FIRST REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS Fourth Session Fifty-eighth Legislative Assembly of the Province of New Brunswick November 17, 2017 MEMBERS OF THE COMMITTEE Mr. Holder, Chair Mr. Chiasson, Vice Chair Mr. Doherty Mr. Guitard Mr. Bertrand LeBlanc Mr. Boudreau Mr. Albert Mr. Bernard LeBlanc Mr. Roussel Mr. Jeff Carr Mr. Crossman Mr. B. Macdonald Mr. Coon

November 17, 2017 To The Honourable The Legislative Assembly of The Province of New Brunswick Mr. Speaker: I have the pleasure to present herewith the First Report of the Standing Committee on Public Accounts. The report outlines the activities of the Committee during the Second and Third Sessions of the Fifty- eighth Legislative Assembly. In addition, the report contains recommendations regarding the annual report policy of government. And your Committee begs leave to make a further report. Mr. Trevor Holder, MLA Chair

1 November 17, 2017 To The Honourable The Legislative Assembly of The Province of New Brunswick Mr. Speaker: Your Standing Committee on Public Accounts begs leave to submit this, their First Report. The report outlines the activities of the Committee during the Second and Third Sessions of the Fifty-eighth Legislative Assembly. The Committee note s that Mr. Holder, Chair; Mr. Chiasson, Vice- Chair; and Mr.

Coon, Leader of the Third Party; worked collaboratively to establish an agenda for meetings of the Committee. • December 15, 2015 The Standing Committees on Public Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2015, Volume III - Financial Audit and Volume IV - Performance Audit.

Volume III focused on matters arising from the annual financial audit of the provincial government and Crown agencies including observations on pension plans, administration of school raised funds, and the financial audit of the New Brunswick Lotteries and Gaming Corporation.

Volume IV presented performance reports completed during 2015 including Public Debt, Centennial Building, and f ollow up on Recommendations from Prior Years’ Performance Audit Chapters. • June 15, 2016 The Standing Committees on P ublic Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2016, Volume I - Performance Audit .

The volume presented performance reports completed during 2016 including Nursing Homes, Public Trustee Services, and Agricultural Fair Associations. • September 14, 2016 The office of the Auditor General coordinated a workshop session for the Committee with the CCAF-FCVI Inc. (renamed the Canadian Audit & Accountability Foundation in 2017) entitled Fundamentals of Effective Oversight .

The CAAF provides parliamentary oversight work based on a program of research, identification of good practices, and professional development workshops and tools designed to help oversight committees increase their effectiveness. • The Committee held three meetings in October 2016.

The following departments appeared and answered questions: October 4, 2016 Department of Post-Secondary Education, Training and Labour Appearing: Jean-Marc Dupuis, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 October 5, 2016 Department of Health Appearing: Tom Maston, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015

2 October 7, 2016 Department of Tourism, Heritage and Culture Appearing: Kelly Cain, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 • October 26, 2016 The Standing Committees on Public Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2016, Volume II - Joint Audit of Atlantic Lottery Corporation.

The volume presented the results of a joint audit of the Atlantic Lottery Corporation completed by the four Atlantic Canada Auditors General. • November 29, 2016 The Standing Comm ittees on Public Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2016, Volume III - Performance Audit and Volume IV - Financial Audit. Volume III presented the performance report completed during 2016 on Meat Safety in the Food Premises program in the Department of Health, and f ollow up on r ecommendations from prior y ears’ Performance Audit Chapters.

Volume IV focused on matters arising from the annual financial audit of the provincial government and Crown agencies including observations on pension plans, nursing homes, and the financial condition of the Province. • The Committee held four meetings in November and December 2016.

T he following departments appeared and answered questions: November 29, 2016 Aboriginal Affairs Secretariat Appearing: Patrick Francis, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 November 30, 2016 Department of Finance Appearing: Nicole Picot, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 December 1, 2016 Department of Social Development Appearing: Craig Dalton, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 The following motion, moved by Ms.

Shephard, was adopted during the course of the meeting: THAT the Chair of the Standing Committee on Public Accounts write a letter to the Chair of the Standing Committee on Crown Corporations, asking the Chair that Service New Brunswick appear before the Crown Corporations committee forthwith to answer questions regarding the contract awarded to the Canadian Red C ross, October 2014, pertaining to the management of services provided under the Convalescent Rehabilitation Services Program. December 2, 2016 Department of Justice and Public Safety Appearing: Johanne C.

Bray, Q.C., Deputy Minister Years under review: Justice 2012-2013, 2013-2014, 2014-2015; Public Safety 2012- 2013, 2013-2014, 2014-2015

3 Office of the Attorney General Appearing: Lee Bell-Smith, Deputy Minister Years under review: 2012-2013, 2013-2014, 2014-2015 • June 20, 2017 The Standing Committees on Public Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2017, Volume I - Performance Audit. The volume presented the performance reports completed during 2017 including Advisory Services Contract in the Department of Social Development and Climate Change in the Department of Environment and Local Government and NB Power.

The Standing Committee on Public Accounts met following the adjournment of the joint session. The following motion, moved by Mr. Jeff Carr, was adopted during the course of the meeting: THAT this Committee endorses all of the Auditor General’s recommendations related to the Report of the Auditor General of New Brunswick, Volume I – Performance Audit. The following motion , moved by Mr.

Coon, was adopted as amended during the course of the meeting: THAT the Department of Social Development be considered a priority when departments are called to appear before the Standing Committee on Public Accounts, to account for the decisions made regarding the rewarding of advisory contracts in 2013. • The Committee held nine meetings in September and October 2017.

The following departments appeared and answered questions: September 26, 2017 Department of Post-Secondary Education, Training and Labour Appearing: Jean-Marc Dupuis, Deputy Minister Years under review: 2015-2016 Department of Environment and Local Government Appearing: Kelli Simmonds, Deputy Minister Years under review: 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016 September 27, 2017 Department of Environment and Local Government (continued from September 26, 2017) Appearing: Kelli Simmonds, Deputy Minister Years under review: 2011-2012, 2012-2013, 2013-2014, 2014-2015, 2015-2016 Department of Justice and Public Safety Appearing: Michael Comeau, Deputy Minister Years under review: Justice, 2015-2016; Public Safety, 2015-2016 September 28, 2017 Office of the Attorney General Appearing: Lee Bell-Smith, Deputy Minister Years under review: 2015-2016 Department of Education and Early Childhood Development Appearing: Gérald Richard, Deputy Minister; John McLaughlin, Deputy Minister Years under review: 2014-2015, 2015-2016

4 September 29, 2017 Department of Transportation and Infrastructure Appearing: Kelly Cain, Deputy Minister Years under review: 2014-2015, 2015-2016 October 3, 2017 The Standing Committees on Public Accounts and Crown Corporations held a joint session to receive and review the Report of the Auditor General of New Brunswick 2017, Volume II - Performance Audit. The volume presented a special examination which detailed findings and work performed to address remaining unanswered questions from the 2015 Report Financial Assistance to Atcon Holdings Inc. and Industry.

October 10, 2017 Department of Energy and Resource Development Appearing: Jean Finn, Deputy Minister Years under review: Natural Resources, 2014-2015, 2015-2016; Energy and Mines, 2014-2015, 2015-2016 Department of Agriculture, Aquaculture and Fisheries Appearing: Jean Finn, Deputy Minister Years under review: 2014-2015, 2015-2016 Aboriginal Affairs Secretariat Appearing: Bill Levesque, Deputy Minister Years under review: 2015-2016 October 11, 2017 Department of Tourism, Heritage and Culture Appearing: Françoise Roy, Deputy Minister Years under review: 2015-2016 Department of Finance Appearing: Nicole Picot, Deputy Minister Years under review: 2015-2016 Treasury Board Appearing: Gordon Gilman, Deputy Minister Years under review: Human Resources, 2014-2015, 2015-2016 Department of Social Development Appearing: Eric Beaulieu, Deputy Minister Years under review: 2015-2016 October 12, 2017 Department of Social Development (continued from October 11, 2017) Appearing: Eric Beaulieu, Deputy Minister Years under review: 2015-2016 October 13, 2017 Department of Health Appearing: Tom Maston, Deputy Minister Years under review: 2015-2016

5 • Committee Proceedings Historically, the Committee has reviewed as many individual departments and entities as practical during a given year. The Committee notes that it discussed changing th e current practice to use it s time more effectively. Specifically, departments should expect to appear before the Committee as many times as necessary in a given year, while other departments may only need review every other year. • Annual Report Policy The Committee noted a trend in the annual reports of many government departments. Members observed a reduction in the volume of detailed information that was previously included.

Section 5.1 of t he annual report policy of government (AD -1605) states the following regarding the content of annual reports: a. To the degree possible, departments and agencies should give a clear account of goals, objectives and performance indicators. The report should show the extent to which a program continues to be relevant, how well the organization performed in achieving it s plans and how well a program was accepted by its client groups. […] b. Actual and budget financial information in

summary form and a narrative explaining major variances as well as other aspects of financial performance are to be included in all annual reports. The Committee therefore recommends to the House that annual reports should include the necessary detailed information to fully comply with the annual report policy of government. The Committee further noted that reports prepared by the Office of the Auditor General play an important role in parliamentary oversight, specifically during deliberations of the Public Accounts Committee.

The Committee therefore recommends to t he House that the government review the annual report policy and consider requiring annual reports to contain departmental responses on the implementation of Auditor General Recommendations, using consistent formatting to address the status of implementation of individual recommendations with clear reasoning. And your Committee begs leave to make a further report. _________________________ Mr. Trevor Holder, MLA Chair