September 21, 1994

PUBLIC ACCOUNTS

COMMITTEE

The committee met at 2:00 p.m. in the Legislative

Chamber of the Colonial Building.

MR. CHAIRMAN (Windsor): Order, please!

I would like welcome the witnesses from the

Department of Education, and thank them for coming here today to participate in

these hearings.

The Public Accounts Committee hearings are a little

less formal than in the House of Assembly, although it's a Standing Committee of

the House. We operate under the same rules and procedures, basically, as does

the House of Assembly, but we are a little less formal, so you can make

yourselves comfortable, as I have. There is coffee available. We will take a

coffee break mid-afternoon, but feel free to help yourselves.

We are here simply to gather information and to

report back to the House of Assembly - nothing more than that. This is not a

trial, by any stretch of the imagination - although you may feel that it is,

that isn't the purpose of the committee. The purpose of this committee is to

enquire into matters presented through the Auditor General's report, or referred

by the House of Assembly, or other matters that the committee, itself may feel

are worthwhile of its consideration.

This afternoon we will be looking at the Department

of Education and a number of issues that were referred in the Auditor General's

report. I will introduce the members of the committee for, particularly, the

witnesses who are here for the first time.

To my right is Mr. Danny Dumaresque, the

Vice-Chair; Mr. John Crane, MHA for Harbour Grace; Mr. Oliver Langdon, MHA for

Fortune -Hermitage; Mr. Melvin Penney, MHA for Lewisporte; Mr. Glenn Tobin, MHA

for Burin - Placentia West, should be here shortly; and Mr. Alvin Hewlett, MHA

for Green Bay, had to leave to go his district for an urgent meeting. I'm Neil

Windsor, MHA for Mount Pearl and Chair of this meeting.

I will first of all ask the Clerk - probably I

should ask everybody else to introduce themselves. I'm getting ahead of myself.

I welcome, Ms. Marshall, the Auditor General, and ask her to introduce her

staff.

MS. MARSHALL: Thank you, Mr. Chairman.

To my right is Mr. Bill Drover, Audit Principal

with the office, and to my immediate left is Mr. George White, Audit Manager

with the office.

MR. CHAIRMAN: Thank you very much.

Welcome, Dr. Williams, the Deputy Minister of

Education.

DR. L. WILLIAMS: Thank you, Sir.

I am Len Williams. On my right is Florence Delaney,

the Assistant Deputy Minister of Finance, and I have Mr. John Thompson and Mr.

Gerry Adams from the Department of Education.

MR. CHAIRMAN: Thank you very much.

As I said, we operate under the rules of the House

of Assembly, and information is given under oath, so we have to ask the

witnesses to be sworn in; therefore, I ask the Clerk, if she would, to swear in

those who have not been here before. The Auditor General and her staff are

already under oath. Unless you've been here in the last six months, you need to

swear.

SWEARING OF WITNESSES

Florence Delaney

Leonard Williams

John Thompson

Gerald Adams

MR. CHAIRMAN: Thank you very much. For the benefit

of Hansard, that bang you heard was Mr. Tobin arriving, banging his briefcase on

the table. For the record, I introduced you, Mr. Tobin, a moment ago and said

you would be here shortly. For the record, Mr. Tobin has now arrived.

Again, for the benefit of the witnesses, we are simply

gathering information. If you don't have the answer, you can certainly take

notice of it. The question may be directed at you, Dr. Williams, as the head,

but it could be directed to any one of the witnesses. Feel free to refer to

whoever you wish. Again, if it's a detailed answer that's required you can feel

free to take notice and provide that to the committee at a later date.

We will begin now; I'll go back to our old procedures.

This morning I bypassed the - I have been, I will say for the new witnesses,

ever since this committee was formed, giving both sides an opportunity to make

an opening statement. I decided this morning to bypass that because it seems

somewhat repetitious. Information that was provided generally was what was gone

through, and I was soundly chastised by both sides because they had made a

special effort to come up with something new and provocative.

I will now ask the Auditor General if she would care

to make an opening statement to introduce this particular topic.

MS. MARSHALL: Thank you, Mr. Chairman.

During the -

AN HON. MEMBER: (Inaudible).

MS. MARSHALL: You're going to say now it's

provocative.

During the 1992-1993 fiscal year, $566 million or 16

per cent of total government expenditures were provided to school boards for

primary, elementary and secondary educational programs.

The Schools Act and departmental policies of the

Department of Education include several provisions which establish an

accountability relationship between the Department of Education and the school

boards which it funds.

School boards are required to submit audited financial

statements, interim financial reports, annual reports and management letters to

the department. In addition, the department has committed to enhancing the

accountability process through other means, such as the establishment of an

internal audit function for school boards.

As a result of our review we concluded that there have

been improvements in controls exercised by the department over the payments to

school boards; however, several issues were identified that require additional

work by the department, and these have been identified in my report to the House

of Assembly.

Included in my comments is my recommendation related

section 18 of the Schools Act. This

section of the act requires school boards

to report annually to the Department of Education on the educational programs of

their board. At the time of our audit, which was January, 1993, eleven of

twenty-seven school boards had not filed annual reports with the Department of

Education in compliance with this

section of the act.

School boards deliver significant educational programs

at significant cost. The reporting requirements defined in the Schools Act are a

major component of the accountability process, and the department should ensure

compliance with the act.

In addition, although not provided for in the act, I

am recommending that the accountability process include an annual report by the

Minister of Education to the House of Assembly on the performance of the

department and the educational institutions funded by the department. A report

by the minister to the Legislature is a critical part of the accountability

process, and would significantly enhance the existing framework.

There were two additional areas that we looked at

during our audit. One was the new grant system implemented in 1992, and we

concluded that the department implemented that system prior to complying with

two conditions of the Minute of Council.

Firstly, the department had not prepared new or

amended regulations prior to implementing the new grant system, and this was

required by the Minute of Council.

Secondly, the Department of Justice had not determined

the constitutionality of the new grant system in light of Term 17 of the Terms

of Union with Canada, and again, this was a requirement of the Minute of

Council.

In addition, the department was not in compliance with

the Schools Act which requires that grants be paid to school boards on a

non-discriminatory basis. The department funded some schools in excess of their

entitlement under the new system while nineteen boards were funded less than

their entitlement under the new system. With respect to the review of the pupil

transportation grants for school busing totalling $29 million, we concluded that

the system of control was inadequate. We recommended that the department review

the transportation of pupils regulations and relevant legislation to insure

compliance. We also recommended that the department implement proper controls

including efficiency audits.

Thank you, Mr. Chair.

MR. CHAIRMAN: Thank you very much.

Before passing to Dr. Williams to make a presentation,

I neglected to point out that we need you to speak clearly into the microphones

and if I fail to identify you, identify yourselves for the benefit of Hansard,

who have to identify those who are speaking.

Dr. Williams, if you would like to make an opening

statement.

DR. WILLIAMS: Thank you, Mr. Chairman, and members

of the committee. I should like to say first, as a new senior civil servant,

that the Auditor General's report and appearance before this committee lends

considerable legal and moral authority to the department in dealing with third

party or agencies at some arm's length from the department. Having met yesterday

with college presidents, it is interesting when you are talking about new

directions or accounting for past directions to be able to say that you do have

to give an accounting.

I would like to take a few moments to comment briefly

on the points raised by the Auditor General in the report, and I am going to

follow the notes and then would welcome later the opportunity to pursue further

in questioning.

The major thrust of the Auditor General's report

pertains to the financial management control system over transfer payments. I

want to say that the Department of Education recognizes that a significant

portion of our funding is budgeted for transfer payments to third parties, and

the department must ensure that third party agencies are more accountable to the

Department of Education for their expenditures.

With respect to the specific issues raised, I would

note the following: number one, The Receipt of Financial Statements. The

department has taken steps to ensure that financial statements are received from

all school boards. However, in most cases, they are still not received by the

specified date of September 2 in the legislation. We note that the school year

doesn't end until June 30 and then you are into summer holidays, and the

response generally is not possible to get by September 2, these statements, so

we propose to change this date in the new schools act. We are certainly not

going to change compliance with the intent.

With respect to bonding coverage, procedures are now

in place to ensure that all audit reports contain an opinion on the sufficiency

of the bond coverage. The third reference to annual reports, most school boards

are now submitting an annual report, however, we have not prescribed a specific

report. It is interesting, because when I read the Auditor General's report, I

met with the senior people of the department to ask: What report are we talking

about? because we receive any number of reports from school boards, the most

significant are two, very significant; one would be the annual general return

which would give us the statistical basis to deal with the system and, of

course, the financial accounting. In addition to that, school boards prepare

their own very comprehensive reports, but in terms of a specific form which

would be a number of pages cataloguing specific topics, there is not a report,

and we are now taking steps to address that.

The withholding of payments: While the Schools Act

states that a board should not receive further payment from grants if the

financial statements are not received by September 2, the withholding of funding

from the board is not a realistic position or method for dealing with

non-compliance. Obviously, the school system must operate and in order for it to

get about its business in the new school year, the withholding of the funds

would simply be impossible in terms of operating it, but we do intend to address

this issue in the new Schools Act and have moved on that.

The fifth point, management letters: We have now taken

steps to ensure that copies of management letters are forwarded to the

Department of Education, and if the letters are not received with the financial

statement, we will proceed immediately to follow up and attain them and get

them.

The interim financial report: The Department of

Education had intended to implement this for the 1993-1994 school year. As a

matter of fact, we moved to put procedures in place to receive interim financial

reports from the colleges and that is now in process and in place. However, we

did not move with the new school boards, we now intend to address this issue in

the 1994-1995 year, but I do note that for the 1994-1995 school year, all school

boards were asked to submit a budget to the Department of Education. Indeed, the

whole area of budget submissions, budget monitoring and budget allocations is

under review.

The seventh point we noted is with respect to

guidelines for dissolving and combining school boards. School boards are

combined or dissolved upon receipt of a request from the respective DEC,

Denominational Education Council. This request, in turn, is routed to Cabinet

and a decision gazetted - that's the process. I am not sure as to what the

Auditor General would like to see further than that, or why guidelines are

necessary, but we can raise that one.

MS. MARSHALL: I am looking for things such as: if

you are dissolving school boards or splitting them up in some manner, what

guidelines are there for maintaining control over things like fixed assets? We

found with some of the school boards which had been reorganized, you have so

many fixed assets going in different directions, and I would like to see control

maintained over those assets.

Other issues would be staffing - some of the school

boards were reviewed, they changed their staffing and some of the staff were

given significant pay increases. So it would be things of that nature.

DR. WILLIAMS: Thank you. I fully agree. Because of

consolidation with declining enrolments, there is a concern with the employment

of staff and the kinds of contracts given, and obligations which we will have to

look at.

Basically, the point on that is that school boards are

creations of the DECs and our guidelines at the present time will have to be

advisory guidelines with respect to the kinds of contracts they enter into. One

of the things we are following on is what obligations have boards entered into

which would not be covered by pertinent - or regulations at the existing time.

MR. CHAIRMAN: If I might interrupt you, Doctor,

that, I think, is a very important point here. You are telling us that you don't

have that kind of legislative or legal authority over these boards that are

created by DECs. Your authority is over the DECs, and they, in turn, have

authority over the boards. There would appear to be a weakness in legislation.

DR. WILLIAMS: The education act says that school

boards have the right to enter into contracts with their employees.

MR. CHAIRMAN: Yes, with the employees.

DR. WILLIAMS: So we have to look at the nature of

that right, the extent of that, in terms of practice.

MR. CHAIRMAN: Very well. Continue.

DR. WILLIAMS: The next point I would move to is

legislative reporting requirements. With respect to the submission of annual

reports to the House of Assembly, this really is an issue that goes beyond the

Department of Education. While we have brought it to the attention of the

minister, it is really an issue that should be raised, I suppose, with Treasury

Board or Cabinet.

MR. CHAIRMAN: Actually, we dealt with that issue

this morning with the Department of Health, as well. Really, that is the

conclusion we have come to. I guess most of us, as members of the House, found

it quite amazing that there is no requirement on each department to report. You

are looking at hundreds of millions of dollars of expenditure of taxpayers'

money and you are not required to report on your performance, your mission plan,

the financial accountability - you are not required to report to the House of

Assembly. I think most of us were amazed this morning to realize that. Many

departments do, in fact, issue annual reports and have been doing so for a

number of years, but I guess not all are.

That is an issue the committee will deal with at a

separate time, so perhaps we won't waste a lot of time on it this afternoon,

unless members of the committee want to deal with it. I think we dealt with it

adequately this morning, and we will be dealing with it ourselves in a separate

meeting.

DR. WILLIAMS: Thank you. Board deficits: The

department has taken steps to ensure that current deficit levels do not

increase, clearly. As well, we are working on a plan with each school board,

each of the twenty-seven, to eliminate the deficits at the present time. The

minister's letter of '93-08-06 advises boards of their 1993-1994 funding

allocations, and we stipulated in that letter that boards cannot incur a deficit

in this current fiscal year. We are working with boards to ensure that they

comply with that, Mr. Chairman.

The verification of student enrolments: We agree with

the Auditor General's concern in this particular area. The figures that are sent

to us can change significantly and, of course, as a result of that so, too, the

funding and financing of the system. We will establish for this school year,

1994-1995, a process to verify. It may be a selective verification in the

beginning, simply because of the sheer enormity of the task, to be able to go

into each school to verify that the students are there. As you can appreciate,

we allocate teachers to the school boards and we will work with boards in a

selective way to verify in selected schools, enrolments that they attest to, to

see that student X is in that school. That will be part of our internal audit

functions.

The eleventh point, with respect to reports and

statements from the Denominational Education Committees: We have taken steps to

ensure financial statements are received from the DECs on a more timely basis.

However, we have not taken any steps at the present time with respect to the

form or the content and the use of an annual report. Certainly, it is our intent

to move to a further consolidation of these councils and we will see what

transpires within the next few months or a year. The councils, themselves

recognize the need and the opportunity for further consolidation in their

activities.

The new grant system: The Department of Education

received a legal opinion with respect to that new grant system. In addition, we

received a draft copy of the regulations from the Department of Justice and, in

light of the legal opinion, some changes were required to the grant system

retroactive to July 1992. These changes have now been finalized and we should be

in a position to obtain approval of the proposed regulations.

The non-discriminatory treatment for 1992-1993: We

have taken steps to ensure that grants paid to the school boards in 1992-1993

are adjusted and this will be reflected in proposed regulations.

My final comment will be on pupil transportation

grants. This is probably one of the most contentious and complex. The Department

of Education has not defined the term `non-discriminatory' in this area. I think

it fair to say that what we have done is put together, in consultation with the

significant partners in the system, an informed but rather arbitrary working

definition. We have taken steps to address potential deficiencies in school

board grants. This year now, this present Fall, we have three major studies

ongoing with school transportation. We are going to be looking at busing in St.

John's, we are going to be looking at busing of handicapped or special needs

children, and we are going to be looking at board-operated busing systems. All

three of these reviews will take some time to complete but our intent is to

ensure that the transportation system is not only operated as efficiently as

possible but that it provides the best benefit to those who have to avail of it.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Williams. No doubt we

will get into those items in more detail as we go through but perhaps now we

will begin the questioning. Mr. Crane, would you like to begin this afternoon? I

have to go make a phone call and I'll be right back.

MR. CRANE: We will begin with busing - very

crucial in our area. You're talking about some of the things you are doing, and

I had one thing come to me the other day that I noticed you didn't cover there

and it hasn't been covered with the board in Avalon North: There is a group of

students from various schools who are all going to Holy Redeemer School in

Spaniard's Bay, doing french immersion, and even though some of those travel on

the regular buses, the buses going to the school, they have to pay $200 a year

per child I think it is, while everybody else travels free. It is not an extra

bus, it's a bus going by the school, and it has plenty of seats for the

students. Now, it can't take all of the students, because some of them are

coming from Trinity Bay, but I'm talking about a segment of students who are

going from where the bus leaves, to the school. The bus is bypassing the school

and they're paying $200 a year per child. To me, it sounds very, very strange.

If there were no bus there, then that would be a different matter; if you had to

put on an extra bus, that's a different matter, but they are arriving with their

friends, the students who are not in a french immersion class and who are paying

nothing. The regular students pay nothing but the french immersion students pay.

Their families have to pay - I know one family now with two students, paying

$400 for the winter.

MS. DELANEY: I can't respond to this specific

situation but I can say - and Gerry you can correct me if I'm wrong now, because

you're closer to the busing than I am - we do have a policy whereby if it's an

optional school or an optional program, that the child has to pay his or her own

way to get there. Because we have situations now where, with respect to busing,

the boards have been lenient and allowed children to get on a bus, and the child

may live less than 1.6 kilometres from the school. They may say it's no extra

cost because the bus has to go that way anyway but the problem occurs when other

kids all of a sudden become eligible for busing and then we have to say to those

kids who were previously bused, you can no longer get on the bus. Do you follow

what I'm saying?

MR. CRANE: Yes, I can see that point, but that

point is not covering this group of kids - they are further than 1.6 kilometres.

There's no doubt about it, if they were going to that school, not doing french

immersion, they would get on that bus, go to that school, and there would be no

problem. The only difference between these kids and the other kids is that these

are doing french immersion. They live 4 or 5 kilometres from the school.

MS. DELANEY: It must be a situation - unless,

Gerry, you know the specifics - but normally, we will bus to the designated

school and the board has the option, the board has the right, as a matter of

fact, to designate which school a child will attend. If the board has not

designated that school for that particular child, then there should be no busing

provided for those children.

MR. CRANE: The reason why the school board hasn't

wouldn't be going to that school, they would be going to another school, closer

to their homes.

The fact I am getting at is, you know, on one side of

the coin we are pushing children - and I say, actually pushing them if they want

to get into french - to become bilingual; and here we have a group of kids who

figure they can do it and we are throwing a stumbling-block in their way when we

say, because you are going into a french class, you have to pay for it.

MS. DELANEY: I will have to check. I will agree

(inaudible).

MR. CRANE: Well, I have gone to the school board

about it and I know they are not going to do anything about it, but I am just

saying, it sounds very, very, unfair to me.

DR. WILLIAMS : Is the school operated by the same

school board?

MR. CRANE: Yes, it is the Holy Redeemer School in

Spaniard's Bay and the kids come from Upper Island Cove, from the St. Peter's

School area.

MS. DELANEY: We can check the specifics.

Basically, what I outlined here earlier was just a general policy that we have.

MR. CRANE: I know there are some people going to

that school from Trinity Bay where there is no bus transportation so they have

to find their own way. Everybody knows that's in the plan but the

part I can't

understand is if there is room on those buses and they go to that school, and

there are no extra stops for picking them up, why in the world -

DR. WILLIAMS: The logical questions are the most

difficult to respond to.

MR. CRANE: Anyway, if you get time in your busy

schedule -

DR. WILLIAMS: Yes, `will do'.

MR. CRANE: - you can talk to somebody. Perhaps Dr.

Trask will have a good explanation and he might give it to you.

Anyway, getting into some other notes on busing - the

Auditor General noticed that the department funds different school boards based

on adequate public transportation available and she calls this practice

discriminatory. How do you react to that?

MS. DELANEY: In essence, the only place where we

are not providing busing is primarily in St. John's.

MR. CRANE: That's right, yes.

MS. DELANEY: And that's because there is a public

transportation system within St. John's but for most of the other areas of the

Province we are providing busing where a child lives in excess of 1.6 kilometres

from the designated school.

MR. CRANE: The Auditor General also found that

section 4 of the act on busing is not consistent with the Public Tender Act. How

do you work around allotting bus runs?

MS. DELANEY: We have two types of busing systems.

One is a board-operated system and the other is a contracted system. In the case

of the contracted system, all those contracts have to go to public tender.

School boards are required to comply with the Public Tender Act, as are our

government departments, so they are required to go to public tender for the

awarding of the busing.

Now, some of these contracts also have a clause in

them with respect to renewal. A contract may initially be for one, two, or three

years and some of those contracts also have an option to renew, so a decision is

made at renewal time as to whether we will renew or whether we will again go to

public tender, but they all do go to public tender.

I shouldn't speak for the Auditor General, but the

problem, as I understand it, is that our regulations may not specifically state

here and now the policies that we are actually following.

MR. CRANE: May I ask the Auditor General to

comment on that, please?

MS. MARSHALL: When we reviewed some of the school

boards - I cannot remember specifically which ones they were - some of them had

contracts, I believe, that were entered into back in the early 1980s, wasn't it,

`George'?

MR. WHITE: Yes.

MS. MARSHALL: And they had continually renewed so

now they were being renewed for the eight, ninth, or tenth year, or whatever.

The problem we had with that was that the Public Tender Act had come into being

after that initial contract had started up in the early 1980s and we felt that

the continual renewal of this contract over a lengthy period of time wasn't

within the spirit and intent of the Public Tender Act.

MR. CHAIRMAN: Is that not a clear breach of the

Public Tender Act? As I understand it, in the Public Tender Act, you can only

renew if the original contract has a renewal clause in it. Or are you saying

that these old contracts had a renewal clause? And even if they do, I would

suggest it is clearly outside the spirit and intent of the Public Tender Act,

continual renewing for ten years.

MS. MARSHALL: My recollection is that they had the

renewal clause within the agreement and there was no time frame. Some of the

agreements say you can renew up to another three years without going to tender

but these were indefinite and they just kept going on and on.

MR. CHAIRMAN: The Public Tender Act was in place

before 1980.

MS. MARSHALL: The existing act came into being in

1987 or 1988. I believe we mentioned that at a previous committee hearing.

MR. CHAIRMAN: It amazes me that a contract was

entered into since that time that had an open renewal clause. Generally it may

be renewable for one or two years, or maybe renewable for one or two additional

years, one year at a time, but not open-ended.

MS. MARSHALL: Yes, we have come across them

open-ended.

MR. CHAIRMAN: You have multi-year ones?

MS. MARSHALL: Yes, and because we have looked at

so many school boards, I can't remember if we already reported back to the House

or if it will be in one of my future reports, but there were school boards,

though, with the indefinite renewal clause.

MR. CHAIRMAN: It's amazing. I'm sorry to

interrupt. Mr. Crane, continue.

MR. CRANE: I guess maybe -

MR. CHAIRMAN: Did you want to respond, Ms.

Delaney?

MS. DELANEY: Yes, if I may. I would have to say I

don't disagree that if we have situations where contracts have been in place for

ten years and have been renewed on an annual basis that those contracts should

now go to public tender.

I mean, I have some concerns, as well, with annual

renewal of contracts, even though the original contract may have provided for a

renewal clause, so if we have those situations, I will take it upon ourselves

here now to ensure that those contracts do go to public tender.

MR. CHAIRMAN: Well, within the spirit and intent

of the act, I don't think you have any choice, quite honestly.

MS. DELANEY: No.

MR. CHAIRMAN: I'm amazed that it has been allowed

to continue this long. It is totally outside the spirit of the Public Tender

Act.

Mr. Crane.

MR. CRANE: The Auditor General also found

inconsistencies that were not in compliance with the regulations, and she listed

some of them - more than four stops per mile, pick-up within walking limit to

the school, bus service in areas serviced by public transportation. What I would

like to know is if you have done anything to correct any of those questions

she's asking?

MS. DELANEY: I guess that is one of the reasons

why we have started these reviews. We recognize that there are cases where

boards may be picking up children who are less than 1.6 kilometres from the

school, and as well where there may be more than four bus stops within a mile.

It is our intention, as I said earlier, or as Dr.

Williams said earlier, we have efficiency reviews right now ongoing of all our

bussing systems to identify areas where the boards are not complying with

regulations, and as well, to identify where we can introduce double runs to

reduce our cost for the public transportation system.

MR. CRANE: Yes. Can some -

MS. DELANEY: But it means, to pick this up - if I

may, Sir - that we are sending people out into the field and, in actual fact,

you have to follow the bus runs. You have to determine that a particular child

is getting picked up within a distance that's less than 1.6 kilometres from the

school, so you need a team of auditors to go out and pick this up.

MR. CRANE: Okay. Have you looked into the

consolidation of boards? I know, out our way you have buses going about seven

ways to Sunday - there's one going this way, and you're meeting one going this

way, none of them overloaded, only in a couple of areas where they might all be

full.

Say, in Brigus, coming off Roaches Line, you get a bus

going to the catholic school system and you might get another bus coming down

the same route right behind him going to a protestant school system in the area.

I'm sure the boards haven't tried to consolidate them and put them together - I

don't think, because there's one heck of a lot of buses running in that area,

and I am wondering if the Department of Education has ever put a push on to try

to get the boards to co-operate with each other?

DR. WILLIAMS: Let me respond to that one, if I

may.

MR. CRANE: Yes.

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: When I came in as deputy, one of the

first things I got involved in - I suppose one of the first, but one of the most

tormenting ones, was in your district, in your area, with respect to trying to

consolidate, get two denominational boards to agree on a joint busing contract,

and never shall the twain get together, to put it bluntly. Those young people in

Bay Roberts had to bused over to - not Brigus, but -

MR. CRANE: Coley's Point, or -

DR. WILLIAMS: No, the name escapes me, and the

reverse, so we were picking up young people -

AN HON. MEMBER: Spaniard's Bay.

MR. CRANE: No, they were going to North River, I

guess.

DR. WILLIAMS: Bay Roberts and -

AN HON. MEMBER: Brigus.

DR. WILLIAMS: It was Brigus, yes, Bishop O'Neill

School in Brigus. We would have saved considerable amounts of money had we been

able to get the two to agree, and we never did get them to agree, and that's

reflective around the Province.

Now, having said that, we have as many as five boards

in certain parts of the Province coming together to say we can save considerable

amounts of money if we go together and operate on contracts, so that's what has

led primarily to the thrust that we're on to with assessing. Considerable

savings can be made there but, at the same time, we have to bring more authority

back to the Department of Education.

MR. CRANE: Yes.

DR. WILLIAMS: And if that means a provincial bus

system, that's probably what we're going to have to look at. When I said

considerable legal and moral authority initially, I had these sorts of things in

mind.

There is a fine balance between giving autonomy to

boards to operate and then dictating the way they shall operate. That's the

balancing act that we're into with third-party agencies, and now we are in a

situation where the Province pays full 100 per cent of this. There has to be far

more accountability for what we deem to be right.

The next sensitive one in transportation in this area

will be the busing of special needs children. We can't afford to be thinking

along any kinds of segregation lines when we talk these things, nor can we,

really, in transporting students, but I have to be very frank and say that while

we spend an inordinate amount of time trying to convince, we have not had the

power to be able to say that this shall be.

MR. CHAIRMAN: Mr. Crane.

MR. CRANE: I think there's certainly money to be

saved in busing, certainly in our area. If you want to leave home and come to

St. John's, leaving at 8:00 a.m., it will take you an hour to get up the bay as

far as Roaches Line.

Anyway, that will be fine for me.

MR. CHAIRMAN: Thank you, Mr. Crane.

Mr. Tobin has to leave early for some other

commitment, so perhaps he can carry on next, if my colleague will agree.

MR. TOBIN: Mr. Chairman, I apologize, but I have a

commitment in my district at 7:00 p.m. so I have to be down there for that.

Before I get to my line of thought on the school bus

system, let me ask the Deputy Minister: The system on the Burin Peninsula, I

mean, that system must be working well. That is the Burin Peninsula school bus

operated by the board. It came in back in the late 1970s, early 1980s, I guess.

Is that sort of a good system?

MS. DELANEY: If I may?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: Undoubtedly there now the

board-operated systems overall, I think we would have to say, are fairly good

systems, to respond directly to your question. We do have some concerns,

however, with board-operated systems as well as contracted systems. Our primary

concern, I guess, with board-operated systems is the cost of some of those

systems. In most cases they cost us significantly more dollars than what the

contracted systems do. So, part of our efficiency audits is to look at ways and

means to make board-operated busing more cost effective. And I think, in those

board-operated systems there are still opportunities for double runs and the

same efficiencies that we can get in contracted systems.

MR. TOBIN: Mr. Chairman, the area that I want to

address would be basically the new educational grant system. When I went through

this

section here - and I don't know if I read it right or not, if I haven't you

can correct me - I find that the department basically proceeded with a new grant

system when it had not been approved by Cabinet. According to the Minute of

Council 0951-1992, it was not approved to implement a new system, but approved

in concept subject to a couple of essential conditions, which is basically that

it was constitutional and drafted in regulation form for Cabinet's final

approval.

It goes on to say that the new system was implemented

on July 1 1992, but as of February 11 1993 there had been no report back to

Cabinet on the constitutionality and the regulations. That had not been

submitted for Cabinet approval. I'm just wondering, what happened there? Who -

was the department taking over Cabinet?

MS. DELANEY: If I may respond to that as well. I

wasn't there at the time, but I understood, and from my reading of the MC as

well, it is my understanding that Cabinet had approved the new grant system. The

Cabinet, however, did direct the department to obtain a legal opinion as well as

to introduce regulations. It was not our understanding that Cabinet had directed

the department to not implement the new system until we had the legal opinion

and until the regulations were in place. So I guess it is a matter of

interpretation.

As well, the department had at that particular point

in time, one of two decisions to make. We felt that we had Cabinet approval for

the new grant system, the concepts of the system. We had to make a decision as

to whether we would continue with the old grant system, which in essence was a

per pupil grant system, or whether we would implement the new system. The new

system had been established by a committee that consisted of the department, the

DECs and a number of representatives from the school boards. All the school

boards in essence here now were very much in favour of the new grant system

because they felt it was a more equitable and a non-discriminatory means of

allocating the funding.

So we made a decision to implement the new grant

system. We recognize clearly that we did not have a legal opinion in place at

the time that said that the new grant system was non-discriminatory as per the

Terms of Union, nor did we have regulations in place. I don't disagree with

that.

MR. TOBIN: So you've done it basically without the

approval of Cabinet and the legislative authority to implement the new system.

Who made the decision to go ahead with these grants even though the legislative

authority did not exist?

MS. DELANEY: I will have to - I wasn't there at

the time, so I can't tell you that.

MR. TOBIN: I realize that - probably most of you

weren't there at the time.

MS. DELANEY: I would think it would have to be a

decision of the department and the minister, but again, I would have to say it

was our view that we did have Cabinet authority, from our

interpretation.

MR. TOBIN: Cabinet states fairly clearly that it

had to be approved subject to the conditions - that it was constitutional and in

draft legislation. It is not there, according to the MC.

MS. DELANEY: I don't think it said `subject to',

and I think that was our

interpretation. I will have to get the MC.

MR. CHAIRMAN: So are you saying these are the

Auditor General's words, or the MC's words? Can you clarify that for us? We

don't have the MC before us, all we have is the quote from the Auditor General's

words.

MS. MARSHALL: That is right. `Subject to' is used

in the MC, but it is used in the context of other items. What it says is: The

Department of Justice, in consultation with the Department of Education, is

directed to prepare regulations to implement a system, and so on, right? But if

you look at

section 86 of the Schools Act it indicates that the grants that are

to be paid to the school boards are to be paid on a non-discriminatory basis and

in accordance with scales set out in regulations approved by the

Lieutenant-Governor in Council.

MR. CHAIRMAN: That is another aspect of it. We are

first trying to clarify whether or not the MC said - and I think what you said

was: `to draft regulations'. Those regulations had not been approved by Cabinet,

I take it.

MS. DELANEY: No.

MS. MARSHALL: No.

MR. CHAIRMAN: Therefore, the department shouldn't

have proceeded.

DR. WILLIAMS: We proceeded, though, when the

regulations came from the Department of Justice.

MR. CHAIRMAN: With the legal opinion?

MR. TOBIN: No, no, no.

MS. DELANEY: If I may?

MR. CHAIRMAN: Ms. Delaney.

DR. WILLIAMS: I shouldn't speak about things where

I was not present.

MR. TOBIN: That is not what you just said.

MS. DELANEY: I wasn't either, but I've been

advised, at least, of the history of this one. We did proceed, as I said earlier

here now, we proceeded without the regulations and without the legal opinion. I

will state that very clearly. There is no doubt about that. We proceeded to

implement -

MR. TOBIN: Even though Cabinet asked to have that.

MS. DELANEY: Yes, but we did not proceed, in our

view, without Cabinet authority, here now, for the new grant structure, because

from our reading of the MC, it did not say that the new grant system was

approved subject to the department obtaining the legal opinion and subject to

the regulations being approved, so it is a matter of

interpretation.

MR. CHAIRMAN: I think we are splitting hairs here,

because as I understand it, the MC says to approve the system; they directed the

department to draft regulations and to seek a legal opinion from the Department

of Justice as to whether or not the whole system was constitutional in light of

the non-discriminatory clauses. Now, if I were a Cabinet Minister, that would

have said to me that no authority has been given; we have given them authority

to go ahead and draft regulations and bring them back to us for final approval

and to seek a legal opinion from the Department of Justice as to the

constitutionality, neither of which was fulfilled, in my view, and I think the

department was way off base.

Now, I accept what you are saying is that Cabinet

probably knew what you were doing and they proceeded without issuing proper

Cabinet authority. I am not determining who is at fault here; maybe it was

Cabinet who was at fault for not ensuring that they issued a proper MC, but

clearly, no direction covered by a Minute of Council has been given to the

department to proceed with that.

AN HON. MEMBER: Why would they ask for it if it

wasn't there?

MR. CHAIRMAN: Mr. Tobin, I am taking away your

questioning - please go ahead.

MR. TOBIN: The second question, Mr. Chairman, is:

How much money is paid out every year under this new grant system?

MS. DELANEY: Under the new grant system it is

approximately - close to $100 million, Jack? $90 million, somewhere in that

vicinity.

MR. TOBIN: Is this grant system still in effect?

MR. CHAIRMAN: How much was that? I'm sorry, I

missed that.

MS. DELANEY: I'm sorry, it's about $90 million.

MR. TOBIN: Ninety million.

MR. CHAIRMAN: Ninety million?

MS. DELANEY: Yes, Sir.

MR. TOBIN: Is this grant system still in effect?

MS. DELANEY: Yes, it is.

MR. TOBIN: Have regulations been approved by

Cabinet now as required under

section 86 of the Schools Act?

MS. DELANEY: No, they have not; not yet.

MR. TOBIN: They have not. How can you explain why

the department continues to act, in my opinion, and what has been said, in

contravention of

section 86 of the Schools Act, which states that grants for the

operation -

MR. DUMARESQUE: It is only your opinion. Other

people have given the opinion that you are wrong.

MR. TOBIN: I am asking the question of Ms. Delaney

and she will answer.

MR. CHAIRMAN: Are you finished with the question,

Mr. Tobin?

MR. TOBIN: No, I am not finished, I have a line of

questioning.

MR. CHAIRMAN: Go ahead.

MS. DELANEY: If I may?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: We have received the legal opinion

from the Department of Justice. As a result of the legal opinion, we have gone

back and made some retroactive adjustments to our grants, back to 1992-1993, as

a matter of fact. We have a draft of the regulations that now have to be revised

as a result of the changes we have made for 1992-1993. The intentions are that

those regulations would be done retroactively here now to July of 1992 so when

we table regulations when they are gazetted, they will be applicable to

1992-1993 and 1993-1994, as well as the 1994-1995 school year.

MR. TOBIN: So, what you are saying, then, is that

$270 million has been paid out since July 1992 without Legislative authority.

MS. DELANEY: Undoubtedly, we have paid out the

grants in those three years without the regulations; I don't disagree with you

on that point.

MR. TOBIN: Is the minister aware of that?

AN HON. MEMBER: But not without Legislative

authority.

MR. TOBIN: Yes.

AN HON. MEMBER: No.

MR. TOBIN: But yes. Is the minister aware of that?

MS. DELANEY: I am assuming - I can't comment as to

what information has been provided to the minister but I would think, when these

decisions were made by Cabinet and when the grants were allocated to the

schools, that the minister would have been fully aware of what the department

was doing.

MR. TOBIN: Two hundred and seventy million

dollars. Mr. Chairman, there is another area that I would like to move to. One

of the things that Cabinet ordered the department to do in 1992 was to get an

opinion from the Department of Justice to determine the constitutionality of the

new grant system. In response to the Auditor General, he said he received the

legal opinion on June 24 1993, one year after the system was implemented. Why

was government concerned about the constitutionality of the new system and, was

he concerned that all or part of the new system might violate a

non-discriminatory provision of Term 17?

MS. DELANEY: If I may again?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: The Cabinet and, I guess, the

Treasury Board officials and the ministers, as well as the department officials,

wanted to ensure that the new grant system was non-discriminatory. In essence,

that was the reason why a legal opinion from the Department of Justice was

requested and, as you have indicated, that legal opinion was received in June

MR. TOBIN: We can only conclude that the

department ignored the Cabinet order and proceeded without legislative authority

without knowing whether or not the new system violated the constitution, if you

implemented the system a year before you got the legal opinion from the

Department of Justice. You operated for a year, at least, without -

MS. DELANEY: We undoubtedly implemented the system

without the regulations and without the legal opinion, that is very true.

MR. TOBIN: Without knowing whether or not it

contravened the constitution.

MR. CHAIRMAN: Mr. Tobin, might I just interject a

question here? I don't mean to interrupt you, but in the process of preparing

the documentation, Mr. Noseworthy, our Research Officer, requested a copy of the

legal opinion. That has been denied. The department has refused to provide that.

In view of what you have just said, that after you got

the legal opinion, you made some retroactive adjustments, I would read into that

that the legal opinion told you that what you had implemented a year or more in

advance of that was contrary to the constitution and was therefore illegal, and

that's why you went back and made adjustments.

I understand, from Dr. Williams' opening remarks, I

think you said that steps will be taken to see that 1992-1993 grants are

adjusted. You are still making adjustments. Obviously, therefore, your

regulations were neither approved, nor were they accurate in that the concern

that Cabinet expressed in 1992, that MC 0951-1992, that constitutionality being

considered and commented on by the Department of Justice; in other words,

Cabinet wanted to ensure that what you were doing was constitutionally correct,

that was not done as directed by Cabinet, and what you instituted was a grant

system that was non-constitutional. Is that a fair assumption?

MS. DELANEY: If I may, I will explain to the

committee gladly as to the specific area that the Department of Justice picked

up in our grant system that we had to make an adjustment to, and that pertained

to - in the new grant system there are several components. As I said, it's no

longer a per pupil grant.

One component of the new grant system was debt

servicing cost, whereby we were paying the debt servicing cost on school

buildings or school renovations or whatever that had occurred so many years ago.

The way the new grant system was structured was in such a way that we paid

actual debt servicing cost. That was the proposal; that's what had gone to

Cabinet, we would pay actual debt servicing cost.

When the legal opinion came back from the Department

of Justice, the Department of Justice indicated they felt that since we were

paying for debt servicing cost on capital construction, we had to pay that on a

denominational basis the same as we would pay our up-front capital grants. In

other words, instead of paying actual debt servicing costs, we had to go back

and make adjustments to ensure that the debt servicing cost was paid on a

denominational basis. That was the major adjustment that we made to 1992-1993.

As well, while that was not picked up in the legal

opinion, the other thing that we did go back and address, was in 1992-1993 we

funded some boards as much as 102 or 103 per cent of what you would care to call

as their funding allocation, and some boards were funded at 97 per cent. Before

we concluded 1993-1994 grants we went back and adjusted that for all school

boards. We brought all boards to 100 per cent, in essence here now, of 1992-1993

levels.

Those are the two adjustments that we have made and,

if I may say, it took some time. We had to sit down with the DECs. It meant that

we had to do two years in a row, so it took some time here now, after we had the

legal opinion, to sit down with the respective school boards and the DECs to

iron out the redistribution of the debt servicing funding.

MR. CHAIRMAN: I could have told you in 1979 that

you had to do it on a dollar-per-dollar basis, when I sat as President of

Treasury Board, facing the Bishop and the Archbishop, and heads of all the

various churches, trying to explain how we were going to deal with their

deficit.

Let me ask you this - I've lost my train of thought,

now, having said that. I was going to ask you something relating to that.

Go ahead, Mr. Tobin.

MR. TOBIN: I've just have a final question, I

guess, Mr. Chairman.

AN HON. MEMBER: (Inaudible).

MR. CHAIRMAN: Mr. Tobin can complete his line of

questioning and I will get to you, then.

MR. TOBIN: I have an understanding, for sure,

where Ms. Delaney and the deputy minister are coming from. Both of them are

answering questions and they weren't in the positions when the decisions were

made, when this took place.

MR. CHAIRMAN: We recognize that.

MR. TOBIN: You're in an awkward situation, I'm

sure, and I have an appreciation for that, but I hope you have an appreciation

for where I have to come from on this, as well.

You got an opinion from the Department of Justice in

June 1993. Are you prepared to table a copy of that opinion?

MS. DELANEY: We cannot. We have, as a result of

the request from Mr. Noseworthy, asked the Department of Justice as to whether

we can release the legal opinion, and we have been advised that we cannot

release the legal opinion. I gave a letter to that effect to Mr. Noseworthy last

week.

MR. CHAIRMAN: That was the question I was about to

ask you.

MR. TOBIN: Mr. Chairman, that leads me to your

role as Chairman. The duty, I guess, of this committee, to a large extent, is to

determine, on behalf of the Legislature and the people of the Province, whether

public funds are dispersed and spent properly. We have today determined, I

think, fairly clearly, that there has been approximately $270 million spent

without being properly accounted for.

MR. DUMARESQUE: That's not true. You feel that way

MR. TOBIN: Yes, basically three years -

MR. DUMARESQUE: No, no.

MR. TOBIN: - at $90 million a year.

MR. DUMARESQUE: No.

MR. TOBIN: The officials -

MR. CHAIRMAN: Order, please!

Go ahead, Mr. Tobin.

MR. TOBIN: You might be in the Premier's office

but the Premier doesn't run the Public Accounts Committee.

MR. CHAIRMAN: Order, please!

MR. DUMARESQUE: I am a member of the committee and

I have a right to say what I feel. You're trying to say that we did it without

constitutional jurisdiction and we did not.

MR. CHAIRMAN: Order, please!

Let's stick to the questioning and you can deal with

this in camera when we consider our report.

MR. TOBIN: Mr. Chairman, in my opinion,

approximately $270 million has been spent without legislative authority -

MR. DUMARESQUE: That's not true, that's your

opinion.

MR. CHAIRMAN: Okay. Let's leave it as his opinion

for now. Some of us may or may not share it.

MR. TOBIN: - roughly $90 million confirmed, over

three years, that was spent without legislative authority. If we are to do our

job and get the information we need as members of this legislative committee -

now, with all due respect to the people, they have an opinion from the

Department of Justice, but it seems that every time there's a kerfuffle with the

Department of Works, Services and Transportation or something else, run to the

Department of Justice and get a legal opinion that says you don't have to share

the information with the Public Accounts Committee. For whatever reason - we can

surmise what the reasons are as to why people don't want all the information to

come out, and I don't reflect this on the bureaucrats here either, but how are

we going to do our job? What ruling can you bring forward to get us the

necessary information? We cannot fulfil our commitment and do our job here this

afternoon unless we can find out what the ruling was of the Department of

Justice. We do know what the Cabinet directive said, we do know that it was a

year later before they got the opinion from the Department of Justice even

though the grant system had been implemented. We know that it went on for three

years, at around $90 million a year, or $270 million. Yet the department of

Justice is telling them not to share their opinion on the constitutionality of

this with the Public Accounts Committee, which has been authorized by all

members of the House of Assembly to go out and get the information. So I don't

know if we can proceed. I don't know what can happen, but something must be

done, because right now, as a member of this committee, as a member of the

Legislature, I believe that there have been roadblocks, stumbling-blocks set up

to hinder us in getting the information we need.

MR. CHAIRMAN: Well, Mr. Tobin, thank you. We can't

direct the department, of course, to provide the information, we can only

request it, and if it is not provided by the department, the committee will have

to consider reporting that to the House of Assembly when we get back to them on

this item; that is something we can discuss when we are considering our report

on this particular set of hearings.

Mr. Tobin, would you like to carry on with your line

of questioning?

MR. TOBIN: No, I have finished, thank you.

MR. CHAIRMAN: Thank you. Mr. Dumaresque, you're

anxious to jump in there. Would you care to ask some questions?

MR. DUMARESQUE: Yes, I would. Thank you, Mr.

Chairman.

Just a question on that item: Has there been a legal

challenge by the churches to that particular aspect of it or were the reforms

carried out, the money receipted, the respective school boards accepting of that

particular money and no opposition came, certainly in the form of a legal

challenge, from the respective school boards or respective denominations? Is

that accurate?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: That is accurate. As a matter of

fact, I would think that it is fair to say that all of the school boards feel

the new grant system is a substantial improvement over the prior method of

allocating funding to the school boards. In actual fact, it probably may be

considered, well, I guess, in reality here now, it's a far better system -

that's our view as well as that of the school boards and the DECs.

MR. TOBIN: I would think so, as well.

MR. CHAIRMAN: That may well be - if I might just

interrupt for a few minutes - that may well be, but the act still states it must

be done in a non-discriminatory manner and the act should be changed before you

do it. It doesn't forgive the breach of the act.

MS. DELANEY: If I may, the legal opinion that we

have from the Department of Justice -

MR. DUMARESQUE: You are concluding that there was

a legal opinion that said there was no -

MR. CHAIRMAN: Order, please!

Ms. Delaney you have the floor.

MS. DELANEY: The legal opinion that we have from

the Department of Justice basically indicates to us that under the new grant

system, the funding has been allocated on a non-discriminatory basis, so we are

comfortable -

MR. CHAIRMAN: Perhaps if we had a copy of that

legal opinion, we would be prepared to accept that, but since you've refused to

give us that I'm afraid we are not quite satisfied, or at least some of us are

not.

Mr. Dumaresque, would you like to continue?

MR. DUMARESQUE: I'm glad you corrected that

because, obviously, the government is satisfied that it did everything right for

all the right reasons. I'm sure Mr. Tobin had no trouble defending why he

wouldn't release any of the Sprung reports under the Freedom of Information Act

MR. CHAIRMAN: Mr. Dumaresque, let's stick to the

question.

MR. DUMARESQUE: - and a number of other items that

came from the Premier's office.

MR. TOBIN: No wonder you're not in Cabinet.

MR. DUMARESQUE: Mr. Chairman, I think what we've

heard here in the past little while, relating to busing and to other elements of

unfairness in the system certainly bellows for change in reform in the education

system. I think all members of this House have, for some time, had great

difficulty with some of the things that have been done at the local level and

the lack of ability of the government to be able to focus in on a change and

direct ways that our precious tax dollars are being spent for the best education

possible.

I have always been interested in, and followed up on a

number of occasions with different school boards, on an area, and I am not sure

what they call it or even if they itemize it - but a number of school boards,

particularly in Labrador West, have found ways to collect fees for different

things in the school. They have collected fees for lockers, they have collected

fees for a host of particular items, and I found certainly no acknowledgement of

these particular revenues specifically itemized in their financial statements.

And even upon asking them we have not been able to get exactly where those

revenues are shown in the financial statements, or where those expenditures are

accounted for on the other side of the ledger.

Is that something that concerns you, and is it

something the department is looking at, because we all know it is very difficult

to turn down, and I don't say any of us do turn down anybody coming to sell

their Girl Guide cookies or anything else to collect some money for those

things, but at the same time we know that our tax dollars are out there being

spent that way. I would like for you to comment on that.

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: If the revenues are collected by the

individual school boards, I am assuming that the auditor would do his or her job

in ensuring that those revenues are properly recorded in the financial

statements. From the department's perspective, we don't have so much of a

problem with the small amount of revenues that schools or school boards would be

able to collect to supplement their operations. We do, however, take into

consideration situations whereby school boards may be getting revenues from

renting their facilities or from other sources of revenue, whether it be

cost-shared agreements - and that is all taken into consideration in our grant

system.

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: I would just like to follow the

question because it is a very relevant one. We have witnessed in the last year

or so the fact that schools may charge a registration fee which would be

encompassing enough to cover laboratories, gymnasiums, and all sorts of things.

We are taking some initiatives with school boards, certainly with the

forthcoming superintendent's meeting, to discuss this, both with respect to the

practice and the amounts of money that will be coming in, but more importantly,

that school budgets will be properly audited by the school boards so that this

avenue of funding, which can be substantial in terms of a large school, can be

properly accounted for.

MR. CHAIRMAN: Mr. Dumaresque.

MR. DUMARESQUE: Another thing that also interests

me - and you touched on it earlier, in relation to how school boards are dealing

with various challenges. One of the areas is, I guess, the emerging area of

student assistants and having people there to assist in the educational

development of children with handicaps.

We have seen some discussions over the years,

particularly in Labrador West, where they have developed, I think, a model

program in that area. I am just wondering if the department has given that

particular area greater consideration, in particular, I guess, how some of the

job descriptions may or may not change, how the curriculum is developed, how it

is monitored, and how that integration process is working, because no doubt

there are many students out there up to this point, particularly in rural

Newfoundland and Labrador, who have not been able to get the educational

opportunities they deserve.

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: In my opinion, we have moved further

than any other province in Canada with a philosophy of integration of children

with special needs into regular classroom settings. As you know, a decade ago we

could have looked to institutions that were specifically established to house

children with disabilities.

Your reference to the Labrador case is an exceptional

case where the department last year moved directly with personnel and resources

to move the mentally handicapped children into the regular classroom setting. I

keep stressing classroom as opposed to the school because there is a big

difference. To be housed in a site is not sufficient. What we need is to

acknowledge that each child, regardless of disability, can be educated to the

fullest in a proper setting.

In my opinion, we have moved both with respect to the

philosophy and operationalizing of that philosophy, down to programming and

resourcing in a significant manner. It is a very costly operation; however, that

is the price we pay to properly educate each child.

Having said that, when the addressing of special needs

was done in a discreet manner, in other words you could look at Exon House, and

you knew the cost of operating it. The only institution we have left in the

Province now is the School for the Deaf. When you look at these institutions you

know the actual cost of in many ways, both with respect to the financial cost

and the educational cost. We are now at a point where, in terms of blending

within the system, or melding within the system, the cost is not as recognizable

and we have to really make concerted efforts to try to do what is proper,

couching with what we can afford, if I might try to put it that way.

You are always wrestling between what is, and the

ideal, but we're dealing with a very costly enterprise here. Student assistants

may not be the way to go in the next three years, but if I just might carry it

for a second, in terms of changing the attitude of teachers - forget the

community for a moment - towards accepting all children, and to try to do the

very best, takes a tremendous in-service on our part and a considerable

resourcing, but as soon as you get to that, you get into a further definition of

what is the teacher's responsibility.

We are now, in this very year, at a stage where

operations are going on in the education setting, in school and in classrooms,

which just three years ago would have been classified as medical. We are asking

teachers to assume responsibilities for practices in dealing with special

children that one time were dealt with by public health nurses and the medical

community, and as soon as you get into that, you've had not only a mind-set

change, you've also had to give appropriate in-servicing to deal with the

dispensing of medication, needles, all sorts of major issues.

The bigger issue, and that's one issue, in terms of

giving each child the - there's another issue unfolding, and that is, how do we

deal with raising educational standards for all, and expectations, as we move to

the socialization and inclusion of all children? It is one thing even to

properly resource by putting trained adults to deal with these children. It is

something else when you begin to put a lot of emphasis on raising higher

standards, because we have to begin to address not only learning outcomes for

age and grade groups, but what degree of performance would we expect for

children of differing abilities? And to what extent is inclusion incompatible

with that kind of goal? Now, that's when a so-called regular teacher force comes

back to ask for far more resources and personnel support than are in the system

at the present time.

MR. CHAIRMAN: Mr. Dumaresque.

MR. DUMARESQUE: There's no doubt, Dr. Williams,

there are very challenging times in that aspect of education, but although the

challenges are immense, I certainly would encourage you to do as much as you can

to meet the objectives that were in your report.

Obviously, as I said, the need for reform in getting

at some ways to get those dollars and be able to channel them back into the

areas that you mentioned are certainly very, very important these days.

I noticed the other night when Miss America was

crowned, that she happened to be, I think, deaf and had a speech impairment.

There's no doubt in my mind that would never have happened ten or twenty years

ago, and I hope that we'll be seeing more things like that. I am encouraged to

hear that this Province is leading the way in that area, and certainly I offer

my support in any way possible to keep going in that direction.

DR. WILLIAMS: Could I just make one comment

further to that?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: Some years ago, the government of

the day established, in conjunction with the four Atlantic Provinces, the

Atlantic Provinces Special Education Authority, APSEA, where children with

hearing and visual disabilities - not so much hearing on our part, except those

from social services who were in vocational training - were sent to Amherst and

Halifax to be educated. This coming year we will not have any students, not one,

housed in that special institution. They are all in our regular school system,

and we are caught in a dilemma of trying to deal with, how do we get out of this

co-operative agreement with the provinces while we still need some of their

resource services to help us as we begin to put and house in this Province the

proper infrastructure. It's just an indication of how far we've moved.

MR. DUMARESQUE: Thank you very much.

MR. CHAIRMAN: Thank you, Mr. Dumaresque.

It being 3:20 p.m., perhaps we'll break for ten

minutes for coffee and come back at 3:30 p.m.

Recess

MR. CHAIRMAN: Order, please!

If we've all had our coffee then we'll call the

meeting back to order and I'll pass on now to Mr. Langdon, to carry on with the

questioning.

MR. LANGDON: Yes, I'd like to go back to Mr.

Williams or Ms. Delaney, either of them. Earlier estimates were saying that we

were spending approximately $29 million in busing. Considering the scarcity of

dollars and so on, if with reform and if one of the criteria for viability would

mean that the school could not remain open with busing, how many of these

dollars could we save, approximately?

DR. WILLIAMS: I don't have an exact figure to give

you on that because we have not really defined viability yet. We're in the

throes of coming to some resolution on that and obviously, as soon as you do,

and start closing schools, you increase the cost of transporting children

further. Because an interesting scenario is that over the last six or seven

years we have moved from A to B, from B to C and C to D as we further

consolidate. We just bus further and at more cost attached. We are now down to

492 schools and I don't think there's much more consolidation we can do,

possibly twenty more schools, in that range, and some shifting in St. John's. So

that will give us an indication that the savings on that aspect of transporting

will not be there. Where we'll save will be looking at efficient routes, and

buses will not pass each other nor pass schools half-filled and this sort of

thing. There are considerable millions that we can - I was going to say take out

but change from to something else in education.

MR. LANGDON: That was my point, to put back into

the system to enrich what you already have.

DR. WILLIAMS: Right.

MR. LANGDON: I'd like to pose a couple of

questions on, No. 9, non-compliance with the Department of Education Act

referring to the education councils. You have three councils, the Roman Catholic

Council, the Intergraded Council, and the Pentecostal Council. How many dollars

are passed over to these three councils from the department budget to -

DR. WILLIAMS: Operating dollars?

MR. LANGDON: Yes.

MS. DELANEY: Operating dollars, it's close to $1

million per year, $922,000 almost, to be exact, this year, if I remember the

number properly, but it's almost $1 million in operating. The capital account

allocations will vary depending on the fiscal year. They have been as high as

around $25 million and this year it's something like $10.6 million.

MR. LANGDON: Okay, so when these funds are

allocated to the education councils for school construction, for example,

capital costs, that's given to them in one lump sum like $10 million or $6

million or whatever?

MS. DELANEY: We have changed the process effective

last year, prior, the DECs were allocated funding. They were provided their

funding on a quarterly basis. In 1993-1994 we changed the process whereby we are

only providing the capital funds to the DECs on a cash flow basis. So, in other

words, we do not give them the money until they need the cash.

MR. LANGDON: Okay, that is a change in policy?

MS. DELANEY: That went in place in 1993-1994.

MR. LANGDON: But what I'm getting at is - like in

Harbour West which is probably one of the worst schools in the Province, the

worst, and my point is that because these numbers of dollars have been given to

the Integrated Council over the years in a lump sum and they have been able to

take these dollars to re-invest, if they wish, in whatever way they want, then

they have been allowed to accrue a significant number of dollars in interest -

is that right? So in that particular sense, then, they have been able to keep

the money there for themselves to deal with emergencies. If it had not been for

the change in policy that would still be the case so they would be able to

accrue more, but now the dollar stays with the department rather than with the

education council - is that right?

DR. WILLIAMS: That's right. We, too, were very

concerned about the amount of money that would accrue between the time of their

receiving it and actually expending it.

MR. LANGDON: So, over the years, going back, then

these numbers of dollars have been significant and probably a number of schools

could have been replaced had government done what you people have done with it

the last year or so?

DR. WILLIAMS: Yes. In fairness to the

Denominational Education Committees, they did use the funds for, as you said,

emergencies.

MR. LANGDON: Yes, I know that.

DR. WILLIAMS: You know that, yes.

MR. LANGDON: It also says that of the three

councils here, according to the Auditor General's report, one of the councils

has not submitted its financial statement. Which one of the councils are we

referring to?

MS. DELANEY: That was for the 1992-1993 year and I

think the council was the Pentecostal Council. Is that right, Jack?

MR. THOMPSON: Yes, and is already done now.

MS. DELANEY: And the requirement under the

legislation is that the councils submit their statements by September 30. As of

this point in time, for this particular current year, we have one in and we are

advising the remainder of the councils that their statements have to be in by

September 30. So we are following up to ensure we do get the financial

statements.

MR. LANGDON: Okay, can you -

MS. DELANEY: If not, we'll tell them they can't

have their money.

MR. LANGDON: Okay. Can you tell me the number of

people who are employed in the three councils, total?

MS. DELANEY: I don't know the exact number

offhand, it would be probably - unless Jack knows it.

MR. THOMPSON: No, I don't know the exact number

but it's in the range of, I'd say about twenty to twenty-five people. That's the

way it was prior to further changes in their staff complement during the fiscal

year 1993-1994 and they have taken measures to even reduce their staff

complement over the past year.

MR. CHAIRMAN: Thank you.

Mr. Langdon.

MR. LANGDON: I don't want to take up a lot of time

here because many of the things here, I guess, we recognize it's a matter of

opinion the way they're stated, but I would like to go back to the new grant

system.

I compliment again the department because, as you

people know, the district that I represent has probably one of the smallest

school boards in the Province, the Bay d'Espoir - Hermitage - Fortune Bay one,

and if it had not been for the new grant system, I don't think that particular

board would be operating now. They would be insolvent, and not even in business.

So, in that sense, I'm pleased that's happening; however, I still see that there

is going to be significant need in that particular area in distance education or

other areas if the people in these small communities are going to survive. There

is just no way but that, and I'm sure Dr. Williams recognized that in his

report.

I'm thinking primarily now of talking today to the

Assistant Superintendent of Chemistry for the Connaigre Peninsula - Hermitage -

Seal Cove. What is the possibility of government - I know it is happening all

the time, but what is the possibility of new courses like chemistry and other

courses being headed into distance education to compensate for the lack of

teachers according to pupil allocation and so on?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: Distance education is one of the

major initiatives of the department this year. We added physics this current

school year, and six additional sites. We have now, eleven teachers full time

who are teaching distance education courses.

We can offer a full range of high school curricula

courses through distance education. We've been offering it long enough now to do

an assessment of those who have taken it as a follow-up to see if their scores

on external examinations compare with those in regular settings, and it's very,

very positive indeed, not only on par, but in some cases, in excess of

performance.

It's a very costly enterprise, and we have to move to

extend it beyond course credits to other avenues of government delivery services

in order to justify putting it in small communities, so we have to blend the

services of health and social services and other government agencies to justify

the kinds of linkages and the infrastructure that's needed.

Also, within education we can look at the use of this

in professional development, administrative. With STEM-NET we now can link each

school in the Province directly with the school board and with the Department of

Education. STEM-NET ostensively have set up to further the development of

science programming and teacher competencies and, of course, student access,

too, so we have the technology links now in place, and we have to build on that.

It will, in some respects, significantly change the system because in

conjunction with that we're developing a foundation program.

One of the dilemmas of the small schools you refer to

is that you can't offer or expect a teacher to teach thirty-six courses because

of small numbers of students, so we have to define what would constitute an

appropriate program for each child, define that in terms of foundation program,

and then decide how to deliver it. That will mean a disproportionate allocation

of resources for small schools.

I'm hesitating on the word `discriminatory' because

that's what it's going to be. In order to bring equality we're going to have to

discriminate, and we'll have to do that not only with respect to the number of

teachers going into a setting, but also in terms of the distance education, so

that the cost of educating a child in a particular setting, McCallum, for

example, will be three times the cost of educating a child in Bishop Field or

St. Pat's, but that's the reality of the geography of the Province and the

nature of trying to bring a degree of equality, too.

MR. CHAIRMAN: I guess, Dr. Williams, if I might,

it's a matter of

interpretation as to what `discriminatory' means. Is

`discriminatory' meaning we're not getting an equal level of education because

on a dollar-per-dollar basis it would cost more to educate a child? So

`discrimination', I guess, can be - from an educational point of view it may

cost more to educate that child where that child is getting a fair education,

and perhaps that's not discriminatory. I recognize that's open to some

interpretation.

Mr. Langdon, please, I didn't mean to interrupt you.

MR. LANGDON: That's okay.

I know the technology is relatively new, the distance

education and so on, but has there been any trend develop over the last couple

of years that students who study on their own, self-discipline and so on, with

the monitors or the teacher in the discipline, that when they go to university

these students are better prepared to accept and to move into the curriculum in

the post-secondary institution than they would if distance education were not

then given to them.

DR. WILLIAMS: I can't say that we have any data to

substantiate that kind of thrust. I can only tell you that when we looked at

their performance on say the Grade XII courses they have written, external

examinations, they have done as well as those in the larger school settings.

We are following up on that because this is an

interesting year. We're also following up on the admission to university for

those who did not get the 70 per cent average. As you know, with the fuss we had

last spring, public exams were dispensed with, so it's an interesting research

question for us, as we advocate, or the university advocates, we need a 70 per

cent academic average in order to be admitted. What about those who were

admitted with less? How well will they do this year? In conjunction with that,

we'll be able to look at those young people who came out of multigrade

situations, small school settings, distance education, and so on.

Having said that, no young person would have been

completely on distance ed. They would have taken one or two courses which would

supplement the program, so unless you follow them discreetly by subject or

discipline we wouldn't really know.

MR. CHAIRMAN: Mr. Langdon, have you completed?

Mr. Penney, would you like to carry on from here?

MR. PENNEY: Thank you, Mr. Chairman.

Let us stick with the two topics that have dominated

most of the questions so far today - I will stick with it for a few more minutes

- grants and busing.

The Auditor General states that, in her opinion, the

department did not have the authority to allocate grants to the school boards

ranging between 97 and 100 per cent of the actual entitlement. We found what

happened was that seven school boards were allocated approximately $500,000 more

than they were entitled to, and nineteen boards were allocated approximately $2

million less than they were entitled to. Then we find that additional funding

was made available by the department to bring the nineteen school boards up to

the acceptable level but there was no adjustment made to the boards that

received the excess funding. Why was that?

DR. WILLIAMS: We, this year, are reclaiming from

these boards the amount of monies they were paid in excess. As a matter of fact,

we have given one board a period of time to pay it back because it was a sizable

amount of money.

MR. PENNEY: This would have been after the Auditor

General had completed her audit?

DR. WILLIAMS: We are taking it from them, out of

their budget, this current school year.

MR. PENNEY: Okay.

There is a

section here on page 13 of the information

docket you have that mentions consultants found there were two school boards

inconsistent in their

interpretation and application of adequate public

transportation. Now, we recognize that adequate public transportation is not

defined, so I am assuming from that, that you have two school boards in the same

area and one interpreted it one way and another the other. Could you elaborate a

little bit on that and tell us where you are talking about, which school boards,

and exactly how they interpreted it differently?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: This is a report that was done in

1989, so I will have to ask Jack to respond to that because I am not aware of

the full details.

MR. CHAIRMAN: Mr. Thompson.

MR. THOMPSON: Are we addressing the specific

report that was prepared by Advan/tech that made reference to Exploits Valley

and the Avalon region? Is that your specific question or are we dealing with

another area of the Province?

MR. PENNEY: In 1989 an independent consultant

study was performed on the cost-effectiveness of bus operations in the Avalon

region and Exploits Valley.

MR. THOMPSON: The boards in question dealt with

the Exploits Valley Integrated School Board and the board-owned-and-operated

school system that they have in effect in that particular region. The other area

dealt with contracted services applicable to the Avalon and, if I recall, dealt

with the St. John's region, and if not, it was also expanded to include the

Conception Bay area as well.

The report touched on any number of issues ranging

from school bus safety, size of vehicles, types of tires, to the point of

doubling of runs, bundling of services and so on. In response to that request,

and the recommendations put forward in that report, the department did, in

effect, follow up on the recommendations that pertained to cost effectiveness

and efficiencies with respect to doubling of runs, bundling, in other words

having larger routing schedules or configurations where you have one contract

versus ten or twelve contracts operating in different pockets within a region,

so we have taken efforts to address a number of those areas.

With respect to the safety aspects, of course, one

would expect that we are certainly keeping uppermost in our mind with respect to

the vehicles and meeting certain safety standards that have been established,

whether it be by, what we call D250 or D409 standards. As well, we place a great

deal of reliance on and work with the people in the Motor Vehicle Registration

Department, so we have addressed many of those items that have been recommended

and put forward in that report.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: That really wasn't my question. I

understand the consultants found there were two school boards that had totally

different

interpretations of what was adequate public transportation, and their

application was totally different. I am assuming that one school board said,

there is definitely now adequate public transportation, and the other school

board said there isn't.

MR. THOMPSON: The specific area you refer to is in

the urban area here in St. John's. We had an issue, and we still continue to

have difference of views with respect to the operation of a public transit

system and a system that is operated through a contractual arrangement which we

fund through the school boards. We have a number of areas within the City of St.

John's proper where we have public transit services that do go to certain areas

and in other areas we do not. So boards have interpreted again this definition

of adequacy or inadequacy of public transit systems. We have several areas in

the St. John's region that can be identified and it can be questioned whether

there are adequate or inadequate busing services. This has been further

compounded with the annexation of a number of areas to the city over the past

couple of years. So again, yes, the boards have interpreted in their opinion and

definition of adequacy and inadequacy which we define as; if there's a public

transit service in effect, that's servicing the population in the urban area, we

consider that to be an adequate public transportation service.

MR. PENNEY: There could conceivably be two school

boards providing transportation in exactly the same area. Do we still have this

problem? Now, I recognize this was 1989 - do we still have the same problem

today, 1994, where we have the two school boards with totally different

interpretations and application of adequate public transportation? Does that

problem still exist?

MR. CHAIRMAN: Mr. Thompson.

MR. THOMPSON: Mr. Chairman, to answer that

specific question, there are situations that currently exist where we have what

one would consider a duplication or apparent duplication of services. To address

that we have undertaken to initiate reviews of the transportation services

within the City of St. John's in particular and also as part of our efficiency

audit, we will identify and make recommendations to avoid such occurrence in the

future of duplicate runs and services.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Yes, somebody mentioned earlier about

consolidation of school boards as it relates to busing. I think there's a lesson

to be learned from what happened out in Central Newfoundland. You take in the

Lewisporte area, we have the Integrated School Board and the Pentecostal School

Board that have consolidated their busing and it's called the NORPEN School Bus

System, if you were to have that in every area I think you would solve a lot of

the problems.

The Auditor General makes reference in her report to

an Employment and Immigration Canada sponsored youth strategy training program

in 1991 where three employees were trained to do an evaluation of the school bus

transportation system at one school board. It says here that the project costs

$40,000 and the efficiencies disclosed by the project realize savings of

$242,000. Do we have any similar programs ongoing today?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: What we have in place - at the

beginning we did say that we have three reviews ongoing of busing. Number one is

busing in St. John's, number two is handicapped transportation and number three

is board-owned busing. So, in essence, yes, we do. We are making a concerted

effort to look at busing right across this Province and we are using existing

departmental resources to identify areas of efficiencies to come up with savings

similar to those and probably in some other areas even more savings.

MR. PENNEY: The process that is being used in

these evaluations is similar to that used in this one, in 1991?

MS. DELANEY: Probably so, and maybe, in some cases

even more intense.

MR. PENNEY: Okay, what school board was that?

MS. DELANEY: I wasn't there I can't -

MR. THOMPSON: That was the Avalon North and the

Western Avalon RC.

MS. DELANEY: Avalon North and Western Avalon RC,

Jack advises me.

MR. PENNEY: Okay - $40,000 seems like a marvellous

investment. You invest $40,000 into a study and you save $250,000.

MS. DELANEY: Yes, I don't disagree. If I may, as

Dr. Williams pointed out earlier, one of the difficulties in achieving some of

these efficiencies in busing is we have to have co-operation among the boards.

Dr. Williams pointed out earlier some of the difficulties we have had out in the

Conception Bay North area in trying to implement some efficiencies that we feel

are possible in that particular area as far as busing is concerned.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Let's stick with that one for a

moment, this particular program with that school board, $242,700. Could you give

us some idea exactly what changed, where the efficiencies were, what changes

were made, where this saving was realized?

MS. DELANEY: Most of the savings are in busing.

Okay, I'll just discuss contracted systems here for the moment, because in

board-operated systems a lot of the savings will have to come from persons,

actual staff people. As to the contracted systems, in most cases we get the

savings through a number of areas, number one is that we double up on runs;

number two, boards have to be prepared in many cases to change the opening and

closing times of schools. Now, normally that's where boards will have some

difficulty - in changing the opening and closing times of schools; number three,

part of our audit program whereby we ensure that students are not picked up if

they live within 1.6 kilometres of their school; number four, they are not

providing lunch hour runs. So there are a great many areas like that, that will

generate those savings you are talking about.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: You can appreciate why I am asking it.

We are looking at 20-odd school boards and we are looking at a savings of

approximately $250,000, and it says here, at one school board. If you multiply

20-odd school boards times $250,000, that's -

MR. CRANE: You can't do that now.

MR. PENNEY: Pardon?

AN HON. MEMBER: You can't do that - not really.

MS. DELANEY: It is not. The savings at individual

school boards may be more or less than that particular amount. I mean, there are

a number of school boards, in fairness to them, on their own initiatives, that

have introduced more efficient busing systems and have generated substantial

savings. There are some other cases where that has not occurred to date, which

is one of the reasons why we have initiated reviews at the departmental level,

to ensure that the busing system is as efficient as we can possibly make it.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: One last question, not really related

to this, but related in that it has to do with accountability of expenditure of

public funds.

Is there any policy of the Department of Education

relating to the payment of a bonus to school board superintendents over and

above their salaries? If so, could you explain to us exactly what that policy

is?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: You touched a very sensitive issue

that will confront our meeting with superintendents next week. There is no

policy because the Education Act says, in effect, that the school board has the

right to negotiate a contract with superintendents.

One always presumed that that meant within the

confines of the remuneration allocated either through the teachers' collective

bargaining process or as stipulated for superintendents and assistant

superintendents; but over the years, boards did enter into private contracts

with superintendents and assistant superintendents. We now, for the first time,

have the data on that.

We asked school board chairmen to investigate for us.

It wasn't forthcoming in previous attempts but we have directed chairmen to

provide that information for us, the extent of these contracts and the kind of

remuneration, and we now have to deal with how best to address, whether we seek

legislation or what, but we have to deal with it now.

MR. PENNEY: Do I understand that you have that

information?

DR. WILLIAMS: We now have the information from

school boards on bonuses paid to senior executive people in the school system,

and it varies from board to board.

MR. PENNEY: Can you provide that information to

the Public Accounts Committee?

DR. WILLIAMS: At this point I can't give you

anything. We just got it in by letters from boards, it hasn't been to the

minister or to anyone in government. I can only tell you that it varies; some

boards have been very, very discreet, some boards have not paid any bonuses and

others have paid bonuses that are substantial.

MR. PENNEY: What would be the most blatant one or

the highest one, or the largest figure that you have seen, that you recall?

DR. WILLIAMS: The largest figure that I have seen,

and I can be corrected on this, was $12,000-something, to a superintendent, in

excess of normal provisions.

MR. CHAIRMAN: That was the largest one?

MS. DELANEY: We don't necessarily have all the

replies in from all of the school boards yet but we have a little over one-half

of them in, and we anticipate that all the replies will in by the end of the

month.

MR. PENNEY: How soon do you anticipate there will

be policy governing this?

DR. WILLIAMS: Certainly this Fall.

MR. PENNEY: This Fall?

MS. DELANEY: If I may add to that?

AN HON. MEMBER: Yes, you add to it - you're the

one in this area.

MS. DELANEY: If I may, as well, one of the things

that we have already done even prior to receipt of this information, we have

written all school boards and all colleges, and clearly advised them that the

rates of compensation for travel are not to exceed the rates of compensation

that government pays to its executive employees. So, with respect to car

allowances, travel rates whether it be kilometre rates or meal rates, we have

already taken the initiative to advise school boards and college boards clearly,

that the rates are not to be in excess of those that are provided to government

employees.

The issue of the bonuses is another issue and we have

to wait until we collect all that information before we determine as to - we

have to have a picture, I guess, before we determine what action we will be

taking.

MR. PENNEY: Is there any policy of the department

that applies to school board members being remunerated for lost wages because

they had to attend meetings on behalf of the school board?

MS. DELANEY: If I may again?

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: We are writing school boards now and

college boards as well to advise them that they cannot reimburse their board

members for lost wages. We have contacted our counterparts in the Department of

Health to find out what policy they follow and we have also talked to people in

Treasury Board. So, as a result of that, we will be writing both boards - as I

said, college boards and school boards - to advise them that board members

cannot be reimbursed for lost wages.

MR. CHAIRMAN: Our next audit of one of these

boards might be interesting, Mr. Penney.

MR. PENNEY: Yes, I can appreciate that.

MR. CHAIRMAN: The reason Mr. Penney raised all of

these questions - they are very valid questions - is that over the last two

years we have dealt with maybe a dozen different school boards, I suppose, and

in several cases, these types of payments were being made without authority, and

in several instances, travel expenses were quite high. In fact, we had an

interesting discussion where one member of the board tried to convince us that

the amount he was being paid for a day's travel, which was double what the MHAs

were being paid, the members of this committee were being paid, was quite

justified; and it may well be. We might argue that ours should be doubled, but

in view of the fact that the government has stated a policy, we found it

difficult to accept that, so a very pertinent line of questioning, Mr. Penney.

MR. PENNEY: If I recall, Mr. Chairman, I believe

at that same meeting one of the individuals stated that the school board was

actually reimbursing his employer rather than reimbursing the member of the

board. He would continue to draw his wages from his employer, and the board

would then reimburse the employer. I found the concept to be somewhat offensive,

and I am delighted to see that this is about to be changed.

MR. CHAIRMAN: Ms. Delaney.

MS. DELANEY: One of the arguments that has been

put forward to us on this particular issue is that these members are basically

serving of their own free time and whatever on particular boards, whether it be

college boards, school boards or hospital boards, and in many cases, it may mean

that the particular individual has to use his or her annual leave, has to lose

wages, in order to serve on these boards, so the argument that has been put

forward on the other end is that there should be some recognition of the amount

of time that these individuals put in to these particular boards, and therefore,

that they should be compensated in some manner for that. So that's the argument

that has come in to us with respect to at least providing them with some

compensation for lost wages - the argument from their end.

MR. PENNEY: Yes, I can appreciate that, and I

guess it has some validity, but when you look at the manner in which it has been

- and I don't apologize for this expression - it has been abused, and I believe

it's been blatantly abused, based on what we've seen, what I've seen since I've

been with the PAC, I think you're on the right track to make them a little bit

more accountable and to remind them that they are volunteers, and these things

are not to happen.

When somebody is working at a job that is paying him

$80,000 or $90,000 a year, and he has to go out of town for three or four days

and then his employer is reimbursed accordingly, I don't think that was the

intent.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Penney.

I just wanted to go back to one thing that Mr. Penney

raised. It relates to the school busing thing once again. Most of our discussion

today is centred around discrimination of one sort or another. The Auditor

General refers here on page 14 of our notes, several cases, one being the

payment of 100 per cent of the cost of school busing to board-operated systems

and 90 per cent to private operators. That does two things: One, it

discriminates against those boards that are not operating their own service, I

suppose. Secondly, it encourages them to operate their own service because they

get 100 per cent of the cost if they operate their own - they have to find 10

per cent otherwise - and it certainly discriminates against private operators.

In my view, it is a clear attempt - maybe not a deliberate attempt, I'm not

suggesting that, but clearly it isn't in the best interest of private operators.

We seem to be going in the opposite direction in many

areas of government, saying go to private operators; a private operator can do

it better than a public system. The experience here may or may not verify that.

It may or may not be related to the Public Tender Act and these extensions of

contracts that we've been looking at. Perhaps the whole system, and I know you

are doing that, needs to be looked at, but that is clearly one area of

discrimination.

The other area that the Auditor General points out,

and I agree most entirely, deals with this issue of the St. John's area again

where parents of students in the St. John's area are not receiving service for

their children. They are paying through the St. John's Metrobus system, or

providing their own transportation for children. Clearly, that is

discriminatory. It has been going on for some time. We have talked about it many

times. I was quite concerned about it myself when I was in government, in fact.

I probably shouldn't say it, but had we not changed government in 1989, it would

have been dealt with in 1989. We had every intention of at least hoping to

include something in the budget to deal with that.

Would you not agree - or perhaps it's not a fair

question; maybe I should rephrase it - would it not be better, perhaps, to

provide transportation to the students in St. John's? I think, at one time was

Corner Brook not excluded as well? Corner Brook, because they had a bus system,

didn't get school busing; maybe not. But clearly, it would be far more

equitable, it would seem to me, let me put it this way, if transportation were

provided in St. John's. Now, it may be through the St. John's transportation

system. If so, the citizens of St. John's are paying for the St. John's

transportation system. They are also paying a share of the busing system in

rural Newfoundland. The cost of busing per student in rural Newfoundland is

probably much higher than it would be in St. John's simply because of the

geographical distances involved here.

The report here, in fact, makes mention of four stops

per kilometre maximum. You see many buses in rural Newfoundland stopping by each

person's door as they go down the highway. There may only be, on the average,

four stops per kilometre, but there's a tremendous service provided in rural

Newfoundland, and I'm not knocking that. Please, let me be very clear, the

service is an excellent service. The question is, should the people of St.

John's not expect a reasonable level of service as well?

I think this whole question of what is a reasonable

public service is not the question at all - it's whether or not service should

be provided to the children. If we're not going to provide it to the children,

then let's provide a subsidy to the St. John's Metrobus system of some

reasonable amount so that Metrobus provides an adequate service, so that these

people, the people in St. John's, are not paying twice for the same service.

There are many ways of doing it, either providing a separate service in the city

or providing a subsidy to Metrobus, and I would submit to you that it certainly

is discriminatory, in my view. Would you like to respond to any of that and I

can add some more?

MS. DELANEY: If I may respond to the first one

first. With respect to the 90 per cent and the 100 per cent, when I first came

with the Department of Education, I guess I had the same question. As a matter

of fact, if we were going to fund anybody at 90 per cent, I would have funded

the board-operated busing at 90 per cent as a means for them to come up with

some efficiency measures. I guess we have changed the system now so that all

busing is funded at 100 per cent but my understanding is that the logic at the

time for the 90 and 100 per cent, with the contracted services being funded at

90 per cent, was to ensure that the boards out there got the most cost-effective

contract that they could possibly get. That was my understanding as to what the

logic was for the funding contracted systems at 90 per cent.

MR. CHAIRMAN: The same applies to board

operations, so I think you're right. You should never fund anything 100 per

cent.

MS. DELANEY: No. I can't say I disagree with you

on that point.

With respect to busing in St. John's, that has been -

because in some areas of the city, for example, Wedgewood Park where we continue

to provide school busing, there have been a lot of issues or a lot of concerns

with respect to busing in St. John's. It is one of the reasons why we have

initiated a review solely of busing in St. John's. I think probably for the

first time we have set it up as well so that we have had discussions with the

St. John's Transportation Commission directly, because my understanding is that

the St. John's Transportation Commission is solely responsible for busing in the

St. John's area. So we have, over the past summer, despite annual leave and

everything else, spent some time routing areas in St. John's where we are now

providing busing and having very detailed discussions with the St. John's

Transportation Commission on the whole issue of busing in St. John's. I don't

know what the answer will be at the end of the day. It is fair to say that we

are looking at several options. We will have to cost those options, look at the

pros and cons, but the process is a fairly lengthy process. I would think it

will still take us another several months before we are in a position to even

complete the study at the officials level and that's forgetting bringing it to

our executive and minister, but we are -

MR. CHAIRMAN: I don't think the cost would be all

that prohibitive. It may be $1 million or $2 million perhaps to provide busing

in St. John's, probably not that much. Do we have a figure in mind? Mr.

Thompson.

MR. THOMPSON: Mr. Chairman, at the early stages in

our discussions with Metrobus officials, just dealing with a number of what we

categorize as hot spots in the City of St. John's where we cross over Metrobus

and yellow bus services, they say that they could provide service in those areas

for a cost in the vicinity of $2.4 million, but that is just, as I said, dealing

with the areas where we are currently providing yellow bus service.

MR. CHAIRMAN: Yes, that doesn't deal with the

whole city, though?

MR. THOMPSON: Not at all.

MR. CHAIRMAN: That seems much higher than the

figure I had mind but I'm not questioning your figure. I will say this to you

though, that whatever it is I still think it's justified and if the money is not

available then maybe there needs to be a charge and polls right across the

Province in a non-discriminatory manner to all persons who are riding on the

buses. Maybe then parents in this Province would realize that there's $28

million now, it could be $33 million or $35 million if service were provided in

St. John's and the rest of the areas of the Province. Maybe if they were paying

part of it there would be less abuse of the system because there is some abuse

there within the system even now.

There is a number of smaller things here that I could

get into but I know a number of people have other commitments and they are

anxious to move on. If members of the committee don't have any further

questions, I will give the Auditor General an opportunity to quickly sum up or

make any final comments that she may wish to make.

Ms. Marshall.

MS. MARSHALL: Based on the testimony here today it

seems that the Department of Education has been taking some steps forward in

resolving the issues identified. We have continued with our audits of the school

boards and, in fact, have isolated some school boards whereby we are looking

only at their busing and I hope to have that item included in my next annual

report.

MR. CHAIRMAN: Thank you very much. Dr. Williams,

have you any final comments?

DR. WILLIAMS: Just to say that we appreciate the

relationship with the Auditor General and the office. We see it as supportive of

our initiatives, and thank you, Mr. Chairman, for the opportunity to present.

MR. CHAIRMAN: Thank you very much. Thank you all

for your participation in these hearings. The answers you have given us - as has

been said before, you are the messenger and we didn't intend to shoot you, and

you were not here when much of this took place but we appreciate the answers

that you did give us. Thank you to members of the committee, to the Auditor

General and her staff and to the staff of the House of Assembly for your

assistance here this afternoon.

May I have a motion to adjourn?

On motion, committee adjourned.