1. INTRODUCTION Mr. D'Autremont, Chair of the Standing Committee on Public Accounts, presents the Committee's seventh report as follows: Business Conducted Since its last report to the Assembly on May 29, 1994, your Committee held 10 meetings during the fourth session and fifth sessions of the Twenty -second Legislature. Your Committee initiated examination of both the Provincial Auditor's annual report for the year ended March 31, 1993, and the Public Accounts of Saskatchewan for 1992- 93. The progress of the Committee is reflected in this seventh report.

Your Committee respectfully requests from the Government of Saskatchewan a response to its recommendations within 120 days. Acknowledgements Your Committee elected Mr. D'Autremont to preside as chair on May 9, 1995. The C ommittee expresses its appreciation to Mr. Martens, who served in the position of Chair from March 23, 1993 until April 24, 1995.

The Committee expresses its appreciation to the Office of the Clerk for administrative support and procedural advice, to the O ffice of the Provincial Auditor, to the Provincial Comptroller and his staff, to Hansard, and to the many officials of the various government departments and agencies who appeared as witnesses and supplied written responses. II. MATTERS OF CONTINUING INTER EST Task Force On Roles. Responsibilities And Duties Of Auditors Your Committee reviewed the Report of the Task Force on Roles, Responsibilities and Duties of Auditors and reports that it concurs with the Task Force's recommendations.

The Committee thanks the members of the Task Force for their work and for appearing before the Committee to answer questions and discuss the recommendations. Government's Response To The Sixth Report Your Committee notes that, as requested, the government replied to its Sixth Report.

The response of the Minister of Finance was dealt with pursuant to the operating principles the Committee adopted May 26, 1992 and February 1, 1993, which are as follows: There shall be a systematic review by the Committee of government action and formal responses to the Committee's recommendations in order to c omplete the accountability cycle; this could be done partly through a reporting mechanism by the Comptroller or through other means.

Such follow-ups should be performed in the spirit of maintaining a constructive relationship with the government. (paragraph 40, Operating Principles and Practices, Standing Committee on Public Accounts). Since 1993, the Committee has reviewed each government response in conjunction with the examination of related issues raised in the Provincial Auditor's report. The result of those deliberations were not, however, distinctly reported to the Assembly.

Commencing with this report, your Committee has taken steps to formally complete the accountability cycle by noting the consideration given to the government's reply to the Commit tee recommendations. That aspect of the Committee's work is recorded in the Appendix of this report. Recommendations From Previous Reports As a "housekeeping" measure, your Committee will deal with outstanding matters from earlier reports which might have been resolved over the course of time.

At the request of the Provincial Comptroller, your Committee dealt with the 1975 recommendation (as reflected in Appendix V of the Provincial Auditor's report for 1992-93) that the Public Accounts report aggregate amounts paid to persons across all departments. Upon review of the matter your

Committee is satisfied that the current detail of the Public Accounts fulfils the original recommendation and reports to the Assembly that the matter should be considered as resolved. Review Of District Health Boards Your Committee afforded itself an opportunity to discuss accountability issues concerning District Health Boards. The Committee was very pleased to hear the points of view of the Provincial Auditor's Office, the Department of Health and by two representative Health District Boards; the Pipestone District Health Board and the Regina District Health Board.

Your Committee found the presentations very informative. The information will help the Committee determine the various roles and responsibilities in the accountability chain. The Committee expresses its appreciation for the participation of the many officials who attended the Committee. III. EXAMINATION OF THE PROVINCIAL AUDITOR'S REPORT FOR THE YEAR ENDED MARCH 31, 1993

CHAPTER 1 -- OBSERVATIONS Supplemental Report of the Provincial Auditor Your Committee considered the Provincial Auditor's proposal to issue a Fall report, which would focus on the

Summary Financial Statements and government organizations with fiscal years ended December 31, in addition to the extant annual report issued each Spring. To facilitate the proposal, the Chair of your Committee was pleased to sponsor Bill No. 71,

An Act to amend The Provincial Auditor Act, during the fourth session of the 22nd Legislature. The said bill was enacted June 2, 1994 and the Provincial Auditor submitted his first Fall Report on November 22, 1994. New Provisions for Tabling of Reports by the Provincial Auditor Your Committee is pleased that the amendment to the Provincial Auditor Act (above noted Bill 71) also provided for the tabling and distribution of the Auditor's reports during times when the Assembly is not sitting. Reports of the Provincial Auditor are now deemed to be referred to your Committee during periods when the Assembly is not in session or has adjourned.

CHAPTER 2 -- THE GOVERNMENT'S

SUMMARY FINANCIAL STATEMENTS Pension Costs Your Committee again considered the issue of unrecorded government pension liability and noted the Provincial Auditor's recommendation at paragraph 2.11, which states that the government should record its full pension costs and liabilities in the

Summary Financial Statements. It is pointed out to the Assembly that a recommendation on this subject was made at paragraph 10 of the Committee's Third Report and reiterated at paragraph 9 of the Sixth Report. It is your Committee's observation that for the first time the government did record pension costs and liabilities in the

Summary Financial Statements issued for the year ended March 31, 1994. Pension Cash Flow Your Committee considered whether the government should provide the Assembly with forecasts of the cash required to meet its existing pension liabilities, as recommended at paragraph 2.16 by the Provincial Auditor. It is your Committee's recommendation that the matter should be dealt with by the following means: v

vi RECOMMENDATION 1 The government review whether forecasts of the cash required to meet existing pension liabilities should be provided to the Assembly and included in the

Summary Financial Statements. Unrecorded NewGrade Losses Your Committee notes that the government has complied with the Provincial Auditor's recommendation at paragraph 2.20, which states that the government should record its share of losses in NewGrade Energy Inc. in the

Summary Financial Statements.

CHAPTER 3 -- UNDERSTANDING THE FINANCES OF THE GOVERNMENT Disclosure of Information on Infrastructure Investment Your Committee considered the Provincial Auditor's recommendation at paragraph 3.23, which asked the government to examine how to disclose more information in the

Summary Financial Statements about its investment in the province's infrastructure. Your Committee notes that it made a recommendation on this subject in its Sixth Report, to which the Minister of Finance responded (noted in the Appendi x). With regard to the response, your Committee encouraged the Minister to monitor the progress of the Task Force on Reporting Capital Assets (a body created by the Public Sector Accounting and Auditing Board of the Canadian Institute of Chartered Accountants).

After examining the issue again, your Committee came to the conclusion that disclosure of the government's investment in infrastructure should begin within the context of departmental mandates. Therefore, your Committee recommends: RECOMMENDATION 2 The government should examine how to disclose more fully, in departmental and Treasury Board agency annual reports, information to describe its investment in infrastructure.

Presentation of a Total Financial Plan of Government Your Committee noted the Provincial Auditor's recommendation at paragraph 3.29, which states the government should present to the Assembly a multi-year forecast and a financial plan for the activities of government as a whole. It is noted that your Committ ee made recommendations on this issue in its Third Report, which in turn were reiterated in its Sixth Report.

After re-examining the matter, your Committee took note of the Minister's response (see Appendix), which asserted that the issue of government wide planning, managing and reporting is complex and is worthy of study. Your Committee agreed to reiterate its previous recommendations as follows: RECOMMENDATION 3 I. The government study the implications and issues related to the achievement of the goal of a multi-year financial plan for the government as a whole and; II.

As to the matter of an annual financial plan showing proposed revenue -raising programs and spending programs of all government organizations, and the matter of a multi-year plan for all government organizations, this Committee recommends that the Office of the Provincial Auditor, the Crown Investments Corporation and the Department of Finance undertake discussions on this issue, and return to this Committee with a joint report and;

Ill. During these discussions, the Committee asks that the advice of the Institute of Chartered Accountants of Saskatchewan and the Provincial Audit Committee be sought.

CHAPTER 4 -- ANNUAL PENSION COSTS AND TOTAL LIABILITIES Estimate of Pension Cost and Liabilities Your Committee noted the Provincial Auditor's recommendation at paragraph 4.26, which states that the government should use consistent estimates when calculating the costs and liabilities of its pension plans. In t his regard, your Committee notes for the Assembly that the government is moving towards using consistent estimates when calculating the costs and liabilities of its pension plans.

Formation of a Pension Review Task Force Your Committee responded to paragr aph 4.28 of the Provincial Auditor's report with the following recommendation to the government: RECOMMENDATION 4 The government should implement the Pension Review Task Force announced in the 1992/93 budget documents to study its full pension obligations to both those presently covered by Government plans and those presently having no pension coverage.

CHAPTER 5 -- THE FINANCIAL MANAGEMENT REVIEW COMMISSION Report on Implementation of Recommendations Your Committee considered the Provincial Auditor's recommendation at paragraph 5.05 and reiterates the recommendation it made on this subject in its Sixth Report, as follows: RECOMMENDATION 5 The government should report annually on its progress in impleme nting the recommendations and guidelines of the Financial Review Commission.

CHAPTER 7 -- ANNUAL REPORTS OF GOVERNMENT DEPARTMENTS Guidelines for Content of Annual Reports Your Committee agrees with the Provincial Auditor's recommendation at paragraph 7.05. As to paragraph 7.06, which reflects the Committee's own Sixth Report recommendations on the content, referral and release of annual reports, your Committee's response to the action taken by government is reported in the Appendix.

With respect to the question whether annual reports should be referred to the Standing Committee on Public Accounts, your Committee notes that annual reports of government departments and Crown agencies are important accountability documents and, thus, the Committee and members may use and refer to those reports in its review of public accounts and the report of the Provincial Auditor. It is not the Committee's intention that annual reports should be the subject of a formal review,