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October 15,

PUBLIC ACCOUNTS COMMITTEE

The Committee met at 9:00 a.m. in the House of Assembly Chamber.

CHAIR (Bennett): Good morning, again. I say again because this is a

resumption of a previous hearing where we ran out of time. We have had some

change in the individuals who are here, I believe, so I think it might be useful

if people introduced themselves again, because this is being televised

internally right now and also it is being recorded for Hansard purposes.

I am Jim Bennett, Chair of the Public Accounts Committee. I will go to Mr.

Paddon and go back to the members.

MR. PADDON: Terry Paddon, Auditor General, Province of Newfoundland and

Labrador.

MR. SULLIVAN: Brad Sullivan, Audit Senior.

MS RUSSELL: Sandra Russell, Deputy Auditor General.

MR. BARRON: Mike Barron, President and CEO of the Newfoundland and

Labrador Centre for Health Information.

MR. DILLON: Ray Dillon, Chair of the Newfoundland and Labrador Centre for

Health Information.

MR. JANES: Jim Janes, Board Member, Newfoundland and Labrador Centre for

Health Information.

MR. CLARK: Steve Clark, Chief Financial Officer.

MR. BRAZIL: David Brazil, Vice-Chair of Public Accounts.

MR. K. PARSONS: Kevin Parsons, Member for Cape St. Francis.

MR. CROSS: Eli Cross, Member for Bonavista North.

MR. MITCHELMORE: Christopher Mitchelmore, Member for The Straits White

Bay North.

MR. JOYCE: Eddie Joyce, Bay of Islands.

CHAIR: Our Clerk is Ms Murphy.

One individual who started with us, Mr. Peach, is not here because of a death

in the family, but I think we are all sworn and everybody is familiar with it

from being here previously so we can just get right into the questioning and

continue. We hope to conclude in the morning; it is not necessarily the case,

but hopefully it will be.

I will start with Mr. Joyce for Bay of Islands.

MR. JOYCE: Thank you.

First of all, I saw some comments in the paper this weekend: This became a

distraction.

Can you clarify those remarks?

MR. BARRON: Well, Sir, if you were employed under a certain contract and

all of a sudden somebody said your contract is changing not me, now; I am

talking about the people at the Centre for this not to be a distraction would

not be natural. Essentially, what the interviewer asked me: Was it a

distraction? If somebody wanted to be honest and speak for the employees of the

Centre, yes, it is a distraction.

MR. JOYCE: I apologize if trying to keep reins on the funds, the people's

money, that it is a distraction to you.

MR. BARRON: That is not the distraction.

MR. JOYCE: I apologize to you.

Mr. Chair, from my understanding, the last time we met we were supposed to

get some minutes from the meetings. Did we request some minutes from meetings

you had when the increases were given? There were minutes in the meetings.

CHAIR: Mr. Joyce, we received a very substantial package that was

circulated.

MR. JOYCE: Okay, I never received the package.

In the minutes, and I go back again, because when we discussed this before -

I just want to go back and refresh my memory with my notes - Ross Wiseman was

the minister. Billy Fanning was the Chairperson. Am I correct on that?

My understanding, from your testimony in the previous meeting that we had, is

that Billy Fanning went to the minister, who gave him the wink and the nod, came

back and informed you, yes, go ahead and give yourself and everybody else the

big pay raise. Am I correct in that? Is there anything in the minutes to confirm

that?

MR. BARRON: I know there is; I am just going to find it now.

MR. JOYCE: Perfect.

MR. BARRON: It is unfortunate that you did not have the package, because

it is all there.

MR. CLARK: We did provide a package to the Committee. Included in the

package, there were board meeting minutes.

MR. JOYCE: Which stated that

MR. CLARK: Yes, Sir, they were there.

MR. JOYCE: Was there anything in writing besides just the verbal that Mr.

Fanning brought back to the board?

MR. CLARK: There was a letter, I believe, that went to the minister,

indicating that the board had decided to proceed; then there was a motion by the

board and they did approve to move forward with the salaries, yes.

MR. JOYCE: My question again is: Was there any letter back from the

minister saying yes, this has been approved?

MR. CLARK: No, there was not.

MR. JOYCE: I ask the Auditor General: Did you ever see any of those

minutes where there was any approval given for these increases?

MR. PADDON: The minutes that were provided as part of the package of

information were made available to us during our audit, so it is the same

information that we had seen back then. There is nothing here that would change

the content of our report.

MR. JOYCE: Do you feel that there was not permission given?

MR. PADDON: I guess there are two elements to it. There is a substantial

amount of legal back and forth as part of the package. The act does provide the

Centre with some autonomy in terms of compensation and those sorts of things, so

I do not think that was the point we were necessarily making.

There were a couple of points. One was that there was some discussion at the

board about whether they should proceed in the absence of approval from the

minister; and, ultimately, I think they did.

The second our point was not necessarily could they do it, because I think

their act probably does give them some ability to provide some compensation. The

question was should they or should the amount of compensation be where it was

and should there then be, after they set their compensation, sort of the level

of increases within a certain period of time after that. I think those are the

points we are really trying to get at.

MR. JOYCE: Okay.

Is there now some guidelines given from the Department of Education, or is it

the same as before? Are there guidelines now

MR. BARRON: I would assume you mean Health, I am sorry?

MR. JOYCE: Pardon me; Department of Health, yes.

MR. BARRON: Yes.

Guidelines what we are doing is we are aligning our policies fully with

Human Resource Secretariat policies. They are not the policies of the

department; they are the policies of overall government. So what we are doing is

aligning fully with the government compensation regime.

MR. JOYCE: When did this start?

MR. BARRON: That started subsequent to the Auditor General's report.

MR. JOYCE: Okay.

So, my question to you is: If you feel that you did not need any autonomy,

why all of a sudden the big change? If you honestly, and the last time we spoke

here, felt there was no need to check, there was no need, but now why the change

if you feel, after the Auditor General's report came out why do you feel now

that there is a change to comply and to fall in the guidelines if before you

never, after the big raises?

MR. BARRON: At the time that the compensation system was approved by the

board, I acted upon the instructions of the board, essentially. Five years, we

submitted budgets to the government and the budgets were approved with the

individual compensations involved; and when the AG report came out and there

obviously was some concern at that time, the board felt that we should do what

the government wanted.

We had never received anything to say not to do it, when we did it five years

ago. All of a sudden now obviously, there was a bit of issue with the salary

regime, so the board agreed to align with the government compensation system.

MR. JOYCE: Again, I just want to get this straight. At the time, the

minister, Ross Wiseman, never, ever gave a letter of permission to go ahead with

those raises. It was just a wink and a nod to Billy Fanning who came back, who

then had a board meeting who approved the minutes for the board, and went on

with the raises. There was never a confirmation letter on file from the

minister. Is that correct?

MR. BARRON: Not to my knowledge.

MR. JOYCE: Not to your knowledge.

Is it also correct was there ever a rep from the Department of Health on

your board to act as liaison between your board and the Department of Health?

MR. BARRON: We always had a representative from government, and at that

time it was the Assistant Deputy Minister of the Department of Health and

Community Services.

MR. JOYCE: So the assistant deputy minister was on the board at that

time?

MR. BARRON: Yes.

MR. JOYCE: The positions now that come up in your area, are they all

advertised? Obviously, back before when there were increases, they would just

give it to the people who were already in the positions. If there is any new

increase in funds or any new positions coming up, are they advertised publicly

now through the Public Service Commission?

MR. BARRON: They are advertised publicly, yes our positions. Unless it

is a position that is determined that may be able to be filled internally, but

then it is still advertised internally for those employees to apply for.

MR. JOYCE: Okay, because there were some concern with the Auditor

General's report that a lot of the people within the division were just given

the raises and there was no advertisement publicly for a lot of these positions

where you could have gotten the best qualified candidate but you just took the

person internally.

MR. BARRON: Well, I would say that we had the best qualified candidate

and those people were usually

MR. JOYCE: I know

MR. BARRON: We have the best qualified candidate, in our mind, because

they came through the system. The same as if you had a small business, you would

expand people's responsibilities as your business got bigger; and, essentially,

since the growth period occurred, we always advertise our positions.

MR. JOYCE: I do not know; I have to give you credit or something when you

say this is nothing but a distraction. Now you are saying you always had the

best qualified. You do not know who is around Newfoundland and Labrador, who is

around Nova Scotia who could have applied.

To me, just from a member of the government, the Public Accounts, it is

almost like saying okay, I am going to do this; here is what I am doing. I know

who is best; I know what is better. It is not the way government operates when

it is public money, Sir; I can assure you. If you always feel that you had the

best qualified without going public, you would have never have known never

have known.

I feel that even now, what you are saying that you always felt you had the

best qualified, it follows on the line of the

article that it is a distraction.

I ask the Auditor General: Did you have any time to follow up to see if they

are compliant with the regulations now for hiring in the

MR. PADDON: We have not done any follow-up at this point in time; it will

probably be another year or so before we would follow up.

MR. JOYCE: Okay.

Can I have one last question? I know I am up to my ten minutes, but this is

my last question. Are you compliant now with the Public Service Commission in

hiring, or are you going through the Department of Health, or are you just doing

it internally yourself again?

MR. BARRON: We are aligning with government policies. So, whatever the

government policy stipulates, that is what we would follow. The policies were

approved by the board subject to confirmation by government that they were

aligned, and that process is occurring as we speak.

MR. JOYCE: Are you getting confirmation in writing, or a wink and a nod?

MR. BARRON: We would always act on the appropriate written authority.

MR. JOYCE: Written authority now?

MR. BARRON: Yes.

MR. JOYCE: Okay, thank you. I know my ten minutes is up.

CHAIR: Mr. Brazil.

MR. BRAZIL: Thank you, Mr. Chair.

Welcome, gentlemen. Before we go anywhere, I am going to go to the Auditor

General and ask the question and I am just reading the Executive

Summary, but

I am also going through some of the discussions we had previously.

While you outline concerns around compensation and recruitment practices and

governance, are you saying that in your opinion, or your

interpretation or your

understanding, is that the Centre for Health Information had the authority to

make different compensation offers and packages to its (inaudible) prior to what

Treasury Board indicated would be the new standard for all Crown agencies and

organizations within the realm of government responsibility?

MR. PADDON: That is right. If you look at page 173 of my report, right

upfront we acknowledge that

Section 12 of the Centre's act does give them the

power to employ or engage the service of those persons it considers necessary,

so on and so forth and I guess then there is some supporting legal

interpretation that that does give them the authority to set their own

compensation.

I guess, at the end of the day, it was not necessarily can they do it; it is

then a question of you have the power, how do you implement and how do you use

it. That was more the issue for us.

MR. BRAZIL: Okay, fair enough.

The recommendation and what the Centre has acknowledged that they will be

doing is following the compensation and hiring process that government has

already implemented.

MR. PADDON: I guess the issue of government requiring consistent

compensation practices certainly started to occur somewhere around 2012,

somewhere in that time frame. So, it was sort of before the release of our

report, but certainly after or at the back end of the audit period that we

covered.

MR. BRAZIL: Fair enough, and I think all of us on the Committee realize

that prior to your report and prior to them implementing the new process, there

were some concerns about the compensation packages.

In some cases, we understand why. The recruitment, particularly in those

fields where there is a specialized set of asset skills that you must have, that

there is a recruitment process, and it is why we have it in a number of agencies

and Crown corporations to do that.

With that being said, we are still responsible for trying to staying in line

with what we have indicated as a policy for all agencies.

I have gone through the notes; I have read them over the last few days to get

more familiar with it, and the first part of our hearing. What I would like to

know now is just the last three months, bring us a little more up to speed after

identifying and I do accept and realize that the Centre had started to put in

place the process to bring us up with what Treasury Board policy would be to

direct that. If you could take us where we are in the last three months, how we

have moved that forward and I know it is summer and everything else, but

particularly, if you are running into any struggles; but, more importantly, I

would like to be able to know that this is working, that the process is moving

in place, that the accountability, the compensation, the recruitment process

falls well in line with every other agency and board we may have in this

government.

MR. BARRON: I keep forgetting, Mr. Bennett, to identify ourselves when we

are speaking. I am Mike Barron, President and CEO of the Centre.

The Centre's board has approved a set of policies, actually, and we just got

a response back from government last week to align with the government policies.

Essentially what we will do is make exactly our policies to align, even the

wording, of what the government policies are.

When it comes to the pay scales, we have not had a date set yet, but we have

been working closely with the Human Resource Secretariat on doing a complete

re-evaluation of every position at the Centre. So that will essentially create

the new regime. That would be the government-aligned process of doing that.

As well, as you are aware of the package we sent, we did send a road map for

that alignment to occur that would allow for a smooth transition from the

current regime to the new regime. That, to my knowledge, is being discussed and

will be brought back to us in the near term.

MR. BRAZIL: Okay, great.

MR. BARRON: Really, we have spent a lot of energy to get where we need to

get.

MR. BRAZIL: So it is your plan to be able to implement this come new

fiscal, April 1? Everything will be in place, people will know their job specs,

they will know their classifications, and these types of things?

MR. BARRON: Well, certainly the job salaries for any new positions will

be known at that time. How we deal with the current positions will be a matter

of discussion between the government policy and ourselves. Outside of where you

may need to red circle people and things of that nature, depending on how it all

works out, we will be certainly in that position.

MR. BRAZIL: Okay, great.

A question around governance, and I think most of it has been addressed: Are

you comfortable now and I will ask the Auditor General after that the whole

governance process of appointing members to board and everything else has been

now following the process that was originally set out? I know there were some

glitches there in 2011 and even early 2012.

MR. DILLON: From a governance perspective, yes, we have looked at what

the Auditor General has had to say and changes have been made. Obviously my

position, appointed Chair, is part of that. We do now have a member from Health

and Community Services on the board as well.

A third comment the Auditor General put forward was around models as to

whether a CEO should be or should not be part of a board, and I think it was

more of a statement as opposed to a directive, if you will, or a recommendation.

We did look at that and Mike has since stepped away from being a voting member

of the board. I think from a governance perspective, we have addressed, I

believe, everything the AG has asked for.

MR. BRAZIL: Okay, thank you.

Are there set time frames for the liaison committee or the board itself

meeting, or is it periodic when there are issues on the agenda?

MR. DILLON: We have regular quarterly meetings, as well as an AGM and

then committee meetings. There are a number of committees that are struck from

the existing membership that get together in advance of all of the board

meetings. It is fairly well structured and regimented.

MR. BRAZIL: Is that information then shared with the department,

particularly at the minister's level or executive level?

MR. DILLON: There is a representative from the Department of Health and

Community Services who sits on the board. I do not know that we have a protocol

to send exact meeting minutes to the Department of Health and Community

Services. Certainly, their membership on the board, that member would be

MR. BRAZIL: Responsible for bringing it back.

MR. DILLON: Yes, if they wanted to bring back the details of the board

meetings.

MR. BRAZIL: I just wanted to make sure I clarify that so that if

information is not being distributed, then Health and Community Services have to

take some responsibility for delays that they have there.

Gentlemen, after going through everything and, like I said, we have been

through the hearing, the concerns, I know from my point of view, were about the

process that the Auditor General had outlined, the compensation packages that we

had adopted as an Administration that everybody would be under one umbrella and

what process would be followed, and compensation, in cases and there are rare

cases, but they do serve a purpose where compensation has to be different than

the scale that we have, then that would be justified and approved in a proper

manner.

From the steps that you have outlined and discussions with the Auditor

General, I am pleased at this point to be able to say if things move accordingly

then there will not be any problems when we do the review in a year or so.

Thank you for that. If there is anything else, I may come back later on, Mr.

Chair. I will pass it to Mr. Mitchelmore.

CHAIR: Mr. Mitchelmore.

MR. MITCHELMORE: Thank you, Mr. Chair.

This is the second opportunity I have had to question the Centre for Health

Information. The Auditor General's report certainly was eye opening in the fact

of what it revealed about the salaries that happen at the Newfoundland Centre

for Health Information and how they were not in line with other government

agencies. It raises me to question, I guess, going back to the size of your

organization, and your operating budgets, how has the operating budget grown

since inception on a year-over-year basis? Because it is primarily funded by the

provincial taxpayer.

I mean, in the documentation I have seen it looked like the budget topped out

at about $70 million in terms of funding, in terms of capital projects, at a

point in the literature that was supplied for job descriptions.

MR. BARRON: Actually, the funding, the $70 million, would have referred

to the money that we got from an investment fund from Canada Health Infoway. Of

course, when you are in a project mode, as you spend that money, that gets

blended into your operational budget for purposes of accounting and auditing.

The chart on page 168 clearly shows what the budget of the Centre went to in

2012; and, essentially, it is not that much different today. Right now, today,

we have gone from what appears to be around $12 million in 2007 to over $25

million. It is usually between $25 million and $30 million right now, depending

on what phases the projects are in at any one time.

The provincial funding currently, Steve, is

MR. CLARK: Currently at about $23.5 million.

MR. MITCHELMORE: In 2007 the Salaries and Benefits, it looks to me, were

about $2 million. We fast-forward five years later and they go from $2 million

to $70 million. Is that correct?

MR. CLARK: Could you repeat the question?

MR. MITCHELMORE: Page 168, the chart you just referred to, in 2007 the

Salaries and Benefits were about $2 million; and, in 2012, if we fast-forward,

they look to be about $70 million.

MR. CLARK: It would not be $70 million; it would be about $12 million.

MR. MITCHELMORE: Right, I am looking at the other side of employees.

MR. CLARK: That is okay. The staff complement is on the right side of the

scale. You would see that there was a significant in staff complement.

MR. MITCHELMORE: Right.

How many employees would account for this staff increase? In 2007, how many

employees were actually working? It was about eighty employees, from the chart?

WITNESS: (Inaudible).

MR. MITCHELMORE: Okay.

MR. PADDON: In 2007, there were about fifty-four employees, which made up

$2.6 million in salaries. In 2012, there were 156 employees, which made up about

$11.7 million in salaries.

MR. MITCHELMORE: Okay.

Based on the documentation that has been provided, it seems like the Centre

for Health Information has been pushing for quite some time to look at

increasing its salaries, from letters that it had sent to the Department of

Health and Community Services, asking for a new compensation package back during

those earlier years; and, certainly, did not get anything in writing.

Now, we see, fast-forwarding to 2013, the Minister of Health and Community

Services, in a letter you supplied February 7, by Minister Susan Sullivan, it

states: Your Chief Executive Officer, Mike Barron, has discussed these issues

with the Deputy Minister, Bruce Cooper, on several occasions this is referring

to the salaries and compensation the department has considered the views put

forth. As I am sure you are aware, there have been numerous contacts with your

organization requesting compliance with government policy, specifically

compensation policies and the market adjustment policy.

It seems like the Centre for Health Information has gone out of its way to

not be compliant and has enlisted the legal opinion of McInnes Cooper in the

documentation that was supplied in 2007, 2013, and 2008; Benson Buffet in 2012,

2013. There was a request asking for the cost of outside services, like legal

services.

Can we have a breakdown of what this non-compliance or failure to listen to

the Department of Health and Community Services has actually cost the taxpayer

in terms of salaries? Because, even in your roadmap, it highlights that you are

going to be red-circling, but that means that the salaries are still going to

maintain at that level, well beyond the general public service for comparative

work being done. How much has been cost in legal fees in pursuit of maintaining

higher salaries?

MR. BARRON: I can certainly find that out for you. I would not have that

information directly at my fingertips here, but it has not been exorbitant at

all.

MR. MITCHELMORE: I guess I question because, in one piece of the

documentation, it had one legal firm basically do some research around comparing

the salaries of Nalcor, other Crown corporations like Eastern Health, Memorial

University, the Newfoundland and Labrador Housing Corporation, and comparing the

salaries.

I guess I initially started off my question asking about the employees and

the scale of budget. If we look at the scale of budget at Memorial University

and the comparison of the department and the amount of oversight and work that

is being done by these individuals compared to the Centre of Health Information,

it is very difficult to compare one organization to another, when the size is

very different, budgets are different, employees are different, and the work is

quite different.

It found that the salaries at the Centre for Health Information were very

closely linked, at par, or in that range of those large organizations.

MR. BARRON: It is also important to see where the Centre fits in the

scheme of things with the health system. The Centre is a provincial relationship

broker and maker of larger things than the organization. The whole point of the

organization is to try to bring regional health authorities together, for

example, to do these provincial projects because the Centre cannot do these

projects without the full involvement, buy-in, and engagement of the regional

health authorities.

For example, when you look at the Centre's vice-presidents involved with the

actual Electronic Health Record work, we have oversight committees and group

committees that involve the vice-presidents of the regional health authorities,

Assistant Deputy Minister of Health, as well as our people. So it is not just

the size of the organization; the broader impact is really on the larger health

system.

MR. MITCHELMORE: What has changed since 2007 to 2012 when it comes to the

roles of the senior managers who started off as managers, moved up to a director

or now vice-president, and hirer positions, hirer titles, basically? What has

changed in the scope of their work beyond the increase of salary and benefits?

MR. BARRON: The scope of the work essentially relates to the projects in

most cases. As more projects are approved, that would be a broader

responsibility basis. For example, with the Pharmacy Network, as that became

more operational, we began a project called the iEHR/Labs Project, which was a

$32 million project once again involving all the regional health authorities.

That is what really changes, to a larger extent.

Of course, when you get into these projects, then certain portfolios are also

expanded. For example, getting the standards and the nomenclature involved with

these health information systems, that would expand as well. Of course, when we

go through the re-evaluation process, the current state of the Centre's

operations will be considered as part of all that.

MR. MITCHELMORE: I guess I am not clear, actually, as to in 2007 with the

budget that was operated, the Centre for Health Information would have peaked at

a certain point when it came to the amount of money it was able to secure from

Infoway or other federal sources, and now it primarily depends on provincial

sources for funds. I question the scope of the work that the employees in senior

management positions are doing that would justify such large increases in

salary. In the minutes that were provided, it had said there were potentially

recruitment issues as being a challenge.

Was there an indication that staff would actually leave? We have seen

consistently the same staff signing off on documents that have been put here in

the review. They are still with the Centre for Health Information, in most

cases. That is not always the case with a government department or agency.

MR. BARRON: I do not understand your question.

MR. MITCHELMORE: In 2007 your senior now the Vice-Presidents, I guess,

of the Centre for Health Information. What were their positions in 2007, their

titles?

MR. BARRON: I would have to go back and check that, but certainly I can

get that back to you. We provided some information to you folks as part of the

MR. MITCHELMORE: I read the information and

MR. BARRON: Yes. So just let me rather than me just speak out of my

memory.

MR. MITCHELMORE: I think we need to go through this and actually get a

thorough view of what the employees were doing in 2007, what their salary ranges

were, and to see the increases over the years to justify that.

This is a public organization that is publicly funded; it is not a private

enterprise, so it operates quite differently. In my view of the Public Accounts

and with the findings of the Auditor General's report, it is quite appalling, in

some cases, if there is no justification and there is no documentation from the

Minister of Health when the wage increases were requested. Mr. Joyce had

questioned that earlier, about this lack of documentation; but the current

Minister of Health has been providing documentation saying the Centre really

needs to get in line. This has obviously cost the taxpayers a significant amount

of money over the years, and it needs to be justified.

CHAIR: Mr. Mitchelmore, will you be content to have that in a letter

form? Mr. Barron indicated that he did not want to trust his memory. Would you

be content to receive that

MR. MITCHELMORE: I would prefer to have this information discussed and

debated. I am willing to wait until another time, if that is needed, but I feel

those are legitimate questions. This is what the Auditor General's report was

specifically about; it was about the salaries and the compensation at the Centre

for Health Information. Right now, the Centre for Health Information has said we

cannot provide the legal costs; we do not know them over the years

MR. BARRON: We do know them. We do not have them in front of us.

MR. MITCHELMORE: Right.

CHAIR: I need to really understand the question because we may get a

written response. I am not sure; what is it exactly this is not a criticism;

it seems like it might be useful information. Mr. Barron said he would not want

to trust his memory, so there must be some precise way to put the question that

it can be answered.

MR. MITCHELMORE: This is the point of having the hearing, I believe, Mr.

Chair, is to ask questions of the documentation that was supplied. There is

documentation supplied around the directorships, the vice-president

MR. BARRON: We can go through this.

MR. MITCHELMORE: These details are there and I would like to take the

time to go through it.

MR. BARRON: Sure.

CHAIR: You can do it in your next ten-minute interval, or we can come

back the third time. There is no reason the Centre cannot come back in January

or February, if we cannot get the information now.

MR. MITCHELMORE: Right.

CHAIR: We could move on to Mr. Parsons because of the time

MR. MITCHELMORE: I have no problem with that.

CHAIR: and you can pick up the line of questioning, which I think is

quite appropriate, when the time comes.

MR. MITCHELMORE: Sure.

MR. K. PARSONS: Thank you very much, Mr. Chair. Again, welcome back you

guys.

I just have a few questions here this morning, and I just want you to take

we looked at 2007; the Auditor General said you have fifty-four employees and

now you are gone to 156. Could you just explain to us how you have changed from

2007, what role and how the whole organization has grown? Your demands,

obviously, in 2007 were a lot different than what they are at 2012. So if you

could just bring us through some of the changes in your organization.

MR. BARRON: Certainly the biggest change in the organization is as a

result of the large capital projects that we have been involved with. We have

transitioned somewhat from largely a project-based organization

MR. K. PARSONS: Can you give us an example of some of the programs?

MR. BARRON: Well, the Pharmacy Network project, for example; there was a

build phase of that, that would have required a lot of energy and time of

various people. Then we moved into an iEHR/Labs Project that we are currently

in. Anyway, the Pharmacy, as that became operational, then you need a certain

amount of people to feed and nurture that particular system.

The nature of the Centre is we have more operations to maintain as a result

of those projects. We have a Client Registry, we have a Provider Registry, we

have a Pharmacy Network, and we have a provincial Picture Archiving

Communications System, which are the radiology images for throughout the

Province. All of those things require feed, nurturing, and caring, so that is

your operational base.

As the organization has matured now, we still are adding projects depending

on the availability of public funds and the approval of government because we do

not take on the project unless the Department of Health and Community Services

requires it. We do have now a solid operational base, which needs to be

maintained to maintain those previous investments.

At the same time, we still have a significant project component of people who

do these large-scale provincial projects that tie in together. As a matter of

fact, the project we are currently working on is the first step to tying all

those projects together so there would be one-stop shopping for health providers

in the Province to garner that information in a timely and accurate basis.

MR. K. PARSONS: Okay.

I am going to go back. Mr. Joyce was asking some questions about the

increases over the last number of years. When you do read the Auditor General's

report, it is pretty astounding, actually, to see the increases of 119 per cent.

For example, with the Human Resource and Strategic Planning person, VP, did

anything change in the work that he was doing, or person who was doing that

work? To see increases of 103 per cent and 119 percent obviously, I do not

know if it is a standard with other Centres for Health how can you justify

increases with that much money?

MR. BARRON: Really, it has nothing to do with the Centre for Health or

equivalents; it has to do with the timing in the evolution of the organization.

MR. K. PARSONS: Explain, though, why

MR. BARRON: It is quite clear that the organization became much more

complex and it had to grow in a very significant actually, in a very short

period of time in order to meet its obligations. As a result of that, and of

course, we have said it before, these things could never happen today because we

are in a mature situation with the organization as a whole, and we will be

aligning with government policies.

At the time that those things happened, the Centre was in an extremely

volatile growth mode. In terms of getting the resources it needed was difficult

enough, but to maintain the ones we had was also extremely important. So while

those percentages optically do not look good, they occurred over a period of

time, even though sometimes a short period of time

MR. K. PARSONS: Five years.

MR. BARRON: I have the timelines here. They had to happen. Of course,

when you look at trying to recruit, it can take you six to twelve months to

recruit a particular position; but when you are in absolute growth mode with

capital funding at the table and projects already in process, you have to do

what you have to do within the boundaries of the board and the board approval to

do the job, and that is essentially what we did.

MR. K. PARSONS: Okay, but when I look at increases of 119 per cent over

five years, I hope that there is no ransom there over someone's head, that in

order to get this person we have to pay whatever it is. That is not the way any

organization should work.

The other question I have I just have one more question here it was with

the competition, and again, Mr. Joyce asked a question on that also. Any time

that there is a posting or anything at all, I believe in fair competition, and

if there is a person within an organization then they have just as much right as

a person from outside the organization, and the best possible person be

qualified for the position. It seems like in this case there was a lot of

internal and just moving up the scale. Can you explain?

MR. BARRON: Much the same as the previous answer. We were in that massive

growth mode and we had people who were gaining expertise you could not buy off

the street, first of all, because they were doing on the job they were

learning. Even from a business perspective, dealing with Infoway investment

funds, these are not grants; that is a fairly complex thing just to account for

these kinds of things. Essentially, the only answer I can give you and once

again, it was with full board approval is that it was an extremely volatile,

risky growth period in the Centre's evolution and that today could never occur,

ever again, because the Centre would never be in a position to grow like that

again first of all.

In those days, it went from a very small group of people to a very large,

complex group of people; large, being more in complexity, in some cases, than in

numbers.

MR. CLARK: If I could add as well in terms of additional

responsibilities, because I know that was the root of the questions. Maybe I

will speak to myself. If I could just speak even to my own situation, which

really I would prefer not to, but it is the one I know the most about so it may

provide some insight.

In 2007 we became a Crown agency. Up to that point in time, I was the Manager

of Finance. I have a finance background. I also have other skills as well.

We became a Crown agency. Prior to 2007, things like procurement would have

been administered by Eastern Health, because we were part of Eastern Health;

things like facilities and so forth. After 2007, I was given additional

responsibilities to manage procurement. As you can appreciate, there were a

number of multi-million dollar procurements and I had expertise in that area, so

I assumed that responsibility.

Then, of course, we had to manage our facilities, when you are growing staff

complements, so I took on facilities. We also had now a board; I needed to

become the corporate secretary. There was a need for that. We also needed a

project management office and, again, I needed to fill that role. I am a PMP and

I am a certified professional project manager. Again, I had that expertise.

Again, that is my own personal situation; but, as you transition to a Crown

corp., there are different needs which were administered by Eastern Health and

we had to take on those responsibilities, which are key to the organization's

success. So, hopefully, that provides some insight.

MR. K. PARSONS: Yes, that is where I wanted to go with the question. If

there is a huge increase, when you see 119, obviously I was hoping that the

answer was what you just gave us; that, obviously, your demands for your time

and everything else and the expertise that you need to provide also came up the

scale, too. Okay, that is good.

I just have one question to the Auditor General. I know the responses that

they gave and stuff like that and actually, I think this is probably the one

that we will be really interested in two years' time or a year's time when we

get the report back from you guys to see where you have come. As of 2005, this

was a very new organization; this is not something that has been on the go for

twenty years or whatever. Again, I am interested the responses were okay; but

is there anything in particular, out of the hearings that we have had and what

you have heard here this morning, that you are going to be looking for in their

MR. PADDON: Really, what we would do is we will take each recommendation

that we have made, we will formally ask the Centre for a response or for an

update as to where they are in terms of implementation of those recommendations;

it is up to them how they wish to respond, whether they agree or disagree or

whatever. Then, we will do some evaluation of the responses, so we will go back

in a take a look.

Some of the issues here are around how the Centre is going to align itself

with government's compensation policies.

MR. K. PARSONS: Yes.

MR. PADDON: I would presume that there would be some agreement between

the Centre and the Department of Health and Community Services as to how they

move forward on that, so that would sort of almost be a touch point against

which we can evaluate where they are. I think that is really how we would

approach it. It is a bit too early to be able to provide any sort of evaluation

here on the spot.

MR. K. PARSONS: Okay, I can understand that.

I guess you guys understand the

importance of the optics portion. Obviously, when you read it first, you look

the increases of 119 per cent and job competitions and stuff like that, so it is

going to be very interesting to see what comes back in your next report, to see

where you are and where you have aligned yourself with government policies. It

will be interesting to see.

Mr. Chair, that is it for me for the time being.

CHAIR: Mr. Joyce.

MR. JOYCE: I am just going to ask a few general questions and I just have

a few smaller questions that I have to ask.

First of all, if you had the legal opinions and this was something that I

could not understand if you had the legal opinion saying that you could do it

on your own, why were you so adamant that you needed government approval or

going through the Minister of Health? Were you 100 per cent sure on your legal

opinions that you could give these pay increases on your own or

MR. BARRON: You would have to ask the board Chair that question. I was

not the one dealing directly with government.

MR. JOYCE: Weren't you on the board at the time? Weren't you a board

member?

MR. BARRON: Yes, but I removed myself from issues regarding compensation

as a board member, the same as I would not vote on the financial statements.

MR. JOYCE: There is no board Chair here, so we cannot ask that.

Okay, that is just something that so we do not know why. There was a reason

why. Obviously, you were not 100 per cent sure you could do it.

No answer? Okay. I did not think there would be an answer.

MR. BARRON: I would not be able to answer that.

MR. JOYCE: The last time we spoke, I spoke to you when we were asking

questions and if I am wrong, I am just going on memory, and I read the

minutes. When the board was going to make the decision, my understanding is

Billy Fanning went and met with the minister, Ross Wiseman, who said yes, or

Billy Fanning came back and told the board yes, Ross Wiseman said go ahead and

do it, and then it was approved by the board.

Am I correct in that?

MR. BARRON: That is not my understanding.

MR. JOYCE: Pardon me?

MR. BARRON: That is not my understanding. My understanding

MR. JOYCE: Well, from my understanding that is what was said the last

time, that Billy Fanning spoke to the minister, the minister came back and spoke

to you, and said yes, go ahead, we have approval, and that is how it was done.

MR. BARRON: I have never heard that, no. My recollection would be that

Mr. Fanning went to the minister and when he came back he directed us as

executives to put in the system.

MR. JOYCE: Yes, that is what I just said.

MR. BARRON: Oh, sorry. It did not sound like that. I am sorry.

MR. JOYCE: Yes, that is what I said. He spoke to the minister, the

minister would not put anything in writing, Ross Wiseman, but Mr. Fanning came

back and said: No, I have the verbal; go ahead and do it.

MR. BARRON: I cannot recollect Mr. Fanning saying that.

MR. JOYCE: You just said he came back and told you.

MR. BARRON: I did not say what he said. I cannot quote the man. I was not

at the meeting with him and the minister.

MR. JOYCE: So you never, ever spoke to Billy Fanning about any of those

issues that he spoke to the minister, whatsoever? There is something

MR. BARRON: There are minutes there that show Mr. Fanning came back to

the board and discussed certain things, but all I can say from my perspective as

the CEO because I would not even have been in the room when some of those

discussions had happened, depending

MR. JOYCE: I will check the minutes from the last meeting.

MR. BARRON: Well, sometimes I was and sometimes I was not.

MR. JOYCE: I will have to check the minutes from the last meeting,

because my understanding from the last meeting is that you said Billy Fanning

came back, said he spoke to the minister who said yes, approval, and go ahead

and do it. I will have to check that because this is where a lot of I could be

wrong, too, but I do not think so.

Anyway, I will just move on. Of course, we could not get the answer, Mr.

Chair. I just want that on record. We could not get the answer. If they had

complete authority, which they thought, why were they going to the minister

trying to get authority to go ahead with permission to do it? So obviously there

was not 100 per cent complete authority given to you guys to give these great

pay raises at the time.

On page 179 of the Auditor General's report, it says right here, "Centre

officials indicated that the Minister had not responded to their letter

regarding the implementation of the new pay structure."

It was raised at the time. Can anybody tell me why I do not know who was in

on the discussions at the time, or if there is anybody there now who were in on

the discussions. If you felt you had the authority, why was it so adamant that

you needed the minister's permission? After you were seeking the minister's

permission and you did not get it, why was it done without his written

permission?

MR. BARRON: The paragraph above discusses a special board meeting where

the board certainly knowing its authority, proceeded with approval of the new

salary scales because the Centre was having difficulty recruiting and was having

difficulty doing what it needed to do as per its legislation.

The sentence below was a sentence that, certainly when the Auditor General

came in, when they asked: Did we have a letter? No, we did not have a letter.

MR. JOYCE: It was just a wink and a nod from (inaudible).

MR. BARRON: No, I had a letter from Mr. Fanning that outlined that he,

along with the rest of the board not me, because I would not vote on that

once again, that special meeting to proceed with putting in that salary

structure. That is what the executive would have acted on, would be the letter

from Mr. Fanning.

MR. JOYCE: I just want clarification. I think the Chairperson just

mentioned, now they have someone on the board from the Department of Health.

From my understanding, was there not someone on the board when this was done

also?

MR. BARRON: Yes.

MR. JOYCE: Yes, because you mentioned that now with the new realignment

there is someone on the board but there was always someone on the board at the

time. If you notice in the Auditor General's report here, is that this person

who was the CEO at the time?

MR. BARRON: I was the CEO.

MR. JOYCE: Okay. Can I ask a question then? Again, I am just going by

what is in the Auditor General's report.

"Despite the concerns raised by the Board representative from the Department

and the CEO, the Board approved the new salary structure." If you were excluding

yourself, did you have input into this?

MR. BARRON: I would have input into most issues if the board sought my

opinion on anything.

MR. JOYCE: I am getting confused here.

MR. BARRON: No, no, there is no confusion.

MR. JOYCE: No, no, don't say I am not confused, because I am. I know it

is a distraction to you. I am confused because you are saying you would step

aside if there is any issue with the compensation but here you have input into

it. You cannot have it both ways, Sir. Either you excluded yourself from all of

that and let someone else take the role, or you did have input. You cannot have

it both ways.

MR. BARRON: I would have had input.

MR. JOYCE: So you did not exclude yourself.

MR. BARRON: But I would not have voted.

MR. JOYCE: Okay, but you can have input.

I ask the Auditor General, is this normal for someone who is going to benefit

from it to have input into it until they get to the board; now all of a sudden:

No, boys, I can't vote now. Did you ever see a board structure because in my

experience with board structures, first of all the CEO would never be able to

vote anyway. I do not know how that ever came about. Is that common?

MR. PADDON: I think that was the point we were making in the report. That

having the CEO as a voting board member is an odd structure because it does

create some issue. It is not unusual. As a matter of fact, it is probably the

norm that the CEO, even if they are not a board member, would attend board

meetings just because of the nature of the position and that sort of thing, and

clearly would provide input into whatever issues are being discussed at the

board.

Even if it is compensation issues, I suspect there is clearly a role there

for the CEO to provide the information to the board. If the CEO is also a voting

board member, then it stands to reason that they probably would excuse

themselves from voting if they are a beneficiary of a particular issue. I think

that is what I heard Mr. Barron say, that he did exclude himself.

MR. JOYCE: Okay, you can have input but not vote. That is a good one.

Okay.

I am going to go to page 175. It says here, "The Public Service Commission

recommends a competition file contain documentation such as screening

criteria", and I see it was not done here. Is that being done now for any new

positions or any ?

MR. BARRON: All of our recruitment at this time is already following the

policies of the Public Service Commission.

MR. JOYCE: Okay. I just want to get it clear again, that when the

chairperson said that Health and Community Services has a member on the board,

there always was a member on that board, the ADM or the DM. That is nothing new,

from my understanding?

MR. BARRON: That is not new. No, Sir.

MR. JOYCE: That is not new, no. Okay.

I will go to page 176. This is coming back to something you said, that you

know you had the best qualified person, "applicant assessments resulting from

the interview process were not documented in any of the 10 files. As a result,

the Centre could not demonstrate that the most suitable applicant interviewed

was selected."

If that was the process, how are you sure that you had the most qualified

person instead of just picking somebody, giving them a huge increase, and saying

take the job?

MR. BARRON: I do not believe that refers to the executive positions we

were talking about previously.

MR. JOYCE: Any positions.

MR. BARRON: Yes, but these positions here, what would have happened there

well, for example, if you view having everything done as 100 per cent, the

Centre did 90 per cent. What that refers to is that on the front end there was

not a written record of how say there were fifty job resumes came in. Well,

our people certainly were not sitting there with a column and a spreadsheet

ticking them all off.

A lot of times, particularly when you are in growth mode, you would certainly

look at these and take out people who met the basic qualifications immediately,

you put them to one side, and they would be the ones you would have a tendency

to try to pursue as part of recruitment. All of the rest of the processes

involved with the recruitment process, including having hiring boards,

documenting best candidates, et cetera, all of that would have been taken care

of, yes.

Just to let you know, as of now, we are doing exactly what the Auditor

General has pointed out. We are now documenting every resume that comes in to

ensure that nobody slips between the cracks.

MR. JOYCE: I am confused again. I will just read it. "Our review of 10

job competition files identified issues with the completeness of the

documentation to support the competition process." He went through it,

"screening assessments were not documented in any of the 10" So we do not even

know how someone was screened in or someone was screened out.

"As a result, the Centre could not demonstrate the most suitable Candidates

were interviewed; and applicant assessments resulting from the interview process

were not documented in any of the 10 files." I mean ten out of ten. "As a

result, the Centre could not demonstrate that the most suitable applicant

interviewed was selected."

MR. BARRON: I would suggest that would be because of the expediency

required at the time. It was not as a means to determine people or to screen out

people who were qualified. Essentially, people were very busy and they had big

stacks of resumes. That would have been the approach taken at that time.

MR. JOYCE: There is no way to confirm that you had the best qualified

person picked for the position? As you said earlier, we just picked the best

qualified. There is no way to determine that.

MR. BARRON: I would suggest that the candidates, when they are hired, if

they were not qualified then you would take whatever other means you need to.

MR. JOYCE: I am missing

MR. BARRON: I mean, that is what it is. I just explained that in the

future

MR. JOYCE: When you say that here I am just going with the Auditor

General when you say to us and say here that we picked the best qualified

candidate, yet when you picked ten out of ten, there is no documentation to show

that you picked the best qualified candidate, it is hard to justify your

statements that the best qualified candidate was picked when there is absolutely

no documentation, out of ten out of ten files, to suggest that.

MR. BARRON: That is not correct that there is no documentation. There was

no documentation of the initial assessments. There is documentation of the

interview process.

MR. JOYCE: I think you should read page 176.

CHAIR: Mr. Joyce, we should move on to Mr. Cross now.

MR. JOYCE: Sure.

MR. CROSS: Thank you, Mr. Chair.

This being our second go-around, I guess most of my questions that I would

have asked in the beginning would have received an answer.

Just to review, I guess, the dates in most of the documentation here indicate

things that have happened since 2005 and 2008; 2012 is when the Auditor General

did the report. Today is 2013; 2014 is when the Auditor General is going to come

back and look at what has been happening. In looking at this organization, it

has grown from approximately fifty employees to 160-plus, from a budget that is

quadrupled or tripled in that same amount of time as well.

I have two or three areas that I just want to look at and the main theme, I

guess, or the main question about what I am asking is: How is this done today?

Not how it was done in 2005 or 2008, or what you expect to be ready for 2014,

but 2013, today.

We know that Mr. Joyce has referred to, on a couple of occasions today,

concerns by the board representative from the department and the CEO. I will

just read from page 179. This is a 2008 scenario.

It says, "At a Board meeting on January 16, 2008, the Board considered the

new classification and salary scales proposed" and I will jump ahead, it

says, "Also documented in the minutes was the CEO's comment that this is

similar to the pharmacy market differential which was not supported by

Government. However, if we proceed with implementation and it is taken in the

wrong context by Government, there is a fair amount of risk for the CEO.' He

agreed with the Board representative from the Department, that the Board should

wait for a response from Government. It is also on record that the Board

representative from the Department voted against the motion." Despite all of

these concerns, a vote was taken and action was done.

How would that be done today? Is this still the same practice? What would be

in place today that would show us that there is a growth from that?

MR. BARRON: Certainly the main thing that is in place today is the

complete alignment as we move forward with government policies. When it comes to

the authority of the Centre, the legislative authority of the Centre has not

changed, but the board of the Centre has certainly agreed because, once again,

salaries have changed even in the public service since that time. What we are

working with now is hoping that those increases in the public service, as well

as potentially using the market adjustment policy of government down the road

for those really tough to recruit positions, will hopefully meet the needs of

what the Centre's mandate is. That is the thought.

As a result of that, the board right now is completely in line with and

certainly agrees with the Auditor General's recommendation for the Centre to

become fully aligned with government policy. It is really a mentality thing of

the board; the board agrees that we will align with the government compensation

regime.

MR. CROSS: Okay.

Table 3 on page 181, talking about the difference between the Centre salary

scales and government salary scales this is of October 2012 there were

points where the Hay point totals and the Hay scale was used and the Centre's

scale was used. It had pretty similar statistics, yet the pay difference was

quite a bit.

Has that come more closely in line, has it been red-circled, or how is that

differential in the salary for someone who is conceivably at the same point as a

government employee?

MR. BARRON: As part of the alignment process, we are working with the

Human Resource Secretariat to re-evaluate every position so a new Hay point

total will result from that process and, at that time, we will be matched up

with whatever the equivalent government process is.

The Hay system in government is not the same as the Hay system that was

employed by the Centre. As a matter of fact, the Hay system in government was

put in twenty-five years ago; it is not the same. We will be working with the

Human Resource Secretariat to re-evaluate all of our positions on the government

scale and match them up with the appropriate compensation. That is part of the

alignment process that we refer to.

MR. CROSS: Okay, so there is no indication of what the difference in

salary may be right now versus what it was a year ago or where it will be in

2014 or going beyond?

MR. BARRON: No, there is not; but, certainly, our indication would be

that it will happen this fall.

MR. CROSS: On page 191, the first are bunch of recommendations here, and

I guess not necessarily how is this done today or how close to implementation

are these recommendations recommendations: The Centre should conduct and

document job competitions for all job postings.

MR. BARRON: We do.

MR. CROSS: So that is done, signed off, and up-to-date?

MR. BARRON: Yes.

MR. CROSS: Ensure compensation policies are consistent with those of

government.

MR. BARRON: We have a board set of policies that were submitted to

government. We vote our policies to align with the government compensation

policies and the board approves subject to government confirming they were

aligned. It was just last week that we received documentation of some

wordsmithing, more than anything else, and we will wordsmith exactly as we have

been asked to do to make our policies completely aligned with government.

MR. CROSS: Okay, you are talking about wordsmithing, so out of the vague

language that was used in some of the previous things that we looked through,

like on page 182, we talked about performances and step increases. There seemed

to be a lot of language there that left a lot of leeway. So you are talking

about the wordsmithing that is going to tighten that up, and that is going to

MR. BARRON: Well, it is a couple of things. Sometimes, we would have had

two policies, for example, where the government may only have one. That kind of

stuff, really, is what I am more referring to.

MR. CROSS: Okay.

MR. BARRON: Of course, these policies are vague. Even when you look at

the civil service policies, there is a little bit of vagueness to some of them;

but, for the most part, they are very self-explanatory. Our language over the

next week like I said, we just received this last week. Our language will

reflect exactly the language of government. There will not be any room for

whoever follows in the Centre to get a different determination of what

MR. CROSS: So we should not be confused when we

MR. BARRON: Well, it will be the government policy.

MR. CROSS: Okay.

To ensure Centre policy is followed regarding: an effort to hire at step 1

prior to upscale hiring.

MR. BARRON: Absolutely. That is the current practice right now at the

Centre.

MR. CROSS: Okay.

Consider whether a position vacancy can be filled with a permanent or

temporary salaried hire prior to a decision to outsource work. So outsourcing

and contracting out, how

MR. BARRON: We always try to do that, and we will continue to try to do

that. Once again, depending on your project milestones and the timelines

associated with a project, you need to do what is right for the project. We

always look to see if we can hire somebody, as opposed to going external.

As you can appreciate, you cannot always hire somebody, particularly

temporarily, that have the specific skillset in the area that you require that

will leave a permanent job to come to a temporary position associated with a

project; but we always try that.

MR. CROSS: Okay.

I guess I did not plan my ten minutes so well, but that concludes what I have

ask right now. I do reserve the right to come back a little later.

CHAIR: Mr. Mitchelmore.

MR. MITCHELMORE: Prior to the new pay structure that was implemented in

2008, the Newfoundland and Labrador Centre for Health Information had the

ability, through different hiring means, to look at if an employee was difficult

to recruit. As with other agencies and departments, there is a process through

the Treasury Board and through ministerial approval that could be sought. That

is correct, right?

MR. BARRON: Well, certainly we are aware of the market adjustment policy

as it currently exists today.

MR. MITCHELMORE: Right, but prior to 2008, prior to these changes, that

option always existed for your organization.

MR. BARRON: I am not aware that it was. The only thing I am aware of in

the health system would have been the pharmacists. It may have been called a

market adjustment or it may have been called a market differential.

MR. MITCHELMORE: I guess depending on the skill set and demand.

MR. BARRON: It was really difficult to hire, yes. To my knowledge, that

policy only came in around 2008 with government for that, and it was only for a

couple of positions. Once again, I am not in government so I do not know.

MR. MITCHELMORE: Right.

Government has a policy that allows for wage differentials and upscale hiring

in certain instances.

MR. BARRON: Today they do, yes.

MR. MITCHELMORE: The Centre for Health Information in 2008 went through

the process that was in its mandate and in its legislation where it prepared and

put forward documentation to the Minister of Health and Community Services at

the time to seek approval. There was nothing in writing and the Auditor General

requested that letter. It has been referred to this morning and also in the last

meeting.

Did the Auditor General have the ability to ask maybe the Department of

Health and Community Services if there was a letter to seek out that

information, or is that not a possibility?

MR. PADDON: We certainly do have the ability to ask the department, but

in this case we just inquired of the Centre had they received a letter or a

response from their initial request, and the answer was no.

MR. MITCHELMORE: Okay.

The Auditor General's report also highlighted in the board meeting that the

department official with Health and Community Services voted against these wage

increases. So there was no written approval by the Minister of Health and

Community Services in agreement with these new pay structures. The department

official voted against this pay structure, but the board saw it was appropriate

to look at increasing the wages of these individuals without the authority,

basically. That is correct, right, Mr. Barron?

MR. BARRON: The board voted majority to proceed with the wage regime,

yes.

MR. MITCHELMORE: The votes were basically all of the non-government,

non-Department of Health agency voted against. One vote

MR. BARRON: There were government people actually, at least one who

voted for.

MR. MITCHELMORE: What government position was that?

MR. BARRON: OCIO.

MR. MITCHELMORE: Okay.

MR. BARRON: There was also a member of Nalcor as well who would have

voted for that, or an employee of Nalcor who would have voted for approval.

MR. MITCHELMORE: Okay.

On page 180, it highlights the salary increases for the Director of Finance,

the Chief Privacy Officer, and basically six positions that received an average

increase of about $15,500 each, while all the other employees at the

organization received about $2,000 in increase. My original line of questioning

was: What has changed in terms of the organization?

You provided some response to Mr. Parsons when he had asked about the work

and the scope of the individuals to justify or look to justify these large

salary increases, because they have jumped, in a short time span, up to 135 per

cent. That is significant.

My question to you would be: What positions did you have that were difficult

to recruit back in 2007-2008?

MR. BARRON: I would have to go back and see. We do have a record of what

positions. I can assure you that anything involving information technology would

have been difficult to recruit, and that would be consistent with the advice and

consultation I would have had with the OCIO at the time. These jobs are

difficult to recruit, and it is not about recruiting somebody with a title. It

is about recruiting somebody who can go to work immediately as opposed to us

bringing them up to scratch.

MR. MITCHELMORE: I want to point out then that if you are talking about

technology, and there is certainly a high skill level for certain technology

positions, they may be difficult to recruit. I would like to see that, but the

positions we are talking about here that received the salary increases, and the

bulk of them were management positions that were already on staff who had basic

title changes and some additional duties added, while the rest of the staff

received the average of $2,100 each. Those would be those technology people and

whatnot, those difficult to recruit positions. Am I not seeing something here?

MR. BARRON: I do not know where the $2,000 is coming from.

MR. MITCHELMORE: It is on page 180. It says the average increase of the

other fifty-two employees.

I guess we would need to see a breakdown of the actual jobs that were the

positions and the salary ranges, before and after.

MR. BARRON: We can certainly supply that to you.

MR. MITCHELMORE: Because we need to see to show where you had difficulty

in recruiting for that hiring process to justify how salaries were being

increased. It seems like the top management positions received a significant

increase in salary and there is no indication that these positions could not be

filled by other people. There were no job competitions for them.

I question then: Were there job competitions opened up? Once people were

promoted to a vice-president position, the management position or the position

below that stayed, were there open job competitions for those positions?

MR. BARRON: In some cases there would have been positions. In some cases

there may not even have been a position.

Once again, you are going back right now to about 2008. When you look at the

management, I believe I have mentioned it to the committee before, our job was

to make sure we solidified at the top. While in that time frame you may see the

$2,000, over time the employees at the Centre, outside of people who were

reclassified, everybody was treated the same after we got through that growth

period into 2008-2009 time.

MR. MITCHELMORE: Okay. During that process I would like to have the legal

fees that have been expended through the Centre for Health Information leading

up to this job classification and then after the fact, because there has been a

lot of legal fees, legal services retained.

MR. BARRON: Could you provide us the dates and we will provide that

information?

MR. MITCHELMORE: I would like a breakdown for each year.

MR. BARRON: From what year, I am sorry?

MR. MITCHELMORE: From 2007, 2008, 2009, 2010, 2011 and 2012.

MR. BARRON: Absolutely.

MR. MITCHELMORE: If it could be provided, further information on that. I

appreciate that the Centre for Health Information in our questioning did provide

a significant amount of documentation which helps in the accountability process

but I still see significant flaws in how wages were increased for a number of

employees at the Centre for Health Information without seeking appropriate

approval to the rules and policies that existed.

It is quite clear that the Centre for Health Information did not have the

approval from the Department of Health and Community Services. It sought a

significant amount of legal opinion to basically fight this to I question

about the oversight and the ability of how a Crown corporation feels that it has

such authority to do so, and the board of directors to go against government

policy. I would like to know what the cost is in legal fees and in salaries

above the amounts, because right now there are a number of employees who are

being red-circled. Correct?

MR. BARRON: No, actually; we are awaiting a response on our road map,

which you have a draft of, for the official move toward where we need to go.

MR. MITCHELMORE: So the road map was supplied, and you had said you had

received a response from the Department of Health and Community Services on this

road map?

MR. BARRON: On the policies, not on the road map.

MR. MITCHELMORE: Okay.

So what policies is the Centre for Health Information taking? Is it doing

red-circling? Are there people who are going through the voluntary process of

receiving a lower salary at the reduction of 10 per cent?

MR. BARRON: We await the direction of Treasury Board, I believe, which is

where that would sit.

MR. MITCHELMORE: So is the Treasury Board providing you with some

information as to the overall costing of what these decisions have made by the

board that did not have approval by Department of Health and Community Services?

MR. BARRON: No.

MR. MITCHELMORE: Can costing be looked at? I think the taxpayers need to

know how much this has actually cost, this decision that did not have approval

by the Department of Health and Community Services.

MR. BARRON: It will be difficult, but certainly when the new evaluations

are in place, you would be in a position to get an indication of what it would

have been like. It is hard to compare apples to apples there, but certainly,

yes, that information, you could come up with a number.

MR. MITCHELMORE: There could be cases where individuals, if red-circling

is the option taken, would be well beyond a comparable government salary for a

similar position being done. I am correct in that, right?

MR. BARRON: Possibly, yes.

CHAIR: Mr. Mitchelmore, we should move on to Mr. Brazil.

MR. MITCHELMORE: Okay.

CHAIR: We will take a ten-minute break when Mr. Brazil finishes, a

mid-morning break.

MR. BRAZIL: Perfect.

I do respect my colleagues' questions and they are very pertinent to us

clarifying where we are, but particularly how we got to where we are at this

point. I suspect I still do have, but I feel much better now that we are on the

right track. I like the template you have set out in addressing these issues and

the concerns about the amount of increases that were there.

My first question, again, is just to an understanding. As a former civil

servant and somebody who has gone through recruiting employees, understanding

you can negotiate to a certain level in what step in the scales that we worked

on. I understand the scope of work changes from the day somebody gets hired to

the day you do reclassification or a new realignment and these types of things.

When you did your assessment, obviously maybe the base amount was

particularly around what the government levels were on the Hay scale or the HL

scale, did you look at other jurisdictions? What did you just base it on?

Arbitrarily, just looking at qualifications, experience, or the scope of

their work is one thing, but there has to be a template somewhere. Was it Nova

Scotia, Ontario, anywhere else in the world, that you would say here is what

somebody doing comparable responsibilities would be compensated for?

MR. BARRON: We employed an external company that does those types of

things, and they utilized the Hay level methodology and they used the blended

public-private sector rate for Atlantic Canada. That would have included 80 per

cent public, I believe, and 20 per cent private. That would be our market; that

Atlantic Canada market was essentially the environment from which we were

competing as opposed to in just, say, a St. John's market, for example.

That is what was used and, once again, that was supplied to us through the

consulting company.

MR. BRAZIL: Did that take into account the increases then that were

negotiated for the public servants, nearly 21 per cent?

MR. BARRON: Actually, I do not know if the provincial government

information is part of that particular group, particularly where the Hay level

in government is reasonably old. So, I do not know.

MR. BRAZIL: I am trying to get my head around I have no problem with a

disparity between the two entities because maybe the responsibilities, again I

keep saying the scope of work, but the nature of the thing and the expertise you

may have to have. When it becomes this big, it becomes more of a concern. Now,

if it is less and less because what was then negotiated with the civil service

would have brought everybody up at the end of the scale, fair enough, then we

know if there is disparity it is part of that process. I will research some more

of that and find out exactly where we are.

My issue now is on a go-forward basis to make sure that we have covered every

basis here. One that the governance process is dealt with now; that the process

from the CEO to the voting concept is all in line with what we do with other

Crown agencies and associations and organizations within government. Am I

correct on that?

MR. BARRON: Well, there are still instances I am sure in the public

sector that the CEO may be on the board.

MR. BRAZIL: There is no doubt there is unique there is an umbrella, but

it is not etched in stone how it does it. Every agency

MR. BARRON: I can show you certainly, and maybe Mr. Dillon can talk to

the governance, but

MR. DILLON: From a governance perspective, Mr. Barron did resign from the

board. So, as would be expected, he certainly is there to help us out at our

board meetings, supply us with the information, but he is no longer a voting

board member whatsoever. So, it is not a case of excusing himself from certain

things; he is no longer a voting member of the board.

MR. BRAZIL: Okay. Thank you on that.

I do realize and I appreciate Mr. Mitchelmore's question, too, about the

amount of money being spent, and I do understand from your organization's point

of view. You wanted clarification as to what your responsibilities were when it

came to compensation from the act itself. There is no doubt, I would think,

parts of the act would have to be reviewed to be clarified exactly so everybody

understands what it means and what the

interpretations are. I think the Auditor

General has alluded to that also.

I am going on the assumption that you guys assumed you had that pure

responsibility and authority to be able to compensate based on your own internal

reviews of what the roles and responsibility would be in the compensation

package for that.

MR. BARRON: Yes, and certainly from my observations being on the board at

the time, the business leaders and senior members of other public agencies who

were on that board felt this is the route that had to go.

MR. BRAZIL: It may be not a fair question, but do you think you still

should have that same authority now?

MR. BARRON: I think there are ways now where government compensation has

gone up quite a bit over the last six years. With the new market adjustment

policy, there are ways we could work within the public system to meet our needs

on a go-forward basis.

MR. BRAZIL: Okay. That is the right answer from my perspective.

MR. BARRON: Yes, and once again, that remains to be seen but that is

certainly what we are going to do.

MR. BRAZIL: Okay, that is reassuring.

My only last comment was we all must understand where we come from. It was

alarming when we saw the disparity, not only from a taxpayer point of view but

even from a bureaucratic point of view, from other bureaucrats trying to

understand exactly why, particularly people in line departments who in their own

responsibility would think they do a similar type of work, what went on there.

With that being said, we do realize recruiting people in with specific skill

sets is very important. We want to get the best person or best individual to be

able to do the best scope of that work. To be able to do that, we have to be

accountable for what we pay out. More importantly, one of the concerns my

colleagues had outlined, too, was about everything being documented. I have no

problems in appointing somebody in a temporary position. We do that every day.

It is part of the process.

No doubt, then, when the job spec is put out there that it is an open

competition, be it internal or external at the end of the day, and that the

process as followed is transparent, that we know why this individual got it or

why the individual scored second but was offered the position for a number of

reasons. That happens in any organization; it happens within government. It

makes it easier for us, but more importantly, the taxpayers know exactly what is

being spent and why it is being spent.

The accountability is very important, and that is what this is about. I am

glad to see that within the last six months even the process has been put in

place. What has been outlined in the documentation shared with us does outline

that you are moving in the right direction.

I would make government a little bit more accountable for reviewing the act,

to make sure the act falls in line with what the perception of transparency,

authority, and autonomy is versus being able to be out there and then

challenging that down the road. I do not feel it is appropriate for any agency

to spend hundreds of thousands of dollars of taxpayers' money to be able to

either justify doing something or coming back and saying: Government, we need

authority to do it. It should be thought out in advance so that it is in the

best interest of everybody being served, particularly in this case, the

taxpayers.

I do thank the Auditor General in this case, too, for outlining the concerns

here, and obviously back and forth. I do appreciate the fact that you guys have

accepted the fact that major changes need to be made in the organization to

bring it in line with other agencies within government. Hopefully, this process

continues to get to a point where there is no discrepancy. Pay discrepancy I

have no problem with, once it is justified and transparent.

With that being said, Mr. Chair, I am comfortable to know we have moved

forward. At the end of the hearing, obviously, we will see from the Auditor

General's point of view where he thinks we have gone, and obviously we will hear

that from our colleagues as the morning goes on. At this point, I am quite

comfortable where we are.

CHAIR: We will take a ten minute break. I am going to ask people to keep

the ten minutes sharp because we will try to conclude this morning, but if we

cannot, we will have to roll over. If we use up too much time with breaks in the

morning, we will find ourselves back here in the afternoon; not that that would

not be a wonderful experience, but everybody is busy and if we can do it this

morning we should try to get it done this morning.

Thank you.

Recess

CHAIR: Okay, ladies and gentlemen, we are back on. We will resume

questioning with Mr. Joyce.

MR. JOYCE: Thank you again.

I am just going to ask some questions about the minutes that I had some time

to review. I will just go through it and I will ask for clarification and just

give an opportunity to look at it.

If you go back to the minutes of January 16, 2008 Mr. Barron, I guess this

is going to be an opportunity for you to clarify it, or get the minutes

readjusted, because in your earlier testimony you stated that you never, ever

voted on any issues pertaining to compensation dealing with yourself.

In the minutes and this is a chance to clarify it or get the minutes

changed it was proposed and seconded by S. Peters/F. Cahill that given the

urgency of the need for a new classification and pay scale, and after due

consultation with the Minister of Health and Community Services, that the board

approve the implementation of such retroactive to the date of proclamation of

the Centre of Health Information Act - carried.

For the record, J. Strong voted against the motion; telephone attendees

voted, R. Bryans and T. Dawe. In that, there are no minutes that you declared a

conflict, or if you did not vote for it or abstained.

CHAIR: Mr. Joyce, what is the date of those minutes?

MR. JOYCE: The date is January 16, 2008.

MR. BARRON: I can assure you, Sir, that I would not have voted on that

and despite the fact that the minutes may not have made note of the fact that I

did not, that was a common practice at the board table that I did not vote on

compensation issues.

MR. JOYCE: Okay.

I just find that the information that was given here and the information that

was coming from you for each time for each job posting, why it was done as

justification, then when you brought up about the wage increase, such huge wage

increases, and you were adamant that you would never vote on it, yet J. Strong

voted against the motion.

Will you ensure that the minutes are clarified? Or is there a mistake there?

This goes back to the whole concept of the hiring practices because we are given

a reason why all the hiring had to be done, why there are such huge increases;

and then now, all of a sudden, you said no, no, I would never get involved with

that. A lot of this testimony it is in the minutes that it is coming from you.

So, would you be able to get that clarified in the minutes, because it

clearly states in the minutes that you actually did not abstain from it?

I will go on page 2 of the same minutes Declaration of Conflict of Interest

- no conflicts declared by members present. It is on page 2 of the minutes.

MR. BARRON: I am still trying to find the minutes.

MR. JOYCE: Yes, take your time.

MR. BARRON: January 16?

MR. JOYCE: Yes.

MR. BARRON: Once again it was assumed always that me, as CEO, I could not

vote on financial statements or issues of compensation. So, if need be,

certainly I could go back to all those board members and

MR. JOYCE: Can you see why someone like me

MR. BARRON: Oh, absolutely, and going back

MR. JOYCE: and then you ask and everything is a wink and a nod

MR. BARRON: and this is five years ago, and certainly I can tell you

that when I read those minutes and saw the board approval as part of the process

we went through, the AG, I was surprised that there was not a note of me being

excluded from the vote as well.

MR. JOYCE: So twice; there was no conflict, number one; and also, because

at each

MR. BARRON: Well, it is one minute, right.

MR. JOYCE: No, first they asked, right at the beginning, declaration of

conflict of interest; there are no conflicts. At each meeting the Chairperson

asked: Are there any conflicts of interest? It was either declared for what was

on the agenda, and there was nothing declared at that time. Also, when the vote

was taken, it was clearly in the minutes that you voted for this big

compensation package.

MR. BARRON: Well, it is not clear that I voted for it; it is just not

clear that I did not vote for it.

MR. JOYCE: Well

MR. BARRON: Even recently we had a finance and audit committee meeting.

When they declare a conflict, everybody knows I cannot vote on it, so it is just

not done. Once again, we will certainly take that under advisement and make sure

that in the future

MR. JOYCE: I will ask the question now; I do not know who can answer it:

Why was there J. Strong who voted against the motion, which was in the minutes,

and then also people on the phone, R. Bryans would prefer waiting for a few

days, but agreed with the motion; T. Dawe voted for the motion. Why would all of

that be in the minutes, yet you say: no, I abstain, or I cannot vote. Why would

that

MR. BARRON: I cannot answer that for you; I do not know.

MR. JOYCE: Were you the one who helped put this whole compensation

package together?

MR. BARRON: That was done with an external consultant and the help of

executive and with advice from our senior members of our board.

MR. JOYCE: What was your increase, the CEO?

MR. BARRON: My increase?

MR. JOYCE: Yes. I could look it up there, but

MR. BARRON: Yes, I do not have it offhand, but my increase was

significant from my result.

MR. JOYCE: Can you ?

MR. BARRON: Well, once again you would have to get the dates and I could

get you the numbers.

MR. JOYCE: I could ask the Auditor General.

MR. BARRON: Yes, sure.

MR. JOYCE: I do not know if the Auditor General would have it close.

MR. PADDON: Let me see if I can find it here now.

MR. BARRON: Actually, my increase was (inaudible). I had a contract with

government initially as being the CEO. My compensation was changed as a result

of the increasing size and complexity of the Centre as opposed to the contract I

initially hired. As a result, the Board Chair at that time went out and got

professional advice as to what the compensation for a position of that type

should be.

MR. JOYCE: Sure.

My other question, I suggest to you that the information you gave here today

that you voted, you never, ever voted for any of this here. My suggestion is

that you get the minutes clarified.

MR. BARRON: Sure.

MR. JOYCE: The other thing, and this is a question, is in the next

meeting. At this meeting, why was it all made retroactive? Why would all the

increases be made retroactive? "retroactive to the date of the proclamation of

the" Centre for Health Information Act.

If you hire somebody today and you get hired on a certain pay scale, then all

of a sudden you approve a new pay scale, why would you make it retroactive to

everybody if everybody knew what they were hired and the compensation they were

getting?

MR. BARRON: The retroactivity would have applied to the fact that when we

became a Crown agency that is when the activity related to that particular

change occurred. Much like if you are applying for reclassification, for

example, in government and it gets retroactive to when you put in for your

reclassification, the rationale at the time, and once again it was not a sole

decision of the CEO as much as it was a conversation and discussion among board

members, and as well as how it is laid out in the minutes, that in fairness to

the people who were doing that work, it should be retroactive. So it was a

fairness principle, really.

MR. JOYCE: Okay.

Was it made retroactive once that was done?

MR. BARRON: I think so, but I would have to check that.

MR. JOYCE: Okay.

MR. PADDON: Yes.

MR. JOYCE: It was made retroactive?

MR. PADDON: That is my understanding, yes. It was, yes.

MR. JOYCE: Okay. We had this set up then we went ahead and asked the

minister for these huge increases. We did not get anything in writing. We went

back and gave the increase and we made it retroactive. Then you wonder why it is

a bit distracting to a lot of people that this is the procedure.

I want to go back to your other board minutes. I knew I got the information

on February 28, and I knew it was from the last meeting. If you go to Business

Arising on page 2: B. Fanning met with the minister on February 27. If you go

through the minutes there it shows that the minister would not approve it until

they had further consultations. Then B. Fanning meet with the minister on

February 27, and then on February 28 it was approved.

In our last discussions, and I am sure I can get the minutes of it, you

mentioned that Mr. Fanning met with the minister at the time, Ross Wiseman, who

said sure go ahead. He came back and said: Yes, sure go ahead. I spoke to the

minister, go ahead with it. I was not dreaming it. The minutes show that he did

meet with the minister the day before and he brought back to the board without

any written approval from the minister, he came back verbally and said he had

the okay from the minister.

I will check the minutes from our last meeting on it, but that is how it

happened. Just to clarify that for my own personal I am going to go to page

CHAIR: Mr. Joyce, we should go to Mr. Parsons now.

MR. K. PARSONS: Thank you, Mr. Chair.

I am just going to conclude this morning with a couple of observations. Like

I said the last time speaking here, it is going to be very interesting to see

what happens and where you have come from since the Auditor General's report. I

hope you guys understand that there are a lot of questions to be asked. I hope

you are going to be on the right track when it comes to all the compensation and

salaries in compliance with government policies and things like this.

Again, I am going to conclude by saying it has been very interesting,

probably the most interesting one we have done so far as the Public Accounts

Committee. I am going to be waiting to see what happens with the Auditor General

and where you guys have come from. I know there are a lot of issues here and

there are things that we would like to see put in place to make sure that the

compliance is there when it comes to different policies and things like that.

I am going to conclude, and thank you guys for coming here this morning.

Thank you very much.

CHAIR: Mr. Mitchelmore.

MR. MITCHELMORE: Thank you, Mr. Chair.

I am concerned, very concerned about the findings of the Auditor General's

report and the fact that the CEO would, in The Telegram over the weekend,

state that the salaries is a distraction basically, this whole Auditor General's

findings. It is quite clear that the Auditor General had found the Centre for

Health Information was not in compliant with policy, as well as the Department

of Health and Community Services. It has been articulated over and over again;

yet, the Centre operated on its own accord and it is costing the taxpayers a

significant amount of money.

It is very frustrating to take the viewpoint that this is a distraction,

because this is very important work that is being done here to make sure that

organizations within government that are funded by government are in compliant.

That is certainly the role of the Auditor General and a role of our Public

Accounts Committee, is to ensure that funds are spent wisely. They have to be

accountable for actions. It is good to see the Centre for Health Information is

taking action, but it is only taking action because it seems like it is forced

to. I need to see the legal documentation.

What I would like to see is what caused or what was the premise for this need

to have a new payee regime? In anything documentation has been put forward, you

are saying recruitment. What brought on that we need large pay scales for our

top management?

MR. BARRON: The need to bring on large scales was not just for top

management, and it was not about large scales. It was about paying the

appropriate scales to recruit the people that the Centre required to fulfill its

mandate.

MR. MITCHELMORE: But you did not recruit any new individuals for these

top management positions.

MR. BARRON: We had very qualified, competent people who grew with the

organization that were rewarded for being in that place of growth within the

Centre. Once again, that could never happen today, but they happened to be in

that place and showed the type of skill sets we required to fulfill and meet the

mandate of the Centre.

MR. MITCHELMORE: I assume it would never happen today because of the

findings of the Auditor General's report that has basically squashed any ability

of looking at such type of practice to continue with your organization, because

it is certainly something that was not willingly complied with. Do you agree

with that?

MR. BARRON: Well, no, it is your statement.

MR. MITCHELMORE: I guess I need to wait for the additional documentation,

but it is very unfortunate that Mr. Fanning is not available to be able to be

questioned by the Public Accounts Committee for clarification purposes on a

number of matters that were discussed before the board. It seems like we have

new board members and a new board Chair. When it comes to oversight and

accountability for our Public Accounts Committee, the original board members

during this whole process are not present in the room to get the answers I think

we need.

Is that something, Mr. Chair, that is possible, to look at requesting Mr.

Fanning to appear before the Public Accounts Committee?

CHAIR: Generally, any organization advances the people who have the most

or the best information, or who can make themselves become informed. In order to

compel attendance, we would have to go before the House of Assembly and

essentially have the House of Assembly make an order in the nature of a subpoena

that an individual attends.

When organizations show up for this type of a hearing, they advance the

people who either have the best information or the most information because they

do not really know what is going to be asked, or people who can become informed

from the organization because no one person would know everything.

Mr. Barron, I would think, is certainly the best or the most appropriate

individual. Maybe Mr. Fanning knows something more. Mr. Barron has been with

this organization for the last five, six, or seven years, so he has been privy

according to the documentation. He would seem to be probably the most

appropriate person and he is here; that is not to say you always get the answers

that you are looking for. On a few occasions he has indicated he would not want

to hazard a guess on what he is advancing.

If there is something he can refer to his files and provide the information,

then that is usually how that is done. The witnesses that are here, I am

satisfied they have the requisite information or the ability to obtain the

information so the Committee can be fully or adequately informed.

MR. MITCHELMORE: There have been questions that have been asked by myself

and particularly Mr. Joyce around the conversation and the lack of

documentation, the letter to the Minister of Health and Community Services. When

they had sought approval, Mr. Fanning had a meeting. The only person who could

actually speak to the direction given by the Minister of Health and Community

Services at that time would be Mr. Fanning, which led to a series of events from

the minutes and the documentation of this board meeting that ended up approving,

despite the Department of Health and Community Services representative voting

against it, which clearly indicates there was not support from the department's

side.

I think it would clarify a lot of issues if Mr. Fanning was available. He is

the only person who clearly could answer any of these questions when it comes to

what actually trickled down in terms of the aftermath. Now we are seeing that

salaries are much higher than the government norm, and there has been a lot of

legal fees and a lot of salaries, even with the rollback, the retroactive

amount.

Initially, when people were hired, they were hired based on that skill set,

that ability, and to do their job. Obviously, when they were doing their

original job, it is not the same amount of work as Mr. Barron has said with the

growth phase. Now I am the vice-president of a certain position, that is not

what you were hired to do originally and so you got a significant pay raise for

a different type of work and different scope. That is pretty frustrating.

Is there something you could clarify, Mr. Barron, on those comments?

MR. BARRON: The only clarity I can give you is that I was not privy to

the discussions between Mr. Fanning and the minister, and that I acted

completely upon the direction of the board at the time to do what we did. If at

times judgment is into question, well, judgment is into question; but everything

that was done was done for the right reason and for the purposes of fulfilling

the mandate of the Centre for Health Information, which was to improve where it

could the health system of the Province.

MR. MITCHELMORE: I think overall the only individuals who could provide

further clarity beyond Mr. Fanning would be the Minister of Health and Community

Services at that time, and if there were other individuals present at the

meeting. To go further with this, that is where the Public Accounts Committee

would have to go.

It is quite clear that your organization was not in line and had spent the

taxpayers' money in a means that is going to end up costing us. There are many

cases where there were not job competitions, and the payouts were higher when an

employee was terminated that did not apply. There are many findings in the

Auditor General's report that we had discussed previously.

We are seeing this too often, I think, when it comes to government agencies

and government departments, and that will follow through the rest of the week as

we have additional Committee meetings.

CHAIR: Mr. Mitchelmore, on that point, much and most of our work is

document driven and even if we had certain witnesses who became before the

Public Accounts Committee from five or six years ago or maybe even five or six

hours ago, there might be a difference of opinion over who said what. I do not

think whatever evidence that we could get from such a person would be reliable

for report purposes.

If we have an issue with not getting full and forthright information from any

witness and I do not detect that here then I think that would be something

that the Committee would probably deal with in an in-camera meeting and

determine where do we need to go from here.

Sometimes you can ask questions and you do not get the answers. Many times

you can ask questions and you do not get the answers. Many times you can ask

questions and the answers are not forthcoming for perfectly valid reasons. We

might not like those reasons, but it is whatever it is. I think, for our

purposes, we need to move forward this particular hearing with what we have.

I do not sense that we are not getting any information from Mr. Barron that

he does not have. If he knows it, he is telling us. If the document is there, he

is telling us. The other side of that coin is that we have minutes and minutes

are taken to reflect the record. The record, according to the minutes, says that

Mr. Barron voted on certain items and did not declare conflict and so on.

Somebody else would need to deal with that.

It is very difficult to overturn a five- or six-year-old document unless

someone can demonstrate that it clearly was a slip, but I do not think it is

helpful for us to try to pursue oral discussions that people may have had

surrounding information, if they are not available or not present. Even if they

were available and present, then we still would need to be weighing evidence and

I think that is beyond the scope of procedurally how this Committee operates or

any Public Accounts Committee would operate. It would be more like a court of

law, and that really is not our purpose. This is more inquisitorial and more

remedial.

Although having said that, the record indicates in 2005 the old organization

was before the Auditor General; but the nature of this organization changed in

2007 and, really, it only has a consistent history, from what I can see, of

about the last half a dozen years.

It has been problematic in some areas. It may have been people in good faith

moving forward on what they think they could have done or could not do, and that

is why we are here with the Auditor General. I would like to have you take

another couple of minutes because we have used up a fair bit of your questioning

segment and then move on to Mr. Brazil and Mr. Joyce and so on. Otherwise, we

will be here through the afternoon and maybe come back, and that is simply not

practical or efficient. There is nothing wrong with your questions; you are just

not given the answers you would like to get. There may not be a mechanism to get

them, but if there is we can certainly take it up as a committee.

MR. MITCHELMORE: Right. Thank you, Mr. Chair.

I would like to go back to the actual growth phase of the organization from

2007 and 2008 when it went from X number of employees to X number of employees.

There was a significant growth phase in 2008-2009 as you had discussed.

Primarily, that has been the Pharmacy Network project. Is that correct?

MR. BARRON: It has been numerous things. We have also taken on additional

projects that may not have had the same scope, but pharmacy certainly would have

had an impact on our resources.

MR. MITCHELMORE: Once the projects get implemented, staff that were

hired, were they hired on a contract basis or is there a certain amount of

maintenance? Will we see a reduction in staff at the Centre for Health

Information based on if projects are less or not? What is the outlook of current

projects?

MR. BARRON: That is typically what would happen. What we do when we do

these larger projects is we try to set the project up for sustainability, of

course. It is one thing to do the project, you cannot just walk away and hope it

stays there and runs fine and everything else. What we try to do as a strategy

is to get people trained throughout the project, who are part of the project

team, who will be actually used after the fact to maintain and sustain those

systems that are put in.

As we go forward, large projects depending on the financial capacity of the

Province, as well as Canada Health Infoway, because they have been a very

significant contributor to our capital investments. If those projects, the

nature of those types of projects, if the funding for those dry up there will be

less people required by the Centre, but we will maintain those people required

to once again maintain and sustain those systems that have been put in.

MR. MITCHELMORE: How many employees right now are part of your

sustainability piece to maintaining systems versus work on new projects?

MR. BARRON: It depends what piece of that maintenance you would be

discussing, but I would suggest that right now where we are in such a

maintenance mode and about to become even more in a maintenance mode when this

current project is over, I would suggest it could be anywhere from 70 per cent

or 80 per cent would be the part that we need to maintain these current

initiatives and systems that we have in place.

MR. MITCHELMORE: Right. So you could see a 20 per cent to a 30 per cent

reduction

MR. BARRON: We do not know, because once again, until you are faced with

that

MR. MITCHELMORE: - depending on other funds.

MR. BARRON: Until you are faced with that, you really do not know. It is

not just depending on other funds. It depends on what you are faced with at the

time when that comes up through the budgeting process with the provincial

government as well.

MR. MITCHELMORE: Have you had recruitment issues for current positions?

Are there vacancies?

MR. BARRON: We have several vacancies right now. The recruitment issue,

really, is that we do not know what to advertise for a salary for compensation

purposes. What we have been trying to do is trying to align when we get the

direction from government, and through that process to be able to do that. If we

needed somebody mission critical, we would try to find a way to do that.

MR. MITCHELMORE: What type of positions would be vacant?

MR. BARRON: Right now? Well, we have a Vice President of Clinical

Information Programs and Quality that is vacant. I can get that for you. We have

three or four positions, but the mission critical one right now would be that

Vice President of Clinical Information Programs and Quality.

MR. MITCHELMORE: Are they advertised externally of government?

MR. BARRON: Absolutely, unless it is an internal competition. Actually,

that job will be advertised this week. That person only recently vacated the

position.

MR. MITCHELMORE: Okay.

MR. BARRON: Every job right now follows the Public Service Commission's

process. We do the same thing that government does. Once again, we are beyond

that growth stage; we are into more normalcy.

MR. MITCHELMORE: What was that actual growth stage? The Centre would have

existed not in its entity, but it existed some time prior as an organization

under Eastern Health. What was the actual growth? That is too vague in my view

of talking about this growth phase. We had this growth phase where we have

employees, we had to increase salaries for top management, but the rest of the

average of employees who were hired received a very nominal salary increase in

comparison. I would just like for you to explain the growth phase.

MR. BARRON: Well, the growth phase was from day one, essentially, if you

want to go way back. The Pharmacy Network project itself was the huge impetus,

which would be around 2005 in which it started. Then it exploded a bit in 2007,

particularly with the additional activities required to create a Crown agency.

MR. MITCHELMORE: In 2007, with the Pharmacy Network, that was basically

where you got your Infoway funding?

MR. BARRON: A significant portion of that project would be Infoway, not

all of it. Obviously, the provincial government would be responsible. It is an

investment fund. Once again, it is not a grant.

MR. MITCHELMORE: When did that project get to a point that it was near

completion? It is implemented in the majority of pharmacies and whatnot now in

Newfoundland and Labrador, correct?

MR. BARRON: No, it is about 40 per cent right now.

MR. MITCHELMORE: Forty per cent.

MR. BARRON: It continues to be tweaked because it is a national leading

system. We still have some issues with the national standards that we are trying

to implement but certainly the project itself while the capital funding

component of that project is complete, the ongoing sustainment and deployment of

the network, the resources required for that are still in place.

MR. MITCHELMORE: What is preventing it from getting to the other 60 per

cent?

CHAIR: Mr. Mitchelmore, we should move to Mr. Brazil now. That was a

fairly long session because we had that exchange.

Mr. Brazil.

MR. BRAZIL: Thank you, Mr. Chair.

After reviewing and listening to the other questions, I am still comfortable

we are on the right track. I am just waiting for the conclusion at the end from

the Auditor General to make sure that he is comfortable.

CHAIR: Mr. Parsons, do you have any questions?

MR. K. PARSONS: No.

CHAIR: Mr. Cross.

MR. CROSS: In my last comment, I asked about what was being done today,

what was the current practice. At this point, I notice this has been a very

complex issue and the report of the Auditor General 2012 flagged many items. I

guess the period of reaction is there now and the review will come in 2014.

The period of time between the report and the review is the time of what

reaction has taken place. At this point, I see it as a going forward thing and

needs an element of optimism that things are going to work out but if things are

not positive or optimistic in 2014 when the Auditor General reviews, I guess we

will probably be back in this room again.

I would like to thank the people who came to represent the organization and

the Auditor General's department for their candour and their time. I respect the

right of others to ask more questions.

CHAIR: Mr. Joyce.

MR. JOYCE: I am just going to ask a few more and I will have a statement

at the end.

In the minutes of the meeting February 28, 2008, it says the Centre was

contacted by the minister requesting that action be held pending additional

discussion. Was that a verbal contact, written contact?

MR. BARRON: I would not be aware of it. I would not have had contact with

the minister.

MR. JOYCE: The letter was copied to the board of directors. The Centre

was contacted by the minister requesting that action be held. That was discussed

at your board meetings. You, as a board member, do not know what type of contact

that would be?

MR. BARRON: I am pretty sure it was personal contact because there is a

line there that says that Mr. Fanning met with the minister on February 27.

MR. JOYCE: That was after, yes. I know he met with the minister, but it

says here that the Centre was contacted by the minister requesting action be

held, pending additional discussion.

You are not aware, as a board member, if it was brought to the board in

writing or by a verbal request. You are a board member. You were a board member

at the time.

MR. BARRON: I am not aware of any actual documentation. I assume but do

not know that it was a verbal communication between the minister

MR. JOYCE: Can we find out? Because if there was a letter written, there

might be some information in the letter. If it was verbal, who did he speak to?

In the minutes of the meeting, there has to be something if the minister is

saying hold off, pending further discussion, for a board to hold off, there has

to be some documentation of what type of contact it was, what was in the letter,

why it was held off. There has to be something. You just do not put it in the

minutes and say oh, we do not know, as a board member and I will just use you

for an example.

MR. BARRON: As a board member, I am not aware of a letter.

MR. JOYCE: Okay.

Are you aware who he spoke to then?

MR. BARRON: Who Mr. Fanning spoke to?

MR. JOYCE: No. At the minutes of the meeting there, the Centre was

contacted. Who at the Centre was contacted?

MR. BARRON: I would assume that would have been the board Chair.

MR. JOYCE: You assume? Okay. So, once again, we do not know.

The Centre was contacted. So, he contacted the board, not the Centre, the

Chair of the board?

MR. BARRON: I am sorry. Was that a question?

MR. JOYCE: Yes, it was a question.

MR. BARRON: What was the question?

MR. JOYCE: The question was you assumed he contacted so, we do not know

what the conversation was and you are assuming there was no letter written back.

MR. BARRON: I am not aware of a letter.

MR. JOYCE: Okay.

Can you just check for us later?

MR. BARRON: Yes, and we have in the past, actually, with the Auditor

General, too.

MR. JOYCE: There was no letter from the minister?

MR. PADDON: All I can say is that we had asked the Centre if there was

any response or a copy of the letter and there was none available, so we would

assume that there is none.

MR. JOYCE: Okay. That is another one that the minister calls and says,

the next day, that B. Fanning met with the minister on February 27 and said

everything should go ahead, and nothing in writing.

In the next column in the same minutes, page 2, L. McDonald requested that

consideration be given to approve retroactive pay to April 27, 2007 for the DHCS

bargaining unit employees.

I will not read it all. Was that ever followed through?

MR. BARRON: To my knowledge it was, yes.

MR. JOYCE: Okay.

MR. BARRON: We had a certain amount of people who were part of the early

goings of the organization who were actually taken from the department or placed

by the department into the Centre.

MR. JOYCE: My question to you or to the board: If that was followed

through, how do you know you had the best candidate if you just got people

coming over to do a certain job at your Centre? There is a huge increase in pay,

and instead of going out and advertising these positions where there was a

possibility you could get more qualified people, the board just said: Okay, we

will just give all you guys a pay increase without advertising any of the

positions or going out where there is a higher pay scale. How can you justify

that?

MR. BARRON: These people came from the Department of Health and Community

Services back in the early days of the Centre. These people were operating under

the auspices of whatever bargaining unit contract they had. Now, the Centre

comes under well, this is probably previous anyway the Labour Relations Act,

not the Public Service Collective Bargaining Act. Those particular employees

were with the Centre for some time. Once again, we were working off of health

care corporation in terms of getting our administration and all of those things

done.

What happened was, when we became a Crown agency, the offer was made to those

people: Do you want to continue with the Centre? If so, you would become part of

the internal equity required underneath an organization-wide compensation

regime. That being the case, that is why they would have been offered that.

Those jobs were not there to be advertised. If those people determined they

did not want to remain with the Centre because of the different status that it

would give them, they had the option of going back to the department.

MR. JOYCE: So if you brought someone over at a certain pay scale, if you

increased the pay scale and instead of advertising that position because you may

get more qualified, you said, no, we will just give it to you because you are

already there.

MR. BARRON: We used our judgment at the time to determine that those

people were deserving of that offer, yes.

MR. JOYCE: So there was nothing concrete except your judgment that these

were the best qualified people for these positions?

MR. BARRON: That was not the factor that was taken into consideration.

The factor that was taken into consideration was that they were effectively, if

not legally, employees of the Centre, and that is why they were made the offer.

MR. JOYCE: It is a good one.

I will go on now to the Auditor General's report, page 184. I just have a few

more questions. Page 184, the second paragraph, "A Technical Manager's personnel

file contained no request for salary adjustment. However, there was

documentation on file from the CEO giving the employee a 3 step increase on the

pay scale because this is a retention issue and based on their 20 years

experience as a provincial leader in health information technology'."

Now, excuse me for asking, but usually if someone wants a job

reclassification should they not usually fill out some kind of form, or is it

just like the CEO, which I assume was you at the time, just going okay, we are

going to give you a three-step increase without applying for it, without asking

for it, without doing the proper documentation? Is that correct, what happened

here?

MR. BARRON: What happened there was a pressure on the resources of the

Centre to keep those qualified people. There was certainly pressure that may not

have always been documented. Certainly our job, and certainly the job that I, or

the challenge that I presented to the board when they approved these particular

moves was to ensure that we did not lose those key, hard-to-recruit senior

executives at a time that was crucial to the development of the Centre as a

Crown agency but yes, you are correct. If something like that happened today,

there would certainly be a formal request and there would be a formal approval

process that would be followed. It would be exactly the same as what you would

find in the provincial civil service.

MR. JOYCE: I go to page 185, "Centre employees requesting a

reclassification shall first submit a request to the Job Evaluation Committee,

which is an internal committee set up by the CEO for the express purpose of

evaluating and rating jobs within the Centre. That request shall include a

revised Job Fact Sheet".

You set it up for a reclassification, but for some reason if you see someone

in a position you say, okay, I am going to give you a three-step increase

without even applying for it. You say it is retention, yet this person never

even asked for the increase, never even asked for a pay increase, never even

asked to be reclassified.

MR. BARRON: It was not documented that it was a retention issue, but it

was certainly a retention issue or it would not have been done.

MR. JOYCE: Obviously we see a few things with the documentation

MR. BARRON: It would not have been done if it was not necessary for the

good of the Centre.

MR. JOYCE: We look at the documentation here, board meetings that you did

not exempt yourself from, this is not documented I ask the Auditor General,

and again, I will not harp on him, because I think we have the point very well

made: In your findings here, did you see some places that asked for

reclassification and others did not, or it was just?

MR. PADDON: Yes, there would have been instances where the documentation

was in place where it went through the process that was set up. The instances we

report here in the report are, by and large, instances around documentation or

lack of documentation.

MR. JOYCE: Okay.

On the bottom of that page again, "On June 30, 2011, the CEO informed the

Chair of the Board that he recommend we move three of our executives up the

current scale to more accurately reflect their relative experience and

responsibilities as per the Hay Classification system, This is not a

reclassification but an upward move on the current Hay Level salary

classification.' These three salary increases were retroactive to May 1, 2011.

Centre officials are unable to provide documentation required by Centre policy

to support these salary adjustments."

Were there ever any documentation put on it to support these salary

adjustments?

MR. BARRON: Documentation for (inaudible) the Chair of the Board

outlining the issues that we have with maintaining and keeping those people. The

Hay level system, as opposed to what some people may think it is the Hay level

system is meant to give a range of salaries based on the experience and

expertise of individuals and their relative going