PDF Version

May 26,

GOVERNMENT

SERVICES COMMITTEE

Pursuant

to Standing Order 68, Lorraine Michael, MHA for Signal Hill Quidi Vidi,

substitutes for George Murphy, MHA for St. John's East.

The

Committee met at approximately 7:03 p.m. in the Assembly Chamber.

CHAIR (Forsey):

Good evening, everyone, if we are ready to go.

I want

to thank everybody for coming. First

of all, on my right, we will make the introductions of the Committee and the

staff, starting with Cathy.

MS C. BENNETT:

Cathy Bennett, MHA for the

District of Virginia Waters.

MS DYKE:

Laura Dyke, Researcher, Official Opposition Office.

MS MICHAEL:

Lorraine Michael, MHA, Signal

Hill Quidi Vidi.

MR. MORGAN:

Ivan Morgan, Researcher, NDP Caucus.

MR. DINN:

John Dinn, MHA, Kilbride.

MR. K. PARSONS:

Kevin Parsons, MHA for the

beautiful District of Cape St. Francis.

MR. PEACH:

Calvin Peach, MHA for the

great District of Bellevue.

CHAIR:

Clayton Forsey, MHA for the

District of Exploits and Committee Chair.

First,

what we are going to do is Finance and Public Service Commission but we are

going to do the Public Service Commission first.

Before the minister introduces his staff, or if they introduce

themselves, first of all, I will call for the subhead of the Public Service

Commission.

CLERK (Ms Proudfoot):

Subhead 1.1.01.

CHAIR:

Subhead 1.1.01.

Before I

ask the minister, I need a motion for adoption of the Government Services

Committee minutes of May 25, Department of Service NL.

Could I have a motion for adoption?

Moved by

Calvin Peach. Do we need a seconder

for that? No, okay.

What we

normally do, we will give you a few minutes for introduction, Minister, and we

give each one back-and-forth questions at ten minutes each, but the first one

usually gets fifteen. I see Lorna

has it set up for fifteen; we will go with that.

Minister, you are on.

MR. WISEMAN:

Thank you, Mr. Chair.

Welcome

to members of the Committee. As the

Chair has indicated, we are going to deal with the Estimates of the Public

Service Commission first and then we will move into the Department of Finance

after we finish that one.

Before

we start, maybe I will ask my staff to introduce themselves, starting with my

left, Bruce Hollett, who is the Chair of the Public Service Commission.

Bruce, go ahead.

MR. HOLLETT:

Bruce Hollett, Chair and CEO

of the Public Service Commission.

MS CHAFE:

Ann Chafe, Commissioner,

Public Service Commission.

MS THOMAS:

Raelene Thomas, Director,

Public Service Commission.

MS TRICKETT:

Wanda Trickett, Departmental

Controller.

MS DRODGE:

Megan Drodge, Executive

Assistant to Minister Wiseman.

MS TULK:

Jennifer Tulk, Director of

Communications for Finance and Human Resource Secretariat.

MR. WISEMAN:

Okay, I thought we lost

somebody on the way. We will

introduce the rest when we get into Finance.

CHAIR:

Okay.

Also,

Minister, when you or your staff are responding to questions most of you have

been through this before identify yourselves for the Broadcast place so they

will know who is speaking and who is responding.

Thank

you.

MR. WISEMAN:

Thank you, Mr. Chair.

Again,

thank you to the Committee. First,

we are going to do the Public Service Commission.

Many of you have some experience with the Public Service Commission, but

the Public Service Commission is an arm's-length agency that supports

government's efforts to be accountable and transparent in its hiring processes

and decisions.

I will

not spend a whole lot of time talking about the Commission, per se, and

hopefully as we get into the discussion around the Estimates, there may be some

questions that arise with respect to its operation and its function and its role

so I do not want to eat into that kind of time.

Mr. Chair, we are open for questions.

CHAIR:

That is great.

Cathy, we will start with you.

MS C. BENNETT:

In the first

section 1.1.01,

Services to Government and Agencies, I had some questions around the I will

start at Transportation and Communications.

A budget for the last fiscal year was $97,000, revised was going to be

$50,000, and the budget is back at $97,800.

I am

just wondering what initiatives were undertaken last year to move from the

target down to the actual of $50,000, because you guys did some great work

there.

MR. WISEMAN:

Just to that Transportation

and that whole block of operating accounts here, there is some flexibility

within some of those accounts as the savings may be accrued in one because of

some spending pressures in some of the others, and that is what happened here.

The Commission has made a conscious decision to defer some of the travel

because of some of the pressures that they had on their EAP and trying to

balance and live within the overall global budget, they had to make some

management decisions as to how they spent their money.

MS C. BENNETT:

What kind of things did you

defer not choose to spend money on, sorry.

MR. WISEMAN:

These would have been travel

deferments. Some of the work that

the Commission does provides services to people throughout the Province.

The base of operation may be here in St. John's, but we have employees

around the Province. So some of that

travel would have been deferred and handle the issues that arose in a different

fashion.

MS C. BENNETT:

Is that line to cover travel

for staff of the Public Service Commission who does hiring throughout the

Province?

MR. WISEMAN:

Maybe I should backtrack a

little bit because you posed a question about assisting with hiring.

The Public Service Commission is not involved in the hiring, recruitment

process. It is involved with

ensuring that there is compliance in the fairness principle.

So there is not travel associated with hiring.

The

Public Service Commission might be involved in travelling to we have EAPs, for

example. There are programs that

they are involved with respect to professional development opportunities for

staff who work within the Commission.

Those sorts of things would have been included in this expenditure head.

So, they deferred some of those things to be able to respond to some of

the pressures they had in other areas.

MS C. BENNETT:

Right.

Congratulations, great job.

I am

just wondering what actual travel was deferred.

If there was a budget of $97,800 the year before and we are back up,

obviously there is travel that needs to happen; I am just wondering what travel

was actually not incurred.

MR. WISEMAN:

It is kind of difficult to

tell you that on this particular day they deferred the travel to some particular

part of the Province, or they deferred a decision to attend some kind of

conference; but, throughout the year on any given month, day, or any period of

time, Bruce and his staff would be responsible for making day-to-day management

decisions as to what they are going to participate in with respect to

professional development, for example, and some of the work that they do with

respect to classification and appeal processes, which is one of their other

mandates.

They may

defer some of the travel to deal with some of those issues and deal with it in a

different fashion. The cumulative

impact of those day-to-day decisions that they made resulted in this kind of

profile that you see here at the end of a twelve-month cycle.

MS C. BENNETT:

In the Purchased Services

there was an under expenditure from what was originally budgeted which is great

news. I am just curious to know,

what were the things that were not purchased?

MR. WISEMAN:

If you look at Purchased

Services, that covers an array of things which could include meeting room

rentals associated with some of the just tie those two things together, for

example. If you are deferring some

travel that you may be attending, you are also deferring some of the expenses

associated with that.

Whether

you are renting meeting rooms or if you are purchasing services like courier

services and printing services, those sorts of things are all captured under

this Purchased Services area. So as

a result of the prudent fiscal management, they made some decisions as the year

progressed to not spend some monies in certain areas.

MS C. BENNETT:

The EAP that was referred to

earlier; just for my own clarity the actual costs of the EAP are not the

responsibility of the Public Service Commission.

Administration or connections with the EAP are, is that correct?

MR. WISEMAN:

The cost of the service

there is a referral to an EAP, for example.

Frequently, that may be referred out to some outside counselling service

to provide that kind of support.

That gets paid for through this fund here.

MS C. BENNETT:

Would that be paid through

this particular line item?

MR. WISEMAN:

Professional Services, yes.

MS C. BENNETT:

Okay.

MR. WISEMAN:

There are two things that are

driving that cost: number one is increased utilization; and number two, the

increased cost of providing it or getting access to the services.

People who are being contracted have there are changes, like a fee, to

cover their fee schedules.

MS C. BENNETT:

Is there a preferred supplier

or a supplier that is in place on an annual basis for the EAP services,

understanding that the services are very broad and they can be very unique in

what the needs might be, and that we may not always be able to have a particular

provider for a service. I am just

wondering is there a contract in place?

Or has there been a process to identify the support services through some

type of competitive bid?

MR. WISEMAN:

There is a fair number,

actually, of service providers.

Obviously they reflect the geography of the Province and the distribution of

employees in the Province. We have

people who provide these services in many parts of the Province.

There

are a number of individuals and organizations who provide this service, not just

our own Public Service Commission, but do it for a number of employers.

There are a number of service providers both here in the Northeast

Avalon, Eastern, Western, and throughout Labrador.

There is a profile, a list of those service providers in various regions.

MS C. BENNETT:

When employees make requests

for the EAP, is it an independent individual who funnels those calls out to the

service providers, or is that handled through the Public Service Commission?

MR. WISEMAN:

It is handled through the

Public Service Commission. There is

group of Bruce, I think it is four.

OFFICIAL:

Six.

MR. WISEMAN:

There are six employees who

work with the Public Service Commission and that is their sole focus.

They coordinate and handle all of the employee assistance inquires.

They make the connection to the services that are needed if required.

MS C. BENNETT:

Okay.

Mr.

Chair, just out of curiosity, I know there is six-and a half minutes or almost

seven minutes left on the clock, if I am finished questions on 1.1.01, do you

want me to defer to or ?

CHAIR:

We are doing the Public

Service Commission. We will vote on

the Public Service Commission. It is

only one page.

MS C. BENNETT:

Yes.

CHAIR:

If you are finished with

that, we can pass it over to Lorraine.

Sure, by

all means.

MS MICHAEL:

I do not have any other

questions. The ones I had have been

answered.

CHAIR:

Okay.

MS MICHAEL:

Could I ask one thing,

though, of you? Well, it is actually

of the minister. So far in Estimates

the briefing notes for the ministers have been passed on to us.

It really helps. It is just

the basic information that you have in your briefing notes.

Are you going to be doing that as well, Minister?

MR. WISEMAN:

Sure, we can do that too.

MS MICHAEL:

Okay great.

That

means there are things that we do not have to ask sometimes.

MR. WISEMAN:

Sure.

MS MICHAEL:

Great.

That is

all.

CHAIR:

You are finished?

MS MICHAEL:

I am finished, yes.

CHAIR:

All right.

I will call for the subheads of the Public Service Commission.

CLERK:

Subhead 1.1.01.

CHAIR:

Subhead 1.1.01.

Shall

the total carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

motion, Public Service Commission, total head, carried.

CHAIR:

Shall I report the Estimates

of the Public Service Commission carried without amendment?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

motion, Estimates of the Public Service Commission carried without amendment.

CHAIR:

Good.

Thank you.

Your

Public Service Commission is free to go.

MR. WISEMAN:

Thank you folks.

CHAIR:

Okay, so we have some more

introductions, Minister?

MR. WISEMAN:

Yes, we do.

We have

just changed out the troops. Now we

will have some further introductions.

I will start to my left.

MS HANRAHAN:

Denise Hanrahan, Assistant Deputy Minister, Department of Finance.

MS TRICKETT:

Wanda Trickett, Departmental Controller.

MR. MARTIN:

Craig Martin, Assistant Deputy Minister, Department of Finance.

MR. GRIFFIN:

Jay Griffin, Director of Tax Policy.

MS MILLER:

Ann Marie Miller, Comptroller General of Finance.

MR. HOLLETT:

Alton Hollett, Assistant Deputy Minister of Economics and Statistics.

MS TULK:

Jennifer Tulk, Director of Communications, Finance and Human Resource

Secretariat.

MS DRODGE:

Megan Drodge, Executive Assistant to Minister Wiseman.

MS BOLAND:

Gail Boland, Director of Policy, Planning, Accountability and Information

Management.

CHAIR:

Okay.

Thank you.

We will

start with Finance. What we normally

do here, Cathy I know Lorraine is familiar with it.

We will do the subheads of the different sections.

Right now, we are going to call for the subhead of the Executive and

Support Services so we will call for the subhead.

CLERK:

Subhead 1.1.01 to 1.3.01.

CHAIR:

Subhead 1.1.01 to 1.3.01.

We will

start with you, Cathy.

MS C. BENNETT:

Sure.

As I

mentioned to the Chair earlier, if I ask a question that is inappropriately

timed, based on the

section that we are going through, I am sure he will correct

me and let me know I am offside.

I wanted

to ask some questions with regard to some of the salary Estimates, if we could

start there. Based on the

information that I went through, in the information we had from last year and

this year, I see the number of permanent positions in fiscal 2014-2015 at 272

and in 2015-2016 at 271. I am

wondering if you can give me some clarity on the number of contractual,

temporary, and seasonal positions.

MR. WISEMAN:

Right now the department has

355 employees. There are 271

permanent, fifty-seven temporary, eleven contractual, and there are sixteen

seasonal.

MS C. BENNETT:

The fifty-seven temporary, is

that number consistent with the same number as the last four years?

MR. WISEMAN:

I do not have the Salary

Details from the previous year here.

I am not sure, Denise, if you have some knowledge of that.

I will have to find that out for you.

I can

verify the number for you, to answer your question, but there have not been huge

swings in the staffing levels in the department for a number of years.

If there are some variations, they are small numbers, but I can verify

the number for you.

MS C. BENNETT:

That would be great, thanks.

Budget

2015-2016 expected expenditures are $1.16 million in other salary costs; the

year before it was $64,000. Can you

give us a breakdown of this?

MR. WISEMAN:

Are you looking at the

Minister's Office?

MS C. BENNETT:

It is page 3.6.

I am probably ahead of myself, am I?

CHAIR:

Yes, you are.

You are in Financial Administration.

MS C. BENNETT:

I am in 2.1.

CHAIR:

We are doing Executive

Support now.

MS C. BENNETT:

Sorry, my apologies.

CHAIR:

That is okay.

MR. WISEMAN:

That is all right.

MS C. BENNETT:

Of the 271 positions, how

many of those positions are expected to be a part of the attrition plan over the

next five years?

MR. WISEMAN:

Departmental targets, in

Budget 2015 there is a target of three.

That will repeat itself over the course of the next five years, so there

will be fifteen.

MS C. BENNETT:

Based on the blend, I guess,

of the positions that are inside that make up the 271, have you forecast out the

individuals or the positons that will be eliminated?

MR. WISEMAN:

Not at this point, no.

We have profiled those who would be eligible to retire, so obviously we

have a profile of our employees in terms of their eligibility for retirement and

when those dates would occur; but, in terms of setting long-term forecasts about

which one of those we may not replace, these are decisions that we have not yet

made.

MS C. BENNETT:

Has there been any

identification of the three positions consecutively over the next five years

that will be eliminated through retirements?

Has there been any identification of skills gaps inside the departments

that will be created with those positions being made redundant?

MR. WISEMAN:

That becomes a big

consideration in that forecast. All

departments have the same responsibility in doing their attrition planning as to

recognize that here is your mandate, here is the range of programs and services

you provide. In our case, obviously,

it is tied back to our role as the Department of Finance.

So we need to have the talent and the skill to be able to manage the

financial affairs of the Province.

When we make those considerations that will become a factor.

MS C. BENNETT:

Are those decisions that

departmental staff are expected to create a strategy to identify or is there

MR. WISEMAN:

The Executive will have that

responsibility to make those decisions.

MS C. BENNETT:

The Executive in the

department?

MR. WISEMAN:

Yes.

MS C. BENNETT:

Each department will be

responsible for that.

MR. WISEMAN:

At a departmental level the

Deputy Minister of Finance, together with the Executive team, would make that

determination in the Department of Finance.

The deputies in other departments, together with their Executive, would

make that decision as well for their respective departments.

These individual decisions are made by individual departments.

MS C. BENNETT:

Okay.

This may

not be a question that the Chair will allow me to ask.

Finance would have a target of three over the next five years.

I am assuming that other departments have a target as well.

MR. WISEMAN:

Exactly.

MS C. BENNETT:

Besides the attrition

program, will there be any other positions that will be cut in Finance in

2015-2016?

MR. WISEMAN:

No.

MS C. BENNETT:

How many people retired in

the department last year?

MR. WISEMAN:

Actually, I do not have that

here. I will have to get that for

you.

MS C. BENNETT:

Okay.

What is

the total number that is eligible for retirement over the next five years?

MR. WISEMAN:

I will have to get that for

you as well.

MS C. BENNETT:

With the total number of

retirements, has there been an identification of the skills gaps at the total

number of retirements, not the ones for the attrition plan will create in the

department. What plans are in place

for that skills gap replacement?

MR. WISEMAN:

I guess that goes back to the

question you posed a moment ago, because it is the same question.

So I am going to try to give you the same answer, which is each

department and in our case, I will speak specifically to the Finance.

The deputy minister, together with the rest of the Executive team, as a

part of their mandate, now have to put together an HR plan that maps that out,

giving consideration to the skills that are going to be necessary to provide the

services that we are mandated to do.

When we

look out this year and the out years over that five-year period, as we identify

those individuals who are eligible to retire, we need to make some determination

of what we need to do for succession planning, and what we need to do across a

department to ensure we have the breadth of skills that we need to do the

services and provide the services that we do.

Part of that new HR plan that the executive has a mandate to develop will

be reflected in that strategy.

MS C. BENNETT:

Just for clarity, the

information there have been a couple of questions we asked that the minister

graciously offered to provide us the information.

Just for my own clarity, can you explain how that information or when

that information will come to us?

MR. WISEMAN:

We can put it together fairly

quickly. It is not something that

there will be, necessarily, any great delay in because it is only a matter of

assembling the information. The

issues of people who retired and a profile of eligibility is something we looked

at very recently, so that is something that is readily available.

MS C. BENNETT:

Would that information be

forwarded to the Official sorry Lorraine, I am asking probably a stupid

question that you know. So a brown

envelope slips under my office door?

MR. WISEMAN:

What would happen

MS MICHAEL:

John brings it.

MR. WISEMAN:

This is a committee of the

House and so you have asked that in a committee proceeding.

MS C. BENNETT:

Okay.

MR. WISEMAN:

What I will do is I will

provide it to the Chair. The Chair

then has the responsibility for distribution to those on the Committee.

MS C. BENNETT:

Okay.

MR. WISEMAN:

That is how the information

will flow to you and other members of the Committee, through the Chair.

We will provide that to him.

MS C. BENNETT:

Time frame typically?

MR. WISEMAN:

Soon, a matter of days.

MS C. BENNETT:

Days, okay.

I wanted to make sure that I understood.

I want to understand what the expectation is.

Mr.

Chair, that covers

CHAIR:

Yes, I was going to say,

Cathy, that we actually started with fifteen minutes, but it is supposed to be

ten now. It was only in the

beginning that it was fifteen.

MS C. BENNETT:

Yes.

I am happy to turn it over to Lorraine.

CHAIR:

To sort of speed things up

back and forth, we try to go with ten and ten.

If you have no more questions on that section, that is okay, that is

fine.

MS C. BENNETT:

I am happy to turn it over.

CHAIR:

We will go to Lorraine.

She may use up ten probably.

MS MICHAEL:

Okay.

Thank you very much.

CHAIR:

Sure.

MS MICHAEL:

I am going to start right

away with line items. It is a minor

one, but still I will. Subhead

1.1.01, under Purchased Services, $4,000 was budgeted, but revised down to $600.

Very little was used in Purchased Services last year, if we could have an

explanation of that.

I think

it is normal practice to go back up to the base so that you allow yourself a

certain amount of money. You are

going back up to $4,000 in this year.

What was the $600, Minister?

MR. WISEMAN:

That covers items such as

some training costs associated in there, the photocopying, entertainment, and

printing services. Those sorts of

costs would be included in that number.

MS MICHAEL:

Okay.

Historically, does it ever go up to the $4,000?

Do you know?

MR. WISEMAN:

I am not sure what it has

historically been. I think we have a

profile here of what it was last year the year before last, rather.

I thought we did. I will see

if I can find it here for you. I

thought I had it here, but I do not.

There

was $1,000 spent the year before that.

MS MICHAEL:

Okay.

MR. WISEMAN:

The base has always been

$4,000.

MS MICHAEL:

Right.

MR. WISEMAN:

The previous year it was

$1,000. This past year it was $600.

MS MICHAEL:

Okay.

Thank you.

Coming

down to 1.2.01, under Salaries the budget was $1,240,000 and it was revised up

to $1,299,000. Then for this year it

is back down partway, actually, between those two, to $1,277,800.

Could we just have an explanation of that whole line there, Minister,

please?

MR. WISEMAN:

I thought we were still on

the Minister's Office part.

MS MICHAEL:

No, I am sorry.

I thought I said I am just moving to 1.2.01.

MR. WISEMAN:

Okay, I am sorry.

The drop

in Salaries from last year came about as a result of two employees who retired

and there was a deferred replacement.

That is why we ended up with the savings from last year.

This year

MS MICHAEL:

Last year it was overspent by

$59,000.

MR. WISEMAN:

Yes.

Associated with that we had severance; associated with their leaving, there was

severance.

MS MICHAEL:

Okay.

Thank you.

Then I would like to come down to Professional

Services. The budget was only $7,000

and the expenditure was $607,000.

Obviously, something big happened that you had not anticipated under

Professional Services.

MR.

WISEMAN:

That is associated with pension reform.

We had to use the services of actuarial consulting services to assist

with that exercise, and that is where we picked up the cost of those services

associated with pension reform.

MICHAEL:

Okay.

Who was it who offered that service, that professional

service?

MR.

WISEMAN:

Eckler was one of the companies and Morneau Shepell was the other; there were

two companies that we used. These

are people, we use them and many pension funds do; that is their area of

expertise.

MICHAEL:

think we all are aware that is a pretty special expertise, the actuarial work,

especially around pensions too.

Thank you.

That is all the questions I have in that section.

Moving to 1.2.03, Transportation and Communications, the budget was

$289,100 and the revision was up to $450,000.

Let's look at that first.

What happened last year that made that go up by so much by $169,900 I think?

MR.

WISEMAN:

was primarily associated with increase in mail costs as a result of increases by

Canada Post to postage.

MICHAEL:

see.

What would be the I mean, that is a fair chunk.

MR.

WISEMAN:

Yes, it is. I am not sure, Denise,

if there is some additional detail around it, but it is associated with postal

increases.

MICHAEL:

Just with postal increases

MR.

WISEMAN:

The

amount of activity I am not sure if there is any one event or something that

contributed to more mail outs going out last year, but

HANRAHAN:

would be vender payments and it would be payroll cheques.

MICHAEL:

Right.

HANRAHAN:

as we move towards EFT, the hope is that that will come down.

MICHAEL:

Okay, thank you.

I guess it is because of that increase that the budget

for this year is higher than it was last year.

MR.

WISEMAN:

Exactly, yes.

MICHAEL:

Okay, thank you.

Down to Revenue Provincial, what is the source of

that revenue and why was it so much higher than budgeted last year?

MR.

WISEMAN:

That is increased revenue from the pooled pension fund, over and above what was

budgeted from last year.

MICHAEL:

Okay, thank you.

Moving to 1.2.04, Appropriations provide for the

purchase of tangible capital assets. Purchased

Services

MR.

WISEMAN:

did some changes last year to office space we had down on Mews Place.

We operate a facility on Mews Place, Topsail Road, here in the building,

and in Grand Falls-Windsor locations.

We have a small operation where you have an employee embedded in another

department's facility in Corner Brook but the facilities that are have a

responsibility for ourselves as a department, one on Topsail Road and the one on

Mews Place. These are some

improvements we made to the Mews Place facility.

MICHAEL:

Okay.

You budgeted what you thought it might be, but it

turned out to be less.

MR.

WISEMAN:

Yes.

MICHAEL:

Yes, that is good.

Then, under Property, Furnishing and Equipment you have

not budgeted anything, but you spent $158,000.

MR.

WISEMAN:

That was a couple of things. We had

six high-resolution scanners to manage our information systems, and then we had

a mobile filing system that was purchased as a part of the relocation to Mews

Place.

MICHAEL:

Okay, thank you.

How far was the call?

Was it to

CHAIR:

was 1.3.01.

MICHAEL:

Okay, great. I will continue on to

that then, although I am not sure I have any questions there.

Under Operating Accounts: Employee Benefits, the budget

was $72.3 million and the expenditures $66.8 million.

Could we have an explanation of that, please?

MR.

WISEMAN:

This area here, 1.3.01, Government Personnel Costs, there is a couple of areas

in Finance like this where the Department of Finance absorbs the budget for and

then underwrites the cost of those expenditures across government.

These are the costs associated with the group insurance program, pension

plan contributions, and all of those costs.

Rather than have individual departments dealing with

that, all of the money is allocated in Finance, and Finance is kind of a

flow-through account held in the Finance budget . These are things that are

associated with the Employment Insurance program, the Canada Pension Plan

contributions, group medical and group life, and the post-secondary tax paid on

payroll. All of that is captured in

this category here.

This is a reflection of employee activity, or the amount of employee activity

that we have across government. It

gets absorbed in here. These changes

reflect fluctuations in those expenditures which are influenced by fluctuations

in staffing at various departments throughout government.

MS MICHAEL:

Right.

It would be difficult to do a right-on estimate of that.

MR. WISEMAN:

The estimating is based on

historical information, but it is an area where we have no control over how

costs the Department of Finance does not, in and of itself, have an influence

over how the cost flows and the changes that are incurred.

(Inaudible) driven by operational departments that may make changes in

their staffing over any given year, we just absorb it here.

MS MICHAEL:

Right.

MR. WISEMAN:

We try to budget for it based

on what we historically have done and any information we have about forecasting

that has been done with respect to staffing in various departments throughout

government.

CHAIR:

Lorraine, it is okay.

If you only have a question or two left

MS MICHAEL:

Just one more.

CHAIR:

we can finish it.

The response is probably lengthy at times so it uses up some of your

time.

MS MICHAEL:

I cannot believe that the

minister has lengthy responses. I

cannot believe that.

MR. WISEMAN:

You are asking such important

questions that they deserve a good answer.

MS MICHAEL:

They do.

Thank you.

CHAIR:

You might as well take the

other question if you are going to finish up on that.

MS MICHAEL:

Again I always like to know

because in some places it is the same, but in other departments it is different

what the provincial revenue source is in this section.

MR. WISEMAN:

The revenue.

Maybe I will ask Denise, if she can speak to that, actually, because I am

not some of it comes from group insurance recoveries, but I want to make sure I

give you the answer that reflects a little more detail.

MS HANRAHAN:

When employees go on

secondment to other agencies, this is us recovering this portion of their cost.

In some cases, that would include group insurance, but it generally

includes their employee benefit portions.

MS MICHAEL:

Right.

Okay.

Could I ask a general question before going back to Cathy?

CHAIR:

Yes, sure.

I will make it up with Cathy.

That is not a problem.

MS MICHAEL:

Okay, thank you.

This is

more personal interest actually, but I think I am in the right spot to ask it.

If, for example, I owe money to be honest, one time I was travelling

and did not know that my Blackberry was roaming.

I had a bill of over $2,000 which I paid.

I went down to Finance and paid it.

I do not get anything that shows I have paid it.

So if

somebody were to look at my expenditures they would say, well, Lorraine Michael

spent $2,500 when she was in wherever she was.

There is nothing to show that I paid that money back.

Is that normal?

MR. WISEMAN:

There are two answers to your

question; one is the receipt itself you get.

So you yourself have had the acknowledgment of the payment.

MS MICHAEL:

Yes.

MR. WISEMAN:

You have been given a

receipt. The Comptroller General's

office would provide the receipting.

MS MICHAEL:

Yes.

MR. WISEMAN:

I think what you are more

referring to is the manner in which that gets reported in the House of

Assembly's report

MS MICHAEL:

Publicly.

MR. WISEMAN:

and the public information that is out there.

MS MICHAEL:

That is right.

MR. WISEMAN:

All MHAs and their

expenditures there is no revenue stream associated on that line at all.

MS MICHAEL:

That is right.

Yes.

MR. WISEMAN:

So it is much more the way

the reports established by the House of Assembly the construct of the reports.

The revenue is clearly put back in the public Treasury and you get a

receipt for that. Your concern and

your question obviously is much more about how the public looks at your

expenditures and sees that you spent all of this money on something, not knowing

that you ever paid it back.

MS MICHAEL:

That is right.

MR. WISEMAN:

It is a reflection of how the

House of Assembly itself has constructed your reports.

MS MICHAEL:

Right.

MR. WISEMAN:

It is something that the

Management Commission

MS MICHAEL:

Should look at it.

MR. WISEMAN:

should address so that there is a reconciliation should there be an

overpayment that is recovered. That

way it is fully accountable for and transparent in its reporting.

MS MICHAEL:

Right.

MR. WISEMAN:

Now it is paid out of the

public purse and that is how you got the money.

MS MICHAEL:

That is right.

MR. WISEMAN:

Therefore, when it is

recovered it goes back to the Exchequer Account and it is recorded in general

revenues.

MS MICHAEL:

Right.

MR. WISEMAN:

It is much more a reporting

issue established by the Management Commission.

MS MICHAEL:

Right.

Thank you.

I will

consider bringing that to the Management Commission.

CHAIR:

Okay.

Thank you, Lorraine.

Cathy,

did you have any more questions on this particular subhead?

MS C. BENNETT:

I did.

CHAIR:

Okay, not a problem.

MS C. BENNETT:

Under 1.1.01, Minister's

Office, the line item is referenced Transportation and Communications.

For a process question that may help me and help speed things up so I do

not ask the same question every time; in 2014-2015 we had a budget of $51,000.

Is that a built-up budget, or is that a budget that is built from

historical performance?

When I

say built up I mean is it built up from a plan, or it is based on the historical

results of that particular line item.

MR. WISEMAN:

It would be based on

historical changes. There is a thing

here that influences this. Depending

on where the minister's residence would be and their travel so if you have a

minister, maybe two ministers ago, and their residence was here in St. John's,

as a minister then, there was very little travel in terms of that constituency

travel;

whereas if you are a minister where your office space is here but your

constituency is somewhere, then this travel may change.

The figure that you see built in the base here is a reflection of

historical utilization by that department.

MS C. BENNETT:

Right.

MR. WISEMAN:

What was experienced last

year came about as a result of who happened to be the minister and their

circumstance, both where their residence would have been and where their

district would have been. So that

would have been a reflection of that change.

MS C. BENNETT:

Then, generally speaking,

when we look at the Transportation line, in subsequent areas, the same process

would apply that it is a historical budget based on the spending from the past.

I guess my question then is: Decisions about travel or about staff

training, things that would require travel, are they linked to a strategic plan

or are they made based on historical we have always gone to this convention;

we have always done this training.

I guess

I am confused as to how a historical budget would link to a strategic plan of

activity. Maybe it is just because I

do not understand the process.

MR. WISEMAN:

Okay, so let's separate the

answer in two ways for you because we started off your question with respect to

the Minister's Office.

MS C. BENNETT:

Yes.

MR. WISEMAN:

My answer was with respect to

the Minister's Office.

MS C. BENNETT:

I understood, yes.

MR. WISEMAN:

You are broadening your

question to look at how we actually allocate funding in a variety of areas.

Let's take that one, travel, for example.

Any budgets that you see in here as we walk through, seeing there are

other departments here, they would be a reflection of decisions we would have

made through a budgetary process.

As a

team, we would have said: Let's look at Executive Support for next year, and

let's look at what would be our operational plan for next year, how we are going

to function next year as a department, what are some of the things we want to do

next year and how much money are we going to need to do that always in the

context, though, of what our fiscal reality would have been.

As you

go through this document, and you have gone through some of the other Estimates,

you will see adjustments in the budget this year relative to what it was last

year. They would be a reflection of

operational decisions. I think you

used the word historical context versus accumulative.

In that context these are not accumulative numbers, so it is not an

accumulation of what has happened in the past.

They

reflect, historically, what has been our practice, what are some of the things

we have done and participated in, and that is how we built the minister's

budget.

MS C. BENNETT:

Right.

MR. WISEMAN:

Other areas that we talk

about, as we move forward here, will reflect what we have chosen to do in the

next twelve-month period. We have

said to a number of others here is where we are fiscally today, here is the

nature of our operation, here are some things that we must do.

For

example we will talk about it in a moment as we get to it, but let me use it

as an example now the area of taxation.

We have tax auditors. As a

part of their program, they need to be travelling.

If we are going to have a tax audit function, they need to have resources

to do their job and a part of that is the ability to be able to travel.

So when we map out the travel budget, we need to consider what the audit

activities are for next year. Based

on these forecasted audit activities, we need to allocate this much money for

travel.

It is

based on an operational plan for the coming twelve months.

MS C. BENNETT:

Okay.

MR. WISEMAN:

We walk through each of those

areas of operation in that same fashion and we came to the number that you are

going to see as we walk through each of those headings.

You

started your question with respect to the Minister's Office, and that is why I

framed it the way I did.

MS C. BENNETT:

You are obviously right; my

question was asked in the context of trying to speed up every time I asked about

travel, so I appreciate you giving me both answers.

To this

one specifically then, we underspent happily by $49,000.

I am just curious as to what things did not get done, or was that a

reflection of what the minister mentioned earlier about the fact that it was a

different minister, a different travel costs associated.

I am curious to know what was not done.

MR. WISEMAN:

Again, the issue of what was

not done, I cannot tell you that the minister last year, or prior to my coming

last year, what that person may have chosen not to do and did not charge the

travel to that account. I can tell

you my own experience after becoming minister in the last fiscal year in that

most of my time last year, with the exception of one trip to Ottawa and I think

I had one other travel, was pretty much focused in the department around

preparation for this year's Budget.

As you

recall, last year in July we started to run into some challenges with our

revenue stream. So we really needed

to dig in, in the fall to start planning for this year's Budget.

Therefore, my time was anchored mostly to the office.

What I

did not do it might be that there are a couple of things that I ordinarily

would have participated in last year in the fall that I did not, but that was

conscious decision about where I devoted my time.

MS C. BENNETT:

Okay.

That one I am good on, and that one I am good.

Thank you.

Heading

1.2.03, Administrative Support, I had a couple of quick questions there.

There was a salary of $112,000 which was allocated last year for students

within the Department of Finance. I

am wondering: Did you not hire whom you had planned as far as students go?

MR. WISEMAN:

There are two groups of

students that we have within the department.

We have co-op students who participate; most of them would be business

students. Most of them were from the

College of the North Atlantic or from Memorial University.

Then there are some students we provide summer employment to as well.

Last

year, we did not have as many requests for students as we budgeted for and would

have historically had. I think

throughout government you will find that most departments provide educational

opportunities, employment opportunities, as a result of supporting programs like

the co-op program, whether it is business, engineering, or other areas.

Then, in the summer, we provide student employment opportunities for

students as well.

Sometimes the demands are high and some more times they are not, depending on

other opportunities that may exist in the community.

MS C. BENNETT:

Would those positions have

been advertised to students to fill or

MR. WISEMAN:

Many of them are done through

direct application to the departments.

Some of them are through the Human Resource Secretariat.

They are not positions that we have decided that we are going to create

ten positions and here are their position descriptions and we are going to

advertise these jobs this year.

What we

tend to do is we direct their applications to the Human Resource Secretariat,

direct applications to departments (inaudible) students, through high school

students, university students, college students.

Depending on the flexibility that departments may have in their budgets

for any one year, there may be an ability to accommodate half a dozen, there may

be an ability to only accommodate one or two, and some more times there is a

flexibility enough to accommodate more than that depending on the demand for

student employment.

MS C. BENNETT:

I am just curious if, this

year, the demand and applications for those positions was less, what is the

rationale around budgeting more than what was budgeted last year?

MR. WISEMAN:

Again, we believe that last

year might have been an anomaly in that the demand was not as high as we have

historically had it. My own personal

experience with students in areas where I have worked, there are fluctuations.

Through some years there are lots of other employment opportunities that

students may take advantage of and the demand through various government

departments may not be that high; in other years, it is.

MS C. BENNETT:

Can we get the numbers for

student hires for the last four years?

MR. WISEMAN:

We can do that.

MS C. BENNETT:

Perfect, thanks.

Okay,

that question was asked and I am finished that one.

Subhead 1.3 the last question, a short one there was an allocation of

$60,000

MR. WISEMAN:

In what

MS C. BENNETT:

Sorry, 1.3.01, Government

Personnel Costs.

MR. WISEMAN:

Okay.

MS C. BENNETT:

Is that okay?

MR. WISEMAN:

Yes.

MS C. BENNETT:

I know that Ms Michael asked

a question earlier, but I am still sort of confused.

Last year there was an allocation of $60 million in Salaries.

The breakdown from last year's Estimate book showed about $23 million in

collective bargaining increases, $18,000 for a JES block to address can we

have a little bit more detail on the Salaries in this section?

I did not understand, Minister, with due respect, the balancing that you

were talking about.

MR. WISEMAN:

Remember I said, as I

answered this question, there are a number of areas throughout government where

blocks of money are allocated because the Department of Finance becomes a

holding spot for that.

MS C. BENNETT:

Yes.

MR. WISEMAN:

This is one of those areas

where you have the implementation of the Job Evaluation System the first block

was done in the middle of April. We

have another group being implemented as of the middle of July.

We we have put a block of money in here to be distributed to departments

of government to cover off the cost of that Job Evaluation System.

Plus, we

have some areas where we are trying to we have had a block of money allocated

in here for some service contracts that government will have to fund.

There are negotiations taking place with ambulance operators, for

example. There are negotiations

taking place with the Newfoundland and Labrador Medical Association, to name a

couple. So we needed to create a

block of money here to make provision for those kinds of decisions that will be

made during the course of this fiscal year.

Rather

than allocate it to a particular department, we needed to create a block to

cover the outcome of those kinds of discussions that will occur.

MS C. BENNETT:

In essence, though, this is

operating money for operating departments that is captured here as a result of

salary band changes or salary changes.

MR. WISEMAN:

Yes.

MS C. BENNETT:

Would it not make more sense

to have those operation costs captured in the department so that

MR. WISEMAN:

Just so we are clear, it will

be captured in terms of its costing.

It will costed to the department, but we need to have it here for its

distribution. In terms of when the

expenditures are reported next year in the accounts of government, it will be

charged to the respective department that has incurred the expense.

MS C. BENNETT:

I understand.

Okay.

CHAIR:

Okay.

You have

one more question, Lorraine?

MS MICHAEL:

Yes.

CHAIR:

Sure.

Okay.

MS MICHAEL:

Yes, just one question that I

missed under 1.2.03, the Salaries line.

It looks like it might be only one person, but budgeted $112,800 and then

the revision was down to $39,600.

MR. WISEMAN:

This allocation here is for

students. It is a block of money for

students.

MS MICHAEL:

Oh, that is for the students.

Okay.

MR. WISEMAN:

That is the student

conversation we just had a moment ago.

MS MICHAEL:

Good enough.

Okay.

thought it might have been that, but I missed it because it did not say that

specifically.

Thank

you very much. That is it.

CHAIR:

Okay.

No more

questions, Lorraine?

MS MICHAEL:

No.

CHAIR:

No problem.

We will call for the subheads of the Executive and Support Services.

CLERK:

Subheads 1.1.01 to 1.3.01.

CHAIR:

Subheads 1.1.01 to 1.3.01.

Shall

the total carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 1.1.01 through 1.3.01 carried.

CHAIR:

Now we will call for the

subhead for Financial Planning.

CLERK:

Subhead 2.1.01 to 2.1.05.

CHAIR:

Subhead 2.1.01 to 2.1.05.

We will

start with you now, Lorraine.

MS MICHAEL:

Thank you very much.

Subhead

2.1.01; it seems always to be the beginner.

The Salaries line, please, Minister; budgeted at $754,600 and down to

$606,100, then this year up to $777,000.

MR. WISEMAN:

There were two vacancies that

occurred in that unit last year. We

deferred filling them. Then, the

other increase reflects the 3 per cent general salary increase.

MS MICHAEL:

Right.

MR. WISEMAN:

In all of those areas, just

as a general commentary, the original budgets for this year of 2015-2016 reflect

a 3 per cent increase in salaries.

MS MICHAEL:

Right.

MR. WISEMAN:

Some of the changes that you

might see in some of those categories reflect that 3 per cent increase.

MS MICHAEL:

Have those two vacancies been

filled, or at least you expect to fill them, one or the other?

MR. WISEMAN:

One of them is.

MS MICHAEL:

Okay and the other will be

filled?

Okay.

Thank you.

Under

Professional Services, $337,000 approximately was budgeted and $291,000

approximately spent.

MR. WISEMAN:

Part of that are the changes

that we had made. Last year, you

might recall in the fall we started making some conscious decisions about

discretionary spending.

MS MICHAEL:

Yes.

MR. WISEMAN:

This was one area where we

were able to make some changes from last year.

Some of the costs we were able to defer.

MS MICHAEL:

What would normally be the

Professional Services that you would be contracting there, or paying for,

whichever?

MR. WISEMAN:

Denise, do we have any

history there of what we paid out of this one here.

This is the Pensions Administration fund.

MS HANRAHAN:

Yes.

Historically, that would be paying actuaries, such as Morneau, for

evaluations of the pension plan as well as maintenance contracts for our pension

benefits system.

MS MICHAEL:

Maintenance contracts.

MS HANRAHAN:

Maintenance contracts for the

IT system.

MS MICHAEL:

Yes, right.

Okay.

Thank you.

MR. WISEMAN:

It is the software that

administers the plan.

MS MICHAEL:

Right.

Then

under Purchased Services, budgeted at $56,600, but only spent $29,000.

It looks like you have done a reassessment of what you need in that line

for this year which is only $36,600.

MR. WISEMAN:

Last year's dip in what our

forecast was, again, was as a result of that decision on discretionary spending.

MS MICHAEL:

Okay.

MR. WISEMAN:

We were able to realize some

savings.

MS MICHAEL:

Right.

We have asked this question of others: Where you have made cuts due to

discretionary spending, is it in any way affecting negatively what you are

doing? Or are you making sure that

you have what you need to do the work that needs to be done?

MR. WISEMAN:

It is an interesting question

actually, and the fact that you have asked it of everybody it is a fair

question to pose. Obviously,

anywhere that we have made some changes in our spending patterns and our

forecast expenditures, we believe that we are able to do this by making some

modifications in how we deliver services.

We have

not had to discontinue doing anything in the department.

In some cases, we have looked at how we might do things slightly

different, but we have not had to discontinue providing any service or program

to live within our forecast.

MS MICHAEL:

Thank you.

Under

Property, Furnishings and Equipment you seem to have a baseline of $20,700 and

last year spent only $13,500. I do

not know if you have the historical information there.

Is that a usual revision in terms of the ratio?

MR. WISEMAN:

Denise, I do not know if we

have any historic data there of what we spent that on.

MS HANRAHAN:

(Inaudible).

MS MICHAEL :

Pardon?

MR. WISEMAN:

In the previous year to this,

the one just ending, we spent all of that allocation.

MS MICHAEL:

Okay, thank you.

Let's go

to 2.1.02, Budgeting. Again, let's

start with Salaries and taking into consideration what you said, I will be more

interested in the difference between the budget which was $1.1 million,

approximately, and the revision down to $1.2 million.

MR. WISEMAN:

Are you talking about the

Budgeting

MS MICHAEL:

Yes, what was the revision

downwards; I think it is $81,400 is the difference between the budget and the

revision.

MR. WISEMAN:

Are we looking at the same

page, Budgeting

MS MICHAEL:

Heading 2.1.01.

MR. WISEMAN:

The $1.145 million was last

year's budget and the actual was $1.2 million.

MS MICHAEL:

Yes, $1,145,300.

MR. WISEMAN:

Yes, so the increase over

last year

MS MICHAEL:

The decrease.

MR. WISEMAN:

I am sorry, you are asking

MS MICHAEL:

No, I am sorry.

You are right; it is an increase.

I apologize. It has been a

long few days.

MR. WISEMAN:

Okay.

I was starting to question myself there for a second.

There

was an initial severance we had to pay out as a result of employees leaving, and

that is what drove that cost up.

MS MICHAEL:

Okay, thank you.

Over to

2.1.03 and here well, it is not much of a difference, but I will still ask

the budget was $221,100 and this time it is revised down to $208,300.

MR. WISEMAN:

There was a position that

went partway through the year before it got filled.

There was a vacancy and it was not filled for the full fiscal year.

MS MICHAEL:

Right, thank you.

MR. WISEMAN:

This is one of those grants,

the small complement, we are back at complement.

If you add on the 3 per cent salary increase, then you get this figure

here. That is why it grew back up

again.

MS MICHAEL:

Right.

I am not

usually asking that because I can see that; it is only if it is going to be a

large number that I will question that.

Thank

you.

Down to

2.1.04, Financial Assistance: Appropriations provide for promoting business

opportunities and financial support for departments and Crown agencies for

initiatives consistent with government's objectives with relevant funding

transferred to departments during the year as required.

I know

it goes into a second page; that is why I am getting my pages ready here.

We see that you have $1.2 million, approximately, budgeted in 2014-2015.

That was not spent and now this year you are budgeting $2.2 million,

approximately. I would like some

explanation of this money, please.

MR. WISEMAN:

Again, this is one of those

areas where Finance holds the block but will not end up spending it as a

department. For example, the Muskrat

Falls oversight activity, there is $500,000 in here for that.

MS MICHAEL:

A half million.

MR. WISEMAN:

Yes.

Then there is another $300,000-and-some-odd allocated in here for some

additional pension reform initiatives.

We are in the process of finalizing the NLTA, and we have the Uniformed

Services one that we will work on next.

So we have allocated a block of money in here for some activity around

that.

Under

the revisions to the new legislation we have made some provision in here for the

implementation of ATIPP. The Privacy

Commissioner has indicated that it will be in June.

I think he might have, as a part of the Management Commission process,

indicated to the Management Commission that it would be June before he had a

chance to get a better feel for what resources he would need.

MS MICHAEL:

Yes.

MR. WISEMAN:

So we needed to make a

provision so we have a block of money in here for that.

There is some $700,000 in here for that activity because he has indicated

that he needed to have some time to figure that out.

Aligning with his activity, the Office of Public Engagement also needs to

make some adjustments in how they are going to support that new legislation.

We have

taken a block of money, some-$700,000, and put it in a block and placed it here

to facilitate that happening. This

block of money represents that kind of decision.

It is a pretty broad description you will see in the Estimates for it,

but the money that is allocated in this year, it is for those items that we have

just identified here. Plus, we have

an additional $300,000 for Professional Services embedded in here as a provision

for services akin to those sorts of activities.

MS MICHAEL:

Okay.

CHAIR:

That is a good way to finish

it oh, you are still on the same question?

MS MICHAEL:

Yes, I am still on the same

question.

CHAIR:

Okay.

MS MICHAEL:

If I can finish it?

CHAIR:

Yes, you can finish.

MS MICHAEL:

Okay, thank you.

I have a

follow-up. Number one this is just

a comment you have all of that so when we get the notes, we will have that

detail.

MR. WISEMAN:

Yes.

MS MICHAEL:

I just want to question if

I am reading my notes here correctly last year we were told that the money

that was being estimated was for Deloitte & Touche for its strategic

procurement. Obviously that did not

happen because no expenditure happened.

MR. WISEMAN:

Are you talking about last

year's Estimates?

MS MICHAEL:

Yes, it was last year's

Estimates? Last year $1,223,000 was

being estimated and it was not spent.

Our notes tell us that we were told it was going to be for Deloitte &

Touche to do a strategic procurement.

MR. WISEMAN:

I just want to go back to the

question I answered a moment ago from Ms Bennett about the way this goes in the

previous account, how it gets expended.

I think your question earlier was around why won't you then transfer it

out to that department.

When it

gets expensed, it gets expensed out to that.

The expenditure for that money would be captured in the Cabinet

Secretariat expenditures, so the money would have been transferred out to them.

That piece of work that Deloitte was doing on that project, that work was

done last year I believe.

MS MICHAEL:

So it is showing up somewhere

else?

MR. WISEMAN:

Yes, as an expenditure.

MS MICHAEL:

Yes.

MR. WISEMAN:

It is this issue with the

placeholder in the budgetary process.

We need to make a provision for it somewhere, so we block it here.

Then when the expenditure occurs, the relevant department, we transfer

the money out to them and they incur the expense.

MS MICHAEL:

Okay.

MR. WISEMAN:

It is accounted for as an

expenditure item.

CHAIR:

Thank you, that is good.

Cathy.

MS C. BENNETT:

With the Chair's indulgence,

if it is okay, I am going to keep asking questions on 2.1.04 and go back to the

beginning

CHAIR:

Yes, we are at 2.1.01 now to

2.1.05. So if you want to go back to

2.1.01, that is fine.

MS C. BENNETT:

Is it okay if I stay on

2.1.04 and finish the line of questioning?

CHAIR:

Sure.

MS C. BENNETT:

I am still confused.

Muskrat Falls oversight, as an example, $500,000 was budgeted last year

for it so when that expense took place, that expense was charged to the

Department of Natural Resources in a line item?

MR. WISEMAN:

Muskrat Falls oversight would

have been in Cabinet Secretariat.

MS C. BENNETT:

Last year if we knew we had

to make an allocation for it and we know there is going to be an expense this

year, why would that still be in this year's budget?

MR. WISEMAN:

We transfer that as they draw

down on it. If they only spend

$300,000 that is all they get. It is

earmarked specifically for that project.

MS C. BENNETT:

Okay.

So then

their department operational expenses, it is a special thing that does not

happen on an annual basis that is why you are keeping it there.

Okay, I got it now.

2013-2014 it was $4.5 million that was budgeted and zero was spent.

The reason I would assume that zero was spent is that the $4.5 million

was expensed out as it needed to be got it; I understand now.

That

would include, as an example, what Ms Michael just referred to, some of the

expenses related to the procurement cost-savings initiative.

MR. WISEMAN:

To the Deloitte contract.

MS C. BENNETT:

Yes, got you.

These are one-time, never to be repeated, never to build into our annual

budget I got it now. It just took

me a moment, thank you.

On the

procurement cost-savings initiative, I am wondering if the minister or even

staff would like to give some indication of what exactly some of the things were

that were identified in that.

MR. WISEMAN:

We can get that information

for you. Keep in mind, we were the

placeholder for the money; the expenditure was incurred by someone else.

We will get the answer for you, but it is not something we are

responsible for the administration of, and we would not have been involved

directly in the project.

MS C. BENNETT:

Right.

Who

would have owned accountability for the project?

MR. WISEMAN:

On that one it would have

been SNL under GPA Government Services under GPA.

MS C. BENNETT:

Okay.

The

money that is allocated, the $2.2 million that is budgeted for this year, if I

have heard correctly, there is still the money for the Muskrat Falls oversight.

MR. WISEMAN:

Yes.

MS C. BENNETT:

There is still an amount for

the continuation of pension reform initiative.

MR. WISEMAN:

Yes.

MS C. BENNETT:

There is a new amount that

builds up to cover what the minister just referred to, I am guessing cost

associated with Bill 1.

MR. WISEMAN:

Seven hundred thousand,

exactly, yes.

MS C. BENNETT:

Okay.

With the

Chair's permission, I will go back to 2.1.01, Pension Administration, if that is

okay.

Under

the line item Professional Services I am wondering where the savings come from

to move from $337,000 as a budget to a revised estimate of $291,000.

MR. WISEMAN:

I guess when you go back to

this, if your savings we just were able to, as I said earlier, in a lot of

these discretionary spending decisions, some of them were decisions that we were

able to defer an activity, and some of them were areas where we completed a

project maybe cheaper than we would have had thought we would have been in the

forecast. Some of these savings, the

difference between the $291,000 and the $337,000, would have been a result of

day-to-day management decisions that would have been made that accumulated to

give you that differential.

MS C. BENNETT:

The source of provincial

revenue again, just to refresh my memory can you provide the details on

that?

MR. WISEMAN:

Again, this is associated

with the recovery from the pooled pension fund.

That is a couple of times that question have come up.

It would be recovery from the pooled pension fund.

I will ask Denise to give you an explanation of how the revenue stream

works from the pooled pension fund.

MS HANRAHAN:

All of the costs that are

related to the administration of the pension fund are ultimately charged back

against the fund and they pay back to government to cover the costs of salaries

and operating. You will always find

that activity nets to zero.

MS C. BENNETT:

Okay.

I guess

my question then now is with the changes in some of the pension programs as we

go forward, and this being a transition year, how have we changed the budget

process to reflect that going forward; or is it timed to be with the end of the

fiscal year, March next year?

MR. WISEMAN:

It is an interesting question

you are posing because we are moving into some slightly different territory for

the administration of the pension fund now as a result of the changes we have

made. Historically, the pension plan

has been administered by this division in the Department of Finance.

Government was responsible for all of the liabilities of the fund and the

Minister of Finance was the trustee.

Now, as

a result of the joint trusteeship, we now have established a separate

corporation. Remember we dealt with

the legislation here in the House.

MS C. BENNETT:

Yes.

MR. WISEMAN:

We now have an entity that is

going to be responsible for that and we are in that transition phase now where

the entity is taking control of the administration of that plan.

At some

point in the future you might find that this may not be an item in our

Estimates, because the pension plan will be administered by a corporation and

they will pay their own expenses as a corporate entity; but, for now, in the

transition, we are continuing as business as usual to provide the administrative

support for the plan and charge it to the fund.

As time

progresses, depending on the decisions of that corporation, they may in fact

look to government say listen, you have been administering the plan for a while,

can we continue to pay you a fee and let you do it; or, they may choose to do it

in some other fashion. That is the

corporation's responsibility and the trustees would make those decisions as to

how they see the plan being run.

This

area in these Estimates will start to evolve over time, so this is very much a

transition year. I would suspect we

will not see any change in the fiscal year that we are moving into now, because

the corporation is just getting itself working and they will start to decide how

they manage the fund into the future.

I would not expect that will change much in the next eight or ten months.

As we

move forward in coming years, depending on the decisions they make, this may

change totally and this may disappear from our Estimates.

MS C. BENNETT:

In the past when government

had 100 per cent of the liability, it had 100 per cent accountability to do the

work. Going forward, it is a shared

liability. Obviously the

accountability will shift from government directly, in the Department of

Finance, it will shift to the corporation.

Yet, as a shareholder, government will still be responsible.

What is

MR. WISEMAN:

Just so that we are clear, it

is a joint trusteeship so government will be responsible for

MS C. BENNETT:

Yes, for its portion.

MR. WISEMAN:

50 per cent of the

liabilities and will be, in theory, the benefactor of any growth that the plan

experiences. So it is a shared

responsibility now between the plan members and the government as an employer.

What we have done as an employer and what the employees themselves have

done is made a decision to appoint trustees.

So there have been appointments from both the employer and from the plan

members to this corporation and they have a fiduciary responsibility to the

plan.

MS C. BENNETT:

The skill matrix for the

trustees on the corporation has been defined by who?

MR. WISEMAN:

That was an interesting kind

of discussion actually because the plan members and the various unions that

represented the plan members in the Public Service Pension Plan in particular,

there was a fairly lengthy discussion around what constituted the credentials

that would be required to sit on that board.

Keep in mind that the employer gets to pick who they want to appoint as

trustees and the employee groups get to pick who they want to represent their

interests. So there was I would

not use the word a negotiated understanding of what that would be, but

recognizing that the plan needed to have certain skill sets to be able to carry

out their fiduciary responsibility, it was agreed at the end of the day that the

employer would appoint people who were capable and competent broadly defined to

the board, and the employee groups would do that same thing.

There

was a belief that the management agreement for the plan should not be

prescriptive and dictate who the employees should put on that board.

The language in the agreement is broad in that it does not nail down

specifically the skills, but it acknowledges that there are competencies

required to be on that board.

MS C. BENNETT:

Right.

MR. WISEMAN:

That was an agreed upon

language that grew out of the negotiations between the employer and the various

unions that represented the employees in that plan.

CHAIR:

Okay, thank you.

Lorraine.

MS MICHAEL:

Does Cathy have a follow-up

question to finish off discussion?

CHAIR:

I am assuming she has more

than just one follow-up question in this section?

MS C. BENNETT:

I can wait.

MS MICHAEL:

Okay.

For the

last

section in this part, 2.1.05, Financial Assistance: Loans, Advances and

Investments, I know what a large part of the $11.2 million was spent on last

year, but not all of it was spent.

Could we have an explanation, Minister, please?

The revision down, I think $1.2 million was not spent.

MR. WISEMAN:

That amount is basically the

Corner Brook Kruger deal.

MS MICHAEL:

The money that went to

Kruger, yes. That is what we were

told last year.

MR. WISEMAN:

That $9.7 million is what is anticipated to be the drawn down against that $110

million in this year coming.

MS MICHAEL:

In this year coming, okay.

MR. WISEMAN:

Last year $9.96 million was

drawn down.

MS MICHAEL:

Okay.

We were

told it was going to be $10.7 million.

MR. WISEMAN:

For this year?

MS MICHAEL:

No, for last year.

We were told it was going to be $10.7 million, but it was actually $9.96

million.

MR. WISEMAN:

It was $9.96 million, yes;

and then $9.759 million is what is forecasted for this year coming.

MS MICHAEL:

Okay.

That is

all still Kruger so we are talking

MR. WISEMAN:

It is all still Kruger, yes.

MS MICHAEL:

Okay.

They got that last year and they are getting this this year?

MR. WISEMAN:

Based on the $110 million,

there is still $5.5 million in change left over to be drawn down in subsequent

year.

MS MICHAEL:

Okay.

When you

come down to the provincial revenue, what is that?

MR. WISEMAN:

That is the interest.

MS MICHAEL:

That is the interest, okay.

So they are paying the interest, great.

course you probably did not know when you were setting it up, you could not

budget for knowing what exactly the interest rate was going to be, et cetera, I

suspect; that is why there is no budget for the revenue.

MR. WISEMAN:

I am not sure, Denise, if you

understand why we had a zero in the budget for last year but we had a revenue

stream. Did we not anticipate what

that would have been?

MS HANRAHAN:

There was no estimate made.

MS MICHAEL:

There was no estimate made.

MR. WISEMAN:

I think the rate would have

been understood, but I cannot explain why there would not have been a number in

there.

MS MICHAEL:

Right.

Maybe the contract was not finished, maybe there were things in the

contract that would have although the rate would have been the thing, wouldn't

it?

MR. WISEMAN:

I think in the revenue

forecasting we recognize it as a revenue if we are able to (

a) have confidence

that we will realize it, but we understand what it will be.

MS MICHAEL:

Right.

MR. WISEMAN:

That is when we enter it into

the budget as forecast revenue. I

would assume that at the time of the budget last year we were not in a position

to determine what they would be, nor where we in a position to say that we were

going to realize the interest payment in that year.

MS MICHAEL:

Right.

Minister, would that then be done directly between the Department of Finance and

Kruger, or Natural Resources and Kruger?

MR. WISEMAN:

I suspect it would be Finance

and Kruger. The payment would have

come to directly to Finance?

OFFICIAL:

(Inaudible).

MS MICHAEL:

It looks like the interest

rate did.

MR. WISEMAN:

We will verify it to be

certain, but I would not be surprised that it goes directly to Finance rather

than to Natural Resources.

MS MICHAEL:

Okay.

Now I am

sure the bottom line, whether it is you or Natural Resources, is that they are

honouring the loan

MR. WISEMAN:

Yes.

MS MICHAEL:

Is anybody interested in what

is happening at Kruger in terms of are things going well, is business going

well, et cetera? I actually heard

I forget; where were we today?

MR. MORGAN:

(Inaudible).

MS MICHAEL:

Yes, it sounded like was

that this morning?

MR. MORGAN:

Yes.

MS MICHAEL:

Yes, that was this morning; I

have done so many Estimates this week.

We did hear this morning, I think, from Minister Granter that things are

going well there. Do you have a

sense of that also, or do you look at it from a business perspective like that?

MR. WISEMAN:

I understand it is not a

file that Finance has a responsibility in terms of relationship directly with

Kruger, other than relative to this contract.

MS MICHAEL:

Right.

MR. WISEMAN:

I understood, the interest we

would have obviously as a Department of Finance only, not as government but just

purely as the Department of Finance, is whether or not we are living to the

financial obligation and their ability to live up to their obligation

financially.

MS MICHAEL:

That is right.

MR. WISEMAN:

I understand they have been

able to make some changes that reduce their operational costs, the production

costs at the plant. They have been

very successful in reducing their costs compared to other industries, or other

mills within the industry. That has

bodes well for them but beyond that, Natural Resources would be in a much better

position to speak to, operationally, what they are doing.

MS MICHAEL:

Right, thank you.

That is

all the questions I have for this section.

CHAIR:

That is it for this section?

MS MICHAEL:

Yes.

CHAIR:

Okay.

Seeing

we are also halfway through our time, we only have one person in the Broadcast

so we are going to take five and give him a break.

MR. WISEMAN:

It is your call, Mr. Chair.

CHAIR:

We will take five and we will

come back to Cathy.

Recess

CHAIR:

Okay, if we are ready.

Mr.

Minister, okay.

Yes,

Lorraine, you had another question before we went to

MS MICHAEL:

Yes.

CHAIR:

Sure.

MS MICHAEL:

Might as well get me out of

the way.

CHAIR:

Yes, not a problem.

MS MICHAEL:

I forgot that we had this.

This morning when we were in Estimates for the Forestry and Agrifoods

Agency we had a few questions regarding the royalty exemptions granted to Corner

Brook Pulp and Paper for things such as the construction of forest roads.

Another one was the degree of the slope on which pulpwood was harvested

just a couple of examples.

I am

just wondering, Minister, can we get a clearer picture of these royalty

exemptions and how they work? How

much money is actually involved with these exemptions?

How much is it that we are not collecting?

MR. WISEMAN:

Craig, I do not know if you

are

MR. MARTIN:

(Inaudible) directly by Forestry and Agrifoods.

MS MICHAEL:

They told us it was you.

MR. MARTIN:

They deferred to us?

MS MICHAEL:

Yes.

MR. WISEMAN:

That is why I deferred to

Craig. It has not come across my

desk on that.

MS MICHAEL:

Right.

MR. WISEMAN:

We will commit to get the

answer for you.

MS MICHAEL:

Okay.

MR. WISEMAN:

Regardless of who has it, we

will commit to get the answer for you.

MS MICHAEL:

Okay.

Thank

you very much.

CHAIR:

Okay.

Thank

you, Lorraine.

Cathy,

you are still on this subhead.

MS C. BENNETT:

Yes.

CHAIR:

Okay.

MS C. BENNETT:

Just so that we are all on

the same page, back to 2.1.01, Pensions Administration.

CHAIR:

Yes.

MS C. BENNETT:

This year is the transition

year for the new pension format. I

am just wondering what plans or strategies have been put in place, that are

reflected in these budget lines, that takes into account that transition?

We have several pension plans that are going into the corporation, some

left for government to do what it chooses to do in conjunction with the unions.

I am wondering what transition plan has been budgeted for in this with

regard to the staff.

understand that we are going to still manage.

I get that, but there will be new tasks; tasks that will be moving off

individual's job descriptions. As

that transition happens, has there been discussion about increases in work or

decreases in work depending on how the transition goes?

MR. WISEMAN:

A couple of parts to your

question; the first one, as I understood it, was what plans have we built into

this budget we are looking at here now.

I go back to an earlier answer I provided in that we are not envisaging a

change in this fiscal year that we are currently dealing with in this budget.

So we are envisaging a status quo in terms of that relationship that

government has in the administration of the plans for this fiscal year.

suspect that as we get closer to the end of this fiscal year and the new

corporation has established itself, then we will enter into discussions around

what transitional plans we may need to build in next year's forecast.

This budget here does not reflect any shifting of any roles and

responsibilities in this fiscal year.

It is

difficult to start forecasting. Keep

in mind now with the new corporate entity that we are one side of that

discussion and that corporate entity is the other side.

So in the absence of that entity being fully operational, it is difficult

for us to enter into a discussion with them to talk about what this might look

like.

What we

have assumed, a judgement call we have made is that based on what we believe to

be the task ahead of that new corporation for the next fiscal year, there will

be other things that they will want to focus their attention to.

The administration of the plan is not that they need to make a change to

in this twelve-month period.

We have

assumed the status quo in this period.

Now in theory, I suppose, sometime in the course of this fiscal year that

entity could come to us and say, listen, as of tomorrow we want to start doing

business differently. Here is how we

would like to do it. We do not want

you to do it anymore and we are gone.

We are going to take this and do it some other way.

That

could in theory happen. How

realistic is it? Well I guess it is

the $64 question. We are suggesting

that it may not happen like that in this fiscal year.

Therefore, this budget does not reflect any operational change in this

year.

MS C. BENNETT:

Have the trustees all been

appointed?

MR. WISEMAN:

They have.

MS C. BENNETT:

When will the names be

released?

MR. WISEMAN:

We could do it now.

I can get them for you. I do

not have them here with me, but I can get them for you.

MS C. BENNETT:

Okay.

The

pension overpayments that government is currently collecting from pensioners

now, is that activity going to be expensed in this line area?

The cost associated with the individual who has been asked to mediate and

discuss with the pensioners, is that in this section?

MR. WISEMAN:

I think that cost right now

is being borne by the Department of Finance.

Do you know what category we put that in? The cost right now is to the

Department of Finance and, not the Pensions Administration, not the pension

fund.

MS C. BENNETT:

Is there an estimate on the

costs associated? Is there a maximum

allowable that is going to be used for that?

MR. WISEMAN:

Yes.

What we base this on is we have taken a classification with a pay level

attached to it and said on an annual basis this piece of work should be paid at

this level. What we have done is

then equated it to an hourly rate because a person does not work every single

day. Therefore, we then equate it to

an hourly rate with a cap based on that annual salary.

I can

get that for you. I do not have it

with me.

MS C. BENNETT:

Is there a total dollar

amount that the department is expecting to spend to collect?

MR. WISEMAN:

No, we anticipate this to be,

maybe a three-month exercise. We do

not anticipate it going beyond that.

The group of people who might be impacted here well, forget the full number

for a moment. As I have indicated

many times, some of the amounts are smaller amounts.

We have approximately eighty people where there is a material and

obviously material is relative to the individual's circumstance, I appreciate

that.

We have

about eighty people where the dollar value is $1,000 or up.

The contacts that are being made would appear that these would be the

people who would have the greatest interest in having a discussion about their

circumstance and wanting to look at a repayment arrangement that may need some

modification or special consideration.

That kind of number, we believe, can be completed in about a three-month

period.

MS C. BENNETT:

Of the original amount that

government had hoped to recover, has there been any amount that has been written

off so far to date, or considered uncollectable?

MR. WISEMAN:

There is a piece of work that

Mr. Bonnell is proceeding with. He

has not provided me yet with a at least that

summary has not come to me of the

work that he has done to date. The

intent would be that he will meet with individuals who have an interest in

meeting with him. It is not

mandatory that they meet with him.

If an

individual has been contacted and expressed an interest in meeting with him, he

has a process that he will go through.

When he has concluded, he will make a recommendation on each individual

case and provide that as a

summary format for my consideration.

We have not actioned any of those individual cases that he has actually

met with to date.

MS C. BENNETT:

Some people have already

received communication that they will no longer be required to repay.

Has that number been quantified?

MR. WISEMAN:

I am not aware that people

have been advised that they will not have to repay.

MS C. BENNETT:

I am sorry.

I understood that there were individuals who had it had been indicated

that due to length of life or personal health situations, that those individuals

had been.

MR. WISEMAN:

You are speculating on

something I am not aware of.

MS C. BENNETT:

Okay.

My apologies, I misunderstood.

Subhead

2.1.02, one of the questions I had here, and I am sure I am just missing

something, the two-year increase in the Salaries line is 7.6 per cent.

I am wondering if there is some explanation for

MR. WISEMAN:

Subhead 2.1.02 you mean?

MS C. BENNETT:

Subhead 2.1.02, under

Budgeting, with the Salaries line, if you go back historically to the prior

year, the actual increase over a two-year period is 7.6 per cent increase.

MR. WISEMAN:

Right.

MS C. BENNETT:

That seems inconsistent with

the salary it is a 3 per cent salary increase on an annual basis, isn't it?

MR. WISEMAN:

If you are going back to a

prior year, I am looking at the the Estimate I have here looks at a 2014-2015

budget and a 2015-2016 budget.

MS C. BENNETT:

Right.

Yes, so back to the 2013-2014 going forward by two years.

MR. WISEMAN:

Okay.

MS C. BENNETT:

This is a 7.6 per cent

increase. I am just curious is that

because staff complement changed?

MR. WISEMAN:

The 7 per cent there is a 3

per cent increase this year. What

was the last year? It was 2 per

cent. You had 2 per cent and 3 per

cent, and you had step progressions.

So 7 per

cent is probably in the order of magnitude with the same staffing levels.

I would have to reconcile the numbers for you, but just as a crude

measure, 2 per cent on one year compounded and now the 3 per cent, and a couple

of step progressions, that is about right.

MS C. BENNETT:

Okay.

Can we

get some more detail on that one?

MR. WISEMAN:

Yes, we can do that.

MS C. BENNETT:

Perfect.

MR. WISEMAN:

So your question is the

salary profile

MS C. BENNETT:

An explanation of 7.6 per

cent.

MR. WISEMAN:

The salary profile in

2013-2014, 2014-2015, and 2015-2016, and the salary profiles for those two

fiscal years.

MS C. BENNETT:

Yes.

MR. WISEMAN:

Okay, or three fiscal years,

two actuals and one forecast.

MS C. BENNETT:

Thank you.

CHAIR:

Do you have another question,

Lorraine?

MS MICHAEL:

No, not in the section.

CHAIR:

Okay.

Do you

have another one, Cathy?

MS C. BENNETT:

We are going to 2.1.05,

right?

CHAIR:

Yes, we are.

MS C. BENNETT:

Yes, so just let me double

check here. No, I am good there.

CHAIR:

You are good there?

Okay, so

we just did the Financial Planning and I will call for the subhead.

CLERK:

Subhead 2.1.01 to 2.1.05.

CHAIR:

Subhead 2.1.01 to 2.1.05.

Shall

the total carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

Thank

you.

motion, subheads 2.1.01 through 2.1.05 carried.

CHAIR:

Okay, so now we will do

Taxation and Fiscal Policy.

CLERK:

Subhead 2.2.01 to 2.2.05.

CHAIR:

Subhead 2.2.01 to 2.2.05.

Lorraine.

MS MICHAEL:

Thank you.

2.2.01 looking specifically at Professional Services, there was nothing budgeted

in Professional Services last year, but $224,000 approximately was spent.

This year, the estimate is $1.3 million approximately.

If we could have an explanation, Minister, please.

MR. WISEMAN:

I will provide an

introduction to it and then I will ask one of the officials to provide a more

detailed commentary. It has to do

with an audit that we are doing about HST that we are entitled to receive.

The

$224,000 was as a result of some fees that we paid for a service to do an audit,

and it is based on a percentage of amounts collected.

The $1.3 million, as you will see in next year's forecast, is again a

fee, but that fee is based on an estimated recovery of $8.6 million.

So this

is a special audit on HST that we are doing to establish an entitlement to HST

funds and it is based on a percentage of what is collected.

That is how the fee structure is with the consultant that we are using.

I gave you that broad introduction and I will have Craig, you can

provide a deeper explanation of where this exists.

MS MICHAEL:

In plain language.

MR. MARTIN:

What this is this was an

activity undertaken last year with respect to the group health plans and group

insurance fund.

MS MICHAEL:

Okay.

MR. MARTIN:

What it is, it is an external

auditor on (inaudible) case in the first instance came in, was contracted to do

a review of the monies going through those funds from the purpose of looking at

whether or not all the HST paid through those funds was captured back and

claimed back from the federal government.

As a result of that review, it was determined that there was HST there

that could be recaptured. So this is

being done on a fee for service, a recovery basis.

MS MICHAEL:

Okay.

MR. MARTIN:

When you see for this year a

fee of $224,000 there, the actual recovery on that fee you will see a related

revenue there in the current year of $260,700, there in the 2014-2015 year.

Also, for that particular $224,000, there was another $1.146 million

recovered. That was credited back to

the group insurance fund.

MS MICHAEL:

Okay, so it is paying off.

MR. MARTIN:

Yes.

Then the budget we see for the $1.3 million is for them to continue this

activity into the current fiscal year.

The anticipated estimated recovery on that is about $8.6 million.

MS MICHAEL:

That is the $8.6 million.

Okay, sounds good, smart move.

Thank you.

Coming

down to 10, Grants and Subsidies, $50,000 was budgeted and $89,500 was spent.

This year the estimate is down to $30,000.

It is a line item, so are the grants and subsidies that you give out

there consistently the same, or is it a one-off kind of thing?

MR. WISEMAN:

Last year we provided $80,000

to Memorial's Department of Economics for some research that they were doing.

It is a program the acronym is CARE, which is the Collaborative Applied

Research in Economics program that the Department of Economics at Memorial has.

We provide them with a grant to do some of that economic research that

they were working on. That is why

the difference you are seeing.

MS MICHAEL:

Okay.

This

coming year you are not allowing very much money there.

MR. WISEMAN:

No.

MS MICHAEL:

Was that a policy decision?

MR. WISEMAN:

No, actually it was a one-off

process with them.

MS MICHAEL:

Okay.

MR. WISEMAN:

It is a piece of work that

they were doing. We assisted them

with the grant.

MS MICHAEL:

Okay.

Had you

a sense that was going to be happening when you budgeted?

It was more than what you budgeted?

You budgeted $50,000 last year.

MR. WISEMAN:

Yes.

I am not sure what the logic would have been.

I do not know if there is any detail the officials have that talk about

the $50,000 from last year.

MS MICHAEL:

Okay.

OFFICIAL:

(Inaudible).

MR. WISEMAN:

I am sorry; last year the

$50,000 was the you remember the harness racing discussion that we had?

MS MICHAEL:

That is right, yes.

MR. WISEMAN:

The regulation around the

harness racing. Remember, last year

we went with the Atlantic Provinces to do the regulatory piece for us.

MS MICHAEL:

Yes, I do.

Actually I have it written in front of me here too.

MR. WISEMAN:

It was $50,000.

MS MICHAEL:

Yes.

MR. WISEMAN:

We had budgeted $50,000, but

it became $30,000.

MS MICHAEL:

Okay.

Then you had the money

MR. WISEMAN:

We have the annual fee

associated with that.

MS MICHAEL:

Okay.

Thank you very much.

Okay,

let's go to 2.2.04. I will do line

items first and then I have a couple of questions related.

I might not get to them right at this moment.

Salaries: once again the budget was $3,475,000 but the revision was down

by $641,500. Could we have an

explanation?

MR. WISEMAN:

There were a number of

vacancies in that area last year and we delayed filling them.

As a result of that, then we had positions that were vacant and we had

salary savings, and we did not move quickly to fill them because of some of the

cost reduction initiatives that we wanted to undertake.

Now with those vacancies filled, together with the 3 per cent salary

increases, that is what we are seeing in the change here.

MS MICHAEL:

Right.

About

how many positions were vacant?

MR. WISEMAN:

There were three individuals

in total who left, resigned or retired, and then we had some changes that

occurred delays in the refilling of those.

MS MICHAEL:

Right, thank you.

Down to

Professional Services, you budgeted $152,000, nothing was spent, and you are

still budgeting $152,000 this year.

MR. WISEMAN:

That is a result of a tax

audit that we are doing on a client.

We had thought we were going to spend the money last year, but we did not.

The audit is still ongoing and these are fees associated with that audit.

MS MICHAEL:

Okay, thank you.

I think

that is the audit on Vale. Last year

we were told that there was money allotted for an audit of Vale for possible

transfer pricing practices. I am

assuming that must be the money there; that is the client that we were told last

year.

I think

that is all that I had it is still going ahead, the audit on Vale?

MR. WISEMAN:

That is proceeding, yes.

MS MICHAEL:

Okay.

Do you

have any expectation do you think it will be completed this year?

MR. WISEMAN:

Audits are sometimes lengthy

in their process depending on the level of detail that needs to be evaluated, so

it is obviously proceeding to do the work I would not want to try to pin down

when any audit might be finished. I

am not sure what kind of detail and what kind of information would need to be

reviewed.

MS MICHAEL:

Would there be an expectation

that the report from that audit would be made public? Could it be made public?

MR. WISEMAN:

One of the things you have to

keep in mind with audits is that under the Financial Administration Act there is

a very strict provision around the confidentiality of subjects that are

MS MICHAEL:

Yes.

MR. WISEMAN:

Any individual, whether it is

you or I, are subject to tax audits.

Corporations are subject to tax audits.

MS MICHAEL:

Right.

MR. WISEMAN:

Information coming from those

audits is protected by the Financial Administration Act which is very specific

around the confidentiality of any information on any client who gets audited.

MS MICHAEL:

Okay.

That is not surprising I will let you know.

Subhead

2.2.05 wait now, just let me make sure.

Just out

of curiosity; the Grants and Subsidies under 2.2.04 was $3,000, and $2,500 was

spent last year. What is that?

MR. WISEMAN:

It is associated with a fuel

tax project. I do not know, Craig,

if you are familiar enough with the project to comment on it.

It is the Fuel Tax Uniformity Project, but I am not sure of the detail of

the project.

MR. MARTIN:

I will have to confirm for

you, but I believe the Uniformity Project is a national project wherein they are

trying to set up a uniform tax return for basically all companies that are

remitting in multiple jurisdictions.

As a result, the costs associated with that program were slightly less than they

anticipated.

MS MICHAEL:

Okay.

That is

a continuing program?

MR. MARTIN:

That is a continuing program.

MS MICHAEL:

Okay.

Thank you very much.

I am

finished.

CHAIR:

You usually watch the clock.

That is why I left you alone.

MS MICHAEL:

Thank you.

CHAIR:

Cathy.

MS C. BENNETT:

I will go back to 2.2.01, Tax

Policy. On the HST recoverable on

the group insurance, how did we identify there was a possibility that there was

a recoverable?

MR. GRIFFIN:

It is a type of work that had

been done previously in earlier fiscal periods, so I guess we had experience of

some modest sort of recoveries.

Since the time of those original reviews, data mining techniques and

technologies have developed, and specialized consultants with specific expertise

in these areas have been honing their techniques and skills.

This

particular project was the result of some interest from certain consultants who

had made some proposals to us which we looked favourably upon.

OFFICIAL:

Nova Scotia (inaudible).

MR. GRIFFIN:

Yes, fair enough.

One of the consultants had also done some work for Nova Scotia which had

resulted in some very significant recoveries.

It was a situation where there was really nothing to lose by having a

look at this.

MS C. BENNETT:

Just so that I understand I

am pretty sure I heard it right, but I do not know if I wrote it down right so I

want to make sure I have it the $1.376 million under Professional Services

this year is expected, if history repeats itself, to yield an $8.6 million

recoverable.

MR. GRIFFIN:

This is a result of expanding

the scope of the work, as well as expanding the period under review.

MS C. BENNETT:

Yes.

MR. GRIFFIN:

The consultants looked at the

scope that they have covered and the period that they have covered already, and

basically extrapolated that out to a larger period.

They feel that this is a reasonable assumption of what they will be able

to recover.

MS C. BENNETT:

Okay.

On the

Grants and Subsidies, just to make sure I understood, the $50,000 for membership

in the Maritime Provinces Harness Racing Commission actually came in at $30,000.

I did not catch the amount on the care grant.

Was that the remaining difference between the it is $50,000.

It was $89,000, I think, so the difference between the $30,000 and

$89,000?

MR. WISEMAN:

Yes.

MS C. BENNETT:

Okay.

Under

2.2.03, Project Analysis and this may not be the appropriate

section for the

question, so I apologize. I am not

sure exactly where to ask it so I will try it here.

Expenses related to internal auditors, is that under Project Analysis

here? Where do they actually get

so the internal audit team

MR. WISEMAN:

That is the Comptroller

General's department.

MS C. BENNETT:

Okay.

Cool.

We are

not there yet, right?

MR. WISEMAN:

Yes.

MS C. BENNETT:

Okay.

I was

not 100 per cent sure where it was going to be so I appreciate your patience.

Project Analysis I am good. Tax

Administration, 2.2.04, the Salaries; Minister, you mentioned that there were a

number of positions that were vacant in the last fiscal year.

From the notes that I have, there were positons that were also vacant in

the prior fiscal year

MR. WISEMAN:

Yes.

MS C. BENNETT:

What I would like to ask is

if the positons were the same, or if you can provide me with what the actual

vacancies were for the last number of years so that we can also take a look at

what the vacancy forecast is that we talked about earlier tonight.

I am wondering if you could give me some clarity on that.

MR. WISEMAN:

We will get that information

for you.

MS C. BENNETT:

Particularly what I am

looking for is if they are the same positions for the two consecutive years.

MR. WISEMAN:

The issue of positions, just

so we are clear, to make a distinction here between classifications

MS C. BENNETT:

You are right.

MR. WISEMAN:

We could have a group of

individuals in the same classification, so two were out yesterday and two of

them are out today. They are two

different individuals but they just happen to come from the same grouping

because they are tax auditors, so there are probably a larger number of them in

the same classification. Just not to

mistaken the fact that they may be the same individuals.

MS C. BENNETT:

I understand.

Sorry, I should say same positions, or the same classification of

positions.

MR. WISEMAN:

Yes.

MS C. BENNETT:

From the question I asked

earlier this evening, the information I am assuming that we will get around the

forecasted retirements, globally in Finance, will include a breakdown by

division, so how many retirements are actually in this particular area.

MR. WISEMAN:

Yes.

MS C. BENNETT:

Okay.

Subhead

2.2.05, Debt Management, there was a reimbursement of Salaries and other

operating costs from the Newfoundland Municipal Financing Corporation Sinking

Fund. Is that what the revenue line

is here under Debt Management? It is

the same thing that happened last year; there is a recovery under that?

MR. WISEMAN:

Yes.

MS C. BENNETT:

Okay.

With

regard to Salaries in 2013-2014 we under spent in this division by $150,000 and

the reason that was given at the time was that the manager for capital markets

and a debt analyst had been unfilled during a certain period.

We have under spent again. I

am just wondering if those two positions specifically have been filled and they

are new positions that are vacant now, or if it is a continuation of positions

that have been vacant?

MR. WISEMAN:

The manager of the capital

markets is still vacant. The other

one was filled, but there was another vacancy that occurred, other than the one

that you referred to earlier.

MS C. BENNETT:

Okay.

Mr.

Chair, I am sorry; I think I am at the end here.

CHAIR:

Are you?

MS C. BENNETT:

I think so.

I am not sure. Can you remind

me we are supposed to be ending?

CHAIR:

Yes, at 2.1.05.

MS C. BENNETT:

Yes, then I am.

CLERK:

Subhead 2.2.05.

CHAIR:

Subhead 2.2.05.

Yes, I am sorry; thanks, Lorna, for correcting me.

MS C. BENNETT:

With three minutes on the

clock, I will stop.

CHAIR:

Lorraine, did you still have

a couple of questions on that?

MS MICHAEL:

No, the questions I had on

that

section Cathy has asked, so that is fine.

CHAIR:

Okay.

So no more questions on Taxation and Fiscal Policy?

Okay, if

that is the case, I will call for the subheads.

CLERK:

Subhead 2.2.01 to 2.2.05.

CHAIR:

Subhead 2.2.01 to 2.2.05.

Shall

the total carry?

All in

favour?

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

motion, subheads 2.2.01 through 2.2.05 carried.

CHAIR:

The next one we call is

CLERK:

Economics and Statistics Branch.

CHAIR:

Subhead?

CLERK:

Subhead 2.3.01 to 2.3.02.

CHAIR:

Subhead 2.3.01 to 2.3.02.

Lorraine.

MS MICHAEL:

Okay, thank you.

The

Salaries line again, there is a variance from the budget to the revision of

$218,400. If we could have an

explanation, Minister, please.

MR. WISEMAN:

There were some vacancies

that we delayed recruiting.

MS MICHAEL:

Right.

Are they

back in place now, those positions?

MR. WISEMAN:

I have to verify that for

you. Actually, I am not sure which

ones are filled and which ones are vacant.

I will find out what vacancies are there for you.

MS MICHAEL:

Okay, please.

Thank you.

MR. WISEMAN:

Maybe I can find out for you

now.

MS MICHAEL:

Okay.

That is

why you have all of that crew there.

MR. WISEMAN:

That is why I have that crew

here, yes.

MR. HOLLETT:

There were a variety of reasons for the savings there.

There were some vacancies, but we had some issues in getting positions

filled because there was a backlog at the Public Service Commission.

As we got later into the year and we got into restraint, there were just

some positions that we would have liked to fill, we just held them.

So there are a variety of reasons there for that.

MS MICHAEL:

Okay.

MR. HOLLETT:

I think besides a couple of positions that we have actually identified as being

frozen, the rest of it is moving ahead as fast as it can.

MS MICHAEL:

Okay, thank you very much.

Under

Revenue Provincial, what is that revenue and why was it more than you

anticipated last year?

MR. HOLLETT:

The revenue there came from ACOA and it is contributions that they made to some

work that we do, Community Accounts and that sort of thing.

MS MICHAEL:

Okay.

MR. HOLLETT:

The reason it was over is

because they actually paid us more than we expected them to.

MS MICHAEL:

Oh, very good.

You do not always get money from ACOA that you are not expecting.

MR. HOLLETT:

Yes, and it does not happen

often.

MS MICHAEL:

No, right.

Thank you very much.

Subhead

2.3.02 it probably gets tedious answering this question about the staffing,

but I think we have a responsibility to ask.

This time the variance from the budget down to the revision is $357,200,

so once again

MR. WISEMAN:

It is the same answer as the

previous one actually.

MS MICHAEL:

Okay.

The whole answer is the same?

Okay,

great. Thank you.

It looks

like you plan on bringing up the complement this year.

Under Professional Services the budget was $115,000, and the revision was

down by $85,000. Could we have an

explanation of that? Did you have

expectations around the Professional Services, something did not happen?

MR. WISEMAN:

We just made some decisions.

Those are discretionary spending decisions that we made to defer certain

things we were proposing to do.

MS MICHAEL:

Okay, great.

They

will be happening this year.

Under

Purchased Services, again, budgeted at $851,600 and was down somewhat to

$767,200 where it is remaining for this coming year.

What gets purchased there?

Why was it down from what you had budgeted?

MR. WISEMAN:

A big chunk of that $657,000

is a rental cost for space that we have outside of this building.

MS MICHAEL:

Right.

MR. WISEMAN:

Some of the other changes

came about as a result of some data purchases that we delayed doing last year.

That is part of that discretionary spending decision that we made.

MS MICHAEL:

Right.

Okay. Thank you.

Under

Revenue Provincial well I will ask for the federal too.

I am curious about getting $20,000 from the federal that you did not

expect. Under the provincial you are

almost $100,000 above what had been budgeted.

If you could just explain those two lines, please.

MR. WISEMAN:

I will get Alton to give you

a little more detail. This is one of

these areas where we have a particular expertise and a talent, and we are able

to produce work for sale. The

Newfoundland Statistics Agency is a tremendous source and a wealth of

information sought after by many, so we have an opportunity to generate some

revenue.

I will

ask Alton to give you some sense of who we get the revenue from.

MS MICHAEL:

Okay.

Thank you.

MR. HOLLETT:

It varies from year to year. There

are some that we do each year. We do

forecasts for Hydro, we do forecasts for the City of St. John's, and we did some

work for the university.

This

year most of the revenue came from the university, the City of St. John's, the

Housing Corporation, Hydro, East Coast Trail, and Goss Gilroy.

One reason why that is up a little bit this year too is that there were

sometimes the timing of the billing does not match when the books close off.

MS MICHAEL:

Right.

MR. HOLLETT:

So we had almost $75,000 this

year carried forward. It is a

combination of the carry forwards plus the external work that we do for people.

MS MICHAEL:

Okay.

Thank you.

What was

the $20,000 from the federal government?

I am curious.

MR. HOLLETT:

The $20,000 from the federal government; actually that was from ACOA as well.

It was on the statistics side instead of the economics.

MS MICHAEL:

We made money from ACOA this

year. Okay.

Moving

on to 2.4 that is the wrong sheet.

I thought you said 2.4. I am missing

a sheet, I think.

CHAIR:

We are not up to 2.4 yet.

MS MICHAEL:

No, I know.

That is why I think I am missing a sheet.

No, I am

not. Okay, that is it.

OFFICIAL:

(Inaudible) there are only

two.

MS MICHAEL:

Yes.

Those are all my questions then for that section.

CHAIR:

That is it?

MS MICHAEL:

Subhead 2.3.02, was that the

last heading?

CHAIR:

That is it, yes.

MS MICHAEL:

Okay, yes.

CHAIR:

Okay, great.

Thank

you, Lorraine.

Cathy.

MS C. BENNETT:

On 2.3.01, under Economics,

last year there were eighteen permanent positions in the division.

This year there are nineteen.

Is there anything else that accounts for the $240,000 increase in Salaries

besides that position?

MR. WISEMAN:

The 3 per cent increase and

step progressions.

MS C. BENNETT:

The 3 per cent?

MR. WISEMAN:

The 3 per cent increase.

MS C. BENNETT:

Okay.

I will

move on to 2.3.02. The entrepreneur

in me wants to say can we not make this a cost centre, if you can get revenue

coming in. I am not suggesting that

be a government policy, but it was exciting there that revenue is coming in for

services rendered. I just had a

little entrepreneur moment there. I

am sorry about that.

One of

the questions I had here was that we underspent Salaries by $357,000.

What positions exactly were not filled?

Were there any special projects here that did not materialize?

MR. WISEMAN:

We will get you the detail on

the positions that may have not been filled.

MS C. BENNETT:

Okay.

That was

it on those two sections for me.

CHAIR:

That is it for you?

MS C. BENNETT:

That is it.

CHAIR:

That is it for you, Lorraine?

MS MICHAEL:

Yes, it is.

CHAIR:

Okay.

That is it for Economics and Statistics Branch.

So I

will call for the subhead.

CLERK:

Subhead 2.3.01 to 2.3.02.

CHAIR:

Subhead 2.3.01 to 2.3.02.

Shall

the total carry?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

CHAIR:

Carried.

Thank you.

motion, subheads 2.3.01 to 2.3.02 carried.

CHAIR:

Next subhead.

CLERK:

Subhead 2.4.01.

CHAIR:

Subhead 2.4.01.

Who

finished off?

MS C. BENNETT:

I did.

CHAIR:

Yes, I thought.

Okay, Lorraine. I wanted to

make sure.

MS MICHAEL:

Okay, thank you.

The last

heading, once again the Salaries. I t

seems like you did have, throughout different parts of the department, a number

of vacancies and that is what it seems we have again here.

So how many vacancies were there, minister?

MR. WISEMAN: Let

me get that for you, actually, because that is a similar question to ones you

have posed on a couple of other areas.

MS MICHAEL: Yes.

MR. WISEMAN: I

want to make sure we give you the right answer in terms of what positions we had

vacant and for how long.

MS MICHAEL:

(Inaudible).

MR. WISEMAN: I

am sorry. Were you waiting for me?

MS MICHAEL: I

was waiting for you. I thought you

said

MR. WISEMAN: Oh

no, I am sorry. I said I would get

it for you. I did not mean right

away.

MS MICHAEL: Oh,

you did not mean right away. That

was funny.

MR. WISEMAN: I

thought you were reading your notes, I was leaving you alone.

MS MICHAEL: I

was waiting for you to find your information.

Okay, well, I look forward to getting that.

MR. WISEMAN:

Okay.

MS MICHAEL:

Okay.

Why I

was looking through my papers was, as I said, you seem to have had two and three

vacancies in various branches along the way, but, I guess, cumulatively it did

not affect the whole department because they were in different offices.

About

how many in total across do you know?

Have you done the arithmetic on that?

If not, could you do it? How

many vacancies all together in the department?

MR. WISEMAN:

Vacancies are depending on

when you ask the question because it is a snapshot in time.

So March 15 here is what it would look like and then September 15 here is

what it might look like.

Over the

course of a twelve month period, in any one of those divisions, there may have

been some changes in staff; people coming and going.

So we can give you an answer about the number of vacancies we had over

the course of a year but it may not necessarily reflect the snapshot in time.

MS MICHAEL:

Right.

MR. WISEMAN:

To speak to your point that

you raised with respect to impact, it goes back to a question I responded to

early in the evening, of the changes we have made and the decisions we have made

to either delay recruitment or defer recruitment in an effort to save some

money. We have been sensitive to our

mandate and our responsibility to provide services.

So there may have been a variety of vacancies that have occurred over a

twelve-month period, but at any given point in time one department may have been

short one or two and some other departments may have been flush.

MS MICHAEL:

Right.

MR. WISEMAN:

Six months later it may have

been changed slightly different.

So it

has meant that we have had fortunately, we have a good, capable, competent,

dedicated group of people working for us who do some really good work and they

are able to respond to the changes that have occurred in their respective areas.

It allowed us to continue to provide the service that we have always

(inaudible).

Now we

have put together a as a part of our way forward, we talked earlier about an

attrition plan and I said then that we would map out a staffing plan for the

next five years to help us manage through the changes that we are forecasting to

be made. We want to make sure that

we maintain the skillsets that we need to provide the depth and breadth of

services that we have and will continue to provide.

MS MICHAEL:

Thank you.

You did answer that quite fully at the very beginning, so thank you.

Under

Purchased Services, the budget was $794,300 and the revision was down to

$695,600. What are the services

purchased in the Comptroller General's office, and why was it down so much?

MR. WISEMAN:

The biggest chunk of that

money is a $456,000 lease we have space on Topsail Road.

There is a lease on that of $456,000 annually, so that is the biggest

chunk of that.

MS MICHAEL:

Okay.

MR. WISEMAN:

Then some of the other

changes we have made come about as the result of some of those adjustments we

made in discretionary spending that we referred to earlier, and that we

deferred.

MS MICHAEL:

That is the biggest chunk, is

the lease. What else would be under

the Purchased Services, generally speaking?

MR. WISEMAN:

Maybe Ann Marie can tell us,

because I do not have profile

MS MILLER:

Banking services would be another portion of that.

MS MICHAEL:

Pardon?

MS MILLER:

We are responsible for banking services for government

MS MICHAEL:

Okay.

MS MILLER:

so a portion of that would be our cheque costs and costs associated with

banking services.

MS MICHAEL:

Okay, which would be pretty

high for government, I would say.

MS MILLER:

Yes.

MS MICHAEL:

Okay, thank you.

Knowing

how high it is for an individual.

MS MILLER:

Yes.

MS MICHAEL:

Under Revenue Provincial,

the $41,000 expected and $41,000 delivered.

What was that?

MR. WISEMAN:

Ann Marie, do you want to

comment on that, please?

MS MILLER:

Can you say that again?

MS MICHAEL:

Under Revenue Provincial,

$41,400 was budgeted, and that amount was spent.

I am just curious what that was.

MS MILLER:

That was money that we would normally recover from the pension fund for costs

associated with the because we produce the cheques for the pensions.

MS MICHAEL:

Right.

MS MILLER:

I guess we assumed that there would not be for the transition year, whether or

not that service would continue into this year.

MS MICHAEL:

All right, and so that is why

you have budgeted nothing

MS MILLER:

Yes.

MS MICHAEL:

but if you had to, I am

sure the money could be found.

MS MILLER:

Yes, it is revenue.

MS MICHAEL:

Yes oh, it is revenue?

Right.

I have a

couple of general questions. They

are all related to the issues, but general.

One,

Minister, is about the royalty dispute between IOCC and the government, and we

have over the years gotten information on this.

Can you shed any light at where things are at the moment with regard to

this dispute? I am not looking for

details, but has arbitration begun?

MR. WISEMAN:

(Inaudible) provide a comment

on the status of that?

OFFICIAL:

I will follow up on that one and respond.

MS MICHAEL:

Okay, so you will let us

know. Thank you very much.

Also, in

the Consolidated Revenue Funds last year the revised income from Mining Tax and

Royalties was $107,642,000 and this year's estimate is up by $36.6 million, up

to $144,234,000. So I am wondering,

what are the indications to you that we can expect another almost $37 million in

mining tax and royalties?

MR. WISEMAN:

You are into the Consolidated

Fund now?

MS MICHAEL:

Yes.

We read all the books.

MR. WISEMAN:

So your question is why the

optimism about

MS MICHAEL:

That is right.

MR. WISEMAN:

I did not anticipate dealing

with the Consolidated Revenue Fund tonight.

I thought we were going to deal with that in Committee of the Whole.

CHAIR:

Actually, if it is not in

this she just had a couple of general questions

MS MICHAEL:

Oh, that is right.

Yes.

MR. WISEMAN:

Okay.

CHAIR:

That is not part of these

Estimates tonight.

MR. WISEMAN:

When we deal with

Consolidated Fund, I will have the answer for you because I do not know the

answer I cannot give it to you now; although if I did, I would give it to you.

MS MICHAEL:

You would give it to me,

okay.

MR. WISEMAN:

I did not anticipate this

discussion around the Consolidated Revenue Fund.

MS MICHAEL:

Okay, thank you.

I just

have one more general question general in the sense that it is not a line

item. It has been a while since we

have asked about VLT and the VLT strategy.

Two years ago we were told the department was developing a full, broader

strategy on all forms of gambling. I

am wondering if there been any movement on that.

MR. WISEMAN:

No.

MS MICHAEL:

No.

Is it a discussion at all right now inside of the department?

MR. WISEMAN:

We are continuing with the

VLT strategy that was announced in 2005.

We are still focused on the objectives and we have met the targets that

are outlined in that initiative, but there is not any current activity with

respect to that issue today.

MS MICHAEL:

Okay, thank you.

CHAIR:

That is it?

MS MICHAEL:

I would like to think that

discussion will go on to look at it because people do have a lot of concerns

around gambling, so I think it is important that we stay on top of it.

CHAIR:

Okay.

Thank

you, Lorraine.

Cathy.

MS C. BENNETT:

Office of the Comptroller

General, 2.4.01. This is where the

internal audit is. If I had read the

heading I would have known that earlier, my apologies.

I know

we have asked a lot of questions about the vacant positions.

I think part of the reason those questions are so important not only to

those of us on the Committee, but certainly to the public as a whole is when

there are big chunks of positions that are not covered, there is obviously work

that does not get done. I was

wondering if I could get a little bit of clarity on I will start with the

internal audit where the direction comes from to the internal auditors as to

the work that they are supposed to be undertaking on an annual basis.

MR. WISEMAN:

Just let me correct something

in your assumption. The fact that

there are vacancies you should never assume that there are big chunks of work

not getting done. Vacancies are

vacancies and work gets realigned.

Sometimes it may not get done in the same time frame it ordinarily would be

done, but it would not be fair to suggest that it does not get done at all.

There is

an internal audit committee of government chaired by the Clerk, and obviously

the Comptroller General's Office, headed by the Comptroller General who is

responsible for the internal audit process.

I will ask her to provide some commentary in terms of the mechanism that

we have in place to conduct those internal audits, and the structure that

facilitates that happening.

Ann

Marie?

MS MILLER:

Last year, we developed a

formal internal audit plan. What we

would do is we would meet with the deputy ministers of the departments and ask

them if they could identify any areas where they felt were high risk areas that

they would want us to look at for that coming year.

It would be a combination of that or some direction from the internal

audit committee, as well, as to specific reviews that they would like to have

undertaken for that fiscal year. We

get all the feedback back and then we allot out the hours and create the plan

for the year.

MS C. BENNETT:

How are the risk assessments

I am going to back up for a second.

How are the profiles of risk assigned?

How do you determine which is high risk and which is low risk?

MS MILLER:

Yes, we apply a certain

methodology to that. We did do a

piece of work this past year in developing a formal risk assessment process.

We did have a consultant help us just with developing the methodology

because it was new to us. We did do

a risk assessment for a particular area of one department.

Now we will apply that methodology each year and do so many risk

assessments on a yearly basis with different departments on a go-forward.

MS C. BENNETT:

When we look at the Salaries

so you said you worked with a consultant last year.

Is that consultation ongoing?

Has the methodology been identified, adopted, and communicated through all

departments? Obviously, internal

audit, through the Comptroller General, would not necessarily be driven

singularly by the Department of Finance.

It would be driven by the risks that would be identified in other

departments.

MS MILLER:

Sure. What they did is they helped

us with developing the methodology.

We also came up with templates to assess risk.

So now that we have that process in place, we will work with the

departments to go through the risk assessment process where we will go out and

I mean, the one we did last year, we just went through the methodology that they

provided to us. There was a

knowledge transfer during that whole process.

Now an Internal Audit Division would have the expertise to go out and do

so many of these risk assessments on a yearly basis with departments.

MS C. BENNETT:

The audit plan has not been

drafted based on risk assessment though, it has been driven

MS MILLER:

Well we did do an allocation of risk, but it was more our own experience versus

a formal methodology.

MS C. BENNETT:

Yes.

I am assuming the methodology will appear on the audit plans going

forward.

MS MILLER:

Yes.

MS C. BENNETT:

The reference to the

methodology will

MS MILLER:

There will be a certain portion of the audit plan each year on doing these

formal risk assessments.

MS C. BENNETT:

The Comptroller General's

Office would manage it directs the internal auditors, is that right?

I am not sure.

MS MILLER:

Yes.

MS C. BENNETT:

Is there any reporting

mechanism into Executive Council or Cabinet, or is it solely the responsibility

of the Department of Finance to direct through the Comptroller General's Office

the internal audit?

MS MILLER:

We do have this audit committee which is chaired by the Clerk of the Executive

Council. It has a number of deputy

ministers on it. We would also get

direction from them as well.

MS C. BENNETT:

Does that direction come from

the Clerk via the Premier's Office?

Who else would influence the audit committee?

Who else drives the priorities for the audit committee?

MR. WISEMAN:

The audit committee

(inaudible) autonomously. They will

not take direction from a minister or from the Premier.

Their role is to ensure there are internal controls and processes in

place to mitigate any risk associated with any financial exposure.

MS C. BENNETT:

Okay.

So in

the results from the Budget to the Estimates, I am just wondering where there

any special projects planned as part of the operations plan for the Office of

the Comptroller General that were not actually executed last year due to a

variety of reasons?

MS. MILLER:

No, we did fairly well.

The only audits that did not happen were only one or two and they were

because of departments really not we met with the departments and they wanted

to switch out another project for the one that we had originally put on to our

audit plan, because, I guess, they identified during the year that this was

another area that they wanted to look at.

So we would have swapped out, but we would have done, for the department,

the number of reviews that we had planned to do.

MS C. BENNETT:

Okay.

Sorry, I

should have prefaced that I was moving to Purchased Services and was curious if

any special projects that were originally budgeted in the $794,000 did not get

executed to result in