Finance and Government Services — Issue No. 44 — Monday, December 11, 2006 (HTML)

2006 Legislative Session: Second Session, 38th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES


CONTENTS

		Page

Office of the Merit Commissioner		1045
	J. Illington

Office of the Ombudsman		1050
	K. Carter
	L. Hubbard

Office of the Auditor General		1060
	A. van Iersel
	S. Shum
	E. Price

Chair:	* Blair Lekstrom (Peace River South L)
Deputy Chair:	* Bruce Ralston (Surrey-Whalley NDP)
Members:	* Iain Black (Port Moody–Westwood L) * Harry Bloy (Burquitlam L) * Randy Hawes (Maple Ridge–Mission L) Dave S. Hayer (Surrey-Tynehead L) * Richard T. Lee (Burnaby North L) * John Horgan (Malahat–Juan de Fuca NDP) * Jenny Wai Ching Kwan (Vancouver–Mount Pleasant NDP) * Bob Simpson (Cariboo North NDP) * denotes member present


Witnesses:	Kim Carter (Ombudsman) Christine Davison (Office of the Auditor General) Lanny Hubbard (Office of the Merit Commissioner; Office of the Ombudsman) Joy Illington (Merit Commissioner) Errol Price (Office of the Auditor General) Su-Lin Shum (Office of the Auditor General) Arn van Iersel (Acting Auditor General)

B. Lekstrom (Chair): Good morning, everyone. I would like to call the Select Standing Committee on Finance and Government Services to order. I would like to welcome you all here today.

We are presently, as a committee, reviewing our statutory officers' presentations to our committee for their upcoming budget of next year and the three-year fiscal plans as they roll out. This morning we are going to begin with our Merit Commissioner, Ms. Joy Illington. As well, we have Lanny Hubbard.

Welcome. I would like to thank you for taking the time to come and present to our committee here today. Without any further ado, I will pass the microphone over to you, Joy. I look forward to your presentation today.

J. Illington: Thank you very much, Chair, and good morning. Thank you to the members for braving the forces to arrive here. I appreciate that.

As you noted, Lanny Hubbard, director of corporate services for the Ombudsman's office, the Police Complaint Commissioner's office, the information office and also the Merit Commissioner's office, is here. I was saying that perhaps his name tag should read: "Lanny Hubbard, jack of all trades."

I wanted to put forward my submission to you as a brief and economical one, because I am making a small request for $50,000 in additional funds for the coming year. At this time I am not proposing any further increases over the rest of my term as commissioner.

I've been very lucky in having the office be given a very realistic operating budget in 2006, which has allowed me to get a very fast start in terms of beginning to fulfil a mandate immediately. I am also, I just want to note, reducing the capital budget request by $139,000.

As this is my first appearance before you, if I may, I'd like to touch a bit on what my priorities are for the present year and what activities have been done as I oversee a non-partisan merit-based public service.

The merit principle is commonly understood to mean that there's been an assessment of competence and ability to do the job and that the appointment has been without patronage. In fact, I note that in 2008 we'll be celebrating 100 years since the introduction of the first legislation that required entrants to the B.C. public service to pass a competitive exam and to supply certification of good health and good character. I don't think we require those last two now.

I have included in my statement, on page 3, some brief facts about the B.C. public service. While I won't read those out to you because I think they're probably known fairly well by you, I want to point out that the public service faces the same challenges as the private and public sectors all across Canada.

There are looming retirements and a workforce shortage caused by fewer people in the labour pool and global competition for skilled workers. Retention is being emphasized, and employee engagement is being surveyed to test the extent to which employees are committed to the organization and are satisfied with their opportunities.

Just to give you a scale, 35 percent of current bargaining unit employees and 45 percent of managers are eligible to retire within the next nine years, so recruitment is on the rise. This year all competitions were open to external candidates. I've noted that so far, over 2005 there's been an increase in 22 percent of appointments that are within my jurisdiction to monitor.

Government's goal is to have the B.C. public service be the leader in Canada and be recognized internationally for public service excellence, and I believe that merit-based appointments are critical to achieving that goal. The Public Service Act gives me a couple of ways to examine appointments for merit: first of all, through random audits of a sample of a year's appointments to assess recruitment and selection processes and that successful candidates were qualified; and second, upon request by employees who've unsuccessfully applied for a position within a bargaining unit. They can apply for a final and binding review of whether the appointment was merit-based.

When I was appointed in May of this year, the legislation had changed to separate the head of the public service from the Merit Commissioner and made this an independent office back in November. There was a bit of a backlog. Both applications for reviews and the 2005 audit hadn't been done, so those were my first priorities. Besides that was setting up an office.

Then I think the other things that were done were contacting the key stakeholders of the B.C. public service so that they both understand and support the role of independent oversight. I met with a federal counterpart of mine, the president of the Public Service Commission, who has offered to provide further performance audit training free of charge for my staff, which is a very good thing since it's difficult and expensive to get.

I want to bring to your attention the fact that if you look back at the last five years of audits that have been done…. On page 7 of my submission you'll see two graphs. On the first graph, the top graph, the bottom line gives you some sense of the number of appointments that were subject to audits. Running from partial results in 2001 — when the office was very first conceptualized — to 2005, there have been audits done each year. But the audits which are identified in the second table on page 7 have been very small audits, from as few as a sample of 30 to as much as a sample of 70 in 2005.

Really, what you've been getting is a snapshot of a very, very small sample of all appointments to the public service. I'm interested in providing you with a

representative sample that's large enough to apply to hiring across the whole of the public service so that you can generalize the results and see what they are like.

The four key changes that I've introduced to the operation. Robust annual audits and special audits will be done to establish baselines and trends. Bargaining unit position reviews will be completed within 30 days. Non-meritorious findings will be followed up for action, and interaction with stakeholders will occur on what the day-to-day application of merit looks like in the workplace.

This last point is important to bring to your attention, because this year in January and February a work environment survey was sent to all regular and auxiliary employees. I think 64 percent of the public service replied — 14,540 people. Only 40 percent of the respondents agreed that in their work unit, the process of selecting a person for a position was based on merit. Thirty-four percent disagreed, and just over a quarter said they didn't know or didn't care.

There is a fairly obvious gap between what the small audits of the Merit Commissioner have revealed about appointments today — in the small audits you're seeing that it runs from a low of 87 percent to a high of 98 percent of appointments being based on merit — and what a large number of employees actually perceive to be the case. Since merit is a cornerstone to building and sustaining a highly engaged workforce, I believe it's important to find out the reasons for that gap. The budget provided to me will enable me to research that.

On staffing. I currently operate with two staff who are seconded to me from the B.C. Public Service Agency. I plan to hire a full-time performance auditor this year. That should allow me to reduce my reliance on contractors, even though the number of audits and the number of files audited will expand. That's just because I'll be able to manage that with three full-time staff.

The work plan for 2007-2008 to 2009-2010 will have…. In addition to one annual statistically robust audit of all appointments, I propose to do some special audits each year. The first audit will be one of all direct appointments. These are appointments without any competition, where one person gets selected for a specific position. The Public Service Act exempts the competitive process in such cases but states that the merit principle must still be applied. The head of the Public Service Agency is required to exercise his discretion to authorize direct appointments on the basis that there are unusual or exceptional circumstances.

That audit will show how the merit principle has been applied, by auditing the special audits, and also will show where discretion wasn't exercised to authorize that. So it will set out for the public service and for the managers of the public service, for the very first time, a very clear indication of how direct appointments are made.

The second special audit that I'd like to do is one of all temporary appointments without competition that have exceeded seven months. The purpose of temporary assignments is to fill a short-term vacancy or to provide a developmental opportunity, which I'm very supportive of.

I am concerned about temporary appointments that last for a period of years, when they were initially done for a period of less than seven months — so where competitions may be warranted for what's obviously no longer a temporary vacancy. That audit should demonstrate the number of and time periods for temporary appointments.

The third special audit in 2009-2010 will focus on appointments in ministries where the work environment survey has been done year over year. If there are any ministries that show a consistent pattern of employees who don't agree that the process of selecting a person for a position in their work unit is based on merit, then perhaps those ministries ought to be singled out for a special audit. There will have been, by the time that audit is done, three years of surveys and many opportunities to address the merit question.

Finally — and this is why I'm asking for the small lift in my budget — the office has never had a formal database in place — not when it was with the Public Service Agency. It's had a filing system but not a database that can be mined for information. So given that the audits and reviews provide a statistically important record of change year over year of practice and performance and that managers of government will be depending, in part, on the integrity of that database, I'd like to have a reliable and proven tracking system. The proposed lift in budget will allow the office to purchase a customized case-tracker system from the Ombudsman's office in 2007-2008 and to pay for licences and maintenance thereafter.

I'm requesting that the present funding level be slightly increased by $50,000 so that I can implement the priorities I've outlined as necessary for the office. Due to the economical manner in which the office operated for its first six months and the fact that this is a startup year, I am anticipating that there'll be a slight surplus this current fiscal year. But with full staffing and a vigorous workplan for the coming years, I believe the budget request as presented will enable me to carry out the duties of my office.

I think I've gone over the rest of the presentation. I'm happy to review any parts of it or any questions that you may have.

B. Lekstrom (Chair): Thank you very much, Joy, for your presentation here this morning. On behalf of our committee and British Columbians, I want to thank you for the work that you and your office do.

J. Horgan: Thank you, Joy, for your presentation. It's a pleasure to see you here this morning. And as always, Lanny, it's good to see you as well.

I'll review the submission in more detail later this afternoon, Joy, but I'm concerned with respect to the confidence levels that you spoke about in the survey

that was done of public servants. Firstly, has there been a proliferation of order-in-council appointments over the past five, ten or 15 years? Is that something that your office would look into in terms of a concern about the need for competitions for all public service appointments?

And from that, what is the perception within the public service — and perhaps outside the public service — about individuals that are appointed directly without competition and are exempt from your legislation? Is that something that you're going to monitor over the next 12 months or 24 months?

J. Illington: Because I don't have jurisdiction over OICs, over auxiliaries or over appointments less than seven months, I don't track those. In my research with employees about the reasons why they do not feel that merit is applied, I would expect to find some concern about that, but all I have at this moment are anecdotal stories that have been told to me. I don't have any evidence at this time.

J. Horgan: In the undertaking of your responsibilities, would you be compiling a list? For example, if a member of the public contacts my office and asks me how many public servants are employed by the province of British Columbia, where would I get that information? Would I get it from you? Would I get it from the head of the Public Service Agency? If I did get that information, would I be able to find it broken down into those that were hired under the merit principle by competition, those that were appointed directly, those that are auxiliaries and those that are temporaries?

J. Illington: Yes, you will be able to get it from the head of the Public Service. I get those reports on a monthly basis, and they are broken down exactly like that.

J. Illington: So it is possible to see, and it's possible to see in what categories — the OIC or direct appointments, the auxiliaries, union and excluded membership.

B. Simpson: Thanks, Joy, for this. It doesn't surprise me — the disconnect between what you're seeing in your spot checks — because there's a lot of emotion involved in appointments, particularly if you're one of the applicants. It'll be interesting to see what you uncover there.

My question has more to do with the whole issue of merit relative to retention. As your statistics point out, we've got quite a few retirements coming up. When you have a retention strategy and where you have a lot of your senior people retiring, it's hard to attract people from outside to come in.

I guess my question is: how does the idea of merit, then, have to shift to where you're actually taking people that you may not have taken in another kind of competitive environment? That may also cause a greater gap to occur between what you're auditing and what the perceptions are.

What's your sense of that as you start to dig into this? That's not just within the public service; that's a problem across all organizations now. How do you adjust whatever your measurement tools are to take that into account?

J. Illington: Well, I think the principle still applies that you expect people who both are assessed and are qualified to do the job. But I do think that perhaps the corporate human resources plan that was issued in October of this year reflects some of the reality that you're referring to. It talks about the ability to greenhouse new recruits to the B.C. public service — the ability to take people and really do two things. One is to try and give them a very thorough orientation and put them a bit on an accelerated fast track to try and do some of the succession planning.

The greenhousing isn't necessarily at odds with the merit principle at all. Interestingly, the federal merit principle talks about hiring people — it says expressly to hire people — to meet the current and future needs of government. While that isn't expressly said in the B.C. public service, it's very clear that managers have the ability to do that.

B. Simpson: I take your point. I think the big difference is that a lot of the prework is where you sometimes get into the problems of merit — when you're actually, as a manager, kind of scanning who's got the capacity, either duration of years or an innate learning capacity, that you're then going to start grooming. The grooming period as opposed to the appointment period becomes the problem, where some people think they've been passed over for the grooming or greenhousing or whatever.

In terms of that disconnect between what you're seeing in the audits and what the perception might be…. That's another area that I know we experienced in our company. We would deliberately select some folks that…. The people they work with may not see that what we're doing has any merit to it, but we saw something in that individual. We started to groom them so that when it came time for the appointment, they were the person who was ready to take on the job.

Do you look at that previous to the actual appointment, or is that just part of what goes on in the organization and you just look at the appointment time?

J. Illington: We are just looking at the appointment. We may look at what the thinking was behind the recruitment strategy to ensure that people are being picked who are qualified in terms of who they are recruiting for. But the idea of the merit commission is not to substitute our opinions for those of managers who really do know both the jobs and the requirements of the jobs that they're recruiting for.

J. Kwan: Is there anything else that's exempted from your office, in terms of review?

J. Illington: All OICs. Those include assistant deputy ministers, associate and deputy ministers and other OICs — that may be people who are appointed by OIC and excluded because they deal with highly confidential issues; auxiliaries — people who are just coming in; and appointments less than seven months.

J. Kwan: With the public affairs bureau, are those appointments under your purview?

J. Kwan: Do you have a sense of what percentage of the ones within the public affairs bureau are OICs and non-OICS? What percentage of that office is under your mandate?

J. Illington: I'm very sorry. I don't have those statistics with me. I can certainly get them and supply them to you and to the committee, if you wish to have that.

J. Kwan: I would be interested in that, if you could. I would appreciate that very much.

B. Lekstrom (Chair): One thing. I'll just jump in. Under our terms of reference, we are limited as to what we are to do here as far as the presentations with what our statutory officers bring before us.

I do want to confirm that with the members and certainly encourage you to read the terms of reference, if you haven't lately, so that we can stay focused on what our mandate is as a select standing committee of the Legislature.

J. Kwan: Thank you, Mr. Chair. I appreciate that guidance. I have further questions for Ms. Illington, if you will, please.

With respect to the percentages you have outlined in your findings, where 7 percent of the public service is under 30 compared to 26 percent in the province's labour force and that 9 percent make up the visible minorities — and 15 percent in the provincial workforce, and so on….

How does that break down with respect to management positions? Do you have a sense of that?

J. Illington: I don't. I'm sorry. I believe the same statistics are available from the B.C. public service, which will give you broken down by ministry and sometimes by central agency as well. That will tell you the proportion of employees that are OICs versus those that are regular public service employees and will also give an age breakdown. I don't think it will give you the breakdown, though, of visible minorities. That information is supplied voluntarily by public service members, and I'm not sure that it is tracked.

J. Kwan: In your presentation on page 4, where you highlighted four key changes that you've introduced to the operation to the office, item 3 states: "All non-meritorious findings will be followed up for action." Can you elaborate on that, please?

J. Illington: Certainly. I think in the past, when the public service head was the Merit Commissioner, the public service head would be in the position of saying, "Gee, these hirings didn't meet the merit principle," and was in a bit of a conflict of interest because many times their own staff had been supplying the information for those appointments to take place.

Now that those offices are separated, there can be actual investigations of why things didn't meet the merit principle. In some cases there may need to be a very clear indication that either managers need more training or more resources are needed to be directed to a certain area. In some cases, if there has really been some flagrant exercise — I'm not suggesting that there has been — the Public Service Agency could remove the discretionary authority from a ministry and take it back to exercise themselves.

B. Ralston (Deputy Chair): Looking at the budget, perhaps the most striking thing in the budget is the fact that as far as I can tell, you're projecting your salary to be half of the full salary. Yet you seem to have accomplished all this work on that basis. Can I confirm, then, that you are working on a part-time basis or a half-time basis?

J. Illington: I am working on a part-time basis. But I think the other reason you would see that is that at the time the '06-07 budget was conceptualized for the office, when there wasn't yet a person there, they were thinking that the salary would be based on much the same lines as other officers of the Legislature, who are paid according to standards of the judiciary. I'm paid on a daily basis, so in fact my pay is much less and perfectly satisfactory.

B. Ralston (Deputy Chair): And you've assured your fellow officers that that's not contagious.

I. Black: Also within the context of the budget, I dare say — the terms of reference of our committee — what strikes me as I look at it…. I was hoping you might make some general comments on why, when you've got a budget of a little over $800,000 a year, there's actually considerable swing.

MLA Ralston touched on some of that already. There's considerable swing in about five or six of the line items, from salaries to your office salary. Central management services is down $79,000, professional services is up $80,000, information systems is up $54,000, and the building occupancy is down $35,000.

As a percentage of your overall top-line budget, those are actually materially large numbers. I was wondering if you could elaborate on the nature of some of that. And within that context, what have you learned such that this is what we're seeing in the moment?

J. Illington: Again, I hope Lanny Hubbard will jump in at any time that the technical details need to be filled in. This is the first time this line budget was given to the office, so it was up to the office to see how this is actually going to work in practicality.

The salaries on STOB 50 are going to go up because I'm going to hire someone full-time. That is why that salary is going up. The information services are going up because there wasn't any substantial budget set aside for things like computers and a data service. That is why that line item is proposed to go up. There wasn't, for instance, any budget set aside for me to issue a statutory report, which I'm mandated to do by May 31 of every year.

It was a good guess, and it was a very good guess, because it has been an adequate budget. Except for the part of the data collecting service, it's been a fine budget. But that's why the swings are in place. It's showing the difference between what someone theoretically thought the office would use and practically what we are using.

B. Lekstrom (Chair): Joy, maybe I could jump in and ask a question. Going back to page 7, where you talk about appointments and audit results — a twofold question…. The issue of the auditing that your office does on these appointments — has that been an ongoing issue from the beginning of the Merit Commissioner's mandate? Have audits always been part of that?

J. Illington: Yes, audits have always been part of it, but they've been, as I explained, very small audits. I think that was due in part to the factors of time and money available, and also the fact that the Merit Commissioner at that time was wearing another hat for the B.C. Public Service Agency, which I'm sure took priority.

This is, I think, important to emphasize, because we are the first province to have a Merit Commissioner, both in Canada and in the Commonwealth. So there's a fair amount of interest in terms of how we're tracking, which is why robust audits and a good reliable database are going to be important to establish both the activities and the value of the office.

B. Lekstrom (Chair): Maybe just following up on that. When I looked at the audit and the results and, based on merit, at those percentages from '01 to '05, we see that from 95 percent we're sitting — with the '05 results — at 97 percent. That, again, is based on page 7.

The trend continues to move forward, and I'm just curious what your thoughts would have been prior to that — if you've managed to accumulate any data as to where those numbers were.

J. Illington: No, I'm sorry. I don't think there were audits done prior to 2001. There was not an Office of the Merit Commissioner prior to 2001.

J. Horgan: Since we're exercising some latitude, I'd like to go back to…. As the first of your kind in the Commonwealth, Joy, it's even more delightful to be talking to you. I hadn't looked at it in those terms, but when you frame it that way, it's even more exciting for me to ask my second question.

J. Horgan: It goes back, to a certain extent, to my first question and the perception in the public mind that the government, in creating this unique office, was trying to blaze a trail. That trail was uncertain, and you're guiding us through it today.

What would the public say when they get access to the documents you've discussed with us this morning, with respect to those direct appointments that are beyond your purview — order-in-council appointments and other individuals that could number many thousands? How is the public to react to this groundbreaking?

Do you have any capacity, as we move forward — which I'm always delighted to say in this committee — to expand your mandate in the future? How would that happen? Would you come back to this committee? Would you come back to the Legislature so that we could have a comprehensive review of all public servants in British Columbia and whether or not merit has been exercised in their appointment or hiring?

J. Illington: I do think that over the course of three years, I'd be very surprised if I didn't have an opportunity to make some comments on Public Service Act amendments. I hope I would have that opportunity. I can't say whether or not government is contemplating any changes, but if they are, that would be a very good opportunity for me to make some recommendations. Without a strong database that I can track and without some robust audits, I won't have any evidence on which to make those recommendations.

B. Lekstrom (Chair): Joy and Lanny, I want to thank you. I see no further questions from members of our committee. It will be our intent to go through the information from each of the statutory officers and put forward our report to the Legislative Assembly with recommendations attached to it regarding the budgets.

Again, I want to thank you very much for the work you do. On behalf of the committee, merry Christmas, and we wish you all the best through the holiday season.

Members, our next presentation is going to be from our Ombudsman. Kim Carter is joining us. We're just setting up now. We'll take a two-minute recess and reconvene so people can get situated and set up.

B. Lekstrom (Chair): Good morning. We will reconvene the Select Standing Committee on Finance and Government Services.

It is my pleasure to welcome our Ombudsman, Kim Carter, as well as Lanny Hubbard again. Lanny, you are here so much that we are going to have to make you an honorary member of our committee.

Thank you so much for coming before the committee to present to us here today. It will be our intention to listen to your presentation and then allow members to ask questions, if they have any, of what you've brought before the committee. Following that, our committee is mandated by legislation to put forward a report to the Legislative Assembly with recommendations based on what we have heard.

From there, I will pass the microphone over to you, Kim. Again, thank you for coming before the committee.

K. Carter: Thank you for the opportunity, Mr. Chair. This, as you know, is my first presentation to your committee. I am ably assisted by Lanny Hubbard who, I will begin by saying, really is in the Office of the Ombudsman. I know you have a series of different signs for him, but he actually does operate out of our office.

It would be my intention to speak for about 15 minutes. Then any questions the committee has, I would be happy to respond to.

In essence, what I wanted to do was break down my presentation into three parts: what we do and how we do it; my vision for the office — that is, where I see us needing to go over the next few years; and finally, what resources I am asking for to allow the office to achieve those goals. In addition to the budget submission, you will find in the binders a copy of our annual report and also the strategic report that was issued last week.

The Office of the Ombudsman in British Columbia has as its guiding motto that it is B.C.'s independent voice for fairness. The mandate that we have is to work to ensure that every person in British Columbia is treated fairly by public authorities. Public authorities in British Columbia are a very broad group of organizations including not only government ministries but local governments, school boards, health authorities, colleges and universities.

We do this through resolving individual complaints, and traditionally we have also conducted systemic investigations into problem areas. What I will be asking you to do is make a recommendation to fund both parts of that mandate.

I perhaps will begin by giving you a very brief overview of the people we serve in our office. I'll just mention the summary of some cases. If you are interested in some more details, I'll be happy to provide them during your questions.

The kinds of people who come to our office for assistance include homeowners who have problems with municipal zoning; youths in custody who have complaints about things ranging from improper staff conduct to the cleanliness of the clothing that they're being asked to wear; self-employed foresters who have claims for wood; newly arrived immigrants to Canada who have difficulty obtaining health coverage; workers with brain injuries who are having difficulties with medical assessments; seniors who've had rights-of-way on their property cleared and are seeking compensation; rural business persons who are involved with road requirements for subdivisions; workers who have not been paid by employers and are seeking hardship assistance; the parents of children, including a parent of a child on anti-seizure medication who needed special approval for extra dental treatment; and the son of a senior who was having difficulty obtaining a refund from Pharmacare.

I thought it might be useful to give you some idea of the range of people we deal with in our office. As for who we are, you will find on page 18 of the submission two organization charts which give you a good idea of how our office is organized. We have an office in Victoria. In addition we have telecommuters in the lower mainland, and we are conducting a telecommuting trial here in Victoria.

There are two main parts of our organization. The first is the complaints analysts — the intake team. They're the face of our organization to all the complainants who come to our office. That's who they speak with first. If they cannot help them, then they open a file and pass it to one of our investigators.

We have two teams of investigators that are divided into different areas. One is called social programs, and the other is called regulatory programs. That's just a general overview, because we have about 2,800 authorities altogether, so we have a general division between them. The background of the investigators in our office, who are called Ombudsman officers, ranges from lawyers and social workers through to former police officers, engineers and foresters.

This year we will deal with approximately 6,500 inquiries and complaints. As set out on page 6 of the budget submission, we are having fewer inquiries, but more of them fall within our jurisdiction, and more of them require investigation.

We also in 2006 produced three public reports. The first one was on the power of an apology. The second was an investigation into the Public Interest Advocacy

Centre complaints about the Ministry of Employment and Income Assistance programs, and the last one was a strategic plan, which I've already mentioned.

Most of the complaints that we deal with come in by phone, but we also have a number that we receive by letter and, more recently, by e-mail. Our complaints analysts review these complaints for jurisdiction and to ensure that we have the basic information we need to proceed. In addition, our complaints analysts provide assistance on internal complaint resolution mechanisms.

Once a file is opened, our investigators will talk to complainants to determine the nature of the administrative fairness issue and then speak with the agency that is being complained about. The aim in the office is to ensure a fair and satisfactory resolution of complaints, and we have a high success rate.

I'll move from what we are doing to what I see as the priorities of the office over the next few years. These are set out on pages 6 to 8 of the budget submission. First and foremost, I think the area we need to work on is outreach and communication. There's still a large number of people who don't know about our services, and there are some who believe that the office, at some point in time, was closed and are surprised to find out that we're still around.

We have a disproportionate number of users in the lower mainland. By disproportionate, I don't mean a higher number. I mean a lower number than you might expect, and a fewer number of users who are new Canadians. So I see that a priority for us is to reach out to a number of these groups to make sure they're aware of our office and what services we can offer them.

To do that, what I want to do is look at reporting more of our results. Traditionally, we have had an annual report, and then other than that, we do special or public reports. What I have started to do is try and go out with more information about individual cases that we've resolved so that people who are in similar situations have some idea of what we can do.

I see a need for the Ombudsman to do more tours to other parts of the province. I've been on one so far in September to the southern interior, from Golden to Merritt, and I am planning another one at the end of January to the Sunshine Coast and the northern part of Vancouver Island. One of the things I've done on my tour is always try and get involved with the local schools, colleges and universities to talk to students there.

Another area is accessibility. I've mentioned this already in the context of newer Canadians. I've met with two groups at least — SUCCESS and MOSAIC in the Greater Vancouver area as well as some of the other not-for-profits that provide services to people, such as The Law Centre — to try and make sure they're aware of what we can do. What I also want to do is have a look at any social and cultural barriers that exist for some people who are perhaps reluctant, even if they know about our office, to make complaints.

I'm also looking at working with the agencies that fall under our jurisdiction to improve their internal resolution complaints and also to conduct some checks of the referrals we make in our office — that is, we refer people back if there is an existing complaint resolution process. But one of the issues that has been raised with me is: do people end up exhausted by trying to navigate the system by themselves? Are those referrals back really referrals that are going to resolve something or simply end something? So I want to check that.

One of the things I would rate as most important is that we need to get back in the business of doing systemic reports. These are reports that can solve problems and cure injustices for many people at once. They can be proactive. They can serve as an example to other authorities who are looking at their own problems and how they might solve them, and they can also be, in part, access to an underserviced community. That is, communities that might not think about coming to us, if there's a report in an area they're interested in, may well become aware of our services.

I have with me four examples. I haven't passed out copies to everyone, but if you're interested, I have four examples of what I'm referring to. These are examples of reports that were done from 1988 to 2001. In 1988 there was one on pesticide regulation in British Columbia, in 1991 on the administration of the Residential Tenancy Act, in 1994 a review of youth custody centres and in 2001 an investigation of Forest Renewal British Columbia. All of these came out with recommendations, and the large majority of those recommendations were accepted and were implemented.

I would move now to page 7 of my submission — that is, the resources requested. The first resource that I'm looking at is two investigator positions to be confirmed permanently. The recommendation of this committee last year was that two positions be provided on a one-year term to the office to attempt to deal with the backlog in professional association and local government complaints. And as promised, that is an area that we've dealt with. We do not have, or will not have, at the end of this fiscal year a holding queue for local government and professional associations.

I will tell you, frankly, it's been a challenge to get rid of those and to keep up with the incoming complaints in those areas. One of the things that we're starting to see is that when you've gone out of an area and then go back into it, while you were out of an area — that is, while people were told there was a holding queue, or perhaps, as was the case earlier, we just were not dealing with most complaints in that area — a number of people just fall off the radar. They're just not interested in proceeding in a matter.

Certainly, one of the things that I've done is try to highlight the areas that we've gone back into in the past two years — schools, school boards, professional associations and municipalities. I think we are seeing that more people now are coming back.

It took a little bit of effort and some internal rejigging to both deal with the incoming complaints and deal with the holding queue, but that was a commitment that was made by my predecessor, and we will have done that by the end of this fiscal year. But if we want

to keep dealing with this year's — about 450 — inquiries and complaints that are coming in, we're going to need those positions. So that's the first resource issue that I wanted to ask for a recommendation from the committee about.

The second is the establishment of a communications officer position. I think that's indispensable for the office. It's necessary not only to work with the media and to identify low-cost opportunities and, if we're lucky, no-cost opportunities to put forward the message of the office but also to produce education materials and pull together packages.

I think a number of your offices will have received a binder that we have sent out from the Ombudsman's office, which outlines the services and provides for your constituency assistants copies of our forms to make complaints and information about the process. This is the kind of thing that a communications officer does, and I think it's something we need to do. In addition to MLA offices, I'm also sending these out to a lot of not-for-profit organizations.

I have to say that even though we may be in an electronic world, I'm always amazed at how many people just like to have a binder and the paper to deal with. Sometimes it is a personal preference; sometimes they're simply dealing with groups of people who are not naturally attuned to electronics and still prefer to look at something.

The next request relates to systemic investigations. This is the biggest resource request that I'm making. It's for three new investigative positions that will allow us to maintain our current service standards for individual complainants and to conduct systemic investigations. Pages 11 to 13 of the submission set out why we cannot simply incorporate doing systemic investigations within existing resources.

Firstly, we have an increased number of investigations, as I've said. Although the complaints themselves are declining, the number of investigations is increasing. We're beginning to see — and I think this has been highlighted — a very slight increase in the length of time that files are remaining open — that is, how long it takes us to resolve a complaint. This is currently much lower than is the case historically or even comparatively with other offices, I think, but it's critical for us that we keep a balance on that time open.

As all of you will be aware, of course, you can have two people do 300 investigations as long as you extend the time and give them several years to do it. The balance that we've tried to keep is to make sure that the investigations we do are dealt with in a timely fashion, both for the complainant but also for the agency that's complained about. If we start to slip on that, then we start to undermine the work that we do for both parts of the equation — both the organization and the individual.

I'm asking for three rather than two because it would be my intention to try and run two investigations at once. Quite frankly, in my background dealing with the law and the police…. You can't have something that's run by one person. You can't put all your eggs in one basket. But if I get three people, then I can run two investigations at one time, having one person as the backup investigator for the other two. In essence, I am pitching to you that I can double my capacity with only 50 percent more resources.

The next request is for student positions. This is set out for you. It is, I understand, consistent with government initiatives to attract young people. Frankly, I was delighted that earlier this year our office went to a University of Victoria law school careers day here in Victoria, and we actually did that without having any student positions or articling positions to offer. We were surrounded by large law firms and big agencies that had both, and we had more students, I think, coming to talk to us. People would come and say: "We love your office. How can we get involved in what you're doing?"

We were very fortunate — a very positive experience. We did it all, as I would describe it, on charm and gall, because we didn't actually have anything to offer them — not even really good giveaways like some of the offices that had pedometers with MP3 players in. All we had were fridge magnets and some very cheap pens.

But there is, I think, a real opportunity there. In my previous positions I've always tried to hire students. I've tried to do it for both short- and long-term benefits. My description is: with a student, if you can give them a paycheque, a computer and a small part of an office, then you can get excellent work out of them, and they're just delighted.

The intention would be to split the funding that I'm asking for among different students. I don't want all law students; I don't want all social work students. Those are probably the two big groups that we would draw from. It would also allow us to fund some who are on co-op programs and can come through our office. I see a tremendous advantage in research, special projects and also in outreach to young people. If we're going out to the youth community, it's very helpful to run some of your presentations by people who are a little younger, at least, than I am. The reaction can sometimes be different.

It can have a long-term impact. One of the things that happened during my tour in September is that I was invited to speak to the Upper Nicola band. I and one of my ombudsman officers went to the Upper Nicola band and made a presentation. That was really because there was a student in our office in 1988 who is now the manager of the Upper Nicola band, and that was where the invitation came from. I'm also a very long-term proponent of: you never know where students might end up, and you'll be happy they came through your office.

I'll try to finish up quickly. We're looking for an additional 0.8 of a complaints analyst position. This is because I'm trying to introduce an early response team initiative. This is something that I've seen in other provinces and which I think, given the experience and

background of our complaints analysts, we can do here. The idea is to give them authority to try and resolve more complaints that are open to easy resolution quickly. That again ties into the idea that timely service is very important in the areas that we deal in.

There's also 0.2 of an FTE for our case-tracker system. There are some details of that on page 17. Then the rest of the increase is for things such as statutory and contractual increases, rent increases, some increase in the travel budget for the reasons I've outlined, and professional services.

I've mentioned on page 7 some areas that we're tracking. One is trends in government service delivery — for example, the use of guidelines and discretions and ultimate service delivery and how that impacts in our office. As I've indicated there, I'd also like to look at updating our act and looking at where, after 30 years, we should be. I do have some ongoing concerns about protecting the confidentiality of our investigations, which may tie into updating our act.

Finally, although it's not in there, one of the issues that I'm looking at — I haven't made up my mind yet — and might be addressing at some time with either the Attorney General or the committee is whether or not there's a benefit to having a committee looking at ombudsman issues. I don't think it's going to be particularly useful if we don't get into systemic investigations, but if we do, then that might be something that's positive.

I'm going to conclude with a quote. Introducing a systemic approach "…requires a threshold maturity for an ombudsman's office." And: "As skill and experience accumulate…there evolves both the capacity and the responsibility to identify and remedy systemic causes of recurring unfairness."

The Ombudsman's office in British Columbia has that capacity. I believe we've been told in the mandate we were given that we have the responsibility, and I would ask that you recommend that the mandate be funded. Thank you very much.

B. Lekstrom (Chair): Thank you very much, Kim, for your presentation here this morning. I'll look to members if they have any questions.

L. Hubbard: The Ombudsman doesn't count as an FTE — the Ombudsman position itself.

H. Bloy: Okay, but you're still out. Then you're going to 43 in the one below, and there are only five new employees.

B. Lekstrom (Chair): I think the one that you may have…. The student position, I think, would take that up.

K. Carter: No. What I would say, first of all, is that there's a debate as to what's the appropriate salary for a student. They can fall into a number of categories, but my intention would be to spread this over a year. For example, in the summer you can hire two students for four months, and then during the year you can have students part-time. Depending on how it's finally arranged between one and 1.5 FTEs, those would be spread over multiple students.

For some students, if you get them in as interns, then you may not have to pay them directly. A co-op you have to pay, but the interns you don't. But there may be a situation where you keep them on part-time after that to complete something.

So with the students it's more a fixed amount. I think it's $50,000 — Lanny? — that we've set aside for students, and so it's a question of getting multiple students for that money.

H. Bloy: Okay. Do the other independent officers of the Legislature…? They all have communications officers, do they not?

K. Carter: I have to tell you I don't know. I doubt that Joy and Dirk have them, because they're pretty small organizations. I honestly don't know about the Auditor General and Elections B.C., because they're pretty big. I don't think that David Loukidelis does.

K. Carter: Since we have his director of corporate administration here, that's the answer — no.

In my case, I think it's critical. I think we do a different kind of work, in some cases, than some of the other officers. If you're looking at police complaints and the freedom of information, I think those are…. People very much know what that is and know whether they want to take advantage of it or not.

With us, often people don't understand that there's an opportunity out there to get something fixed. Certainly, this hit me when I went out on the tour. When we actually went around and set up meetings in places where we haven't been, people would come in and say:

I think that's an area that for our office may be a little different than for some of the other offices. We do need to go out, and we do need to let people know about this.

H. Bloy: I support the education component of it. Can I have one more question?

H. Bloy: When you look at the age of the files — and I'm going to assume that 90 percent of them are solved within a year…

H. Bloy: …which I think is a long time…. But is there an ongoing reason why there's such a small percentage that go on beyond the year? Does a person never accept your answer and just keep coming back and coming back because they felt they'd been wronged?

K. Carter: The answer to that is yes, but that wouldn't necessarily explain why the file was still open. We do have certain people who come to us. We're the office of last resort, in essence. Frankly, there are some organizations that are quite happy to refer people to us, because it gets us as the organization that's going to deal last with someone. There's really nowhere else for them to go. So we do have people who come back again and again.

That was one of the issues I looked at early, to say that for some, we spend quite a bit of time dealing with matters, and it's clear there's not going to be a resolution. I've come to the conclusion that that's actually part of the service we provide. Certainly for some people, the fact that they're still talking to someone about this is probably better than the alternative, which is if they think there's no hope of anything happening. For a lot of people, they may end up fixated on an issue.

As for why some of the cases take longer than a year, they can be quite complex and involve a lot of going back and forth with an organization. Sometimes it's a question of trying to negotiate a resolution. There's a little bit of give, but not enough, and so there's a back-and-forth with the organization and with the individual to try and work out something that's satisfactory to both. Sometimes things are longstanding and complex.

I think not accepting the result is inherently part of our work. We continue to try and deal with those people and provide some kind of courteous service. At some point we have to say: "We're not going to do anything else. You haven't raised anything new, but if you've got another problem or another issue, come back and talk to us."

Some people are pretty innovative in recasting some of the stuff. When I came in as an Ombudsman, one of the first letters on my desk was about a file where the substance of the matter happened more than 20 years ago. The file, as far as we were concerned in the office, was closed about 17 years ago. The first thing that happened when there was a new Ombudsman was that the person came back and said: "Gosh. You know, we don't think the file was ever really closed, and we'd like you to look at it." Frankly, it was a very long, complicated thing — boxes and boxes. So there are lingering ones, but that wouldn't be on our books.

J. Horgan: My question is also around the communications position. Currently, do you avail yourself of any services internal to government? As an independent officer, do you access the public affairs bureau, for example? Do they provide any communications services at all?

K. Carter: We run our press releases by them for a professional critique, as I understand it. That is, they say: "Don't use long words and…."

K. Carter: Yes, style rather than substance. In part, that's because it's an independence thing. The substance is ours. With the style, we're happy to have someone tell us how to communicate more effectively with the many levels of audience that we have.

In terms of having an internal communications officer, as I said, I think we can do more of that. I'm hoping that if we can have the resources to get back into systemic reports…. I want to use the communications officer as part of that team so that they're readable and interesting.

You'll notice I put a two-page summary on your budget submission. That's the kind of thing I think you need to do for every report. Not that it's not riveting stuff, but for people who are just going to want to know: "Give us the bottom line, and give us a reference so we can find more…." That's the kind of thing that a communications officer would help with as well.

J. Horgan: So you don't envision this individual to be the face of the Ombudsman's office, the spokesperson on all matters? That would be something you would reserve for yourself, if required, or some other individual, depending on what the substance of the matter was?

Let me expand on that. There's the classic case in issue management and communication. Her name is Constable Anne Drennan of the Vancouver police department — basically, the gold standard for one person, one entry point to all matters. Anne Drennan became that person for the Vancouver police department and did an exceptional job. I think everyone in the world knows who Anne Drennan is. She was the face of the department.

Would that be the sort of thing that this individual would do? Or are you thinking purely about ensuring that the printed materials are readable and are accessible to a broader public — or a combination of those?

K. Carter: Well, in fact, it wouldn't be solely that. I would see that in some areas the person would develop the relationships and be a point of contact for the media for entry and in some areas might be the spokesperson for certain things. I think the obligation is on the legislative officer — the Ombudsman, in this case — to be available on a number of issues and to speak publicly about them.

J. Horgan: Perhaps Lanny can answer this. What would the salary be for that individual? In the salary lift, what portion do you envision for communications?

L. Hubbard: The salary that we've provided within this is $51,000, and then related benefits would be about $10,000.

K. Carter: Actually, we attract some very qualified people because of the work we do. So I'm much more hopeful than that.

J. Kwan: With respect to the lift that you're asking for — for the funding and the two investigators, more particularly — would that restore your office back to 2000 levels, to the capacity that it had in doing investigations?

K. Carter: The numbers will be different, but in terms of the areas that we can provide our services in, we would then be providing it in all the areas.

J. Kwan: The areas that you've had to drop in terms of investigations — what were those areas, and what would this restore?

K. Carter: There was some restoration already last year, but the two particular areas are professional associations. That would be everything from the Law Society to the association of engineers and geotechnologists and the college of nurses — and local government. I have a bad tendency of saying "municipalities." My staff beat me about the head a little bit and say: "No, no. Think of the Islands Trust. Think of other local government organizations."

It's actually a very big group, because it also relates to all the independent boards. Things such as boards of variance in some municipalities are semi-independent from the municipality. There are organizations such as water improvement districts in some areas, which fall under local government. Local government and professional associations are what would be restored by these two positions.

J. Kwan: With the budget lift, this would not restore another office. Is it your intention to continue with the notion of mobile intake units?

K. Carter: What I would say is that it would be my intention to continue with mobile intake. I think we have to look very carefully at whether we're doing them in the right places in the communities. I would actually like to increase the mobile intake.

I've looked at the statistics. The percentage of complaints from the lower mainland was not adversely affected by the closure of the office. It's been a longstanding issue about the disproportionate number of complaints.

In fact, the people who come to our mobile clinics sometimes say that they wouldn't have gone downtown, if we had an office. They would much rather do it in their community. As I understand it, for some people in south Surrey and Langley, they'd rather drive out toward Abbotsford to talk to someone than drive into the city and find parking and stuff like this.

However, I think the key for us is: are we doing them in the right places in the communities? Are we tapping into the right groups there to work with us to make sure that people know about it?

The office itself — we do have a capacity. In fact, one of our intakes is held at that office on a rotational basis. It's really the Police Complaint Commissioner's office predominantly now, and we sublet a percentage of it. I'm not entirely sure what percentage, but Lanny could tell….

K. Carter: Twenty-five percent. So we do have that ability. I am in the habit now of making sure I go to Vancouver and the lower mainland at least once a month for two or three days because I think what's important, in addition to the mobile intakes, is a visibility with organizations — both authorities and not-for-profit groups — over there so that they see the Ombudsman's office as being responsive.

It wouldn't allow us to fund an office there, but we also have, of course, our telecommuters who live in those communities and provide a certain visibility and certainly a service.

J. Kwan: When you suggest that you may be looking into issues that are systemic within various organizations, or problems related to it, can you elaborate upon that in terms of some ideas?

K. Carter: As I said, one of the reasons I brought these reports — and I'm happy to leave them — is to give some idea of the kind of things that have happened. I'll tell you one thing that has struck me, because it's come up several times during my six and a half months now. That is transition programs.

Obviously and continually, there are changes in government programs. The whole issue of change and legislative decision-making is quite outside the scope of the Ombudsman, but the implementation of some of those changes is very interesting and can leave out groups inadvertently.

People go through something. The program changes. People are there under the old program. Everyone

assumes that they've kind of been taken care of. Often everyone assumes it differently. Then it actually ends up at the regulatory or even the policy level. Suddenly someone says: "Wait a second. There are 150 or 200 people here who…. Gosh, how do we deal with them?"

It doesn't necessarily come up to the Legislature to say: "We've got to fix this." There's an interpretation there. I found that in some cases people just say: "Oops. We didn't really think about them in passing…." For example, one thing we could do is have a look at several programs and indicate which ones have provided well for this and which haven't.

We did an administrative justice checklist for organizations. I could see something like a program transition checklist, where we say: "What kinds of things should you be looking at as you go into this to make sure that you don't miss people or don't end up treating them contrary to the intention of the program?" That's one example.

Another example would be to look at specific programs. I'll take something that's in the local government area so it doesn't really impact on anything particular here. In some areas, local governments have programs where they offer incentives for development and things like that. How are those run? Are they run well? What are examples of well-run ones? What are examples of ones that had problems?

That can be particularly useful. Because a number of municipalities are quite small, they venture into areas because of an economic situation, and then they kind of get bogged down. They can learn from the examples of other programs. So that would be another one that might be systemic.

If you have a look at this, for the Residential Tenancy Act, it was looking at the administration of an act — simply taking an act and saying: "There's the legislation and then regulations. But how are they actually working at the office level, and what kinds of improvements might be made there?" That can be particularly important as things go to regionalization. There may be different standards in different regions.

Those are examples. Another one might be something that I've mentioned, which is the move away from regulation to guidelines and discretion. There was, perhaps on some people's part, a thought that this would reduce complaints.

It may have improved service, but I don't think it has reduced complaints, because rather than something being a regulation, now it's a discretion. So locally people who think they're in a similar situation and get treated differently feel aggrieved and can end up at our office wanting an explanation. Sometimes it's difficult, particularly if there's a commercial aspect or a privacy aspect, because the person exercising the discretion says: "I can't really tell you everything about this other example which you think is just the same as you. You just have to trust me that it's not the case and that you're being treated fairly."

One of the things we do is look at those kinds of things. We can go back with an independent review of that. I don't know whether that might be something — another area.

J. Kwan: Just one follow-up question, the last one. You mentioned the residential tenancy branch. Would this fall within your realm — for example, an issue of administrative fairness with respect to the new system of telephone tribunals and the access issue for people who may have difficulties accessing an arbitrator through the telephone and the problems associated with that sort of process?

K. Carter: Yes, that's the kind of thing that someone could come to our office about and complain. We would look at it to see if there was an administrative fairness issue in terms of: was there anything arbitrary about it? Did it meet the goal that it was established to meet? Did people have the right opportunity to put forward their case? Did they know what the process was going to be? Are they getting reasons? That kind of stuff.

R. Hawes: Very interesting so far. I've got a couple of questions about the scope of the work that you do.

R. Hawes: Yeah, I am looking at your 2005 annual report. It looks like the second-biggest thing that you handle in your office is files relating to workers compensation. I'm just curious with respect to the files that you do handle for WCB. When people have gone through the appeal process and have been unsuccessful, would you then get involved? And if you do, what success do you have in trying to convince them to reopen and reconsider?

K. Carter: What I would say is that we get involved at different levels at WCB. For example, I gave the case of a chap who was a brain-injured worker. That was something where we got involved during the evaluation process. It was a situation where the family came to us because the worker was being required to undergo a lot of medical evaluations. His spouse and family felt that these were adversely affecting his recovery — just the nature and travel and everything else.

We got involved there and talked with WCB and worked out a schedule that was much better for them. From our perspective, that was resolved because the family felt that the new schedule didn't impede the recovery of the individual.

We get involved with the WCB at every level, right from the beginning to the end. At the tribunal level, if somebody has gone through a tribunal…. It's the same with the WCAT as it is with a large number of others — the Human Rights Tribunal and a bunch of other tribunals. What we'll look at there is the fairness of the process.

I'll give you an example of something where we would become involved. There's a tribunal hearing, and there's a finding, and that's it. The person comes to us and says: "I never knew that hearing was ongoing."

We go back to the tribunal, and the tribunal says: "Well, we sent them something. They didn't turn up. But hey, we can only do so much. We can't drag them in to a hearing."

We looked into it, and the person said: "Yes, but I'd moved, and I'd given them my new address." We went back to the tribunal, which said: "Yeah, I guess they did. I guess we sent it to the old address, and it didn't get forwarded on."

I'm sure there's a lot of gnashing of teeth about how, surely, they should have had a forwarding system that allowed them to get this quickly. But the tribunal eventually came back and said: "Fine. That's a flaw in the administrative fairness of our process. We're open to having another hearing."

It may end up with the same result for the individual — don't know about that. It's not a question of us going in and saying: "We want you to change the decision." But what we are saying is: "You need to make sure the process is fair and people are treated fairly." So that's an example of what could happen, even after a tribunal had dealt with something, where we could make a positive outcome.

R. Hawes: Okay. If I could, with respect to some of the independent agencies like FICOM, for example. Do you look at complaints that would arise from people who feel they've been unfairly dealt with by FICOM or the B.C. Securities Commission?

K. Carter: The Securities Commission, I think yes, because they would fall under the definition of one of our boards or committees. And they are listed, so we have done something in 2005.

R. Hawes: I'm just curious: is this set by regulation, or is that actually built right into the legislation? Changes — are they legislated?

R. Hawes: …that are required if you want to change that. Or can it be changed by OIC?

K. Carter: No. I believe it's part of our act, so it goes in for legislative change.

B. Simpson: A couple of questions. You mentioned the Islands Trust. There's now a number of other trusts that have been established around the province. Do those come under the purview of the Ombudsman, or do they have to be explicitly designated as such?

K. Carter: Well, it depends on whether or not they would fall under a board, committee, commission or similar body established under the Community Charter, the Local Government Act or the Vancouver Charter. If not, then it would have to be added as the Islands Trust has been.

B. Simpson: That's what I'm getting at. It's just that we have had a number — the northern development trust, southern development trust, new Islands Trust…. As we move down the path of possibly beetle action–type coalitions and so on….

If I understand correctly, those entities would come under the purview of the Ombudsman only if so named in legislation or if somebody had a complaint, because it's still 100-percent public money that's going into those entities.

K. Carter: In which case it might fall under 2, a corporation, commission, board…

K. Carter: Yes. So this is it. What I will do is have a look at the other trusts you've mentioned. I'll perhaps get back to the Chair and just give him some idea of whether or not they fall within….

B. Simpson: Just from a workload consideration. As an example, there's a dispute with the northern trust on the fairness of the funding formula being used for unincorporated communities and incorporated communities under 5,000 versus larger communities. So there's an internal debate and dialogue, and nobody quite knows how to get it resolved. They're kind of spinning in it. Those kinds of things occur. If there was an outside agency that could assist in that, I think that would be helpful. It may be a workload issue.

K. Carter: It may be, or it may be…. One of the things when I went on my tour was that pretty quickly some of the authorities said: "So could we complain to you about this other authority?" The municipalities had their eye on ministries. Actually, some of the ministry offices thought some of the municipalities would be a good group to complain about.

What I've said is that that's not really the purpose of our office, but if it's something where it's the treatment of the individuals in the community, then yes.

The other thing is that to some degree, there's a dispute resolution expertise in our office that might be useful. You would have to do that very carefully, because it's very hard, at the end of that, for one group not to feel that you favoured the other. So I would be tentative.

B. Simpson: Well, in this case it's more a matter of the fairness of the criteria being used to judge whether or not a project gets funding from the trust. So it's well-established funding criteria, and the dispute is whether

or not the funding criteria are fair to all parties concerned. Anyway, just something to think about.

With respect to your budget submission, the three additional permanent investigator positions…. Jenny already asked what some of the thoughts are around that. It would be helpful to me to have a little bit more flesh on the bones around that. That's a substantive funding request. I think that the approach — taking more of a systemic approach — is a good one, but to get a sense of what that might look like might help us as we deliberate about what will be supported and not supported across the various independent officers.

The question I have about that is: will there be efficiencies elsewhere in the system if you go down this path? There's a sense in your argument here that there will be, but you've asked for an increase in investigative positions and an increase in positions to do the systemic work. I'm wondering if there's not an offset where if you do the systemic work well, you decrease the investigative burden if you target that appropriately.

K. Carter: I think the answer to that is that I hope it will, but it's not something where there's an immediate trade-off. The first thing is that the two positions are simply to allow us to continue to deal with individual complaints in those two areas. It's not a question of: could you take one of those and perhaps use them for systemic and only do some of them?

I would be very reluctant to get into the position of trading off resolutions for individual complainants against systemics. It's all very well to say to someone: "Hey, the good news is we're going to resolve some big issues for a whole bunch of people down the road." They say: "That doesn't help me." I have to say that, as it's described in other things, a redress of grievance for individuals is critical. If we don't do that well, then we fail in our jobs.

The systemic one, I believe, won't only lead to, hopefully, a reduction in complaints in some areas, but it will forestall them. I have to say that I'm in the position that I'm always in when I'm looking at prevention, which is that no one gives you a medal for stopping something from happening. What they always do is give you the medals after things have gone horribly wrong and you come rolling in afterwards to clean them up.

I can't give you a for-instance from right now and say I can tell you that in 2009 or 2010, we won't have these many complaints because we will have resolved it. I can say to you that I think the work that was done in things such as the pesticide regulation and the administration of the Residential Tenancy Act stopped complaints coming in down the line, because we resolved the issue.

Looking at transition programs and saying if you've got people who are covered under the old program, then it's important that be included…. This is something I can say now. It's important that that's identified in everything from the rationale for the legislation through the legislation itself clearly, and that the regulations don't let it end up that all of a sudden it's a policy or an administrative decision by someone under the new act, who suddenly says: "Gosh. Don't have money for these people. Don't know what to do with them."

I can tell you that that will save complaints. But to trade it off with the individual complaints…. I'm not sure how to do it. As I say, I can see in some of the municipal areas it will be helpful, because there are some very small municipalities. If you can give them an example of this, then they can use it and stop something from happening.

B. Simpson: Those are fair comments. I didn't think that the trade-off would be immediate. But even in how you've responded, I think a stronger case would have been made before this committee if some more work had been done around what those systemic investigations would have looked like.

It certainly would have helped me, in whatever deliberations we're going to go into, to get a sense of where you think the critical aspects of those systems issues are at this juncture — just for what it's worth.

K. Carter: Okay. Well, I thank you. I'm constrained in kind of giving particular commitments to particular investigations.

K. Carter: And that's really what I'm operating under. I can only give you the examples of areas where it's paid off before and some idea of areas that I would, at this time, look at.

I. Black: I'm going to build on MLA Simpson's line of questioning. I'm going to approach it from a slightly different angle, but it's the same theme.

Let me start by saying that it's my belief that at an individual-citizen level in the province, there is probably no other office we have that embodies the notion that there not only has to be justice done, but the perception of justice must be done. Your office accomplishes that. So to that end, I'm very respectful of the work that you do.

With the broadest mandate in Canada — I'm reading from your report here — B.C. has an enviable national and international reputation for efficiency, fairness and accountability in public administration. My first remark would be that that's extraordinarily commendable.

I want to ask you a little bit of a rear-view-mirror question, and then I want to look forward a bit. With respect to achieving the very laudable statement that I just read, what changes has your office made over the last four, five or ten years, for that matter, to allow you to be able to stand up and proclaim that, and for us to be able to congratulate you on that basis?

K. Carter: I'm not saying that we're responsible for it. I have to add that. I think one of the things that I made clear at the outset is that the ombudsman office, the concept, is very widespread.

I have to say that we talk internationally, and some of the problems that our international colleagues have around public administration we think are amazing. The questions come: "So how do you deal with public officials who are routinely taking bribes?" We say: "Well, actually, it's not our area of focus." When I say enviable, that's what I'm saying. What we're dealing with is a better type of problem than those very fundamental ones.

What has the office done? I think the office itself has tried, over the past number of years, to work with the authorities. I think that's the thing that has probably paid off in terms of developing internal complaint resolution mechanisms.

I was at a conference in Winnipeg on Saturday on independent officers of the Legislature. One of the points made at that was that the notion of ombudsman has spread from parliamentary ombudsman to the stage now where everybody has an ombudsman. If I looked back over the past ten or even 15 years, that's where the development is — convincing organizations that they need to have their own internal complaint resolution mechanisms that follow the administrative fairness models that we've set up. So that has, I think, paid off.

The concern I have, as I've indicated, is that I don't think we have yet gone back to check so that we can say that people aren't being exhausted by your process. They're being impressed by the exhaustiveness of your process. I think that's one of the areas we need to go back to. That's what probably is the biggest impact.

Internally in the office there have been some significant rearrangements. In all honesty, my understanding is that that's more as a result of outside pressures than necessarily internally induced decision-making. I think, however, that it's led to a very good system. One of the things that we can say now is about the timeliness of our investigations, the delivery of services in a timely manner.

I don't think we could have said that ten years ago. I think we can say that now, and that's critical for individuals who often when they come to us have been through years of going back and forth on something. They want something to be done reasonably quickly.

I. Black: That leads me into the next question, which is a variation on what MLA Simpson was talking about. When I look at the charts you've given us today, I'm struggling with the ask a little bit, and I need you to help me on this.

I look at your own information. You've got in your bar chart that there have been no instances — a little red piece — of declined services in the past two years. You've got a drop of about 14 percent of files assigned to investigators. You've got a total number of instances of files assigned and those that are closed at the outset dropping from around 11,000 to about 6,500. You've got an age distribution that is relatively static, although it has slightly declined this year. I need you to reconcile the request for a 13½-percent increase in full-time-equivalents.

K. Carter: I'm happy to do that. I think the thing is that the investigations haven't gone down. What has happened is — and this is what I looked at setting out at the top of page 6 — the inquiries and complaints have gone down. The investigations have gone up, and we're doing about 35 percent more of them now than we were a couple of years ago.

The rationale is that the kinds of complaints we're now getting are the more complicated ones that can't be solved quickly or resolved internally. They take more time and more energy and need to be investigated. The reason why we have not had to decline and have been able to work on the holding queues is because we've had four positions increased. So that's the reason. It's a simple equation of if you have more people, then you can do more things.

In terms of keeping the average files assigned to investigators, that I can't claim any credit for. That is the effective management of the office. I go back to my other statement, which is that you can assign 25 cases to investigators each month. They'll get them done. They won't get them done in the time frame that you've established.

I think the chart on page 13, "Average Files Assigned to Investigators," shows that there was good management and that what we've been able to do for a while — not investigating certain areas, which is really what declined and putting in a holding queue means…. They both sound nice, but they both mean that we'll do it when we get around to it, and the holding queue allows you to wait a long time to get around to it. What that means is that match of resources has paid off. Retrospectively, you can look back and say: "Hey, it was a good idea."

One of the things I looked at when I came in was: what's the equation? — if I can put it that way. How much in? How much out? How long does it take to get out? What's a reasonable caseload for the investigators?

I think the time lines we have are right. Basically, the vast majority of cases are done within a year. For the majority of them the target is 70 percent within three months, which I think is a good one. To do that, what we've had to do is take away cases and then put them back in to make that.

What we haven't done, if you have a look at the public reports, are systemic investigations. We have not put that back in the equation. We can't do that without skewing everything else. I do think it's a critical aspect of the job. As I say, I think it's the second part of the mandate.

When I look at the mandate, I go back to the report of the committee that appointed me, which was adopted by the Legislature and which says: "The Ombudsman's two primary roles…." What I'm saying is that we're not doing one of our primary roles. The only way I can do it within current resources is to penalize individuals. That does not, to me, seem to be consistent with the other part of the goal, which is investigating those complaints in a timely fashion.

I. Black: I realize there are other people, but my closing remark would be that I agree. From the cursory look at the data that we have here — and granted, by definition of how it's assembled for us, it is cursory — I would agree that there's an indication there that it has been very well managed from that standpoint.

I would like, however, just to point out that the assignment of investigations…. While it's gone up 35 percent to your point, it's also a number that historically does fluctuate. It's been as high as 2,500 — almost 2,600 — down to as low as 1,700. So it bounces around a wee bit. In isolation, I would caution using that as a stand-alone stat. The rest of your story, I accept.

K. Carter: The baseline is that it's not controllable. I can simply say to you that by the outreach and communication, my intention — and I say this in the most reassuring fashion to the staff — is to increase the number of complaints and, ultimately, the number of investigations we do. I think there's an underserviced community out there that we're not reaching.

That's my goal. If I'm right, then in a couple of years we'll come back and there'll be more. If I'm wrong, then we won't.

L. Hubbard: If I could just add a comment back in terms of the time when the number of cases that were assigned to investigators — the 2,500 that was referenced there. At that time there were about 25 FTEs in the investigative role — so a higher number, more investigators. At that time the actual caseload that was being carried by the investigators and the number of open files by the office was quite a bit higher as well.

K. Carter: If you have a look at our 2001 annual report, which has a file on age distribution of open files, there's quite a significant number back in the late '90s that were one to two or two to three years old. That's the trade-off that we've been making.

B. Lekstrom (Chair): Kim and Lanny, I want to thank you very much for your presentation here and for coming before our committee. You have put forward a very thorough presentation. As I indicated at the beginning, it will be our duty now as a committee to deliberate on what we have heard — the information you've put forward — and come forward with a report and recommendations.

K. Carter: Thank you very much, and I'm sure Lanny will be relieved. I don't think he actually comes in front of you again.

With that, the committee will take a five-minute recess. We address our next statutory officer in five minutes.

B. Lekstrom (Chair): Well, good morning, everyone. We will reconvene the Select Standing Committee on Finance and Government Services. We will move to our next presentation, which is from our acting Auditor General. Joining us is Arn van Iersel as well as Errol Price, Su-Lin Shum and Christine Davison.

I want to welcome you before the committee here today. We will continue to work on the technical side of this to get the machines working, but we do have a hard copy before each member as well. Again, I want to welcome you before the committee today and look forward to your presentation.

Our mandate is to hear from each of the statutory officers, to listen to their presentations, to hear their budget proposals for both next year and the three-year rolling plan as well.

A. van Iersel: Thank you, Chair, Deputy Chair and Members. Please do try to follow along on the slides, despite the fact that you won't see them there. We'll try to make it obvious when the slides are to be changed.

We are pleased to have this opportunity to talk about our 2007-2008 business and financial plan with you today. I'm glad that the winds didn't create a problem for those of you who had to come from other points.

I apologize that a few members will have already heard on Friday at the Public Accounts Committee some of what I have to say, but today I will go into some additional details that I was not able to on December 8. Hopefully, we will meet your needs.

Discussing the plan with you is obviously a major part of our accountability to the Legislature and to the public. Consistent with the recommendation that this committee made last year, it sets out the workplan for our office in relation to the funding that I, as your acting Auditor General, feel is necessary.

Once a funding decision is made, I will develop a more detailed service plan based on that decision by February 2007. To complete the accountability cycle, I will then issue my annual report in June 2008, which informs you of how we will proceed relative to the service plan expectations.

I hope you have had an opportunity to review the plan in advance of our discussions today. If you have, you'll know that we're putting forward four budget packages and recommending a significant increase for our office based on a five-year plan that we've established.

The first slide you would have seen, had our technical wizards been able to make it happen, is our new vision and mission. Our five-year plan is geared towards meeting that vision and mission.

Before I go into the details, I'd like to walk through how we developed the plan to give you a sense of why

I think it's an appropriate request and the benefits that the Legislative Assembly and the public will gain from further investment in our office. This year we did take a new approach in regards to the preparation and presentation of the funding request.

First, the plan is based on that five-year vision, linked directly to the specific goals for the office.

Second, we presented our plan and request for resources in the packages that I already referred to so that we can better show your committee what the Legislature will get from our office, dependent on the approved level of funding.

Third, we've provided information within the plan that directly addresses what we heard in feedback from you, either during discussions last year on our funding request, at the annual MLA survey or in meetings that have been held outside of that.

Examples are: providing greater information on our office priorities as expressed by our corporate goals — you would find that on page 6 of the financial and business plan — and comparative expenditures across different audit offices in Canada. That's covered both on page 10, in regard to some benchmarks, and on page 25, in regard to the total expenses of other, similar legislative offices.

Fourth, there has been no prior public discussion or release of our plan or requests. That was done on purpose, to respect you and your deliberations. Consistent with other statutory officers, this plan is now being made public today based on our discussions here. We want, as an office, to be open and transparent about our plans and budgets, but we're also mindful of the Finance and Government Services role and mandate.

Our office does have a clear vision now of how we can best serve legislators and the public and of the resources that are necessary to achieve that. But we respect that the Legislative Assembly must decide on an appropriate level of funding, given many other pressures on the provincial budget. We hope our new approach — and you're going to be the best judge of that — best meets your needs in making the appropriate decision.

Speaking to Vision 2011, I've been the acting Auditor General now for approximately six months. Since my arrival I've been working closely with the executive team, staff in our office, on opportunities and how the office needs to change, going forward. This has resulted, as you see in your slide deck, in a new five-year vision for the office that describes, in effect, what we want to be by the year 2011.

There's no particular magic to 2011 other than that it's a five-year plan. We think that becoming a highly valued legislative office, recognized for excellence, is going to take some time. Our office is already, however, seen as a leading office in Canada on various aspects of our lines of business. For example, we receive numerous requests to mentor or partner with other audit offices on performance audits.

Recently we were visited by a senior member of the European Court of Auditors, the European Union's independent auditors. They wanted to know more about our approach to performance audits. The visit was positive both from their point of view and from our own.

However, there is much more to do in fulfilling the vision, as we wish to be the best in serving you and the citizens of British Columbia. Our mission continues to confirm that we serve the public and you, as the public's representatives, by providing independent audits and advice on how well government is managing its responsibilities and its resources. No one else does or can do this kind of work for you.

I often like to describe our vision further through some key attributes. The first attribute is an independent audit office that is well understood and respected by legislatures, by you and by the public. Second, regularly sought out by legislature, government and our peers to provide advice and support. This is something that now happens.

We model credibility, accountability, efficiency and effectiveness as well as openness and transparency in operating in the public interests. We believe if we make recommendations in these areas, we have to demonstrate what we're recommending.

We also wish to be innovators in best practices and to work to the highest standards, the standards of the Canadian Institute of Chartered Accountants. We are an employer of choice with highly engaged and motivated staff. Better than 70 percent of our budget relates to staff, and it is important to make sure that we use those staff in the best possible way. These are further descriptive statements of what's behind our vision.

We also have goals. As government's external and independent auditors, we seek to provide you and the Legislative Assembly with credible, relevant and timely information that promotes sound financial administration and reporting across the government; well-managed programs, services and resources; comprehensive public sector accountability reporting; and effective public sector governance. We also will continue to incorporate best practices in our work as an employer. While we realize we cannot achieve these goals through our actions alone, they are what we strive for in achieving our work.

Since coming to the office, one of the changes we've managed is an organizational structure change. We have organized our structure to better align our goals in our lines of business. Errol Price as Deputy Auditor General is responsible for corporate services and overall quality assurance for the work. Both Su-Lin Shum and Christine Davison, who you've been introduced to today, play key roles as part of his corporate services team.

We also have assistant Auditors General, and each is responsible for key limits of our lines of business as reflected in the chart, being financial audit, performance audit — sometimes previously called risk audit — and accountability reporting, which, for example, is looking at the government's reporting of its results.

Both our organizational structure and changes to our vision, mission and goals are steps to improve our effectiveness and efficiency. Staff, as well as the executive, felt that the previous structure pulled staff in too many directions, so with the new structure we believe we

have a greater alignment of the staff with what has to be done and a better focus in terms of the various activities of the office.

Our lines of business. You've already heard me reference…. We have three lines of business. First is the financial audit, second is performance audit — or as I've already said, sometimes referred to in the past as risk audit, value for money, comprehensive auditing; it depends on how far back you go as to what particular term you would use — and then accountability reporting.

For '06-07 we're projecting to spend 65 percent, 30 percent and 5 percent of our resources across these lines of business, and each contributes directly to the goals we have set. In addition, each contributes to fulfilling different responsibilities under the Auditor General Act. For example, the act clearly specifies that I must report on whether the financial statements of the government reporting entity — i.e., what is government as defined by the accounting standards; whether they meet generally accepted accounting principles and are fairly presented to you as legislators and to the public.

The act also specifies my duty to bring assessments to you concerning a number of other responsibilities. These include whether government is operating efficiently, effectively and economically, which relates to our performance — our risk audit work. I also tell you whether government's accountability information with respect to program results is adequate. This relates to our accountability reporting line of business.

The act further specifies a number of other responsibilities related to proper management of revenues, grants, trusts, transfers and loans. The act was revised in 2003 and is still one of the most comprehensive and permissive in regards to what an Auditor General's office can examine. Therefore, we have a lot to live up to.

In trying to meet those requirements, we, like any office, have a number of challenges. We have a strong reputation and a track record that the office is trying to live up to, but we do face some issues. Our strength, as I've said, is our people, and our first challenge is ensuring that those staff remain with us and that they are of the highest quality in meeting the standards of the work that we must do.

In recent years we've become far less able to recruit the staff we require, with fewer people applying and usually with less experience. For example, our last auditor position has been posted three times because we have not been able to hire someone with the qualifications that we think we need. At the same time, audit standards have changed tremendously, affecting the public and the private sector alone. It is estimated that audit standards have changed by up to 40 percent and now require even more substantive planning and audit procedures.

There is a whole new approach to auditing now. That means a much greater emphasis on systems, business processes, governance procedures and top-down controls. What this means is that we need to spend more time carrying out our audit work and that we need to train our staff on the new standards and procedures. Much of our effort in meeting the new standards in doing financial statement audit work has had to come at the expense of our other two lines of business.

Operational costs continue to increase, in particular costs related to professional services. These are the contractors we use where we're not able to hire staff directly to do that work. The same market pressures related to staff are applying to contracted professionals, and we expect professional services to rise by as much as 25 percent next year.

Of our request, budget package 1 — almost 60 percent, or $1.37 million — in our view is considered to be non-discretionary. It is what I generally term the "treading-water budget," in terms of just doing what we're doing now. There are uncontrollable pressures that we've identified that are challenges for us to address. Examples would be the public sector salary increase of 2½ percent for management and 3 percent for other staff — that's $175,000; funding for the audit standards that we think would be another $655,000; operational cost increases, professional services, rent and so forth — another $540,000, which is why we say again that package 4, our last package, is "just able to carry on."

In addition, we have some gaps and opportunities. Rather than cutting back further on performance audits to meet the challenges, we really need to increase our presence through the government entity. It's over 150 different organizations that we're responsible for financially in regards to the financial statement work as well as looking at them from an accountability-reporting and a performance-audit point of view.

We want to get over all these various aspects of the government entity over a reasonable period of time. Therefore, we need to dedicate more effort on these entities as well as look at internal control systems and procedures which are required under the new standards and are cornerstones, in any event, of good financial practices. These I consider to be the biggest gaps in our audit work.

Our opportunities, on the other hand, include best practice guides. These are a new product. They would allow the Legislative Assembly to capitalize on our existing expertise. They would build on the audit work we're already doing by providing value-added advice that takes our audit work and adapts it to a broader subject area.

I brought with me some examples of best practice guides — at least the title page and a summary of the table of contents — to show you in regards to what other jurisdictions are able to do in terms of capitalizing on the work that they do and allowing the government to better operate.

For example, the findings and recommendations of an audit on the specific ministry's contract management process could be broadened into general best practices. Having been an over 30-year employee of the province and in Alberta, contracting is always a challenge in regards to doing that in the best way. We continue to need to learn from those practices and our audits to make sure we get the best value for the dollars that are spent.

These kinds of guides are already produced in Australia and New Zealand. We think it's a practice that needs to be emulated by us.

Finally, we need to bolster resources dedicated to accountability reporting. We continue to believe that robust accountability reporting by government organizations to the Legislature and the public would enhance the oversight role of the Legislative Assembly and the committees and would give the public greater confidence that resources were being spent in the best possible way.

With respect to budget development, next year's budget request has been developed, as you already heard me say, as the first year towards meeting a five-year plan, or Vision 2011. We've chosen five years because we know change, as I've said, doesn't happen overnight. It's going to take some effort and some time.

We've started with our current workplan and budgets, and then we've built in funding to address the challenges that I mentioned to you to close the gaps in regards to the performance we would like versus what we're doing now and the type of work that we want to do. We want to focus on the opportunities such that we can become the office we want to be by 2011.

B.C. has a strong tradition of a strong Office of the Auditor General, and we want, with your assistance, to continue to ensure that that tradition continues. We believe that through a high-service organization that maximizes benefits for you, you will be better served as legislators and as representatives of the taxpayer.

Our response. Of the four packages, our recommendation is package 1, which is the highest level of resources in the range of options that we've presented to you. The reason is that if we want to meet Vision 2011, we need these resources to address the challenges, gaps and opportunities.

We want to be able to attract and retain high-quality staff. We want to meet all the audit standards, which has been traditionally something that we've aimed to do. We want to cover our operational cost increases. We want to deliver essential performance audits in regards to how well government is doing, and we want to build on existing strengths — for example, again, the best practice guides — in terms of how we capitalize on the work that we're already doing. We want to do more accountability reporting in regards to the information that flows from government to legislators and give you the comfort and, where necessary, the assurance that that information is correct.

While the three alternate packages are still viable, they enable the office to meet only certain aspects of our vision and key deliverables.

As shown in the diagram, package 2 meets all of the above elements except for a greater focus on accountability reporting. In package 3 our challenges and gaps are met, but it does not fund two major opportunities — the best practice guides or a greater focus on accountability reporting. Package 4 — this, as I referred to, is our treading-water budget — addresses our immediate challenges but would only maintain our current service levels in regards to audit, so this would not address our gaps in delivering examinations of important government programs and services to you.

Our revised budget estimate for this year starts with the $8.47 million voted appropriation this committee recommended last year. That figure includes an $800,000 increase over the previous year. Since then there have been increases in relation to public-sector-wide salary and benefit levels that, combined, amount to over $270,000. Therefore, we've shown a revised voted appropriation of $8.74 million.

With this revised budget, this slide summarizes the four packages we are presenting. Budget package 1, the recommended option, requests an additional $2.32 million, which for us is significant, and I realize that — approximately 20 percent. However, it is important to recognize that $1.37 million, as I alluded to earlier, is required to meet existing pressures, again, to keep doing what we've been doing. Each alternative budget package, as I've outlined, only deals with some of our challenges, gaps and opportunities, with lower funding levels to match. Overall, our budget request ranges from just over $12 million to $13 million, so really, there's a spread of $1 million between the highest package and the lowest levels.

However, this is the first year towards our five-year vision. Subsequent years also propose increases such that we get to our vision by 2011. Future resources, however, would still be subject, of course, to this committee's annual review and approval. Future funding levels for each package are identified on pages 30 and 31, which is appendix D, so this is your five-year summary of the requests, ranging, again, from $13.35 million, if you follow the lowest, to $17.8 million if you agree that we need the resources to follow Vision 2011.

Overall, our recommended five-year budget package 1 plan builds on our core functions, our financial statements and seeks to provide the Legislative Assembly and the public with greater assurance about key aspects of government operations and value-added products. We've included a five-year preliminary workplan on pages 27 to 29. There are a number of audit topics outlined, many of which relate to subjects you have identified as priorities within your 2007 budget consultation report. It's not surprising to me.

Your views on what is important to focus on are similar to our own, e.g., revenue management, taxation, education, health services, child services infrastructure and environmental issues. As I've already said, we wish to make sure that all aspects of the government reporting entity are properly covered, taking into account the various risks and issues of the day. The plan we presented to you is our best thinking today and may change and evolve, but in terms of the level of work, we think that would be the same, depending on the revenue that is provided to us.

I'll now talk about our workplan in terms of the benefits I see being provided to the public and to you as Legislative Assembly members. For sound financial administration and reporting across government, you'll continue to receive our audit opinion on the summary

of financial statements and would also receive a number of additional financial management reviews related to, for example, contract management practice, internal control systems and revenue collection.

Under the heading of "well-managed provincial programs, services and resources," you will receive substantially more independent insight covering different program areas. This year we expect to produce five performance audits that cover significant topics of interest. These are identified on page 14 and include, for example, the November 28 treaty negotiation audit. However, this does not imply that we are providing adequate coverage. This means we are only providing information on a few key subject areas across 19 ministries and 150 public sector organizations within our mandate of audit.

We believe covering a broader range of government activity, including an increased focus on the SUCH sector representing schools, universities, colleges and health authorities would mean we are delivering better service to you. Past examples of important work are water quality, seismic safety, alternate service delivery, access to health service, early literacy, environmental compliance and environmental enforcement.

Under the heading of "comprehensive public sector accountability reporting," you will gain our assessments of how well reporting is being done by government, governmentwide, as well as in specific sectors such as education and health.

For effective public sector governance you will retain our advice, which identifies where government has put in place good governance practices and where there might be room for improvement. An example here is our audit committee report just issued last week under section 10(8) of the Auditor General Act, where we looked at audit committees.

Also, as noted earlier, we believe we can add greater value by producing a series of guides that I've already mentioned, which seek to identify areas where government activity is being well managed. These guides would flow from our work in financial audit, performance audit and accountability reporting. It is, again, capitalizing on what we already do but having a more positive, long-lasting effect on the government as a whole.

For best practices in our work and as an employer, we will ensure that we are an effectively run organization. That includes being able to attract and retain high-quality audit staff. On this point, I need to note that the only additional funding built into this package relates to the 2½ percent increase I spoke of earlier for management and 3 percent for administrative — or what's called schedule A — employees.

There's also $80,000, which was a policy change in regards to leave liability. Organizations are now responsible for their own leave liability, which means we must ensure that staff take the various holidays they are entitled to. Otherwise, there will be an expense that we haven't otherwise covered.

Government is also considering extending a 6.6-percent salary top-up as a temporary market adjustment. We haven't yet as an organization heard how this may apply to our particular staff. The issue is that we are, rightly, an excluded organization. Again, though, we face the same pressures as many other organizations that are dependent on accounting professionals in regards to recruit and retain. That isn't yet resolved.

There's also consideration of a new management classification and compensation framework, which has been referred to generally as broadbanding. It allows organizations to use a more flexible system in regards to how you bring people into the organization and classify them based on the work they're to perform. Again, we need funding to do that, and that hasn't yet been provided.

We're hopeful that decisions on these items will assist our own efforts in regards to attracting and retaining the staff that we need. Additional funding, we hope, would be made available. However, we may have to return to the committee if at some point it is noted that we don't need additional funding to do that.

I also want to reference something in regards to the turnover rate that was briefly addressed on Friday. I mentioned at that time that the turnover rate for our office was roughly 19 percent, and a question was asked: how does that compare to government? Over the time period since Friday, we've checked. I think the government turnover rate is just over 6 percent.

That's not a very relevant group, so we also asked what the turnover rate would be in internal audit and advisory services, a comparable organization that relies on staff. That rate is much higher than the government rate. Not surprisingly for us, I think it was 14 percent or 15 percent. So we're facing the same issue, which is that there are many opportunities for newly minted accounting professionals from the three associations, and we see that as a continuing challenge.

Alternate packages. I respect that the Legislative Assembly is faced with difficult choices. That is why I'm presenting three alternative packages for your consideration. I've already described and addressed how they address some of the issues, but not all of the packages address our challenges, gaps and opportunities.

Packages 2 and 3 still build on our current workplans, but package 4 only addresses our immediate challenge. While workable options, these packages unfortunately do not live up to the office's potential as we believe is envisioned by our corporate direction, the new vision mission, or under the Auditor General Act of 2003. We should be providing much more information assurance on government operations to you as Members of the Legislative Assembly and to the public.

I have not put forward a zero-increase package because, in effect, that means a 13-percent budget reduction. That's the impact of escalating costs and other factors. Without a funding increase, I'd have to find money within my existing budget to pay for the immediate challenges facing the office. While for some that may be an option, it's not an option in my mind, nor advisable to recommend that same to you.

Each alternative package also provides benefits to the Legislative Assembly and the public, although not

as many as the funding is reduced. This chart summarizes and compares at a high level all the benefits noted.

Package 4, however, only allows us, as you heard me say a few times now, to modestly keep up to best practices in our office and to be somewhat of an employer of choice. This budget package reacts only to our immediate pressures including costs of meeting the audit standards, which is paramount in our minds, and the already announced salary increase of 2½ percent and 3 percent. This I already referred to as our treading-water budget.

So what are we recommending to you as representatives of the Legislature and the citizens? In summary, our Vision 2011 plan needs to be resourced properly. In my opinion, that means in 2007-2008 a voted appropriation for operations of $10.6 million, cost recoveries of $2.4 million and a voted appropriation for capital of $170,000.

The reasons I think this needs to be is to be able to inform you of whether government's $34 billion in finances programs and accountability information are being properly accounted for and achieving the results that you as legislators and the citizens expect. No one else can do this kind of work, which is why our office exists.

We have a significant mandate under the Auditor General Act that's been entrusted to us, and with your assistance and the Legislative Assembly we want to deliver on that fully. Vision 2011 captures the key elements in our workplan, and budget package 1 presents the first-year resources to carry it out.

This is my summary of why we need these resources. At this point, staff and I would be happy to answer any of your questions. I know, Chair, there were some questions related to recoveries. We can wait for that question to specifically come up or, alternatively, I can speak to that now.

B. Lekstrom (Chair): Arn, if you'd like to address it now, it may actually answer some of the questions before they arise. I would move forward on that and ask you to address it now, if you could.

A. van Iersel: Perhaps while I am doing that, what I would like to do is ask the Clerk to hand out examples of the best-practice guide so that members have an opportunity to see…. Again, if I can just repeat, the best-practice guides…. These are the title pages and the table of contents. We didn't think it was appropriate to copy every page, but if there's interest, we would be happy to do that. These are only illustrative examples. There were many, many to choose from.

The other thing I would like to do while we're waiting is…. We have a chart. Another question from Friday was: how does the distribution of your resources change over time? Christine Davison, who you've been introduced to, will again provide to the Clerk Assistant a diagram that shows where we are in '05-06 related to financial audit, performance audit and accountability reporting, and show the '06-07. The '06-07 is a projected, which matches the pie chart that you saw in your presentation. Then we show you what happens by 2011 and 2012. There again, I'm trying to proactively meet some of the questions that may come up again today.

On cost recovery. I think there were good questions on Friday. It was the first time for me through this particular procedure, but I do want to say that I respect the questions that were asked. I think they are good questions to ask, and I endeavoured on Friday, for those who read the Hansard, to give additional information and to make members feel more comfortable, recognizing that we have new members here today who weren't in on that conversation.

The first question was: what is our aim? Our aim is still in relation to 100-percent cost recovery. That is our aim. We don't wish, unless there are very good reasons to do so, to have cross-subsidies in regard to what we charge for our audit services.

In this regard, it was also questioned: "Well, how do you do relative to your aim?" We didn't have the answer with us on Friday, but we have gone back and reviewed. It is 85 percent of our full costs, including overhead, that are recovered from our clients. That is our best figure today. So that's 100 percent of our direct costs plus an allocation of overhead.

Overhead allocation is a critical piece in this. What you include in overhead obviously changes the percent recovery. While I'm comfortable in quoting the 85-percent figure to you, there are other alternatives to argue in terms of higher or lesser overhead.

Why you wouldn't include all overhead, for example, is that there are some things we pay for that audit clients would not necessarily agree should be reflected in their charges. An example would be the work we do directly for you. School districts and whatnot don't necessarily feel that our costs of our office related to providing information for the Legislature are directly attributable to them.

Overhead. Our commitment, in addition to today, is that we will go away and intend to further examine the allocation of overhead in terms of what is reasonable in regards to what should be applied. Our office has been grappling with overhead for some time.

Another issue: should it be marginal cost or full cost? Why I'm raising this is I know that in private sector companies, if they have additional staff available, it isn't always full charge-out rates. If they have an auditor or senior project leader available and an RFP comes up, they will often bid more aggressively to make sure that those resources are productively employed as quickly as possible, as opposed to being dead overhead. That is an issue for private sector and is always an issue for us. Is it marginal cost, which is quite a bit lower than the average cost of overhead?

Another example includes travel. One of the issues we have is that we're not a regional organization. We're headquartered out of Victoria. To clarify, we don't wish to be a regional organization in the sense that we don't think we can justify that. But other audit offices that are competing on business have offices in Duncan, Nanaimo, Prince George, Fort St. John.

One of the challenges we have is that if those offices are now delivering audit services to local clients, they have an automatic advantage in regards to…. They don't have the travel costs and the travel time costs that relate to our office. That's always an issue in regards to discussing how our fees are applicable and appropriate or not.

These are part of the examples of why it is difficult to do things. They are live examples based on recent businesses that we've engaged in, such as school district 68 in Nanaimo, in terms of what would be seen to be reasonable for them.

Another factor that is key in this is that when it comes to discussions around fees, what's often pointed out — correctly, in my mind — is: "We didn't ask for you. This isn't a competitive process, so why should we simply accept what you say are your charges?"

Here again, you have to go back to the financial statement audit coverage plan. Why do we ask to be auditors in certain cases? Again, it goes back to the situation of, under generally accepted auditing standards, we need to have certain coverage in various organizations such that I can sign the financial statement opinion. You need to have direct involvement in a number of different entities to deal with that. I can't rely, in my opinion and under the standards, on necessarily having all of that done by private sector auditors.

We therefore do a plan that is blessed by your colleague committee, and that committee is the basis on which we get the assurance we need. But it's not the case that we're competing for business. We're not interested in competing. That is not our goal.

Our goal is not to become an organization that does everyone's audit work. In fact, consistent with the legislation of 2003, we want to move around the entity based on risk, based on our need to get assurance. It's not about trying to win all the business.

If you were to ask us to compete on everything, I would be concerned as your acting Auditor General. That would mean that I would be competing, and I wouldn't be sure of the outcome. We would obviously do our best. The difficulty is that I might end up being auditor in a small part of the entity, which wouldn't give me the coverage that I need. I wanted to explain that as well.

Another question that comes up is: why wouldn't you charge full cost recovery if you're not already doing so? I've said that we're not already doing so, but we need to have a harder look. In addition to having a look at the allocation of costs, part of this also relates to better project management.

One of the efficiencies we're seeking is to better manage our audit work in regards to tracking the costs, the benefits, the various comparators and so forth. We are interested in maximizing efficiency, and I think there's some room for doing that.

The other thing that needs to be considered is…. Because of the fact that we're not competing, when I deal with school district 68 — more recently my live experience is Richmond school district 38 — they asked the hard questions in regard to: "Why are you charging what you're charging?"

In that case we're using an outside auditor, and we're providing oversight. The question there was: "Why do you have to add 8 percent to 10 percent on top of what the outside auditor is already doing?" I had a long discussion with them in terms of why we needed to be involved and, again, couldn't rely directly on that.

Here again, part of our issue was that we couldn't find all the staff necessary to do all the work, which is another reason why we don't aim to do the whole of government entity and don't wish to. These are challenges that our office faces with respect to recovery.

The other issue that came up, Chair, Deputy Chair and Members, is: why don't you charge a profit? There were two aspects to this. One is the policy implications of this. The other was: do you have legal authority?

We hadn't asked, at least not since I arrived, about the legal question. So we did that. Over the course of the last couple of days we checked with our own legal adviser. The advice is that we don't believe we necessarily have the authority to charge a profit. I can go into some more details on that with the committee later, but the basic reason is that it's a fee-for-service.

As a fee-for-service, the legal interpretation consistent with other past rulings is that we can recover our direct costs. We can also recover a fair, reasonable allocation of overhead. Judges have been a little bit discretionary in terms of what a reasonable overhead is, but the profit motivator is not there in regards to what we can recover. That's based on our view of the language in our Auditor General Act as well as past court cases.

It's my understanding, although no one from the Ministry of Finance is here today, that Finance is also asking the same question of its legal advisers. So perhaps when that information is out, we can confirm whether they agree or not.

There is another issue to consider here, which is that large audit firms, as I mentioned the other day, generate efficiencies. They have regional offices. They have the ability to capture whole sectors. For example, I believe that KPMG has a significant amount of all the health authorities. The more you are able as an organization to corral like entities, the more efficiencies you have.

What I'm trying to say here is that there are some challenges. We are going to see how we can improve in terms of getting to that general goal of 100-percent cost recovery. But there are some challenges, as well, in explaining to school districts…. That's the best example and often the most vocal example of why we wouldn't necessarily want to charge for going to Nanaimo. Or with the Oil and Gas Commission, which was previously served by a local firm, we wouldn't necessarily want to charge them full costs for travel time and travel costs.

These are things we have to think a little harder about to make sure that what we all deem is reasonable, in terms of cost recovery, is also accepted. Rather than discussion around what our office is to do in the audit, my worst fear would be to have ill will and a long discussion over the cost recovery. We already do that, in my view, a little bit more than what I would like to see happen.

Our turnover rate was another issue I prepared, but I think I've mentioned that. It's 19 percent, to get into specifics, last year for our office. Seven people have now left our office, as of today. We actually lost another one on Friday, since I spoke to the Public Accounts Committee. If the trend continues, we think we'll be at 14 percent.

In keeping with internal audit, they say their range, depending on who you include, is 15 to 20 percent. In the public sector it's 6 percent. Again, I think that's a reflection of what's happening in our financial community. It's good for accounts, not necessarily good for taxpayers in regards to various organizations that have to pay for those services.

Here again, I wanted to touch on a couple of the issues that were raised last week. I would be prepared to speak further on it when another question arises.

B. Lekstrom (Chair): Thank you very much, Arn, for your presentation and for the options that you've put before the committee and what those options mean for consideration. It's my understanding that PAC deals with the cost recovery issues per se. We will deal with the voted appropriation for the office — just so that we're all of the same understanding of that. But I do want to thank you for the information you've just put forward.

R. Hawes: I have two questions. The first one. Arn, maybe you can tell me: where else is performance auditing done to the extent that you're proposing? Which other province? And accountability auditing — where else is that being conducted in Canada?

A. van Iersel: I guess one of the best examples of performance auditing would be the Auditor General of Canada. I don't have specific figures for you today, but we were actually discussing it on the way up to see you.

The Auditor General of Canada Sheila Fraser and her 600-plus team do a significant amount of work. In fact, if you're watching the papers — and I know that you all do — you would have seen the latest release of federal OAG reports. One of them was a concurrent audit that we did in regards to treaties.

Performance auditing is a major feature at the federal level. It is also a major feature in the province of Ontario. In fact, Ontario got a huge — well, huge might be my term — or fairly substantial lift a year ago for them to do these audits.

What I want to be clear on — because I've done a lot of research before and since coming to this committee — and what I want to make you're aware of is that while you might like to lump auditor general offices together and say that we're all in the same business, that's true. But getting to maybe the point of your question, we're not necessarily doing the business to the same emphasis in each of those three lines.

Ontario, though, is very heavily focused — in comparison to us — on performance auditing. Again, I think there is a recent set of Ontario reports that came out, in my recollection, dealing with child protection and so forth. But they do less work in regards to the financial statements.

Part of that, I think, relates to the fact that B.C. — and we can take some pride in this — is a leader, because our entity is the largest entity in Canada from an inclusiveness point of view. We include all schools, universities, colleges and health authorities. That's a positive, in my mind, in terms of capturing what government is, consistent with the standards. Now as opposed to a few years ago we're auditing all the 60-odd school districts, the health authorities, the universities — some of which we did in the past — and the colleges. That drives our work as well.

Down in the Maritimes they do less performance audit work. They're not as well funded, necessarily, as we are. Like most audit offices, the primary focus is the financial statements.

I guess what I was trying to get across in my remarks is that that's only one measure of accountability, back to you and to the Legislature. It's an important measure of accountability in regards to what citizens often look to in terms of what the surplus is, what the deficit is and whether we are handling our finances correctly. But it doesn't deal with whether we're managing our hospital programs well, whether we conduct treaty well. There are many issues.

In fact, if you look at our report, one of the things we're trying to convey to you — again, on pages 27 and so on — is: what do you buy when you look at our highest-level package? We've illustrated what you buy in table 1, for the financial audit. This is package 1. You can see the many examples. It's not just more performance audit work. It is work in the area of financial controls, capitalizing on the work we do when we scrutinize contracts and other things.

On the other side is information technology. One of the key drivers of costs and one of the highest risks is information technology. That's no surprise. That's something that's been going on for many years. We think we need to do more work in that area as well.

Performance audits. Getting specifically to why we think we need to do more performance audits…. Elsewhere in our document — I think it was page 6 — we named five. Five in relation to 150 organizations isn't very much. We say we want to cover it over time. The question is: is it a three-year plan or a five-year plan?

Again, just to be clear, our office isn't looking to review every program over a cycle. Again, that would be too expensive. We have to look to what the key issues are, what the risks we see are, and try and capitalize some of those. This is an illustrative example of that, as I already said.

Table 4. We wanted to summarize for you accountability reporting. What kind of extra effort can we do? Here in this situation, we think we have to mix it up a little bit. We've done Building Better Reports for a number of

years and in discussions with our staff. We're not going to do that next year. We're going to take stock. We're going to do some work on use and users. We're going to do some other work. Then we might come back to auditing again. Our observation on accountability reporting is that ministries have done reasonably well, but they haven't progressed much in the last three years. They need to step up their efforts and take it to a higher level.

Having said that, B.C. and Alberta — now I'm starting to remember; I'm getting back to your question of who else does this — continue to be seen as leaders in terms of accountability reporting. So what jurisdiction, in addition to our own, emphasizes that and is seeking resources? It's the province of Alberta.

Provinces that are now starting to do more of it would be Ontario and Quebec and, to a lesser degree, Saskatchewan. It's an uneven playing field. I think we're all aiming for the same things, but due to past resources, past issues, we're trying to be the best.

In fact, I'll tell you a little story. When I first came to the office, I said that our mission should be to be the best. Accountants weren't very happy with that. In a sense, would that mean that we weren't the best already? So we ended up with the wording you've seen.

The whole emphasis is that we're an important function. We do service on your behalf. We want to be the best, so Vision 2011 is all about being the best. Sheila Fraser might take a bit of exception with me on that, but I'm speaking at least provincially.

There isn't a uniform story here in regards to who does what. The best thing we can offer you in regards to the relative comparison of our budget request to others is the table that we've provided. Ten out of 12 measures show that our request is consistent with how others are measured. That is on page 10.

Here again, we tried to ask ourselves the questions that you would ask in regards to: well, is this an unreasonable request? Does it fit? In this case, as you can see, ten out of these measures show that it's a reasonable request. It may not be the request you approve. It doesn't mean that our vision is perfect, but at least in terms of reasonableness — where do we fall in the spectrum of audit offices? — we believe that's some comfort, not absolute comfort or a guarantee. I hope, Member, that goes a little way towards answering your question.

R. Hawes: My second question — actually, it may be a bit more detailed; I don't know — has to do with the cost recovery versus market rates or whatever you charge. I believe that does have a direct impact on appropriations, so it's quite fitting to be here. If you're at 85-percent cost recovery today and you move to 100 percent, obviously your need for money has decreased by $300,000 or $400,000 in your request, because you've found the money internally or from sources other than a direct appropriation from the government.

I want to just touch on why you can't charge market rates. Incidentally, I have also done my own look at your act and at the Financial Administration Act. It would appear to me that if we as a committee don't have the direct ability to approve your budget on the fees you charge, certainly it can be approved by Treasury Board.

I guess I'll just touch for a moment on a couple of comments in what you said, and then I'll have to ask again why we would not consider that.

To start with, the school district. You're auditing Richmond for many years in a row — six years in a row, perhaps, a direct audit. If your rates are lower there than other comparable school districts, then it would seem to me that Richmond is getting an unfair advantage over other school districts in that they're paying less for their auditing costs.

There are other school districts in which you have oversight where you've taken whatever the auditors are charging, but you've added. You've taken a look at their audit plan. You've added to it, I think you said, as much as 8 percent to 10 percent in additional costs on those few school districts for which you have oversight. I can see they would be complaining because they've got an extra financial burden that other school districts don't have, and they would see that as unfair. I get that, but nonetheless, it's a fact of life.

If it's rotating through the system, it seems to me that you're going to get hit with oversight periodically — with that extra expense. But so are the others periodically, so there is some fundamental fairness there too, and it's a necessary thing. I just want to make sure…. You talked about the bigger outfits charging less money because they might have extra auditors.

You contract auditors from time to time in other areas — right? I see that under your professional fees in your own appropriation budget, so I assume that you would be able to contract those at a lower price as well. But if you are charging the same kind of market rates that they're charging, it seems to me that we're not having artificial subsidies on organizations that you're auditing, which others that you don't audit in the same line of business are not receiving.

The other thing is that today with the market demands for accountants, etc., I don't think there is a heck of a lot of bidding at lower prices going on to obtain contracts. I just don't think that's happening today. And I'm not so sure in the case of Richmond, for example, where you've audited it for a number of years, that you've kept pace in your fee. You haven't had to really go out, I don't think, and take a look at what a new auditor in Richmond would charge.

I'm just afraid that what we're doing here is having the general taxpayer subsidize, through your appropriation request here, what should have been paid for by the individual agency that you're auditing. I think there is a fundamental unfairness there to the other similar organizations.

I would like to have your comments on that. I would like to think that we would move towards at least a market rate, so we're comparable in every place that you audit to what the other agencies that are paying the market rate would also be paying. Long question, sort of.

A. van Iersel: Again, I appreciate these questions. This is an important discussion. As I've said, based on Friday and previous discussions in our office, this is something I personally want to focus on. Again, you heard me say on Friday that the general objective here is cost recovery. But I want to do that in a way in which I don't end up spending more time negotiating or otherwise explaining to various audit clients why the fee is what it is.

If I may just make one correction. I think the member was referring to school district 68, Nanaimo-Ladysmith, where we have had a longer-term relationship. School district 38, Richmond, is new to us. This will be our first year. I think the points are valid, but they're different school districts.

I can tell you that I've spent many hours since coming into this position going to school district 38 and explaining our costs and how we add value. I believe that. I don't just say that; I believe it. At the same time what I tried to say on Friday and am saying again today is that it's a difficult environment. They are looking for every dollar. I don't think I'm saying anything new here in regard to using those dollars to go towards school funding — be it books or whatever it may be. There are many reasons.

They are not an appreciative client in the sense that while they understand that by legislation we have the ability to insert ourselves…. And we don't insert ourselves lightly. We do it based on the need to get that generally accepted auditing standard met. Again, we try to move around.

We do a tender. We're going to get a new private sector auditor. They might be the same auditors. Then we add 8 percent to 10 percent on top. They say: "Why do I have to pay for that 8 to 10 percent?" We say: "Well, that's for our involvement — issue one." Then they say: "Well, what about the fees, expenses of staff we now have to have for the March 31 year-end?"

Here again, I'm going into some detail just to give you an explanation of what the challenges are. What we have to do, because they're on a June 30 year-end, is extra work in regard to what we call school district 99 — which is the accumulation of all school districts — which means we have to do some extra work at March 31 to prove the March 31 balances for purposes of the summary financial statements. There the question is: "Why do we have to pay for that? Why doesn't the Ministry of Education or you absorb that cost?"

In each case it's not necessarily as clean as what we would like. Same with the Nanaimo example. The previous auditor there was a local auditor that didn't have to pay for people going up and down the Island, both from a mileage point of view and from a staff time point of view. Their challenge is: "Well, here you're inserting yourself. It's a non-competitive situation, and we're going to pay more costs?" That's a challenge.

Again, I don't want to get into a long argument with them. It depends, too, on whether we have the market information. That's another thing. We need to work on that. We need to work on better market information, because I don't think we have as good market information as we would like. It's not just our office. Market information is a competitive thing and isn't necessarily offered up.

Same with the Oil and Gas Commission. We don't have a presence in Fort St. John to deal with the oil and gas. That's a hard place to get to and from. We think it's important to do the work, but there's a cost.

None of these are as clean as what I would like, but I am committed to recovering as much of the costs as I can, provided I don't spend all my time negotiating fees as opposed to talking about the value services we provide.

If I may, with the member's indulgence, I'd just like to give you some excerpts — to come back to the profit question — out of a piece of advice that I've got from our legal counsel. This is in-house counsel. As I said, the Ministry of Finance, I think, is looking at this with their own lawyers and the Ministry of Attorney General. I'd like to hear about that, but it's not my business to speculate regarding that.

Then he quotes a particular court decision that said there must be a nexus or reasonable connection between the fees and the cost of services, but the court will not insist that fees correspond precisely to a cost of service.

Here again, this is the advice we received. We will be following up with our own legal adviser, and we'll check with the Ministry of Finance as well, because I know they have wrestled with this issue in a much bigger forum regarding fees that government generally imposes.

B. Lekstrom (Chair): Randy, what I'm going to try and do, if we could, is…. We'll have a number of questions. That's two now. I'm going to hold it to two questions per member. Then we'll go back around. We certainly need to be fair, in all fairness to the members, if that's acceptable.

B. Simpson: Thanks for the outline of the proposed workplan. I think that's helpful.

A quick question, in terms of establishing these priorities as potential areas you want to investigate. I note that on page 26 you've got some factors that were considered, but there's an overlying filter in here, and that is what other people think is important. Is this just an internal set of factors where you sit down and look at it, or do you actually go outside to see what the priorities are? We could have quite a substantive discussion about taking the five-year plan and juggling it as to degrees of priority or which ones need to be done sooner rather than later.

A. van Iersel: That's another good question. Again, because of the independence of our office, this is for illustrative purposes for you. Of course, each of you as Members of the Legislative Assembly would have different views on what the priorities are. We always listen to people in regards to what you may think.

At the end of the day, though, for independence reasons, we have to find comfort in what we believe as professional auditors, consistent with the standards that we think are necessary.

Let me go on now to give you some considerations in our making that decision. One is public interest. I guess the best example of that would be the Olympics. We recently did a report, in September, on the Olympics. You've already heard me say in the media that we think we need to do another report, until such time as the games are held, and we may do a follow-up report.

Why? That is of paramount interest to the public in regards to the cost of the games. We are hopeful that over time people would continue to find value in that report, as they would in perhaps a follow-up on treaty. So part of our thinking in regards to what are our audit priorities…. What are the issues of the day? What is the public looking for?

The other is magnitude. As I said, we don't have the desire or the ability to try and get into every program in 150 entities in 19 ministries. We have to ask: what is the magnitude — magnitude in terms of resources employed towards that program, the risk that we see, the impact of that program? Again, what are we hearing? Is it well managed? Did an issue come up that would trigger us? The greater the impact, obviously, the greater the attention we want to focus on it.

Sensitivity. Is it a sensitive issue such as the Olympics, such as treaty? How much sensitivity is out there, and is there a need for us to look at it?

Auditability. Is it auditable? Sometimes we get asked questions…. Again, since coming to the office, I've started to get letters from people who say: "Look at this. Look at that." Some of those things are easier to audit than others. Some of those things we choose — and we choose it — are not appropriate things to investigate. Others we most often take as input in terms of formulating our plan.

Government reporting entity coverage. We don't want to sort of do health focus for five years. Just as on the financial statement side, we want to pick programs throughout the entity.

That has two effects. One is that we've made those decisions so we can corroborate it as being reasonably well-managed or not and find that out. The other is that it's a deterrence factor. As they see you moving around the entity, that provides a deterrence about where the auditor is going next. The auditor doesn't just stay put. The auditor moves in different directions based on some of these factors.

Continuity is another consideration. Sometimes we do work in an area — follow-ups would be the best example of that; Pharmacare — that we'll come back to — particularly if, in our opinion, we feel there's more work to be done and perhaps the findings and the recommendations have not been fully addressed.

Ministry gaps. What are we hearing? We have our ears out in regards to what's happening in government and ministries. If there's a particular issue like contracts, we will endeavour to go in there. Again, we'll pick our spots and react accordingly.

Are there corporate issues? An example of a corporate issue is audit committees. I already referred to the report we recently released under Section 10(8) of the act, which says that we can explore how well financial statement processes are working. So in the Auditor General Act, we chose to look at audit committees. Are they doing the same kind of supervision that we would like to see in regards to the financial statements and so forth? That's a corporate issue in our minds, and it relates to where the accounting profession is focusing a lot of its energies these days, which is good corporate governance.

Now in that case, we didn't examine each individual audit committee in terms of its effectiveness. We looked at what they had in place. Do they have appropriate agendas? Do they meet often enough? Do they have follow-up and so forth? If you've had an opportunity to read the report, you'll see that in regard to the financial statements, there are some positive things to be said. However, when you move beyond that, you'll also find that there is some room for improvement.

The other factor we look at is: is this consistent with the act? One simple example of that is: is somebody asking us something that's within the entity? Obviously, most of our work would be within the government entity. But if there's an important issue regarding an organization that was outside of the entity, we will look at that. Obviously, we have to make sure that we can do it under the act and would seek the necessary permissions from the Public Accounts Committee.

There are a number of factors. The last thing I would say is that this isn't just us. This is a pretty consistent set of factors with what the federal Auditor General or other audit offices would look at.

B. Simpson: Just a follow-up on that for my second question. Let me take an example to illustrate my question: the forest worker safety in '07-'08 which, of course, has already been announced. In a situation like that, in this case in particular, the Minister of Forests announced that an independent audit of some kind needed to be done. I know that with the work done through the

summer, it was difficult to find somebody that could take a look at that. Now the Auditor General is going to pick that up.

In those events, is there a charge back to line ministries — if you talk about cost recovery — for those kinds of things? Some of these areas, where you can step in and take a look at things, particularly where the minister has made some kind of commitment that hasn't been followed through on…. Is there a charge back to the line ministry so that you can pick up other work during the year, which may not be work that you were planning to do but is work of an emergent nature?

A. van Iersel: Again, a very good question. When it comes to performance audits, our clear preference, desire, is that they are funded through our appropriation. The reason we say that is that gives us the maximum public sector credibility, flexibility, in terms of meeting the need.

We have had some exceptions. I'm glad you asked about the forest worker safety, because that's an exception.

We didn't have the money in our budget. It was too late in the year to reallocate to do that work. So we said that if we did this, we needed the ministry — and, in fact, it's now two ministries; the Ministry of Forests and the Ministry of Labour — to pay for those costs. Having said that, I would prefer to have the funding for that, but that's the circumstance. What we did say is, "You pay, but we control the audit, we control what we do, and we control what gets reported" — other than the standard consultation that takes place whenever we do a report. We check for facts, for continuity and so forth.

It's an interesting story, the forest worker safety audit, in the sense that the minister did ask my office. But how it originally arose was that I saw a newspaper clipping. I get clippings in the morning — too many, I'm afraid — and I saw forest worker safety being a continuing issue, despite the work of the Enns review in 2004 and the Gramlich case, which has been much talked about.

I asked myself the question. I said: jeez, this looks like something where you need independence, credibility. So I approached the ministry and said: "Are you wedded to doing this yourself? Here are some reasons why you should consider us for doing the work."

To make a long story much shorter, the ministry agreed that yes, they would ask us to do this work. We developed terms of reference — again, to be clear — that we felt were appropriate. Those terms of reference themselves could be added to. I've had many calls already, since that announcement came out, asking me: "Well, are you going to look at this? Are you going to look at that?" I've said that we're going to follow the terms of reference, and in the event that our work leads to something else, we will add that, as long as it's relevant and needs to happen.

We also checked with WorkSafe B.C. I wanted to make sure that people felt we were going to add value. They did. They said: "Yes, it's a good time for your office to go in."

Here again, I'm probably going on too long about that specific audit, but we have two key resources on that. One is a private sector fellow, Mr. McGinn, who is…. This is not secret. I've already told a newspaper reporter that we've got him on contract. He's got lots of experience in terms of worker safety issues. Then we have one of our pre-eminent auditors, who has since retired, but we're bringing him back on contract — Mr. Ken Lane — plus a few others. Ken Lane has done some phenomenal work in the area.

That is why we…. We defined how it could be done and how it could be paid for, and we're going to get it done by, we said, early June. Preference, though? I would rather have the appropriation to pay for all that myself, if that were possible. That wasn't possible.

R. Hawes: Just to clarify. I do see, under the Financial Administration Act and Public Service Act, that this committee can recommend to the Treasury Board that a regulation, an order or a directive, under the Financial Administration Act, be made inapplicable to or be varied in respect of the Auditor General.

In other words, if this committee made a recommendation to Treasury Board to allow you to charge market rates — if it wasn't otherwise allowed and the Treasury Board agreed — they can make that happen. That's the way I would read that.

A. van Iersel: I'm not sure that takes care of our legal issue. I think there's a possibility, of course, for this group to recommend what you wish. I don't believe that Treasury Board itself has the ability to make a regulation related to us. My understanding is that in regards to the budget, you make a recommendation and that then goes into the estimates.

Again, it was done for independence reasons, to make sure that no Minister of Finance could otherwise influence the decision on our budget. But there is still that legal issue regarding: is this a fee for service, and does that allow a profit component at all? I've told you what our legal adviser has said.

A. van Iersel: Oh, sorry. Errol has pointed out one other thing. In our act, yes, there is a potential override related to both the Financial Administration Act and the Public Service Act. I was somewhat involved in passing them. These were put in place to make sure that if we ever ran into a particular issue that didn't allow us to do our work properly, we could ask for an override on any applicable statute.

I haven't considered that in regards to what that means for the legal opinion on recovery of fees. I need to do that.

R. Hawes: If I could just ask more question about the line items within your budget. Maybe you could tell me, Auditor, when you put out reports such as this,

is the printing of these reports contained within your budget? Who pays for the actual printing of these?

R. Hawes: Would that be under…? There are quite a few reports you put out. I don't know how many copies you generally would put out that would go to the public but, I assume, quite a number.

A. van Iersel: It does vary, and we have Christine with us, but my recollection, based on my experience in the office, is that right now when we issue a report, it's about 300 copies we're producing. In the past we produced more, but I've decided to scale them back again. I don't want to have boxes of reports. It's also available on the Internet, so many people don't ask for the hard copies the same way they used to.

R. Lee: My question is on the comparison between different provinces. Alberta spent $18 million last year. B.C. spent $10 million, but Ontario, a much bigger province, only spent $12.5 million. Are there any fundamental differences between the offices? If Ontario can manage with $12 million and B.C. is much smaller, why can we not have economics of scale?

A. van Iersel: It goes to my earlier comments about how comparable our office is. Ontario is an up-and-coming office in regards to accountability reporting. My understanding, having been here six months and having advice from my staff, is that they do much less work. It's Alberta and B.C. that do the most work in that particular area. You've already heard me say that Ontario's focus is on performance audits. They do much more in the area of performance audits than we do.

When it comes to financial statements, there are two factors at play. One factor, as I've noted already this morning, is that we're the leading jurisdiction in regards to the organizations that are considered to be part of the government reporting entity. We have been this way since 2005. Other jurisdictions are still catching up.

When you talk about the expanded entity, if I can use that jargon, it includes schools, universities, colleges and health authorities. You won't find that in the province of Ontario. Their entity at the current time is smaller. In fact, I believe that their proposed entity, which will come out fairly shortly, will still be less than ours. We're bigger in regards to who we define as government. I don't make any apologies for that. I think we've made the right decisions from an accounting point of view.

The other thing you have to bear in mind is that we have some interesting organizations here that other jurisdictions do not. We are an organization that audits trusts. As I came in on the tail end of the Ombudsman's conversation, I heard you mention trusts. Here again, there are a number of trusts that are created, and we have to audit the flow of moneys into those trusts. We have to look at whether those trusts should be considered to be part of government. Is government getting value?

There are many things that we do because, generally speaking, we're more complex here. The other aspect to that would be P3s. Ontario is catching up on P3s, I would say, but they're still behind us in regards to active P3 projects and so forth. That's probably an area for the Auditor General in Ontario to poke at, just as we are doing here.

We're more complex. We have a larger entity, and I think that in Ontario they rely more on private sector auditors. That's my understanding of the situation.

S. Shum: Yeah, I just wanted to add to what Arn is saying. Over the last few years Ontario has seen a budget increase. In 2004-2005 they had a budget just under $10 million. In '05-06 it was roughly $12.5 million, and for this current year, almost $14 million. So you'll see an increase in budget over time for Ontario, which is kind of interesting.

On page 25 of our business and funding plan we've outlined a number of other jurisdictions as well. We're often compared to Alberta and Quebec. They have expenditures in the range of $18 million, $19 million.

You have to look at trends over time. You have to look at other jurisdictions and comparables and, as Arn has mentioned, comparisons in terms of mandate as well. Looking at a handful of other jurisdictions is a useful comparison.

B. Simpson: Just very quickly on the trust component, I believe that the previous Auditor General already made the recommendation to government that those trusts need to be reported as within the bounds of government and not as stand-alone entities. I raised that issue in estimates, and it might be worth pursuing.

B. Simpson: No, I just wanted to make a clarification. There was a previous statement made already by the previous Auditor General that those trusts ought to be brought in and reported within the public reporting process. I think that's an important issue, given some of the struggles that we've had up our way with a fairly substantive trust and how that trust is making its way to the ground.

A. van Iersel: I would like to make a comment, Chair, if I may, on the trusts. They are not included for the '05-06 financial statements, but consistent with all other government entities — be it a trust, be it a Crown corporation — we periodically review the accounting guidance to determine who's in or out of the entity. That determination will have to be looked at again for purposes of '06-07, which will come out in June.

Regardless of that, the other thing we want to look at is the moneys that flow to those trusts. Are the moneys being spent? Are we getting value for the dollars? That's another important question in my mind. Both are things for us to look at, consistent with the guidance.

J. Kwan: On your trends breakdown document and then, I guess, tying into page 25 on interjurisdictional audit office expenditure comparisons. Could you advise, if you have the information: what are other jurisdictions are doing in terms of the ratio breakdown with respect to financial audits, performance audits and accountability reporting? How does B.C. compare?

A. van Iersel: We don't have as good information on that as we would like. In fact, we were talking about it on the way here and how it would be interesting to compare, because it arose from the question on Friday. As you can see, we can't speak to ourselves in terms of how that's changing. We don't at this time have accurate information. Part of it is definitional in terms of what they call performance audit cost and what we call a performance audit cost. The key issue, as you heard me in response to the recovery question, is how people define overhead, and the allocation of that overhead is very difficult.

However, what I can say is we strongly believe, if that's fair, that the federal Auditor General, for example, spends a significant amount of their budget, more than we do, in terms of doing performance audits. That speaks to…. I think they release four times a year.

They do it differently than we do. They release sections of a report that deal with topics. We release a topic at a time as we we're done. They spend, I think, a higher percentage than we do, regarding performance audits.

In terms of the financial statements, they probably spend a little less. They're not quite as complicated — I mean, as a percentage. They're complicated in the sense that it's a huge entity. Then, in regards to performance, our accountability of reporting — again it's a guess, but I'd say it's probably comparable.

See, the difficulty is that we in B.C. don't have an environmental office as part of our office. But if you look at Sheila Fraser's office, they have a significant group of people within their office that does environmental reporting, in terms of how well the government is doing in regards to environmental issues. We don't have that. Most other audit offices don't have that.

Then, if you look at Alberta, they spend a significant amount on the entity, but I don't know who-all Alberta will end up including in their government reporting entity. They're going through the same issue we've already resolved. They spend a significant amount of money, though, on the accountability reporting. I would say they're amongst the lead, if they're not the lead, in Canada in regards to the level of disclosure that they have. I'd like to learn and copy some of their things.

That's one of our thrusts in our vision: how can we get to the second level? You heard me say earlier that I think we've plateaued, and I honestly believe that. I think ministries have somewhat plateaued in regards to where we want to be. But rather than jumping up and saying, "This way," we want to reflect a little bit. So some of our work that's going on will be directed at trends — what's happening in the broader accountability reporting — use and users. What do you as users want to see, in the Public Accounts Committee?

Here again, I think we have to mix it up a little bit, but at the end of the day, we'll still come back and assess again how ministries are doing, and I hope it's more positive than what it's been for the past few years, which is flat line.

E. Price: If I may just supplement Arn's question. Again, one has to look at the legislation — which, as we've said, is different across jurisdictions. We've commented that the 2003 Auditor General Act is one of the strongest, if not the strongest, legislation for an Auditor General office, certainly at the provincial level, and probably compares fairly well to the federal level.

I think that we're probably the only jurisdiction that has in its legislation contemplation of providing information to legislators about the quality of accountability reporting. Other jurisdictions are doing work in that area. As I mentioned at PAC on Friday, the accountability reporting is still a relatively new line of business.

It's an evolving state of affairs, and the amount of work that each jurisdiction is doing is dependent upon the state of evolution in those jurisdictions. You do have to look at the legislation to understand the various types of work that each jurisdiction does.

J. Kwan: With respect to the trend breakdown, you started with '05-06, '06-07 and then to '11-12. Do you have information prior to that in terms of what that trend looks like?

A. van Iersel: We chose to do it this way. In a sense, we wanted to show the end point in terms of what our vision would provide you in the '06-07 and '05-06. We need to do some more work on the intervening years. We didn't have enough time to hone it the way we want it in terms of what's the right allocation. What we're trying to explain is that the trend is correct in that we see and hope that there will be a decline in the relative percent for the financial audit.

That makes sense because…. One is that we're working through the standards. We hope to realize some efficiencies. We want to do, on a relative basis, about 30 percent on the performance audit, and we want to recover more in our accountability reporting.

Again, why that's important is because, as I said, in the immediate year coming up, we're going to do some taking stock in regards to how our ministry is progressing or not progressing. We're going to do some trend reporting in regards to what we saw in accountability reporting ten years ago, going back to the days in 1996 and Fred Gingell, and if we've met that promise. So we're doing some work there. We're doing that in collaboration with CCAF.

There's a temporary downturn in that, but then we expect that to go back up. We're comfortable with the 60-30-10 in the vision, because, again, relative to years ago, we're doing more financial statement work than ever — larger entity, new standards and so forth. I'm not confident in terms of the intervening. I don't have accurate numbers right now that I'd be comfortable with.

I. Black: You've spent a lot of time this morning talking about how we're in the lead in a lot of areas in B.C. in terms of the work of our Auditor General's office. I've got a concern that I'd like you to help me with a little bit. I have a concern with what I perceive could become an unending appetite for the expanding mandate of your office — especially, but not limited to, the area of performance reporting. I've had some discussions with some members of the Auditor General's office on this in the past.

I see it as a little bit of a slippery slope for a couple of reasons, but one of the primary ones is because it begins to impinge on some of the responsibilities of some of the select standing committees of this Legislature. I'll draw on one in particular, the one I chair, which is the Crown Corporations Committee. There, our focus is very specifically the performance of Crown corporations relative to their service plans, etc. — which is, by any other definition, performance reporting.

The second concern I want to register for comment and feedback from you is that I'm a little concerned at the degree to which you're comfortable with the media favour or interest driving your agenda. The notion that the motivation of your office would in any reasonable or material manner be controlled or influenced by the media versus an otherwise vast knowledge of the inner workings of government, which I certainly believe you've got, concerns me a little bit, if for no other reason than that the media have a very legitimate and time-honoured motivation of their own with respect to selling newspapers and getting ratings.

I would not want to see what I believe to be an untarnished credibility of your office become undermined with respect to efforts being put into areas of questionable value. What I meant by that phrase is areas where there is something other than a very, very direct accountability to decisions that are made by this or any other sitting government.

I'll give you one simple example, because you did put it into play about 25 minutes ago. It's the Olympic Games. Notwithstanding the fact that VANOC has an independent auditor, notwithstanding the fact that you are absolutely entitled to follow the money wherever it goes with respect to the expenditures of this or any other provincial government, VANOC….

Once the money is there, you're dealing with an entity where the provincial government, and thus the taxpayers it represents, holds three out of 17 board seats. It does not control the entity that ultimately spends not just the B.C. government money that goes towards VANOC but also the federal government's expenditures and the vast amount of private money that's gone into the Olympic Games as well.

That's a wonderful vipers' nest of politics. It's a wonderful vipers' nest of uncertainty because of all the players involved, and the notion that there's such an appetite to wade into that concerns me. There are three or four areas of concern there. I'd like you to comment on some of those, please.

A. van Iersel: Okay. Again, good questions. It allows me to say a few things from my perspective regarding this.

First, in reference to performance reporting and it being a slippery slope. We're trying to meet the accountability requirements of you, the legislators. As I already said this morning, it's a three-part accountability test at a high level, which is financial accountability in the statements, financial practices, financial policies and so forth.

Performance reporting is important because if we don't look at the various programs of government — and I've read out some of the criteria that we use, consistent with other auditors — who's going to look at that? Is there going to be voluntary offering of information? Perhaps in an ideal world, yes. But that's why we have audit offices, which is to provide independent, relevant information to you about how things are working.

Having said that, we want to do it in a fair way. One of the things I've said — long ago, it seems now — is that I have an interest in being balanced and fair. So we will always be balanced and fair.

Regarding overlapping work in other committees of the Legislature, I have no desire to do that. I would hope what work we do is relevant to those committees and would inform those committees in regards to things. Here again, to be clear, we're focusing on what we think we need to look at based on those factors, which are risk, size, past experience and so forth.

I hope you get correctly the understanding that it's quite focused in terms of the discussions we have internally regarding where we should go next. That's why, to be very clear, this document we've provided is our indication, for the first time, of what kind of things we would look at. But it's not the final list. We're not seeking approval. We're going to do what we think, and this document will be amended over time.

A. van Iersel: As we should. I heard that message loudly on Friday night. I was glad to clarify it. By all means, we will independently determine, but we do get advice from people.

Regarding the media, I am the least of a media darling you're ever going to have with an Auditor General. I say that with pride, in the sense that my focus for 31 years was to do the best thing in the public interest. I will continue to do that. Not alone, but I'm going to do that with staff. I don't get driven by any particular media request regarding: "We think you should look at that." That's a consideration, along with: "What do we think?"

I'm not playing to the media. In fact, I've said all along that when we release reports, I will release the report. I will be available, I will answer, I will speak, and I will be accountable for the report. But I'm not a press hound. Clearly, it's not my name. I want to do the job in the very best way.

Media, in my estimation, in my experience, doesn't drive us, and it shouldn't be interpreted to drive us on Olympics. Why I say that…. I understand the situation with Olympics. It's a very curious thing, when you think about Olympics in regards to the number of people we have sitting there, whether that entity is in government or whether it should continue to be outside of government.

One of the key things, though, is the government guarantee. We've got money that flows to this organization — substantial sums. We have lots more to come, but regardless of what we put into it, our review, our work tells us that we still have a potential exposure under the guarantee. Just to be clear, I, like you, am hopeful that the Olympic costs will be a positive story in the end. But the situation we're all facing is that until such time as the games have been held and it's over, we don't know if that guarantee will be called on.

That's one of the reasons why we're continuing to look at it. What's the evolving picture? What's the issue here? We want legislators like yourselves to be informed early on in regards to: is it getting better? Is it not? What are things that can be done? Part of our Olympic report was recommending certain things in regards to hedging and project management on how to improve things.

Again, we weren't driven by media. The media obviously does what it does — I'm learning that as well — but my focus is public service. What's the story that has to be told? How do we keep you informed of the costs and opportunities? Media's not a big thing for me.

R. Hawes: I'm sorry, just…. This morning we had one of the presentations in one of the budgets requesting money for communications personnel. I'm just curious: does your office have communications personnel?

A. van Iersel: I think I read a past quote from these proceedings. I think the situation still is that I'm it. So no.

Just to explain, it's an interesting thing. Doing press releases, backgrounders, etc., takes time, and boy, I and others end up spending a lot of hours, after hours, trying to get the right message, the right focus and so forth.

R. Hawes: My question is not a recommendation that you ask for money for this.

A. van Iersel: It's obviously something I overlooked in regards to the request. It's not a high enough priority, based on what I just said a few minutes ago as well.

Arn, I do want to thank you and Errol, Su-Lin and Christine for coming before our committee today with a well-thought-out presentation, a number of ideas that we can entertain as a committee and in our deliberations come up with a recommendation that, hopefully, moves all British Columbians forward.

As a statutory officer, you work on behalf of British Columbians, and I want to recognize the work that you and your staff in your office do and to thank you on behalf of British Columbians.

A. van Iersel: Well, it's a response and a bit of a question too. We made, as you heard me say, an honest attempt to change our approach on this in terms of packages, the amount of information you got in terms of our requests, and the value to that request. I hope — you don't have to respond to me — you found that our honest efforts did improve the discussion a bit and show our transparency.

I have a bigger hope beyond that, but I'll leave that for the committee to decide. It is honestly our belief to be among the best, if not the best audit office. We want to fulfil the requirements of the Auditor General Act in the right way — in a balanced way, in a results way — so that we all would look back from 2011 and go: "Wow. That's the kind of audit office we have."

B. Lekstrom (Chair): Again, I would like to thank you and certainly wish you and your staff a very merry Christmas and a happy and safe holiday season. We'll look forward to working with you in the future.

B. Lekstrom (Chair): The committee will stand recessed for ten minutes, and we will reconvene at that time to go into deliberations for development of our report.

B. Lekstrom (Chair): All right. We will reconvene the Select Standing Committee on Finance and Government Services. We have concluded the presentations before our committee for this morning. We will now go into deliberation of our report. We do have information to hand out. We have some draft portions of the report from our first three presentations from last week.

B. Lekstrom (Chair): Having just discussed much of the draft report and continuing to work on the presentations and working towards recommendations that we will submit to the Legislative Assembly, we will reconvene our meeting on Thursday of this week. We have the child and youth officer to submit to our committee, at which time we will then move into, hopefully…

…further deliberation on the development of this report. We have done a great deal of work to date.

I want to thank the committee members for their work. It is moving forward. I want to thank the statutory officers who have come before us, to date. I look forward to the future presentations.

I think that concludes today's work for the committee. I would look for a motion to adjourn.

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	Merit Commissioner
	• Joy Illington, Merit Commissioner • Lanny Hubbard, Director of Corporate Services

	Ombudsman
	Kim Carter, Ombudsman Lanny Hubbard, Director of Corporate Services

	Auditor General
	• Arn van Iersel, Acting Auditor General • Errol Price, Deputy Auditor General • Su-Lin Shum, Director, Corporate Planning, Reporting and Communications • Christine Davison, Director, Finance, Administration and Systems

Committee Staff:	Josie Schofield (Committee Research Analyst)

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES