The committee met at 8:02 a.m.

[M. Bernier in the chair.]

M. Bernier (Chair): Good morning. Welcome. Thursday, November 25. I’ll call the meeting to order, the Select Standing Committee on Public Accounts. I want to welcome everybody.

Before I get going, I just want to acknowledge that it’s been a very, very busy and crazy couple of weeks for, I know, most people in here, especially for, if I can highlight, some MLAs who are dealing with a lot of struggles back in their ridings, on both sides of the House. I just want to acknowledge…. I know it’s been very busy.

This looks like a lot on the agenda today, and I know it’s been a busy couple of weeks. I just want to, right off the odds, at the beginning here, say that if we feel, at the very end of this, that we haven’t got through everything, then we will reschedule more time at a later date, if we need to. I just wanted to say that. I don’t want people to feel rushed. There’s nothing in here that is absolutely time sensitive for this meeting.

I just wanted to put that up front. I want to make sure that we give all of this the due diligence and scrutiny that is required. In saying that, I’m hoping everybody feels comfortable as we go through it today. I wanted to flag that, just in case. I know there have been some members here that probably have had other things on their minds for the last couple of weeks. I just wanted to acknowledge that and thank them for the work they’re doing, as well, for their constituents.

With that, we’re just going to try to jump right into this.

I want to thank all of our presenters that are here today as well. It’s been almost a month, I guess, since our last meeting. I’m trying to remember now. It flies, between different committee meetings.

I want to maybe start right away with the Auditor General. We’re going to be looking, first — review and consideration — at the Auditor General’s report on the audit of public accounts for 2020-21. Quite a thorough report, as always.

I’ll turn things over, to start, to our Auditor General, Michael Pickup.

Good morning, sir.

[8:05 a.m.]

Consideration of
Auditor General Reports

Auditor General’s Report
on the Audit of the
Public Accounts – Fiscal 2020-21

M. Pickup: Good morning. Thank you. Respecting what you indicated, I will feel no sense of need to rush through anything. I also would suggest to my team that when we’re having these discussions, do take the time you feel is necessary to answer the questions. Don’t feel a sense of rush either. Thank you for that reflection as we start the committee meeting.

I, of course, would like to start by acknowledging, with respect, that at the OAG British Columbia, we generally work on the lands of the Lək̓ʷəŋin̓əŋ-speaking people, known today as the Esquimalt and Songhees Nations. I’m grateful for being a visitor on this land and strive to be mindful of the connection it holds to the Indigenous peoples of these territories. As a member of the Miawpukek First Nation, I’m particularly mindful of this and try to reflect on this every day of the week.

I’m going to limit my opening comments to the report on public accounts. I certainly want to thank the committee members for their interest in this. Also, as I’ve mentioned before and generally mean it — sincerely mean it — thank you for the expediency of the meeting and how close it is to the timing of the report. We, as auditors, find that just wonderful — thank you — particularly since the report was only released last month. It’s great to be sharing it with you this soon and while it’s still very much fresh in our mind and as we proceed to start working on the 2022 financial statement audit as well.

To everybody in our office who’s worked on this, I appreciate all the work that has been put into this report and to get it out, probably, five months in advance of where we did last year, which is remarkable. I applaud the entire financial audit team. You’re getting to spend time today with a very small percentage of the number of people who actually work on this. I thank folks for their work commitment and flexibility through this process. A few of the folks are with us today, and some are not.

I particularly want to thank Stuart Newton, assistant Auditor General; Molly Pearce, to my right, principal and engagement leader for this report, for her remarkable efforts on this and the audit; Lisa Moore, principal, who is behind — I’m going to guess — my left shoulder; Jacquie McDonald, who is likewise back there; and Mark Castator, who is back there as well. While they are back there behind us today and not at the table, they weren’t back there in delivering on this report. They were up front and centre with us and remarkable in getting this work done.

I also want to thank the folks to my left. Likewise, only a few of those folks are here today, but I thank folks of the staff at the office of the comptroller general in the Ministry of Finance for their cooperation during this engagement as well. While we go through things in this report, there’s generally a lot of agreement on a lot of things — different independent roles but similar objectives, I would suggest, in wanting to see financial statements that are high quality, wanting to see financial management and controls in place and working through that.

I do thank, sincerely. I get to spend probably a small proportion of the time that my colleagues do with these folks, but I do get to spend time with these folks on a regular basis and very much appreciate that engagement and their professionalism. I guarantee you that while at times we have different perspectives and different views, that is a good thing. Differences of views are important. It’s always professional and never steers off of that, and I’m thankful for that.

I note, with interest, that this week has been proclaimed Restorative Justice Week in B.C. Of course, restorative justice intends to help communities, including Indigenous communities, to foster a criminal justice system that’s fair, accessible and compassionate. I think this year’s theme, “Inspiring innovation,” has, broadly speaking, relevance to the work of my office. Our vision shares some of the same goals — questioning the status quo, looking at diverse perspectives and supporting new and innovative approaches.

Maybe, before I turn it over to Stuart, a final thank-you to the folks that are with me today as well for accommodating their home and family schedules to make it here for eight o’clock, which often means adjusting family life and finding people in their extended families to fill in on daycares and stuff like that. I appreciate all of you folks adjusting your schedules, as well, to accommodate the committee and their eight o’clock start. Thank you to you and your families as well for that.

I will turn it over to Stuart.

[8:10 a.m.]

S. Newton: Thank you, Michael, Chair, vice-Chair and Members. I’m going to walk through the Report at a Glance. Pages that you have received, I’ll go over at a high level. It’s important to understand that when we do a financial statement audit, there’s more to the audit than just the financial statement opinion. So the report is set up to highlight a number of areas where there are areas of interest or areas for improvement as well.

Our mandate is to produce an audit opinion on whether or not the financial position of government and its operations as at March 31 are fairly presented. Our audit opinion states that in all material respects, except for the qualification, that was the case.

Our report highlights overall…. Because of the work that we did, government corrected errors that resulted in a $550 million increase to the deficit. The qualified opinion is the same one as in previous years, and the basis of qualification is the same, based on deferral of revenues. This year the overstatement is nearly $6 billion.

In our audit opinion, we highlighted what we call key audit matters. These are areas where it requires a significant challenge or significant judgment in order to complete the audit. We’re not stating that there are any concerns or errors. What we’re stating is that these were significant areas that had to be reviewed in order to come to the conclusion. Those were determining what is included in the public sector entity or the province of B.C.’s financial statements.

Estimates are rather challenging. The estimate for personal income tax is $10 billion. It’s a significant estimate that requires a lot of work to review. As well, COVID-19 for the year ended March 31, 2021 was still a significant issue and did have an impact on government.

We also highlight other areas of financial interest — the St. Paul’s Hospital sale for $850 million and the write-down of personal protective equipment, of $66 million. Then we’re also following along on the Public Sector Employers Council CEO freeze of pay. It occurred in the year, and we are looking at it this year and next year to determine that the freeze actually took place.

Then, as part of an audit, we also produce management letters back to auditees. The audit firms that audit other Crowns do that as well. This is to provide advice and comment on improvements that could be made to management processes or controls.

On the next page. Because COVID programs were significant in the amount of expenditures that they had, it requires us to understand those programs well enough to be able to assess how well the financial information flows into the financial statements to be able to audit.

The three programs that we focused on in this report were the B.C. emergency benefit for workers, the B.C. recovery benefit for families and individuals, and the small and medium-sized business recovery grant. The eligibility controls for the emergency benefit for workers were not sufficient to mitigate potential fraud. To get payments out quickly, government accepted people saying that they were eligible. Government audits to verify eligibility are planned for all three programs.

We did not find any problems with the controls over the accuracy and completeness of financial transactions which flowed through to the financial statements.

After reading the report, you may wish to ask the following questions. Why should people care about the audit opinion and that it’s qualified? How will government resolve the problems that caused the qualified opinion? How concerned should government be about significant management letter items? How are management letter points resolved? And when will government verification audits for COVID-19 programs be completed?

M. Bernier (Chair): Okay. Well, thank you very much for that, Stuart.

Was there anything else, Michael, that you wanted to add before I turn things over to Carl?

M. Pickup: No. I think that will be it for our opening comments.

M. Bernier (Chair): Okay. Well, with that, then, we’ll move to the comptroller general.

Carl, it’s great to have you here this morning as well. I know you have a bit of a presentation to go through, but I’m looking forward to you going through that with us and then questions afterwards.

C. Fischer: Thank you very much. I have with me today Diane Lianga, our chief accountant, whom you’ve seen before — and will see again and again in the future — and Alex Kortum, who is responsible for compliance and audit functions at OCG. Diane and Alex have put together a presentation on the public accounts report, and I’ve asked them to include some additional context that will help inform the observations in the Auditor’s report, particularly for the ’20-21 fiscal year and the extraordinary measures that government undertook in response to the pandemic.

[8:15 a.m.]

This will be useful context for the committee, not only for this report but for future COVID-related reports that will come to you, so we think it’s worthwhile taking a few minutes to provide that context.

With that, I’ll pass it over to Diane to begin.

D. Lianga: Thank you. Good morning, Chair and members. My name is Diane Lianga, and I am the executive director for the financial reporting and advisory services branch at the office of the comptroller general. Part of my responsibilities is the summary consolidation, the publication of the public accounts and coordinating the annual year-end audit.

Today I’m going to discuss the most recent public accounts and observations included in the Auditor General’s report on the financial statement audit. Following our last meeting, when we talked about government’s accounting policy, I’m going to take it one step further today and provide a bit of context around the financial reporting cycle.

On slide 2, I’ve summarized that the 2020-21 public accounts were prepared consistently with prior years. They followed the same basis of accounting as prescribed in the Budget Transparency and Accountability Act. The act requires Treasury Board to set the accounting policies for government, which are based on the Canadian public sector accounting standards, often referred to as generally accepted accounting principles, or the acronym GAAP.

The form of the public accounts remained the same as in prior years. There were no changes in the legislative framework, and there were no new accounting standards implemented. When a change in accounting policy or the reporting entity occurs, the change is required to be tabled and disclosed.

There was some new content added within the public accounts this year. There is a new table of COVID-19 pandemic spending. This disclosure uses the same categories and groupings as the budget and quarterly reports. Total pandemic spending for the year was $10.1 billion.

Second, there was some additional disclosure that we’ve included for deferred restricted contributions, to describe the restricted contributions by program, contributor and recognition period. Lastly, there was a new note added to the financial statements for the long-term B.C. First Nations gaming revenue sharing provisions that are contained in the Gaming Control Act.

On slide 3, you will see a timeline of the public accounts process going from left to right. In order to accomplish this complex consolidation of over 160 entities in a timely manner, we work through a two-draft process.

Draft 1 is based on the preliminary results of ministries and organizations. For organizations, those are the financial statements that they present to their auditors for audit. For each entity, sector, statement, note and schedule in the public accounts, we follow detailed accounting programs to consolidate the financial information and to ensure that they are complete and as accurate as possible.

A first draft of the consolidated financial statements with full note disclosure is provided to the Auditor General in mid-May, with the understanding, however, that adjustments will occur, because entities and ministries are still finalizing their estimates and they’re still under audit. We know that as time passes through the audit period, adjustments will be required.

We call these draft audit adjustments, and typically they fall into one of three categories: those that result from confirming events, like CRA tax data or quarterly consumption tax returns that we receive after March 31; those that result from inter-entity reconciliation — consolidation is a pretty delicate balance, and we want to make sure that we haven’t missed anything and everything ties directly with each other; and those that result from one-off transactions that really are only discussed between an entity and their auditor at year-end.

Once the final financial statements are provided by the entities around mid- to late May, the same consolidation process is used to complete draft 2. By the end of June, draft 2 is provided to the Auditor General. At this point, there are usually no outstanding items, and any further changes really are just a result of the production process.

Timely release of the public accounts helps to promote financial accountability and provides the necessary information for legislators such as yourselves to make decisions. We complete the financial statements by June 30 of each year. Public accounts release, however, often occurs in mid- to late July. Once the Auditor General is satisfied that the audit is concluded, we receive his audit opinion and work through the production process.

[8:20 a.m.]

On slide 4, the Auditor General’s report on the audit of the public accounts includes a few items for information. As I mentioned, each year we process draft to audit adjustments because information gets better as time moves forward. We encourage ministries and organizations to provide all necessary draft to audit adjustments, to ensure the public accounts are as complete and accurate as possible.

We expect these adjustments to total in the range of plus-or-minus $100 million to $400 million in each year. This year the net impact was within the normal range, and it included the nine items that were identified in the Auditor General’s summary of adjusted differences in this report.

Also in the report, the Auditor General explains the three key audit matters that describe the processes the auditors take to gain assurance over the items that they’ve noted.

Lastly, management letters are used to communicate audit observations that do not have a direct impact on the auditor’s opinion on the financial statements. At the office of the comptroller general, we use these observations to inform our own risk assessment, either through compliance or audit and financial reporting.

On slide 5, I talk about the audit opinion. The audit opinion on the 2020-21 summary financial statements continued to include a reservation on the deferral of government transfers revenue. This qualification item was first raised in 2011-12. As directed by the Budget Transparency and Accountability Act, the government has not adopted the recommended treatment. Government continues to recognize restricted contributions when the service delivery obligations are fulfilled, which is consistent with the way the underlining assets are recognized.

On 6, I’m going to go into a little bit of a highlight — how it affects accumulated surplus. This is a little bit of a technical topic, so I apologize in advance, but I’m happy to take any questions after. This past year really highlighted how the Auditor General’s recommendation would have had a serious impact on the accumulated surplus. On government financial statements, accumulated surplus is the net position of the government. It is akin to equity or retained earnings that you might see in the private sector. It is the difference between government’s assets and its liabilities. The provincial accumulated surplus of $3.2 billion at March 31, 2021, is a healthy financial position.

Accumulated surplus is the most important number in the financial statements, because it links the operating statement, which is the revenues and expenses, with a statement of financial position, which is its assets and liabilities. An accumulated deficit means government would have to raise revenues or decrease spending to return to balance. An accumulated surplus means government has resources available to support future activities. If accumulated surplus is misreported, legislators may think that there is more money to spend than there really is.

Had the auditor’s recommendation been accepted, accumulated surplus at the end of the year would have been $9 billion. However, we know that government is obligated to use $6 billion of that amount toward future capital asset expenses that were previously funded. That $6 billion is not available for incremental spending on government goods and services.

Moving on, on slide 7 there is some good news. This has been an issue for nearly a decade now, and standard setters both nationally and internationally have recognized that there is a requirement for further detail on non-financial liabilities. The Public Sector Accounting Board has been reviewing their conceptual framework and reporting model and, you may recall, had reached out to this committee in June for feedback.

We are encouraged by the recent proposals. As you can see on this slide 7, an excerpt of the PSAB’s presentation material identified deferred restricted contribution as one type of non-financial liabilities. These new accounting standards are expected to be approved by the Public Sector Accounting Board in the next year and implemented within two to three years. We will work closely with the Auditor General on the implementation of those standards in due course.

With that, I will turn the presentation over to my colleague, Alex Kortum, who will provide additional context on government’s response to the pandemic.

A. Kortum: Good morning, Chair and members of the committee. I’m Alex Kortum, executive director of policy compliance and audits at OCG.

[8:25 a.m.]

For the next few minutes, I will talk with you about OCG’s role and response measures during the pandemic. I do this as the pandemic had a significant impact on the public accounts, our business and operations at OCG, and is referenced not only in the Auditor General’s report before you today but, likely, other reports to come before this committee.

In early February 2020, myself, Carl and Diane gathered to consider the impacts of the widespread outbreak of the COVID-19 virus and what we might need to do to ensure continued good governance and administration across government. We identified five key areas, as indicated on slide 8.

The first step we took was to implement governmentwide financial reporting for pandemic expenses, which provides corporate-level, real-time reporting of government’s financial transactions related to the pandemic, thereby ensuring that decision-makers have access to the best available information. Reporting information is one step; even better is ensuring it’s accurate and complete. To that end, we pivoted our compliance resources to focus on this area. Additionally, we recognized the need to focus our compliance resources on new and emerging risks and withdraw them from areas that no longer presented risks.

The B.C. Public Service was asked to quickly develop new programs to ensure continuity of service to citizens and organizations in British Columbia. This created a unique opportunity for us to deploy our audit staff in a range of capacities, everything from leading research of emergency support programs to providing advice and guidance on security controls in IT systems.

Along with the need for new programs came the requirement for policy supports and tools to ensure that decision-making governance remained robust and operated within existing frameworks. Our role was to ensure that decision-makers were familiar with these frameworks and had mechanisms and tools needed to quickly develop and deploy new policy.

Finally, we recognized the need to accelerate changes to our IT infrastructure. Firstly, we streamlined our process for creating supply payments in our financial system. Secondly, we expanded our payment platform, PayBC, making it easier for citizens and organizations to pay us remotely.

The pandemic has profoundly changed how we carry on our role and responsibilities at OCG. While we were forced to accelerate many of these changes and initiatives, our outcomes were consistent and successful.

Slide 9. I’ve included this slide as it provides context on the significant financial impact of the pandemic. This information is found in more detail in the Public Accounts, and updates are published in quarterly financial reports. This is $10 billion in new programs, and our objective is to ensure good governance and accurate reporting for as long as the pandemic continues.

We provide three categories of expenses. Each of the categories cuts across many ministries, many programs, and may involve thousands of transactions throughout the year. These expenses were for critical services, financial supports, economic recovery, and were provided to citizens, organizations and local governments throughout the province.

All these programs are incremental to government’s regular activities. The measures we took allow us to segregate this activity, enable good oversight and provide transparent reporting to the public.

Moving on to slide 10. On page 16 of the Auditor General’s report, three programs are identified: the B.C. emergency benefit for workers, the B.C. recovery benefit, and the small and medium-sized business recovery grant. These programs are one-time emergency or recovery payment programs to support individuals and organizations in British Columbia.

[8:30 a.m.]

Programs of this nature are of higher inherent financial risk for three main reasons: identity registration and authentication is required, programs are designed and implemented in a short period of time, and they’re an attractive target for fraudsters.

In response to these risks, we implemented daily analytic tests to support the program’s existing financial controls. Our tests are designed to act as the last line of defence against systemic external or internal fraud attempts, errors and omissions. We also ensured good documentation of program design and used internal audit resources for risk assessment and control review.

Taken together, our actions and the actions of ministry staff are designed to mitigate risks of loss to an acceptable level. All this evidence shows that we have avoided the dramatic losses experienced by other jurisdictions and countries. Some of that you may have read about in the media.

The three programs highlighted by the Auditor General are all subject to audit and recovery steps. Work has commenced and continues as income tax returns and other information is received by CRA and here in B.C. These measures are effective, have avoided systemic instances of loss to the province and support citizens and organizations receiving their intended benefits.

Slide 11. I would like to close my presentation talking about our results. Over the last 22 months, we have started and completed a lot of analysis, testing and reporting. That, we have shared with the Auditor General. So far, our results indicate that event-driven reporting is highly accurate. This, to us, is a demonstration of the commitment of the people who are in the B.C. Public Service and the tasks assigned to them. Further, we found that for the pandemic payments we reviewed, compliance with financial policies was higher than we expected.

Our monitoring of government’s regular business transactions continues to indicate a low level of risk due to fraud, error or omission, and we have found no systemic fraud schemes or loss events. We continue to enhance our fraud-risk tools by evolving our analytic and monitoring capacity, partnering with industry and jurisdictions across Canada and continuing to engage with the finance community and build our capacity across government.

While B.C. has negated the fraud incidents that have occurred in other areas of the country, we do need to remain vigilant and thoughtful as our operating environment continues to change over time.

Finally, I have spoken for the last ten minutes about our operations at OCG and within government. I did want to recognize the other aspects at play while we completed this work. For many of us, this included leading people, ensuring they had a safe work environment, whether that was at home or in the office, ensuring they had the supports they need to keep their families safe and, in some instances, reinventing ourselves as grade 1 geometry teachers or other roles far outside our comfort level.

Thank you, and that concludes our presentation, Chair.

M. Bernier (Chair): Thank you, Alex.

Anything, Carl, you want to add to that?

C. Fischer: No. That’s it. Hopefully, that provides a little bit of context to this unusual year. It’s easy to look at financial statements and say it’s just another year, but when events like the COVID-19 pandemic, and now the floods, occur, that greatly amplifies the impacts throughout the process.

When our collective responsibility is to pull together all of that information from 200 organizations, 40,000 or 50,000 people making transactions, that really becomes a critical change. So our commitment to you is to be thoughtful about those events, to be transparent and, hopefully, try and communicate the impacts on the administrative processes of government and, of course, work with the Auditor General to be as self-challenging as possible to make sure we do a good job.

[8:35 a.m.]

M. Bernier (Chair): I’m looking around for questions, but before I jump into the first question, I just want to thank everybody as well, because I think Alex said it well with the term “reinvent.”

This has been an interesting and a different year, which I can appreciate, for everybody. I want to thank all the staff in all of the different agencies for having to, overnight, reinvent policy and reinvent programs to try to help the people of British Columbia. I know, from an accounting perspective, it can create quite a nightmare when things…. As I hear some chuckles, I assume I hit an accurate comment there.

We were able to achieve a lot, I think, at the same time, collectively, but that doesn’t happen without everyone rolling up their sleeves and reinventing themselves, Alex.

I just want to thank everybody that was involved in that as well. It’s been a very interesting year.

A. Mercier: I’ll just echo Mike’s comment there. I think that learning to become a grade 9 geography teacher overnight is probably more difficult than preparing the public accounts. So kudos to you and your team.

My question is about the qualified opinion and the reservation on deferred revenue. I know that’s something that’s taken up a lot of time in this committee previously, in conversation.

I remember last year, Michael, our discussion on last year’s public accounts. I’m not quoting you verbatim here but it was a comment that you had made about how you were bringing a fresh perspective and working with the comptroller general to be resolution-oriented towards this historical grievance.

We’ve heard from the comptroller general’s office, placing their hope in the new conceptual framework and reporting model being debated by the Public Sector Accounting Board. I think what the comptroller general is saying….

By no means do I want to put words in your mouth, Carl.

I think what the comptroller general is saying is that in their view, the adoption of this model would rectify this issue or disagreement.

I’m just wondering if you can clarify, from the position of the Auditor General, what your view of that would be. Would this get us past this? I think this takes what, in many ways, is a very important and technical dispute, which is grounded philosophically…. It takes a lot of time and energy and focus away from the actual public accounts themselves.

M. Pickup: I think that question was to me, right? Thank you for the question and the comment.

I want to be hopeful. We all want to be hopeful, and we all hope for financial statements that are unmodified, that don’t have qualifications and that respect the interpretation of the standards as well.

To give an advance perspective review without allowing the process to unfold and seeing the details that come out of these things…. A lot of the things are in: where do we end up? What do the details look like? What are those interpretations? Let’s be hopeful that it will do that. Certainly, I wouldn’t give an advance opinion to say: “If A, B, C, D and E happen and it’s interpreted this way and implemented this way, then this will happen.” I think we just have to stay tuned and go forward and recognize….

Nobody wants to see a qualification exist forever, but it is incumbent upon us…. We’re the independent folks here at this meeting. We are not the preparers of government. We are the independent auditor coming to give the audit opinion. So we have to wait and see and let process go through and then work together and see where we end up.

That’s probably the best I can give you at this time.

D. Coulter: I’m just wondering. I don’t want to start an accountant fight here. There’s legislation that they’re following, right? It’s not just a difference of opinion between the Auditor General and the comptroller general. This is a difference of opinion between the Auditor General and the Legislative Assembly in a lot of ways. The comptroller general is just following legislation that the Legislative Assembly has passed.

I’m wondering. How do you kind of rectify that, or do you think about that when you’re doing a qualified statement?

[8:40 a.m.]

M. Pickup: Our responsibility, of course, and our role as the independent auditor is to give an audit opinion in accordance with generally accepted accounting principles for the public sector, which are defined by the accounting board in Canada. That’s what we’re giving an opinion in compliance with or in accordance with. That is our role.

These are general purpose financial statements. General-purpose financial statements are meant to be prepared in Canada in accordance with public sector accounting standards.

We all recognize the position that the comptroller general is in, the position that the government preparers are in, the position that the government accountants are in. That is all very clear. It’s not my role to take on the legislative mandates, the legislative domain of what legislators do, what governments do. But it is my job to continue to give an opinion in accordance with those public sector accounting standards. That is what I do.

To the extent that the accounting standards change as we move forward, within the context that we’re in now…. The interpretation of those may change, may get us to a different opinion, depending on, as the previous question indicated, what those look like and what the interpretation of those are. But for now, we continue to do our job to give an opinion.

It’s not my job, and it’s not my role, to go to or lobby the Legislature to say: “I think you should change legislation. I think you should do A, B and C.” That is up to people who are elected. That is up to the Legislature. So I continue to do my job, to give the opinion, to bring it to the attention of all folks in the Legislature to say that this is offside, in our view, keeping in mind, again, we are the ones that are the independent auditor. We’re not the preparers of the statements.

So as much as we get along and respect each other, we have different roles, and it’s our job to give you that independent piece of opinion that is different. And this is not a difference of opinion between independent officers. It’s not a difference of opinion between independent auditors. There’s only one opinion from the independent auditor, and then the other is the opinion of the preparers of the statement on behalf of government.

B. Anderson: I was just curious. With this particular situation that we’re talking about, how common is that in other jurisdictions across Canada? Is this typical or very atypical?

M. Pickup: Perhaps the comptroller general can give you a perspective on that, on views across the country. To some extent, comparability of financial statements is important, and the size of this issue will likely vary, depending on the government as well.

I guess we want to keep in mind that independent audit offices make their minds up on these issues, look at these issues, determine their opinions on these issues in accordance with the determination of those standards, not by sort of a vote, if you will, across the country.

There will, at times, be differences of opinion across the country from auditors on what may seemingly be similar issues that may be nuanced by facts and circumstances particular to a jurisdiction. At times, it may be easy to defer to, “Well, we’re all the same,” when, perhaps, the accounting does differ in a jurisdiction, reflecting what is happening there.

Likely there will be differences across the country. I would not ever suggest that differences across the country reflect one auditor being right and another auditor being wrong. Auditors know not to opine on other auditors’ views and perspectives and conclusions when they’re not the auditor in those circumstances, and often audit-type stuff and accounting-type stuff is in detail as well.

It’s always a long answer, I know, but thank you.

N. Sharma: I had a couple of questions. The first one was on this whole accounting dispute, on the deferred revenue. It strikes me that the idea that you would try to make sure your accumulated surplus was more accurate and not overstated would be better for public perception than overstatement of deferred revenue.

As you sort out this kind of issue of where to put it in the books, I can just…. My opinion, based on not being an accountant, is the fact that the idea that accumulated surplus would be overstated, to me, is more of a harmful thing for the public and policy-making. So just a comment…. I guess I’m hopeful that, through the process that you’re going through right now, you’re able to find a solution that will come up with something that shows it in a better way.

[8:45 a.m.]

I guess my second line of questions was about the whole idea of what happened through COVID and all of the work that was done behind the scenes. I just wanted to start by echoing the fact that I think it’s not only remarkable that all of the controls were put in place in such a fast…. I’m sure it was a lot of work by your department, working through that and trying to figure out how to mitigate fraud and all of the things you need to do when public money goes out the door. My hands are up to you.

I’m really curious about this idea of what we learned from that process. You mentioned daily analytics that were done to make sure that you were keeping track of some of the programs and the technology that you introduced to figure out how to do it in a better way, I guess — the oversight mechanisms. I just would really love to learn whether or not those were things that we’d done before — the daily analytics — and if that’s something that we’re learning in terms of going forward with helping us design programs in a way that can not only be faster but can have better oversight mechanisms.

C. Fischer: I can start off. In terms of the accumulated surplus, I think the accumulated surplus issue is the most important issue. To my mind, and I’ve been doing accounting for a long amount of time, if accumulated surplus doesn’t work, the rest of the financial model does not work. We have been very diligent for 12 long, drawn-out, painful years — painful for everyone, not just for us — about taking a very reasoned approach that was accepted by several governments now, all the way back to 2012, for a very simple reason.

British Columbia is a very big entity. Michael and I were talking about this yesterday. A large number of organizations; many, many people throwing numbers around; a lot of complex work. Had we made a change in 2012 with the hope that, “They’ll see it and we’ll make a course correction later,” that shift would have been immediately irrecoverable. There would be no way to go back — too complex, too deep, too broad.

Accumulated surplus is often overlooked in British Columbia, in our jurisdiction, because we focus on annual surplus or deficit. Of course, media, as excellent as they are — particularly Vaughn Palmer, who does a good job of trying to explain things — always focus on, “Did government balance the books?” meaning the annual surplus or deficit.

We all, as accountants, collectively hate that approach, simply because it’s very short-term, it doesn’t really reflect the state of financial health for the province, and it doesn’t help legislators make decisions about spending in the future. For example, if legislators had thought earlier on, “Well, we have $6 billion extra during the pandemic. We could provide an awful lot more support,” that would have been great. But ultimately, that spending would have to have been supported by increased revenue, like taxes, decreased program spending — which is a problem for people — or increased debt.

We are so lucky to be in this wonderful, financially sustainable situation in British Columbia. This issue is not about government transfers. It’s not about capital programs or how we finance things in our government context. It’s about maintaining sustainability going forward.

From time to time, I get a little apologetic, particularly when we get another new Auditor General, who has to deal with that question. But it is an important issue. It’s an important issue to me, it’s an important issue to us as an organization, and it has been for governments, going forward. I think that speaks very well of governments, because a self-interested government may very well have said: “We’ll make the shift. We’ll take the benefit, win some points and then worry about it later.” That hasn’t happened, so that’s good.

I do recognize it’s a struggle for OAG and for Michael in particular, being new in the position. He is taking up the opinions of previous Auditors General. Obviously, we need to be respectful of that. We do continue to work through it.

[8:50 a.m.]

I’m not above trying to nudge or coax Michael when I want to, but it will happen in the fullness of time. The most important thing, in terms of public accountability, is that we have this opportunity, in this process, to express different opinions. That forces us to be very transparent and clear with the public.

In terms of the analytics, Alex came over to OCG from OAG about five years ago, when I assumed this role. I coaxed him away, specifically to focus on reprofiling our compliance function. Before five years ago, it was a very traditional, tick-box kind of function, with a lot of manual faxing of documents, and slow shuffling and ticking with cobwebs and dust.

Alex came on board, built a new team, and developed a compliance program solely around analytics, finding databases. We started off with daily analytic testing of key indicators — parts of transactions that were wrong. As we developed more analytics and became more mature, we started to use multiple analytics to indicate high-risk situations. We used that information to identify risky situations. The 3CMB team sends out daily CFO alerts to the relevant CFO with a note that says: “Listen, we found this transaction. It may be a problem. You need to look into it.”

I’m trying to remember…. There’s about 700 analytics that are currently processed every day — dealing with everything from purchase cards, travel cards, gas cards, journal vouchers, expenses, procurement, capital assets — that all work together to support good oversight and compliance over the transactional environment. We are very much there now. Over COVID in particular, what that allowed us to do is to move much more quickly to predictive analytics, which are those analytics that use multiple factors to indicate the potential of risk, rather than focusing on identified risk.

Does that represent it, Alex?

A. Kortum: I think what I would add, specifically with these COVID emergency and recovery programs, is that it’s a balance between controls — you know, we can put so many controls in place that have guaranteed, absolute surety — versus actual service and research. It’s getting that balance right and using your understanding of the risks — the inherent risks in an operating environment — to make sure we’ve mitigated risk to an acceptable level.

One of the things we did was to make sure that our infrastructure and processes were nimble and scalable. There was a time — it could be in 2020 — when government had a number of recovery programs coming up. While this report speaks to three, I think at one stage we had about six or seven programs that we were monitoring. You want to have infrastructure in place, so that if more programs come up, you can quickly spin them up.

Another key aspect of this, given the sheer volume of these programs: you really do need to ensure that your processes, as far as possible, are automated. If you’re receiving 50,000 or 200,000 applications per day, we can’t have an army of staff sitting in the back checking it. We have to use automated processes. It’s the only way to be effective and efficient in service delivery.

M. Pickup: If I could make a quick comment on the accumulated surplus. I think it was an example we gave last year. Fortunately — or unfortunately, I guess, depending on your perspective — most of my time in my world is spent outside of work, with non-accountants. So depending on your perspective.

[8:55 a.m.]

But how I explain this to non-accountants, in terms of the financial statements, I would say: “Okay. Let’s say the government of Canada gave you $100 to build a school.” They said, “Okay, you’ve got to build a school with this $100,” and you build a school. The school, you say, is going to last ten years. You open the school.

In year one, you would be showing that you have a liability to somebody for $90. If you close that school, you’re not giving the government back $90. The money’s yours. You’ve got the money; you built the school; you did what you said you were going to do. How many years you operate that school for doesn’t matter, because the money is yours. It’s with you. That’s why we’re saying “showing a liability.” If you close that school in year one, who would you actually give the $90 to? You don’t owe it. You’re not going to give it back to the government.

That is how I sort of contextualize this a bit for non-accountants — that’s a really simplified version of it — to say: “What is the problem with this sitting in liability? What is the accounting issue?” Anyway, I just wanted to add that, Chair. I know we used that example last year.

M. Bernier (Chair): Thanks for that, Michael. I appreciate the discussion, too, as we go through this, because I’ve been around this place long enough to know that we’ve had this almost similar discussion every year.

I think it’s really important, as well, to acknowledge — Carl, as you did, too — that the last thing we want is to have that false impression, I guess, that there’s money there that could be spent that we really shouldn’t. Otherwise, that comes with implications. With the liability side of things, we do want to make sure that we — hopefully, at some point, as Diane mentioned — get to a point where we won’t have to have this discussion every year. We’ll wait to see how that gets there.

B. Banman: If we have this discussion every year…. I’m assuming we’re going to have this discussion every year. That part probably isn’t going to change. We’ve just heard a simplified version from Mr. Pickup. I’m wondering if Mr. Fischer could give us the government’s dummied-down version for the viewers at home. Let’s hear the watered-down version of that, if it’s all right.

C. Fischer: Well, if you want something dummied down, I’m your man.

B. Banman: Yeah, like your audience.

C. Fischer: Michael went through half of the accounting for this situation. The other half is the asset. So in the same example, you start off with a $100 school. After year one, you’d have a school valued at $90.

Now, in the private sector, which maybe you’re more familiar with, the reason that we capitalize assets or that organizations capitalize assets is that they’re cash-generating. So whatever you spend to purchase an asset — whether it’s a truck, a storefront or a factory machine, whatever it is — you can capitalize up to the expected net return of cash that that will provide you. That makes common sense. We know how that value was calculated.

Government doesn’t invest in cash-generating assets. Schools don’t, primarily, generate cash — although my kid’s school apparently does — as part of their business. The value of that asset is service potential. It wasn’t until 2002, I think, that PSAB said: “Yes, government should start capitalizing assets.” The reason that you would capitalize them is the service potential that you get from that investment in the school or hospital or highway. That’s the other part of it.

If we’re saying that in the public sector, the accounting principles — those core concepts that make the whole thing work — say the value of an asset is on service potential, then in order to make the whole thing balance, you also have to say that the value of a liability can be non-financial. That represents the service obligation.

If we have a school, and after one year, we decide we don’t need a school anymore — “Let’s sell that, to become a store or something” — legislation, the Education Act, requires that money to be returned to government, unless the minister determines that it can be directed toward some other, similar use. It’s the same thing for hospitals, both for the provincial contribution as well as the local government contribution through regional hospital districts.

[9:00 a.m.]

When we receive money from the federal government for infrastructure funding…. If we received money for Highway 1 and decided to use it for hats for little elves or whatever other program met the desires of the day, the federal government, one way or another, would get their pound of flesh back. We know that. We’ve seen that. A really good example would be on the repayment of the HST transition funding — $1.6 billion. That still stings in certain parts of government, right?

That’s the basis of British Columbia. Not just British Columbia — British Columbia, Alberta, Ontario, Quebec. Oddly enough, all those provinces that pursue a sustainability model rather than a deficit reduction model…. It’s to stand up and say: “No, the accounting model is not quite correct.”

PSAB has kind of recognized that. Diane showed you the slide with the little clip from their slide deck to stakeholders. We’ve all sat down with PSAB, with the chair, with the executive director. They’ve recognized that, yeah, there’s a problem in the model. It needs to be corrected. They’ve provided their proposal of how it’s going to be corrected. It’s going to take, hopefully, two years, because I’m going to retire in two years, and I’d rather not pass this on to yet another comptroller general. But it will be resolved. It’s right that it is resolved and that it suit the requirements and the objectives of public sector accounting.

M. Bernier (Chair): Dummied down enough for you there, Bruce?

B. Banman: Based on the two of them, I’ve got to say Mr. Pickup’s was probably more dummied down than that, but I followed along just fine, thank you.

C. Fischer: Well, some of us can only fly so low.

M. Bernier (Chair): Okay. On that, I do have…. I don’t see any other questions yet, but I just want to…. I’m curious, as it was brought up around the fraud perspective. That was quite an in-depth part of this.

When we, from a budgeting perspective…. From the private sector, we always built fraud losses, theft losses into a budget profile. Was anything like that done through a budgeting process when we started putting these programs together? Was there an anticipation or accepted number or percentage that was used for possible fraud when we budgeted? I’m assuming not, but I’d love to hear your answer.

And then what steps, and how will that be balanced as we collect possible payments that should not have gone out and that will now be into a new budget cycle year? How will that all work itself out?

C. Fischer: We don’t specifically budget for fraud. I know what you’re referring to. Some organizations — Amazon, for example — have a whole process of setting aside or categorizing a portion of their sales as losses. I think a lot of organizations do.

What we do try to do with regard to fraud — and it’s really a challenge — is try to make an assessment of the vulnerability to fraud based on the controls applied. That’s very hard to do in the start, because, of course, you don’t have any experience with a program like EBW. We’re left with Alex and his team staying awake until three o’clock in the morning doing research on internal audit and forensic examination websites and the Institute of Internal Auditors and even the OECD as they were trying to grapple with what the impact is going to be.

We use that not to try to quantify what the expected or acceptable loss is but to try to determine what is the right balance of control measures that still meet the policy objective. Remember the emergency benefit. When it was released, it was released within a couple of weeks. That was really a public health measure, right? It was a program that was stood up to give people the economic confidence to comply with recommendations for isolation.

[9:05 a.m.]

In that context, that’s very different from the later programs, which were more about economic recovery and economic support for small businesses and organizations. For those, we could take a different perspective and move that bar of what is the right balance between controls and assurance versus getting it out quickly, to hit the right tone. I think government was very thoughtful and quite effective at doing that.

I know that during the first one, in particular, our minister was online hour by hour throughout that whole two weeks’ development period seeking information and making decisions about: what is the right measure or balance between those two?

So our answer is: it was kind of like that, but it was more subjective than quantitative. The reason was not to budget for loss, it was to determine what the right balance of controls and measures were.

Now, in the future, if we identify material expenses arising from loss, what we would have to do to account for it…. There’s no immediate need for a change in accounting, simply because they’re already recorded as an expense. It doesn’t make a lot of sense to make an adjustment and say: “Well, this government transfer expense was some other kind of loss expense three years ago.” But public disclosure, I think, would be the key objective in accounting and reporting, and that would be in the service plan reports, probably from the Ministry of Finance.

M. Bernier (Chair): I appreciate that answer, and I also want to thank everyone again. That’s a little outside the comfort zone of the accounting world — determining a risk-reward in some respects. Usually, things are black and white — at least, that’s the way my accountant explains it me — and not so much the reward aspect built into it of determination of the flexibility, as you stated, on trying to get something out the door quickly.

Again, I know it was a very hard year for many. I think it was Brittny that said that we’ll hopefully learn from this as well. Hopefully, we’ll never have to go through this exact same scenario again, but we learned from some of the flexibilities that had to be adhered to, so that’d be good.

Any other questions on this topic, on this part of the agenda? Okay. Seeing none, with the group’s agreement, we’re going to move quickly to item 3 on the agenda before we go to 2, because we will have to have a quick two-minute recess just to move a few things around.

Information from Audited Organizations

MINISTRY OF CITIZENS’ SERVICES,
MINISTRY OF FORESTS, LANDS,
NATURAL RESOURCE OPERATIONS
AND RURAL DEVELOPMENT

M. Bernier (Chair): I want to quickly jump to item 3. The committee had asked for some follow-up information, and I wanted to highlight that. There are no motions required, but I just wanted to see if there was any discussion or questions from anyone on the committee on item 3, which was the follow-up information from the Ministry of Citizens’ Services and the Ministry of Forests, Lands on some questions that the committee had.

I don’t see anything, so I assume everybody is…. I just want to thank those two ministries too, then, for their timely response on getting some follow-up and some answers back to the committee.

With that, let’s take a two-minute recess just so staff can quickly move a few things around. We have a few other presenters. We just have to change some name tags. Thank you.

The committee recessed from 9:08 a.m. to 9:13 a.m.

[M. Bernier in the chair.]

Action Plan Progress Assessments

M. Bernier (Chair): Item 2 — which is now 3, I guess — on the agenda is around reviewing subcommittee recommendations around the action plan progress assessments.

Maybe I’ll just start it off by…. I’m noting the time here, and this is not something we want to rush, but we do want to facilitate, maybe, some questions and discussions on a process.

One of the things, as Carl and Michael know, that we’re trying to do as a committee is to try to get into a better process of accountability, but also, from a committee perspective, of us having a framework that we can also work with on a go-forward basis. As reports are generated, as recommendations are presented and then followed through, as we talk about in follow-up reports on recommendations, we want to — and we’re considering anyway, as a committee — try to come up with a better process to be able to tick the boxes, so to speak.

As we feel that reports and the recommendations within those reports have been completely implemented and that there’s an agreement amongst all the different groups and the committee….

[9:15 a.m.]

As a committee that is now the responsible group assigned by the Legislature to review and to look at that, we can then, from that accountability standpoint, check the box and say that we are comfortable that all the work has been done and the recommendations have been followed through, or if not, have a succinct follow-up process that is something that I think we can all work through, that the committee members are now comfortable with. They’ve done their due diligence, as well, asking the right questions and making sure that recommendations, to the best of our ability, have been followed through, or if not, that there are valid reasons.

Now, we’ve talked about this in previous meetings where some recommendations are old — three-, four-, five-years-plus old. Instead of them always coming back all the time, we want to have a succinct process to say: “Okay, if these are old, and if they’re still going to be implemented….” From Carl and through advice, we say: “Yes, the ministry is still trying to enact it, but there have been some changes. The process is delayed, but the goal is still there.” At least, we can have that discussion.

But if things have changed on the provincial landscape — that it maybe is no longer relevant — then we also need to have that discussion to be able to remove that recommendation so it’s not always coming forward. From a public perspective, and even from our committee or future committees, ask the questions: why is this still on the books; why is it not implemented? Or: where do we stand?

I appreciate…. Maybe before I turn it over to the committee for any discussion on this around what we’re trying to achieve or a discussion from a committee perspective, I want to thank the comptroller general and the Auditor General for their input and advice to us as we’re trying to implement a process. This is a partnership between the independent offices, the government, the committee, trying to make sure that we’re setting the stage and giving the best information possible for the public. We can only do that if we feel comfortable that we have the right information as well.

I will say — noting, again, the time — that we have a subcommittee within this committee who has reviewed a lot of the information, because there is a lot of information. We have put some recommendations forward to the committee with some possible motions to make.

I will, maybe on the onset, just say to the committee, especially in the fact that the Deputy Chair has had to take off for personal reasons, that we will defer any motions today, because I don’t want to rush this. I think we need to be having a very holistic discussion around this of what we’re trying to achieve and make sure we’re very comfortable and that we’ve asked the appropriate questions. We might not have all the questions answered today or the questions even asked today.

With that, I’ll maybe turn it over to committee members if there is any discussion of what we’re trying to go through here or specific questions to ask.

A. Mercier: I would just say, having been part of the discussion with the subcommittee, that I think this strikes a really good balance in terms of process between efficacy and expediency in dealing with the outstanding items, recognizing, as well, the power of the Public Accounts Committee to call back government agencies to come in, and, if we are not satisfied with the responses we get, to question them and to make sure that we’re doing that in a very tailored and effective way.

I think that the approach that we’ve adopted of recognizing the practical reality for some of them…. Then to recognize, as well, on the advice from the OAG, that there might be more information we want to seek about why they haven’t completed or haven’t met the recommendations for the Auditor when they had made representations to us that they would. We can seek additional advice in writing.

Then we can scrutinize it and make a decision from there on whether or not to recall them for questioning, which I think still preserves the discretion and the powers of the committee there, and also makes sure that folks aren’t getting off the hook. I’ll just put my two cents in that it’s a good and balanced process.

M. Bernier (Chair): Thank you for that.

Michael, I was going to ask you a question, but maybe start with some commentary first on what your thoughts are on this.

M. Pickup: Yeah, I have some summary comments if the Chair will grant me the permission to walk through sort of a summary, I think, of where we’ve been and where we are and a couple of thoughts that we have. Is that okay?

M. Bernier (Chair): Yeah, please. It will probably answer some of the questions I was going to ask, anyway.

M. Pickup: Yeah, I think it is relevant. Of course, I want to thank Laura and Laura and Malcolm, who are with me today, and others who’ve put a large amount of work into this. Thank you for that.

I’ll be honest. If at times this seems confusing, on follow up and APPAs, join the club.

[9:20 a.m.]

For an auditor, it’s often confusing trying to keep things straight, and I’m sure it is for you folks, too, to say: “Well, what do we have going on here? Who’s on first?” When we look back, in June, we discussed the future follow-up process with the committee. I’ve been working since then.

At the committee’s request, we reviewed the 14 APPAs that entities had reported as fully implemented and recommended, whether the committee should require any further follow-up. We reviewed all 14 APPAs and assessed the probability that an organization had, in fact, implemented the recommendations and could be removed from the list.

We used staff from across the office, and we spent a couple hundred hours — just to give you some context — doing this work, which was a risk assessment and not assurance work. That was based on a risk assessment, and it takes hundreds of hours to do that. With that, we recommended that the committee remove seven APPAs from the list and continue to monitor specific recommendations from the other seven. The committee then requested that the OCG provide a one-pager for each of the 15 where implementation was still in progress. We received copies of those last week, and future meetings with the OCG will be scheduled to happen on discussion on those, following today’s meeting.

From our review of the one-pagers, we note that 14 of the 15 APPAs are reporting recommendations as fully implemented. The remaining 11 are reporting recommendations as partially implemented. Therefore, doing some math, 54 percent, or 51 of the 94 recommendations in these 11, are still outstanding. On the positive side, there is only one entity of the 11 that does not plan to do anything more to implement outstanding recommendations.

Given that information provided by the OCG, and in the interest, I know, of cleaning up some of this historical stuff, we don’t necessarily see the benefit on those, at this point, of providing additional work to review the progress on those partially implemented recommendations of the 11, given the hundreds of hours that we have spent. So if entities are actually reporting these as partially implemented, they’ve already told you that they’re partially implemented, and our work would never likely result in a conclusion that something is fully implemented if somebody said that it was only partially. That’s a very low risk.

The one-pagers provide an explanation to you as to why entities have not been able to implement the recommendations and what they plan to do to achieve full implementation. I think that the committee may choose to use this information to inform any potential future action, such as dropping the APPA from future requests or calling in witnesses to answer questions or requesting that they provide additional written explanations. So those are some.

We’re happy to support the committee by providing assurance on recommendations that are fully implemented. We anticipate that today’s discussion will help clarify what the committee is looking for from us for the next round of the APPAs and updates. We have provided the committee with a table that describes the different levels of assurance, from no assurance of the risk assessment to review level and audit. Again, with the 14 APPAs that we provided you with, we undertook a risk assessment and a high-level briefing.

If we move forward to a model similar to like we did in Nova Scotia, our office would provide a report to the Legislative Assembly on a yearly basis. The report would provide review-level assurance on the recommendations that are indicated as being fully implemented. That level of assurance would provide this committee and others with greater confidence that the recommendations have been implemented, beyond just the risk assessment.

Beyond that, it would be quite resource-intensive for us to undertake a full audit on this — on fully implemented recommendations — and it may not be worth the benefit. So that was why, for example, in Nova Scotia we’d get it to review level of assurance and, frankly, it still took us a couple of thousand hours to do that. It’s a big project. But I do believe it was worthwhile, having said that.

I think that those were some high-level comments. I kind of wanted to summarize and put us on the same page in where we are in our thoughts. But I look forward to discussions. I hope that that’s helpful.

M. Bernier (Chair): I appreciate that, Michael. I think the committee said, right from the onset, that we’re trying to be sensitive. We’re not asking for make-work projects. We understand the jurisdictional differences, too, of the independent office but then also the role of the select standing committee that’s appointed by the Legislature and the job we have and, then, the partnership that we try to accomplish, which I want to thank you for.

[9:25 a.m.]

Carl, maybe I can ask you, then, too, on just, if you don’t mind, throwing in…. We only, unfortunately, have about five minutes, and then we have to start getting ready for the House. But the committee is going to take this back, whether it’s the full, whole committee or the subcommittee, and really want to dive into it a little further with more questions. But your advice or opinion on, maybe, what we’re trying to achieve and how you think it’ll work — maybe the process, as well, and how you think.

C. Fischer: We’re happy to do whatever we can to support the committee. I don’t have a mandate or any funded resources to support the committee, so any kind of research we can pull together…. I forced my colleague Gord Wong to do…. He’s well-connected with all the ministries, so he has the facility to do that, but I also recognize he has a full-time job as well. There may be limits to the degree of research that we can help out with, but we’re committed to helping.

In terms of this request, we can certainly work out a strategy to set up some meetings where Gord and I would meet with each of those ministries and talk through their progress. I recognize that they’ve already provided progress assessments on these recommendations, some of them for many years in a row. They’ve confirmed that they’ve done everything that can reasonably do. No further work is planned within the ministry.

What we haven’t seen is what the deficits in the progress are or what OAG has identified as remaining or residual risks. I think that will be a key element to really determine what’s outstanding. Does that help the ministry redirect their efforts? Or are they at a place where they’re saying: “No, we’ve done everything that we can do with our program”? Then it’s back to the committee to decide: is this risk worth re-audit, as Michael suggested, or something else?

Until we identify those deficits, we run the risk of falling into another recursive cycle of doing research — and I’ll make Gord work really, really hard for as long as it takes — but if doesn’t result in us agreeing and understanding that, yes, this is completed or there’s an outstanding risk, I don’t know where we’re going to go with that.

M. Bernier (Chair): I appreciate that.

We’re not going to rush through this, as I said. We’re out of time, unfortunately. I want to thank you, because we’re going to have to have further discussion on this as we go through.

What I would like to ask the committee, though, before we adjourn is: would the committee like the subcommittee to dive into this a little bit further, or would you prefer to bring it back for a wholesome discussion as an entire committee? Okay, I’m hearing pretty well unanimously that we’d prefer to have it as a whole group. We will make sure that we schedule that.

Again, I want to thank everybody that came. That was a really good discussion today. Not enough time to get into everything we wanted to, but looking forward to the next meeting when we can dive into topics further. Michael, Carl, and your teams, thank you very much for everything you’re doing.

Maybe just a motion to adjourn please.

Motion approved.

The committee adjourned at 9:28 a.m.