Legislative Assembly Management Committee

Present: Hon. Linda Reid, MLA (Speaker and Chair); Hon. Michael de Jong, MLA; John Horgan, MLA; Michelle Stilwell, MLA

Substitute Members: Douglas Horne, MLA, for Eric Foster, MLA; Kathy Corrigan, MLA, for Shane Simpson, MLA

Officials Present: Craig James, Clerk of the House; Kate Ryan-Lloyd, Deputy Clerk and Clerk of Committees; Hilary Woodward, Executive Financial Officer; Gary Lenz, Sergeant-at-Arms

2. Resolved, that the Committee adopt the agenda as circulated. (Kathy Corrigan, MLA)

3. The Clerk of the House provided the Committee with an overview on the governance role of the Legislative Assembly Management Committee, the work of the Finance and Audit Committee, and the work of the Audit Working Group.

4. The Clerk of the House provided the Committee with a financial update on Vote 1 (Legislation) FY 2013-14 – Quarter 1 (April-June) as well as on the move to independent, audited, stand-alone financial statements.

5. The following witnesses appeared before the Committee, made a presentation on Effective Governance and answered questions:

6. The Clerk of the House provided the Committee with the report of the Finance and Audit Committee, an update on internal audit work, and the reports completed to date.

7. Resolved, that the Legislative Assembly work towards an April 2014 date for the disclosure of Constituency Office expenses for the months of January, February and March 2014. (John Horgan, MLA)

8. Resolved, that the Legislative Assembly Management Committee accept the two internal audit reports, the proposed management response, and the Assembly’s action plan. (Michelle Stilwell, MLA)

9. Resolved, that the Legislative Assembly Management Committee appoint Ernst and Young as the internal auditor for the Legislative Assembly. (Kathy Corrigan, MLA)

10. The Clerk and the Deputy Clerk provided the Committee with an update on the new template for the disclosure of Members’ Expenses and answered questions.

11. Resolved, that the Committee approve the proposed model for expanded disclosure of Members’ compensation, travel and constituency expenses. (John Horgan, MLA)

12. The Clerk of the House provided the Committee with an update on the following items including: the planned Constituency Assistants Seminar; the business continuity plan, disaster recovery and earthquake preparedness plans; accessibility upgrades to facilities on the precinct; inventory and asset controls; MLA travel card; recruitment for a Director of Financial Services; preparation of the 2014-15 to 2018-19 Vote 1 Budget Estimates; and constituency office lease services.

13. The Deputy Clerk presented the Committee with a draft copy of the Committee’s annual report entitled Legislative Assembly Management Committee Annual Report, 2012-13.

14. The Committee agreed to defer final consideration of its draft annual report to a subsequent meeting of the Committee.

The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

LEGISLATIVE ASSEMBLY MANAGEMENT COMMITTEE


CONTENTS
Page
Adoption of Agenda	1
Update on Governance Role of Legislative Assembly Management Committee	1
Financial Update	1
Office of the Auditor General: Effective Governance	4
M. Gaston
P. Nyquist
Finance and Audit Committee Report	8
MLA Expense Information Disclosure	13
Clerk of the House: Update	15
Legislative Assembly Management Committee: Draft Annual Report, 2012-2013	17
Other Business	18

Madame Speaker: Hon. Members, if we might begin by extending our very best wishes….

Shane Simpson, as you know, is recovering, and we have, instituting substitutes on behalf of Shane, Kathy Corrigan today, and on behalf of Eric Foster, Douglas Horne.

Hon. M. de Jong: Greetings to all and best wishes to Shane. John Horgan, you have a friend whose name escapes me, a deputy minister in the Finance Department in Manitoba, who asked that I pass along greetings. Hopefully, you know who I mean.

Madame Speaker: Hon. Members, today we will be taking decisions to expand public disclosure of expenses and strengthen the Legislative Assembly's financial management and business practice. These decisions continue the Legislative Assembly's actions to be accountable to British Columbians, based on principles of openness, transparency and public accountability.

Item 1 in the agenda. If we might have a motion to accept the agenda as presented. So moved, Corrigan. Seconded, Horne.

C. James (Clerk of the House): Thank you very much, Madame Speaker and members of the committee. We have a very lengthy agenda this afternoon and not a whole lot of time, I don't think, to deal with some of the matters.

C. James (Clerk of the House): Anyway, let me start off with No. 1, which is an update on the governance role of the Legislative Assembly Management Committee. Members will be aware that this committee is governed by the Legislative Assembly Management Committee Act, and specifically under section 3, "Powers and duties of the committee." I encourage you to become familiar with the legislation and in particular with section 3, which lists all the powers and duties that flow to members of this committee.

I won't belabour the fact that the Legislative Assembly Management Committee is the backbone of the work of this committee. I'm sure that our presentation, which is going to follow from the Auditor General, will refer to certain aspects of it.

Following that, I just want to report that we've had a very successful year in terms of the various committees that have been created. We do have the finance and audit committee. The finance and audit committee has met several times this past year and has recently met twice while the House was sitting, and we met a week ago today, in fact, in Vancouver during UBCM. The finance and audit committee will be presenting a written report to this committee for its consideration along with several recommendations it is making. That will occur under a future agenda item this afternoon.

Also, I have, as you probably are remembering, an audit working group. The audit working group meets every Wednesday morning now. It consists of Kate Ryan-Lloyd, the Deputy Clerk and Clerk of Committees; the Clerk; the Sergeant-at-Arms; the executive financial officer; and a consultant. It also is joined by a representative, usually Malcolm Gaston, from the Office of the Auditor General. We go through a variety of different matters which we are wrestling with. We have met, probably over the course of the year, maybe 40 times or more, so that's very significant.

The Legislative Assembly Management Committee has met — I believe, Kate — four times since August 2012. I know that Madame Speaker has suggested some future meetings in relation to both the finance and audit committee and also the Legislative Assembly Management Committee over the course of the next few months as it deals with a variety of other matters, some of which I will update this committee later on during the meeting.

C. James (Clerk of the House): Madame Speaker and the members of the committee, if I could draw your attention to tab 2: (1) the fiscal 2013-14 first-quarter financial reporting expenses by function; (2) the forecast expenses to March 31, 2014; and (3) capital expenses — all of which have been included in a prior communication to you.

If members have any questions about the reports that are included under tab 2, you are most welcome to ask them now or to ask the Deputy Clerk and Clerk of Committees, the executive financial officer or myself later.

I would like to note, though, that at the end of this fiscal year we are expecting to return anywhere between
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$2 million and $3 million to the consolidated revenue fund and perhaps more. That's partly as a result of the House not sitting this fall. But it is also in large part due the fine-tuning of some of the projects, deferring some of the projects and realigning some of the projects that we've undertaken during the course of the current fiscal year in line with the government's view of reducing expenditures. We've been very cognizant of that over the course of this current fiscal year.

J. Horgan: Thanks, Craig, for that report. I would like to know if you could break out for me: of the $2 million you're suggesting that we return to Finance at the end of the fiscal, just how much is a result of only 36 sitting days? I assume when we made the budget last year, we were expecting a fall session and a spring session, as per the fixed calendar in the standing orders. If you could break that out: of the $2 million, what exactly is being saved by not having activity in the chamber?

Also, as I look at legislative operations, there's a $500,000 variance year over year, and I'm wondering: is that also a result of the absence of a fall session?

C. James (Clerk of the House): In terms of your first question, I believe — we were talking about this earlier — that the cost of running the Legislature for a sitting day is approximately $30,000. So depending upon the number of sitting days that we would have over the course of the autumn, if we just multiplied that times $30,000, roughly speaking, that would be the amount.

The balance of the amount is coming generally from Legislative Facility Services, I believe, and the Sergeant-at-Arms has reined in a number of different projects, if he wishes to speak to that topic.

The legislative operations amount has nothing to do with the House sitting or not sitting.

J. Horgan: Then why have costs gone up if it has no bearing on sittings? I assume that in that first quarter there was nothing going on because we were in the middle of an election campaign.

C. James (Clerk of the House): Well, the $500,000 increase in costs is partly to do with Legislative Facility Services expenses which were carried over, I believe.

G. Lenz: Over the first quarter, there'd be a variety of projects, depending on a time if the House is sitting or not sitting. It's the timeline of when facilities can do work within the facilities. Throughout the cycle of the year you'll see it go up and down on the capital and other projects, depending upon if the House is sitting or not, when the members can get in and do the work within the facilities.

C. James (Clerk of the House): Additionally, there was an additional payment made to the Conflict of Interest Commissioner for a pension that was never honoured during his first term. That was provided to him just after his term expired but, I believe, before he started his next term. Anyway, it was just following that amount.

J. Horgan: On that question, was that taken to the Finance and Government Services Committee for approval?

C. James (Clerk of the House): No, I don't believe it was taken to the finance and audit committee.

J. Horgan: No, sorry — the standing committee, which reviews independent officers' compensation and operating budgets. Would that have been done by the Finance Committee? I'm looking at someone I think is on the Finance Committee, but….

C. James (Clerk of the House): Well, as I understand it, the decision and the payment were made during a period of dissolution. Consequently, there was no committee. I understand that there was a written legal opinion in terms of the liability the Legislature faced in terms of the payment to Mr. Fraser. I understand, too, that there was a company called Hewitt Associates that was involved as well, in terms of the review of the obligation facing the Legislative Assembly.

J. Horgan: Well, perhaps if the Clerk could provide me, after the meeting, with the legal opinion and the decision-making process that led to that, that would be great.

Hon. M. de Jong: A question. Craig, are we also, in this section, looking at the third page in the material on the capital side?

C. James (Clerk of the House): Yes. If I could also refer to the legislative operations, note 3, that Mr. Horgan has raised, that will also include a figure concerning Mr. Doyle and the salary continuance provision that goes forward until, I believe, the end of October of this year.

Hon. M. de Jong: I wanted to ask a question about the capital expenditures for the first quarter. Two things. The information technology reference, just under $1 million — what's that for?

H. Woodward: That's primarily for the election-related costs for the computer refresh — the refresh after every four years.

Hon. M. de Jong: Okay, so that's the "everyone getting new computers whether they want one or not" fund.

Madame Speaker: Well, every four years they've found that the technology advances sufficiently that the upgrade is required.

C. James (Clerk of the House): Some members do retain or purchase their old computers from the Legislative Assembly. But all computers are replaced — both in the Parliament Buildings, I understand, and also constituency offices. It's a very costly exercise.

C. James (Clerk of the House): Well, some members buy them. They're returned. Those that are returned are sent back to the government disposal agency, and that's the end of it.

J. Horgan: What I did, Mike, in my office was I purchased the computers and donated them to a seniors organization so that, rather than Windows 95, they'd have more up-to-date equipment. That's what I did.

The other question I had was on the entry with respect to the broadcast. I take it they did some kind of an upgrade or update to the broadcast capacity.

C. James (Clerk of the House): That's correct, yes. Every so often they have to revisit the technology. In fact, the cameras in the Douglas Fir Room were part of that exercise this year as well. It's very expensive equipment, unfortunately, but we try to limit the amount of change to the system to every three, four, five or six years — in some cases nine years — in relation to changing the cameras and some of the robotics that are included.

Hon. M. de Jong: Can I ask this question? Don't laugh, because I'm not suggesting we should necessarily sell conventional advertising, although the thought did cross my mind, on the broadcast channel. But is there any kind of a revenue opportunity by making that channel available, maybe, to universities or other…? You know, when the House isn't sitting, it's delightful symphonic music that comes out at you with pretty pictures, but have they ever looked at using that air time for other purposes, when the House isn't sitting, to generate a little revenue?

C. James (Clerk of the House): It's certainly a thought that I've had over the years, but we're limited in what we can do because of the licence that's granted to us by the CRTC.

J. Horgan: Just following in the steps of Stephen Colbert, Mike, I think that we could have question period brought to you by Doritos or something like that. It might be a good idea. I'm sure people are tuning in for this meeting, so we could have this from Hyundai or some other organization.

Thank you. Gentlemen, that brings us to the Office of the Auditor General presentation.

C. James (Clerk of the House): Sorry, Madame Speaker. There's just one other item to discuss under No. 2, "Financial update," and that's a move to the independent, audited, stand-alone financial statements, which is pleasing the Auditor General. We're working feverishly, I think, toward accomplishing that goal by April 1.

The Auditor General may actually make a comment about that later during his presentation.

Hilary, if you have anything to say about this, now might be the time. The Office of the Auditor General is also helping us through the transition, which is a very lengthy and cumbersome process, but we're very happy to be doing that. There are only a few jurisdictions in the country, to my knowledge — Alberta being one of them — that have stand-alone, independent financial statements.

Madame Speaker: Allow me to welcome Malcolm Gaston, Deputy Auditor General, Office of the Auditor
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General, and Paul Nyquist, director, Office of the Auditor General.

M. Gaston: Madame Speaker, Members, we appreciate this opportunity to meet with you to discuss effective governance. We are used to, obviously, presenting to the Public Accounts Committee, but today is a first with us actually presenting to this committee. So I thank you.

Russ Jones, the acting Auditor General, has asked me to pass on his regrets for not being able to be here today. Unfortunately, he had a previous commitment out of the province.

With me today I have Paul Nyquist. Paul is a director with the office, with great experience in governance practices, including being an active member of a cross-Canada study group of legislative auditors which focuses on public sector governance.

If I can maybe move on to the second page in the slides that you have. Our intention in this presentation is to highlight governance — good practices and how they might relate to the Legislative Assembly Management Committee's role in maintaining effective governance over the work of the Legislative Assembly.

We do hope that you will find this helpful to you in your work going forward. We're going to cover six broad areas within our presentation: what governance is and why it is important; the foundation of our work in this area; just a quick look at different governance models and how you relate to those; the duties of the committee and the Speaker; and how auditors can help you in your governance role. Also, at the end we'll just quickly highlight some resources that could be helpful to you in your work going forward.

In relation to governance: what is governance? It's something that's important for every public sector organization, including Crown corporations, health authorities, school boards, colleges, universities. But also, many of government's programs and services cut across organizational or even jurisdictional boundaries. If all of these services are to be delivered in a seamless way, then good governance needs to be in place.

Good governance is achieved when an organization's structures, processes and actions enable it to deliver the goods, services and programs it is there for, both effectively and efficiently, and also to meet the requirements of law, regulations, standards, community expectations and, ultimately, for that organization to achieve its goals, objectives and mandate.

So why is governance important? In summary, good governance in the public sector ensures that resources are allocated wisely and that the public interest is served openly and helps to build and maintain public confidence in public organizations.

In some ways, the best way of saying why governance is important is to talk about when it's absent. So the risk from poor governance is that an organization's mandate is not delivered effectively and efficiently and that public confidence in that organization can be eroded.

I'll now hand over to Paul Nyquist, who will take you through our guidance on public sector governance.

I'd like to start my portion of the presentation with slide 5, OAG governance work foundation. Our office started to increase its focus on governance in 2008. In fact, one of the first publications that we issued at that point was a guide to the principles of good governance. We developed those principles in concert, or in tandem, with other legislative auditors from across Canada. Those principles have become the foundation for a wide variety of other work and projects that our office has completed in recent years.

Our guide includes five core principles and a house of governance model. The principles in our guide, incidentally, are also consistent with the guidance that has been issued by the provincial government, as well as other provincial and national jurisdiction governments.

The next slide, slide 6. Before I start that conversation, I'd just like to highlight something that we provided in advance of this meeting. In it, you'll see the first page has the A-list, which we'll talk about in the upcoming slide, and the next page shows the house of governance. This document includes much more detail than we'll go through this afternoon in this presentation, so we provide it in case it's a useful resource for you in the future.

Good governance is underpinned by five core principles. An organization that uses good governance is one that always in word and action demonstrates accountability, leadership, integrity, stewardship and transparency.

Some examples of how these principles have manifested themselves in LAMC's actions, say, for leadership. The Legislative Assembly Management Committee's and the finance and audit committee's work in reviewing the Legislative Assembly's financial and non-financial information helps demonstrate how seriously the Legislative Assembly takes this information. And that, in fact, sets the tone for management about how seriously they should manage these results.

With regards to stewardship, the Legislative Assembly Management Committee has an essential role in ensuring the stewardship of the public funds entrusted to it or to the Legislative Assembly each year.

As far as transparency, this meeting being public and the upcoming publication of audited financial statements are all examples of how LAMC's actions can greatly enhance the transparency of the Legislative Assembly's ac-
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tivities.

I'd like to speak to the next slide, the house of governance. Again, in this handout it's on the second page.

As well, in this presentation I believe you've been provided an electronic copy of our PowerPoint slides, and there are hyperlinks at the end of that document which will take you to this publication.

The house of governance is a model that our office developed that shows how these principles can be put into practice. All the building blocks of the house are important, even essential, to building effective governance. Many of the actions, again, that LAMC has initiated are reflected in this model. I'll speak to three of the blocks.

The information-and-decision-support building block. Now, that, in your handout, is the third horizontal line. That building block anticipates that the oversight body will review the quality and accuracy of the financial and performance information that the organization is generating.

The middle column of that document, the planning-and-performance-monitoring building block, anticipates that the oversight body will review and approve the financial and performance information that's provided to government and other stakeholders.

The stakeholder-relations building block, which is the second horizontal line from the bottom, anticipates that the oversight body will review all public reporting to ensure that it provides a complete, accurate and balanced picture of performance.

Again, these are all things that LAMC is currently involved in or we're anticipating it will be as it moves forward through the financial year.

I'd like to speak to the next slide, slide 8, which is around governance models. We've talked about governance principles and the key components. What about the structures used to deliver these?

In a traditional corporate governance model an organization will have a board of directors that's been appointed by the owners. Their role is to establish corporate direction and also to oversee management. The board typically will establish some set of subcommittees that focus on specific aspects of their responsibility. The most common and perhaps most relevant to our discussion is the audit committee. The audit committee is responsible for reviewing the organization's financial performance and overseeing management's financial stewardship. In this model, management is led by, say, a CEO.

The public sector, and the Legislative Assembly in particular, has a slightly different structure — the traditional model it's still founded on. But the principles still apply. Under this scenario the Legislative Assembly Management Committee are the board of directors. That's similar to other public sector organizations, say like school districts, where the management oversight body is comprised of elected representatives.

We note, as well, that LAMC has established the finance and audit committee to oversee the Legislative Assembly's financial performance and also management stewardship of the financial resources. In the Legislative Assembly governance model the management is led by the Clerk of the Legislative Assembly.

As was alluded to in the introduction or in an earlier presentation, the governance and oversight duties and powers of LAMC are very broadly defined in the LAMC Act. They empower the committee to deal with any number of matters that affect the Legislative Assembly's administrative policies — the appointment, supervision and management of all Legislative Assembly staff, excluding permanent officers.

As well, they cover the review of financial estimates and forecasts and expenditures of the Legislative Assembly. They also include payments to the members, including expenses. Finally, they have kind of a broader observation. They also include any matters related to the efficient and effective running of the Legislative Assembly.

While the structure has differences from the standard corporate model, there are strong parallels, and fundamentally, the basic principles of good governance still apply.

M. Gaston: Thank you, Paul. Talking about auditors and how auditors can support you in your governance role, auditors are an important governance resource available to you in your governance role, and we would encourage you to use them as such.

Internal auditors provide feedback on effectiveness of management's internal controls and processes to support you in your oversight responsibilities. Their focus is broader than just the financial statements, so they can look at the full range of systems and processes within an organization.

External auditors, in terms of financial audit, provide an opinion on whether published financial statements are fairly stated. But from the work they do, they also provide additional reports, usually back to the audit committee, on anything they found during their work. This can help you as well.

They can also provide further guidance on good practice in key areas, including in relation to governance.

I would like to take this opportunity to say that we would be pleased to present in future to the committee on any areas where you feel we can add value to your work.

Moving on to other resources, we mentioned earlier our good governance guide, but our office has performed a number of projects based on good practice expectations mapped out in the house of governance model. The list-
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ing on slide 11 mentions some guides and reports that we feel may be relevant to your oversight role. We've performed a number of governance audits and examinations based on the principles set out in these documents.

This PowerPoint presentation actually has embedded links for each of these documents, so if you click on these, it should take you straight to the documents on our website.

There are also other resources available, and we've highlighted just a couple that we've found useful in our own work. The first one is the Canadian Institute of Chartered Accountants' 20 Questions series. There are a number of documents in that series that go through the role of board members, audit committees and so on. We've also mentioned KPMG's publicly accessible resource for audit committee and board members.

On slide 12 there's also a range of guides available, aimed to help Crown agencies in B.C. discharge their governance responsibilities. These are provided through the Ministry of Finance. Again, we've provided links to these documents in the electronic version of this presentation, and you may find these guides to be useful and informative.

Thank you again for inviting us to present today. We genuinely hope that you find this useful. We'd like to be of service to you in the future, if that's desirable, and we'd be pleased to take any questions.

J. Horgan: Thank you, Malcolm and Paul, for your presentation — the presentation that's being held in a public committee room with microphones, with cameras, with recording apparatus and even, a minute ago, a couple of members of the press. It's my view, and I think all committee members share it, that we would not be doing this were it not for the work of the former Auditor General and his staff — you two — to bring forward these issues for public disclosure.

In that context, I'd like to ask directly…. I know it's implied in your slides, but a direct question: how are we doing a year later? It strikes me that the staff here at the Legislature have seized the challenge and the opportunity and have opened the doors to what was, until recently, a very Byzantine operation, and the public is better served as a result. That's my personal view. I'm wondering if you would support that, Malcolm, or diverge from that.

M. Gaston: Thank you for the question. Russ Jones and I actually met with the finance and audit committee last week, and at that meeting, we acknowledged a lot of the good work that has taken place over the last year or so.

As the Clerk mentioned earlier on, we have been regularly attending the meetings of the audit working group, and we've seen a lot of progress take place there in terms of changes and procedures. Through the Legislative Assembly Management Committee, we see increased reporting taking place. The move to having audited financial statements is obviously something that a couple of reports from the office, in the past, had recommended, so it's good to see that happening. If I'm allowed to harken back to one of my mother's great sayings, you know, the proof of the pudding is in the eating, then the proof will be in the audit.

The fact that we are moving to an audit of annual financial statements is a big step forward. It's certainly our hope that something like this just becomes routine for the Legislative Assembly. It is something that will strengthen the processes and the accountability within the Legislative Assembly. We are pleased to be a part of that.

K. Corrigan: I sit on the Public Accounts Committee, as you well know, Malcolm. One of the things that I have appreciated over the last several years from the Auditor General's office is that there has been a real focus on governance and improved governance.

One of the things that both you and the former Auditor General John Doyle said more than once was that the purpose of audits is not to show the imperfections of government as much as it is — or equally, certainly — to improve government for the benefit of all British Columbians.

I do appreciate what the Auditor General's office has done over the last several years in order to improve governance in British Columbia and all those principles of accountability and so on. I'm glad to see that the Legislative Assembly is part of that push towards more accountability, transparency and so on. So thank you for that.

C. James (Clerk of the House): I'd just like to make one final comment under this section. Last Tuesday, when the Auditor General, Russ Jones, and Malcolm were with the finance and audit committee in Vancouver, that was a first. That was the first time that's ever happened. They presented their audit plan for the Legislative Assembly and took the finance and audit committee through it.

Today is another first, having the Office of the Auditor General appear before the Legislative Assembly Management Committee. I know that the collaborative and collegial atmosphere and work relationship that we have between this place and the Office of the Auditor General is very, very encouraging.

Madame Speaker: Mr. Gaston, I think your Scottish granny probably knew my Scottish granny. She said: "You start as you mean to go on." So we have good work before us. Thank you so very much, gentlemen.
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Hon. M. de Jong: Madame Speaker, I have a question. Is this the appropriate time to ask about the September 12, 2013, letter and the report to the Speaker about the audit plan?

Hon. M. de Jong: On page 10 of that report, there is reference to the auditor setting quantitative materiality of $755,000. Then towards the bottom they refer to an adjusted non-trivial error and, I think, try to quantify what a non-trivial error is. I don't know what that means. I don't know what a quantitative materiality amount of $755,000 means.

M. Gaston: Quantitative materiality is based on the budgeted expenditure of the Legislative Assembly for the year. This is something that we're required, under auditing standards, to set. It's really a quantitative reflection of what users of the financial statements might see as material to their ability to rely on, to use a set of financial statements.

Materiality can vary slightly, depending on the sensitivity of the financial statements and who's using the financial statements. For the purpose of the Legislative Assembly, we've set that level at 1 percent of the budget for the year, and that's not an unusual figure.

If you were to look at the planning for our financial statement audits of other public sector organizations, there's a bit of variation. But 1 percent is certainly within the normal range.

We've then identified some transaction streams where there might be just a bit more sensitivity. So what we do there is reduce the materiality level. That just means we've got a little less room to play with when it comes to our work so that we rely on things just being a bit more accurate there because of the increased interest in those particular areas, in terms of people using the financial statements.

More recently — I think in the last couple of years — when it comes to quantitative trivial errors, this again really is just under auditing standards quantifying the value of any changes that need to be made in the financial statements that we identify as part of our audit. It, really, sets a threshold above which we would be raising those errors with the finance and audit committee typically, if necessary, here at LAMC. We would be asking for changes to be made to the financial statements.

Normally, it doesn't get to that. Normally, because we're working with management as we work through our financial audit, we would be raising any differences that we're picking up in our audit as we go along. We would normally expect those to be adjusted for.

When the financial statements get to the final draft stage, being considered by the finance and audit committee and then by LAMC itself, then we would normally assume that those kinds of issues would have been addressed, would have been adjusted for, and the financial statements would have been corrected.

Hon. M. de Jong: I think it does. Then the reference to trivial and non-trivial errors. If and when either of those arose, the auditors would, I think it said, report or not report to management, as the case may be.

M. Gaston: Management would be to the Clerk, to the financial staff within the Legislative Assembly. We would be raising any things that we think need to be adjusted as we go through our audit, regardless of whether they are trivial or non-trivial.

The distinction that's been made here, I think, is our requirement to report to the finance and audit committee and to yourselves. It's setting a threshold for that reporting. But as we go through our audit, if we pick up anything that we think needs to be changed, we would be raising that with management all the way through the audit.

D. Horne: Along the same lines, I think, auditing practices over the last few years have actually changed dramatically as to what is reported to the audit and management committees. Under current practices, where it hadn't been in the past, mistakes that are made within the statement — adjustments that are recommended and made — normally wouldn't have been reported to the audit committee in the past. But now, under new practice, it's suggesting that be the case.

Those adjustments that are made by management at the recommendation of the audit, during the audit: is it the intention to address those to the audit committee as well?

P. Nyquist: Yes. At the end of the audit we have some potential adjustments. We discuss those with management. They're posted or not posted by management. We will be reporting to the oversight body: "Here are the potential adjustments we've identified and the adjustments that have been made."

D. Horne: So it's in full quantum of which ones have been made and which ones haven't been.

If I may build slightly on Malcolm's comments, we said overall materiality: for financial statements, to look at if the quantum of errors equate to some dollar threshold, whether the savings would be materially misstated.

The non-trivial error calculation is especially useful for us in looking at individual transactions — so not looking at the quantum of the statements but just the building blocks that roll up into the statements.

D. Horne: I have a question that's not related to this, but if we are ready to move on….

I'm interested in your thoughts on the dealings with the members' accounts themselves. Traditionally the members have been, for lack of a better description, treated as independent contractors in many of the aspects of the way they operate their offices and everything else. The leases are in the names of the members, and basically, the allowance is passed down and managed by the members.

That quasi-independence — from a governance standpoint, I'd be interested in your thoughts on that. Oftentimes the difficulty, too, especially when it comes to human resources issues, has been highlighted when a member has run into problems on the human resources side, with severance and those types of issues, where basically the Legislative Assembly has had to move in and assist the member in dealing with those issues.

Quite frankly, it's been difficult to deal with those issues because of that relationship. I'd be interested, from a governance standpoint, in what your thoughts are there.

M. Gaston: There are probably advantages and disadvantages to having more local control, more central control. There's a training event this week for constituency office assistants. I think part of that is some of the developments that are taking place — the move forward to support constituency offices in the work that they do — recognizing that there's a small number of staff in constituency offices and that it poses some challenges in terms of maybe the level of financial expertise that might be there.

It's really…. I'm being cautious here because I don't really think it's my place to say whether it should be one model or the other.

What I would say as an auditor is that there is an appropriate level of guidance and control in place to make sure that transactions have been processed properly, that they are within the rules, etc. When we're auditing the financial statements of the Legislative Assembly, obviously the amounts that go through the constituency offices are part of what appears in the Legislative Assembly's financial statements.

The more devolved that processing is, in some ways, the more challenging it makes it for us, the more it increases the likelihood that we would then have to go out to constituency offices to do some work. The more centralized that processing is, the easier it would be to audit those financial statements, to control the finances of the Legislative Assembly from the centre. But obviously, there may be a trade-off in terms of local control.

C. James (Clerk of the House): The finance and audit committee has a written report, which is in your binders. It summarizes the meetings of January 24, 2013; July 10, 2013; July 17, 2013; September 17, 2013.

There are a couple of recommendations that the finance and audit committee is making. One specifically refers to the finance and audit committee workplan. A workplan has been prepared for the finance and audit committee. It's contained in your material. I believe it's under 4(a). It's a workplan and meeting schedule.

Members have been in receipt of this for a while now, and a motion to accept the workplan and schedule would be appropriate. If members would like to discuss it further, that's fine.

Thank you, Craig. Does the workplan contain…? Rather than me flipping through…. Again, I didn't note it on this document or the one in my package that I received earlier, but they're recommendations coming out of the July 10 meeting. What would be the appropriate time to speak to those action items? Now?

With respect to "Legislative Assembly staff prepare a formal workplan" — agreed. "There will be quarterly updates on business continuity" — agreed. "Letters sent to all MLAs regarding transitional assistance and the re-
[ Page 9 ]
quirements of the program" — agreed.

The issue that I'm concerned about and I'd like to have some discussion on at LAMC outside of finance and audit is that "MLA compensation for the period April to September is disclosed on the Legislative Assembly website on October 13." I'm all good with that.

But it says: "With constituency office expenditures disclosed, to start January 2014." Now, I had a discussion with Ms. Woodward about this just before the meeting, and I just wanted to raise some of the workload issues I have with that.

I'm absolutely in favour of disclosure of expenses through our constituency offices, but I want to make sure…. We have some 32 new members of the Legislature, which means 32, presumably, new constituency assistants who are not familiar with the procedures and governance issues that they're required to understand. Nor do they have any formal training on the accounting package that we're going to be imposing. And I don't use that word in a derogatory way.

We're going to be bringing forward a method by which our CAs — who are not CAs in the chartered accountant sense…. We're going to be asking them in a number of days to start work on preparing for disclosure for the October-to-January period.

It strikes me that until such time as we have confidence that our staff in our communities across B.C. have a good understanding of what's being required of them, we're going to get an uneven product. That uneven product will lead, potentially, to questions that are unnecessary or questions that will take us in a direction that isn't where we as a committee or where the people of B.C. would want to go.

I just wanted to table that for discussion, if possible. Although we all agree that we need to target a date, I'm not certain that targeting January 1, 2014, is necessarily the best way to go when we have so many new people, one of whom is a committee member today. Perhaps she would have some ideas on how we could proceed in terms of the learning curve for new members but also for new staff.

Again, in speaking with Ms. Woodward, the notion of going backward is absolutely unhelpful in my mind. We should pick a date, agree to the date and then try and meet it so that all of us are giving the same product with the same level of competence in our communities.

C. James (Clerk of the House): If I could comment on that, Mr. Horgan. I agree, it's a very aggressive schedule, and our resources are limited as well. I would actually prefer to see April 1, the start of a brand-new fiscal year. That would help us. I think that, as you say, is a more level playing field. It's more accurate in terms of the information that's been provided.

With the constituency assistant seminar that begins tomorrow for a day and a half, it's going to give everybody a month or two or three or even more to become more familiar with the work that they need to perform in their constituency offices by way of reporting and maintaining different financial information. So I thoroughly agree.

Hon. M. de Jong: To the specific issue, I think I appreciate the spirit with which it's been raised, and I get that it's an aggressive timeline. I actually wonder if new members are going to have a bit of an advantage here, because they're not going to have to unlearn whatever habits or processes that CAs and offices have been following, in some cases, for years or even decades.

My concern is that if we move it to April 1, we're still going to have, probably, gaps. We're still not going to have a perfect product. For what it's worth, I'm inclined to keep our foot on the accelerator for the beginning of the calendar year. Yeah, the first time out it might not be as complete as we want, but I think people will understand that, that we're trying to do something new.

I'm not trying to be argumentative about it. I just think, for what it's worth, on balance I'd rather stick with the date proposed. That's my thought on that.

On the workplan, I had a couple of questions. These are issues that arise from what is really a good product — the fact that there's this plan and meeting schedule and that we've got a good sense of the work that the finance and audit committee needs to do.

On the second page of the workplan, right at the top, the first entry is "Review of the annual budget." I'm wondering to what extent LAMC is aware and comfortable with the manner in which the budget comes about. We're all Members of the Legislative Assembly. We know the traditional way by which votes for ministries are discussed and there's an opportunity for members to ask questions.

This has always been a little more convoluted, whether it's Vote 1, the Legislative Assembly, some of the other statutory officers…. I mean, on the final day of the session the Finance Minister stands up, or the Government House Leader, and reads a bunch of votes into the record that sort of pass on a perfunctory basis. Is LAMC satisfied with the way in which the budget is arrived at?

C. James (Clerk of the House): If I could just interject for a moment, Mr. de Jong. Over the past two years we've had a very methodical and rigorous approach toward assembling or preparing the budget estimates for Vote 1.

Primarily, as it involves the various branches of the Legislative Assembly, and a great deal of consultation is undertaken with the caucuses and the Office of the Speaker in relation to the amounts that would flow into the budget itself.

By and large, though, a lot of the budget is formula-driven, so we're a bit impaired, I suppose, in terms of being able to reduce figures in a certain area. Having said that, over the past two years the overall budget for Vote 1 has come down, I believe, in the first year about 7 percent and roughly about 1 percent in the current fiscal year.

We do have a very rigorous internal process that involves a number of serious meetings and proposals. This new system, I believe, is better now to engage the finance and audit committee by way of a presentation by either the committee executive or the Clerk of the House.

The finance and audit committee could then wrestle with the figures, the budget, and once they're comfortable with that, could then recommend that the budget be brought forward to the Legislative Assembly Management Committee. If there's a concern about public discussion about the budget, that would be, certainly, a forum that would be available to members, if that's helpful.

Hon. M. de Jong: Actually, it is, because I think in the past…. First of all, I'm not quarrelling with the results, particularly of late. But it's the last part.

I think that when the committee has had its discussion, makes its recommendations to LAMC as a whole, that's now the public forum for a further discussion — as long as we're all kind of agreed with that and understand that that's going to be the process that is followed with respect to the public discussion around the budget.

The other question I had related to item 5, review of the annual plan. It's on the second-last page of the document. Does that include capital?

Hon. M. de Jong: Okay, good. I mean, because there's obviously, in the precincts…. It's a big physical plant. There's work that needs to be done on an ongoing basis. We've all seen some of that work. But that would be included. The plan for capital improvements would be discussed and included as part of that process.

Madame Speaker: That is correct and certainly an opportune time for me to remind those here for the first time that it will be a standing agenda item on finance and audit — the health of the precincts. The minister is correct, and we're all certainly aware of the outstanding issues around plumbing, heating, electrical that need to be addressed on a more timely basis as we go forward. That will, again, be an agenda item we return to the next time finance and audit meets.

K. Corrigan: On the issue of the constituency office expense disclosure starting in January 2014 or later, I want to be clear that when we're talking about a date to start disclosure, that's also the date that is going to be disclosed. In other words, if you start disclosing in January 2014, you're talking about disclosing the office books for January of 2014, not reaching back to October or some earlier date. Is that correct?

C. James (Clerk of the House): Well, the disclosure would be — and that's arguable — from the beginning of the fiscal year to December 31. It seems to me that probably a more appropriate starting point might be June 1, June 30, when members have vacated their offices — those that aren't returning. A start date for the current fiscal year should be decided upon by the committee.

The cutoff date, though, would be, say, December 31 for posting on January 31, January 30 — thereabouts.

K. Corrigan: I don't think I quite got across what I meant, or maybe I didn't understand the response. When the recommendation is that the office expense disclosure is to start in January 2014, what months, what period of time would that January 2014 disclosure cover? Would it cover just January of 2014, or would it cover the many previous months? Are you talking that it would be, like, from April of 2103 through to January 2014?

C. James (Clerk of the House): Well, that would be the idea. But again, I don't know if that's an appropriate starting point, given dissolution, the members closing their offices and some members perhaps claiming, being able to receive the allowance. Other members have not. They have not taken up their new office accommodation.

The starting point, I think, is very critical. It could be July 1, or it could be the quarter from October 1 to December 31, for instance.

Madame Speaker: And the Chair is more than happy that we take some moments to nail down….

Madame Speaker: Well, I think it's something we can actually decide today in terms of: do we want it January, February, March? Do we want to take the first quarter of 2014 and report out at the end of March? Do we want
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to just report out October, November, December and report out in January? Give us your thoughts. Give us your leanings.

K. Corrigan: Well, just on that, as has been already mentioned, tomorrow and the next day the CAs are coming to be trained. The order seems odd to me.

If you're asking for reports…. I'm fully in support of disclosure. But if we're asking for reporting on a period where there is perhaps inconsistency in the way the accounting was done…. It's not that anyone was wrong in what they've done or have not had the highest standards, but if there's inconsistency and the reporting is going to be problematic because of that, to me it makes more sense to make sure that everybody's trained up.

Nevertheless, there will be glitches as we start off. I think we'd be better to wait for the period that is being reported to be after the period, at least, that we know the results and can act on the audit that was done of the three offices and, in addition, that the staff are trained.

K. Corrigan: Well, you know what? I'm new on this committee. I think it should be a later spot, but I defer to somebody else to make the actual recommendation.

M. Stilwell: Just in addition to that, I agree with you. I think there is that discrepancy. We have members who…. Quite a few of them are new, and there are new staff. Then you have the members who are returning to their offices. And for that transparency….

It's not that we don't want that there or that people are doing it right or wrong. It's that when the public is looking at it, it will look like much more money is being spent by those people who are returning members versus the new members who perhaps took several months to get their offices up and running or hired their staff later. I think it's a more level playing field for us to disclose everything starting in January.

J. Horgan: Disclosing the previous quarter, or start disclosing for the quarter that we're in, in January.

J. Horgan: Yeah, I would say. I think that's what Kathy said as well. I don't disagree with Mike that, you know, let's not keep our foot down. That's led to the fact that we're sitting here, that we've been aggressive, as a committee and staff, to get to the point that transparency is a given rather than an exception. But I'm very concerned about the workload for our CAs, who are not appointed for their financial acumen.

As the pilot shows, from the three offices that were reviewed, the expenditures are not significant in terms…. There is $119,000 for every member to spend in 12 months, and there are limited numbers of things you can do with that money. The public needs to know what that is.

If it means that someone that's in distress, someone who has addiction issues, which are the stock in trade of our constituency offices…. Let's be candid. People come to us with problems that require hands-on attention, and if we're adding more hours to already full days to meet a training regime that is not yet fully comfortable for our staff, I think we're going to fail in the long term.

I would argue for starting in the calendar year 2014, to do that last quarter of the current fiscal as the test run. Let's see how it goes and make the commitment that on the first quarter of the next fiscal we're on to the show at that point.

That would be the recommendation I'd like to make, and if that has the support of the committee, I think we could go with that back to our caucus. I'm fairly confident that would be acceptable to the opposition.

Madame Speaker: So to summarize, you would see us report March 31 on the months January, February, March of 2014.

Madame Speaker: Certainly, to allow the record to show that in election years, that is where you will find…. I think "(e) every four-year period…." You will see that six-month piece be confounded by the turnover of members elected — the frequency, the speed with which they seek their new offices and occupy the new offices. All of that reporting will have an anticipatory six-month flux every four years. I think that's fair comment in terms of experience in this role.

C. James (Clerk of the House): No. I agree. That certainly makes it easier for us to be very methodical in terms of working on this project. I think that if we do the quarter, the quarterly reporting will perhaps be out of line with the actual fiscal year quarter, but if that doesn't bother anybody, it certainly doesn't bother us.

If it was the first three months, it would come out, then, January, February, March — the end of March would be the cutoff — and would be reported by the end of April.
[ Page 12 ]

C. James (Clerk of the House): Yes. Madame Speaker, you did refer to the health of the parliamentary precinct, and I do have copies for members. I think they do have a copy of a couple of documents here that review in some detail the slow but steady rusting away of pipes and concrete and other bits and pieces around the Parliament Buildings and the outbuildings on the parliamentary precinct.

Internal audit update. If you can turn now to 4(b) of your binder, there's a decision note that relates to two things. One is the current audit program and completed audits. You will see further along — I'm sorry; I hope that this hopping around isn't confusing — under 4(c), there are two internal audits of the Legislative Assembly. One is the pilot internal audit of constituency offices, and the other is the capital audit for the Legislative Assembly as well.

We have provided what we think is a very fulsome response to the internal audit. It did point out, in the case of the constituency audits, that we need to do more work. We need to provide constituency offices with more guidance. That's what we intend to do. What we do with our response and with these internal audits is share them with the Office of the Auditor General to make sure that they're aware of what we're doing and that it makes their life a little easier in terms of the work that they will be performing here as well.

You've had this material for some time, so a recommendation that's being made is that the Legislative Assembly Management Committee accept the two audit reports and the proposed management response and our action plans. If you're comfortable with a member moving that motion, Madame Speaker would be prepared to entertain that, I believe.

Madame Speaker: Looking for a mover — Michelle Stilwell. Seconder, Kathy Corrigan.

C. James (Clerk of the House): And No. 2 in the same tab, 4(b), is an update on a request for proposals for our own internal auditor. Again, this is an initiative that's supported by the Office of the Auditor General and also by the comptroller general for the province of B.C.

We've gone through a very rigorous program to secure, on a contract basis, our own internal auditor. The auditor will, over the course of several years, be providing internal audit, primarily in terms of the various branches that we have with the Legislative Assembly. That could be the Legislative Library, IT, Hansard, television and a variety of other areas, including the Office of the Clerk. We want to make sure that we're holding ourselves out to be exceptionally well-run.

Again, internal audit is not a mechanism that's used widely across the Commonwealth. It certainly is not used widely across the country, and there are only a handful or less, maybe three, jurisdictions in the country that have their own internal audit, so we're quite pleased with the route that we're following.

As a result, there were some candidates who submitted proposals to assist us. We had interviewed two candidates, and we have settled on Ernst and Young to be our internal auditor for the Legislative Assembly. They will do four audits per year, and they will, with the input from the finance and audit committee at a minimum, assist with internal audits of a sampling of constituency offices. But that's a decision that that the finance and audit committee can make in terms of our presentation to them at a subsequent meeting.

To that end, the Speaker may wish to entertain a motion to appoint Ernst and Young as our internal auditor for the Legislative Assembly.

Madame Speaker: Moved by Kathy Corrigan. Looking for a seconder — Michelle Stilwell.

C. James (Clerk of the House): Completed internal audit reports. Again, I just referred to those. They're included in your tab 4. I think, again, if you have any questions about those documents, we very much welcome your input. The Sergeant-at-Arms in terms of capital, Hilary in terms of capital and Hilary in terms of the pilot constituency office reviews as well.

J. Horgan: I think I missed an opportunity to raise a point, so if you'll indulge me….

It was to do with action items, including "Legislative Assembly staff to look into the technology requirements for the use of Skype by MLAs." How's that going? They're about to phase Skype out just as we're about to latch onto it. This speaks to the changing computers every four years. Is there any update on our ability to speak around
[ Page 13 ]
the world?

C. James (Clerk of the House): Well, there is, actually. Yes, there is. The finance and audit committee considered that matter in July and approved it. I talked to our IT department, which says that the technology has changed sufficiently so that viruses, which was their primary concern with the use of Skype, would be severely limited, and they would be available for any member upon request.

Madame Speaker: I certainly supported Mr. de Jong's necessity to have that happen, on behalf of the committee.

Madame Speaker: So tab 5, "Disclosure of members' expenses," "Travel expenses — update on October 2013 release." Anything further?

C. James (Clerk of the House): I would just like to advise members that this is a change from the posting of members' expenses, travel costs, last October. What is being included this time, of course, you'll see in your binder. You have a global amount — so all the members listed from A to, in this case, Y, followed by extensive footnotes at the end of that particular webpage.

I draw your attention to the fact that we are going to include, as well, ministerial travel. We've had great cooperation from the Ministry of Finance to enable us to extract the travel for ministerial travel expenses. That will be included, as well, in this new posting at the end of October.

It will also include parliamentary committees. Parliamentary committees have been somewhat troublesome because of the inability to reveal individual expenses. I think what I'll do is let the Deputy Clerk and Clerk of Committees explain that reason.

K. Ryan-Lloyd (Deputy Clerk and Clerk of Committees): Yes, thank you, Mr. Clerk, and good afternoon, Members.

The summary template that's included in your binders today gives you an idea of the anticipated disclosure report which could be prepared on behalf of the committee for public disclosure outlining expenses by parliamentary committees.

The proposal is not to report out committee-related travel expenses by individual member but rather by committee, to reflect that many of the travel costs that have been processed and paid during the period of reporting would not necessarily be expenses that were known by the members participating in those parliamentary committee endeavours.

For example, the Finance Committee, as you may know, is currently travelling the province as part of a group, a set of meetings, public hearings around the province. Many of the expenses that our office coordinates on their behalf are shared between the ten members or so who are participating on a week-to-week basis. In some cases, should a member be unable to join the group, then proportionally, the expenses for the remaining nine members, for example, would thereby increase for the group expenses for prepaid arrangements for travel or catering expenses.

The proposal for your consideration today will give a snapshot of those committees that have been active in the reporting period, as well as the number of committee meetings and the total for combined travel expenses incurred by all members. For the reporting period proposed this afternoon, it would be the April 1 through September 30 period of activity for reporting out at the end of October.

As you know, the House, the 39th parliament, was dissolved April 16, so we're anticipating that most of those expenses will have been incurred by new members of parliamentary committees which began to be activated mid-July. The actual content here will be populated with financial details in the mid-July to the end of September time frame.

D. Horne: When it comes to the committees, obviously you've got committees like Finance and others that travel as a group. Others of the committees — like Public Accounts, for example — wouldn't travel as a group. They normally meet here in Victoria or in Vancouver. Members would make their own arrangements.

Basically, those expenses would appear, normally, under the MLA travel expenses. Would they not still, or are those going to be aggregated and put as part of the committee expenses?

K. Ryan-Lloyd (Deputy Clerk): My understanding is that the committee expenses for members travelling to Victoria-based committees would be covered in this category. Those expenses incurred by individual members are not yet incorporated in the routine reports of members' travel expenses that have been available on the assembly's website.

J. Horgan: Unless Hilary wants to answer that question…. I think Doug's point is….

Let's use an example of the member for Columbia River–Revelstoke as a member of a standing committee
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meeting in Victoria. That member travels, incurs expenses to travel to Victoria to sit on the committee. Those will show up under his "Member's expense" line, not under the "Travel for the committee."

If I understand what the Deputy Clerk has said…. And the Finance Committee is the one that incurs the biggest cost because it has an ambitious travel schedule. I think we agreed at the finance and audit committee that to apportion, of the ten members, 1/10 of the cost of renting an airplane and travelling from Kitimat to Smithers to Fort St. John was unfair. That's how, I think, the total cost for the members is going to be disclosed.

I think that Doug is absolutely right: if he's coming from Port Moody to a meeting in Victoria, that won't be captured by the Public Accounts Committee. That'll be captured by his traditional expenses to get back and forth to the capital.

K. Ryan-Lloyd (Deputy Clerk): If I may, members, I think it may depend on how the member submits a travel claim expense for that period. There could be a variety of reasons why a member travels to Victoria. If the claim is entirely submitted as a committee-related trip, then it would be covered by the parliamentary committees appropriations and, as such, would not be connected to the member's own travel expenses.

The member, as you would know, would have an option, perhaps, if it was a caucus-related trip or for other duties perhaps related to government. There would be other methods of submitting that claim. But if it is entirely flagged as a committee-related expense, it would be covered here and not in the individual report.

J. Horgan: In that case, then…. I guess when this was explained to me, when I was speaking to the Clerk and the Deputy Clerk, it was that to apportion 1/10 of the cost of the functioning of the committee to each member is not fair because, as you said in your preamble, members aren't able to find savings because those decisions are largely made by the committee. But I think Doug's point is spot-on.

I'm a capital regional MLA, so I don't have the same frequency of expense claims. I'm not certain that I was aware that you could hit the committee up for travel if you were coming from somewhere else to a committee. I wasn't aware of that. Can you do that?

K. Ryan-Lloyd (Deputy Clerk): If a committee meeting has been scheduled, for example, in Victoria, the members will routinely be reimbursed through our office for expenses to travel on the day of that meeting to and from Victoria for the purpose of committee activity.

K. Ryan-Lloyd (Deputy Clerk): Claims submitted in the fashion that we've just described — no. My understanding is that they are not incorporated into the individual reports that are currently available.

C. James (Clerk of the House): They would be apportioned, of course, or charged to the Public Accounts Committee or the Finance Committee or any other parliamentary committee. If you are having expenses incurred as a result of attending this committee, then it would be apportioned or charged to the Legislative Assembly Management Committee.

Madame Speaker: I think we're probably in that place where no one has ever exceeded their allowable trips, including committee work, but certainly this option is available.

M. Stilwell: I think my question is just clarification. When you're on, say, Treasury, like I am, as well as core review, and they meet in Vancouver, one on Wednesday and one on Thursday, who are you assigning…? How are you breaking that down for disclosure of those expenses?

C. James (Clerk of the House): I think you'll have to talk to those entities and see how they are reimbursing your expenses, whether it's through them or whether they're using your MLA travel and expenses. I suspect probably not, that it would be more government-related and so they would absorb that cost. But it's worth talking to them about it.

K. Ryan-Lloyd (Deputy Clerk): The proposal that is before the committee this afternoon relates to those all-party parliamentary committees, of which there are select standing committees of the Legislature and this committee.

D. Horne: I'll be very, very quick. I think, going back to the point, John, and the point I made originally, it goes back to communications, as well, and consistency across members of the assembly. I think when some members do things one way and other members do things another way, it's what creates the difficulties and the confusion. I think it's good to disclose it that way, as long as all of the members are doing it that way.

Madame Speaker: The Auditor is nodding. I think that's probably a good plan.
[ Page 15 ]

C. James (Clerk of the House): This is an excellent topic. Since we have the constituency assistants seminar tomorrow, we'll be sure to raise this matter with them so that they're all aware of it too.

The only other addition to the posting of MLA expenses is under your tab 5(b), "Member compensation." Under that will be a list of all the members in this current fiscal year who have been paid their base MLA compensation, their additional salaries, whether they have an executive salary, and of course, a column indicating their total amount.

Madame Speaker: A decision is likely required, so let me pre-empt that. So moved by Mr. Horgan?

K. Corrigan: This is going to be posted earlier than the discussion that we just had about constituency offices, but the reporting mechanisms are there already.

Madame Speaker: Correct. Hilary Woodward takes responsibility for that piece of our lives.

Continuing with "Constituency office expenses — update and timing: decision," we have reached that decision. That will be April of 2014.

That brings us to item 6 on the agenda, "Clerk's update: information." We have touched on that in terms of the training. Let me say, while the Clerk is coming together, that indeed the timing decision we've reached in terms of April of 2014 would allow us to do a second round of training, should we so desire.

C. James (Clerk of the House): I'll try to be as brief as I can. There are a number of issues that I'd just like to quickly go over with members.

We do, in fact, have a constituency assistants seminar being held tomorrow and on Thursday. This is, again, another first. We have 120 constituency assistants coming to Victoria. We're going to cram them all into the Legislative Assembly, and we have a very fulsome program for them over the day and a half. We have maintaining financial records, constituency assistants' role in public accountability, constituency office allowances and centrally paid services. A lot of it is financial, and of course, a lot of it is managerial. Best practices for constituency office management — that's a topic the Auditor General is going to be speaking to.

The executive committee, along with Hilary and her financial services branch, will be front and centre in terms of going through the financial software package and other ways in which to maintain financial records. We're quite excited about this. We hope that at the end of the day and a half or two days constituency assistants return to their constituency offices better informed and more relieved that they have us to rely on, in terms of any questions that they have, and that we can move forward and assist them in the best way possible.

C. James (Clerk of the House): Business continuity. We have in your binder — I think it's under tab 6(b) — the two updates.

One is that the Sergeant-at-Arms and Josie Schofield — who's our senior researcher in the Legislative Assembly — and myself met with officials at the Parliament of New Zealand at Wellington and also at Christchurch, New Zealand, in April. That was a result of the initiative that we have under earthquake preparedness, disaster recovery and business continuity — three important components that we are trying to resolve by way of a fulsome plan that, we would hope, could be a model for other jurisdictions in Canada.

It's a big task, a big job. We will be meeting with officials in Washington State, Oregon and California to talk to them about the plans that they have in place and the difficulties that they may face as well. The report from our trip to New Zealand is included in this material too.

The business continuity planning continues as one element of the three that I've just described. I'm just going to let Gary, the Sergeant-at-Arms, briefly update members as to where we are with that phase 2 progress.

G. Lenz: The next stage of the process is…. We've had a report from KPMG, who did a summary report to determine where we are and how we're doing our work. As a result of that report, we've put out an RFP. We're about to short-list and interview the final candidates, which will take us through from various parts from this building being damaged to the continuity of government and the linkages that take place with that forward.

From this point, we're looking forward to those interviews and to see what the next steps are going to be and to complete that.

Once this is all complete, this truly will be a model.
[ Page 16 ]
Talking to the other Sergeants-at-Arms across Canada and throughout the Commonwealth, these steps are at the forefront in everybody's mind, and we're definitely in the right areas. I think that's what came out of New Zealand. What we've really learned from New Zealand is that we're on the right steps. We're on the right road. We're moving forward with it, and hopefully, within the next four months we should have those plans in place.

C. James (Clerk of the House): All of which, of course, will be presented to the finance and audit committee and subsequently to the Legislative Assembly Management Committee for their consideration and approval.

Under 6(b), capital projects summary, I'll just quickly mention accessibility upgrades. The members will notice that we have a number of new initiatives that involve better accessibility throughout the Parliament Buildings.

G. Lenz: I'd say since the last year we've moved in a variety of locations and areas that are requiring us to make this building more barrier-free and more accessible for all people. This will continue over the next six months. There are some future barrier-free access points from ramps and doors that'll be installed within the next three months. You'll see those around the building.

Those are all parts within our capital project. Our MAM and operations are covering off those expenses.

M. Stilwell: Well, as a member who is diligently using all the new facilities that you've implemented, I just want to thank you for your graciousness in making those accommodations for the members on our side of the House who rely on them every day to do the work that is so necessary here.

Madame Speaker: You're more than welcome. I can tell you I'm absolutely committed to the accessibility agenda, enjoying great support as we go forward.

C. James (Clerk of the House): Under 6(c)(ii), "Inventory and asset control," we are moving toward a better inventory control within the Parliament Buildings and the parliamentary precinct, along with a better asset control. We hope to be able to report more fulsomely on that at the next finance and audit committee meeting.

On 6(d), "MLA travel card." This was a recommendation by the Auditor General in a series of reports. The MLA travel card has been in use now by members for a couple of months, and I haven't heard any problems with it. I think that reimbursements are being made in a very timely manner. If members have any concerns about the card, contact any one of us on the executive, and we'd be very pleased to address those issues for you.

K. Corrigan: I think it's probably a glitch that's being fixed, but one of the things that had been reported in our caucus was a couple of instances of somebody booking a trip. They were charged at the time the trip was booked, but the trip was not taking place for several months. In other words, they had to cover the cost. I'm not sure what the outcome is of that. Has that been addressed, or were you aware…?

C. James (Clerk of the House): I think I may know the member in question, and I did speak to that member and asked that member to submit the receipt right away for reimbursement.

Madame Speaker: Certainly, Hilary has made this offer to members that if anyone has a significant travel cost, the bill can be sent directly to Hilary for payment and not come forward in terms of something they would feel they would have to cover in anticipation.

C. James (Clerk of the House): Okay, 6(e), "Director of financial services." An appointment notice was put in the newspaper some time ago for a director of financial services, and shortlisted candidates have been agreed upon, I believe — or it's very close to it — with the expectation that interviews for the director of financial services will be held sometime later next week.

On 6(f), "Preparation of the 2014-15 to 2018-19 Vote 1 budget estimates." We've had a preliminary discussion about the budget preparation process, and I just wanted to advise you that we are internally beginning to think about this in earnest. We will be presenting an update to the finance and audit committee, certainly to the Speaker, as we move forward.

What I like are four-year cycles based on the four-year parliamentary cycle. That's why you'll see 2014 to 2018. That gives us better planning in terms, of course, of the end of parliament and the expenses that we're likely to incur as well. So you can see over the course of the term those expenses that we are anticipating during that period of time.
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Hon. M. de Jong: Craig, given our earlier discussion, what's the target date for the presentation of the proposed budget by the finance and audit committee to LAMC? I'm just thinking about the budgeting cycle for the entire government.

C. James (Clerk of the House): Probably as early as Thursday, November 28 — a meeting of LAMC is being proposed for that date — but certainly no later than Thursday, December 12. There is proposed a meeting of the finance and audit committee just prior to a meeting of the Legislative Assembly Management Committee, but it would be proposed that by December 12, LAMC has concluded its consideration of the budget.

C. James (Clerk of the House): One other matter I would like to just notify members of, and that's under 6(g), "Constituency office leasing services." For the first time, we've used the services of a leasing consultant, Shared Services B.C., and I've heard mostly good reports from members in terms of the constituency office leasing aspect and any improvement that might have been needed to their constituency offices.

The purpose of this exercise was to keep members at arm's length from the leasing arrangement and to use the expertise of Shared Services B.C., which is very skilled and knowledgeable about rental properties throughout the entire province.

I just wanted to thank members for taking up that service. Everybody did. I know that there may have been a few hiccups along the way, but by and large, I think it was a very, very successful exercise.

K. Corrigan: I think the thing that was appreciated, which I heard was appreciated, was that there were varying and flexible levels of involvement. For those people who were renewing a lease and had minimum number of changes, there was a certain amount of involvement. But where there were very experienced offices and most of the provisions were in place, it seemed to work pretty well because there was a flexibility in what that level of involvement was. When it was a new member and there was a new lease arrangement or a new place, then there was more involvement.

Madame Speaker: Any other comments? Please know it is something that my office will continue to monitor in terms of the range of payment. There are ways for us, I think, to be more diligent as we go forward and certainly, frankly, to be more transparent as we go forward.

Anything else on six? That brings us to item 7 on the agenda, draft Legislative Assembly Management Committee annual reports.

K. Ryan-Lloyd (Deputy Clerk): Under tab 7 in your binders, you will find a draft copy of an annual report that has been prepared on behalf of your committee in accordance with section 5 of the Legislative Assembly Management Committee Act.

The format of this report mirrors the presentation and summary of decisions that has been undertaken by this committee and reported out in this format in previous years. The reporting time frame for this draft report essentially covers a period from the beginning of 2012 right through to January 2013. In essence, it is a wrap-up of the close of the work of this committee for the 39th parliament, the previous parliament.

We have, as I said, prepared this report pursuant to the usual practices of this committee. So we have identified decisions made by the committee as well as a complete set of minutes, both in topical and chronological format. As you know, because the committee undertook some significant changes in its practice throughout the last 12 months, we were anticipating — and I think it has been discussed previously at an earlier meeting of this committee — that the format for this report would change significantly going forward. But given that it was prepared to reflect the work undertaken at the end of the last parliament, we've opted to prepare it in this manner for your consideration today.

I'm not sure if members have had an opportunity to go through it carefully. We'd be pleased to bring it back to a subsequent meeting if you wish to have more time to review it or to offer any suggestions for improvement.

Please bring it back to the next meeting, updated to the extent that's possible. That would be spectacular.

K. Ryan-Lloyd (Deputy Clerk): For clarification, the
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proposal would in fact be that going forward, which would perhaps take us to the next item on the agenda, we'd like to propose a revised format for the next report of the committee.

It might work best, when the committee is comfortable with the content of this report that's in front of you, to close it out as it would be in conjunction with the dissolution of the 39th parliament. Then, going forward, we would report out on this meeting and all future meetings in a new format. So it's really whether or not members are comfortable with the summary that's been prepared of the four meetings that took place since July 2012. There was one in July 2012; August, I believe; October; and then January. So it's those four meetings that are encapsulated in this draft today.

J. Horgan: Thank you, Kate, for the diligent work you and the staff have done on this. I'm quite comfortable with it. But noting that Shane Simpson, our regular permanent member of the committee, is not here to offer his views on the meetings that he also attended with me, I would prefer that we stand this over to the next meeting and perhaps even take it up at finance and audit, if you require less time between now and the next meeting.

Madame Speaker: That was my intention, as well, certainly for Shane but also for Eric Foster. So we will receive it today, madam.

K. Ryan-Lloyd (Deputy Clerk): With respect, then, if I might, to the next item on your agenda, item 7(b), an accountability report is noted there. Following discussion with members of the executive committee — the Clerk, the sergeant and the executive financial officer — we would like to propose that going forward, the work of this committee is reported out in a more fulsome way in conjunction with the anticipated release of the first set of stand-alone audited financial statements in late 2014.

Our proposal would be to have a public document that not only encapsulates the work of this committee but supports the release of the financial statements and also, at a high level, provides an opportunity to share with British Columbians the steps that have been taken to support the principles of openness and transparency and disclosure over the reporting time period.

The content of that report is still very much in a preliminary phase, but what we had wanted to share with you is a possible overview of what that report might look like. So following an opening message from the Speaker, the report could also include a brief accountability statement similar to the committee's accountability statement that was released in July 2012 and then, at a high level, include some narrative text about the Legislative Assembly's collective accountability efforts and accomplishments over the reporting period.

As I mentioned, the audited financial statements that we are working towards would certainly be the centrepiece of that kind of report. But with your input, we would be pleased to summarize the work of this committee, in terms of summaries of meetings and reports on the disclosure, reports that you have been working towards — the ones discussed earlier in the meeting today — and then an overview, perhaps, of the accessibility agenda that the Speaker mentioned earlier, as well as any sort of public outreach or engagement opportunities that we have taken to supplement those principles over the course of the reporting period.

So we wanted to just take a brief opportunity to share that information with you today and seek your input and feedback in the months ahead, recognizing that we would still be able to meet the expectations of the LAMC Act and its requirement to summarize the work of this committee, but hopefully, as well, adapt it to cover off the other initiatives that are also underway.

Madame Speaker: And that other report format was shared at finance and audit. As we continue to find better and better examples, we will continue to incorporate them as we go forward.

Madame Speaker: Item 8, any other business. Members, bringing forward any other business?

Decisions taken today. Public disclosure of members' expenses will include two new elements, ministerial travel and travel by parliamentary committee, with the next disclosure report, April-to-September expenses, to be released in October.

Public disclosure of members' compensation will be provided on a quarterly basis, with the first disclosure report on compensation for April to September to be released in October.

Public disclosure of members' constituency office expenses will be in April 2014.

The assembly will issue quarterly independent audited financial statements for the first time, which will implement the assembly's commitment for full disclosure of assembly expenses and liabilities.

We will begin this fall to issue detailed reports on actions taken by the Legislative Assembly Management Committee to support an open, transparent and accountable Legislative Assembly.

For our lovely guests, we will continue to work with the Auditor General and outside independent financial auditors to strengthen the Legislative Assembly's financial and business management practice as we continue, through our actions, to respond to the Auditor General's
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Legislative Assembly audit.

C. James (Clerk of the House): I'd just like to add my appreciation to the executive committee, which consists of the Clerk, the Deputy Clerk and Clerk of Committees, the executive financial officer and the Sergeant-at-Arms. This is not an individual effort. This is very much a team effort, and I'm very proud and pleased with the work that we've done over the last year or so. I'm also very appreciative of the input and sincerity of the Office of the Auditor General in assisting us sift through some of the issues and policies and practices that we've had to improve and adjust over the course of the last little while. So thank you very much.

Madame Speaker: Does anyone have any issues to raise under item 9 on the agenda?

J. Horgan: This was to do with what's become a topical question we were asked on the way in, both members of the government and the opposition, and the Chair of the committee, about….

J. Horgan: No, sorry. I thought we were still on other business, but that's fine. We're on 9?

J. Horgan: Just wanting to confirm that the disclosure forms will have living allowances for members outside of the capital regional district. They did last time. So if the public or the media want to ask members about that, they're free to do so. I just wanted to make that clear.

Madame Speaker: So no one wishing to move on item 9 on the agenda? Then what a lovely circumstance.

Just to remind members that the Speaker is suggesting a finance and audit committee meeting for Thursday, November 14; a Legislative Assembly Management Committee meeting for Thursday, November 28; and, as I mentioned earlier, a meeting of the finance and audit committee for Thursday, December 12, followed by a meeting of the Legislative Assembly Management Committee for Thursday, December 12.

Madame Speaker: Further, that we will hold those meetings as required to meet our obligations as per the act. You have my commitment that that will go forward.

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Chair:	* Hon. Linda Reid (Speaker of the Legislative Assembly)
Members:	* Kathy Corrigan (Burnaby–Deer Lake NDP)
	* Hon. Michael de Jong (Abbotsford West BC Liberal)
	Eric Foster (Vernon-Monashee BC Liberal)
	* John Horgan (Juan de Fuca NDP)
	* Douglas Horne (Coquitlam–Burke Mountain BC Liberal)
	Shane Simpson (Vancouver-Hastings NDP)
	* Michelle Stilwell (Parksville-Qualicum BC Liberal)
	* denotes member present
Other MLAs:	Donna Barnett (Cariboo-Chilcotin BC Liberal)
Officials Present:	Craig James (Clerk of the House)
	Kate Ryan-Lloyd (Deputy Clerk and Clerk of Committees)
	Hilary Woodward (Executive Financial Officer)
	Gary Lenz (Sergeant-at-Arms)

Witnesses:	Malcolm Gaston (Deputy Auditor General)
	Paul Nyquist (Office of the Auditor General)

REPORT OF PROCEEDINGS (Hansard)

REPORT OF PROCEEDINGS
(Hansard)