The committee met at 9:02 a.m.

[J. Routledge in the chair.]

J. Routledge (Chair): Good morning, everyone. I’d like to welcome the Auditor General, Michael Pickup, and his team. This is a reminder that we are here today to review the budgets of the statutory officers. We have roughly an hour, and I think the way it has kind of worked out is roughly 25 minutes or half an hour to make the presentation and roughly 25 to 30 minutes for questions and discussion about your budget presentation.

I’ll introduce the committee, and then I will turn it over to you.

The Select Standing Committee on Finance and Government Services is composed of Megan Dykeman, Langley East; Pam Alexis, Abbotsford-Mission; Lorne Doerk­son, Cariboo-Chilcotin; Greg Kyllo, Shuswap; Ben Stewart, Kelowna West, who is also the Deputy Chair; Mike Starchuk, Surrey-Cloverdale; Grace Lore, Victoria–Beacon Hill; and Harwinder Sandhu, Vernon-Monashee.

I’m Janet Routledge. I’m the Chair, and I represent Burnaby North.

I also want to acknowledge that I’m joining you from the unceded traditional territory of the Coast Salish people, the Tsleil-Waututh, the Squamish and the Mus­queam. I thank them for their stewardship of the land and for welcoming us to do our business here.

Over to you, Mr. Pickup.

Review of Statutory Officers

OFFICE OF THE AUDITOR GENERAL

M. Pickup: Thank you so much. If there are any issues, of course, at any time, hearing me or you need me to repeat something, certainly please do interrupt me as well.

Before we get started and I quickly introduce folks and take 25 minutes — I will make sure I absolutely watch the clock in the corner to fully respect that it’s 9:05, and that will bring us to 9:30, so I can easily wrap up by that time — I want to begin our presentation by acknowledging that I am on the traditional lands of the Lək̓ʷəŋin̓əŋ-speaking people of the Songhees and Esquimalt Nations. I have been lucky to be a visitor on these lands for the past six months. On this gorgeous, sunny day, I’m very grateful to call this place home now.

On a personal note, as an Indigenous person belonging to the Miawpukek Nation of the Mi’kmaq group, I find time every day to get to the water to appreciate and be thankful for all that we have here. I will start with that acknowledgment and to thank the folks from my office.

[9:05 a.m.]

This is generally a team effort, as you may see in re­sponse to the questions at times. Certainly I’ve invited Russ Jones, the Deputy Auditor General; Sheila Dodds, the assistant Auditor General in charge of our critical audit support services; and John McNeill, who’s manager of our finance and admin, to supplement anything I say, either directly now or in response to any questions — as I would like to say, to either adjust something I have said or add to something that I have said as well.

I want to thank them for all of their work getting us here today. It truly was a team effort, with the results being greater than the sum of the individual parts and contributions. So I thank everybody for that and certainly thank the committee for inviting us here today to one of the most important things we do in the run of a year, presenting our budget to you.

I’m going to walk through a few pages of the budget, essentially. I know that you have the documents, but I’m really going to zero in on pages 5, 6, 7 and 8 of the budget request document that you received. You will note that our request this year is essentially looking for approximately a $1.5 million increase, which is roughly an 8 percent increase over the budget.

I want to, at a high level, provide you with some reasons for that request, primarily related to four key items that I want to draw your attention to this morning. One is that many of our internal information technology systems have reached the end of life. We are transitioning to a more modern, optimized, secure and affordable cloud-based IT system. This will enhance the delivery of our audits.

Transition like this requires a lot of effort, a lot of expense and a lot of expertise, but we’re really getting down to a point where we don’t really have a lot of choice left if we want to be secure — obviously we do want to be secure in everything that we do — and if we want to effectively deliver on the mandate as well. The new IT system is a big bucket of money. It’s essentially $376,000 of the increase that we’re looking for.

Of the remaining $1.5 million, we’re looking at $1 million for staffing, staffing increases. Now, some of that right off the top is just to be consistent with the rest of the public sector in terms of any inflationary increases and things like this that people would get. But then it’s also a few other things as well.

We’re looking at enhancing our capacity to communicate in a more modern way. I think you will notice our desire to do that, and that will take some investment. We need more IT staff to modernize our IT systems as well. That is two folks.

Finally, we need four more performance audit staff in order to meet our goal of releasing 12 performance audit reports annually. In the past…. I’ve come into this, obviously, new. Last year the office tabled eight reports, so if we’re going to get back on track, which I want to do, and get back up to 12 per year, which is part of our public commitment and desire to do, then we need to have the folks here, particularly on the performance audit side, that can do the work as well.

That will be important to do — particularly, I think, important during a time period of increased government expenditures and what I would say is a growing interest and demand for our work as COVID pandemic–related expenditures increase.

Some of the basic increases that will happen obviously relate to financial audit work, but there’s also growing demand to do performance-audit-related work in various areas related to the pandemic as well. So that is something we need to keep in mind as an office, and we need to be able to deliver, then, on getting up to 12 performance audits a year.

[9:10 a.m.]

On that, I’m happy that…. Essentially, I arrived in August, really. In September, we put our first tabling to the Legislature. By March now we’ll be up to six. That is since September. That is a good sign.

Also, this coming year we’re going to add a group of what we are calling external thought leaders. This is a group of people who will bring very diverse lived experiences as a group to provide us with their thoughts on some of our strategic issues, like perhaps how we pick performance audits, topics we may look at. Obviously, they won’t be running the office. They won’t be making decisions. But it’s just a really varied group from across the province, for example, who bring very different lived experiences than we have here in the public sector, than we have as auditors, and that will help inform us as another bit of information, another perspective. That will cost a little bit of money to put that in place as well.

At a high level, if you…. What I essentially did was walk through the key items on 5. Then we have those things that we just can’t control, that we don’t have direct control on, really. Some of this is inherited legacy. For example, in keeping with the lease and the way the lease works for the space, there was a built-in increase every five years. So that actually means catch-up now. The five years has kicked in for the rent to go up. Well, the rent is going up $180,000, and that’s contractual and not something we/I have any control over at this point in terms of changing that. That’s the five-year catch-up, which accounted for another $180,000.

If you look at page 6, it really does outline, I think, at a high level, yet detailed enough to give you a sense in terms of the differences. If you go to that final column, it’s well laid out in terms of the $1 million that I referred to on salaries and benefits. Professional services, $151,000, which really does also relate to specialized IT resources to help us make sure that our IT functions are working well. The rent increase — I went through that already. Some decreases in travel. More increases in IT, the $376,000. And then a very small increase in our office business expense of $29,000 on, essentially, $500,000, so not overly significant.

That really is, at a high level, the total budget we are looking for: roughly $20 million on the previous $18.5 million, a $1.5 million increase with, really, the key line items, again, summarized on pages 6, 7 and 8. But that’s essentially what I just went through at a high level.

I think we’re doing okay for time. I think it’s 9:15. Perhaps, Chair, if I could just pause for a sec to see if any of my colleagues — Sheila, Russ or John — want to supplement or adjust, as I like to call it. We may say correct — adjust or add to anything that I just said that they think is critical for the committee to know before we turn it back and take questions.

Colleagues, do you have anything you want to add to what I just said?

J. McNeill: I could just point out, highlight, that there has been a very significant decrease in travel. That’s a result, of course, of the pandemic. As we get closer and closer to the next fiscal year, it’s realistic that we could end up spending less than that. Probably, even after the pandemic is finished, based on what we’ve learned, we won’t see travel quite return to what it has been in the past. We’ll be doing less travel, going forward, in the future, but just to note that $309,000 decrease there in our ask.

M. Pickup: Thank you, John.

That’s John McNeill, our manager of finance and admin.

Sheila and Russ, do you want to add anything?

S. Dodds: No, I think you’ve covered it well, Michael. Thank you.

R. Jones: No, it’s all good, Michael. You’ve covered it.

M. Pickup: Okay. Chair, I would suggest, unless there’s something you want me to get into in more detail if you feel I’ve done it too high level, I would turn it over to you for questions or comments.

[9:15 a.m.]

J. Routledge (Chair): Thank you, Michael. Yes, I think that if members of the committee want to dig deeper and ask more specific questions…. I take your point about it being high level. Let’s see if people, at this point, want to dig a bit deeper.

Members, questions, comments?

P. Alexis: Sorry, I didn’t get a chance to hear everything John McNeill said. Could you just repeat that last little bit, please?

M. Pickup: I could kind of hear it, so why don’t I repeat, just for the benefit of members.

What we were talking about is on the travel. We were looking at a $309,000 decrease on a typical approved spend of roughly $700,000. So we’re looking at travel being down in the vicinity of 40, 45 percent. That partially reflects the pandemic, and us, obviously, following all of the guidelines and not necessarily travelling.

It had to do with us adapting, in some ways, on the financial audits, to how we work and doing things more remotely. At times, I would suggest, it probably reflects some of the delays we’ve had in performance audits related to the pandemic, where travel is really on hold, as is the audit.

The example I would give you is that we are in the planning phase of doing an audit on the management of substance use. Previously, it might have been called, on a performance audit coverage plan, “The Management of the Opiate Crisis.” It may have been called “The Management of the Overdose Crisis.” I think we’re essentially calling it, now, “Management of Substance Use.” Well, that is one where we’ve delayed that audit by six months at the request of those we audit. That would mean we’re not getting out there and travelling in this fiscal year, even on the performance audits, to the extent we want to.

Probably I’m giving you a longer answer than you want, but on the financial audits, it can be easier to be flexible, to be nimble, to say: “Okay, we’re going to figure out how to do this remotely.” That can be harder on performance audits, where you need to get out, for example, and see what’s happening in the field. You need to get out and work with the people who are running the programs and services and see how they’re doing inspections or see how they are doing things on the ground.

How we work may change forever. Perhaps some of the travel will be reduced in the short term. For this fiscal year, absolutely, we’re seeing that decrease of $309,000. What will happen as we move from fiscal ’21-22 into ’22-23, ’23-24…. I think some of that really remains unseen right now.

Sorry for giving you a long, long answer to a fairly short question. I thought it was a chance for me to really explain some of the core of what we’ve been dealing with here in the office in terms of managing an office during a pandemic.

P. Alexis: Thank you for your response. So much, through the lens of COVID, has changed. I’m always interested to see how offices have reacted, responded and behaved accordingly.

Can I ask a follow-up, if possible? Can you tell me what your expectations are? I know it’s difficult, but with respect to COVID, what new audits are you thinking may be in store as a result of the pandemic?

M. Pickup: Thank you so much for that question. I’m so glad that you asked me that question. Maybe I will give you sort of the quicker answer. I’m not trying to avoid answering the question, but the quicker answer is really twofold. One of it is that we prepare a performance audit coverage plan annually. That performance audit coverage plan is just about ready to go.

[9:20 a.m.]

In the performance audit coverage plan, it would say: “We are going to do the following performance audits. Here are the ones that may be related to the pandemic. Here are the ones that are related to everything else.” We make that public so that if the Public Accounts Committee wants to talk about it, if members want to call and ask us about it, they can.

We are sitting on that right now — partially, to be honest, because we’re waiting to see what we get for our budget. If we don’t necessarily get all of the budget ask, then we’re going to have to pull back a little bit on some of these audits and say that we’re not going to be able to deliver. It’s not that I don’t want to tell you everything that’s on that list; it’s just that once we find out the budget, then we should be able to get that performance audit coverage plan out the door over the next month so that people will see it.

Likewise, on Monday of next week — and Sheila or Russ or John will correct me if I’m mixing up my days, here — we are going in front of the Public Accounts Committee with our financial statement audit coverage plan to talk about what financial statement audits we’re planning on doing as well, which ties in indirectly to the budget as well. But that financial audit statement coverage plan, per the AG act, has to be approved by the Public Accounts Committee. The performance audit coverage plan doesn’t. That is something that we make public.

But I would also tell you, in response to this, that we’re in the process now of reaching out to all of the caucus offices as well to offer for me and members of the executive team to come and talk with members if they wish about our performance audit coverage plan, about COVID-pandemic-related work, about non-pandemic-related work we’re doing, and also to get some feedback and hear some thoughts. These plans are always being updated, and we’re always sort of reacting every year to say what comes on and what comes off.

We are also going to table to the Legislature, in late March, a report that will indicate if there are delays in audits, like the substance use one I just referred to, because of the pandemic; audits that may be postponed — something like Site C that has been postponed, for example; or audits that have been just plain cancelled due to other things. We are going to do a catch-up report, for the first time as an office, back to the Legislature, in March, so that members can then engage with us as they like and say: “Okay, you know, I understand this. I have some questions on this, or I have some concerns on this, or I have some things I want you to think about.”

I know that’s, again, a multifaceted answer that I gave you, but you gave me a perfect opportunity to outline some of those things that we have coming up. Does that help?

P. Alexis: Yes, thank you so much. I know it’s very complicated. Thank you very much.

J. Routledge (Chair): We have a question from Lorne, and then Greg.

L. Doerkson: Just to follow up, Michael, on MLA Alexis’s comments or questions. I’m a new MLA, and I’m trying to get a bit of a sense of workload. In your budget ask, you’re asking to add eight more staff, I believe. I’m trying to get my head around…. I know the question was already asked, but can you compare next year’s workload to last year’s to give me some sort of a sense of that?

M. Pickup: Sure. Thank you for that question. Essentially, I would say, as you will see on the summary, that some of this — on the dollars — is, of course, IT staff, where we need to modernize. But if we get down to the performance audit request, for example…. Essentially, if you look at last year, the office was able to deliver about eight performance audits. When I say last year, let’s say old fiscal year. Our plan, our desire, our commitment that I want to make and deliver on is to do twelve per year. If we are going to be able to do twelve per year, this ask will enable us to do that.

So essentially, we’re going to go from eight performance audits being delivered a year to delivering twelve performance audits per year, which I think is important given the increased government expenditure and given the pandemic and the risks and issues that come up as a result of the pandemic. There is just so much to audit. So short answer: the plan would be to get the performance audit delivery rate up to twelve performance reports per year.

J. Routledge (Chair): Do you have any follow-up, Lorne?

[9:25 a.m.]

L. Doerkson: I’m sorry. I don’t know if it was my Internet or the thing. It just died on me here. I did hear most of the answer, though, Michael.

Can you give me a sense of how many staff we currently have?

M. Pickup: Sure. As accountants, depending on how we count, it will always vary, but John, Russ or Sheila can correct me if I’m not counting the way they would count. So roughly 120 people.

John, Sheila or Russ, do you want to adjust me there at all, or is 120 good?

J. McNeill: Yeah, 120 is good.

L. Doerkson: Madam Chair, if I might, just one more with respect to our office. I just wondered when the lease agreement would be up for any kind of a negotiation. You mentioned that it’s something that we need to live with. I just wondered how long we have to live with it for.

M. Pickup: Yeah, that’s a good question. I will turn to John on that one. I’m sure I have it somewhere.

John, can you remind us when the current lease…? How long does it go out for?

J. McNeill: We entered into the lease five years ago for 20 years, so we have about 15 years left in our lease.

L. Doerkson: Last question, at least for now. Have you guys moved to…? I didn’t quite understand. I think there was some comment about being cloud-based. I understand that part. How many people are actually working in the office now? In comparison to working at home, of course.

M. Pickup: Yeah. Certainly, we have limits, and we are following, obviously, all the protocol. All of that goes without saying. Certainly, we would never exceed, right now, on any one day, more than 15 percent of the staff being in the office. People come and go. Working as teams, it may be that people come in and find a collaboration space where they can follow all the protocol in terms of distancing and not exceeding the limits. But certainly, if we had 17, 20 people here, that would be a lot.

I arrived in August. In the fall, we had started a process of people coming back one day a week. We had it very process driven of how we would do that safely. People would start transitioning back into the office for a day a week. Then, of course, with what happened in the fall and the new guidelines and respecting the new protocols and stuff, we had to reverse that and go back off of the one day a week.

So fairly structured, but unless Sheila or Russ want to add to that, I would say we never exceed 15 percent on any one day.

Folks, is that a fair response?

R. Jones: Yes, I agree, Michael. One other thing just for the members’ information. We do have, I think, eight people currently working out of Vancouver permanently. Their home base is in Vancouver. As you well know, we have a couple of very large financial audits in Vancouver. B.C. Hydro is one, and University of British Columbia. We currently have those people working out of Vancouver for us.

L. Doerkson: Madam Chair, my apologies. I guess that makes one more question from that statement.

Do we have a separate office there, or are those folks working out of their homes?

R. Jones: They’re mainly working from their homes.

G. Kyllo: Great. Welcome. Nice to meet you virtually, at least, Michael. Hi to Russ, Sheila and John.

With respect to performance audit completion, you indicated that you’re legislatively set up for 12 annually. Could you just share with the committee members a bit of context on the ability or the number of audits that were completed in, say, 2018, ’19, ’20 as a bit of a comparative?

[9:30 a.m.]

M. Pickup: Sure. I’ll look to my colleagues, just so I’m not guessing, to see if anybody has that with them. If we don’t have it with us, we’ll get you the exact numbers. Somebody can add in the detail on this, if they have it with them. Last year I think we counted around eight, and in the year before, it was under 12 as well.

Does anybody have the specific numbers with them?

S. Dodds: Hello, Michael. We have some of those numbers in our annual report.

In terms of performance audits, in 2018-19, we actually delivered 11. We were, at the time, doing a number of smaller pieces of audit work, which we refer to as CCR. So that helped us work towards that target of 12. In ’17-18, we delivered seven performance audits.

G. Kyllo: Great. Thank you. I can fully appreciate that not all audits are created equal and that some would take a more significant amount of time.

Is there any mechanism, when you have a look at the varying degrees of time and effort that might go into auditing different entities, for providing some kind of context? I think, just looking at the sheer numbers — Sheila, you mentioned, seven, 11, eight; this year it appears that we’re on track for about eight audits being completed — it certainly doesn’t necessarily relate back to the actual efforts or the performance of the Auditor General’s office.

Is there another mechanism that could be used to share with members how you guys feel the performance of the audit is? I certainly appreciate, with COVID this year, the additional challenges it would pose. But just from looking at the numbers, it’s hard to kind of suss out or evaluate what the performance is of the Auditor General’s office when it comes to completing those performance audits.

M. Pickup: I think that is a wonderful question for us. It gives us the opportunity to talk about….

We do an annual report, and we do a service plan. Through those mechanisms…. The annual report gets audited as well. We provide information in terms of what we’re trying to achieve and then square back to say: “What did we actually achieve?” Those mechanisms will be there as sort of separate reporting — not to this committee. Sheila may have to correct me here, but I think those get tabled with the entire Legislature — the service plan and the annual report.

Sheila?

S. Dodds: The service plan and the annual report are actually referred to this committee here, the Finance and Government Services Committee.

M. Pickup: Oh, okay. There we go.

S. Dodds: They were included with the package for today’s meeting.

M. Pickup: Right. The ones that you have, though, are the old ones. They would be the annual report and service plan — I say old ones — from March 31, 2020. The ones that I will have been involved in…. You won’t have those yet, for March 31, 2021.

The annual report and the service plan will square up some of that. But I don’t mind sharing with you…. One of the big directions I have here, in arriving and working with the team here — and everybody is on board for — is that we want to do smaller, more focused audits that don’t take as long, that get done more quickly, that allow us to have more output, that are reported in a shorter way.

You will already notice, for example, the report that we tabled on January 19 with the three performance audits in it. We’re moving to these one-page summaries of at a glance. We’re moving to short videos. On top of that, as we go forward, we’ll be reducing the size of the reports as well.

The other thing I would say, in terms of…. I’m all about telling the performance story, including for us, and what that performance story means and the details of it.

That’s one of the reasons why, for the first time, in March of this year, we will table a report in the Legislature that circles back on all of the audits that we had talked about that aren’t done because they’ve been postponed, like the substance use one, where it was postponed for six months, or Site C, for example, or things that have been cancelled for various reasons or reported in another format. It’s giving us a chance to come back to the Legislature and say: “Here’s what’s happened to these.”

[9:35 a.m.]

Absolutely, I think it’s in the annual report that will be coming. We’ll be having a good discussion about what the plan was and about what we delivered and the reasons why, obviously.

G. Kyllo: Michael, if it was the determination of this committee that there was no additional funding available to you for the next fiscal, what would the actual impact be? How would you actually be able to manage that internally, and what would the ultimate outcome be with respect to the number of audits that were completed?

M. Pickup: Yeah. I think it’s…. If you look at the discretionary asks, for example, and the requests that we’re looking for, the only real discretionary area, when you come down to it, relates to the number of performance audits that we can do.

We have to pay higher rent. I’m in a 20-year lease that I’ve inherited. I can’t do much about that.

New IT systems. I mean, we cannot take a chance on having a security breach or not having IT systems that are working. So not a whole lot of wiggle room there.

Inflationary increases, the $300,000, that come with being in the public sector. Not a whole lot of wiggle room there.

We’re getting down, really, to…. The only discretionary area where we could look to reduce is on the ability to deliver performance audits. What would that mean in terms of the number of performance audits? It would depend, I think, on what the actual budget was. Certainly, if this is what it’s going to take to get us to be able to deliver 12, then it’s going to be less than 12. We would have to sit back, depending on the actual budget, and say: “Okay. What does that mean in terms of what we drop?”

We’re getting…. I’m already starting to feel the reverse pressure of doing more audits and of members of the Legislature wanting audits done on pandemic-related matters, for example. So I would have to have that frank discussion with MLAs and say: “Okay. Well, these requests are coming. However, if we don’t have the associated funding, we can’t do more pandemic-related performance audits.”

We’d really have to figure that out in terms of the reduced number of performance audits. That really is the only area where we have any significant discretion to reduce.

If you’re asking me for my view, obviously, my view would be that a time of unprecedented increased expenditure, unprecedented risk in so many areas, is likely not the time for us to be pulling back on the amount of performance audits we do, especially since I’m pushing so hard here, new, for us to deliver and for us to get more performance audits done and to get them done more quickly. It would be a little contradictory to the push that I’m trying to do and everything that I’ve been working on with the team in the last six months and where I’d like to see us go.

G. Kyllo: How many auditors are actually working on the performance audits? Out of your complement of 120 staff, how many would you identify as being actively involved in the performance audits?

M. Pickup: Yeah. Perhaps I will let one of my colleagues go on that, because they’ll be more precise. I will say 47 on financial audits, and I will say 37….

Just to give you a little bit more preciseness, John or Sheila or Russ, do you want to add more preciseness than my 47 on financial and 37 on performance?

J. McNeill: We have about 40 people dedicated to performance audit out of the 120.

G. Kyllo: Okay. So there are about 40. Looks like you’re proposing to add an additional four. That’d be a 10 percent increase. With just a 10 percent increase in labour, do you think that you can increase your performance or productivity from eight to 12?

M. Pickup: I tell you. It’s my number one objective, having arrived here from Nova Scotia.

[9:40 a.m.]

In Nova Scotia, during my six years as Auditor General there, we were able to deliver ten performance audits a year with 39 people. Besides all the people stuff and all the pandemic-related stuff, obviously, which goes without saying, my number one goal right now, coming in here as Auditor General, is to up that number of performance audits, get them done more quickly, make them shorter, make them more focused and have outputs coming.

I got here in August. You know we had a report in September. We had three reports in January, essentially. We have one coming next week. We have two more coming in March. We’re getting up to six or seven in the six months, essentially, since I’ve arrived. It is what I’m trying to drive most of all.

G. Kyllo: Thank you, Michael. Just one last follow-up. With respect to the $300,000 increase in wages, you indicated that a significant portion of that is tied into the public service. Can we just get a breakdown of the $300,000 — on what portion is, I guess, embedded within the collective agreements — and if there are any other increases that are just for management or supervision and other forms of employees?

M. Pickup: I will let John break that down for you.

John, do you mind breaking that down?

J. McNeill: Yes, I can’t provide the exact details in numbers, but I can tell you that the vast majority of our staff are in the MCCF management band. We do have some schedule A. Generally, what we do is follow the direction of the PSA in terms of raises for schedule A, which basically follows the government union increases. Then the government also releases their policy for performance-based increases for the management band. We follow that as well. We’ve estimated that to be around a 2 percent increase. That’s where that’s coming from.

I can’t give you the exact breakdown of what is schedule A and what is management band just right off the top of my head here, but I can tell you that most of it is MCCF, 80 percent or more, with 20 percent or less being schedule A or tied to the GEU.

G. Kyllo: I was just going to ask: are the increases embedded in an agreement where they are required or mandatory, or are these still somewhat discretionary? I’m not saying that it wouldn’t have repercussions.

M. Pickup: John, why don’t I sort of take that at the beginning? Our folks are not unionized, so we’re not negotiating with a group. We are essentially following what the public service provides to people — just because people here are, essentially, part of the broader public sector. If there are restrictions that come in for the public sector, we’ll follow them. If there are general increases for union folks, we’ll follow. It’s generally just to kind of follow along so that people here feel they are treated….

Keep in mind, at the end of the day, from a retention or recruitment perspective, folks here are in the broader public sector and know quite well what is happening out there in the public sector in terms of increases, just to give you that sense. I’m not sitting down and negotiating with people as to whether they get 2 percent or 3 percent. Essentially, you get what the rest of the public service is getting or not getting.

J. Routledge (Chair): Thank you. We have questions from Ben, Harwinder and Mike.

B. Stewart (Deputy Chair): Mr. Pickup, in your opening comments, you talked about hiring or bringing on some external thought leaders. I’m assuming that that’s to help frame as to where the performance audits are going to be going and the direction you want to be taking that. I guess I’m assuming…. Is that process internally driven? If it is internally driven, who’s going to be doing the selecting of these thought leaders?

[9:45 a.m.]

M. Pickup: Thank you for that opportunity to talk about the external thought leaders. Many of the Auditors General across the country have in place what they call a panel of senior advisers. I’ve chosen a different approach and a different name. I’m calling it “external thought leaders.” These are going to be people who come from diverse groups and backgrounds within the province. They may be Indigenous leaders. They may be people from non-profit organizations. They may be people from boards of trade or private business. It is to bring different perspectives.

They won’t be employees of the office. They will be people we use, a couple of times a year, to get together to say, “I want to hear your input. We are performance audit planning,” for example. “You folks are a very diverse group, with very different lived experiences, from across the province” — perhaps rural, perhaps city, perhaps private sector, perhaps public sector. “Give us your input on things that you think we should be auditing from a performance audit perspective.”

It’s to broaden the input beyond the public sector, beyond the people we audit, beyond the people we work for in the Legislature, beyond our own thoughts in the audit community and the world — to get out there and touch base with leaders who represent just such a diversity of perspectives.

It’s not for them to make decisions; they’re not going to be decision-makers. They’re not going to be giving me advice. They’re not going to be running the office. They’re not going to be paid employees. They’re going to be just these leaders who come together at certain times of the year, when I want some thoughts on some things, to say: “Give us your thoughts on the following topics.”

B. Stewart (Deputy Chair): So this is an idea that you’ve come up with?

M. Pickup: The previous Auditor General didn’t have that in place. I’ve best-practised it across the country. The Auditor General of Canada, for example, and Ontario, Quebec, have similar groups in place. They tend to call it a panel of senior advisers, but like I said, I’m calling it external thoughts leaders.

Mine very much is driven by getting a diversity of thoughts and perspectives at the table, people with different lived experiences, to make sure we are inclusively making decisions, things like what performance audits to pick.

It’s not something that was in place with the previous Auditor General, I think. Someone can correct me if I’m wrong. I think perhaps somewhere down in the past a previous Auditor General here in B.C. had something similar in place, but I’m going by memory, I think, of somebody telling me that. Certainly, I would not be the first Auditor General in Canada to have such a thing in place.

B. Stewart (Deputy Chair): The selection process. Who will be making that? Who’s the selection team or individuals that are doing that?

M. Pickup: It is all internal. We’ve gone out and looked across the province to, say, come up with a potential list of 20 or 30 people. It’s driven by us. Nobody is influencing us, if you will. If somebody gives me a thought, fine. We’ve come up with this broad list of people. Now we’re at that phase of going through the list and saying: “Okay. Let’s start making some contact with people to see if they’re interested.” Then there’ll be a clearance process, obviously — whether it’s security or in confidentiality and all of this other stuff as well.

To answer your question, it is internally driven; it’ll be internally decided. Ultimately, it’ll be people that I’m comfortable with.

B. Stewart (Deputy Chair): I guess that takes me to the next area I’d like to probe a little bit. You’ve already been brought into the role while COVID was taking place. You know about — you mentioned it yourself — the risk, the unprecedented risk and expenditures that are going on.

Considering the reason for the existence of the office — the taxpayers and the obligation that government be doing its job — how do you foresee trying to satisfy the people who employ the office, in terms of their concerns about everything from the rollout of moneys to vaccines and things like that? How do you see yourself being prioritized? Are these thought leaders? Or is this going to be internal, in terms of satisfying the current spectrum of priorities?

[9:50 a.m.]

M. Pickup: Sure. This, for me, just on a personal/professional note, is one of my favourite parts of the job. It’s getting out and talking to people and listening to people, hearing what people have to say to inform us about the work that we do and the audits that we pick. I’m thinking of things like the pandemic, for example, and audits that we may do related to the pandemic and then not related to the pandemic as well.

It’s important for us when we prepare the performance audit coverage plan, which is the result of a lot of work across all of these sectors, to be available to talk about this to folks. We are in the process now, and some of this has already happened, where I have reached out — and it’s well underway — to the caucus offices to say I would be more than happy to come and meet with caucus offices, either in whole or parts, or with select members to talk about where we are in our planning in terms of potential performance audits and also to listen and to get feedback, to say, “Could you think about this audit? Could you think about that audit? What about this issue? What about that issue?” and to engage in dialogue.

As well, when I met with the MLAs at the MLA briefing a couple of weeks ago, where I think there were probably 20-some MLAs, I certainly made the offer there. If any MLAs want to speak with me or speak with us, I reminded them they’re allowed to call me.

I remember I would run into MLAs on the street in Nova Scotia, and they would say: “Am I allowed to talk to you?” I’m like: “Yeah. We’re allowed to talk. It’s okay. You can pick up the phone, and you can call, and you can come in.”

Certainly, and I’m not being silly about it, it’s one of my most rewarding parts of this job — getting out and talking to the people we’re working for, directly listening to the people we work for, having that inform the audits that we pick and then also being accountable and explaining: “Okay. Here are the ones we’re doing. Here, perhaps, is why we’re not doing something.”

I can think of three examples in Nova Scotia. Worker’s compensation, mental health and primary care — three audits that really came about because so many MLAs came to see me about these issues. I said: “Well, absolutely, we’ll speed these up, and we’ll get them done.” Really, it gives me a lot of satisfaction when MLAs are engaged with us and are interested in the work that we’re doing.

J. Routledge (Chair): Thank you, and let’s turn to Harwinder.

H. Sandhu: Yes, Mr. Pickup, a quick question. Can you, please, further elaborate when you talk about pandemic-related audits? You mentioned you’re getting requests from MLAs. I wonder: what does it pertain to? Is it the offices, or is there any other organization that can also help with the audit?

Being a new MLA, I just want to know a little bit more about the process and how much time it takes and what it entails when you talk about the pandemic-related audits.

M. Pickup: Yes. Sure. For those folks who aren’t familiar with the audit process, I always remind people when we do an audit, it’s an audit. It’s not a newspaper article. It’s not a journal. It’s an audit, and what stands behind that are all the standards that go with that.

The downside of that, I fully understand for members who are not familiar with audit, can be that we don’t get audits done in two months. If you can get an audit done in a year, that would be a typical timeline. Audits aren’t always, sort of, that quick: “I want an answer in a month or two.” It’s very challenging to do that. Having said that, in September, we tabled an information report to the previous Legislature of B.C. pre the election on COVID spending that we started in May and we tabled in September, which was very well received on the financial commitments.

But the people doing the audits of government programs and services, of government financial statements — that’s us, right? We’re the Office of the Auditor General. We are the ones doing audits and following audit standards. To give you some sense of what we will then select…. When we have this performance audit coverage plan come out after we have the budget finalized and indicate what we have planned….

[9:55 a.m.]

At a high level, there are all kinds of topics coming up that we should consider. It’s partially why we are in the process of making the offers out to caucus offices, to say: “If you want me to come out and chat with MLAs about ‘Why are we doing this?’ and ‘Why aren’t we doing that?’ and ‘How did this get on the plan?’ and ‘Why isn’t it…?’” I’m more than happy to go have those types of discussions with people. I think that makes sense.

There’s everything imaginable, I think, in terms of the pandemic. That can be rural Internet and how well rural Internet is working, to the northern bus service, to the impact on substance use. I mention that one, an audit that we’re well underway in planning, which we have delayed for six months at the request of government because they’re dealing with the pandemic. There are those types of things.

Whether we look at things on PPE, on vaccine planning, on the hotel purchases, for example, that we’re looking at looking at, the issues of people experiencing homelessness — you name it. There is nothing, really, that a performance audit would be limited from doing if government has a program for it or if government is administering policy around it or if government is spending money on it.

The only thing we are limited from doing is…. You know, we’re not making policy. We’re not commenting on the merits of policy. We’re not trying to form policy. We’re looking at the administration of programs. We’re looking at the administration of policy. So that puts the possibilities out to be very, very broad.

I remember when I was Auditor General in Nova Scotia and we did an audit of diversity and inclusion, people would say to me: “How do you do an audit of diversity and inclusion?” I would say: “Well, it’s because government has a program. They have policies. They are saying they’re committed to doing this. We are auditing on what they said they were going to and how they’re administering it. We’re not creating policy.” That is sometimes an example I would use.

There are not a whole lot of limits as to what is possible. Auditors General across the country now are getting lots of requests to do work and to look at things. To some extent, it’s going to be managing. As Office of the Auditor General, what are we capable of doing? Partially why I am pushing for us so hard to get up and delivering on 12 performance audits a year…. Part of it is related to the pandemic and the increased expenditures.

Does that help — that answer? Do you want me to reroute on something?

H. Sandhu: No, no. I’m quite aware about the process and the roles. I was just more curious about the pandemic-related audits and being part of the decision — this committee as well. I wanted to know what kind of requests, like from MLAs, you’re getting. Do they involve travel or…? That’s how it’s going to affect your budget. So I was curious about that — just the general….

M. Pickup: One I didn’t give an example of — another one — is remote working and the potential impacts on cybersecurity and on teleworking — you know, remote working arrangements. That would be even another example of something that we may be doing as well.

Certainly, we had no shortage of potential audits before the pandemic, right? We had a performance audit coverage plan with lots of topics on it. Now add on all of the unique risks and aspects related to the pandemic and the expenditures. There’s a lot for us to keep busy with.

H. Sandhu: Definitely.

J. Routledge (Chair): Russ, you wanted to add?

R. Jones: If you don’t mind, Chair. I just wanted to remind everyone, as well, that when we’re doing our financial audits, we are also taking a look at a number of the new pandemic programs that are out there — the amount of money that’s going out to individuals currently, the money that’s going out to small business and whatnot.

What we do is that while we’re doing our financial audits, we look at the controls that have been put in place to make sure that they’re appropriate. If we find any deficiencies, you will find that coming out in what we call management letter points. We hope to be producing some of those in a report next fall that goes along with our results from the financial audits. So we’re covering a lot of territory.

H. Sandhu: Yes, it really helps. Thank you for the work you’re doing.

[10:00 a.m.]

J. Routledge (Chair): I’m noticing that it is now 10 a.m. Mike would like to ask a question, and Greg would like to ask another question, so I just want to draw your attention to the time.

M. Starchuk: Thank you, Michael, and your staff, for a very, very enlightening presentation. I have to say that when I read a report and hear that the idea is to do smaller reports it is always a pleasure for my eyes to go through. Generally I will race to the first page and see how many pages there are and determine what time of day I’m going to read it in, so I appreciate that.

I also like the fresh ideas that are coming forward, and your enthusiasm is not lost on me at all. I’m just wondering why it took so long to come from Nova Scotia to the left coast of the country.

With regard to the smaller reports and doing them smaller, is there an intent that if you discover something in a smaller report, it actually becomes a spawn of another report in a larger depth? Or is it always going to be in that smaller format?

M. Pickup: Thank you for the question. Just want to remind folks that that was not a setup question, because I love that question.

Absolutely. I’m a fan of…. I would rather get two to three audits done on a topic that can get out more quickly and get them to people in the Legislature more quickly rather than having an audit go on for two to three years to cover everything.

An example I would give you: we started an audit in Nova Scotia on the Workers’ Compensation Board. We very quickly figured out that that were two audits. We got one out within six or seven months, and then we got the other one out after that, so members already had that first piece of information. They had that first audit that they could deal with in the Legislature and at committee, and then we got the second one out as well. It enables, I think, getting attention to things more quickly and, particularly on a bigger topic like workers compensation, makes it more digestible.

I think you’re going to see that on our substance use audit. Rather than covering A to Z, we will cover A to C, with a commitment that if D to L come up during the audit, we will look at coming back to do audits of those things as well.

I just think it’s the way to go, particularly with the increased pandemic spending, with so many things on the go. We’ve got to be able to get in and do things quickly and cover a topic off shorter, and if that means two or three audits on something, we do two or three.

M. Starchuk: Thank you. That’s enlightening — your collaborative approach and open door. I wish you well in your tenure.

J. Routledge (Chair): Final question from Greg.

G. Kyllo: A number of years ago when I was sitting on the Public Accounts Committee, I recall that the AG’s office was availing themselves to government as they started to look at developing new policies and regulations, as a manner to, I guess, put that extra set of eyes on the policy development — not so much the policy, I guess, but the mechanisms in place — to ensure that government is able to, actually, clearly articulate what the desired goal is and then also to be able to internally determine their own performance.

I’m just wondering: is that something that government has taken you up on, of availing your services to them in helping to, I guess, put the appropriate checks and balances in place at the front end, which would make, I would assume, the work of the AG’s office just that much easier on the back end?

M. Pickup: Yeah, so I would say, with all sincerity and meaning what I say, that I am super impressed, here in British Columbia, with the cooperation/encouragement/independent but professional partnering relationship — particularly with what I’ve seen with the comptroller general’s group, with the people doing the accounting, during a time which I’m sure must be incredible pressure for them, to run the finances of a province — and the way we’ve been able to, while maintaining independence, collaboratively work together on things that are important.

I’ll give you two examples that I think are critical. The first one was that September report that we put out on COVID expenditures. This office, the Office of the Auditor General of British Columbia, was the first office in Canada, first audit office in Canada, to put out a COVID-related, pandemic-related, spending audit in Canada. Other places in the world did it, but we were the first.

[10:05 a.m.]

A big chunk of how we were able to do that is getting people here, yes, engaged in it, but the cooperation we received from the comptroller general’s group to say that yes, this makes sense. We shortened that up. We got that done between May and September. We would never have been able to do that without them also seeing the merit of us doing that. So that’s one example.

The next example I would give to you…. Mr. Jones, Russ, just referred to it in terms of the financial work we’re doing. We are doing all kinds of controls-related work around big buckets of money that are being spent related to COVID, and we’re working with the comptroller general’s office to say: “We want to cover things that perhaps you haven’t had a chance to cover. We want to get in there and look at risks that make sense.”

The cooperation we’re receiving, seeing the added benefit of doing that…. Recognizing full well that when we do something, it’s going to be all public — the results will be public. But they see the merit in us doing that and have been encouraging us to do that. So I meet monthly with the comptroller general to have a discussion, to have a chat, and I’m really impressed with how they’re encouraging us to do this work.

They see the value both to them and how they operate but also to the people in the Legislature in terms of: what comfort are you going to get from your auditor — us — about how the controls are working over very big buckets of expenditure that are happening in the province and are happening quickly? We’re going to be able to do that and report on it in October of this year. We are now putting in place the first full financial report by this office, similar to what we did in Nova Scotia, where we will have two or three chapters come out in October that talk about this type of work that we’ve done — controls, for example.

We’re also doing it on fraud risk management. I’ve received excellent cooperation from the comptroller general. We are busy now out there surveying all of the big organizations that are part of the government reporting entity, including people that aren’t directly part of government, like some of the Crown corporations and separate entities that are still part of the overall government financial statements but not run by the comptroller general. We’re out surveying them. We’re out asking: what are you doing for fraud risk management? What kinds of fraud risk policies do you have in place? We’re going to report that back to you in October of this year, not next year. So that is new.

A long answer, but I think sometimes specifics work well, rather than me just sort of being general. So I wanted to give a couple of specific examples of how I see us working with government to improve things.

G. Kyllo: Thank you very much, Michael. I really appreciate that. It’s encouraging to hear the preventative measures, or the proactive approach to making sure those checks and balances are in place at the front end. And I would assume, assuming that government would continue to do that on a go-forward basis, it would, I’m sure, make your guys’ job, or even your interest in undertaking some of these performance audits, just that much easier. So thank you again for that.

J. Routledge (Chair): Well, it looks like that concludes the questions and discussion.

Michael, Russ, Sheila and John, I’d like to thank you very much for presenting to the committee and fielding what is a wide range of questions.

In conclusion, I’d also like to make the observation that the work that you do is critical to government transparency and accountability. You’ve made that very clear to us in the kinds of examples that you’ve given, the kinds of details that you’ve given. It’s also core to the public maintaining trust in their government. The kind of work that you do, the way you describe your work, is so rooted in the public and is reassuring to the public at a….

You know, most of my adult life, people have been very cynical about government — any level of government, anywhere in the world. It’s very important, what you do. It builds public trust and reduces what is a kind of baked-in cynicism that people have and that prevents them, actually, from participating in democracy. So thank you for what you do, on behalf of all of us. We’ll talk again.

Shall we take a five-minute recess and then move into deliberation?

The committee recessed from 10:09 a.m. to 10:16 a.m.

[J. Routledge in the chair.]

Deliberations

J. Routledge (Chair): I’ll call the meeting back to order, and I’ll entertain a motion to move in camera.

Moved by Pam Alexis, seconded by Harwinder Sandhu.

Motion approved.

The committee continued in camera from 10:16 a.m. to 12:09 p.m.

[J. Routledge in the chair.]

J. Routledge (Chair): Now I will entertain a motion to adjourn.

Lorne, seconded by Megan.

Motion approved.

The committee adjourned at 12:09 p.m.