public report in March 2015.

Our 2015 report focused on three areas: access management, data quality management, and a review of the project scope and cost of implementing ICM. In that initial audit, we found that the ICM system had neither met expectations nor fulfilled key objectives. We made eight recommendations to improve the ICM system. This is summarized on page 5 of the progress audit report.

The ministry submitted its action plan to the Select Standing Committee on Public Accounts in May 2016. The action plan outlined the ministry’s progress in addressing our recommendations. We conducted an audit on the ministry progress, which we published in February 2017.

For this progress audit, we looked at six of the eight recommendations that we made in our 2015 report. These recommendations focused on access management and project costs. We did not audit the two recommendations on data quality management because at the time we felt there was a lower risk that the ministry had not fully addressed them. In each of the six recommendations that we looked at, we found that the recommendations were all partially implemented.

As you can see from the slide, our assessment differed from the ministry’s self-assessment. The ministry considered these recommendations fully or substantially implemented, whereas our audit found them to be partially implemented. This difference was in part because the ministry bases progress on the effort it made in addressing each recommendation, whereas we focus on whether these efforts achieved the recommendation. However, we understand that the ministry updated its action plan in November 2017 and that the ministry has changed its assessment to partially implement it for all eight recommendations.

The ministry has made significant effort to address the recommendations on access to client information. For example, the ministry introduced a regular program to review employee access to the system. This includes spot-checking user accounts to make sure they are only accessing what they should be. The ministry also clarified job roles to better define who can access restricted records.

There are also stronger procedures in place now for assigning employees with the correct level of access to records. However, the ministry did not fully implement our recommendations. For example, the ministry did not fully implement the review process for inactive accounts, such as the accounts of employees who have moved on to other jobs or retired.

The ministry also had not determined whether access to restricted records was properly assigned. This means that there is a continued risk that client information in restricted records could be inappropriately accessed without the ministry’s knowledge.

[10:45 a.m.]

The ministry made less progress on cost transparency. In 2015, we attempted to review the capital and operating costs of ICM. During our 2015 review of project costs, budget forecast information for both capital and operating costs was available. The ministries also prepared updated operating cost estimates during the early phases of the project. However, the ministry had not yet compiled total actual costs. This was, in part, because the project had not yet been fully completed.

During our progress audit, the ministry provided information on the $182 million in actual capital costs but only minimal information on actual operating costs. This issue is not unique to ICM. Going forward, it’s important for government to follow through on our recommendation to prepare full accounting of both capital and operating costs for the life of every IT project.

We made this recommendation in our October 2016 report called Getting IT Right: Achieving Value from Government Information Technology Investments. Tracking and reporting all costs will improve project management. It will also provide legislators and the public with greater clarity around the forecast for ICM or any other IT project to help the public know if projects have achieved value for money.

That concludes our presentation on the ICM progress audit.

S. Bond (Chair): Thank you very much. We’re just going to take a moment while we invite the speaker on behalf of the ministry to the table.

R. Byers: I want to start by thanking the committee for the opportunity to provide the context and an update on the audit conducted and the review of our progress to date.

I’m Rob Byers. I’m the assistant deputy minister for the information services division and chief information officer for the social sector. Before I introduce other folks with me here today, I do want to pass on my sincere regrets on behalf of my deputy minister, Sheila Taylor, as she couldn’t be here with us today due to scheduling issues.

Supporting me is my colleague Michael Lord, assistant deputy minister and executive financial officer for the Ministry of Social Development and Poverty Reduction. From the information services division, I have Executive Director Mary LaBoucane and Executive Director Daisy Jassar, who both have key roles in the operations of the integrated case management system. From the Ministry of Citizens’ Services, I have Gary Perkins, government’s chief information security officer, to provide further background on privacy and security across the province.

I’d like to thank the Auditor General for reviewing access controls and data quality, as well as their feedback regarding scope and costs of the project. In 2015, the Office of the Auditor General released their report on the integrated case management system. The report identified eight recommendations related to improving data quality, securing access to client information and providing full accounting details of the ICM capital and operating costs.

In the February 2017 progress audit, the Auditor General found that the work towards the recommendation was well aligned with government’s direction on security policy and standards and with our ongoing efforts to strengthen information security. The Auditor acknowledged the ministry had a plan in place to fully complete its actions and encouraged staff to continue their good work.

Our current estimation shows the ministry has achieved 80 percent against the audit recommendations 1 through 7. In the first quarter of 2018-19, we will submit an action plan for final evaluation. For recommendation No. 8, we have provided full accounting costs of the capital.

ICM operates within government’s technology environment and is protected in layers within the overall government network. Our ministry and the office of the government chief information officer are partners in our commitment to strong privacy and security controls and work together to increase the awareness of best practices for information technology overall.

We have conducted security and threat assessments and privacy impact assessments on all of the ICM project phases and all subsequent enhancements. Social Development and Poverty Reduction works closely with the office of the chief information officer to complete the annual information security review.

[10:50 a.m.]

The 2017 review found the ministry to be fully compliant in areas of information security policies, operational security, incident management and system acquisition and development. In addition, service delivery changes were enabled by the implementation of the ICM system. This includes providing clients with more consistent and responsive services no matter where they live and with more choices on how they access those services. For example, during the 2017 wildfire season, staff who were displaced were able to attend from other work locations to provide services to citizens. As well, unaffected staff were able to provide services from other locations.

The initial audit, released in 2015, was conducted when the project was mid-swing. The Auditor’s initial findings were based on a snapshot taken in November of 2013, which was after phase 3 and prior to phase 4. The final phase of the ICM project, phase 4, was a large implementation focused on key functionality for child welfare, supports for SDSI and service delivery redesign, and it had a usability focus gleaned from lessons learned from staff.

The final project phase also had strong focus on security and privacy enhancements. Since the end of the project, the ministry has continued to make enhancements to the system, many of which specifically address access and data-quality themes from the Auditor’s recommendations. We have added quarterly release cycles, which incorporate both business and system changes.

The Auditor’s initial finding, based on the data provided in 2013, found nine key areas of improvement for both user access and data quality. The 2017 progress report focused on the extent to which each of the eight ICM recommendations has been achieved. Five of the eight recommendations were specifically related to user access.

When we reported our progress in 2016, we based our progress on two things: the level of effort that had been undertaken to address the recommendations and the fact that the progress made to date was on track for anticipated completion. While this is in line with the project management reporting methodology regularly used in government, it differs from the Auditor’s assessment of “substantially complete.” We’ve since gained a better understanding on how the audit progress is measured, and our November 2017 action plan reflects this increased understanding.

ICM remains compliant with government’s standards for security and privacy. Protection of government’s data and networks is a top priority for the social sector, and particularly when it concerns the vulnerable citizens in our sector.

For recommendation 1, “Ensure that access to ICM is based on defined business and security requirements,” we have processes in place to ensure access is limited to staff based on reporting structure and program area. The July 2016 implementation of an access management tool has further defined business and security requirements for access to ICM. ICM released, in December of 2017, updated profiles and automated the process to reduce manual effort and the possibility for human error when granting access. Ministry staff are finalizing an updated process and procedures for maintaining the matrix from an ongoing perspective.

For recommendation 2, “Ensure that access to ICM is updated promptly and regularly reviewed,” we have improved the inactive account review process. We have expanded our regular access reporting to include six monthly reports and three quarterly reports to ensure access is promptly and regularly reviewed and enhanced segregation of duties between access and security privacy teams. The ministry is working on a plan to expand the use of random spot checks to further enhance our compliance reviews. We have some further change management training to do to complete this recommendation.

For recommendation 3, “Ensure that access to restricted client records in ICM is appropriately assigned,” we have a restricted file policy in place. The process for managing access to the restricted files is in place for both ministries, and ICM has an audit screen that can manage all of the data elements within the screen and report back how they have been used.

For No. 4, “Ensure that ICM system administration accounts are properly managed,” we have implemented a quarterly review cycle of privileged accounts. Dedicated system accounts have been created that provide only the access required for running system processes and maintenance. And we are currently enhancing the onboarding and offboarding process to ensure access is regularly reviewed across all user groups, including our vendor partners.

[10:55 a.m.]

For recommendation 5, “Conduct regular monitoring of ICM for inappropriate access,” our service desk runs quarterly exception reports to identify any exceptions. Database logging is done at the network and server level. Audit logs have been incorporated into the approved retention policies. We continue to work with OCIO to investigate any new technologies that may be able to log at a more granular level.

For our recommendation No. 6, “Improve system and review processes to enhance the quality of client records in ICM,” the ministry established a full-time data quality team to ensure the ministry’s business goals are achieved. An internal enterprise data quality application has been implemented to generate a series of reports which are reviewed by the data storage to continually improve our data quality, and data quality is built in to the sector service management and program management framework.

For recommendation No. 7, “Implement a regular compliance program to assess, monitor and improve data quality in ICM on an ongoing basis,” we have implemented an ongoing data quality management program and continue to ensure that it’s a priority within the sector. Twelve thousand data requests are reviewed annually. As well, every new contact is evaluated prior to creation. Data quality issues that are considered high risk are addressed immediately. The data quality team continues to build awareness of best practices across the sector.

Finally, for recommendation No. 8, we have completed the accounting of the capital, which totalled $181.6 million, of which details were provided to the Auditor General. The capital cost fell into three major categories: vendor, staff, software and hardware. The operating costs for the project were not tracked separately. The ministry followed the core policy, which didn’t require us to track those separately, as the expectation was that we would absorb those costs within the ministry budget. The ministry continues to work with our corporate partners, including the comptroller general, to develop a standardized process for tracking operating costs for future capital projects.

In closing, modernizing the technology in the social sector has enhanced the service delivery to the citizens of the province. Based on reviews completed by OCIO, the integrated case management system is currently compliant with government security and privacy policies. Our current estimation shows that we have achieved 80 percent against the audit recommendations, and in the first quarter of ’18-19, the ministry will submit its final report for evaluation.

S. Bond (Chair): Thank you for your comments. We’ll open the floor for questions from our MLAs.

B. Ma: Thank you so much for that update, and thank you again to the Auditor General for her report. What I have to say is more of a comment.

It was concerning to me, when I was reading the report, that the ministry evaluated itself in a way that did not stand up to an audit. I would think that the goal of a ministry when it comes to the Auditor General’s office would be to show that an audit is not required and that a ministry, on whatever issue is being reviewed, is reliable, professional and with it enough that the work of an Auditor General’s office basically has no purpose there. “We’re doing just fine.”

In this case, the ministry’s self-assessment kind of did the exact opposite. It emphasized exactly why an audit was needed. It makes me wonder what might have happened if the Auditor General’s office had not followed up on the recommendations.

I’m pleased to hear that the ministry has now learned from the experience and has a greater understanding as to how the Auditor General does their assessments, and I really hope to see that this sort of mis-self-evaluation does not recur in the future.

S. Bond (Chair): Did you want to comment, anyone?

R. Byers: Just in response to the one piece around that, I do agree that there was a misstep in how we reported that back. But in the evaluation from the Auditor General on where we were going, I think the report actually showed that we had done a significant amount of work over that period of time, and we continue to do that work. Yes, the report didn’t show that, but we had plans in place, even when they came in and evaluated that, that showed we were heading towards that completion place.

[11:00 a.m.]

M. Dean (Deputy Chair): Thank you so much for the work that’s gone into this. I thoroughly, deeply understand all the work that went into ICM from 2008 and that continues to as well. I hope and trust that it does provide benefits in delivery of service and quality of service now and continues to in the future as well.

I have a few questions, if that’s okay. On the self-evaluation, just a comment on where I come from in terms of these records and the individuals, the British Columbians, the vulnerable children, the families whose details are captured. When we talk about data and we use all this jargon, we’re talking about people’s lives, and we’re also talking about personal information that is really important to them as well. People won’t be able to separate out the system from the fact that this is them and this about them and this is their life, right?

For me, when I hear the report back on the evaluation, I think that if we got half a dozen people from the community here and they came in and talked to people in the ministry and had an understanding of what should have been improved, I would have been interested in their assessment of, for my information: “How much do I think the ministry has completed in terms of what the Auditor General has recommended?”

I’m a bit more interested in the quality of the data. You did talk to recommendations 6 and 7. When you talk about the quality of the data, can you explain a little bit more about that for me? Are you talking about the technical integrity of the data, or are you talking about how the system supports the service delivery and how the quality of data supports service delivery?

R. Byers: I think how I would respond to that is the second side of it. We have a data quality team making sure that the…. In the ICM system, we have contacts. Those are the citizens that you’re talking about. That’s how we would track against that — making sure that the citizen, the contact in the system, is correct; that we don’t have duplicates within the system; that the proper access to that contact….

By supporting the social sector, we have children and family information. We have social development information and all of that. It’s making sure that we have access to the data correctly and that it is proper. So through any release that we go through, that data quality team is always going through the records — the 12,000 records that we talked about — and making sure that the information is accurate against the contact and that the right access is there and going through those different processes.

M. Dean (Deputy Chair): Are you making sure that the quality and the integrity of the data that’s being generated by ministry staff is fit for purpose, meets recording standards and could be accessible to these people now and then in ten years’ time or 20 years’ time?

R. Byers: I would say the answer is yes to that, but I might hand that over to Daisy to answer that. She’s the chief technology officer, so she’s responsible for the team that has the data quality piece.

D. Jassar: We are making sure that it’s fit for purpose and that the veracity of the data is correct. So it’s more about the integrity of the data. In terms of whether it is available in ten years, we follow all the ARCS and ORCS policies around data retention. Those are followed according to government policy.

S. Bond (Chair): Sorry, I just need to interrupt. Could you please state your name? We need to have it for the record, please.

D. Jassar: I’m Daisy Jassar. I’m the chief technology officer for the social sector.

M. Dean (Deputy Chair): Is that a manual system, or is it an automated system?

D. Jassar: It is an automated system, which is conducted by 15 staff. We have 15 staff, and they are focused on data quality. That is what they do, working with our service delivery partners and the different divisions within the ministries.

M. Dean (Deputy Chair): Can I ask about the access that we talked a bit about as well? When somebody leaves employment, they get an ROE or whatever. Is the removal of their access to the system immediate? Is that manually done? I understand that you do quarterly checks, but that could leave somebody with unapproved access for many weeks.

D. Jassar: It should be done immediately. That is a process that we’ve been working on putting into place for our onboarding and offboarding of staff — to have that immediate removal of access.

[11:05 a.m.]

M. Dean (Deputy Chair): Okay. If somebody does go in and have a look at a file that they’re not responsible for, is there a record that tracks that? Or is there a notification that alerts somebody to that?

R. Byers: In that scenario, we would have a record within the system — so an audit trail within the system — to know that. We would be able to go back and see everything that was accessed against that file and what happened.

There currently is nothing that pops up and says: “That file….” We have a lot of records out there. There is nothing that’s coming and telling us that somebody has accessed that, but there is a full audit trail that’s behind the scenes.

M. Dean (Deputy Chair): I understand that.

Finally, do you currently have a stakeholder consultation group or a way of engaging with people whose details are put into the system and who are users of services and recipients of ministry services so you can actually talk them through your progress and your plans and for them to be able to provide you with feedback about their views on that and their experiences of that?

R. Byers: Are you speaking more of the citizen side of that or workers out there in our field offices?

M. Dean (Deputy Chair): I’m sure you hear back from your front-line staff. I’m interested in vulnerable families and citizens. It’s a range of systems, how people might come into ICM, right?

R. Byers: I’ll use an example. It may not be specifically to ICM, but it’s how we interact with citizens in the Ministry of Social Development.

We have a system called My Self Serve, which gives them the opportunity, through a web-based portal, to access systems. As we went through the development of that system, we actually did user work groups to understand what the system needed to look like and how we provided the services that they wanted. So we do have processes, as we’re doing system development, to bring users in, to understand what they’re looking for.

M. Dean (Deputy Chair): But day-to-day experience and development now, in response to the Auditor General’s report — you don’t have that kind of proactive, ongoing mechanism at the moment.

R. Byers: We wouldn’t have that mechanism from an ICM perspective, as direct access from a client to ICM doesn’t happen. It’s accessed through workers, which is why I was asking that question of which side. I think our feedback around ICM and how ICM works comes more from the field staff, versus how the interaction that we have with citizens is more of these other things that we have for citizens to provide information into the ICM system.

M. Dean (Deputy Chair): I think, from a citizen perspective…. Knowing how effective our systems are in protecting access to their information in the systems that are in place, to make sure that it’s good quality — and a need to know information that’s in the system, how they can access and be supported to come in and have a look at their information — is still important to them, even though they’re not the ones using the system. It’s actually their information that’s in the system.

A. Olsen: Again, thank you to the Auditor and, as well, to the ministry for your response.

Mine is along those same lines as we’ve been for a couple of the audits we’ve looked at over these two days. I’m going to focus primarily on the second paragraph of the conclusion, on page 8.

The broader issues that I’m struggling with right now are our cultural approach to data, our interactions and our relationships with data and our devices and with managing and maintaining people’s information — in this case, very sensitive information.

Perhaps from my perspective, I look at this and think…. To have a ministry say that it is 100 percent complete and that it has met the recommendations of the Auditor, and then to have an assessment come in and say, “No, in fact, we’ve got some more work to do on that,” highlights for me something that Bowinn said in the last report and something which I would like to put back to this committee.

That is: while the Auditor does a certain amount of reassessment, I think, from our perspective, if we established a culture here within this committee that we would be prepared to come and have more meetings, frankly, and ask the Auditor to invest more into that process, perhaps we wouldn’t have the situation where….

[11:10 a.m.]

I guess I’m uncomfortable with the fact that while we’re still going through the work, the ministry is reporting back that it’s done. Then here today we’re finding out that no, it’s not done.

For me, part of the rigour of an audit and the process of reporting back on an audit and the responsibility that we have, from a public accountability perspective, is to ensure that those audits are being completed, followed up, and the recommendations are being implemented, or we’re being told why they’re not being implemented. That’s fine for me. Perhaps there are reasons why some of these recommendations shouldn’t be, all the way, and I accept that.

But I would just…. It’s less to the Auditor and the ministry and more to this committee. I’m feeling that we can be a part of changing the culture by asking to, frankly, come back and sit and hear more about these reassessments, to ensure that there is the rigour within government and the expectation and accountability to the work that’s being done — not only by the Auditor but the huge amount of work that’s obviously being done by each ministry as they come in here.

I’ll leave it at that. It’s less about this particular one, although it’s drawn out in the assessment process.

G. Begg: Perhaps I can make an observation just based upon what Adam has said and based upon my prior experience with the federal civil service, specifically the RCMP, where part of my job was to conduct audits and evaluations of units and detachments on an ongoing basis.

It was part of a policy of the RCMP, but I was always most impressed with a self-audit that was expected to be conducted within each unit. Those units — in this case, these ministries — could have an ongoing and proactive audit process, knowing that the Auditor General occasionally will select them to be audited.

Adam’s reference to an ongoing and proactive process — it may very well be in place, and my expectation is that it is. The subsequent or consequent appearance before this committee would be very helpful in that process. I endorse it entirely, and I’m sure the Auditor General has the same feelings.

It’s valuable to the process and, certainly on an ongoing basis, would be very valuable to us. My experience is that it’s extremely valuable so that we don’t get so far down the road that we await a report from the Auditor General that points out circumstances or situations that might have come to light before that actually takes place. That is not to denigrate or disregard the value of the formal audit process but to reinforce our expectation and perhaps our requirement that before things get too badly off the rails, we can have some confidence that they’re being addressed.

S. Bond (Chair): Any other questions before we…?

R. Sultan: A generally reassuring interim report. Congratulations. Because it strikes me as being kind of bland…. It’s always nice to have some heat and excitement to liven the morning, but maybe we’ve had enough of that already. I would ask you — aside from the plodding, methodical, “Here was the recommendation; here’s how we have implemented, etc.” — what other issues keep you awake at night, with respect to the integrated case management system?

R. Byers: The one that keeps me awake at night the most…. I actually think we’ve done a good job of it, but it’s the thing that keeps me awake the most. We have a system that’s supporting the social sector. What that system is here to do is to make sure vulnerable citizens across the province have access to services, whether it’s income assistance or child welfare or any of those sorts of things.

[11:15 a.m.]

The availability of the system is the thing that, from an overarching perspective, I have my finger on, every day, to make sure that the staff out there in the field offices have access to the tools that they need to provide services to those citizens. I think we have seen, and you will have seen…. Probably about a year ago, one of the things that came up all of the time, was availability of the ICM system. It was questioned and challenged. The problem around that…. When I explain that I go out and talk with front-line workers all the time…. That’s their biggest challenge: how they get into the system. It’s the access to the system.

Access is about making sure you’re the right person who has access — all of that. That authentication is actually outside of ICM. It’s in the government infrastructure. We’ve had challenges in the relationship between access and ICM. I would say that in the last year, we’ve done a really good job of making sure that that’s not happening anymore. So the communication between those two systems is happening more regularly.

I was just out in Prince George and Kamloops talking with staff, getting feedback, all of those pieces, last Tuesday and Wednesday. The change that has happened out in the field over the last year and a half as people have gotten more used to what that is, is that I’m not hearing about ICM as the problem anymore. I’m hearing, “Well, how can you add this piece into ICM?” now. Rather than me having to do this or that, it’s: “Here’s stuff that you may not have contemplated before, but how can we add that in?”

So availability, I would say, is my biggest worry. I have my staff all over that, as well as our vendors, all of the time.

R. Sultan: So you use “availability” in the sense of the authentication and registration, you might say, of the user — to make sure they’re legitimate. Is that correct?

R. Byers: Yes.

R. Sultan: It’s not availability in terms of downtime or machine failure.

R. Byers: No, sorry. It’s that the worker out there has the ability to access the system and provide the services that the system is there to give.

R. Sultan: I’m a little bit confused. Is the major problem, then, the actual technical issue of having a system that’s up and running and able to respond to their requests? That’s the big issue you’re grappling with — not whether they’re in fact entitled to be on that terminal in the first place.

R. Byers: I think we have processes in place that manage whether they’re entitled, through authentication and different pieces. It’s that the actual system is there to do the job that they need it to do.

R. Sultan: And sometimes it isn’t there as quickly or as efficiently…?

R. Byers: I would say that in the past, we’ve seen that it wasn’t. And I would say that in the last year, we have seen it be available almost 100 percent of the time.

R. Sultan: So from a technical point of view, are these services provided by servers within the ministry or on the cloud somewhere with whomever?

R. Byers: These services are provided within the Kamloops data centre, where we’re based out of. We’ve also, in the past year and a bit, created what we would call an alternate primary site. So if we have a failure within Kamloops, we have the ability to go to Calgary.

On top of that, we’ve created other systems for our workers. So that authentication that I talked about…. If we have a problem with authentication, we have the ability for subsequent authentication that’s different for our child protection workers, to make sure that they have access to the system even if the current government authentication is not there. As well, we have a read-only site now.

I think what we’ve done is build up the resistance in the system — the original system but then all of those other processes — to make sure we’re supporting those workers.

R. Sultan: We own and operate our own server farm up there in Kamloops. Is that what you’re telling us?

R. Byers: It’s a government….

R. Sultan: A government facility. And I presume it has other government clients in addition to your ministry.

R. Byers: Maybe Daisy can talk to that a little bit.

D. Jassar: All of the ministries use the data centres provided by HP.

R. Sultan: Right, okay. Thank you.

S. Bond (Chair): Any other questions from MLAs? I just have a couple of things that I wanted to ask about.

Oh, I’m sorry. The Auditor was indicating she might want to speak.

Why don’t you go first.

C. Bellringer: Thank you. It’s just on a couple of things that have come up that I thought I’d give you a bit more information about.

I guess I’m thinking…. I’m quite encouraged that we’re not out of a job yet. But at the same time, we do appreciate the amount of work that ends up having to go on within organizations, ministries and others outside in the broader public sector that we’re auditing. They’re doing it every day. We come in at one point in time, and we look at a very small number of audits in a year.

[11:20 a.m.]

There are about 100 that we’ve identified as high risk and that don’t make it on to our three-year plan. We do make our three-year coverage plans public. They’re actually going to go out next week, for the most recent updated one.

I think it’s a very welcome discussion around process and how to encourage all organizations to be upfront about what the status is. I think it’s the only way to move forward. We did an audit about, I guess, two years ago now, on the landscape in IT, and we did ask for self-assessments from all of the organizations out there. What was disappointing when we looked at those self-assessments….

We had a selection of them. And this is not specific to this ministry. It’s not in any way connected to this. But when we did a verification of the various self-assessments — and we picked quite a large sample of it — we found that the majority of them were not assessing as openly as we would have liked, and we did not agree with their self-assessments.

To me, the biggest lesson learned is that it is very important for every organization to be honest with itself. You can’t move forward if you don’t know where you stand.

In terms of this particular audit, a couple of things. One of the things you’ll note in the recommendations that we followed up: there were two that we did not follow up. Those were because they were lowest risk in terms of where things probably had progressed in a positive way.

We do, from time to time, have ministries say to us: “Well, why don’t you just pick things that are really being run very well?” The only way that we can use our resources efficiently is we are focusing…. The initial cut is going to be areas where we think improvements need to take place, where there’s high risk that something is going off the rails. So that’s just built into all the work that we do.

In terms of the system itself…. I’m going back in time. I had looked at the equivalent of to an ICM system when I was in Manitoba as Auditor General. Certainly, what the issues are, in any system, changes over time. It changes in comparison with one situation to another. Their situation at the time that we looked at it was an old system. They needed a new one. The B.C. experience — having a new system that needs some improvement, but it’s just an ongoing look to, “How can we always make it better?” — is a really very positive thing.

Having a new system and being able to look at things that were inherent in old systems and need to be fixed in new ones — we get that. The issue of duplicate records is a big one right across the country. I’m well aware of that. It’s very difficult, in particular, on name recognition, to be absolutely sure. It’s important, because it’s impacting people, that when you’re talking about a name in a system, it’s the same individual when you’re talking about a similar name in another part of the system.

I get how much effort is required to continue those improvements, and we are not uncomfortable with the progress being made. But of course, as I’ve said before, we’re always looking for everything faster, all across the board.

S. Bond (Chair): Thank you for those comments. I have to admit I struggled with looking at the original report, knowing that this is a progress report, in essence. but that the original audit was done much earlier, and there were some significant questions about that raised in the initial audit. I’m wondering if the Auditor General can just clarify for me….

Recommendation 1 in the October 2016 report was that central oversight of ministry IT-enabled projects include monitoring total project cost. Who are you directing that recommendation at?

C. Bellringer: When we wrote the original report and made that recommendation, we were directing it to the ministry, not as a systemwide comment. Even though we appreciate that the system itself doesn’t very carefully and very automatically track the operating costs, we still think that it’s something that should be periodically be estimated. There was a year where the estimate was done, for ’14-15.

[11:25 a.m.]

In terms of IT projects, it’s an important component. It can actually be quite a large percentage of some systems, and it’s also possible, in effect, to track things in one category versus the other. So we see the two together being a very important thing.

In the Getting IT Right report, which was the one that Ada referred to, and it’s referred to in the report…. We did, in that report, recommend it for the system as a whole — to central government, if you will — to look at the system itself. So it’s two separate things. They are obviously a related topic.

Here we were asking the ministry to do that estimate periodically — in particular, because at the time, it was very much advertised as a system that was on budget. We thought it important to know what that full budget was and the full actual cost at the end of the project — to look at it carefully.

S. Bond (Chair): I think we’ve seen in the reports that have been clustered together over these two days that IT does matter, and project scope and cost obviously change often, fairly dramatically. I think there’s room for both, where there’s the recommendation directly to the ministry.

This committee has certainly said we need to look at this from a broader perspective. It’s really in many ways the tip of the iceberg, because it comes out as a result of an audit by the Auditor General.

In fact, we know that, inherent in the system, IT projects can grow, and there are cost implications — all of those things. So I think it’s important to think about where and how — what mechanism would be used for looking at that sort of central oversight role.

We talked a lot — Mitzi talked about this, especially — about the type of information that’s on the system. In the initial audit that was done by the Auditor General, it talks about information on the system for 2.5 million people. Is that correct?

A. Chiang: When we did the original audit on ICM, looking at data quality, and we were specifically focusing on client records, that was the count in the ICM database at that time. There were 2.5 million.

C. Bellringer: That would involve a number of…. It’s not that there are 2.5 million individuals who are somehow the subject of…. I mean, it can be any contact of any kind who, therefore, is an individual. They would make up one of that 2.5 million. It’s a variety of categories. Maybe the ministry can fill that in.

R. Byers: I don’t have the detail behind me for that number, but within the system itself…. So contact is a good example of that. We may have an individual contact a ministry staff person to say: “Do you provide this type of service?”

So when the ministry has someone come in — and we’ve had them for various reasons of services that the ministries don’t provide — we would have created a contact for that to start that process, realize what the service is that we’re…. And we would have forwarded them on to some other service in the city that they’re in — or different pieces like that, that we actually don’t provide.

I think the other situation for us within the social sector is the retention policies that we have, from an overall perspective. So within Ministry of Children and Families, the retention policy for any information that we have is 99 years, because it potentially could be the life of the individual. So some of those create longer-term perspective for how long or how many records we have to keep.

S. Bond (Chair): Well I make the point only because, if we think we’re talking about…. It magnifies the concerns that Mitzi’s brought up about information and how that’s managed. The report actually says: “The new system processes and stores vast amounts of data, including personal information — in some cases, highly sensitive — for more than 2.5 million individuals.”

Either that is broader than you…. I’m just trying to get a handle on this. We’re talking about ICM, and if it has 2.5 million individuals, that is the majority of British Columbians. So is that managed by your ministry, or is there some other…? I just want to understand the metrics of 2.5 million individuals’ personal information being in ICM. If you’re not managing all those contacts, who is, or what does that represent?

[11:30 a.m.]

D. Jassar: I’d like to hear the categories, if you have them, because that also includes our service providers, who are contacts as well. Even though they’re not receiving a service from us, they are providing a service. So those services providers, such as a foster family, would be in there as a contact. So that is why it’s not just the people receiving services.

A. Chiang: That’s correct. I’d just like to add that I don’t have the detailed information as to the contact information. But as Rob also explained earlier on, that number of contacts is the number of records that we were flagged — people who actually receive social assistance in any way or form. It also includes the records in terms of the family members that’s relating to the individual who’s receiving the social assistance.

We also believe that the information contained in that record — for example, lawyers, counsellors or physicians — would include anything that is in relation and in the context of the family kind of situation — let’s say with a child with any individual. Also, as Rob pointed out, it’s one of those situations where ICM and a number of records were brought in through a number of different programs, like legacy system programs, from a number of different systems into one system.

So yes, the number of contact records is large. We did not, at that time, look at it in terms of the analysis into the breakdown of the component and whether they were representing individuals or were there any duplicates involved. It does raise a bit of a question, but we didn’t go beyond the scope of the audit at that time.

C. Bellringer: But I will say we did identify that as an area where, at the time, the analysis had not been done, and we believe it should be.

S. Bond (Chair): I just think that in the theme of Bowinn and then Adam and now more, it would be good to get an explanation of the 2.5 million individuals’ information in a system and how much of that. We’re certainly not dealing with 2.5 million people in terms of specifically receiving services from these two ministries.

I think the numbers…. What would be a number of clients that you are serving?

R. Byers: Number of clients that we’re serving?

S. Bond (Chair): Well, let’s not spend time on the math. Let’s just….

R. Byers: I don’t know the exact number of that.

S. Bond (Chair): Okay. The point is that if there are 2.5 million individuals’ information in the new systems, we better make sure that whoever else has that… That is a very large number — more than half the population, practically. So we’d want to be clear about what’s in this system and who’s managing it. If there are duplicates, there could well be a whole lot of them.

I worry about the quality and, frankly, the quantity of what’s in there, if that’s still accurate. That was a number of years ago. Anyway, if someone could just obviously at some point explain to us what that actually means.

The other concern that I had, the overarching concern, was there was an initial plan that more legacy systems would be incorporated into ICM. As time went on…. In fact, the quote in the report is that for some systems, it would be inappropriate or they are not able to be included in the plans.

So as I understand it, and maybe it’s changed today, there are legacy systems operating, and ICM is operating. The two of them obviously need to interface. Is that the situation? Do you anticipate that some of those legacy systems will need to, somehow, change? What’s the evolution of the legacy systems and now ICM working side by side? Are there cost implications of that? The original plan was much broader than what ended up being delivered. What is the current status of the two systems?

R. Byers: Speaking to that, I think that there were systems that were identified in that original business case that we would never put into ICM. An example of that is in one of the deputy’s offices there was a file tracking system that was happening within the deputy’s office. That would not be something that would go into ICM as a case management system.

[11:35 a.m.]

The answer to do we have two systems running right now…. We have an integrated case management system running, and we have the ministry information system running, which is MIS, which is more the calculator of benefits behind the scenes. So those are the two. They’re integrated right now. MIS talks to both ICM and it talks to the corporate financial system, as to make payments for different program areas within that.

We are working on a project right now to modernize some of what we would call mainframe applications. It’s a governmentwide project that’s going on right now and working with the office of the chief information officer on what that looks like. We have a plan in place on what we would call application modernization and to have that completed by fiscal year 2021.

S. Bond (Chair): So we are resigned to, then, living with legacy systems and ICM.

R. Byers: The long-term plan would be that ICM is the system for services within the social sector. Where pieces of MIS make sense to be within ICM, we will move them into ICM, and where they fit within other areas, such as the government’s financial system, that’s where it would go. I don’t see creating ICM as a financial system when we have another financial system that we just can integrate with.

S. Bond (Chair): Well, I guess it just speaks to the complexity and the evolution of technology and integration. We’re integrated, but not quite the entire plan that was initially laid out.

R. Byers: We’re integrated differently than what the original plan laid out.

S. Bond (Chair): Are there cost implications of maintaining the legacy system? You know, the business case was laid out based on a certain plan. Are there ongoing costs related to the legacy systems that were not able to be incorporated into ICM?

R. Byers: We currently have a separate vendor that we just negotiated a contract with called Avocette. They are our maintenance and support vendor for the legacy systems. That maintenance and support is both for what we would call…. There are systems that were never contemplated within ICM that they provide support for, as well as some of these other systems that we’re talking about, like MIS.

S. Bond (Chair): I guess my last question is just sort of a process one, and it’s to the Auditor General and her team.

The decision to audit before full implementation. Part of the significant discussion that remains is about the fiscal oversight and looking at both capital and operating costs. So when the decision was made to look at it in phase 3, phase 4 wasn’t finished yet. Yet it had potentially…. There were financial things that couldn’t be analyzed at that time. Maybe just a bit of the rationale for auditing before the full implementation.

C. Bellringer: It’s something we try to do to the extent possible right across the board in all of our audits. Again, it’s partly…. Coming in after something is finished and saying, “Gee, you should have done it differently,” doesn’t seem to be the best use of our time. That’s the philosophy behind it.

It does cause a complication. We get it that there are things that are in progress, so we have to integrate our work with that. We’ve come up with our own process internally as to how we actually go about doing audits, in particular in the IT area that are in progress, and we follow that process.

We do, to the extent…. We did actually work it into the end of a phase as opposed to just randomly at any time. But indeed, it’s hopefully getting the relationship right so that there’s an understanding. We do appreciate that things aren’t finished, and when we report on something that we think needs to be done differently, we’re doing so, so that that conversation can take place and not as a criticism.

S. Bond (Chair): I’m assuming that the principle behind that is that information or advice provided to the client — or the auditee, at that point — actually shapes what happens potentially or impacts phase 4.

C. Bellringer: In terms of how we work through the process for ourselves, we’re very careful not to be giving it as advice in terms of: we’re not doing a design that would then compromise our ability to go in afterwards and do an independent audit. We are cautious to draw the line between looking at the plan that’s in place and whether or not it would meet the standard and pointing out where it does not, as opposed to saying: “Gee, you should do it this way.”

[11:40 a.m.]

S. Bond (Chair): From the ministry’s perspective, when the audit was done between phase 3 and implementation in phase 4, did the recommendations or the…? Okay. I won’t use the word “advice,” because the Auditor doesn’t provide that advice. But the observations of the Auditor — did they influence or help as you went to phase 4?

R. Byers: I would say they more aligned with what we were planning on doing. When the audit came in, and between the phases…. In system development, it takes some time. So from where that audit came in and where that happened, for us to drastically change where we were going would have been a delay in the end of the schedule. But I think that they well aligned with what we were planning on doing from a phase 4 perspective.

C. Bellringer: We don’t disagree with that. We also, I remember, had the conversation at one point saying what we will never know. But that’s okay. We don’t need to know. We’re glad it goes to a good place, and we don’t care who got it there.

S. Bond (Chair): I think that’s a healthy part of the process, when you think about that, as long as the outcomes demonstrate that there was that alignment.

Do any of my colleagues have any other questions?

M. Dean (Deputy Chair): It’s not a question. It’s just to acknowledge that we have a real opportunity here, because there has been the support from the Auditor General’s office and you’re at this point of review and reflection. I think there is an opportunity here to make sure that all of the planning, the quality assurance in the systems…. At every stage, really think about: “Well, if one of these people came in and had a look at what was happening, what would they think? What would they ask? How would they feel reassured?”

Because some of these files are around for 99 years. We are custodians on behalf of, for example, three-year-olds who are coming into care who, when they’re 43-year-olds, may want to come and access their file, just as an example. We are custodians of that information on their behalf, to think about their experiences of having this part of their life being captured into the system.

S. Bond (Chair): Probably a very important way to wrap up our comments, remembering those important things. I know the staff in the ministries take that very seriously. We appreciate all of the work that you do. So thank you very much for that.

Before we adjourn for a bit of a break, I want to just let Adam and Bowinn know that perhaps, as the Deputy Chair, Mitzi and I can sit down with the Clerk and others to talk about what kind of process helps us get to the place where we’re feeling like we get that report back, so we have a sense of: is change taking place? So I think those were important comments that both members made, and we’ll sit down and give some thought to the whole process and where that might fit.

Thank you again to the Auditor General and her team.

Thank you to the ministries for being here.

We’re going to adjourn now. I’m going to move the starting time of the afternoon session to one o’clock. We’ll make sure that we can get the presenters here. Lunch will be here very shortly, at noon, so you can pick up your lunch, get a bit of work done. Then we’ll come back at one instead of 1:30, so hopefully, we can wrap a bit earlier today. We’ll recess until one o’clock.

The committee recessed from 11:43 a.m. to 1:04 p.m.

[S. Bond in the chair.]

S. Bond (Chair): Good afternoon. I’m very pleased to welcome back members of the committee. Thank you for being very prompt and for adjusting your schedules today, including our presenters. We are reaching the end of our two days of work together — in this session, at least. More is to come later this month.

The one report that we’re going to look at this afternoon…. We had some fantastic discussion earlier in the day about the two we reviewed.

[1:05 p.m.]

We’re going to consider the report done by the Auditor General that’s titled An Audit of B.C. Public Service Ethics Management. It was completed in March 2017. We’re pleased to have Carol Bellringer, the Auditor General, and her staff. She’ll introduce her team to us that will be presenting. Then we have representatives from the Public Service Agency here to respond to the report of the Auditor General.

On behalf of the committee, I want to thank the Auditor General for making herself and her team available for two marathon days, and I know that more are to come. We do appreciate that, and we welcome your comments.

An Audit of B.C. Public
Service Ethics Management

C. Bellringer: Thank you, Chair. I have to tell you it’s quite an invigorating process for me and for my staff. It really is a great reminder of why our work is so important. So thank you for having us here.

On this report, I have with me Malcom Gaston, who is the assistant Auditor General who led this audit, and Jacquie McDonald, senior manager on the audit. Jacquie will complete the comments in a few minutes.

We conducted this audit because of the importance of high ethical standards and that they are fundamental to good governance and good government. When entering service, all public servants are required to sign the oath of employment, which includes the commitment to exhibit the highest ethical standards and to act with integrity.

We carried out the audit to examine government’s management of ethics within the core B.C. public service — that is the ministries and central agencies. We looked at six sample ministries and three central agencies, with the B.C. Public Service Agency as the lead. We also — and this was in many ways a strength of this particular audit — surveyed over 25,000 public servants to find out how they were experiencing ethics in the workplace.

We found the government has set expectations for ethical behaviour, but it must do more to coordinate ethics management across the B.C. public service. Although our audit focused on ethics in the core public service, we thought it was important to engage the broader public sector in the process. We ended up sending out a survey with different questions to the CEOs and board chairs in the school districts, universities, health authorities and other taxpayer-funded Crown organizations to learn more about their efforts to strengthen ethics management. We do, of course, hope that all public sector organizations can use our findings and recommendations to continue implementing strategies that will effectively foster a culture of ethics right across the whole broader public service.

The audit was completed just under a year ago. Since that time, we note some updates to the MyHR site that have been made related to identifying training in ethics management. The Ombudsperson also issued his report on health firings in April 2017, which included several recommendations that are related to those in our report. In PSA’s action plan for this audit, we note that they are keeping both reports in mind to ensure efficiency and alignment in addressing the recommendations of each.

We would like to thank the ministries and agencies, especially the Public Service Agency. We had positive cooperation in supporting the work throughout the audit.

I’ll turn it over to Jacquie now to go through the details.

J. McDonald: The purpose of our audit was to determine whether the government has established and implemented a framework that effectively fosters ethical culture in the B.C. Public Service.

We did not go looking for cases of wrongdoing or unethical behaviour. We were not looking to conclude on whether the public service as a whole is ethical. It’s just not that simple. Instead, we were looking to see whether or not government has a robust ethics management framework that (1) sets clear expectations for the public service, (2) communicates and fosters public service ethics, (3) enforces ethical conduct and (4) coordinates ethics management.

In other words, we were looking for whether or not government sets out how it expects public servants to behave. Does it help them to understand and practise those expectations? Does it put in place effective programs to detect and correct unethical behaviour? Also, are government leaders acting together to coordinate ethics management? Has a management system been implemented to ensure ethics programs are working? Sustaining a culture of ethical conduct requires ongoing conscious effort.

[1:10 p.m.]

Our audit found that government has set expectations for ethical behaviour and has some good practice elements in place. For example, all employees must take the oath of employment, promise to be loyal, give good service to the government of the day and faithfully abide by the standards of conduct for public service employees. All new employees must sign that they have read and understand these standards as a condition of their employment.

A big part of our audit was finding out how public servants experience ethics in the workplace. Of the 25,000 B.C. government employees surveyed, over 12,000 — or 50 percent — responded to our survey. Many had positive feedback about ethical behaviour in their workplace and generally perceived the likelihood of unethical behaviour as low. For example, a majority of respondents told us that their senior leaders and supervisors model good ethical behaviour, and 62 percent strongly or somewhat agreed that leaders communicate ethics as a priority. Also, 59 percent said that they don’t feel pressured to compromise ethical standards.

The survey results also showed areas where government can improve ethics management. For example, just over half of employees that we surveyed reported that they received ethics training, which tells us that many have not. A concerning number of employees, 28 percent, told us that over the last two years, they observed ethical misconduct in their workplace, but over one-third of them did not report what they saw. The most frequent reason they gave for not coming forward was fear of reprisal. This is a significant finding that government must take steps to resolve.

Finally, we found that government agencies have ethics-related oversight responsibilities, but those agencies aren’t always required to report out on how well they’re meeting those responsibilities. Overall, we concluded that government hasn’t established a systemwide accountability for ethics management and that it needs to strengthen its coordination and oversight of ethics management. Ultimately, a clear lead role for the public service as a whole is needed to tie it all together.

We made a total of eight recommendations. If implemented, these recommendations can help to build a stronger framework for ethics management in the B.C. Public Service.

In the areas of setting and communicating expectations, we recommended that government ensure that all public servants regularly review and sign off that they understand both the oath and the standards of conduct, that they have an ethics training plan to make sure that all levels of staff are receiving timely ethics training and that they ensure that ministries formalize the roles and responsibilities of ethics advisors to support staff in questions of conduct.

To improve enforcement of ethical conduct, we recommended that government address ethical risks by including them in their regular risk reviews and evaluation of controls, also that government support understanding and reporting of misconduct by removing barriers such as helping employees better understand the process and, as far as possible, letting employees who report know the outcome of that report so that they know that reporting is important and safe.

To improve overall management of ethics, we recommended that government clearly designate a lead role for coordinated ethics management across the public service.

That concludes our presentation.

S. Bond (Chair): Thank you very much.

Welcome. If you could do an introduction for the record and then, perhaps, introduce your colleagues that are with you, that would be fantastic.

[1:15 p.m.]

L. Halls: Good afternoon. My name is Lori Halls. I’m the deputy minister of the B.C. Public Service Agency. Joining me today are Rueben Bronee, our executive lead for policy, innovation and engagement, and Angela Weltz, our director of policy and research with the Public Service Agency.

We’re pleased to be here today before the Select Standing Committee on Public Accounts to provide an update on government’s response to the Auditor General’s report entitled An Audit of B.C. Public Service Ethics Management.

This report speaks to ethics management in the B.C. Public Service, which comprises organizations that have employees appointed under the Public Service Act. Those are our core ministries, our central agencies and some of our agencies, boards and commissions.

Government has agreed to all eight recommendations set out in the Auditor General’s report regarding how ethics management in the B.C. Public Service might be improved. Responses to all recommendations have been partially implemented. However, we will provide the committee with a status update on each of the eight recommendations, and we welcome your questions at the conclusion of the presentation.

Government’s response to the Auditor General’s recommendations cannot be implemented in isolation of other issues faced by the public service — most notably, those which have surfaced in the Ombudsperson’s Misfire report of April 2017. To provide you with a bit of context, the Misfire report and its 41 recommendations were the results of the 2012 investigation into the termination of employees from the Ministry of Health.

In my role as the deputy minister of the Public Service Agency, I am responsible for leading government’s response to that report. The reason the Misfire report must be considered here is that there are significant policy implications associated with that report.

Recommendation 17 specifies the implementation of a policy framework for assessing situations to determine whether a real or perceived conflict of interest exists.

Recommendation 18 specifies that every ministry and government agency whose employees are subject to our standards of conduct assign a senior and fully trained staff member the task of assessing and providing advice to employees and their supervisors about disclosed prospective conflicts of interest.

Recommendation 19 specifies that the Public Service Agency revise its existing accountability framework for human resource management to ensure a clear allocation of responsibility among senior executives and line ministries.

Recommendation 32 specifies that the government introduce public interest disclosure legislation for consideration by the Legislative Assembly.

Because of this, our responses to the Ombudsperson’s recommendations relate to ethics, and we need to ensure that we are proceeding in a coordinated way. Our response to the Auditor General’s report and recommendations is to do just that: to make sure that it’s aligned and coordinated.

Specifically on those recommendations, the Attorney General is leading the response related to public interest disclosure legislation, while the other HR, ethics-related policy changes are being led by the Public Service Agency.

Now, I’d like to provide a bit of context for the Auditor General’s report and recommendations. The framework that informs ethical conduct in the B.C. Public Service includes legislation, policy and our collective agreements. They’re administered by the B.C. Public Service, the office of the comptroller general, the office of the chief information officer, the office of the chief information and records management officer, Treasury Board and the Public Service Agency.

In addition to this framework, the public service places significant emphasis on promoting an ethical organizational work culture that imbues ethical conduct, because professional and ethical integrity of the public service is fundamental to fostering public trust and confidence in government. Ethics and integrity feature prominently in our corporate plan, Where Ideas Work.

In 2016, the Auditor General completed her audit on ethics management in the B.C. Public Service and found that government has many ethics management elements in place. There were also some notable findings from the report. First, government has set expectations for ethical behaviour, which are primarily set out in the public service oath of employment and the standards of conduct. Second, most employees perceive the likelihood of unethical conduct in the public service as low.

[1:20 p.m.]

The Auditor General’s survey results were consistent with what we have found in our own inquiries on the topic of ethics, using the work environment survey. In 2015, the B.C. public service added three new questions to the two ethics-related questions we had asked our employees in the past. In the last survey, employees agreed that they are clear on ethical expectations of them in their work and that they know where to go for help when faced with resolving an ethical question or concern.

There was a score of 78 for, “The person I report to maintains high standards of honesty and integrity,” up two points from the previous survey. And there was a score of 79 for a question we first asked in 2015: “The person I report to supports me and my co-workers in conducting our work in an ethical manner.”

However, the Auditor General concluded that the government can do more to improve the coordination of ethics management across the public service, and we agree. The report provided eight recommendations. Government has agreed to these and committed to exploring options to thoughtfully address them. Again, these options will take into account the related recommendations from the Ombudsperson’s Misfire report.

I’d like to now provide the committee with a status update on government’s response to those eight recommendations.

In response to recommendation 1 in the Auditor General’s report, we have identified options for tracking the regular review and sign-off of the Oath of Employment and Standards of Conduct, and a working group has been established to decide on the best option to do that and its implementation approach.

In consideration of the policy changes that are going to be coming as a result of the Misfire report and recommendations, we’ll be making those changes to our standards of conduct, and these changes will affect our conflict-of-interest policies and procedures. Therefore, our implementation for this review and sign-off will take place once those changes are in place. Our target date for fully implementing this response will be March 31, 2018.

In recommendation 2, the purpose is to improve how government communicates and fosters an ethical work culture. We have since consolidated information on corporate ethics training and have made this information available on a single page on our corporate website, MyHR. This website provides links to corporate learning resources related to ethics. Furthermore, ethics has been a central component of a new program that we offer: Managing in the B.C. Public Service. This is a course geared towards all managers in the B.C. public service. It was launched in the spring of 2017 and features our ethics management framework and facilitated discussions with participants who attend that course.

As of November 2017, 550 employees have participated in this course. Our training course promoting ethics in the B.C. public service is currently being delivered to employees. So far, ten sessions have been delivered to an additional 201 employees, and a total of 343 are expected to receive the training by mid-February of this year.

The corporate ethics training plan acknowledges that additional training and/or communication resources will need to be developed to support the policy and legislation changes that are being developed to address the Ombudsperson’s report recommendations. Therefore, we recognize that this training will receive updates in the future to ensure that there’s alignment with that new direction. The target date for fully implementing this response to the recommendation in the Auditor General’s report is March 31, 2018.

In response to recommendation 3, a review of the standards of conduct for public service employees to strengthen the role of ministry ethics advisors has been initiated and is underway in the context of the Ombudsperson’s report recommendations.

I will be consulting with the deputy minister’s council about the nature of that ethics advisor role, and its level, and into looking at the HR accountability framework, which outlines for us the rules and responsibilities throughout the organization as it relates to HR management issues. The target date for the completion of this recommendation is March 31, 2018.

[1:25 p.m.]

In terms of recommendation 4, we are currently exploring a designated lead role for coordinated ethics management. A decision is still pending as to whether the responsibility of the evaluation of ethics risks and where it will lie…. The target date for fully implementing this response is March 31, 2018.

Currently the B.C. Public Service has processes and offers protections for employees reporting unethical conduct. For example, our standards of conduct actually obligate employees to report misconduct and protect them from reprisal. Going forward, government is reviewing all content in the standards of conduct in response to this recommendation and will identify any gaps such as those relating to engaging and communicating to employees about these obligations.

The changes will be supported by comprehensive implementation and change-management plans that will include employee communication, engagement and training to address the perceived barriers to reporting and to ensure that all public servants understand the process for reporting unethical conduct and the protections that are afforded to them. The target date for fully implementing this response is March 31, 2018.

In terms of recommendation 6, government recognizes and appreciates the Auditor General’s recommendation. Therefore, government is committed to an effective response, remaining mindful of the Auditor General’s comment that outcomes of an investigation regarding misconduct may not always be reported due to concerns around confidentiality.

In response to recommendation 6, the development of new information for supervisors and employees is being aligned with the policies and legislative changes from the Ombudsperson’s recommendations. Government’s MyHR website also offers staff information on ethics and provides contact information to access our corporate ethics advisory service. The target date for fully implementing this response is March 31, 2018.

Our responses to recommendations 7 and 8 have been partially implemented. We have other roles, including the chief information officer and comptroller general who have broader corporate roles, which include the prevention, detection, correction of misconduct, and we’ll look to see what we can learn from these other corporate functions.

We are currently researching the concept of a chief ethics officer as the lead role for a coordinated ethics management approach. In December 2017, the Public Service Agency met with directors from other central agencies. Representatives from these agencies will form a working group to discuss the recommendations related to recommendation 7, including ethics measurement and monitoring, in much further detail. There is much to be done on this particular front, but we’re confident that we can complete that work to this recommendation by March 31, 2018.

In summary, government has committed to all recommendations made by the Auditor General. Actions that will address these recommendations have been partially implemented, with completion planned for all by March 31, 2018. Going forward, we will continue to take a coordinated approach to implement the recommendations from both the Auditor General’s report and the Ombudsperson’s report.

This concludes our presentation to the committee. I expect that you will likely have questions, and myself and Reuben and Angela are here to answer those.

In closing this part of our presentation, I want to acknowledge the work performed by the Auditor General in preparing the audit of ethics management in the B.C. Public Service. I want to thank the members of the committee for their attention today and for the opportunity to provide an update on the status of government’s response to the Auditor General’s recommendations. We are pleased to answer any questions that the committee may have.

S. Bond (Chair): Thank you, Lori, for that presentation. We appreciate it. And I’m sure there will be questions.

It’s a very interesting audit. Certainly, our most important asset is actually people when it comes to government and how we manage.

I did want to point out — and I’m sure other MLAs on our committee noted it as well…. I should just say to the Auditor General that one of the things I appreciated in her comments in the report was the fact that she actually piloted the survey in her own office and that there were outcomes. As a result of that, there was a recognition that we need to do some work at home here and look at ethics training. I just think that is leading by example.

[1:30 p.m.]

I think that was a really interesting part of the audit, and I’m sure that helps others see that, you know, there is room for improvement everywhere, including in the Auditor General’s office. I just wanted to note that. I’m sure — others are nodding — that they thought that was a very good example. So thank you for doing that and for leading by example.

Let’s start the speakers list. Who would like to go first?

G. Begg: Perhaps I’ll follow up on what the Chair has just said with a general comment that it is the practice of ethical behaviour, not the concept, that’s important.

I think it’s acknowledged in the report that it is something that is, to a large degree, demonstrated by the leadership. We all think of ourselves as being experts on ethical behaviour, but that can only be demonstrated through the work that is done.

I commend you on any training that you plan on undertaking in the future. I think that’s important from an awareness point of view, but I think the best teaching tool for ethical behaviour and performance is the demonstration of it by leadership and by all involved people.

The one thing that specifically caught my attention was the concern of employees about three things. The Auditor General illuminated this. That was the application of merit as it relates to ethical behaviour, the misuse of work time and misuse of sick time. I wonder if that prompted a deeper dive into any of those issues, so that we can have some metrics surrounding that, even if it was only to alert you to issues that you may not have thought existed before.

L. Halls: First of all, thank you for the question. The audit did ask employees about areas where they perceived the highest risk for ethical misconduct. As you identified, the principle of merit, the misuse of work time and the misuse of sick time were the three most prevalent areas that were identified.

I want to first of all start by saying that when you think about the work of public servants, the decisions that they make every day and the interactions that they have every day, I took a lot of comfort, to be honest, that those were the most serious issues that came forward, in terms of the highest degree of risk or perceived risk by public servants.

That’s not to make light of them, but when you think about the role of public servants and the work that we do each and every day, there could have been so much more that surfaced for us.

In terms of those three specific areas, I think the Auditor General’s report itself acknowledged that these were perceived areas of risk. We need to do a far better job with our employees around communicating and educating and engaging them around these areas.

In terms of the principle of merit, it is a foundation of a non-partisan public service. It’s why we are able to continue to maintain and grow the public trust and confidence in the public service. Our own information, though, and that of an independent officer, the Merit Commissioner, consistently demonstrates that the principle of merit is applied in our hiring practices, well over 90 percent of our hires. But the fact that our own staff perceive this as an issue is something that we’ve got to do a better job at addressing.

The issue of the sick leave and the misuse of work time. In the B.C. Public Service, our average sick leave is about 8.7 days. That compares to the Canadian provincial public service average of about 9.8 days and the federal public sector of 11.9. We have mechanisms in place to prevent and address those issues, but again, it’s still a perception there, within a degree of those surveyed by the Auditor General.

[1:35 p.m.]

The last area that I wanted to comment on was the fact that people have that perception of those areas. It means we have to really reinforce the education and understanding of that — that it happens at all levels of the organization but particularly with the supervisors of those folks, who have that relationship that is so critical to the understanding of the policies and practices and how they are enforced.

One of the things that we’ve recently done in the public service is we’ve publicly tendered for our benefits program. That tendering process has resulted in Great-West Life being our provider. When people take leaves, the provider is responsible for the management and oversight of that. One of the things that came as a result of that procurement process…. Great-West Life brought much more rigorous controls around the potential abuse of sick leave and time.

We’re heading in the right direction. There is definitely more improvement, though. I think it’s fair to say that the Auditor General’s report has identified that.

G. Begg: I would just add, and I know that you’re aware of this, that the perception of the B.C. public service is the reality of the B.C. public service, right? It is an issue of perception. That is important to be addressed because it becomes the reality.

L. Halls: It becomes the reality, absolutely.

A. Olsen: Thank you again to the Auditor and to the agency for your response.

I don’t have a lot here, although I have one question. I’d just like to note the quality of the response, and the acceptance, to this. I feel, from hearing and what I’m seeing here today, a high level of acceptance and willingness to get on with it. Of course, when you’re dealing with people, it’s really important, and I can sense that.

I just have a question about recommendation No. 5 and the fear that was noted of a reprisal from management for reporting unethical behaviour. I’m just wondering if…. It may or may not be fair to ask this, but I will. It’s around whistle-blower legislation and what the agency’s thought on that is and perhaps what the Auditor General’s thought is on that. Just, I guess, as an editorial comment really, we have the responsibility here on the legislative side, and I’m wondering what the agency’s thought about that is.

L. Halls: Thank you, first of all, for the acknowledgment up front. I do want to say that it was disconcerting to hear about the fear of reprisal. Within our standards of conduct, there is an obligation as employees to actually report misconduct. I have to say that when I have interactions with employees, it’s one of the standards that is probably the least known.

When people do have the courage and they bring concerns forward that may often lead to an investigation, they also, in those conversations, take comfort in the fact that we can reinforce with them that they are doing the right thing by bringing those issues forward. But the fact that there is the fear…. It absolutely needs to be addressed.

Like the response to the Auditor General, government accepted all 41 recommendations of the Ombudsperson’s report, including the implementation of public interest disclosure — also, in a layman’s term, known as whistle-blower protection — and we welcome that. In fact, Angela, who I would consider a guru in public interest disclosure, has been doing a lot of policy work on that and is supporting the Attorney General’s staff in the development of the policies that will be behind that legislation.

I want to say, though, that despite the fact that people are protected from reprisals in our standards of conduct, in our HR accountability framework there is an obligation of deputy ministers to investigate reprisals, and with the implementation of legislation being considered by the Legislative Assembly about whistle-blower protection, those and those alone are not enough.

[1:40 p.m.]

It really is incumbent on the leadership within the organization to set the tone at the top, lead by example and ensure, with the necessary due diligence, that those reprisals don’t happen.

We’re doing a few extra steps in that regard. We’ve spent a lot of time at our corporate executive, which is made up of all of our deputy ministers, associate deputy ministers and assistant deputy ministers, to understand and help them understand how to foster an ethical culture and what it takes, as a leader, to do that.

Secondly, we’ll be taking the step that as the Public Service Agency investigates issues of misconduct when concerns are brought forward, those investigations are typically characterized as a breach or potential breach of the standards of conduct. What we don’t have is enough data that says whether or not that breach is actually a result of a reprisal. We want to be able to differentiate that, to understand that.

I spoke with my investigative team, which is a large group of professional investigators, on an anecdotal conversation. They don’t believe that the reprisal issue…. While the fear may be real — certainly, the survey indicates that, with those who responded — in terms of the nature of the investigations themselves and those that we are conducting, the issue of a reprisal is not one that comes up for us to have to follow up and investigate. I am not diminishing the fear. I’m just saying that the evidence does not appear to be that that reprisal is in place.

The other thing that I just also want to expand on, on that. In terms of human resource practices, when these concerns are brought forward and there’s a determination that an investigation may be warranted, for those individuals that we are investigating, they are advised up front that there cannot be any reprisal, and if there is any evidence, that they may be subject to a further or subsequent investigation and a subsequent disciplinary action. That is a standard practice that we do when any of these issues are brought forward and an investigation is undertaken.

C. Bellringer: In terms of our position on actual whistle-blower legislation, we don’t have a position on whether it’s something that should be legislated or not. Certainly, legislation is always a clearer set of expectations than policy, but we think there are many different mechanisms or different forms it could take. We aren’t recommending one form over another.

I actually moved here from an environment where there was legislation in place. Still, they too had the same set of concerns and issues in the system. You still need good education. You still need to make sure that people are aware of what processes they should follow. They still need to have that feeling of safety in the system.

One of the things, in fact, going back to the fact that we tested this particular survey and took seriously the responses we got from it in our own office…. It is something that we’ve been also communicating to everybody in our office. We want it to be a safe work environment. We want everybody to know that I’ve got their back, and everybody along the line, the same, but that there is always a way for them to go forward if they have a complaint.

The one gap in that for the Legislative Assembly is that there is a gap in terms of myself. It stops at the top of the public service, and there’s nowhere for somebody in the office to go if their complaint is about me. There are informal ways to do that, but it really is something that’s not comfortable for staff.

I’ve actually been discussing this with the Ombudsperson. He and I both share that same concern: we want the people in our office to know where to go if it’s about the top of the organization, in our case. We’re looking at ways — in the absence of something formal for the Leg. Assembly, for the officers of the assembly — that we can share that responsibility with each other. Our staff can go to the Ombudsperson, and their staff can come to me, if there’s something they’re concerned about. It’s all about setting up that safe environment.

[1:45 p.m.]

A. Olsen: Just a very, very brief follow-up. I would say that in a lot of cases, the reprisal that people are afraid of, in all likelihood, is just exposure — that by bringing it forward, they will be exposed. The culture is to reassure people that, in fact, if they’re coming forward to bring an ethical breach or potential ethical breach to someone’s attention, they can be certain they won’t be exposed through that process. People have careers, and they want to continue, so there’s this balancing act that they strike.

L. Halls: It’s one of the things where it isn’t black and white, right? When you’re facing an ethical dilemma, it’s the churn in your stomach that happens, because it can pull you in different directions. I love the definition that the Auditor General uses for the term “ethics” — knowing what’s right, knowing what’s wrong and doing what’s right regardless of the fact that nobody is watching.

As a public servant, I’ve actually faced ethical dilemmas myself where I have lost sleep over the decision that I needed to make. I have been concerned about: would I be thought of as somebody who ratted people out, wasn’t a team player? While that was part of the dilemma that I needed to face, the clear, the right answer was very obvious — and did so.

In that particular circumstance, it was a direct award of a large contract that I refused to do. I will tell you that it also made its ways into the media. I was identified as a senior Ministry of Health official who, basically, through a criminal investigation…. The words that I had used in my recount of the experience to the RCMP were now front and centre in a Vaughn Palmer article. And that exposure…. It was momentary, but it was real for me.

We use examples, as leaders in our organization, some of that power of storytelling, to help people understand that it is normal to feel that when you’re facing an ethical dilemma and that it is important to search out the proper supports that are available, who can help you talk through these issues. One of the biggest lessons I learned in that particular circumstance…. I always knew what the right thing to do was. But one of the things I didn’t do was I didn’t let my supervisor, who was a chief executive officer at the time…. I didn’t let him know, so I was struggling with this on my own.

We reinforce in our training and in the work that we’re doing with our executive leadership to have an open door and encourage those folks to come forward to you. I thought I needed to handle this on my own, and I needed to demonstrate that I could handle it on my own. He rightfully pointed out after the fact — and it was public — that he would have been there to support me through that.

S. Bond (Chair): Thank you, Adam, for those questions.

B. Ma: Thank you so much for this wonderful report, both to the Auditor General and to you as well for the openness and frankness with which you’ve approached this in your response — your responses in your formal presentation but also your responses to the question.

I’ve been impressed and particularly appreciate that the report brought forward the…. You had talked about the Ombudsperson’s report Misfire, as well. This Auditor General’s report wasn’t about that. You didn’t necessarily need to bring it forward, but you did — and I really do appreciate that — and tied it in together.

I have a few more specific questions on the survey that was distributed to the members of the public service. Going back to MLA Begg’s question about the percentage of respondents who said “extremely likely” or “somewhat likely” in regards to the following behaviour: employees or managers misusing work time, misusing sick time, and so forth.

[1:50 p.m.]

Under that section, which is on page 48 of the report, under “Conflict of Interest,” I’m wondering if there were any other categories in the survey, or is this the complete list of questions that was issued in the survey? Were there questions that maybe were asked but didn’t reach a certain threshold of respondents that were left off the report?

J. McDonald: In this section of the survey, we grouped it into a number of different categories, and there were a lot of questions in this section.

The basic categories were on conflicts of interest…. We asked questions about employees or managers putting their own interests above the interests of the public service. All the response categories we gave people to use ranged from “prefer not to answer” right up to “extremely likely.” We used “extremely likely,” “somewhat likely,” “unlikely,” “extremely unlikely” and “don’t know” or “prefer not to answer.” Those are the response categories for all of them.

Under “Conflict of interest,” there was putting their own interests above the interests of public service, misusing work time, misusing sick time and benefiting because of the power to influence. Other categories included lack of confidentiality, poor objectivity or impartiality and lack of honesty. There were numerous questions. It was a very large number of questions that were asked in that section.

B. Ma: So what’s shown on page 48, then, is sort of like a rollup of a number of different, more specific questions under those certain categories.

I appreciate that the most likely scenarios — employees or managers misusing work time or sick time…. Lori, you had said earlier, they’re relatively…. In the grand scheme of things, there could be worse things to see or worse trends. But I would like to point out that the “employees or managers putting their own interests above the interests of…the public service” and “employees or managers benefiting personally from transactions over which they have the power to influence decisions” were not insignificantly small percentages of responses either.

In the first case, out of the 25,000 respondents, that amounts to almost 5,000 respondents who said that they felt it was somewhat likely or extremely likely that employees or managers might put their own interests above the interests of the provincial public service and 1,250-ish respondents who thought that employees or managers were at risk of performing behaviours that allowed them to benefit personally from transactions over which they have the power to influence decisions.

Those are not insignificant. I was wondering whether or not you could provide a few examples. Since this is a broader category and there were more specific questions underneath, were there certain trends? Were there specific questions that were more alarming that you might be able to provide us for context where respondents were responding “yes, somewhat likely” or “extremely likely” to?

J. McDonald: No, I think the answer to that is that, overall, the perception of the likelihood of unethical behaviour happening in the different areas that we looked at in the survey was generally low. In looking at the questions, it’s one of those ones where we had to be really careful around looking at the “somewhat likely” versus “very likely.” Like you say, it can look like a glass half-full or a glass half-empty, depending on the perspectives with which you’re looking at the answers to the questions and the responses provided.

But overall, the ones we put in here…. It was pretty general like that across the board.

C. Bellringer: I also appreciate and agree with the comment that while low, it still means that there’s at least a perception these things are occurring. I do think there should be some form of follow-up on some of these.

[1:55 p.m.]

I mean, even looking at the 3 percent perception that employees or managers are “giving or accepting bribes or kickbacks” and the 4 percent “involved in contract or procurement fraud” means there are somewhere like 600 people…. It was about half of the 25,000 that actually responded to the survey, so somewhere in the neighbourhood of 600 people out there have done those things in the system, as perceived by those who answered the survey.

We clearly outlined at the front end of the survey to individuals that this form was not a way for them to report things — that if they had a specific item to report, they should go through the appropriate reporting mechanism to bring that forward. So we didn’t have anything in the feedback from individuals that was so specific that it was something real that needed to be therefore reported. But it is concerning, in a way, that those things, somehow or other, do still need to be followed up.

L. Halls: If I could just also follow up. I just want to, first of all, reinforce…. The identification of a perception of any misconduct was concerning for us. It is part of the rationale why it is so imperative that the public service have a strong management framework in place to prevent and detect and monitor and control for those types, because of the very nature of the work that we do and how we do it.

When I look at some of the categorization of things around, for instance, the lack of honesty — the misuse of credit cards — I can’t sit here today and tell you that that doesn’t happen. It does. I can tell you, though, that we are very confident in the means and the measures by which to detect that. We work very closely with our partner central agencies — for instance, the comptroller general and the Ministry of Finance — to do just that. It’s why it’s necessary to continue to be vigilant on all fronts.

I really didn’t want to leave the committee with the impression that we don’t take seriously the other perceptions that were identified by the staff, in no way, shape or form. It’s also, though, healthy, because we don’t want our public servants to have blinders on this, right? We all need to be vigilant in those interactions, in the business processes and the decisions that we make. So that is part of, I believe, a very healthy organizational operation.

B. Ma: Thank you so much. My next question is about — again, page 48, further down, in “Detecting and correcting unethical conduct in the workplace” — the percentage of survey respondents who responded in terms of the question: “How concerned are you that there is pressure to compromise ethical standards of conduct in the workplace?” In the summary of the Auditor General’s report, it highlighted that 59 percent were not at all concerned, and that’s fantastic.

In terms of the slightly concerned, somewhat concerned, moderately concerned and extremely concerned, however, that adds up to 36 percent. Over one-third of respondents were concerned that there was some level of pressure to compromise ethical standards of conduct. I’m wondering whether you might be able to comment on that a little more and maybe provide a bit more context as to what that means. I’m not certain if the survey went into that or received feedback of that nature, but what kind of pressure are these people potentially feeling?

L. Halls: While I certainly wouldn’t want to dismiss that concern, the fact that 41 percent feel that there is pressure is a reflection of the very nature of the work that many of us do in the public service, right? That involves challenges, in some cases to our own personal values and standards. When we swear that oath and we need to abide by the standards of conduct, it can be an ethical dilemma that we face. So the complexity of the nature of the work often requires public servants to face those every day.

[2:00 p.m.]

What matters, though, is that when they’re faced with that pressure, they make the right decision. So they know where to go if they’re unsure of what to do and how to make that decision — and that as an employer we have the very mechanisms in place to ensure that public servants can be helped in making that.

That probably isn’t surprising if you think about the interface between the political environment and the public service environment. Those ethical dilemmas we face all the time. It’s the nature of that. It’s why it’s so incumbent on the public service to ensure that we have a non-partisan, professional public service and that we have the management frameworks in place to ensure that the necessary supports, the necessary training and the necessary leadership are there so that people can make the right decisions — and that when they don’t, we address them.

C. Bellringer: From the perspective of reporting out on this, I totally agree with you. There’s the other side to the percentage that we quoted in the report. What we did, though, was also look through a specific attached to it. So in terms of that personal observation, that was more alarming, if you will, than a pressure — something that’s a little bit harder to measure.

They had personally observed…. We thought that 28 percent personally observing something…. Then from that, only 38 percent did not report that. So that was a very strong indicator around the need for them to have a better mechanism to go forward with something that they had observed.

We really looked at a different aspect of it but, in effect, acknowledging the fact that there were a fairly high percentage of people still perceiving something to go wrong. Which aspect of it do we think needs to be given most attention in terms of follow-up? It would be that observation and support to people to come forward.

L. Halls: I think that’s reflective in the recommendation in terms of really getting at the heart of addressing the fear of reprisal and that people have the right avenues to come forward to do that.

B. Ma: Thank you so much. That clarification is really helpful. I’m glad you brought up the other part of the report and what it signals to the public service where improvements are required.

Given that it is a very complex question that this report attempts to try to break down and analyze, I’m wondering whether or not there’s been any work or, I guess, if you’ve looked into a comparison with other jurisdictions. Sometimes that might be a helpful way to understand where we are — compared to other provinces, compared to the federal government. Is there a way to do that comparison to give us an idea of where we stand?

C. Bellringer: In terms of the survey itself, there hasn’t been another survey exactly like this done anywhere else. There wasn’t that attempt to cross the country. Actually, I had done a similar audit in Manitoba, when I was there, which was part of the reason why we decided to it here, because of the power of that survey. That also gave us a really good indication of not just what we thought was a good practice but what the public service itself was saying.

I will mention one element of that. We got a lower response to the survey than we were expecting. We do know that one reason for that is because we sent it out with a…. Although we had a pre-alert to individuals to please take the survey, it then came in the form of a link in an email. We got a really large number of people contacting our office at that point, saying: “Is this for real, and can I click on the link?” So we actually think we lost a number of people who were just exercising good practice in IT management and not clicking on the link. Then there was outreach by all of the various IT departments in the ministries to let them know it was something for real.

Unfortunately, it just isn’t something that’s directly comparable across the country that we’re aware of.

L. Halls: I certainly shared with my colleagues across the federal-provincial-territorial the results of the survey and had an opportunity to talk to them shortly after its release in the Auditor General’s report. As Carol said, while there wasn’t a comparable survey elsewhere, the general consensus among my colleagues was that they would likely face some similar results. Their guts would tell them that it would be quite similar. I took some comfort from that. We all have room to improve.

[2:05 p.m.]

M. Dean (Deputy Chair): Thanks very much. I totally understand that this is complex and sensitive and very necessary as well. It’s a critical piece of work that I think, as we’re hearing from you, shows leadership. You did it first in your office, which is wonderful, and then we’re doing this provincially.

Rather than getting into a lot of the details, what I’m interested in is…. There was the survey, and it gets into the nuts and bolts and then the recommendations. I’m interested in, rather than looking at it as a deficit and finding unethical behaviour and reducing risks…. That’s the foundation. That’s where we need to start.

Were you able to give any consideration…? Now, as you move through the recommendations, are you able to give more consideration to what a really healthy, ethical public service looks like, rather than just one that has reduced the risks? How could we define ethical competency? How can we reward that in our meritocratic system? How can we find successes so that people don’t only feel safe enough to practise ethical behaviour but actually aspire to it and that, rather than it being a sensitive issue that people are fearful of talking about, it becomes normalized within the language of team meetings, of people’s discussions with their supervisors?

You could have a mechanism. You talk about formally evaluating ethics risks as part of risk reviews. Ethical behaviour as part of your annual performance review as an employee is totally legitimate and could be just another dimension.

There’s an easy way of, “Well, let’s sign off this ethics commitment every year,” but actually, let’s have a discussion around that. Have you ever had that knot in your stomach? Let’s explore that. Who did you feel would have had your back? Have you observed anything? Talk through some hypotheticals but also create those opportunities, that it’s therefore transparent and equal. It’s part of daily operations, management and supervision and building those relationships while not taking away at all from the fact that we need all of the risk management procedures and nuts and bolts in place as well.

L. Halls: Would you like to come work for the Public Service Agency?

First of all, I really do appreciate the question. I absolutely concur with the necessity of this. I want to start by first saying that it is absolutely imperative that the public have trust and confidence in the public service. If that’s eroded, our ability to collect taxes, our ability to deliver services, our ability to improve lives is fundamentally eroded.

My team knows that when it comes to trust, I subscribe to the definition that the confidence in an individual or organization’s character and the confidence in an individual or organization’s competency both have to be in play in order for that trust to be built and to grow.

In terms of that dialogue and conversation, we’ve had several sessions. In fact, they’ve been some of the most engaging sessions at the Public Service Agency. We’ve taken them broader within the public service around that. That’s where, I think, the light goes on. That’s where the supports are identified. The fact that other people have walked down those paths and experienced those ethical dilemmas — there’s a lot that folks can learn from that.

The specific example you used around how we might use this in terms of our performance reviews…. We’ve had biennial performance reviews of our executive leadership — all our associate deputy ministers and deputy ministers — since 2007, every two years. It is important, as part of that performance review, that when we assess an individual’s performance, we don’t just assess what they’ve accomplished but, rather, how they’ve accomplished it.

[2:10 p.m.]

That evolution of our performance management within our executive leadership ranks has resulted in the conversations that our deputies have in reviewing the performance of those executives to actually focus more on the how than the what, so what you get is that conversation about an individual’s integrity, their leadership skills. Do they foster a culture of openness and transparency? Are they approachable? I take a lot of reassurance from that.

I will say, and I’m about to have a conversation with my deputy colleagues at the end of this month around succession, that I think we’ve done a really good job to focus on that and put the supports in that in place at the executive leadership. We need to better penetrate that through the organization so that those same conversations and dialogues, whether they be as a means of ad hoc feedback or through a formal performance cycle, are identified and discussed.

I will also say…. I know the report recognized that while not everybody may have received training as they define ethics training, for those that did attend, we got incredibly thoughtful and very positive results in the quality of that. My engagement with staff at all levels of the organization is when we do more than just what I call the book-smart version of training, where you put some paper in front of people, they read it, they understand it, and they can pass a test on it. But you bring them out of that, and you start to have the conversations and the dialogue. It has exponential opportunities to accelerate the development. I think it leads to relieving some of the pressure — that individual public servants understand that they’re not in this alone and that others have walked that.

Lastly, I just want to say that I do agree…. When the Auditor General’s staff came to the Deputy Ministers Council, and they always foreshadow what they’re going to audit, we were nervous about this, because it can be mushy. It can be. I remember sitting around a table with some deputy colleagues, and it was just a moment when we had this sort of apprehension, and then we thought: “No, we really need to learn more about this. This can help our organization grow. It can help our leadership grow.” I was very proud of what I saw in terms of the response and the reaction by my colleagues. So I’m really pleased to hear that.

M. Dean (Deputy Chair): Thank you. The leadership is really important. It needs to be there, as colleagues have said. You’ve got to have people walking this. You’ve got to have people living and breathing this and creating space for that to percolate as well.

You now have a fabulous tool because you now have this report to actually talk to staff about and say: “This is what’s going on, and there are these worries. Let’s have a look at the different concerns that exist here. How do we all want to improve this? At what point are we going to measure again?” Then actually look at those indicators and maybe: “At what point can we create a framework where we have some indicators that can just be monitored on a more day-to-day basis so the culture, everything, gets lifted?” Everything naturally gets lifted up.

I know it’s a work in progress, and I appreciate your commitment to that.

R. Sultan: First of all, let me say that having worked in various parts of the world, been exposed to governments — been in charge of government relations, in fact, for a very large organization at one point — I think we are blessed with a civil service here in British Columbia which is virtually unmatched around the world. I wrote down some adjectives that I would apply to our civil service: advanced, smart, humane, efficient and effective. They’re honest, reliable and competent. I think we’re very, very fortunate to have inherited this apparatus, and it has been maintained that way.

[2:15 p.m.]

That doesn’t mean to say that there aren’t some issues. But as one of the politicians present, I would suggest that more often than not, the sketchier scandals that hit the headlines about trust and ethics involve us, the political class, and not the civil servants. Anyway, that’s the subject of a different Auditor General’s report, I’m sure.

S. Bond (Chair): It usually takes place about once every four years, Ralph — that other process.

R. Sultan: That’s true.

But I am intrigued by this table — again, appendix B, on page 48 of the report. I would say that having a cross-section of our employees suggest that the likelihood of bribes, kickbacks or procurement fraud is probably in the 3 or 4 percent range…. I mean, it should be zero, of course. But I think 3 or 4 percent is being honest, frankly. I’d be surprised if, in fact, the incidence is significantly higher in reality. We appreciate that this is just an impression.

Theft, 7 percent. Yeah, I must admit I’ve taken some photocopy paper home myself occasionally. I guess that doesn’t involve the government; it involves the Legislature. But my question is…. If somebody has stolen something or if somebody has accepted a kickback, it seems to me this is a punishable offence, perhaps even a criminal offence to some degree. How many cases have we had in the last year or two of such instances?

L. Halls: We undertake approximately 100 investigations a year, on average. They range in terms of the severity of those investigations and the nature of the misconduct behind them. They don’t always result in findings. Sometimes it may be inconclusive. Sometimes there may be nothing to the actual initial investigation.

What we don’t do enough of is properly delineate the nature of those investigations in terms of the actual misconduct. That’s one of the lessons coming out of both the Auditor General’s report and also the Ombudsperson’s report that we’ve reflected on as an agency: to do a better job at getting more crystal-clear about that.

Anecdotally, it is mostly workplace behaviour that is about the bulk of the investigations. That can range from people who have been gossiping, folks that may have used profanity in the workplace, to discrimination and more severe bullying and harassment. So that is, by far, the bulk of the investigations that we see.

R. Sultan: Sort of the #MeToo offences.

L. Halls: I would say we have those, yes.

R. Sultan: The other broad category that pops out of page 48 is work time offences. It is, again, impressionistic, shall I say. Misusing work time, 36 percent likely or somewhat likely. Abuse of sick time, 33 percent of all respondents. That’s a pretty big number. And 39 percent say principle of merit is not always being followed.

At least on hours of work and whether you really are at home with the flu, I would hope and expect that workplace supervisors keep track of this to some degree and, if appropriate, sanction employees who abuse this. Can you point to any statistics indicating that that’s in fact what our managers and supervisors do?

L. Halls: Yes. First of all, I do want to say that the numbers — in terms of those being the three areas of greatest risk — are perceived. But having said that, attendance management is an expectation of all supervisors and managers.

[2:20 p.m.]

One of the things that we’ve done over the last number of years to be a more competitive employer in a very competitive labour market and to challenge our management — I call it management for grownups — is to provide a more flexible work environment, where people can work from home or in the office. And when somebody is not right there, there are often people who will attribute that as: “Well, they’re not doing the work.”

So it is incumbent on our supervisors and managers to ensure that we are getting the results, that the work is being done. That is an expectation. It’s part of our training and part of our performance reviews throughout our supervisory and management levels.

I don’t have specific stats in terms of the number of infractions that we’ve seen around attendance management. I do know that it is one of those issues that is probably…. Well, it comes forward quite easily by supervisors. It’s one of the things that they’re very cognizant of. So we work to support the ministries in those investigations of them.

It’s the type and nature of behaviour that once identified, usually that’s enough to correct it. If it isn’t, then there’ll be subsequent disciplinary action.

S. Bond (Chair): Thank you, Ralph. Thank you for the discussion.

I have a couple of comments and questions. I do want to relate to the comment that you just made about people assuming that if you’re not there, you’re not working. We know a little bit abut that, in terms of if we’re not in the Legislature, supposedly we’re not working. I think we’ve all worked, over the last two days, and in my constit, I work pretty hard every day. So we can relate to that, not that many people have sympathy for our line of work.

You’re going to be really happy that you included page 48, because I wanted to talk about it as well. Actually, Ralph, my colleague, mentioned this and then didn’t pursue it. I think one of the other things that helps…. This is all about building a culture, and we had some great observations by my colleagues about how we do that. It’s not really about mandating it. We have to grow and build and nurture and incent — all of those things.

One of the things that I was most concerned about was the fact that merit-based hiring or promoting of staff is one of the biggest numbers on this page. In fact, when you read some of the comments that are included, people — not everybody, but obviously, a good number of people — don’t believe, even though, and I would agree, there’s a Merit Commissioner. There are all of those processes. It really goes back to Garry’s earlier comment about: “If it’s perceived, it’s the reality.”

For many people, they don’t see their pathway to promotion because they feel it isn’t merit-based. What more can you and the organization more broadly do to assure people that if they work hard and if they’re capable, they do have a pathway to a promotion? Because, for me, 39 percent…. It was one of the largest numbers on this page. It’s: “I don’t see people who are capable or competent moving up. It’s some other reason.”

Really, could you just give us a sense of….? Whether it’s a perception or not, for those people, it’s a reality in their workplace.

L. Halls: First of all, I want to start by saying that as the public service and an employer of 28,000-plus employees, the very nature of the work that we do, the breadth and scope of it, does provide an incredible opportunity for a career. The number of public servants that I’ve talked about over the last years…. The work that they’ve had an opportunity to participate in and sometimes lead has been both meaningful and has helped in their own development.

Without a doubt…. This is maybe because this is the Public Service Agency’s responsibility. I have responsibility for human resource management practices, and that includes the delivery of hiring services in the organization. It was very disconcerting to see such a large number of people who perceive that we don’t live by, and our hiring practices don’t reinforce, that principle of merit.

[2:25 p.m.]

And despite the fact that we do have an independent officer who says differently — that yes, there are, absolutely, areas for improvement — we’ve got more room in that. I want to talk about a few of the things that are going on beyond just our response to the recommendations.

Specifically on that issue, staffing practices are something that we regularly, in our biannual work environment surveys, ask of all of our staff. As part of those processes, individuals have the ability to, if they feel that the hiring practice has not been appropriate and has not followed the principles of merit, appeal to their deputy minister, and then to the Merit Commissioner.

I will say that one of the things that we’ve shed a light on, in terms of the review of those policies and practices, is that we tend to do a very bad job of providing feedback to employees. When they are not successful in a competition, we have to do a much better job, so that they walk away with an understanding. We also have to — and our hiring centre is looking at supports — help people become better equipped to be successful in the types of competitions that we have. They’re generally behavioural competency competitions.

One of the portfolios that I used to have responsibility for was the conservation officer service. For anybody who knows a conservation officer, standing in front of an interview panel is not where these folks want to be. We instituted, in the conservation officer service, a practice where we actually helped our COs understand what they would experience in a behavioural competency interview, and, with that, grew their confidence and their success. We have to do more of that.

We also have to help folks understand that there are other mechanisms in place for advancement that don’t necessarily take you in a hierarchical advancement, but rather a lateral, into a completely different area. Under our own Public Service Act, those do not require a meritorious process.

A couple of other comments that I would just make on this issue. Under the Public Service Act, anybody working in the public service has the ability to be a hiring manager. I always say to my staff: “There is no more important decision that a public servant makes than who they hire.” Because if you think about the subsequent decisions and the impact that those potential future leaders are going to have on other public servants, it’s huge.

We need to do a better job of making sure that we have the supports and the training in place for hiring managers. One of the things that’s coming out, and this is part of our diversity and inclusiveness action plan that we’ve released this year, is to make sure that there’s a certification program for hiring managers. That’s going to include and open up a whole array of training, but also it probably is going to identify whether or not it is suitable for everybody to necessarily be a hiring manager.

The last thing I would say on the principle of merit is I never want to lose sight of the fact that the outcome of that is what’s most important. We’ve had some preliminary conversations with the BCGEU, for instance. They too hear from their members, our own employees, that there are concerns around friends hiring friends or not being able to get past a panel practice. I’m actually meeting with them this week to talk more about how we can bring some transparency to that hiring practice — maybe allowing them, for instance, to sit on more of the panel boards and that.

I take comfort in the fact that we’ve been subject to annual audits by the Merit Commissioner, and the practices, by and large, are in play. There is definitely room for improvement.

[2:30 p.m.]

When I think about the demographics that are facing the public service — a third of our executives are eligible to retire, a quarter of the public service as a whole is eligible to retire — we need to identify, attract and develop the next generation of public servants.

If people don’t see that career path that you were talking about in the public service, if they see barriers to that, we will not have the public service that we need, now and in the future. So it is incumbent on us.

S. Bond (Chair): Thank you for that. I think the bottom-line point is that it’s what people believe that is their reality. If they don’t see their path, then we still have some work to do.

Carol, did you want to make a comment?

C. Bellringer: In fact, on that one, I, too, am surprised by how high it is, given that there is a Merit Commissioner. That one, as well as the misuse of work time and the misuse of sick time — it doesn’t surprise me that they’re a bit higher than other things because of the nature of them.

Part of the problem is that when you do have something that comes forward, even a complaint, you can’t actually go back and say to someone, “Well, this person that you’re complaining about has this particular health problem, and we’re taking that into account,” because you can’t disclose the personal information about the individuals.

So I get it. Based on the nature of those matters, you will end up seeing a higher percentage than others. But they are jumping out as quite a bit higher, so worth looking into.

S. Bond (Chair): Maybe just a couple of short snappers. I don’t want to take the day any longer than it needs to be.

The Auditor General…. The six ministries that were chosen, was there a particular reason? Were they random? Was there a sense that perhaps they needed to be the ones that were participating in the survey and the audit? How were the six ministries chosen?

M. Gaston: The six ministries were not selected on any particular ethical issues that we were aware of. It was really to make sure that we had six ministries that gave a cross-section of the public service. Also, the six ministries that we selected…. They covered health, education, a central ministry, and so on, but they also represented, I think, about two-thirds of the staff within the public service. So it was good coverage to give us a good cross-section of the public service as a whole.

S. Bond (Chair): Thank you for that.

When we look at the demographic of who responded to the survey, if you look at page 23, 34 percent of the respondents began more than 16 years ago, prior to the requirement to actually sign the standards of conduct. In terms of going back and refreshing, are those public servants a particular focus of making sure that there is that going back and having a formal declaration of some sort?

L. Halls: Absolutely, yeah.

S. Bond (Chair): Okay.

There was one thing that I found very interesting. Well, there was more than one. But the comment made by the Auditor General’s team in the report where…. We’re all worried about people understanding the need for ethical behaviour. Then the report talks about that there are so many documents. There were a number. So it’s not that there’s sort of a lack of…. It’s how that becomes part of the day-to-day working culture. It seems to be less about the number of documents.

The Auditor’s comment was, basically, that the Public Service Agency needs to clarify and, in many ways, prioritize what documents employees face. There was a whole list of them. So I thought it was fairly ironic that we were having a discussion about: do people know, and is there a framework? And in fact, the report itself says there are so many documents.

Is there an effort being made to basically prioritize, simplify, whatever it is, so that there is a set of core documents rather than a multitude of them?

L. Halls: Yes, there absolutely is. I don’t know if you recall that in the PowerPoint slide, there was what we call the doughnut. It’s the hub that we’ve created on our internal site that provides an easy link and assignment of those core documents.

It’s also, though, that it isn’t enough, I would say, to ensure that people have access to the documents. In our conversations and our training, sometimes we need to watch our language. People don’t necessarily attribute things like workplace behaviour as, necessarily, something that has to do with ethics, right?

[2:35 p.m.]

So it’s important that we simplify. I call it the content management practices. We’ve done that on the website. We continue to get feedback from the Auditor General about improving that, and from our own staff, to do just that.

S. Bond (Chair): I think content management is a good way to describe — at least, as a response to the issue that was raised — that there’s this whole plethora of documents. I think it was Garry that said: “You know, it’s about actually living and leading by example.” You can have all the paperwork you want. That’s not going to guarantee anything, in essence.

The last thing I wanted to just be sure about was recommendation 2. The Auditor General’s report makes it clear that there should be a training plan, in terms of this topic. It said on the PowerPoint that training is now available. Is there going to be a requirement? Is there a part of every employee’s career path that would see that training take place?

You gave us some obviously fairly impressive numbers, considering how short a time you’ve been dealing with this. But is it now…? Available is one thing. Is every employee expected to participate in training at some point?

L. Halls: Available is one thing; mandatory is another. When we develop a training plan, including the curriculum and that, one of the things we look at is: what are those courses that must be mandatory in nature? Certainly, it’s a requirement for everyone to take the oath, to sign the standards of conduct. The sessions that are around those will be, and continue to be, available to all.

The management in the B.C. public service at this stage has not been a mandatory offering. Quite honestly, the uptake of it hasn’t required….We’re, from a capacity perspective, running to keep up to the demand. But it is something, Madam Chair, that in our training plan, we do give consideration to — the management of that. In particular, training, whether it be in human resource issues or things like information management and that — we will often provide direction that this is mandatory training and that there’s a certain period of time that you have to sign up for it.

A. Olsen: I would just say, further to the conversation earlier this morning — and due to the fact that the Public Service Agency has suggested that they would be completing this process, or completing the response to the Auditor General, by the end of March of this year — perhaps this is one opportunity we can leave with the Chair and the vice-Chair and the Clerk’s office to have a report come back on the success of this, just to follow up.

S. Bond (Chair): I think that’s a good idea, and we’ll add that to the list that we’ve flagged. We do have a number, as of today.

I think it’s also important to note that we do appreciate the expeditious approach you’ve taken here. When you think about making sure we’re getting this stuff done, we’ve had not quite the same reaction from some of the other reports.

I think this is also a very good example…. And I can relate personally to your feeling of, “Uh-oh, the Auditor is coming our way,” having been in that position on the other side of the fence. But I think there is an opportunity — and I think you have seized that — to see that as ongoing professional development, ongoing improvement. I always tried to approach it in that same way. It was a bit more intimidating on the other side. I can tell you that. So I understand that, but I think today you’ve demonstrated that you have not only accepted but welcomed the input of the Auditor General.

I think that’s what we’re all here to do — to try to improve service and identify where there are gaps. Yes, it can feel like the pointy end of a stick. But at the end of the day, it’s about improving our services for British Columbians, making sure we have a great public service. I don’t think it would be fair to end this discussion without pointing out that the B.C. public service has regularly been recognized as one of the top employers in the country, so it’s not like we’re starting from the bottom of the heap.

L. Halls: A deficit.

S. Bond (Chair): Exactly. We’re not in a deficit position. We are recognized because of a concentrated effort, over a number of years, to improve the quality of opportunities. We can only go up from here, we hope, and continue to see that.

[2:40 p.m.]

We want to thank you for your very excellent presentation today and the attitude with which you’ve approached the audit. I hope that our comments were seen as constructive.

We’ll let the Auditor General perhaps have a final comment.

C. Bellringer: It was just a quick comment on the follow-up. This would fall into the next set of requests for an annual follow-up, in terms of just the committee gauging whether it needs something prior to that. It would flow in…. You can know that you can expect that it will say that it’s all been implemented if we ask for it in the fall of 2018. But it’s not too far off from a period other than what you would otherwise ask for. So you can think through if you need another one.

S. Bond (Chair): I think one of the things that we will sit down and do is look at what the regular flow of that feedback is, to see if there’s any that we would like to see expedited, or whether, as you point out, Auditor General, it will come back to us in the regular course of business. Because we certainly don’t want to create massive amounts of new work for people either.

Thank you to the ministry. Thank you to the Auditor General and her staff for two days’ worth of work.

Just a reminder that we will reconvene on January 30, this time in Vancouver. We have a series of reports that we’ll receive, but we’re also looking forward to a lunch and round table with our Public Accounts Committee and also a representative from Western Australia’s Public Accounts Committee. We’re going to sit down and talk about best practice. We look forward to doing that together on January 30, and then our work will continue on January 31.

We will reconvene at 10 a.m. on Tuesday, January 30, in Vancouver.

With no further comments, we will adjourn today’s meeting.

The committee adjourned at 2:41 p.m.