The committee met at 8:03 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): Hi, everybody. Today we’re hearing from statutory officers. We’re very excited to see what progress is being made.

First up is the Office of the Representative for Children and Youth. Welcome.

Financial and Operational Updates
from Statutory Officers

OFFICE OF THE REPRESENTATIVE
FOR CHILDREN AND YOUTH

B. Richard: Good morning, Mr. Chair and members of the committee. Always a pleasure to be here to present and to respond to your questions.

I want to introduce members of my staff who are with me: acting deputy representative Alan Markwart; our director of finance — I hope I have the position right; probably not — Dianne Buljat; and our director of communications, Jeff Rud.

[8:05 a.m.]

As you may know, Dawn Thomas-Wightman, who is the deputy representative, is currently seconded to the First Nations Leadership Council working on a number of issues, including federal legislation on Indigenous child welfare and other significant issues. She’s away. The secondment is for a year.

I’m sure that most of you are familiar with the work of the office. Let me just summarize very quickly. Our mandates are to directly support children, youth and young adults and their families who need help in dealing with the child- and youth-serving system, including the Ministry of Children and Family Development and Community Living B.C.; advocating for improvements; and providing oversight of MCFD and other public bodies that deliver services and programs to children and youth.

My organization has 66 FTE employees working in three locations. Most are in Victoria, but they have an office in Burnaby and one in Prince George.

Our operating budget for the current fiscal year is $9.418 million, including increases of $448,000 this fiscal year to cover new work and assessments of plans of care — $407,000 for that work; the BCGEU-negotiated salary lift for our schedule A employees, $10,000; and the salary lift for all officers of the Legislature, $31,000. These increases were approved as part of the last budget process, applying to this year. Our capital budget remained the same.

Since our inception in 2007, the Office of the Representative for Children and Youth has opened more than 19,000 advocacy cases, directly helping children and youth and their families to navigate what can be a very complicated child- and youth-serving system.

Our office has also released a total of 102 reports since April 2007 — some detailing RCY investigations of individual injuries or deaths of children in care or receiving government services, others examining aggregate cases of such deaths and injuries to see what lessons can be learned, and still others exploring systemic issues.

In most of these reports, we make recommendations to government on how the system can be improved to keep B.C.’s vulnerable children safer and give them the best possible chance for success.

In 2017-18, RCY advocates handled more than 1,500 individual advocacy cases, assisting children and families to navigate a wide and often confusing variety of services. Individual RCY advocacy cases include everything from helping ensure that a youth’s voice is heard when decisions about their future are made by professionals in the system, to working with parents to help them find appropriate mental health services for their child, to assisting youth with developmental disabilities as they transition to CLBC services.

Our advocacy casework also helps to inform the reports of our investigative and monitoring divisions and to inform me as I advocate for systemic change on a larger scale.

During the last fiscal year, our critical injury and death investigations unit reviewed reports of more than 2,000 injuries and deaths of children and youth, either in government care or receiving reviewable services during the 12-month period prior to the incident.

Of those reports, 819 critical injuries and 118 deaths met our mandate. The two most prevalent mandate injuries reported to the office in 2017-18 were suicide attempts and sexual assaults. Together they accounted for more than 44 percent of the injuries.

[8:10 a.m.]

Receiving a reportable from MCFD or another public body is just the beginning of the process for our CID team. These reportables receive an initial review to determine that they are indeed within our mandate. Then they go through a process to determine if further action should be taken by RCY — for example, if the case should be referred to our advocacy team, if we should raise it with MCFD as a case of concern, or if it needs a more comprehensive review to determine whether services — or lack of services — were a factor in the injury or death.

A select number of cases are reviewed more comprehensively to inform a decision about whether or not to conduct a full investigation. These comprehensive reviews are also used to inform aggregate or special reports. For example, RCY is currently working on an aggregate report of substance-related critical injuries and deaths that we plan to release in the fall.

Where a review shows that there was a strong connection between service and the injury or death, the RCY may conduct an investigation. Investigations result in public reports, with findings and recommendations aimed at improving the system through lessons learned. RCY currently has two investigations underway.

Our office released one such report in ’17-18 entitled Missing Pieces: Joshua’s Story. It investigated the life of a 17-year-old Lower Mainland youth with severe mental health issues who committed suicide on the grounds of B.C. Children’s Hospital while on a four-month stay at the Vancouver facility.

Our report found that Joshua, not his real name, did not receive the early intervention services that may have altered his life trajectory. It found that he spent 122 days in B.C. Children’s before his death, in part because his social workers and mental health professionals couldn’t agree on where he could safely live after discharge.

The report pointed to significant gaps in the youth mental health system, including a lack of appropriate community residential placement options for children and youth, the serious challenge for families to obtain long-term mental health services for their children and the fact that there is no single point of accountability for child and youth mental health within government.

Our report’s chief recommendation was for the Ministry of Mental Health and Addictions to take the lead role in developing and implementing a comprehensive mental health system for children and youth in the province. I’m pleased to say that our office is being consulted by the Ministry of Mental Health and Addictions as it prepares this plan. We look forward to seeing the systemic improvements that will emerge from that plan and its implementation.

Meanwhile, our RCY monitoring division continues its work to monitor services provided by government for vulnerable children, youth and families. Included in that work during the past year have been three reports.

The first, Delegated Aboriginal Agencies: How Resourcing Affects Service Delivery, was released March 30, 2017. It reviewed and reported out on the experiences of those who work in the agencies that deliver child and youth services to Indigenous communities and to many Indigenous children and families living outside those communities. This report found significant differences in the availability of supports and services for B.C.’s Indigenous children, depending on where they live.

A key finding was that underfunding and inequitable funding of DAAs means Indigenous children are being removed from their homes and placed in care simply because the money is not there to provide support services to their families. Our report also found there was not a standardized funding approach for delegated off-reserve services and that DAAs often cannot pay wages equal to MCFD.

Our findings echoed those of the 2016 decision by the Canadian Human Rights Tribunal that found the federal government has been discriminating against Indigenous children and their families on reserve by not providing sufficient child welfare funding.

Of course, there has been substantial movement both federally and provincially on the Indigenous child welfare front since our report was released. The federal government has committed to fully funding agencies for the cost of their work, retroactive to 2016. We understand that now, here in B.C., MCFD is working on establishing a zero-base budget equity approach for DAAs, and that’s good news.

The second monitoring report of 2017-18 was titled Room for Improvement: Toward Better Education Outcomes for Children in Care .It was released on October 26.

[8:15 a.m.]

This report found that significant gaps in education outcomes persist for children and youth in the continuing care of the B.C. government. As a group, these children and youth trail well behind other students on all academic measures examined for the report. For example, 51 percent of children in care graduated from high school, compared to 89 percent of all other students. The graduation rate for Indigenous youth in care was even lower, at 44 percent.

Our report included the participation of more than 1,200 people with experience in the school and care systems, including more than 160 youth in and from care and nearly 500 teachers. It made a number of recommendations aimed at improving education outcomes for children in care.

Among those was the establishment of point people in each district to coordinate information-sharing and advocacy in support of improving education outcomes for these children and youth; the allocation of specific funding to school districts to support the learning needs of children and youth in care; to strengthen accountability for these students’ academic achievement; to implement an Auditor General recommendation calling for a strategy to close the gaps between Indigenous and non-Indigenous students; and the assessment by MCFD of the trauma-related needs of all children and youth as they come in to care, followed up with appropriate supports.

As we all know, educational attainment is associated with almost every measure of population health and well-being. Education really is the great equalizer, and children and youth in care should not be left behind.

The final report produced by our monitoring division last year was the B.C. Adoption and Permanency Options Update in December. This report was the fourth update on a 2014 RCY review of the provincial adoption system. Unfortunately, this report found that government is faltering in its efforts to find permanent homes for the children and youth in its care, particularly for Indigenous children and youth.

It found that MCFD was well off the pace of the previous two years when it came to finding permanency for children in care, with only 84 adoptions during the first six months of the fiscal year. It also showed, as of September 30, 2017, that 1,003 children in care in B.C. were waiting for a permanent home, roughly the same number as in 2014, when RCY first reported on the adoption system. This is despite a significant investment by government to boost adoptions.

By way of an update to our most recent report, I can tell the committee that the eventual placements of children in care for the entire fiscal year 2017-18 totalled 243, which compares to 362 in 2015-16, the recent high-water mark. Of those adoption placements last fiscal, 63 were for Indigenous children and youth in care, representing about 26 percent of the total. That figure is well below the totals of 151 Indigenous children adopted from care in 2015-16 and slightly over half of the 2016-2017 total of 121.

Advocacy cases and reports that push for systemic change account for a large part of our work at RCY, but we have plenty of other activities on the go, including a significant youth outreach component. We’ve targeted much of that outreach to Indigenous children and youth, since they are vastly overrepresented in the child welfare system.

We need to know about their experiences and opinions as we work to improve child- and youth-serving systems. With that goal in mind, we’ve held two Ignite Your Spirit Indigenous youth engagement events, one in the Fraser Valley in 2016 and one last August at Lake Cowichan, here on Vancouver Island.

These events have been entirely planned and led by youth. The goal is to let youth talk about and explore their experiences and hear and record their recommendations for government and Indigenous leadership. More than 50 youth in care attended one or the other of the first two events and shared their experiences, ideas and dreams.

I can tell you from being at Lake Cowichan — and I’m sure Minister Conroy, who also attended, would agree — that this was a powerful, moving experience.

[8:20 a.m.]

We are planning to continue to engage with youth through Ignite Your Spirit and ultimately to present the recommendations to government and Indigenous leadership to create change based on what youth say they need, not what others have decided for them. The third Ignite Your Spirit is planned for this coming August in Fort St. James. It will include between 50 and 70 Indigenous youth from the greater Fort St. James area. Can I say that? I’ll be making my first acquaintance with the black flies, I think, in August.

This month our Indigenous Strategies and Partnerships and advocacy teams will also launch a provincewide RCY rights tour that will continue over an 18-month period. That tour will focus on educating children and youth and their caregivers about their rights under the UN convention on the rights of the child and the UN declaration on the rights of Indigenous peoples — documents that ground much of the work of our office.

RCY has also been involved in the debate of important public issues facing British Columbia. During recent months, our office has made detailed submissions to government’s engagement processes with regard to both the regulation of legalized cannabis sales and developing a poverty reduction strategy for B.C.

As I mentioned earlier, this committee approved a budget increase of $407,000 annually over a three-year period for our office to do some important work in assessing plans of care for B.C. children in care, with a particular emphasis on Indigenous children in care. The work, which we proposed in our budget submission to this committee last year, came in response to recent criticism of care planning by our office and, most notably, by Grand Chief Ed John in his 2016 report Indigenous Resilience, Connectedness and Reunification: From Root Causes to Root Solutions.

The Grand Chief’s report specifically recommended: “The B.C. Representative for Children and Youth, the Provincial Court or another independent body be required to conduct an annual review of care plans for Indigenous children in care, with special attention to ensuring that a cultural and language component of each care plan exists and is implemented.”

MCFD has since initiated its own audit of compliance to the standards that regulate care plans. Our RCY review process will focus on assessing dimensions of quality in the care planning process. RCY and MCFD are working together via a joint committee to ensure that these two pieces of work are coordinated and not duplicated.

Our office will specifically examine the quality of the planning that is being conducted, including whether children and youth are encouraged and supported to actively participate in the process; birth parents and extended family are supported to participate in planning, where possible and safe; planning uses a collaborative approach; planning supports the continuity and stability of relationships for children and youth; planning incorporates all areas of a child and youth’s life; planning is done in a timely manner and reviewed regularly.

We will be delving in greater detail into three particularly important aspects of care planning, specifically: to determine that care planning for Indigenous children and youth in care reflects and supports the child’s connection with cultural heritage and identity, as recommended by Grand Chief Ed John; that care planning for all children and youth in care reflects actions towards a permanency goal; and finally, that care planning for youth who are aging out of government care supports actions required to prepare the youth for the transition into adulthood.

Individuals surveyed and interviewed as part of this process will include youth in care; social workers who provide guardianship services; and caregivers, both foster parents and residential staff. We’re currently developing our tools for conducting the review with these key stakeholders, and these tools are also being reviewed by internal and external experts. We’re only a little more than a month into the fiscal year, although we began the process before April 1.

That concludes the formal part of my presentation. I would now be pleased to take any questions you might have.

[8:25 a.m.]

B. D’Eith (Chair): Thank you very much, Mr. Richard. We appreciate all the work that you’re doing in this area, particularly…. I really appreciate the work, certainly, in youth mental health. That’s very important. Most families are touched by mental health issues, so we really appreciate that.

Of course, your commitment to the UNDRIP and the truth and reconciliation work…. We really appreciate that, especially seeing that the Indigenous population is highly represented. Your work to try to get more of our children in care through high school, I think, is really important. I know, now that we have post-secondary…. If they can’t get through high school, how are they going to take advantage of that post-secondary when they’re older? Also, working on getting more permanent placements.

Thank you very much for all the work that you’re doing, especially on the Indigenous side. I’m really excited to see what the increased funding will do for that side of things.

I wanted to open the floor up to our members, if they have any questions.

M. Dean: Thank you to you and your office for all of the work.

I’m really interested in the new audit process and, working in partnership with MCFD, looking at the case planning and the quality of case planning. I’m wondering if you could just give us a bit more detail on what your preliminary findings are there. For example, how many case files and pieces of work of case planning would you say are on target and do fit all of the criteria that they’re being evaluated against?

B. Richard: I don’t know if I have those precise numbers, but certainly, what I can tell you from our investigation work and previous investigations is that case planning is a significant issue. It has come up time and time again. I can talk about a specific case, perhaps: the Alex Gervais report, which we released just about a year ago. It was clear throughout that report that there was insufficient case planning.

The case planning should encompass everything in a child’s life — education, cultural connections, planning for permanency, planning for adulthood. We find time and time again…. I think it’s fair to say that some regions do better than others. In a large province, I think that’s to be expected. But clearly, there are significant gaps in the quality of care planning.

That’s what, I’m sure, motivated Grand Chief Ed John to make that specific recommendation. He went much further than what we’ve ultimately decided to do. Because of our oversight role, we won’t be looking at every individual care plan for every Indigenous child in care. That would require much more significant resources. He’d even recommended, possibly, the Provincial Court or that a special tribunal be created for that purpose.

It’s not consistent with the role of RCY, but I think the value of what we’re doing…. And we’re only a month into it. We’re still hiring for our care planning staff. We’ve hired internally. We’ve had some internal competitions. We’re hiring externally now. We’re not quite into it yet. What we hope that the combined effort of the ministry and ours will do is ensure that every child in care has a robust care plan. Then we’ll ensure that that’s the case by doing our own oversight.

I think that’s where we complement the work that MCFD has committed to do. They’ve committed that internally they will ensure that every child in care has a care plan. Frankly, that should be the case now, and it isn’t. Clearly, there are gaps, and we hope to identify those gaps and to repair the gaps that exist.

T. Redies: Thank you for your presentation and for all the work that you and your team do.

I wanted to have a little bit more clarity around the issue of adoptions. The numbers seem to have fallen off in 2017-18, although we’re not finished the fiscal year yet. Do you have any insight as to why that is happening?

[8:30 a.m.]

B. Richard: Certainly, we’ve speculated on that, and I’ve speculated publicly on that. Personally, I think there’s been a bit of a loss of focus. I mean, there was, I think, a very strong commitment two or three or four years ago, I guess, in 2014, so four years ago — a very strong commitment and then a big push. I don’t know. But clearly, there seems to be a lack of focus on the issue of adoption.

There may be a couple of other issues at play. In the area of Indigenous children, there is, I think, strong consideration of custom adoptions. Some resistance from Indigenous communities about adopting children who are Indigenous away from their families. It’s an added challenge. That may explain the bit of the drop in the area of Indigenous children.

The other point that I think the ministry has made is that the early, larger numbers were perhaps based on children who were easier to have adopted. No question that groups of siblings — we try to keep them together, I think, as a society. That poses an additional challenge. Older children in care are much harder to have adopted, and children with special needs or very complex needs, of course, are harder to adopt. It’s a combination of all of those things.

We’ve encouraged, urged and pushed MCFD to renew its commitment to provide, perhaps, more resourcing to do more focused work in the area of adoptions because permanency is very critical for children in care. They’re so vulnerable as they come into the system. Finding a permanent home means so much for their whole life trajectory. After a certain point, it becomes harder and harder to have them adopted, which means, essentially, all of their childhood life will be spent in care. Transitions are so much more difficult after that.

M. Dean: Thank you for your summary of the key themes and the trends in your inquiries. I’m just wondering. Are you seeing a trend in a certain direction one way or the other, rather than looking backward and saying what came up the most often? Are you seeing any kind of shift or anything in the content of your inquiries, where there are child deaths and child injuries?

B. Richard: It is pretty stable. I can’t say that there’s a significant trend. I’m told by our analysts — the fiscal year just ended, and we’re getting some early numbers — that there probably will be a slight increase in 2017-18. This is quite concerning, given that the number of children in care continues to drop — not significantly, but gradually and pretty consistently. That’s been the case for the last several years.

I would say that issues of mental illness and substance use are particularly concerning to me. In the last three months of the fiscal year, for instance, I think we had something close to 80 suicide attempts of children in care, some a very young age. That stuff keeps me awake at night. It has to be related to either mental health issues, abuse or substance use.

A lot of work to be done there. I attended, last week, the opening of the Victoria office of the Foundry. I’ve said publicly that I really think that’s the kind of model…. I’m not sure if that’s exactly the model, but certainly the kind of model that we need: wraparound services, where services are centrally located, where professionals talk to each other, services are coordinated, there’s a sharing of information and there’s quick, barrier-free access.

I think we’re heading in the right direction in terms of the work that was started under the previous government. It’s continuing under the current government. I really think that’s the kind of comprehensive response we need for mental health issues, particularly.

[8:35 a.m.]

In the area of critical injury and death, one day a month we review all the cases from the previous month. It’s the worst day in our office by far. I know there are no easy answers. I do think that permanency, care planning, identifying issues before they become worse — those are the kinds of things that we would hope will improve those numbers.

Right now they’re not improving. It’s pretty consistent, despite the fact that the total numbers of children in care have gone down. Last month we had, in our review, one 18-year-old girl — I think she was 18 — that had four suicide attempts in the same month.

One eight-year-old was…. I still shake my head over this report. One eight-year-old was a victim of a sexual intercourse — I say “victim” — with a 14-year-old child in care. The report said that she consented to sexual intercourse. That’s not possible, in my view.

So there are some damning, egregious cases, certainly, and we see them month after month. A lot more work to do in that area.

B. D’Eith (Chair): Thank you very much. That’s very tough stuff.

You spoke briefly about having the Ministry of Mental Health and Addictions. I’m wondering if you could talk a little bit more about that and the relationship you have with the new ministry.

B. Richard: I guess since I’ve announced that I’m heading back to New Brunswick…. It’s fair to say that when I arrived, and I think the former minister will agree with that…. The first time I appeared before the select standing committee, I said that I thought that one of my key jobs was to reset the relationship. I like to think that we’ve been able to do that over the last year and a half. It’s been hard work, for sure — lots of mistrust between our office and, particularly, MCFD.

I also talked about three priorities — one being the overrepresentation of Indigenous children in care; the other being aging out of care, transitions from care into adulthood; and the third one being mental health and addictions.

We’ve been quite focused on mental health issues. We had our major, significant investigation report for last year, the only one we released last year, really focused on that issue. The new ministry and the deputy minister, the minister, other staff…. It’s been slow to build up, but certainly, we’ve had an ongoing relationship, several meetings.

We’ve been invited to participate and network, developing a framework for child and youth mental health and addictions. We remain focused on that issue. The collaboration is positive. Everyone, I think, in British Columbia knows that we need to address these issues. They’re not limited to British Columbia by any means, but they are significant issues.

I volunteer for the Canadian Paediatric Society and meet with pediatricians on a regular basis. Pediatricians keep telling me that they’re seeing more and more younger and younger children present with mental health issues, particularly anxiety and depression. These are issues that we need to deal with.

The Foundry, I think, is very effective for older children and youth dealing with mental health issues. I think we have to do more school-based work — identifying issues early on. Actually, some work is going on in New Brunswick that I’m very proud of called one child, one file. It’s a school-based, multi-departmental approach to youth with mental health issues — identifying issues early on, providing supports before issues develop into more complex things to deal with.

[8:40 a.m.]

I’m quite pleased with the progress that’s being made. Obviously, developing a plan is one thing. Implementing a plan is another and will be challenging, regardless of how good the plan is. Getting professionals to work across ministry lines is difficult. Silos still exist. You are well positioned to know this: budgets are provided by departments, departments really are protective of their budgets, so finding collaboration between departments is always a challenge.

There are challenges, as well, in British Columbia because of the vast territory of the province. More remote and rural areas, in the north in particular, don’t receive access to the same quality of services as other regions. Lots of challenges, but I’m pleased with the progress to date.

B. D’Eith (Chair): We have time for one last question.

D. Ashton (Deputy Chair): Sir, I want to thank you for what you’ve attempted to do here. I’ve picked up on some of your subtleties that you have mentioned here.

I have one quick question for you, and I think it’s quite important. Otherwise, to me, you put in the report. In your second paragraph: “The office is responsible for supporting children and youth and young adults and their families who need help navigating the often complex child and youth–serving systems and services and for advocating for improvements to those systems of services.” Have you left a to-do list?

B. Richard: Well, I’ll be working on that the next…. I’m here for another 3½ months, so certainly, I’ll be working on that. I’ve offered to the Deputy Clerk to meet with the selection committee in camera for the next rep, if they so choose.

Sure. I mean, the to-do list wouldn’t be much different than the priority list I established early on. I think the same issues are certainly there. They’re issues that have been around for a long time. They won’t be resolved in a year or even five years, but certainly there are approaches that I’d like to see the B.C. government more focused on.

Yeah, I’ll be pleased to provide you with my to-do list before I leave. I’m kind of working on my to-do list for New Brunswick at the moment, but yes.

D. Ashton (Deputy Chair): It is a big ship, and we understand that, but also when the representatives come here, it gives us an opportunity to say: “Listen, there was some direction on improvement. Is that being followed through?”

I know we are getting close in time.

B. Richard: These are complicated issues. When I say we help youth and parents navigate through a complicated system, it’s because if you have a child that is in need, has special needs or is dealing with mental health issues or who has addiction issues, the last thing you want to do is to try and navigate by yourself through a system of care. They require the kinds of supports….

It’s hard to imagine, I think, until you’ve talked to dozens — and in my case, hundreds — of parents dealing with those kinds of issues. Even some highly educated, well-off parents say they’re so focused on their child’s immediate needs that having to navigate, move from one office to another, is very complicated for them. Their emotional situation really doesn’t allow them, often, to be able to do it without….

I mean, I’ve said many times that I think we need to develop systems that adapt to the needs of children and youth and not require children and youth and their families to adapt to a bureaucracy that can be quite complicated.

B. D’Eith (Chair): Thank you very much, Mr. Richard. This will probably be your last appearance in front of this committee so I wanted to take the opportunity, on behalf of all the members, to thank you for mending fences and building bridges and working with MCFD and the Ministry of Mental Health and Addictions to try to make lives better for our children in care. Thank you very much for your presentation.

B. Richard: Thank you.

B. D’Eith (Chair): A five-minute recess.

The committee recessed from 8:44 a.m. to 8:48 a.m.

[B. D’Eith in the chair.]

B. D’Eith (Chair): We’re very happy to hear from our statutory officers. Right now we have the Office of the Auditor General — Carol Bellringer.

The floor is yours, so please go ahead.

OFFICE OF THE AUDITOR GENERAL

C. Bellringer: Good morning, everybody. I’m joined this morning by three members of the Office of the Auditor General: Russ Jones, Deputy Auditor General; Katrina Hall, who’s our executive director of finance and administration; and Stephen Kearsey, who leads our HR area. What I thought I’d do is I’ll give you an update on a number of the key issues that are impacting the operation for our office.

One question we get asked, not necessarily by this committee, from time to time is: who audits the auditors? Just to let you know, in the event that you’re not aware of this, there is a request for proposals that has been posted to appoint new auditors for our office. That’s just a regularly recurring activity. It’s set to close on May 15.

[8:50 a.m.]

The current auditors have been in our office, and they conducted their field work the last week of April. They’ll be issuing their opinion on our financial statements shortly.

We continue to underspend our appropriation. We don’t see that as a good thing. That’s something we’re trying to bridge, that gap, and spend what’s been voted for our office, because it’s what we do to get our job done.

I will say we have a culture in the office of being somewhat risk-averse. It goes with the nature of being an auditor, I would say. While it’s a good thing in terms of not taking risks in the spending area, it does mean that we’re expecting to close the year, 2018, at $785,000 under budget. So we’re obviously not here asking for supplementary funds.

It is an improvement over last year. Last year we underspent by $1.2 million. So we’ve been taking action to, in effect, overbudget through the year, anticipating that we’re going to have vacancies.

The primary reason for the underspend is that our salaries represented just over $500,000 of that amount, so it relates to vacancies. We’ve had some difficulty filling those positions. I’ll get into a little bit more detail about that in a minute.

The increase in our full-time-equivalents was six in the fiscal year ’18. We’re at 112. In 2017, it was 106. That was reflecting our move to make sure that we are filling all of the various positions.

As I say, we’ve taken action to try not to have vacancies. It’s not only to retain staff, but the bigger challenge for us is that we do expect a fair bit of turnover, in particular with financial auditors. They come in, they get their training, and then they leave for positions. Now that they have a designation, they get paid more, so they move.

A lot of them move within the public sector, so we do act as a training office for professional accountants. While that’s okay, it also means that we have to continually be hiring.

We had a bit of a mantra last year. It was “Hire; hire; hire.” As soon as we anticipated a vacancy, we were trying to get people in before the other person was leaving, and not just waiting because, obviously, in the math, that will result in an underspend.

In terms of some of the staffing information, we had 17 competitions last year and 26 hires. One of the positions was vacant for 14 months, and that’s the director of professional practices. They do the work to verify that we’ve been following auditing and assurance standards. And one of the vacancies was an executive director in financial audit. They’re both senior positions.

Both positions were posted. We used a recruitment firm, and one is still not filled. We’re seeing more people declining offers of employment when we’re recruiting from other jurisdictions as soon as they look at the cost of living. We know that it’s not a problem that’s unique to our office. We’re trying to find ways to be creative around that.

Our primary policy or practice now, to the extent possible, is to recruit at a junior level and train people, coach them, watch them develop and have them move up through the organization. It really is very difficult to hire in at the top levels.

We’re also looking at some policies to make it attractive for people to stay with the office. We’ve implemented a flexible work-option policy, which will allow people to work from home for a day a week. We’re exploring options for people that we hire to work in Vancouver. We have two large audits coming up, the University of B.C. as well as Hydro, for next year. That work is all done out of Vancouver. Our employees are all stationed in Victoria currently, so we’re looking at ways that we can be more flexible about having them work out of Vancouver.

[8:55 a.m.]

For ’18-19, we requested $18.5 million when we presented our estimate of resources in November. That was the number we calculated to allow for full funding of all positions with none of the kind of turnover we’d experienced. The budget that you approved, of $17.6 million, with the increase of the $240,000 for the costs related to B.C. Hydro…. We don’t see any problem being able to work within that.

Part of our request included identifying new positions for IT, in the IT audit as well as IT support areas. The committee’s indication that we should find those funds from within…. We’ve taken that into account, and we’re doing so.

We don’t anticipate any need for supplementary funding this year, but we are continuing to take that risk of, in effect, overhiring at the beginning of the year, anticipating the vacancies through the year. If we run into trouble with that, we’ll let you know as soon as that were to happen. We haven’t had an overage in…. We don’t remember when. We’re always lapsing funds. It’s our goal to avoid those lapses, so we don’t think we’ll be back for more money.

The move to doing the audit of B.C. Hydro is a big one for us. We now continue to work through the detailed planning. We’ll return to the committee in the fall with more precise information on the costs and staffing needs for next year. We’re fine for the current year, but when we’re into the full audit…. As we’ve started to review files and work with the previous auditors of B.C. Hydro, we’re finding out more and more about the details around what this is going to include. There are just some significant issues with it.

We’re expecting to start in April of next year with quarterly audits. It’s not just a year-end audit of Hydro. They do produce quarterly statements, which we’ll have to look at. As a result, we’re hiring people this fall to be ready for that. We’ll try to begin that hiring in the summer.

The other area in the office, compliance, controls and research…. We’ve been calling it CCR. We struggled with a chronic underutilization — it was known in our office as “white space” — where the financial audit staff had time between audits. It wasn’t enough for them to work on a performance audit and get it finished, but once the public accounts were complete, we needed some work for them. So we started to have them….

We’ve got the planning done, and they’re starting to work on small, focused audits. In fact, the first report is to be tabled as we speak today. It’s on school district 61, executive expenses. You’ll see that one. It is being made public today.

One of the issues we just want to raise with you…. It’s an indication of something we’re having to deal with, and that’s access to documents. It’s not a new issue. We’ve had challenges accessing documents for 40 years. The office has been around for 40 years, and it’s always something that…. We have to work with the public service to obtain the documents we need to do our audit work.

We have had a change in our practice for a performance audit. We now require…. This is audit methodology, audit standards, which are the Canadian auditing standards. It requires a management representation letter for our performance audit. It’s the individual who’s responsible for the program area signing off to say that they’ve provided us with all of the documentation we need and we’ve asked for to get our audit done. That’s been in place for a financial audit for years.

It has been a catalyst for change in the relationship with the ministries, with the deputy ministers, in particular — having that dialogue early in the audit to say: “You are going to need to sign off to say you’ve given us everything.” There has been a little bit of a change in the way that we’re accessing documents. We’re working through a few snags, but I’d say, overall, it’s a positive change.

The deputy ministers have taken more active involvement and ownership in the issues within their ministries on the audits that we’re working on, but we do end up with some challenging topics — I’ll name one, and I think it goes without saying why it’s the case — such as Site C. It’s getting into looking at the application of policy, not the merit of policy. Of course, it’s a sensitive topic, so it’s always difficult to work it through.

[9:00 a.m.]

It has slowed down some of our audits, to make sure that we’re taking the time necessary to ensure that all the parties are aware of the issues.

Some of it has been around…. We take the position…. It’s common audit practice for the Auditor to determine how documents shall be transmitted, for example. There have been some suggested changes in practice where ministries are wanting to do it a certain way, and we’re saying, “No, we have to do it the way we’ve always done it, through sharing on a particular….” It’s a SharePoint site. That has been a difficult conversation at times, but I think we’ve kind of worked through explaining to them why it is.

It’s a fundamental element of audit that the…. I go back to the old days when we used to walk up to the metal filing cabinet, pull open the drawer and pull out the sample that we wanted to look at. Nobody actually knew which ones we were pulling out. Now we’re doing it electronically. So of course, there are a lot of questions around who’s controlling the access to those documents.

We also have to ensure that the individuals in the ministries are not afraid to provide us with something and that they are being completely open but at the same time recognizing that they have a responsibility to their ministry. It’s something that’s slowed us down slightly, but we’re still going to meet our targets on output.

Another area where we have a change in our office: we hired an Indigenous youth intern in September. They’ve been working with a manager in our performance audit area, and we’ve created the office’s Indigenous relations strategy. It’s consistent with the government’s obligations under the Truth and Reconciliation Commission. We’ve also looked at the UN requirements and the Canadian commitments.

We have been supporting and helping other offices, sharing our model and telling them about our strategy. Within the office, I’d describe it as an emotional journey. We’ve really worked with the staff to ensure that they identify the barriers that they might have, and it’s also improved our workforce engagement. It’s been a multipurpose strategy, but it also has positioned us well to understand each other and to accept diversity.

One unexpected cost, and we don’t see any reason why we can’t absorb it within our existing budget, is that we’ve suddenly had a large number of FOI requests. Historically, we’ve seen a few minor ones each year. This year we’ve seen 22 separate requests, which we expect to cost at least $100,000. That’s one area.

We will say that in the course of doing it, we’ve learned a lot about disclosure. There are certain things…. There are requirements for deputy ministers, for example, to disclose their calendars. We haven’t been doing that. I’m still thinking that one through, because everything we do is related to audit, and we’re not required under FOI to disclose anything related to audit. But at the same time, we want to be transparent about our administrative practices. It’s a little bit of a tricky one to tease apart.

The other unexpected cost. We have a need for an audit software upgrade, and we’re still working through the details on that. The costs were originally expected to be a capital cost, but it now looks like it’s going to be operating, which we hadn’t anticipated. Again, we don’t see any reason why we can’t absorb all of that through our existing budget.

That’s all I had to update you on, but of course, the team is here. I’ll just check if there’s something I missed.

B. D’Eith (Chair): Well, thank you very much. I really appreciate the update.

Before we get started with questions, I did want to clarify something. I was hoping that you might be able to help me with this. When the original budget request was put in, the committee came back to the Auditor General for some alternate ideas about how we might be able to fund things — in particular, the Hydro audit. That was funded — the alternate plan.

[9:05 a.m.]

The original ask for 2017-18 was actually a 6.8 percent increase. We increased it by 1.4 percent. Then it was actually a request of 11.4 percent for 2019-20, and we increased that by 3.2 percent, to an already very substantial budget.

I’m reading from the service plan. It says: “This year, the office did not receive the full amount requested. The Finance and Government Services Committee recommended a limited increase to support the conduct of the financial statement audit of B.C. Hydro. Additional funds that we sought to support increased staff resources were not provided. We have reduced our program of audits to match the resources available to us.”

In light of everything you’ve said — you’ve said that in fact, you’ve made the changes that are required — I’m wondering if you could take an opportunity to explain to this committee why you would say that in a service plan.

C. Bellringer: As you read it out to me, it sounds a lot more negative than was intended. In terms of the fact as to the amount requested versus where we’ve landed, we did make some modifications to our plan, which we were trying to communicate. I accept that the words were poorly chosen from us, because it was really intended to say that we can work within the amount that has been provided to us — that is provided to us.

There were, I think, two items we removed from the performance audit coverage plan. But again, we didn’t see it as a major issue.

I have to admit…. When we generate documents, there is quite an extensive process of staff in the office that are involved in writing, editing and then producing it. I seriously did not recall it being a negative message, but I certainly hear that when you read it out.

B. D’Eith (Chair): Okay, thank you.

P. Milobar: It’s actually a good segue follow-up to the question I have, I guess.

When you were mentioning the Hydro audit, you mentioned that you’re developing the workplans, that things are looking good and depending where it lands — I’m paraphrasing a little here — you’ll see what happens, and you may need to be back for more resources.

I guess I have a little concern. It almost sounded like a pre-emptive warning: “We’re going to start down this road, but expect to see us come back in a year as we get fully into the Hydro audit.”

Is there confidence that…? I guess if added funds don’t come, is the Hydro audit still going to happen to the scale and scope that you were originally intending it to happen? It seems worrisome, I guess. With some of the phrasing of your presentation, it sounded like a subtle heads-up that you’ll be back in a year or so looking for more funds to complete what was turned down last year.

C. Bellringer: A couple of the factors on the Hydro audit. We are only doing the main audit and not going to be doing any of the large subsidiaries, which would take additional time. As we get into it…. I don’t want to say we’re 100 percent confident at this point, because we’ve never done the audit before. We are quite well aware of the complexity of it, regardless of not doing the subsidiaries.

That’s probably the cautious me speaking, as we get into it. Every planning meeting we have and every set of records we review, we get closer and closer to a more precise understanding of exactly how many staff, at what level, how many hours and how it’s distributed throughout the year.

The staff are nervous, I’m going to say. For them, it’s a big change to absorb a large audit like that. I’d characterize it as there’s an energy from that that’s positive, so I’m quite confident that they will be able to complete the plan and have that clear understanding of exactly how we’re going to get it done.

[9:10 a.m.]

At this point, it’s a very high-level plan. Is it somewhat of a caution? Well, yes, I guess it is, only because until we have that done, we won’t know exactly what it’s going to look like.

There are a number of options, though, at that point. It doesn’t mean a direct relationship between, “Okay, we now know the detail. Here’s how much additional cost it’s going to be, and we’ll come to you with a request,” but rather: “Once we have it fine-tuned, we will know the implications of it, and we’ll have options.”

It could mean choosing not to do something else if it was over what we thought it was going to be. It could be that we have budgeted precisely. There are always going to be variances. We could be fairly close. If we’re not, the only option is not just to ask for more money. It could be to recognize that there is some other financial audit that perhaps we don’t need to do. We can still have an outside firm do some of the other work for us.

We have quite a bit of flexibility in our workplan. We would consider all those options as well.

Was there something else on the Hydro? I know that Russ has been spending a significant amount of time in the detail.

R. Jones: I think Carol has summarized it fairly well. When we have started to look into how to staff the Hydro audit, obviously there are a lot of experts that KPMG uses outside of their regular staff in Vancouver. So we’re looking at how we can use those experts as well, where we get them from. It’s a very complicated audit, as you can well imagine.

There are also some other moving parts that will possibly help us in terms of if there is a need for additional funding to make that up. As most of you know, BCCSS, which is the clinical services society, is changing. We currently do that audit. That could free up some staff for us. A number of other audits could change as well.

We’re looking at all sorts of ways of how to cope with the size of B.C. Hydro. It’s one of those audits where it’ll probably take us 20 weeks out of town in Vancouver. It is a big one for us.

R. Leonard: First of all, I want to say thank you that we have this opportunity to have this continuing dialogue. This is an opportunity for us to clarify things. I appreciate your comments in response to the Chair’s question.

I guess I just want to confirm, so that the public can feel assured, that the audit that you will be undertaking is going to have sufficient scope to answer the questions that might be brought forward and that it will be robust, given the distinct pieces — the pension plan and…. I can never remember what the second one is that you separated from the original ask.

C. Bellringer: In terms of Powerex….

R. Leonard: Powerex. That’s it.

C. Bellringer: Powerex and the pension plan are the two large ones. We would still place reliance on the external audit work. That in itself doesn’t impact the quality of our audit of Hydro itself.

It is just the financial statement audit. We get a lot of public inquiries around other aspects of Hydro, quite a large number of them. I think there is a public expectation that we’re able to go out and look at any aspect of any element of the Hydro operation and provide total assurance on, from a management perspective, all kinds of things. That’s not the intent. This is the financial statement audit that will result in an opinion on, if you will, how complete and accurate the numbers are and not on the other things.

There are a few other audits in the Hydro area that we do have on our list for a performance audit. One that is almost finished is specifically on rate-regulated accounting and an information piece. It’s a very complex area that we don’t feel is well understood. It’s a very detailed information piece to explain for the members.

In addition to that, that will give us quite a lot of information that will assist with the financial statement audit because it is one of the more complex areas within Hydro, and we will have looked at it in sufficient detail that it will give us what we need to do the financial statement audit.

[9:15 a.m.]

It also flows into the public accounts. That’s the largest audit that we do, and that’s the one that we keep our focus on for the financial statement work, to make sure we’ve got what information we need to have confidence in the opinion on the public accounts — that we’re providing the right opinion on it. So it does help us significantly to have done the Hydro audit.

We’re really very comfortable with the process, the pieces that we will be doing. As we say, it’s just when you get into the details of things like it’s in Vancouver and we’re not. It does change a lot of the on-the-ground management that we have to work through, including things like having enough computers and having the appropriate access. That’s where some of the software comes in.

I think there can be public confidence around…. We’re confident that we’ll be able to get the audit done, and we are also confident that it’s going to be a complex undertaking.

B. D’Eith (Chair): Just to pick up on one thing you mentioned, which is Vancouver. I noticed that you’d talked about exploring an office in Vancouver. Are you looking at that within the budget that you have? This wouldn’t be a new budget request? This would be within the budget that you have?

C. Bellringer: Yes, that’s correct. We are unlikely to see it in the form of an office. We have a number of places we can go to for office space. The Office of the Auditor General of Canada, for example, has space in Vancouver, as do other independent officers. If we were to feel that we need to have a presence there, the first option would not be to go and rent space.

With our flexible work arrangements, we think it would be viable to just employ people who are in Vancouver who would come into Victoria on occasion, as opposed to residing in Victoria and then going to Vancouver for 20 weeks.

But we have already thought through…. For the Hydro audit, we’re using existing staff who are our guaranteed best performers. Then we’ll backfill what they otherwise would have been working on, as opposed to hiring people for the Hydro audit.

J. Brar: You mentioned the high volume of FOI requests could cost you $100,000. Is that an additional amount or the total amount?

C. Bellringer: We still feel that we can absorb it within our existing full budget.

J. Brar: I understand that. Maybe I didn’t frame my question…. Is that the total cost of FOI requests, or is this additional costs for FOI requests.

K. Hall: It would be a total cost for the FOI requests that we’ve received at this point in time. Normally, we don’t have a specific dollar amount attached to them when we have them. They’re just part of standard, minor procedure in the office.

T. Redies: Thanks for your presentation. I know Hydro is a financial audit, but you mentioned Site C, and it seemed like you had some concerns or issues. What is the scope of what you will be doing with respect to Site C, if anything?

C. Bellringer: We haven’t confirmed that yet. We had a scope that we included on the work-in-process part of our website, and it was looking at a number of areas in terms of, if you will, background information. We found that the BCUC process that looked at Site C covered off the majority of those, so we’ve changed the focus of the Site C audit, but we haven’t yet confirmed what area we’re going to look at. At that point, we’ll let the ministry and Hydro know what it is.

T. Redies: To follow up on the regulatory account audit, when do you think it’ll be finished — and a report available?

C. Bellringer: We need to have the work on it finished before we sign off on the public accounts, which is in July, but the actual publication of the document, I think, will be around September.

B. D’Eith (Chair): Can I follow up on Site C? What is the distinction between, let’s say, what the Utilities Commission would do and what you would do in terms of audit, just for my own clarification?

[9:20 a.m.]

C. Bellringer: What we had planned to do, as I say, was similar to some of the areas that the Utilities Commission looked at. It was understanding the factors that were being considered in the decision-making.

At the time that we were doing the planning, we found that there was a great deal of information not available publicly, and we thought it should be. But now that information is available publicly. I mean, there are areas like cost containment, so it’s an ongoing concern to ensure that there are appropriate processes in place to keep the costs under control. That would be something that we’re considering — looking at it from that procurement perspective.

It’s a high-risk area, but again, it’s an ongoing activity that is the responsibility of Hydro. We wouldn’t be doing that for them, but we would look at it from the perspective of: do they have the right systems in place? That’s sort of high on the list right now of the risk areas that we’re considering, but there are a few others as well.

T. Redies: I’m a little confused by what you’re saying. Is it a financial audit you’re doing, or are you doing a performance audit as well?

C. Bellringer: It’s a performance audit, but it may take a financial management lens. The distinction we make between…. I’m not speaking of looking at it…. When I talk about cost containment, I’m not looking at it to say what were the costs, and are they accurately recorded. That we have to do in the process of doing a financial statement audit. It would be looking at what controls they have in place to ensure that on a projection basis, it’s being well controlled.

We would look at it, though, with a finer lens than you’d need to do a financial statement audit, if we choose to do that area. There are some similarities. There’s some overlap, for sure, but it is a performance audit with our performance audit methodology.

T. Redies: Again, I’m still a little confused here. You’re doing a financial audit of B.C. Hydro in total, and then you’re doing a performance audit on Site C. Are there two separate audits, or is it all combined? It sounds like, to me, you’re confusing performance audit with financial audits.

C. Bellringer: No, they’re two separate things.

B. D’Eith (Chair): Great. Seeing no more questions, we thank you very much for your clarifications and your report and all the work that you’re doing, Auditor General. Thank you very much for your presentation.

We’re adjourned.

The committee adjourned at 9:23 a.m.