September 20, 2012

PUBLIC ACCOUNTS COMMITTEE

Pursuant to Standing Order 68, Dale Kirby, MHA for St. John's North,

substitutes for Christopher Mitchelmore, MHA for The Straits White Bay North.

The Committee met at 9:30 a.m. in the House of Assembly Chamber.

CHAIR (Bennett): Good morning, everybody. I welcome all of you to this

meeting or hearing of the Public Accounts Committee. Before we go further, I am

going to ask anybody if you have electronic devices, like this one, if you could

silence them.

This Public Accounts Committee is a Committee that inquires into the

expenditure of public money in the Province of Newfoundland and Labrador.

My name is Jim Bennett; I am the Chair of the Committee. I am going to ask

each of the Committee members to introduce themselves, starting with the Vice.

MR. BRAZIL: Thank you, Mr. Chair.

David Brazil, I am the Vice-Chair and the MHA for the District of Conception

Bay East Bell Island.

MR. S. COLLINS: Sandy Collins, MHA for the District of Terra Nova.

MR. K. PARSONS: Kevin Parsons, MHA for the District of Cape St. Francis.

MR. JOYCE: Eddie Joyce, MHA for Bay of Islands.

MR. CROSS: Eli Cross, MHA, Bonavista North.

MR. KIRBY: I am Dale Kirby. I am a Member of the House of Assembly for

St. John's North. I am pitch hitting for my colleague, Christopher Mitchelmore,

who is the Member for The Straits White Bay North. He could not be here, so I

was called up from the farm team.

CHAIR: Seated at the table with me are our staff members of the Public

Accounts Committee for the purpose of this hearing. I will ask you to each

introduce yourselves.

MS MURPHY: Elizabeth Murphy, Clerk of the Committee.

MR. DROVER: Craig Drover, Researcher.

CHAIR: Today we are inquiring into the findings of the Auditor General

with respect to Western School District. We have a number of individuals in

attendance as witnesses. These individuals have come here voluntarily; they are

not under subpoena, or they are not under any compulsion to attend. Any evidence

that they provide today is protected by a parliamentary privilege in that they

are free to give any evidence that they are requested in fact, are expected to

give any evidence that they are requested - and any such evidence cannot be used

against them.

I am going to ask the individuals if they would introduce themselves,

starting with the first gentleman on my right.

MR. PADDON: My name is Terry Paddon, and I am the Auditor General for the

Province of Newfoundland and Labrador.

MR. JANES: Claude Janes, Audit Principal.

MS RUSSELL: Sandra Russell, Deputy Auditor General.

MR. FELTHAM: Brian Feltham, Assistant Director for Finance and

Administration.

DR. ELLIOTT: Ross Elliott, Director of Education, Western School

District.

MR. KEEPING: George Keeping, Assistant Director, Human Resources, Western

School District.

MS BATTCOCK: Sarah Battcock, Purchasing Manager, Western School District.

MR. KING: Brian King, Comptroller at Western School District.

CHAIR: Thank you.

All of the evidence is taken down, it is recorded in Hansard, so it is

available, and this is a public hearing. The format that we follow is that

members are invited to ask questions, they are provided ten-minute increments,

and then we move on to the next member. We start with a member of the Official

Opposition, then we go to the government, then we go to a member from the Third

Party, and then we go back to the government, in ten-minute increments, until

the members have no more questions.

The procedure that we have also agreed to follow is that the Chair, being

myself, will reserve any questions until the end. If there are any additional

questions required, then I would ask those questions at that time.

A normal sitting day would go until 4:30 p.m., if we needed to go that long.

We will break for lunch around 12:30 p.m. or so and I say around, because we

probably would not stop in the middle of somebody's questioning, we likely would

stop with a witness, instead of having the evidence being disjointed. We will

take a morning break and an afternoon break for people to attend to phone calls

or whatever they wish to attend to.

So, the first questioner is Mr. Joyce I am sorry, Ms Murphy, who is very

familiar with these matters, has indicated that she needs to administer the oath

or affirmation to individuals who will be giving evidence.

Swearing of Witnesses

Mr. Terry Paddon

Mr. Brian Feltham

Dr. Ross Elliott

Mr. George Keeping

Ms Sarah Battcock

Mr. Brian King

CHAIR: Before we commence, it is customary, in order to provide in

part

context and so people watching can understand the role of various individuals,

that the Auditor General be invited to offer a statement if he wishes to do so.

It is not mandatory; however, sometimes it is helpful because it provides

context to viewers who may not be fully aware of the role of the Auditor

General.

If Mr. Paddon would like to offer a statement, then we would be happy to hear

from him.

MR. PADDON: Thank you very much, Mr. Chair.

I do have, with your indulgence, a couple of general comments. Perhaps, if

you wish, I could make some specific comments of a general nature related to the

audit of the Western School District, if that is okay.

This is really my first official duty as Auditor General. I was appointed on

June 1, 2012. I have had the summer to get acclimated to the role and found it

to be quite interesting and quite different from my previous positions.

With me today are two senior people in the Office of the Auditor General:

Sandra Russell, who has recently been confirmed as Deputy Auditor General, and

Claude Janes, who is Audit Principal with the office and essentially runs the

Corner Brook office, and had direct supervisory responsibility for the audit of

the Western School District.

Just some observations on the office I have found so far, it is a relatively

small group. I would say a professional group, very dedicated and committed to

the vision of the office of the Auditor General. It is a very busy office, lots

on the go.

We have sort of a mandate really of two different lines of business. One is

sort of a financial statement to test audits, where we would offer an opinion as

to the fairness of the presentation of financial statements of government or

government entities. Then, it is sort of the legislative or performance audits,

such as we are discussing here that we engage in.

It was interesting; over the summer I had a chance to attend a conference of

Auditor Generals across the country. It was a joint conference with members of

Public Accounts Committees across the country. It really gave me an opportunity

to have a better understanding of the sort of a complimentary relationship

between Public Accounts Committees and Auditor Generals. It is something I look

forward to as we move forward, to maintain that relationship and develop that

relationship on a go-forward basis. I am certainly excited by the challenge that

I see as Auditor General and I look forward to my role in terms of enhancing

accountability, performance, and good stewardship of public money.

In terms of the Western School District, I have just a couple of comments. I

will point out, too, that this was a report that was prepared under the

direction of the Acting Auditor General, Wayne Loveys, who retired on May 31.

The reviews occurred in 2011, and covered the period from June 1, 2009 to

December 31, 2010. It covered a period of one-and-a-half years. The objectives

of our audit were threefold: one, to determine whether compensation and

recruitment practices were in accordance with government and district policy;

two, whether purchases of goods and services were properly approved, monitored

and complied with the Public Tender Act; and three, whether capital assets were

properly monitored and controlled.

I would note that any audit does not look at 100 per cent of the

transactions. Essentially, we look at a sample, and that sample is intended to

be representative of the whole population. Generally what you would expect is

that you would see similar observations throughout the full population that you

see in the sample. It would not be cost-effective to look at everything 100 per

cent.

As a result of the review that we made, the office made about forty

observations where we felt there were areas that required attention or

corrective action. They are outlined in the report of the previous Auditor

General. Overall, as a result of those observations, there were seventeen

recommendations that were made to the district. Obviously the district's

response is contained in the report.

Just as sort of an overall concluding comment of a general nature is that of

the observations that we made, a significant number of them resulted from the

issue of either lack or inadequate documentation. I think that was kind of a

general theme that we saw throughout the audit and was reflected in the report.

I will leave it there.

CHAIR: Thank you Mr. Paddon.

Dr. Ross Elliott is the Chief Executive Officer and Director of Education of

the Western School District. He has asked if he could provide us with a brief

statement before the evidence actually, he is under oath so anything he said

would be evidence, but before we get into questioning.

Dr. Elliott, if you would like to provide that statement we would be happy to

hear from you.

DR. ELLIOTT: Thank you.

Good morning, Mr. Chair, and members of the Public Accounts Committee.

First, we thank you for this invitation today and look forward to the

productive dialogue which will occur. The Western School District includes the

southern part of Labrador, the Northern Peninsula through to Deer Lake, Corner

Brook and Stephenville, and south to Port aux Basques and Franois. We have, as

we speak, 11,300 students and something over 2,000 employees when you include

permanent and casual.

The Western School District came into existence in the spring of 2004 with a

consolidation of three districts. Schools opened in September, 2004 as a part of

the new district. At that time, the district had eighty-two schools and a total

student population of 14,742. There has been a 23 per cent decline in student

population since 2004. We have sixty-five schools today, compared to the

eighty-two that we had at that time.

The task of the new school district was to consolidate three separate

financial systems, to consolidate schools where necessary for improved learning,

to provide better facilities through new schools and redevelopments, while at

the same time keeping an intense focus on student learning.

I should add, as well, that in addition to the consolidation, the early

period of our school district coincided with a general increase in resources for

maintenance and repair, and school budgets and so on. So, when we talk about

consolidation, sometimes we think that was the major issue around that time. It

was also the increase in the amount of good activity, as well as the financial

and monetary responsibility that came with that. This is the first visit of the

Auditor General since the beginning of this new school district and some of the

observations of the Auditor General extend back to the original formation of the

district.

Mr. Chair, and members of the Committee, the Western School District has two

main goals. The first is student learning, and I am pleased that we have had

many successes in student achievement in our school district, as indicated by

test results and other data. The second goal is organizational learning, and in

that regard we sincerely thank the Auditor General and his staff for the

tremendous assistance that this report has given us in adjusting and addressing

organizational processes and efficiencies. We appreciate the time spent, the

discussions held, and we also appreciate any anticipated input from the report

of the Public Accounts Committee.

Mr. Chair, the Western School District has had a balanced budget for each and

every year since the new district came into existence. The Board of Trustees and

the staff present today are confident in the overall integrity of our system and

in our success in providing the very best educational opportunities for the

students in the Western School District. At the same time, we continuously work

to improve procedures, processes and documentation so that we can maximize our

resources and enhance the effectiveness of the system.

Many of the issues in the Auditor General's report were in the process of

being addressed prior to the report. The report has been a further stimulus and

source of knowledge for us. I expect that our discussion with you today will

give us the opportunity to outline the manner in which we have responded to the

report and the improvements in documentation, processes, procedure, and results

that have occurred since the report.

Mr. Chair, and members of the Committee, we welcome the opportunity to

discuss this entire report. In my public statements to date, I have encouraged

members of the public and of the media to read the entire report, including the

district's response and the context provided by the district.

Also, for ease of communication, since I am aware of the knowledge held by

particular members of my team this morning, I might suggest that questions could

be directed to me and that I could refer to the appropriate team member as

necessary. That being said, Mr. Chair, we are of course open to the wishes of

the Committee on this and other items so as to best facilitate your purposes

here today.

Thank you for the opportunity to provide these introductory words.

CHAIR: Thank you, Dr. Elliott.

It is common in matters such as Public Accounts Committees that questions

would be directed to the lead member of the team, but there may be individuals

who may have more information, as you have indicated. One person may be familiar

with maintenance, one person may be familiar with curriculum, one person may be

familiar with human resources, and it would only make sense that, although the

questions would be directed to you, whatever member of your group could best

answer the question will be the one who would first be looked to, to provide

answers to those questions.

I will begin with Mr. Joyce from the Opposition.

MR. JOYCE: Thank you, Dr. Elliott and Mr. Paddon, for your opening

remarks.

I will go to page 85 of the Auditor General's report. I will start off there

with the public tendering. We will get this clarified pretty quickly.

On top of page 86, "The report referenced five purchases that were indicated

as not being tendered as required by the Public Tender Act. However, it is the

opinion of the District that two of the identified purchases totaling $356,191

were approved by the Department of Education in accordance with their

established protocols and compliant with the Public Tender Act."

Do you have a letter on file to show the Department of Education approved

that spending?

DR. ELLIOTT: Good morning, Mr. Joyce.

First of all, perhaps this may help us in the future as well. I seem to be

looking at different numbers.

MR. JOYCE: It is right in the AG report, page 86.

DR. ELLIOTT: Sorry?

MR. JOYCE: Page 86, the AG report.

DR. ELLIOTT: Yes, and in ours let's see if we can clarify this in

what we have here, the Western School District report starts at page 33. Are we

dealing with different documents?

MR. JOYCE: No, I have the full report here.

DR. ELLIOTT: Sorry?

MR. JOYCE: I have the full report.

DR. ELLIOTT: Okay, then our copies all right. It starts on what?

WITNESS: (Inaudible).

DR. ELLIOTT: Okay, that clarifies that we are on the same document.

When you are looking at page 86, you are looking at our response, Mr. Joyce,

are you?

MR. JOYCE: Yes.

DR. ELLIOTT: Okay, very good.

MR. JOYCE: There was a spending of $356,191 that was approved by the

Department of Education.

DR. ELLIOTT: Yes.

MR. JOYCE: Do you have a letter on file that the Department of Education

approved that, because that is contentious? Can you forward it to the Public

Accounts Committee, that there is a letter on file saying you were given

permission to do that?

WITNESS: Yes.

MR. JOYCE: Okay, thank you.

CHAIR: Mr. Joyce, if that letter is readily available could it be

provided at the midday break, because if it comes and goes we may be able to use

it this afternoon? Would that be preferable, Mr. Joyce, if it is available?

MR. JOYCE: Sure. I am assuming it was supplied to the AG in their report.

WITNESS: We did not see any documentation (inaudible).

MR. JOYCE: You did not see documentation?

WITNESS: It would have been in the backup documentation, yes.

WITNESS: (Inaudible).

CHAIR: Could individuals please identity themselves by name before they

speak? Because we will have a written record and we will not know who is saying

what.

Mr. Janes.

MR. JANES: As I said, we do not have any documentation, or I do not

recollect having any documentation related to the approval from the Department

of Education. Even if that was the case, we do not necessarily agree that it was

not in compliance, or non-compliance with the Public Tender Act.

CHAIR: So, if it could be made available by midday, it would be more

helpful.

MR. JOYCE: Yes, perfect, yes.

CHAIR: If not, we can get it later, but the more things we can do today

the less likely we are to have to come back another day.

DR. ELLIOTT: If I might conclude on this, I do not recall if such

documentation was asked for by the Auditor General at that time, but the point

is that it does exist, Sir, and it will be forwarded.

MR. JOYCE: Perfect.

DR. ELLIOTT: Thank you.

MR. JOYCE: The next one is the amount of $10,680. Once again, it did not

go to public tender. Can you explain how this happened? Why and who made the

decision? "the District based its original estimate on historical financial

data".

DR. ELLIOTT: Mr. Joyce, I am just having a slight difficulty in hearing

you over on this side.

MR. JOYCE: Okay.

DR. ELLIOTT: You are on page 87 now?

MR. JOYCE: The same page, 86.

DR. ELLIOTT: Yes, if you would not mind just repeating that question.

MR. JOYCE: With regard to the bus contract for one year in the amount of

$10,680, the district based its original estimate on historical financial data

and did not go to public tender. Can you explain why it did not go to public

tender?

MR. FELTHAM: That contract was based not on an annual contract but on a

monthly contract. Historical information was indicating that the amount would be

less than $10,000 and, as a result, as the year progressed, the amount exceeded

that $10,000.

MR. JOYCE: I am asking because I know in most government departments if

it is less than $10,000 you have to get three quotes. Did the department get

three quotes? As the contract came up did the department get the quotes to

ensure that it is below $10,000?

MS BATTCOCK: It was believed for that area that this was the sole

provider as it was in a remote location.

MR. JOYCE: Once you agree it is a sole provider, you do not put it out in

public tender or ask for quotes? Is that still common practice at the school

board now? If someone at the school board feels that, okay, it is the sole

provider so we will not put it out to tender? Has that changed now? Hopefully,

it has.

MS BATTCOCK: Yes, it has changed.

MR. JOYCE: It has changed?

MS BATTCOCK: Yes.

MR. JOYCE: Because of the AG report?

MS BATTCOCK: Yes.

MR. JOYCE: Excellent. That is the idea of the AG report, to ensure in

compliance with the public tendering.

In the next one, the recycling contract, "was not tendered at the time,

since it was thought that the acquisition of this service was sole source."

Who made that decision? I am out that way and I know there is more than one.

MR. FELTHAM: That decision would have been made by staff in the

maintenance department and it was believed there was only one provider. Since

the contract was occurring, we did discover through the Auditor General that

there was another provider. That contract has since gone through public tender

and only one vender bid on the contract.

MR. JOYCE: Staff at the maintenance office can make that decision to put

stuff out to tender?

MR. FELTHAM: No, what occurs is a two-stage process. The need is

identified in a particular department and then they work, through our purchasing

manager, for the procedures and processes to be followed.

MR. JOYCE: Has that changed now? Does it at least go to public tender

now?

MR. FELTHAM: Mr. Joyce, the contract was out to tender and we received

one vendor bidding on that particular contract.

MR. JOYCE: Okay, thank you.

In "the amount of $26,390 the District acknowledges there was an error in the

prior year's addendum. The contract should not have been extended into the third

year, but the extension was based on the addendum and not the original

contract."

Was that just an error in reading the contract itself?

MR. FELTHAM: Mr. Joyce that is correct, an error occurred in the

department.

MR. JOYCE: Thank you.

"In relation to the contracts for the amounts of $77,968 and $280,125

respectively, the District renewed these contracts on the direction it received

from the Department of Education." Once again, does the school board have a

letter confirming that the Department of Education gave them permission to go

ahead with this? Can you produce that letter to the Public Accounts?

WITNESS: Yes, we can.

MR. JOYCE: Lunch time so that we could thank you.

As we find out, a lot of these things here going through the school board

and I have been dealing with the AG now for a long while. If this documentation,

if it was there and readily available then, even if it was and as the AG

mentioned and I would ask the AG is that usually in compliance with the Public

Tender Act?

MR. PADDON: Regardless of whether the Department of Education gave

permission, if you want to call it that, to act in the way that it was done, if

we felt that the transaction overall was not in compliance with the Public

Tender Act, we would still have reported it.

MR. JOYCE: Okay.

CHAIR: Thank you.

Next we have questions from a government member.

MR. BRAZIL: I want to welcome the Auditor General to his first hearing,

and his staff back again, particularly Dr. Elliott and the delegation from the

Western School Board.

As you know, obviously the Committee selected this as one of the issues of

concern after a consultation meeting with the Auditor General to look at some of

the issues that had happened in the Western School District. Particularly

because there had been a trend from other school districts that we wanted to see

if this could be nipped in the bud and if there were some ways of advising the

school district to improve some of the services and some of the practices they

had put in place.

I must admit I am very impressed with the responses and the outline. They

gave me exactly a fair understanding of your approach to addressing some of

these issues, that you have accepted there are some shortfalls in the practices

of the Western School District itself, and that you have taken procedures to do

that. My background as a former civil servant, and particularly around human

resources, lends me a little bit more to ask you have outlined exactly how you

are going to look at the deficiencies when it comes to your policies around

employee management and compensation.

It is spelled out there, but I want to ask you to elaborate a little bit more

and take me through the process you will use when you go out to look at employee

records and compensation for the employees you now have in place, keeping in

mind that you mentioned 2,000 employees. We do understand the vast geography,

but 2,000 is a fair-sized organization. Obviously there are going to be some

integral workings you have to put in place. I would ask that you take me through

that so I am clear what you are putting in place will address some of the

shortfalls identified by the Auditor General, please.

DR. ELLIOTT: Thank you, Sir.

I will open on that, and then ask Mr. Keeping to perhaps provide some

details. As the Auditor General and you have indicated, many of the issues here

are around documentation. To go deeper than that, in some cases it is not just

whether documentation exists but where it exists. I would say that in many of

the cases with regard to hiring documentation certainly existed, but it was not

all comprehensively located in the one file.

For example, unsuccessful candidates were certainly notified but the record

of that would have been the record of the secretary who did the notification,

and that was not necessarily in the file. I just give that as an example. That

has now changed.

I am going to turn it to George Keeping perhaps for some further detail.

MR. KEEPING: Thank you very much, Dr. Elliott.

First I will say, as did Dr. Elliott, the interaction and the questions that

came from the Auditor General were very, very helpful. I will reiterate we have

to keep in mind the context. The context is you have three separate districts

that have come together. For a period of time there was one employee who was

trying to oversee a very massive district. For a period of time, you had one

assistance director and an assistant. So the learning that has occurred from

that time to now has been immense.

I think with the additional knowledge that we have gained from this

experience with the Auditor General, our processes are much more efficient and

in a much better place. That is not to say anything with respect to the people

who have gone before; they were all hardworking people who were in a situation

that required an intense amount of attention to detail.

Just some of the things I will mention very quickly: The interaction right

now with Treasury Board and getting the positions properly compensated, we are

in a really good place. The processes we follow, at all times, we are

interacting with personnel to make sure that the job descriptions and that part

and the proper process is going, bringing it forward so that it is reviewed by

the Hay committee and those steps are done. If you look at the Auditor General

report, you will notice that in the beginning the time frames were a little

longer and then as the years go by, you see that the processes are getting more

efficient. So, that piece we have certainly worked on.

With respect to the documentation, as Dr. Elliott said, there was, I guess,

to have all of the documentation in one particular file that was readily

available is something now that we have gotten the communication out to our

human resources managers and out to our education officers such that files that

are brought in we make sure that if someone withdrew from the file, that there

is a notation put in, an e-mail that this person has now withdrawn from the

competition. So the Auditor General or anyone else who looks at a competition

file, there is no need to wonder what happened to this particular candidate.

That documentation is now in place.

The interviews and the rating of the interviews and the rating of the entire

process is there for people to see as to how we approached it, as to why we made

the decision that we made, and there is a directive given that all of this will

now be put into the competition file. So, really and truly, that experience was

a learning opportunity for us and we seized up on it and we are in a better

place.

I do not know if you have any specific questions around other aspects of it.

MR. BRAZIL: You do mention that you are going to be looking at a

computerized program that will be implemented

MR. KEEPING: For the on-line

MR. BRAZIL: Have you gotten to that stage since that?

MR. KEEPING: Yes, we are. That is kind of a combination of finance and

human resources because it is also used to track overtime, but it also allows

for people to put in their leave. So, for example, after the end of the two-week

pay period, we are in a position where we can go on-line and look at what people

have put forward, and also to cross-reference with the leave request forms and

so on that have been submitted. We are in a place where we are able to more

accurately then go back and see where things are;

whereas before, without that

electronic software it was a much more difficult and arduous process, and a

manual process of transferring things from one place to the other.

So, yes, there were occasions when there could have been a half day missed.

Even having said that, when people retire and so on, we do a comprehensive look

back through their files such that if there were days missed that they do not

actually lose them at the point of retirement or resignation. So, if you were to

come in midway through and look at a file, yes, there might have been a day that

was missed, but before they finish with the organization, a comprehensive review

was done by the human resources division to ensure that they do not miss it

overall.

MR. BRAZIL: Okay, so it would be picked up.

Has there been any collaboration between the other school districts? It is a

bit concerning to me, again, as a former civil servant, that we run into these

issues year after year from different school districts, that Central will run

into it, and Eastern will run into it. Have you sort of sat down with each other

to look at how the human resource process is done, or the communications

process, or the tendering process other than the standards that are set by

government through our policies?

MR. KEEPING: Yes, we have, from the human resources perspective now, I

do not know when this was started, but I know when I came into the office that

there were regular meetings with Mr. Wayne Noseworthy, our labour relations

person, and we would meet with our assistant directors and our education

officers, and we would compare and try to make sure that we are in sync and we

have regular e-mail communication. This has taken a while to develop, as you can

appreciate, but this is something that now we are trying to move towards to make

sure that in the different practices we are in sync as much as we can be. This

will only get better.

MR. BRAZIL: Okay, sounds good.

I have a question around you are mentioned the red circling. How closely

are you working with the NLTA to identify what they consider to be part of their

policies, relevant to the school board's ability to identify who gets red

circled in certain positions?

MR. KEEPING: Well, we would work with the NLTA, but we would also be

working with our own officials at the Department of Education. For example, in

the most recent case where we had to do that, there was lots of communication to

ensure that the periods were right and this was the correct letter and that we

were in a position where we could certainly say that, yes, this employee is in a

position to be red circled, and the letter is documented to ensure that it is

there for the file.

MR. BRAZIL: Okay, I am just going to move right off the human resource

part of it because that will suffice until I come back with some other questions

after.

I want to go through the trip advance policy. While it is not a big amount of

money, it is a concern because it is public funds being not accounted within the

realm of what we should do as the Public Accounts and the Auditor General.

Describe how you are going to improve and you have outlined it here the

whole trip advance policies, the receivables, and the clear and timely manner

that people either get reimbursed or the money is returned that is not used.

Somebody from your financial

MR. KING: Yes, I can.

MR. BRAZIL: Okay, I appreciate that.

MR. KING: Thank you very much.

Our travel advance policy is one we have in place to assist our staff members

with the burden of financing their travel in advance of receiving their expense

claim, processed either at the district or at the department. In order to tidy

that up a little more, we have implemented some measures. First and foremost, we

have begun to insert writing a travel advance cheque, with the cheque in the

envelope, a reminder that upon receipt of your travel expense claim from the

department, you are to immediately reimburse the district for the advance you

received.

Travel advances are looked over, duly reviewed, and authorized before they

are issued. When they are issued, they are logged in what we call a file, an

Excel spreadsheet, noting the date it was issued. It is followed up on a monthly

basis with a proactive call to the particular person who received the advance,

if it has not already been recovered.

The reason we have it in place at all is because we have experienced some

longer-than-normal times for these departmental claims to be reimbursed. We have

done a review of that time frame. We have shortened it now. We fully expect that

everyone will have been reimbursed by the department certainly within ninety

days, and that is improving all the time. Not that we wait ninety days to deal

with it. We are being much more proactive on a monthly basis to be sure we

recover those. It has made a considerable difference in our success in

recovering them in a timely manner.

MR. BRAZIL: So that is your operating policy right now?

CHAIR: Thank you. You may want to come back on a supplementary

(inaudible).

MR. BRAZIL: I am great there, thank you.

CHAIR: Mr. Kirby is next.

MR. KIRBY: Thank you, Mr. Chair.

I guess I want to start out with the July 24 response to Public Accounts

Committee, question one. It states, near the middle of the first paragraph:

Managers have received training in the NLTA collective agreement and will

receive further training in CUPE and NAPE collective agreements as required.

I guess I am having some difficulty understanding why managers at the Western

School District were not already trained in what I would assume would be basic

practices that constitute their jobs effectively. I am pleased to see, from the

response here, that some training is taking place, and I am glad to see the

software is being implemented. I guess I am wondering why managers would need to

have training in collective agreements that govern the relationship with

employees of the Western School District.

DR. ELLIOTT: Mr. Kirby, I will make a start on that, and I think George

will comment as well.

An important question was asked by our friend earlier around the NLTA. You

are right; we work within the broad agreements that have been negotiated. These

are important to our operation.

My comment on your question would be that it depends on how far down you go

in the organization with that level of knowledge. Certainly, for example, we

would have a high level of knowledge of all of the collective agreements at

certain levels within the organization. What we are trying to do is to, I guess,

push some of the management functions further down into the organization and

then that requires training so that more people have the knowledge that Brian

Feltham has and George Keeping has.

Another very simple thing here when we talk about training as well is that we

have considerable staff turnover, so in some instances we are talking about

training new staff.

George, I will let you

MR. KEEPING: That is the guts of what I was going to say. We started with

the education officers because of the fair bit of turnover. Also, as you would

be aware, there are always

interpretations of incidents that occur that we have

not had to deal with: privacy, new legislation. So, there is always the

upgrading, as you are aware, of understanding of the collective agreement and

what this means in certain situations because of things that have occurred in

other schools, other districts, other provinces, other countries.

What we felt we would do is we would start by making sure we start with the

NLTA collective agreement and work our way down through. As we are in the

process now of negotiating new collective agreements, for example, some of the

people who would be on these negotiating teams representing the management with

perspective, we would hope to get these people in and help us understand the

nuances of particular articles as to why they came into being, what they mean

and what the changes mean so that we are as current and on top of things as we

can be.

When they take situations coming from principals, they understand the guiding

principles that led to this particular article, so they can respond and help our

principals deal with situations very appropriately and not have anymore time

distracted from the learning agenda than we have to have distracted. This is

something we are committed to; to make sure we have professional development for

our managers to keep them as up to date as we possibly can.

DR. ELLIOTT: If I could just add one piece that might be of interest to

you, Mr. Kirby, on this question as well.

We all realize that a collective agreement is not quite as static as we

sometimes visualize. It is a document on which each party to the agreement

occasionally pushes its own

interpretations. Therefore, there is ongoing

discussion, in some cases ongoing arbitration, around the

interpretation of

issues. A part of this as well is staying abreast of developments around the

collective agreement, even though it might have been signed several years

before.

MR. KIRBY: Sure, but would you agree then that it is an understanding of

the collective agreements with the employees of the Western School District as a

basic function of the responsibilities of managers of human resources?

DR. ELLIOTT: It would depend on which level you go, and that is quite a

discussion within for example, a principal is a manager of human resources, as

I am sure you would recognize, in many senses. There has been quite a discussion

as to whether time invested in the training of principals in collective

agreement issues is advantageous over having that knowledge at more of an expert

level for the, hopefully, few times when the principal needs it. There is a

demarcation line and what we are doing is moving that demarcation line a little

closer to the front line, but not right on the front line.

I should say, as well, Sir, that education officers, as you know, is a

relatively new category. Three of them were added to our school district

somewhat recently, and they are growing into that role of assuming HR advice to

their schools.

MR. KIRBY: Okay.

In response to the questions of the committee dated July 24, the district

noted it had reviewed HR procedures to ensure employee records are up to date

and that the district has adopted policies to periodically review employee files

to ensure completeness.

Again, wouldn't ensuring the completeness of employee records be considered

to be a basic duty of human resource managers? I am wondering: If that is the

case, then why it was not done previously?

MR. KEEPING: I think that is self-evident, that it would be part of our

responsibility to make sure that records are in place. As I have mentioned

earlier, the manual part of it, as identified by the Auditor General, led us to

move into the electronic format to make sure things are at least done more

efficiently, as they should be.

As part of our own efforts to make sure we are doing this as good as we

possibly can, the decision that, I guess I can say we wanted to move into, was

that after the end of the major hiring season, and in October we would run a

quick audit of our own with our internal auditor. The details of that piece we

will have to work out, but we wanted to do our own double check just to go and

pick some files at random to see how we are doing here before we in four years

time because we put out directives, we just want to make sure that things are

being done that we want done.

As I mentioned in my earlier answer, the complete review of an employee's

file when they resign or retire, again, is the other part that ensures we have

not lost any days have not gone missing when it comes to recording their

annual leave and their overtime, things like that. So, yes, a quick answer, yes.

As in all organizations, we try to make sure things are in place.

A second

part is we are going to try to do some double checks too, just to

make sure that what we are asking to do is getting done.

MR. KIRBY: Is there any written documentation available outlining the new

procedures that are in place?

MR. KEEPING: Yes, that has been e-mailed by me to education officers and

our human resources assistants. As the files come in and so on, we have on the

files checks that have to be ticked off so that we have those things done with

respect to hiring. Letters have gone out from the human resources department,

for example, to our offices to make sure on a monthly basis we see where

employees are with their leave and their step progression. We have directives

gone out to try to consolidate these processes to make them more efficient.

MR. KIRBY: Is that something that can be made available to the Public

Accounts Committee, these new procedures?

MR. KEEPING: Yes.

CHAIR: Thank you, Mr. Kirby.

I understand that there is a document going to be provided. It is a

questionnaire of some form, or a directive. Is that correct, Mr. Keeping? You

are going to provide a document that summarizes the new procedure you are

following?

MR. KEEPING: Yes.

CHAIR: Okay, thank you.

A government member.

MR. S. COLLINS: Just to echo what my colleague had said previous. While

the report came out, it was quite concerning. I think most of the responses, if

not all of the responses you have given have been quite good. It is one thing,

of course, putting things on paper; it is another thing putting it into

practice.

I just want to talk about a few things. The AG had mentioned at the start

that this is a sampling. You have a huge organization. I think it was $160

million in expenditures, 2,000 employees, and whatnot. So it is just a sample

size. If you make systematic changes, of course, that would hopefully, on a

go-forward basis, solve the other problems that were not looked at perhaps or

were not identified.

With that in mind, going back to what Mr. Brazil had touched on there in his

last round of questioning with regard to the travel reimbursement. I am just

wondering how the new rules differ from the previous ones. You talk about the

typical review process is how it is stated. It goes on to talk about review by

accounts payable staff, the comptroller is involved with reviews, and finally,

of course, the accountant takes a look.

I am just wondering how that new process has changed from the previous one.

Of course, if there has not been much change we are not going to see a change in

results. I am just wondering if you would bring me through where we were,

because I have seen you touch on where we are or where we are going, but what

has changed?

MR. KING: Our travel claim adjudication process, we have done a few

things to try and improve and flag every single instance of something that may

have been ineligible before it is paid, of course.

We have recently issued memos and had some in-servicing with first of all,

everyone who wants to submit a claim, we have reminded them of the rules. We

have told them the primary responsibility for accuracy and completeness does

rest with the submitter. We want to make that very, very clear upfront.

We have also extended communication and had correspondence with every one of

our managers and our supervisors to ensure that they are fully aware of what

types of things are eligible, what things are not, what to look for, before they

complete their review and authorize it for payment. From there is does go down

to our accounting staff. They have been reminded, and we have gone through the

various types of things they need to eyeball the things that can slip through.

Like the odd meal, things like that, based on the times of departure and the

times of return, to be very, very conscious of, if by chance it has slipped the

eye of the supervisor, that we catch it as well. That has helped out. As I have

seen it so far, it has been working really, really well.

The accountant who gives the final go ahead to put it into the system has

also taken it upon herself to give that a real good check. At the time of some

of these pieces that were noted in the AG report, there was some changeover of

some staff in some key roles. The current people, who are the permanent people,

are back, are very versed and very confident, and I am very confident, that we

are in a good place to take care of these issues going forward.

MR. S. COLLINS: Okay.

Would it be fair to say that the proposals were all in place beforehand but,

of course, they just were not being practiced? Is that a fair statement?

MR. KING: Quite frankly, it was missed. The protocols were in place. We

have tightened them. We have reminded we have everyone involved to be very

sure that it is caught. It is extremely important that, as all our practices

are, they are done to the best of everyone's ability. We feel good about the

fact that the level of awareness around what is eligible and what is not, and

being sure that all people who are part of the process are versed and understand

and noted when to push back, what to do in every instance before a claim is

approved and payment is released.

MR. S. COLLINS: Okay, thanks.

Also, it is always the thing going third or forth in questioning, some of the

questions will be touched on previous.

I am just wondering if you would go back to the timely manner that is there.

I noticed when you were speaking in your response the last time around you had

mentioned the ninety days. I notice that it says just in extenuating

circumstances ninety days would be given.

Outside of those circumstances, which you have touched on briefly before,

what would a timely manner be and what happens when that time elapses? What sort

of steps would be taken?

MR. KING: Okay. The timely manner is really upon receipt of their claim

from the department, they have been advised to immediately, within reason if

it is someone within a day or two, we would want to be sure we are in receipt of

this advance that they have now been reimbursed for by the department. That is

sort of the timely manner piece. That had not been happening in every case, as

the Auditor General helped us identify. That is our expectation. That is the

expectation that everyone who takes a travel claim now has.

We have experienced some we have researched this, it has taken upwards of,

I think at the time it could have been upwards of three to four months before

some of our travellers were reimbursed for department claims. We took another

close look at it as we stated we would, having discussed it with the Auditor

General's office. That seems to have been improved at that time. We could

readily say that in ninety days surely everyone should be straightened away and

we should have our claim returned.

That said, as I mentioned, the rule is that as soon as they get it they need

to send it to us for recovery right away. Every month we will look at the dates

that advances were issued. We will follow up with everyone on a monthly basis

just to see if we have not already had it returned: Where is it? What is the

status? Should people be tardy in doing that, we will consider suspending their

privilege of this type of advance in the future.

MR. S. COLLINS: Okay, perfect.

Just to change gears, what possibly is a quick question regarding the

cellphone policy. Have we been provided a copy of that policy? I did not see it

there. I checked again this morning, I did not see it.

My reason for asking that, I am just wondering, it seems as though it was a

policy that was developed after this AG report came out. Would that be correct

in saying, or was it a policy that was always put in place but never recognized

and never practiced?

MS BATTCOCK: The policy was in place.

MR. S. COLLINS: It was in place. Okay, so the exact same policy we are

looking at today has been in practice before?

MS BATTCOCK: Yes, we have made slight adjustments to it, and I do have

that here.

MR. S. COLLINS: Okay.

I am just wondering: how would that differ from other school districts and

from government in general, the cellphone policy?

I am just wondering, basically, if I could get a copy of the cellphone

policy. I guess that would answer my question just to because I did not see it

in here. Then I could probably see the changes that were taking place, because

obviously when I look through some of the things that had gone on with

cellphones, it is somewhat concerning. So, I am just wondering if that could be

provided, the cellphone policy.

MS BATTCOCK: Yes, I can provide that.

MR. S. COLLINS: Okay, perfect.

Speaking of policy, I am just wondering, there was a little blurb in there

with regard to the purchase of liquor. What is the policy for purchasing liquor

with the school board? There was a number in there, I believe, $700, if I am

correct.

DR. ELLIOTT: The policy on the purchase of liquor is that liquor not be

purchased. I did, I think, see some documentation here around that that was sent

to schools by our auditor.

MR. FELTHAM: Just to add, that following the Auditor General's review, we

studied fifty-two schools around their practices. Following that, of course, we

then sent, under the internal auditor, communication around that there would be

no tolerance for purchasing alcohol.

MR. S. COLLINS: Okay.

So it is obviously not an issue on a go-forward basis. That is something that

was pretty black and white, I guess.

MR. FELTHAM: It should not be an issue.

MR. S. COLLINS: Okay.

Thank you.

CHAIR: Thank you, Mr. Collins.

Before I go to Mr. Joyce, I understand that the witnesses may have some of

these documents with them, the cellphone policy or something like this. If there

is anything of that nature that you have that the committee has requested, at

the break I would ask if you could provide it to Mr. Drover. Then he can make

copies and have it circulated, so it will be less work later and more useful

now. Thank you.

Mr. Joyce.

MR. JOYCE: Thank you, Mr. Bennett.

I will go back on page 33, just with some of the hiring. I am sure the school

board hears it, and I hear it, and rightly or wrongly, is that a lot of young

teachers find it very difficult to try to get hired at the school board. As we

see in the AG's report, and I will ask the board, how many retired teachers are

on staff now that were hired because you could not get positions filled, or are

there any now?

MR. KEEPING: No, there are no retired teachers at the moment working with

the district.

MR. JOYCE: How many were there last year or the year before when the

report was done?

MR. KEEPING: The last year, I think we were in a situation in one remote

community where there was a math teacher, I do believe, who went off sick and we

could not get a suitable replacement. So, for about half the year we had to hire

a retired math teacher. We were very fortunate that we actually had a retired

teacher to go in and do the work; otherwise, students would not have learned

mathematics for that year.

MR. JOYCE: As we see in the AG report with the documentation for

recruitment on page 33, "None of the 11 competition files reviewed had complete

documentation on the competition process, including 2 files which did not

contain adequate documentation to support why the District had rehired retired

teachers instead of other candidates."

So that is not correct?

DR. ELLIOTT: Again, this is an issue of documentation. None of the eleven

competition files reviewed had complete documentation on the competition

process. There was, of course, a competition process. In most cases the

documentation existed, but we are back to the issue, which we have now

rectified, of all of that being readily accessible and in the one place, in the

one file.

MR. JOYCE: The Auditor General is saying here in the file, "including 2

files which did not contain adequate documentation to support why the District

had rehired retired teachers instead of other candidates."

DR. ELLIOTT: Yes

MR. JOYCE: We were just told that there was none hired. I do not know if

the

DR. ELLIOTT: I do not think, Sir, you were told that there was none

hired. We are talking about I cannot recall which year now.

MR. KEEPING: I spoke to this year and last year. In those particular

cases there, which was what was the year?

WITNESS: (Inaudible).

MR. KEEPING: In those two particular cases there, it was our view that we

had advertised and they were not suitable replacements. I guess there was a bit

of a difference of view as to what constituted having a candidate suitable for

the position. In our view on these files, we did not have suitable candidates at

the time that could do the position because of the combination of

qualifications, experience, and so on that we normally use when we are looking

for a candidate that is suitable, if I recall correctly.

MR. JOYCE: Is that clarified now so that from here on in the procedure

MR. KEEPING: Yes, the process anything with respect to hiring would be

involving ourselves and the department, getting people approved, advertising a

number of times, demonstrating that there is just and we did at that point

no candidate, in our view, that we felt was suitable.

DR. ELLIOTT: Mr. Joyce, if I could just add something to that, again I

will be a little bit more precise about those particular files because I am

familiar with them. Our right to determine whether a candidate is suitable is a

right that management has. In this situation, we exercised that right.

The difficulty, as I understand it, that the Auditor General had that we

agree is a difficultly and that we rectified is the file upon examination did

not have written in it a record of that kind of decision making. One could not

pick up that file and say: Well, that is the decision that was made on this

candidate, on that candidate, and so on.

MR. JOYCE: So I ask the AG: Do you agree it was just documentation and

not that the positions were not actually put out for public competition?

MR. PADDON: In this particular case, it was our view that this was a

documentation issue. Of course, in the absence of documentation it is difficult

then to draw any conclusions one way or the other.

MR. JOYCE: Okay, thank you.

In the next one down, Dr. Elliott, "In 7 of 24 personnel files reviewed,

there was no documentation present to indicate that a competition had been held

when the individual had been appointed to the non-teaching position."

Has that been corrected now also? Has the documentation been put in the file

to show there was competition?

DR. ELLIOTT: Mr. Keeping is going to respond to that.

MR. KEEPING: In those particular cases there, those were ones where the

volume of work at the time required just being able to do the work and to get

it done, there had to be temporary positions put in. The process normally, once

you have established there is a need, you then go through that normal review of

the organization, get the position fully described, and then sent for

reclassification.

MR. JOYCE: So what you do is you put someone in the position, you let

them carry out the position, and then you put it out to public competition.

MR. KEEPING: Yes, but keeping in mind the context I said in the

beginning. This was the context of the boards being put together and the volume

of work that was created with limited staff.

MR. JOYCE: When was the board put together?

MR. KEEPING: 2004.

MR. JOYCE: This is 2009-2010, five or six years later.

MR. KEEPING: Okay, so you are gone a little further ahead.

MR. JOYCE: I hear the complaints. I am sure the board does also.

What I am being told here is that positions come up, you appoint someone

temporary to the positions because of the workload. Once that person because

we have documentation here from the AG where there are people in the positions

for up to fifty months without even advertising the position; there are some

longer. You put someone in the position for a number of months, years, I am not

sure what, and then you go and advertise to see who is best qualified for that

position.

DR. ELLIOTT: Mr. Joyce if I might speak to this.

MR. JOYCE: Sure.

DR. ELLIOTT: Here is the context as I see it. These situations evolved in

a certain context. I do not wish to reference 2004, let us go back to last year

or the year before.

MR. JOYCE: Let us go back when the report was done, because that is what

we are dealing with here.

DR. ELLIOTT: Sure, that is fine and, as a matter of fact, a good year to

talk about it. We run into situations and I want to paint a picture as to the

kind of position that might be filled in this kind of way.

We run into instances where we might, for September, be closing down three

schools and going into a new one. We might be dealing with, as we have dealt

with, facilities issues. I could not begin to describe to you the amount of work

that is going on in maintenance in facilities and repairs in new schools and

everything else.

We have a circumstance where an employee is sick, or leaves, or moves to

another position, which is fairly common by the way in these positions. Here we

are, it is end of July and by golly we have to get the school opened in

September. These are the kinds of situations that cause us to say we have to

have someone in place right away. That is how it happens.

I believe the piece, though, in which improvement which the Auditor General

quite rightly points out should occur, has occurred, and is continuing to

occur, is that once that is done there needs to be a more timely piece in terms

of advertising the position and so on.

MR. JOYCE: Yes.

DR. ELLIOTT: We accept the criticism that too much time in some instances

elapses between the necessary appointment

MR. JOYCE: I understand, yes.

DR. ELLIOTT: and the going of that into advertisement.

MR. JOYCE: I ask the AG again: In these positions, it stated that they

are non-teaching positions. In the report it says non-teaching. So, Dr. Elliott,

what you are talking about is probably teaching positions, but these are

non-teaching. So, were these school board positions or maintenance?

WITNESS: (Inaudible).

MR. JOYCE: Well, no, I am just asking the AG or

MR. JANES: Yes, they were non-teaching; it could have been in

maintenance, or busing, or at the board office.

MR. JOYCE: Okay, so what you just described was the situation where you

are hiring teachers, but these were non-teaching positions.

DR. ELLIOTT: No, Mr. Joyce, what I just described were non-teaching

positions. There is another item here on teaching positions. What I just

described were people who may be managers of maintenance, people who may be

involved in accounting and busing and so on. Specifically, the non-teaching

MR. JOYCE: Has this been rectified now to ensure a timely fashion that a

competition has been put out?

MR. KEEPING: I guess two parts to that, just not to lose the point. We do

have the ability to appoint people in those non-teaching positions when there is

a need. We are within our right to do that.

The answer to your second question is yes, in the ideal world, what we do is

you review the division, you look at the work that is required, you develop the

job description, you do all those pieces and get it approved, but in extenuating

circumstances, we do have the right to appoint someone to a position temporarily

to make sure the work gets done. Our goal is to ensure that it is done in an

efficient way. That the new position is created, and then classified and all of

the other pieces that go with it. So, the answer is yes

MR. JOYCE: How long can you appoint somebody?

MR. KEEPING: Up until six months, I believe. I would have to go double

check now, but I think it is six months.

MR. JOYCE: Okay.

MR. KEEPING: Anyway, the second answer is yes.

MR. JOYCE: Okay.

DR. ELLIOTT: Mr. Joyce, might I just add, though, that while we can do it

up to three months, it is not our objective that it would be sorry, six

months? Anyway, whatever the time period is, it is not our objective that it

should always take that long. So, what we are instituting is even though it may

not be a requirement, a more timely advertisement process that follows an

appointment.

CHAIR: Thank you, Mr. Joyce.

A government member.

MR. K. PARSONS: First of all, I would like to welcome you all here this

morning and thank you for coming.

I really like your response to the questions that were given to you, I think

they were excellent responses, and most of the things that were in the Auditor

General's report have been addressed. I would like to ask the Auditor General's

department if they could let us know I know that you do an extensive review of

the responses back from each department that you have questioned, on the Auditor

General's report. What is your response to their response to you? Are you

satisfied with what they have given you, or are there any particulars there that

you would like to see them address a little bit more?

MR. PADDON: Two points, first we have not seen the responses that you are

referring to so I cannot

MR. K. PARSONS: Okay, but the response in the Auditor General's report?

MR. PADDON: In the report itself?

MR. K. PARSONS: Yes.

MR. PADDON: As a general comment, the responses seem to indicate that

there is a recognition that things will be looked at and processes put in place

to take the appropriate action.

Our process would be two years after the report paragraph comes out we will

follow up with the particular entity to see how they have made out in terms of

addressing the recommendations, and we will do some work at that point in time

to do some verification as to how they have implemented the recommendations that

we have put forward.

MR. K. PARSONS: There are no major concerns there that you have with any

of their responses?

MR. PADDON: There is nothing in the responses that would give us cause

for concern that they would not be heading in the direction that we would think.

Having said that, we will wait until the two-year period is up and we will

provide a report at that point in time as to how the organization is addressing

our recommendations.

MR. K. PARSONS: Okay.

I have a question to you, Dr. Elliott. I know that the school board came into

existence in 2004 and the report was done in 2010. What took so long to get all

of these policies straightened up? When you read this report, there are a lot of

questions there when it comes to travel. There are a lot of questions when it

comes to phone coverage and with cellphones. There are a lot of questions when

it comes to hiring and everything else. It seems with your response that you

gave us I mean, it is a great response, like I said earlier, but why did it

take so long to get these policies in place?

DR. ELLIOTT: I will answer this in a number of ways.

First of all, I would like to say that much was in place. The thread of our

response was that there were very good procedures in a lot of things, and in a

lot of the instances, it may have been a case where, as I would expect would be

true in many organization, that the procedures might not always have worked as

they should.

I would first like to say that our view of that time is that many, many

things were in place. The second thing, I guess, that I would say is that we

live in changing times. One of those changing times was the general increase in

funding and the greater volume of everything from purchasing to accounting to

everything else that occurred at the school level and at the district level, so

we were dealing with a volume issue.

There was a third thing that I was going to say that has escaped me at the

moment.

Brian, do you wish to add anything to this?

MR. FELTHAM: What I would say is that there was an evolution of the

district from coming together in the early stages to identifying needs as work

continued. For example, as more money was provided for repair and maintenance by

government that, in itself, brought the need to hire additional staff. So

additional staff were those required in the maintenance department, and we hired

an internal auditor. Those things were occurring in stages throughout our

evolution. With the addition of the additional pieces, we were certainly able to

respond in a timelier way and more efficient way than we could have back in

Just to repeat a point: With the addition of additional funding, it brings

with it another workload. So if it were status quo from the beginning with a

volume of work and money stayed the same, for example, in one area, you would

anticipate existing policies and procedures will guide you through then. As we

built new schools we have processed more than $100 million in new schools.

That brought with it another piece of work for the district to assist in the

planning and design of that type of work.

So there would be an evolution to get to the point where we are now, and

there is extreme confidence about where we are with respect to our ability to

address the issues that have been identified by the Auditor General.

DR. ELLIOTT: Sir, if I could, I did remember my point.

The other context around this and I want to be very careful in stating it

because I want to state very clearly upfront that all of these matters, all of

these efficiencies are, in our view, of the extreme and utmost importance. So, I

do not want anything that I am going to say to denigrate from that; however,

what I will say is that during the time we have been together as a school

district, our focus our main focus has been on the learning of students, on

reading and writing, on all of those things. Next to that, on the professional

development of our teachers, without which we cannot expect the kind of learning

outcomes we are getting.

If I can use perhaps an overused analogy, our experience has been a little

bit like perhaps refitting a 747 while keeping it in smooth flight. The flight

part is the focus on student outcome, student intervention, student learning,

and rescuing of students who need the kinds of supports that we must give them.

The refitting of the organization as we go through is extremely important and

supports that goal. That is, I think, the kind of continuous environment that

school boards are in.

Some of our staff, Sarah Battcock, who is with me this morning, our internal

auditor, Sherry Brake, and others as well, came to us as the organization

evolved. I do not know just how many years they have been here, but that has

been our process.

Thank you.

MR. FELTHAM: Could I just add one thing? The district, in the beginning,

did not have a purchasing manager. The district believed it was an important

position to have in the organization.

I want to give you the dimensions, just very quickly, of what that person now

would do in addition to other duties. She manages $20.5 million in terms of

purchases. We do about 26,000 purchases each year. She manages 625 contracts.

She works on eighty-five public tenders in a year. More than 300 quotations are

required. She processes about 3,000 telephone inquiries and answers about 7,000

e-mails. That is what that position does, in addition to other duties.

MR. K. PARSONS: There is no doubt you are a huge organization, and I

realize that. With 3,000 employees, like you said, you are dealing with over

11,000 students. You said earlier you had one person on staff that was handling

a lot of your documentations and doing a lot of extra filing and whatnot to

register everything.

Do you have enough on staff now do to that? Have there been changes made to

your staff to make sure that the documentation because most of the issues I

see that came back from the AG report, and the AG mentioned himself, was based

on documentation and knowing where things are and knowing where everything is.

Does the school board have the proper people in place now to make sure that

documentation is there?

DR. ELLIOTT: Yes. First of all, I would just want to make clear and take

responsibility that we would not want to put all the documentation issues down

to shortage of staff.

MR. K. PARSONS: Okay.

DR. ELLIOTT: Our responsibility goes greater than that. It is around

organization, process, checking, all of the things that George talked about.

MR. K. PARSONS: I understand what you are saying, but are the proper

people in place now to make sure that all this organization is in place so

people know where everything is?

DR. ELLIOTT: Yes. The organization, in our view, is now right sized with

the addition of a number of individuals who we have mentioned. We live in an

environment, as well, where there is constant adjustment around this as needs

are identified. For example, one of the things we are looking at is busing and

supports that we may need there.

The Department of Education and the government have been supportive as we

have been identifying needs and doing the right sizing that we can. Of course,

we always have to understand that all of these extremely important efforts must

also be balanced against staff and support that are needed in other areas, in

the learning areas with teachers and so on. There needs to be as well priorities

with fire and life safety, and air quality, and those things obviously taking a

high priority. We live in a complex system with many needs.

To your question, we believe at this point that the organization has been

right sized.

CHAIR: Thank you, Mr. Parsons.

I would like to take about a ten minute break and come back with Mr. Kirby.

We have been sitting for an hour-and-a-half and some people may need to take a

but only a ten minute break because hopefully we will conclude today.

It is a big subject matter with a lot of witnesses and a lot of questioners.

If we could take a ten minute break and come back at 11:10 o'clock.

Recess

CHAIR: We will continue with Mr. Kirby.

MR. KIRBY: Thank you, Mr. Chair.

I want to go back again to the responses provided in the July 24 document. I

am wondering, after reading over all of this, what would be the approximate cost

and you can give me a ballpark figure, but I do not think the Auditor General

likes ballpark figures of the implementation of the new on-line timesheet

system for support staff?

MR. FELTHAM: The approximate cost, there are a number of different things

that go into it. The software itself and the work from our consultants was in

the order of, I would say, at least initially, $15,000 or so. Since then, of

course, there has been a little bit of consultation in terms of rolling out the

plan. Exactly what that cost is, I could not say for sure here today, but it is

not a substantial follow-up cost, I guess, is what I am trying to say.

MR. KIRBY: Okay.

I am just wondering: are there any other controls that have been put in place

since the release of the report of the Auditor General to ensure compliance with

compensation policies? Is there anything beyond what was noted in the July 24

response?

MR. KEEPING: There is a two-part process that I see. One is the on-line

time piece, where we can also put in the leave request. The second part of it is

purchasing an alert system. We deliberately delayed that a little bit until we

can get the on-line time piece straightened out. As Brian referenced, there is a

two-part thing. You have to get software and then you have to implement it in a

slow, systematic way so that all people who are using the system understand how

to use it properly.

The second part we are looking at is called an alert system. The initial cost

of what we have looked at, and we have had some discussion with vendors, was

around $3,500, I do believe. The second

part is to have that alert system that

will trigger your ten days are not used, those kinds of things, or your step

progressions need to be here. It will alert us when employees are not receiving

the correct the leaves are not done. There are eight days and they need ten,

so we can alert people you are two days short and those kinds of things.

There is a two-part piece: The on-line implementation, and then the alert

system that would come in after, once we have that part figured out and done

right. That would be my response to that.

MR. KIRBY: Okay.

In the response to question 3 regarding requirements, approval procedures for

employee travel, and travel claim reimbursement, I am wondering: Is this

administered using an electronic system of some sort?

WINTESS: No, not at this point in time.

MR. KIRBY: Would you say that it would be additional technology or some

information technological tool would more suitably meet the needs of the Western

School District when it comes to the administration of travel claims?

MR. FELTHAM: The addition of software is on our list of projects to get

completed. Possibly this school year we will have something that could address

that particular issue, which would certainly eliminate some of the errors that

might occur in addition and those types of things.

MR. KIRBY: Okay.

I listened with great interest to the questions from the Member for Bay of

Islands regarding temporary employees at the district. The Auditor General quite

comprehensively comments on the hiring of temporary employees in the report, but

with respect to a different department which has some areas of business that are

previously a part of the Department of Education. I do respect the fact that the

temporary hiring is something that is under the purview of the administration at

the Western School District but this is something that has been raised with me

from time to time and raised from time to time by public servants at all levels.

I was wondering, with respect to hiring practices within the Western School

District: Dr. Elliott, to your knowledge, have Western School District officials

ever received any direction from the Minister of Education, or the minister's

staff, or any other executive level of the government regarding the hiring of

particular individuals for temporary positions within the Western School

District? Has any direction ever been provided with respect to the hiring of

particular individuals?

DR. ELLIOTT: I want to make sure I understand your question correctly.

Are you asking whether somebody at the department level would

MR. KIRBY: Make recommendations regarding the hiring of particular

individuals.

DR. ELLIOTT: make recommendations that a particular individual be

hired? Absolutely not.

MR. KIRBY: Okay.

DR. ELLIOTT: That is within our mandate under the Schools Act. There has

never been, in my entire time as director of the Western School District, that

kind of representation. Indeed, if it were made, I would not be in a position to

honour the request.

MR. KIRBY: You could say the same thing then about the hiring of

permanent staff? That applies to the hiring of permanent staff as well as

temporary?

DR. ELLIOTT: That would be correct.

MR. KIRBY: Okay.

DR. ELLIOTT: No, just to say for those attending who may not and I know

you do Mr. Kirby, but those who may not know entirely the distinction.

We have a Schools Act with the duties, obligations and accountabilities of

school boards. As well, references the authorities of the minister and the

Department of Education. Quite clearly, our judgements and according to the

collective agreements as well around hiring are at the local board level, both

permanent and temporary.

MR. KIRBY: Good, I am happy to hear that.

I am also interested in the role of the Department of Education with respect

to the findings of the Auditor General, more generally speaking. In 2004,

government decided to merge three school districts into the current Western

School District, and it has been described here this morning as a massive

district. This review is, as you have acknowledged, the first since the

amalgamation. Surely, the Department of Education has monitored various aspects

of the work of the Western School District over the past eight years or so.

I am wondering, to your knowledge, were officials in the Department of

Education aware of any of the issues that were raised in the report of the

Auditor General? Were these issues that the Department of Education, the

minister, staff, and the department were generally aware of?

DR. ELLIOTT: They were aware of some of the issues because the support

that we received to rectify them was from the Department of Education. For

example, we would have had conversations around the challenges in purchasing and

meeting the Public Tender Act, and the volume now involved in purchasing and so

on. Out of that, it was the Department of Education that provided the funding to

hire a purchasing agent. Likewise, concerns that would have been expressed, I

think mutually by boards, around financial controls and so on. Out of that,

again, the Province responded by giving us the capacity to hire an internal

auditor.

I would say that one of our main issues, it may not be referenced as much in

the report, would be the tremendous obligations that we have now with enhanced

parental expectations and quite rightly, parents should have them dealing,

in some cases, with older buildings and building new a tremendous

responsibility upon our maintenance and facilities division and areas around not

only building but fire and life safety and so on. There has been much dialog

about this, much of it emanating from our leadership at the department with

reminding us of the importance of safety issues and the provision of appropriate

operations managers and so on to help us in that.

CHAIR: Thank you, Mr. Kirby.

A government member.

MR. CROSS: It is my turn now. I guess being the last of six and a couple

of people going through a couple of times in between, a lot of the questions

that you have identified, or I might have identified have already been asked and

I think delved into. I would have liked to have interjected a few times but,

again, the questioner at each time probably supplemented the question with

something that piqued my curiosity.

One of the areas that is not totally covered yet is the whole idea of capital

assets. I know first when the story broke, when the report was issued and it hit

the media, then you know what they were going to look for, issues whereby with

capital assets and see things like TVs, VCRs, or patio sets. Things like that,

that are not accounted for, misplaced or whatever.

Some of the recommendations from the Auditor General's report are along that

line with capital assets, policies and procedures there. I certainly commend you

for the strength and breadth of your answers to the questions that were there.

It makes the job now a lot more difficult to dig into things that are not there

because you have answered most of it.

With regard to in your distinct, and looking at page 62, now you have about

$2 million in land assets; $186 million in buildings; furniture and equipment,

$12 million, and all of these. It is a humongous chore to keep everything

together.

How has this come together and the fact that a lot of your assets now in the

sense of tagging and when they were not tagged, keeping and maintaining the

records of these and disposal of these, how has that come together? Can you

elaborate on it a bit for me, please?

MR. FELTHAM: Mr. Cross, I will begin the answer and probably ask my

colleague, Brian King, to add supplementary information.

The district views this area as being very important, one that requires time

and attention. The district currently has a tangible capital asset ledger which

identifies assets, for example, for furniture and equipment beyond $15,000, and

buildings and land beyond $50,000. We have all of those items identified and

tied into our general ledger system. When we look at things that are termed

moveable fixed assets, we have begun a process to identify assets like that.

Prior to the Auditor General, we were able to have a list of computers, and

we have about 4,500 computers in our district. Those were identified and tagged.

All of our photocopiers were identified and tagged. We have about 849

interactive white boards, those were identified and tagged. Things in technology

were tagged and identified, and a process in place to ensure their whereabouts.

With respect to moving forward, we have a plan for other assets and that plan

involves the development of software. That is now complete. During the late

spring, early summer, we were able to implement a software package and tackle

our largest school to identify the capital assets in that building. That was

Corner Brook Regional High with more than 1,000 children. Now we have a plan to

move that into our other sixty-four schools in a very brisk way this year. The

goal then, once they are identified and they are tied to our ledger system, of

course, is to have our internal auditor conduct the appropriate auditing

procedures around those assets.

I am not sure if Mr. King would add further, but that will be my opening

remarks on that one.

MR. KING: No, I think that pretty much covers it.

For sure, our tangible capital assets are straightened away now. There were

one or two omissions and errors that the Auditor General helped us correct. We

have done that.

As Brian mentioned, the biggest piece left to do is to tackle the variety and

number of assets in all of our buildings, schools and regional offices combined,

and the bus depot, and roll out this internally developed piece of software that

will help us capture the opening balances and manage changes to those listings

as well as years unfold.

MR. CROSS: Okay.

When assets are removed from this inventory system, it is like a big,

cumbersome thing to get it all together and have it there. As computers are

taken out of the system and as these things are moved, they would be taken off

the inventory as efficiently as they are getting on there now?

MR. FELTHAM: The district has a capital asset disposal policy. That

policy has been communicated to all stakeholders. All of our sixty-five sites

are fully aware of the process. They have the required forms, and they work with

our accounting staff to ensure the appropriate documentation is written up. Then

of course the entries into our system are made.

MR. CROSS: Okay.

Part of capital assets sometimes, too, is buildings and land. There are times

when something as large as a school is closed down or a piece of land is no

longer needed, disposal of that how is that done? I know that can also be a

costly venture when a school might be shut down. To try to keep the building in

a standard I suppose or a standing whereby it is able to be either tendered,

sold, or whatever in a good quality requires it be heated for a while and all

these things, maintained. Is there a procedure to expedite the closure, removal,

and disposal of buildings?

MR. FELTHAM: Mr. Cross, that is a very important question. We certainly

pay a lot of attention to schools when they close. Our first order of business

is to ensure that the assets that are there are identified and transferred to

the receiving schools. Then we have a plan that is worked through the school

board around tendering these properties as quickly as possible.

What we find, regrettably, is that the documentation around ownership and

transfer so title to a property is sometimes not as clear. The process to

dispose of a school becomes complicated because there is not enough

documentation from years past to support what we need to do; therefore, the

process is stalled. This year, we disposed of five schools through a public

process. We are pleased to have those move away from us because they are costing

money to keep them repaired.

MR. CROSS: Okay. I am satisfied and comfortable there.

I will defer to Mr. Joyce.

MR. JOYCE: Yes, and thank you again.

I will just keep going through on page 33, just to ensure and have it on the

record that things are complying with the proper procedures and following with

the AGs. I just go to the bottom, "2 teaching positions were filled without any

documentation in the competition file to indicate that a competition had been

conducted for the 2010-11 school year. Although District staff indicated the

vacancies occurred after 1 August, there was no documentation in the file to

support this."

Is it now the procedure of the school board to ensure that documentation is

put in the file, so if there are questions asked to ensure that it is done?

DR. ELLIOTT: Yes, it is.

MR. JOYCE: Okay.

In that case, was there proper documentation to show that it was open does

the documentation support that the position was filled? The AG says that there

was no documentation to show that the vacancies occurred after August 1. Is

there documentation now to show that the vacancies did come up after August 1?

DR. ELLIOTT: Yes.

MR. JOYCE: Okay.

On the next page, "the District created and filled positions without the

required Treasury Board classification approval being requested. In 4 other

instances, the District filled positions that had not been classified until

after the employees had been appointed to the positions. Time periods range from

1.5 to 51 months after the position was created and filled."

Has that been taken care of now, that any position cannot be filled until you

get the reclassification from the Treasury Board, or can you explain what

happened there?

DR. ELLIOTT: The short answer is yes, it has been taken care of. I would

describe what occurred here as a kind of a mutual challenge that we had

provincially around classification with the new boards in the beginning, and

then with the addition of positions there were new positions. There was at one

point then the need to establish or re-establish a Hay classification committee.

I guess I would put it this way, given the challenges that we had at the

beginning, we had challenges in getting all the documentation together,

likewise, the approving mechanisms, if I can call them those, were also under a

stage of development. So, we did have a situation at one time with new positions

that we just had to have; we had to move on. I am happy to say that those

procedures, provincially, are now operating, the committee is operating with the

appropriate representation, and that we ourselves now have a practice where

individuals are not actually hired until classification has occurred.

MR. JOYCE: Okay, good.

I will just go through the next one: Compensation. In two instances, there

was no documentation that the required approval of the Director of Education or

the Board of Directors of the Western School Board was obtained for upscale

hiring. Can you explain this?

DR. ELLIOTT: Yes. Thank you for that. Again, this is a documentation

issue. The Director of Education did approve I did approve the upscale hiring.

The various documents were brought to me by the Assistant Director of Human

Resources, and we discussed it and I did it. The problem was documentation. That

is not to say that there may not be something in his notes or mine around that

meeting, but the point is that the documentation was not in the appropriate file

where it should have been.

MR. JOYCE: The documentation was completed and the approval was given?

Just for the record.

DR. ELLIOTT: Oh yes, the approval was given, and it was within our

authority to do the approval. It is an issue, though, of being able to pick up

that file, Mr. Joyce, and find all of that in the file. That is what we now

believe we have rectified.

MR. JOYCE: The next one, "The District did not follow the direction of

the Department of Education in compensating a former Assistant Director of

Finance when the school districts were reduced from 11 to 5 districts. As a

result, the employee was overpaid $97,308 for the period September 2004 to

December 2010."

Has the school board made any approach to try to recoup this money, or is

there some agreement with the Department of Education or the Treasury Board that

you will not recoup these funds, and why was it done?

DR. ELLIOTT: May I take the last part first and give a bit of context in

this and then go to the recouping piece, the recuperating piece?

MR. JOYCE: Yes.

DR. ELLIOTT: I guess I have to take you back to the context of 2004 which

was when this occurred. We, as a school district at that time began, as George

had said, with one employee, moved from there to the hiring of assistants and to

other positions. It was during a time when, contrary to what people thought

might have happened in which there would be a lot of scrambling for positions

in fact, many people left the Province and took various packages. There was not

availability for some of those positions in the way that one might have

anticipated with the consolidation of three boards.

I just want to make, as an aside here

MR. JOYCE: I understand that, but the thing was the direction from the

Department of Education. Did the department direct you not to do it? It says

here from the AG report: did not follow the direction of the Department of

Education. So, it is $97,000 because the department

DR. ELLIOTT: Yes, and I think if we go into the fuller report from the AG

as well as our responses, it sheds more light on that. What this is about is

that there is a letter from the Department of Education that outlines how red

circling should be done. The

interpretation of that letter made at that time by

the school district in consultation with the Department of Education was that we

were on sound grounds to red circle that particular employee.

MR. JOYCE: Can you provide us with that letter also, to the Public

Accounts? I am sure it is on file.

DR. ELLIOTT: No, there would not be a letter on that. That would have

been discussions around the

interpretation of the original letter and of the

situation. That is a decision that was made.

The Auditor General views it differently. He interprets the mandate of the

letter differently. Obviously we respect what has been provided by the Auditor

General, but that was done at that time.

I wanted to say, by the way, in passing as well that the different views on

this could have been avoided. The candidate in the file we hired at that time

was the only eligible candidate. If we had done it as an upscale hiring, we

would not even be talking about it today. Everything could have been done within

that way. Nevertheless, we did it as a red circling.

MR. JOYCE: Okay.

I ask the Auditor General: Is it your

interpretation also that the Department

of Education at the time of the directive was not to go ahead with that scale of

pay?

MR. PADDON: It would be difficult for me to interpret what the Department

of Education's intent was. All we would say is that there was a directive from

the department to the school boards as to how employees would be red circled.

The issue here is the

interpretation of what my understanding is normal

retirement date is. I suspect, as Dr. Elliott has said, this is a point where we

would agree to disagree. We would have a particular

interpretation of what

normal retirement date is and I suspect part of the discussion was around how

you would interpret that.

MR. JOYCE: Dr. Elliott, you are saying you had discussions but there is

nothing to confirm that your discussions were saying: Here is the directive we

are sending out to you and forget that directive, but go ahead and do what you

are going to do.

DR. ELLIOTT: No, I would put it this way: The shared

interpretation of

the directive at that time was that it allowed us to do

MR. JOYCE: They did not send another directive out to clarify it.

DR. ELLIOTT: No.

Again, I would need to put this in the context of the times. I think it was

March that the announcement was made. We were all in a mad scramble to get

things in place for September. This was a position on which the busing, the

safety, the school facilities issues for a whole zone of our district was

unfilled and we were I do not exactly remember the date well into late

summer at that time. That is the context; nevertheless, at the time, the

decisions made by the individuals involved were that we were operating within

the parameters of the policy.

MR. JOYCE: I am assuming then because you felt that you were that there

was never any intent to try to recoup this $97,000 (inaudible)

DR. ELLIOTT: Obviously, with all of these issues, we do seek legal

advice. We have on this and it is still with our lawyer, but initial

indications, to us, might seem to be that since this was done in good faith with

the employee and there would not be a record at the time of employment of our

need to recoup, that might be somewhat difficult. That is a process that is not

concluded at this point.

MR. JOYCE: Okay.

Just in the next item that the AG brought up, "In 2 instances employee

salaries were adjusted retroactively after the positions were classified by

Treasury Board but the change was incorrectly applied before the effective date

resulting in an overpayment."

I understand sometimes how this can happen. Are there procedures in place now

so it does not happen again, that you can be sure that the procedures are

followed before things are actually done and direction is given?

DR. ELLIOTT: Yes, Mr. Joyce, there are. To go back to an answer to a

previous question, of course, hiring would not occur now without classification,

but we were in that period of time where we needed to move forward. I would say

on this, this was not an instance of somebody being hired and then seeking a

higher classification and having it applied retroactively; this was a case of

individuals who were hired and were not classified.

CHAIR: Thank you, Mr. Joyce.

A government member.

MR. BRAZIL: I just want to note that I am pleased with the direction the

questions are going in and I am very pleased with the detail in the answers.

They echo what has been responded there. It is nice to be able to see face to

face that people are living up to what they write and what their views are. I am

happy with the human resource issues, how they have been answered. No doubt, my

colleagues here will have some additional questions relevant to that and the

capital assets.

The one I do have a couple of questions around is the fleet maintenance and

management the fleets, the cars, and the reimbursement for travel when it

comes to staffing. As a civil servant, at times I was not a big supporter of

having massive fleets maintained by government and sitting in parking lots, and

felt that employees who were travelling past their employment to get to their

main office to take a vehicle to move back out seemed to be a waste of time and

energy and money at the time. I do realize you have moved beyond that, that your

maintenance employees you have asked that it be part of their prerequisite that

they have a vehicle for employment purposes. I think that is a benefit.

I do not think there is a neat, cookie cutter process here. At the end of the

day you may have to go back and re-evaluate that, noticing some of the costs

there for some maintenance employees in excess of $20,000 a year in their

reimbursement. Can you just explain how you have assessed in what cases you keep

a vehicle that is in better use for being used by staff for travel, and in which

cases that you determine it is better that the employee have their own vehicle

and we reimburse them accordingly for kilometres and out-of-pocket expenses

relevant to that?

MR. FELTHAM: We have a formal process for that evaluation. The

vehicles in question are lodged mainly in the maintenance department; in fact,

all of them would be. We have the maintenance supervisor, manager, in

conjunction with the internal auditor. What they do is they conduct a

current-day assessment of the lease-owned versus the personal vehicles. That

assessment occurs each year. We have done two assessments so far and are about

to do a third assessment.

The initial two assessments indicated that personal vehicles would make

sense. In our third assessment now as time has evolved, we are now studying it a

little closer because the gap has narrowed. With respect to the deployment of

those vehicles, they are under the direction of the operations manager. The main

area here would be in the northern zone from Southern Labrador down to the West

Coast, an extensive amount of travel would be involved. That would be probably

be some of the comments I would make at this point in time.

MR. BRAZIL: Okay, that sounds reasonable.

How often do you review the process: every two years, five years or ten

years? In a school district like yours, and in some areas where enrollment is

increasing, and in some other areas it is decreasing. Obviously the need for

vehicles may change. Is there the standard three years where you would reassess

it? Is it based on a contract time?

MR. FELTHAM: We assess these types of situations on a continuous basis,

at least annually, in terms of our needs. We do not provide vehicles without a

fair study being done and an assessment being done. What we try to do is provide

services to schools through the best system we could develop. What we have is

maintenance vans that are stocked with the appropriate supplies so when we

travel our vast geography we are efficient on the job. When we arrive at a site,

the supplies, the equipment we need, is available to complete the repair.

What is so essential here is that we keep schools open because when schools

are closed students do not learn. We take every effort to ensure that our

support in that regard is at the highest level. Therefore, monitoring should

occur at a frequent interval.

MR. BRAZIL: I do notice from the Auditor General's report there were some

concerns about the fuel card use. I know you have started a process to address

that.

Elaborate a little bit more if you could for me on what your process now is

for monitoring the fuel card usage, who would get them, and at what processes.

MR. FELTHAM: I will begin on that subject and perhaps Mr. King may

assist.

What I would begin with saying is that the majority of our buses are in the

Corner Brook area. What occurs there is that we have bulk purchasing under

government standing offer at the bus depot. The fifty or so buses would fuel at

our bus depot in Corner Brook. There is a prescribed process for that to occur.

The kilometres have to be logged, the number of litres taken would have to be

logged, the time of day, and the driver would sign. That would take care of the

bulk of the purchases.

Outside of that, we have areas in Deer Lake, Pasadena, and some remote areas

where bulk fuelling cannot occur. We now have assigned a fuel card to a bus or

individual. Those cards have a PIN and they are monitored by our comptroller.

Each month, more regularly, or sometimes a little later, our comptroller would

review the use of cards, what cards are active, and proceed in that kind of

manner.

We also have all of our gas slips turned in on a regular basis and are

identified through an audit process as being acceptable or not. They are

certainly matched to our supplier statements to ensure in that regard when we

get to the final end of a process that payments are made under the strictest

guidelines and paying for the correct amount that is incurred.

I will pause there. I am sure if Mr. King would add further, but that would

be my remarks.

MR. KING: Yes, I could add just one thing, I guess, Brian, and Committee

members.

We have taken it as we have in some other instances here. We do have an

on-line process for our biggest supplier for our credit card deployment. There

are a few places within our district that, that particular vender does not

service, so we have some alternative pieces there. The on-line piece permits me

to directly monitor what cards are active, where they are assigned, what sorts

of activity are occurring on them. We have also issued some memos to managers

and to all people driving of what types of things are eligible to be purchased

with this card; 99 per cent of it, of course, is fuel. There may be the odd

piece for a repair, like wiper wash or something like that.

Yes, we are in a good position to take care of the custodianship of those

cards going forward.

MR. BRAZIL: Thank you.

Just take me through, if you did identify some discrepancies there, what

would be the process to deal with that before it got too out of hand and became

a black eye in the school district, or a particular bus driver, company or

individuals.

MR. KING: If anomalies are found, we will want to investigate what they

are, get to the bottom of why they occurred. Based on that judgement, if it was

deemed that there was just some undue sort of negligence on the part of the

employee then we would address that with some further discipline. If it was an

honest error or something like that, well, there is a sort of progressive step

to how we would deal with it. It might be something comes in writing and then

sort of further discipline from there.

In terms of making sure that we do not have little incidents like this happen

again, like I said, before payments are going to be released, any anomalies will

be addressed and understood and corrective measures in place before we make any

sort of undue payments. We would not want to have that happen at any point.

MR. FELTHAM: (Inaudible) our accounting clerks are the first line of

defence with respect to purchasing and reviewing invoices. We have taken time to

sit with them, to talk to them about the types of things that are permissible,

things that are not permissible, and what they should do in the event they

discover an item that is not permissible. That communication has certainly

enhanced the integrity of the system and we believe quite strongly now that

there would not be any item go through that should not go through.

MR. BRAZIL: Okay, well that clarifies that, and I am happy with that

response.

Mr. Chair, as we are almost close to lunch hour, I am quite content with the

questions I have asked and the answers I have gotten.

CHAIR: I will invite Mr. Kirby to use his ten minutes and then we will

break for lunch, because at the end of the day, people will want to fly, want to

get moving, and I think Mr. Kirby has had two opportunities, but Mr. Joyce has

had three this morning. So, if Mr. Kirby would like to take his ten minutes,

then we will break for lunch.

MR. KIRBY: Thanks, Mr. Bennett.

Reading over the report, looking at the responses, listening to your

representation here today, the report shows quite a number of incidents where

there is a lack of adherence, or there has been a lack of adherence, or less

than careful adherence, if you will, to policies and procedures that are pretty

standard for government and public agencies in Newfoundland and Labrador. I

appreciate the district's work to improve those areas that were identified by

the Auditor General, but I am also interested to understand if the district has

or had in the past a work culture that does not necessarily see the importance

of following all of these policies and procedures as set forward by government

in rules and regulations and legislation and so on.

Based on the responses that I have heard this morning, it seems to me to

suggest that the size of the Western School District, or at least the

amalgamation of the three predecessor districts, the boards are at the heart of

the problem. I am wondering what the district considers to be the reason for

those instances that are cited by the Auditor General, in terms of following

proper procedures and policies and so on. It seems to me that the district has

an unwieldy size, or it has been unwieldy dealing with the amalgamation. Would

you care to comment on that?

DR. ELLIOTT: The first thing I would say is that there are many processes

and procedures in place, and was at the time of the audit. So, you are not

suggesting and if you were I would not agree that, if I can say it here, the

arse is out of her.

To your question, is there a culture? No, I do not believe so. On the

contrary, I think there is a culture of trying to do things right because

procedures, for the most part, are procedures around fairness. There is a reason

for procedures. The values of our school district in our strategic plan and in

everything else would be around those values of fairness and effectiveness. I

would not say that of hither of the three originating districts.

To your point then, for those things and we may have different views of the

extent of them. For those things that need improvement, what might be the

reason? I will identify some of these. One would be size. Not that our size is

insurmountable, but the fact that we were consolidating not two, but three

financial systems, three cultures as well with regard to a way of doing things.

I will just give you a little example; in the days when we sent out actual

paper cheques, one of those originating districts had the practice of sending

them out unsealed, the other sent them out sealed. We ended up with the employee

working on this from the district that sent them out unsealed, they all went out

unsealed and it became a major kind of issue in the district. What is the

district doing now sending that is just an example of all of the little things

that would need to come together. So size is a factor.

Secondly, the increased volume, not because of size but because of almost

geometrically increased volume. Two things happened in our history. One was that

the districts were consolidated in 2004. Then with the increased funding in

education, school budgets were doubled. Where a district might have been lucky

to be getting one new school at any one time, we would have been building three

or four simultaneously. With the air quality issues, there was a lot of

maintenance, so a tremendous volume going through our shop, if I can put it that

way.

Quite honestly, Sir, I would see the volume of initiatives, good initiatives,

not just in maintenance and so on but in learning initiatives, new programs and

so on. I would see that volume as placing a greater challenge, a good challenge,

but a greater challenge than the actual size itself. We have this influx coming

in, in accounting, in purchasing, in all of this.

An observation I would make is that I think organizations generally get into

good initiatives, perhaps sometimes without a full analysis of the actual number

and capacity of human resources necessary to carry off the initiatives. So we

had that period of time before, what I call the right sizing, when we started to

add and to bring things together.

Is there a tendency, if there is a priority, for our board sometimes to place

an issue of students not being able to read and write above insuring that we

have all of our staplers tagged? I would say yes, that culture is there. I am

not defending it necessarily as a culture because we need to do both. There is

no reason why we cannot walk and chew gum at the same time.

I do think one of the features of our district is that we have placed a

tremendous focus on student learning so that in many ways we are, on many of the

tests, ahead of the Province and certainly very respectable provincially in an

area that I would argue has no disadvantages, but it does not have any special

advantages over other areas of the Province. That is there in the culture. Has

some of that taken priority over writing and revising policy? I would admit to

that.

Other reasons I would give, Mr. Kirby, would be also the proliferation, if I

can call it that, of and this is a good thing too the regulatory

environment. Many of the things that we are dealing with are procedures and

regulations and so on, that have been in the making during the time of the

Western School District, in particular when we look at things like issues around

safety, around busing safety.

We are in an environment of increasing activity, and good activity, around

safety regulations, accounting regulations, access to privacy and information

regulations, and so on. We cannot underestimate either the change that has

occurred in the last decade provincially, and I would say nationally as well,

around the kinds of things that quite rightly organizations are asked to attend

to and to take notice of.

MR. KIRBY: Okay.

Maybe I will just ask one further question. In your response to the

committee's question about the district's land-value assessments, the response

said, "The external auditor and the District are satisfied that its current land

schedule fairly represents the District's interests." This may be nothing, but

the wording fairly caught my eye.

I am just wondering: Does this mean that the valuation of lands is accurate

and complete? Could you use those words to describe the land valuation that the

district now has on record? Is it accurate and complete or is it fairly accurate

and complete?

MR. FELTHAM: Mr. Kirby, I will answer it this way; I will begin by saying

we engaged our external auditor, which is independent, with our internal auditor

to look at a plan to put the proper valuations on the land. Some of the land has

been with the district from the 1960s and, no doubt, there would be a challenge

trying to put the right value on those types of properties, so we engaged two

auditors.

What we saw as a baseline was using municipal assessments as a catalyst to

help us derive what land value would be in the final result. Those municipal

assessments were done and were used to give us the final calculation for land

values. That was signed off by our internal auditor and our external auditor as

an independent process.

CHAIR: Thank you, Mr. Kirby.

We will break for lunch right now. I would like for everybody to come back at

1:20 o'clock not 1:30 but 1:20 o'clock. We may use the ten minutes at the end

of the day and maybe we will not.

As for visitors here, there is a small cafeteria downstairs. If you enjoy a

ten minute walk, there is a better cafeteria in the West wing. It has a bigger

array of good food, Spartan surroundings and fair prices.

Thank you.

Recess

CHAIR: Order, please!

We said 1:20 p.m.; I thank everybody. It is 1:19 p.m., now it is 1:20 p.m. so

we should start with a government member and continue our questioning.

MR. S. COLLINS: Just a quick look again at the cellphone piece there on

page 36. I am just wondering, it makes mention in the third bullet point down,

regarding a senior executive who was provided with a cellphone due to the fact

he was going on vacation and something that he could retrieve his phone calls

and e-mails with. Obviously, that was identified as an issue here and the fact

that after the vacation was over the bills continued to pile on, even though the

phone was not being used.

I am just wondering, in instances now where you have an executive going on

vacation or whatever the case is, those types of circumstance, what would be

provided then? Do you have phones on stand-by for those types of purposes or is

it a practice that you still continue with getting a phone for someone who is

going on vacation or whatever the case would be?

DR. ELLIOTT: Our checks and balances would be such now that would not

occur for a phone to be inactive for that length of time. Let me just say a

word, if I might, about that particular situation.

MR. S. COLLINS: Sure.

DR. ELLIOTT: First, although you have not indicated in your question, any

time anyone associates the word vacation with a cellphone, people sometimes so

let me just say that it is typical for our senior managers and, in fact, some of

our senior maintenance staff to be in contact when they are out of the country.

In fact, some of them are asked by supervisors to be so. Just to clarify again,

that all of these bills are there. To be very clear, there is absolutely no

indication here or no one is alleging that it is for other than business use.

In this particular case, the employee was going to an area of the world where

the regular cellphone did not work. A BlackBerry was provided, it did work. We

were at a period of time where we were investigating whether we would go into

BlackBerrys. I think maybe government officials had them at that time, we were

looking at it. At that time there were two BlackBerrys in the organization and

this was one of them.

We sort of assumed that with this telephone it would be used by other people

going on trips or whatever the case might be, or that maybe everybody might go

to BlackBerrys. That did not occur, so there was a period of time in which,

unfortunately, that phone was not in use. Subsequently, of course, the decision

was made not to go the route of BlackBerrys for everybody. We still have not

gone the route of that kind of technology for everyone, but our senior staff are

now using iPhones instead.

MR. S. COLLINS: Okay, thanks for the clarity. Sometimes it is left to

your imagination or it is left to

interpretation when you read it here, just on

a few lines, so I appreciate the clarity.

The point just above that, the second point regarding the four cellphones

that were not used or were underutilized. Is it common practice to have a number

of phones on hand? Would these phones be provided to certain individuals and

that would be their phone, or is it something like a community phone? Four

community phones and if you need them you take them. How does that work?

DR. ELLIOTT: I am going to let Brian and his staff speak in a moment to

the broader question, but just to put that in context again, as we did in our

report, the reasons for some of the cellphones being underutilized were very

logical reasons. For example, we run an outdoor education program at a camp

called Killdevil, which is outside of regular telephone reach. That camp runs at

a particular time of the year, so you do have activity on the phone, only

periodically, and only if there is some emergency. We would be negligent if we

had a group of students out in the woods and we had not arranged some kind of

telephone setup, even if it only happens very rarely. So, some of our instances

were like that. I am saying there are occasions when it makes sense to have a

phone that has very little usage on it.

Brian, there may be some larger issues here that you might wish to speak to.

MR. KING: Just to say, Dr. Elliott, another example might be, we tried in

Southern Labrador having our technician up there who travels through various

schools, use his cellphone as well, but it did not work as well as we had

planned; therefore, that cellphone was discontinued. It is just another example

of the use.

MR. S. COLLINS: It is nice to have that context, because you are left to

interpret it yourself when you just read these lines, and it can be

misinterpreted. So I appreciate the context.

That is it for me, Mr. Chair.

CHAIR: The next question is from Mr. Joyce.

MR. JOYCE: Yes. I was just wondering, Mr. Chair, about the letters for

approval that we were going to try to get from the school board for the

permission with the tendering. Remember, you were going to try to get them

during the lunch break.

MS BATTCOCK: They have not been e-mailed to me yet, but I hope to have

them received soon.

MR. JOYCE: Okay, so we do not have them yet?

MS BATTCOCK: No.

MR. JOYCE: Okay, because I thought that was what we were waiting on, but

I guess we do not have them yet.

CHAIR: When they arrive, hopefully they can be brought to the attention

of the committee members. It may run too late, but we may be able to get them at

the break. It would be more useful to have them before we conclude today,

because I would really like to finish the hearing today. If we are left with

loose ends, we would not want to have to come back for half a day or a couple of

hours. So, if it is possible, it would be desirable. If you do not receive them,

then simply we will have to look at them when they do show up.

MR. JOYCE: Yes.

I am going to Leave and Overtime, on page 34. There is no need to get into

it, but just for the record so we can have it.

Is the procedure in place now that all leave and all overtime is accounted

for and approved in the proper manner as before when it was not so much, and

there was not a handle on it?

MR. FELTHAM: Absolutely, Mr. Joyce. We have overtime now pre-approved and

documented. That was the issue brought forward by the Auditor General, that we

did not document the pre-approval of overtime.

As well, we have now developed a very formal, on-line time sheet system which

permits employees to key in their work time on-line. The time goes through a

series of checks and balances. The first, of course, is to the supervisor to

confirm that indeed the time was worked. Once it is approved by the supervisor,

it then proceeds into the district office into the accounting

section where it

also undergoes a series of audits from the payroll clerk to our accountant, and

final payroll approval by the comptroller.

MR. JOYCE: I go to page 37 and I will just go through some of this, "A

review of one school's expenditures by an external consultant identified the

following issues and inappropriate expenditures over six fiscal years". In big

terms it is not a lot, but the big thing is the procedures are in place.

The only question is and I am sure the controls are in place now for this

as you mentioned who would have approved all these expenditures? Someone just

does not say: We are going to walk in and do this. Someone has to approve it and

get the money from somewhere, somehow.

DR. ELLIOTT: Mr. Joyce, I am assuming you are referring to the list on

top of page 37.

MR. JOYCE: Yes, I am.

DR. ELLIOTT: I appreciate the opportunity to say a little bit about this

one. What occurred here, as I am sure the Auditor General can verify, is that

the Auditor General in going through our files identified what for us was an

ongoing investigation around this issue. Just to be clear, these are not items

the Auditor General's office discovered. These are items we discovered in the

Western School District and had our own processes and ultimately the RCMP

involved in investigation.

We first became aware of it when the Human Resources Division became involved

initially around some issues of conflict in the school. As that was examined, as

we would when there are those issues in the organization, it seemed to come to

light that some people might have felt there were some financial irregularities

as well. That, combined with the arrival of a new principal on the scene, led us

to investigate further, both internally and then an external consultant and then

the RCMP.

As best as I can make out, Sir, to come back to your question, these

purchases would have been let me put it this way; I have to be careful here.

We would surmise that these would have been approved by the principal of th