Manitoba Committee Hansard — 14 June 1979 (Legislative Affairs Committee, Sitting 4, 31st Legislature, 3rd Session)

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Manitoba — Debates (Hansard)

ISSN 0542-5492 Legislative Assembly of Manitoba STANDING COMMITTEE ON LAW AMENDMENTS Chairman Mr. J. Wally McKenzie Constituency of Roblin Thursday, June 14, 1979 9:00 P.M. Office of the Queen's Printer for the Province of Manitoba

me: 9:00 p.m. Hearing Of The Standing Committee On Law Amendments Thursday, June 14, 1979 iAIRMAN, Mr. J. Wally McKenzie. R. CHAIRMAN: Mr. Balkaran, I hope, will be here momentarily. Members of the Committee, we 11 proceed with Bill No. 3. The Honourable Member for St. James. R. GEORGE MINAKER: Mr. Chairman, I believe it was the understanding that when we dealt th this bill, tha t there would be a straight forward discussion with the Provincial Auditor on this bject, and I would thin k tha t it would be proper for Mr.

Ziprick to be present at the table to 1ve a full discussion in this particular dealing, and I'm sure that the committee would agree with at. (Agreed) Also, I might advise the committee that we have sent for the members of the finance !ministration who had worked with the Auditor on this bill and I hope tha t they will be here in few minutes. BILL NO. 3 - THE PROVINCIAL AUDITOR'S ACT AMENDMENT R. CHAIRMAN: Agreed that we should proceed with Bill No. 3,

An Act to amend The Provincial Jditor's Act and Certain Other Provisions of the Statutes of Manitoba respecting the Duties of e Provincial Auditor. (Agreed) 1(c)-pass; (d)-pass; (e)-pass - the Honourable Member for St. Johns. R. CHERNIACK: Mr. Chairman , do I interpret correctly that (

e) includes any municipality, any :hool board, any individual; is tha t a correct

interpretation? R. CHAIRMAN: The Provincial Auditor. R. ZIPRICK: Yes, anybody that gets public money. R. CHERNIACK: So, Mr. Chairman, it means now that, as we proceed with the Act, we will be �aling with the right of the Auditor to go into any schoolboard and do an inspection or review its affairs - is that a correct

interpretation? Mr. Chairman, I don't know who should answer but I'm just asking the question whether it's the political sidesor the Auditor's side. But, is it ear tha t when we deal with recipients of public moneys in this bill, we will be dealing with the Jthority of the Auditor, whoever he is, to go into public schoolboards, and into municipalities, cities, 1wns, anybody that receives a grant, any individual tha t receives a grant, and give him authority ' investig ate it? Is that the purpose of the definition of recipient of public moneys being brought ? R.

ZIPRICK: Yes, tha t's the purpose of the definition of public money, and it's a limited audit 1at is prescribed . it's not a complete audit that would normally be done, just a limited test Jdi t. R. CHERNIACK: Mr. Chairman, I would only ask tha t the Auditor point out the limitation when e come to it. Otherwise, as long as we clarify that it is the intention of the government to bring 1e Auditor into schoolboards, municipalities, cities, private bodies, all assocations, charitable ·ganizations, that receive funds, like the Childr en's Aid.

Does that include the various sports ·ganizations that receive money - community clubs? ,R. ZIPRICK: Yes, it involves all public money, except tha t it should be remembered that right 95

Law Amendments Thursday, June 14, 1979 now there is provisionfor obtaining an accountability, an accountability is being obtained and � are looking at these financial statements in the departments, and the departments will ha · inspectors and this will just permit us to look at some of them - permit the auditor to look some them where there are difficulties. MR. CHERNIACK: Mr. Chairman, well, then it means to me tha t this extends the powers of tl Auditor. Otherwise, why bring it in? MR.

ZIPRICK: Yes, it does extend the power of the Auditor, in tha t in addition to governme inspectors, the Auditor can go and have a look at certain specific things tha t he may feel warra his attention. MR. CHAIRMAN: The Honourable Member for Logan. MR. WILLIAM JENKINS: Yes, Mr. Chairman , through you to the Auditor, in this recipient of pub money, would the Auditor be looking just at the money that would be received as grants? No take a hypothetical situation - say the. Winnipeg School Division, which receives grants from t Crown, but they also raise within their own right by special levy and things like that.

Would t Auditor be auditing the complete books, or just auditing the receipt of money from the Crow Is that what they mean by "recipient of public moneys?" MR. ZIPRICK: Only those moneys that are public moneys would come under purview of t Provincial Auditor, and not any other moneys that are not public moneys. MR. JENKINS: Well, it's public money because they raise by special levy , a school board rais money by special levy - that still is public money, but it doesn't come thr ough a grant from t provincial government.

Now, what I want to know is, does this Act by this amendment give y the authority to audit the books of the Winnipeg School Division, as far as the money that th raise by special levy- that's the money that they receive on the foundation program of t grants? MR. ZIPRICK: No, it would just be grants from the government. MR. CHAIRMAN: 1( e)-pass - the Honourable Member for St. Vital. MR. D. JAMES WALDING: Mr.

Chairman, I'd like to know whether this change to The Audit< Act, would entitle the Auditor to enter a dottor's office - a doctor, who is receiving money unc Medic are - to check whether that money was being spent with due regard to economy and effici cy. MR. ZIPRICK: No, doctors - it's fee for services and tha t's different - tha t's not a grant.

Hospit would come under inspection and to a degree they do now, where you have inspected some hospit� so in that area it wouldn't be much of an expansion, except tha t it would tidy the situation 1 But any money that's payment for services is not a grant, and the services have been realized the time of payment. MR. WALDING: Mr. Chairman, I understand - perhaps, it's later

section that the Auditor is requir under this bill to account for the proper use of public funds. Can he explain why that would r apply to the medical uses that the hospital is making with its funds from the government? MR. CHAIRMAN: Mr. Ziprick. MR. ZIPRICK: With regard to the actual expenditure of money for medical use, we do that n thr ough the Health Services Commission. And there are reports being made by doctors, and th accounts are reviewed. There's a committee of doctors tha t review it. Their minutes are availa to us; we inspect them.

So in effect, we are now doing and overse eing as to how the money spent for medical purposes but that's at the Health Services Commission. And that would contir in tha t same way. MR. CHAIRMAN: May I ask the members of the committee to - I know you like to have Y' private conversa tions - keep them low, because the Auditor is having problems in hearing · questions and the debate. So if you would be kind enough so we can proceed, keep Y' conversa tions back and forth at a low level, and we can proceed. 96

Law Amendments Thursday, June 14, 1979 The Honourable Member for St. Vital. R. WALDING: No more questions. IR. CHAIRMAN: 1( e)-pass;

Section 1- pass; 2- pass -(lnterjection) Subsection 3: 4( 1) - the Honourable Member for St. Johns. IR. CHERNIACK: Mr. Chairman, we did discuss on second reading the question of the limited 1rm of 10 years as compared with the existing. And the Minister is quite correct, that some risdictions have extended terms, some jurisdictions have more limited terms than those. I think, Mr. Chairman, it's not unfair, since the Provincial Auditor is not at all affected by this ection.

I think it's not unfair if we ask him if he can spell out for us what he sees are the advantages 1d the disadvantages of the present law and what is proposed. I don't think I am putting him 1 the spot because, as I say, it doesn't affect him at all. If he doesn't want to express an opinion, Nouldn't push tha t either. But he should be able to tell us about the advantages and disadvantages • a full-time security and limited in this way. 1R. ZIPRICK: Well, the only advantage I can think of from a legislative and government side, is 1at after ten years there is an automatic review of the situation.

Now, ten years is a reasonable 1nure, and I don't think that it would present undue difficulties for recruitment. As far as tenure is concerned, I don't see too much difficulty there either, because I look at 1e security of this kind of provision. it's more on the short-term and sort of instantaneous reaction 1at could be taken that th ere's protection, because in the long run the only protection the Auditor :�s is to do a good job and be of pretty good standing. Because, if you're not doing too good a job and a lot of reaction and confidence is lost in your work, then the situation would become 1tenable anyway.

So that I would look at long-term tenure through that kind of a position, more than a guarantee law. R. CHAIRMAN: The Honourable Member for St. Johns. R. CHERNIACK: The Auditor, who I know meets regularly with all other auditors in Canada, does � have knowledge as to occasions when auditors were dismissed by the Legislature - a two-third ajority of those present, those voting - or where a term has not been renewed under rcumstances where the Auditor would have been willing to stay on, but was not renewed by )Vernment? R. ZIPRICK: I don't know of a situation or don't recollect of a situation. R.

CHERNIACK: Would the Auditor have any opinion as to whether or not the last few years · tenure might be a little more strained for an Auditor if he knew that he was being studied by e government of the day? R. ZIPRICK: it's possible, but by that time the Auditor has either built up a pretty high level cred ibility, or if he hasn't he's in a very weak position anyway. If he has a pretty high level of edibi lity and if he wants to stay on, chances are he would not be too concerned. And besides, he's got a pretty high level of credibil ity, he wouldn't be too concerned about getting another b, either.

So personally, I don't consider this would be too much of a problem. R. CHERNIACK: I'm just wondering if an Auditor would feel th reatened by disagreements with s audits or certificates by influential Ministers. Would he feel tha t his credibility is threatened to e extent where he wouldn't want to stay on? Is that a matter which comes up at meetings, where 11ditors say, "Well, the Ministers don't agree with me, ther efore I'm not happy." Is that really the nd of situation that occurs, such as we heard discussed in the second reading? R. ZIPRICK: No.

Generally speaking, there's disagreements and there's been some pretty strong sagreements. But the Auditors were on sound gund, and there was no problem. I'm thinking of 1e in particular, the Auditor of Newfoundland, who got into a very strong disagreement with the ·emier. But nothin g had happened, and the Auditor feels it was an honest disagreement, and there'

s) problem. R. CHERNIACK: I wanted to speak to the Member for lnkster for a moment. Maybe one of the 97

other members . . . Law Amendments Thursday, June 14, 1979 Mr. Chairman, I don't want to ask the Auditor anything else on this, but I think I have the ri� to make the statement that the First Minister was absolutely wrong when he described a discussi' I purported to have had with the Provincial Auditor. I believe there is no record to justify I statement; it was just part of the way he operates and this is the first opportunity I' ve had to s that and I'm sayi ng that it's not the first time and I'm sure it's not the last. MR. CHAIRMAN: 4( 1 )-pass; 3-pass; Subsections 5(2) and (3), then (4). Then we go to 5.

Secti 5 of the Act is amended. MR. CHERNIACK: 5(3). MR. CHAIRMAN: Oh, 5(3). I'm sorry. MR. CHERNIACK: I just want to confirm my impression that this is the law and I'm wonderi why it's in here. MR. CHAIRMAN: Well, can I move on to pass 5(2) first and then we get to 5(3)? MR. CHERNIACK: Well, I thought you did because you 're almost into 6. MR. CHAIRMAN: Well, no, I was trying to get the terminology of it correct and I'm not an audi nor a lawyer. Then 5(2)-pass; 5(3) - the Honourable Member for St. Johns. MR.

CHERNIACK: I just said I had the impression that this was the law and if it wasn't the I� I want to know whtther it wasn't the law and if it is the law, then why is it in here? MR. ZIPRICK: Right now, I can employ individual people from firms but not the firm itself a it's a bit of a nuisance and by being able to contract with the firm of professionals, it make� much easier, so really it does away with a lot of red tape. MR. CHERNIACK: If the Auditor would want to employ a firm, would he not want to know 111 in that firm would be responsible for carrying out the audit? MR.

ZIPRICK: Yes, but the contract generally is with the firm and in these particular cases have to make special arrangements for contracts to be with individuals and still pay the firms. it's just a nuisance situation so it's a tidying up of a nuisance situation. MR. CHERNIACK: When the government instructed the Auditor that it wished him to employ cert named firms, did he th erefore not enter into a contract with th ose firms? MR. ZIPRICK: We hav en't completed any contracts as yet. MR. CHERNIACK: 1 thought that some of them were already doing their work. MR.

ZIPRICK: Well, they'v e made a submission and the submission has been accepted, but we still oo complete the contr acts. So there is in fact a contract in existence as far as concerned. MR. CHERNIACK: But there is no contract in existence. Mr. Chairman, I didn't hear what Mr. Zipr said. There is or there is not a contract? MR. ZIPRICK: As far as I'm concerned, there is a contract by submission of a letter and acceptan Now, we've got to prepare formalized contracts. The formalized contracts have not been prepa as yet. MR. CHERNIACK: There is a submission and there is an acceptance? MR. ZIPRICK: That's right MR.

CHERNIACK: And is that a conditional submission or a conditional acceptance? Is it ne contract now? 98

law Amendments Thursday, June 14, 1979 R. ZIPRICK: Oh, it's a contract but the contract forms itself and the setting out of people - 1w we know what people are involv ed - but the setting out; that is still not complete in the 1ntra ct. R. CHERNIACK: Well then, without the passage of this section, there cannot be a contract entered to with a firm? Is that Mr. Ziprick's

interpretation? R. ZIPRICK: That's my

interpretation. I'd have to have contracts with the individual 1dit ors. R. CHERNIACK: And when the contract is entered into, in that contract will you stipulate who e people are that will be doing the work? R. ZIPRICK: lt would have to be yes and under my present provisions. Ft CHERNIACK: No, I mean under this. R. ZIPRICK: Well, with this amendment, no; that's why this is in so that I can contract directly th a firm without necessarily stipulating the people. R.

CHERNIACK: You would not want the right to stipulate who the , people will be; the :lividuals? �- ZIPRICK: Well, it depends on what kind of an assignment it would be. �-CHERNIACK: So in order to carry out the instructions from government, you need this

section ssed. �-ZIPRICK: No, I could complete the contracts with the individual because we know the hours it are going to be spent and the people, and the rates per hour. t CHERNIACK: But the government didn't actually name the individuals, ? it named the firms, :ln't it? I. ZIPRICK: Yes, but the firms are assigning individuals and the individuals are working with r auditors - my auditor that's overseeing it - so we know who the individuals are. t. CHERNIACK: So the government named the firm and the firm names the individual , and Mr. >rick, you then approve the individuals? But passing this

section will make it possible for you carry out the govern ment's instruction to contract with the firm? t. ZIPRICK: lt will reduce some of the red tape in contracting; yes. I. CHERNIACK: Okay. I. CHAIRMAN: The Honourable Member of it. James. I. MINAKER: Mr. Chairman, just through you to Mr. Ziprick. If I understand correctly, Mr. Ziprick, 1t what this particular

section will allow you to do is rather than maybe issue fifteen contracts fifteen individuals in a firm, you can issue one to cover them. Is that correct that you could >t issue the contract for the services of that firm and they would provide the services to provide 1t audit rather than have to hire fifteen individuals or ten individuals? t ZIPRICK: That's right. t CHAIRMAN: 5(3)-pass; (4)-p ass;

Section 5-pass - the Honourable Member for St. 1ns. l. CHERNIACK: Mr. Chairman, maybe Mr. Balkaran will tell us just how much broader this power made by the inclusion of this phrase? 99

Law Amendments Thursday, June 14, 1979 MR. ZIPRICK: Mr. Chairman, this really is just to be consistent with the preceding section, whe it says that - I don't know if you've got the Act 6(4) - now 6(4) says that if certain orders a regulations made by me in my office; if they're in conflict with The Civil Service Act, then my offi wants to proceed yet there is no provision for such , so we've put it in to balance off the two that when the regulations are specified in my office, then those will be the regulations that wm be meant under 6(4). And th at's why the wording is completely consistent as in the presE 6(4).

MR. CHERNIACK: Have you made such orders, rules or regulations tha t are in conflict with T Civil Service Act? MR. ZIPRICK: I would say, for instance, participation let's say in any kind of election work. l Civil Service Act has been broadened. As far as I'm concerned, my senior auditors would not h� that privilege. I would find tha t to be in conflict with their positions at work? MR. CHERNIACK: Would you clarify that? The Legislature, in its wisdom, said that civil serval shall not be restricted from participating in elections.

Are you saying tha t in spite of the opin of the Legislature, tha t your auditors should not have that right? MR. ZIPRICK: That could be my ruling. Now, they can challenge my ruling if they want, thrOL the Civil Service Commission. MR. CHERNIACK: But they wouldn't be able to, once you have this amendment; would the MR. ZIPRICK: Well, it could well be that the way it is now, any rulings that are made in my off are made with the idea to ensure their independence and no conflict of interest and if The C Service Act permits them to be involved.

Now, other than this one that comes to mind, I just de know of any others but if there are any that would impinge on the independence of an audi1 we'd find it very difficult to ... MR. CHERNIACK: Mr. Chairman, that means tha t Mr. Ziprick requires of his auditors that k of restraint, which the Minister of Finance cannot impose on members of his department or Minister of Health impose on people in his department, or the Attorney-General. Does that re make sense, that the Auditor should have such powers tha t are greater than tha t of Minister� government? I find it rather surprising that that should be the case.

I believe there is or has b4 an effort to change The Civil-Service Act, which is fair game, but if the Legislature has pas� certain rights onto civil servants, which no Minister can override, I wonder why the Provincial Aud should be able to override tha t and affect his people. I really didn' t expect hhe answer I got and therefore I am both surprised and doubtful a� whether or not Mr. Ziprick should have any greater power over his employees than Attorney-General has over his employees. I wonder if the Minister of Finance or the Attorney-Gen4 doesn't accept this higher power of the Auditor than they have. MR.

ZIPRICK: That's in my Act. That's been there. That's in other Acts of Legislative Audi1 and, as a matter of fact, Onta rio, for instance, they ha ve removed the Auditors completely fr the Civil Service, and even their tenure of employment; everything is under the control of the Audi So they have gone to ensure independence to that extent. No w, we've had no complaints. lt been in existence for nine years. lt has presented no difficulties and I can't even cite a situat but I would want to be sure that every Auditor has to make sure that he is independent and s to be independent and I make a point of that myself.

I restrict myself to the extent that I dr vote; 1 just don't vote in the provincial election. Now, it doesn't say I can't, but I don't. MR. CHERNIACK: I must tell Mr. Ziprick that Stuart Anderson always said the same thing I always disagreed with him . I think that a vote is a very secret thing, and it's a very personal r and I personally think it should be exercised . He has a right not to vote, but to deny himself · I don't agree with that, but tha t's his business. But, Mr.

Chairman, I'm just wondering, here we find members of the Civil Service, for wt the Civil Service negotiates and for whom the Civil Service has some responsibility, and we something 1 didn't read into the Act. I thought that the Orders, Rules or Regulations dealt , methods of conducting an audit; the method of reporting; the need especially in the case of pri• firms to comply with procedures of audit procedures laid down. But to find now that there i� interference in what 1 consider their personal rights - and when I say "I consider" I think 100

law Amendments Thursday, June 14, 1979 it because the Legislature gave them those rights - I find tha t objectionable, Mr. Chairman . . Ziprick can justify it all he likes, I wonder if his political representative - I don't even mean it, representative - the Minister reporting for him, or other Ministers of the Crown, several of ;om are present, agree that he should have the kind of power that the Legislature has denied them. As I say it has nothing to do apparently with the way they conduct an audit, their integrity in nducting an audit, the procedures used. I must find that objectionable.

I really would like to hear me argument in favour of it, other than that of the ,Auditor, because this Act is one of the gislature, not of the Auditor. �- CHAIRMAN: 5-pass - the Honourable Member for St. Johns. �-CHERNIACK: So, Mr. Chairman, then I have to assume that no one on the government side responding. I mean, they didn't respond. Does that mean that they want to pass it without a �ponse? �-CHAIRMAN: All in favour of signifying in the usual manner, of passing this section? Put your nds up please. Those opposed to the motion? 5-pass;

Section 7.1 added, 6-pass, and we to 7.1. �- CHERNIACK: Mr. Chairman' why is this needed? =t CHAIRMAN: The Honourable Member for St. James. �. MINAKER: This is

section 7.2? �- chairman; 7. 1 , 6. �- MINAKER: Mr. Chairman, this particular

section , the amendment is to provide to clearly jicate tha t the office of the Auditor shall be funded with funds provided by the Legislature. If a Auditor feels he has not been provided adequate funds, a new

Section 18(1) and 18(2) has 1en provided to allow the Auditor report to the Legislature on this matter. �- CHAIRMAN: The Honourable Member for St. Johns. �- CHERNIACK: Mr. Chairman, when we come to 18(1) and 18(2), I am going to agree with it, 1t my question still applies. Is this needed? How has he been paid up to now? Has he been paid lgally up to now? Surely not. R. CHAIRMAN: Mr. Ziprick. R. ZIPRICK: In looking at the Act, the Legislative Counsel felt that it really tidies it up and would 1ve been better to have it in the old Act. And it was inserted. R. CHAIRMAN: The Honourable Member for St. James. R.

MINAKER: Mr. Chairman, it's my understanding it's primarily for clarification to dispel any ,ubts to why the Auditor sho uldn't be funded in this manner. R. CHAIRMAN: The Member for St. Johns. R. CHERNIACK: So, how else could he be funded? R. CHAIRMAN: 7(1) -pass; 6-pass.

Section 7-pass;

Section 8 R. CHERNIACK: Could we get clarification on that, Mr. Chairman ? R. CHAIRMAN:

Section 7. R. CHERNIACK: I raised the point, I want to get clarification. R. CHAIRMAN: Did you want

Section 7 or

Section 8? 101

MR. CHERNIACK:

Section 7. Law Amendments Thursday, June 14, 1979 MR. CHAIRMAN: The Honourable Member for St. James. MR. MINAKER: Mr. Chairman , this

section has been amended to allow the Minister of Finan1 and the Provincial Auditor to negotiate those situations where it is no longer felt necessary th the Provinc ial Auditor pre-audit every payment from the Consolidated Fund. MR. CHERNIACK: Mr. Chairman, tha t's exactly what I read into the present 11 (4). lt says th where pre-audit is not practical, the Minister of Finance may direct payment be made withc pre-audit. That's what it says in the present law. Why does it have to take

Section 10 out a1 say it doesn't apply? Because

Section 10 deals with certification, I think. MR. MINAKER: Mr. Chairman, it was to clarify that under

Section 10 (1) of the present Act, whi reads, "Without limiting or restricting the responsibilities of any Minister, Deputy Minist1 Departmental Officer or other persons charged with the administration of public moneys, the Provic Auditor shall examine on behalf of the Assembly all accounts of expenditure of public moneys the Consolidated Fund, whether held in trust or otherwis e." So that, he would have to certify a payment out of that. And then he also has to certify under 10 (3), so it's with verification. MR. CHAIRMAN: The Honourable Member for St. John s. MR. CHERNIACK: Mr. Chairman, it seems to me we're now being told that under

Section 10 must certify, and under

Section 11 he doesn't have to. And assuming tha t he has been doin£ under 11 where he didn't have to, he's been in conflict with 10 where he did have to; and by gc the Auditor hims elf didn't catch tha t what he was doing, or not doing, was contrary to the I� I don't know whether the Auditor sho uldn't be blushing. Am I wrong in my

interpretation of wl the problem seems to be? MR. ZIPRICK: Well, it's a clarification. I feel that under 11 when it was waived, that what VI in the pre-audit, then we would carry out a post-audit and so 10 would not apply. Obviously, I two of them couldn't apply. MR. CHERNIACK: Mr. Chairman, I am amused, because it does appear as if there's been a conf and yet we've been stumbling along and managing, I think pretty well, and labouring under wl appears to be a real conflict in

interpretation between 10 and 11. I think that, even though it see to have been wrong all these years, and yet we managed, that the correction is probably advisat I couldn't say it's necessary because we've been doing all right, I think. 1 want to have some assurance that there will be a post-audit, that waiving 10 does not t1 away from the requirement that the Auditor has to doubly check what is being done by way waiving his pre-audit by the Minister of Finance. MR. ZIPRICK: No. No, we do not take it that the post-audit is waived. We carry out the post-aL to the extent necessary.

But that's, of course, the payments have already been made. MR. cherniack; Where does it say that? MR. ZIPRICK: Well, that .. . MR. CHERNIACK: Where is the requirement for a post-audit? MR. ZIPRICK: The requirement for the post-audit would be in the re gular checking of expenditUI and tha t would be under 12 (1) . MR. CHERNIACK: Okay. MR. CHAIRMAN: 7-pass;

Section 8, 12 (1)- pass. MR. CHERNIACK: Well, tha t's the new 12(1) . How does the new 12 (1) vary the old 12(1) ? 102

Law Amendments Thursday, June 14, 1979 R. ZIPRICK: There's a change in upproach. The 12 (1) here sets out that I'm the Auditor of the :counts, and I have to carry out an audit. Wher eas previously, it really specified :ertain ways to trry out an audit. Now, tha t provision now is shifted into the reporting side, where these specific �ms are shown in the reporting. Because as far as the ways of carrying out the audit, this is very complete. There are additional audit procedures tha t are carried out in addition to that, as part a general accepted audit procedures. So that this part here now just makes a statement that e Auditor carried out the audit. Then, what has been in the other

section is now placed in the porting requirements, to ensure that the same kind of things are still being given attention. R. CHERNIACK: Mr. Chairman, I think I understand that. The question then is, ... well, maybe should wait for 13(1) and ask the question then. R. CHAIRMAN: 12 (1)- pass - the Honourable Member for St. Vital. R. WALDING: Mr. Chairman, I would like to ask either the Minister of Finance or Mr. Ziprick nether this

section or perhaps some other

section would permit departmental managers to appear �fore the Public Accounts Committee and answer questions? R. CHAIRMAN: Well, I know who can answer the question. Mr. Ziprick. R. ZIPRICK: No, this has got nothing to do with the Public Accounts. Wha tever the Public �counts does, it would have to be rules set by the Public Accounts Committee. R. WALDING: I'd like to ask if there is anything in this Act having to do with the appearance managers before the Public Accounts Committee? R. ZIPRICK: No, as a matter of fact this Act has nothing to do with the Public Accounts.

The port of the Auditor is referred to the Public Accounts by the Legislature, and not by this :t. R. WALDING: Mr. Chairman, perhaps 1 can ask a question of the Minister of Finance then, as matter of policy. This matter was discussed at Public Accounts Committee. My question, Mr. 1airman, is to the Minister of Finance. R. CHAIRMAN: Well, he's not ... can you direct the question to the committee? R. WALDING: Well, it's a matter of policy, Mr. Chairman , tha t's why I'm directing it to the Minister ther than to the Member for St. James. R. CHAIRMAN: 1 can see him, but I just don' t see ... order please.

I don't see any way that :an ask the Minister of Finance to come in and ask that question. Now I . . . R. CHERNIACK: Mr. Chairman , on a point of order. R. CHAIRMAN: On a point of order, the Member for St. Johns. R. CHERNIACK: 1 don't think you do ha ve a right to ask the Minister of Finance to come in. Jt I think that the Member for St. Vital has the right to ask him, and I think he's just asked Tl. R. CHAIRMAN: I agree. R. CHERNIACK: He's coming. MEMBER: Mr. Chairman has the right to rule. R. CHAIRMAN: But I ha ve the right to rule as to what witnesses will be here, and I don't see 1ything in my jurisdiction.

However, the Member for St. Vital jurisdiction asked me to call the inister of Finance to come and answer a question at this Comm ittee. R. WALDING: No , Mr. Chairman, I did not. 103

Law Amendments Thursday, June 14, 1979 MR. CHERNIACK: On a point of order. I believe the ... MR. CHAIRMAN: The Member for St. Johns on a point of order. MR. CHERNIACK: ... Member for St. Vital said out loud he'd like to ask the Minister of Finan a question. Nob ody can force the Minister of Finance to reply, I believe. MR. CHAIRMAN: Right. MR. CHERNIACK: But the Minister of Finance, having heard the question, has the opportun to reply, doesn't he? Well, you wouldn't him that, Mr. Chairman? MR. CHAIRMAN: 12 (1) - the Honourable Member for St. Vital. MR. WALDING: Mr.

Chairman, my question is to the Minister of Finance. lt has to do w discussions tha t were held at the Public Accounts Committee. On this matter of departmen managers appearing before the Committee and answering questions as to the stewardship particular programs. lt was suggested to the members of the Committee, that this was a mat of policy that the government was looking into and that it would be dealt with when the new J. came before the House.

Now, we have been told that it is not in here; I'd like to ask if the Minis or the government has made a decision on policy grounds as to whether it will require or perr departmental managers to appear before the Public Accounts Committee. MR. CHAIRMAN: Now, can I advise the Honourable Member for St. Vital, he can ask the questi of Mr. Balkaran, the Auditor or the Honourable Member for St. James or these gentlemen "" are at the table. The Minister of Finance, unfortunately, is not sitting at the table. MR. WALDING: Well, Mr. Chairman, the record will show that the Minister of Finance has 1 answered the que stion.

MR. CHAIRMAN: The Honourable Member for St. James. MR. WALDING: I will add ress it then, in his absence to his legislative assistant, the Honoura Member for St. James. MR. CHAIRMAN: The Honourable Member for St. James. MR. MINAKER: Well, Mr. Chairman, in reply to the Honourable Member for St. Vital, the particl

section that we're dealing with is to clarify that the Auditor has the author ity to discuss his al with an appropriate official, and it's clearly defined - it does not deal with an actual departm head coming before a Public Accounts. And at the present time, my understan ding is that t decision of the government has not been made at this present time. But what we're dealing v at the present time is a

section which allows the Auditor or clarifies tha t the Auditor can disc1 his audit with the appropriate officials of various departments. lt doesn't pertain to the Pul Accounts Committee as such. MR. WALDING: Mr. Chairman, I thank the Honourable Member for St. James. I do realize fr previous comments that this particular

section had nothing to do with the question that I brou up, but since I did observe the Minister of Finance in the room, I put the question to him tw to ask if he was willing to respond to this matter of policy, and I will give him the opportunity ag; if he wishes so to reply and let us know what the government's position is on this matter that Auditor has raised several times with the Committee and with the gover ment and has recommen1 several times to the Minister and to the Public Accounts Committee. MR.

CHAIRMAN: May I advise the honourable member that the Minister of Finance is not sit1 at a table and I have no way that I can ask him to come here and respond to the questio MR. CHERNIACK: On a point of order. MR. CHAIRMAN: The Member for St. John s on a point of order. MR. CHERNIACK: lt is my impression that we are sitting here at 12 :45 at night or in the morn 104

Law Amendments Thursday, June 14, 1979 :>rder I thought to accommodate the fact that the Minister of Finance would not be here tomorrow, d I thought we agreed to sit late tonight to deal with this bill in order to accommodate to the :t that the Minister of Finance wouldn't be here tomorrow. Are we sitting here late at night at s hour of the night, knowing we must come back tomorrow for any reason other than to :ommodate the Minister of Finance? I thought tha t's why we agreed to sit late. t CHAIRMAN: Order please. I doubt very much if the Honourable Member for St.

Johns has Joint of order on the matter tha t he raised. it's a matter of who wants to sit at this Comm ittee. ave no way as a Chairman to drag people here to sit at the Committee, so I don't think the 'nourable Member for St. Johns had a point of order. · t CHERNIACK: I was raising it for the House Leader to respond, if he wanted to. t CHAIRMAN: 12(1)-pass - the Minister of Finance. �- CRAIK: Mr.

Chairman, I thin k the question that basically was, has there been a policy tablished by the government, that they would bring managers of the various departments, etc., fore the Public Accounts, and there has been no policy as such at this point in time. �- CHAIRMAN: 12(1)-pass. �- WALDING: Thank you, Mr. Chairman. �- CHAIRMAN: 8-pass;

Section 9-pass; tha t's 9 12(4) first of all-pass;

Section 9-pass; !Ction 10 13(1 )(a)-pass; (b)-pass; 13 (1)-pass; 13 and then (1.1 )(

a) okay- pass. �- CHERNIACK: Mr. Chairman, I didn't hear what was said to ... =t CHAIRMAN: 13(1 .1)(a)- pass - the Honourable Member for St. Johns. R. CHERNIACK: I want to get a clarification as to why the wording has been reversed, so that 3 Auditor has to report what he sees is wrong, rather than report as the old

section reads in positive way. R. ZIPRICK: This wording has been lifted from Canada's, it's the same as Canada's and R. CHERNIACK: Mr. Chairman, Mr. Ziprick has given us the source, but he has not given us e explanation as to the reason. Does that make it right, because Canada had it? R. ZIPRICK: We've always reported on an exception basis, so that really I guess that's the reason at it's consistent with the method of reporting. R. CHERNIACK: So, we're adapting the Act to be in accord with the practice. R. ZIPRICK: That's right. R. CHERNIACK: And the practice has not been in accord with the present Act.

Is that 1rrect? R. ZIPRICK: Well, it wasn't clear. R. CHERNIACK: Boy, that old administration was a sloppy administration. R. CHAIRMAN: 13(1.1) (a)-pass; (b) - the Honourable Member for St. James. R. MINAKER: Mr. Chairman , just for the information of the Comm ittee, I believe that the positive >proach takes place under

Section 12, and I think under this

section we're dealing with is it's >rt of a generality of the responsibilities of the Auditor, but I think if we look under

Section 12 , en we'd take the positive approach under that section. R. CHERNIACK: Mr. Chairman , I'm sorry tha t he can't get away with that.

Section 12 deals with 105

Law Amendments Thursday, June 14, 1979 his examination;

Section 13 deals with his reporting, so it's two different things. Sorry, that w< a good effort, but it didn't succeed. MR. CHAIRMAN: 13 (1.1) (a)-pass; (b)(i)-pass; (b)(ii)-pass; (iii)-pass; (b)-pass; (c)-pass; ( - the Honourable Member for St. James. MR. MINAKER: Yes, I believe that as the First Minister indicated that we were listening with intere to the opposition with their contribution to the debate on this particular bill, and that not only t1 Honourable Member for St. John s, but also . the Honourable Member for lnkster had indicatE concern under sections (

d) and (e), and I believe that it might be in order that we review this sectic because of the importance of it, and that possibly we might look at an intersessional study b say the Publi c Accounts' Committee on this section, and I think this migh t be considered by tl Committee at this time. MR. CHAIRMAN: The Honourable Attorney-General. MR. MERCIER: Mr. Chairman, I move that the proposed Clauses 13 (1. 1) (

d) and (

e) to The Provinci Auditor's Act as set out in

Section 10 of Bill 3 be struck out. MR. WALDING: On a point of order, Mr. Chairman. Mr. Chairman, I believe the accepted practi1 is simply to vote against what you don't want in rather than to move it be taken out - it's tl simplest way. MR. CHAIRMAN: May I have a clarification for the Auditor from the Attorney-General regardir this ... MR. ZIPRICK: Regarding

Section (d), we've been carrying it out ... MR. CHERNIACK: Mr. Chairman, we have a Motion. We could debate it if you like, Mr. Chairma but there seems to be an indication to withd raw it so why . . . MR. CHAIRMAN: If the committee would first give me a chance to . . . The Provincial Audit has asked for clarification. Now, am I out of order by permitting him to have this matt clarified? MR. GREEN: Well, Mr. Chairman, I believe that it is out of order.

I believe that the Provincial Audit is called upon by members of the comm ittee, and really what he is carrying out is beside the poir The minister and the members have indicated that they don't want these clauses, and I think i right, and I don't think it will interfere with the Auditor's functions and th erefore they should I removed. MR. MINAKER: Yes, Mr. Chairman. lt's my understanding at committees that I'v e sat in for t last six tha t if a member of that committee makes a Motion that a sect ion is deleted, that it's qu in order. We have amendments quite often ...

The Honourable Attorney-General has made a M oH that Sections (

d) and (

e) be deleted, and I think it would be in order that we vote on t Motion. MOTION presented and carried. MR. CHAIRMAN: So tha t's (

d) and (e). So then 13 (1.1) -pass, as amended;

Section 11 (13 - the Honourable Member for St. Johns. MR. CHERNIACK: I made the point that I didn't quite understand the procedure here - lal on we're going to deal with the Auditor making a special report, sending it to the Speaker I distri bution, but when he deals with his regular report, apparently he's expected to send it to t Lieutenant-Governor, which may direct that copies be sent to members. I made the point and i not a big point; it's not a big deal, but why sho uldn't it be sent to the Speaker for distributi or to the Clerk for distribution? MR. MINAKER: Well, Mr.

Chairman, it's my understanding that the Minister of Finance tradition� has tabled the Provincial Auditor's Report, and this

section really just clarifies the distributi process. 1 think the years that I' ve been here that it's normally come through that avenue, stric 106

clarify it. Law Amendments Thursday, June 14, 1979 =t CHERNIACK: Yes, well then my question is why the "may?" lt seems to me it should be, !hall direct that copies be sent. " Maybe Mr. Balkaran can clarify the reason for the "may" instead the "shall" - 13 (3). �- CHAIRMAN: The Member for St. James says he has the answer. �- MINAKER: Well I think, Mr. Chairman, that under

Section 13(2) of the present Act that it ry clearly defines tha t the minister shall submit the report before a certain deadline. �-CHERNIACK: The point, Mr. Chairman, is "lt shall be filed within 15 days after commencement the ensuing session." But 13 (3) enables, and I think it should require tha t it be sent to the ML As 1en the session is not on, which I believe is the practice. �- MIAAKER: Well, Mr. Chairman, I would have no objections to the word being changed form 1ay" to "shall ". �- CHERNIACK: See look at the great accomplishment. R.

CHAIRMAN: Well, by mutual agreement can we change the word to "shall" or do we have move it officially? (Agreed) 13 (3) as amended then - pass; 13 (4)- pass;

Section 11- pass; :-pass; 14 -pass - the Member for St. Johns. R. CHERNIACK: I don't know just the right point, but I' ve already discussed with the Auditor at i felt tha t there should be a requirement that he review all financial statements of Crown 'rporations. I mention it now because I'm not sure if it belong in 14 , or maybe it belongs in

Section , etc. And if the Auditor can point out where it belongs then I'll raise it at that stage. R. ZIPRICK:

Section 17. R. CHERNIACK: Okay. Then I'l l wait for that, Mr. Chairman. Could the Auditor explain the effect the change in 14 from the previous? R. ZIPRICK: Essentially there is no change; the reference See, this replaces 14 (1) and that sentially is the same, and 14 (

b) is a requirement, whether he has obtained all the information tha t's already provided in another place so that there's no change. R. CHERNIACK: Tidying it up is the word. R. ZIPRICK: Yes. R. CHAIRMAN: 14- pass; 12- pass; 13 -pass;

Section 14 ; 15 (2)- pass;

Section 14-pa ss; 15 ; 1( 1) -pass - the Honourable Member for St. Johns. R. CHERNIACK: 1 just want to know, what's the point to this? What's the point to changing ' Is there a change ther e? R. ZIPRICK: Well, the Minister of Finance has changed that. The Department of Finance has ade that change. R. CHERNIACK: You better watchtthat. Mel Anderson got his hands on it. R. MINAKER: Well, Mr. Chairman, it's tied to

Section 15 (2) of the Act,

whereas if the Auditor 'uld not perform the Act, then under 15 (2) where the Provincial Auditor is of the opinion that 1 examination audit which he has been di rected to make under Subsection (1) interferes with his imary responsibilities, the member of the Executive Council charged with the administration of 1e Financial Administration Act may employ someone to make the examination and audit directed. > because of that addition, the

Section that we're dealing with, this

Section was added to clarify 1w the special audits ordered in

Section 15 could be paid for. The

Section is broad enough to ow payments from any source or combination of sources. The rate would be set under

Section 1(2) by the Lieute nant-Governor-in-Council. 107

Law Amendments Thursday, June 14, 1979 MR. CHAIRMAN: 16(1)-pass; 16(2)(a)-pass; (b)-pass; 16(2)- pass;

Section 15 -pass; Secti1 16; 17(1)-pass - the Honourable Member for St. Johns. MR. CHERNIACK: Mr. Chairman , at this stage the Auditor is given the opportunity, I think thal probably the word to use, to ask questions about accounts of Crown agencies which he hi ms1 has not audited. The government is obviously and very clearly intent on taking from him the audi which have been assigned to him up to now and giving them to him or a private auditor, but thf policy is clearly enunciated that they intend to use private auditors.

And accepting that, from tl point of view of dealing with this section, I think that the Auditor ought to be required to ha a look at those statements, and see if they satisfy him. Let me make this point, Mr. Chairma we've had lots of debate, vituperative and otherwise, as to what our policy was in relation to havil the Auditor do these Crown agency audits. I want to tell the committee that I discussed this wi Mr. McFee, Mr. Ziprick's predecessor, a long time ago, and one of the problems that arose accordi1 to Mr. McFee, and Mr.

Ziprick may be able to confirm it or correct me, was that it was fow tha t certain audits that had been done by private auditors in the past, did not follow the san kinds of procedures, which the then, I guess he was called the Comptroller, or wha tever he w called, wha tever Mr. McFee's role was - the kinds of procedures tha t he had adopted which 1 thought were applicable to the expenditure of public moneys, as compared with the private auc which dealt more with business accountability, taxation and other features. And that was probat one of the greater motivating forces in deciding that Mr.

McFee and his group should conduct the audits, the point being that there would be a form of uniformity of approach tha t would apply all audits. Now, that was probably the greater consideration. Now the other consideration to us was that we felt th;lt it could be done more cheaply by t' Provincial Auditor and at times that suited his organization.

Now, the government has, for its m reasons, and I certainly dispute them , because I think it's a phony statement to say tha t it is bei1 done to help the Auditor - I'm sure the Auditor didn't request it, and I'm sure the Auditor did1 need to be relieved of the responsibility - I'm sure he was capable of doing it. One stateme was made that it would make it more independent, and I said that I noted that when Mr. Zipri was asked to comment on the independence of outside auditors, he was upset at the thought tt' he was less independent than they were.

I think the First Minister challenged my comment; I sti by it I think tha t he did not accept the thought that any private auditor could be more independe than he,' one point The other point was that he never, I believe, found it necessary to be helped by private auditc as described by the First Minister. So I say those reasons were phony.

The acceptable reason that the government decided they wanted to employ private auditors, and I, for one, don't thi that they're going to do a bad audit or a wrong audit; I think they're going to do a more expensi audit - more important, that's the point I'm getting at Their audit ought to be done in such way that the Provincial Auditor, on behalf of the Legislature and the people of Manitoba can fu comprehend it, understand it, and be able to ask questions about it, and therefore, what I woL like to see and I hope Mr. Minaker could accept a suggestion, if Mr.

Ziprick concurs in it, a1 that is that the Auditor's statements tha t are presented by auditors other than the Provincial Audit1 should be required to be reviewed by him. The difference, the nuance, if it's just a nuance, is t11 he should be required to look at them , rather than he may, if he wants to look at them. And tha really the dif ference. I know Mr. Ziprick well enough to know tha t he would look at them, but hE going to be succeeded all to soon by another Provincial Auditor, and I want to make sure tt' Provincial Auditor is expected and required to do so. I wonder if Mr.

Minaker would consider tt' change in the provision of the legislation, after Mr. Ziprick comments. MR. CHAIRMAN: Mr. Ziprick. MR. ZIPRICK: The question, I recollect, was what would be the difference. The auditors tha t ca1 out the audit, carry it out for certification of financial statements. When we are carrying out t audit, we are carrying it out under The Provincial Auditor's Act, which has a broader responsibil than just certification to the financial statements, because the onus is placed on the Provincial Audit and on it requirements are broader than just certification to the financial statements.

So that's t difference. MR. CHERNIACK: Mr. Chairman, at ten minutes after one o'c lock in the morning, I think I hea Mr. Ziprick make a statement which prompts me to question again the government's decision employ outside auditors. I want to know if I understood correctly tha t Mr. Ziprick is saying th the nature of his audit, under The Financial Admin istration Act, is such as to do a broader - a1 108

Law Amendments Thursday, June 14, 1979 at to me means a more intensive or more comprehensive audit - than the kind of audit that )Uid be expected to be received from private auditors. Am I rewording Mr. Ziprick's statement >rrectly? R. ZIPRICK: That's correct, and

Section 17 permits me to carry out that portion tha t the private 1ditors will not carry out and I still intend to do it, and report to the Legislature. R. CHERNIACK: Mr. Chairman , I think this is really an important statement which is new to me, nust say. You know, we have been accused of changing things and bringing in the Auditor, and ried to describe why it is that when I discussed it with it with Mr. McPhee I decided that it would l better to have him do the audit, and I don't know that I really comprehended tha t the nature his audit was more extensive.

I knew that he felt it was more in accord with a certain system approach he had, but now we are finding out, Mr. Chairman - I think this is really important tha t it is costing the Crown agencies $1 00,000 more than they were paying the Provincial Auditor 1d the audits that they were getting are less broad - is that the word? - than that of the Provincial Jditor, and he has to add his input to satisfy his needs. Now, Mr. Chairman, I'm putting it in words which I think are a rewording of what Mr. Ziprick .id, and if I'm right that 's a very important accusation I am making.

But not only did we feel that was a wrong decision to make from the standpoint of money, now I am beginning to sense or nfer from what was said, that it's ina dequate and must be augmented by the Provincial Auditor. > where's all this talk about an independent audit? And worse, what is all this talk about helping e Auditor if indeed , he has to go back, review what was done and add to it? Now let's remember, the First Minister said again today why this is being done: to help the Auditor. 1d tha t's nonsense, apparently. R. CHAIRMAN: The Honourable Attorney-General. R. MERCIER: Mr.

Ziprick, what prevents you from requ1nng outside auditors to do the same 1d of audit that you would do if you were auditing one of these accounts? R. CHAIRMAN: Mr. Ziprick. R. ZIPRICK: I'd have to contract with them and then they'd have to report to me on the portion the audit that they do, to comply with The Provincial Auditor's Act. Fl. MERCIER: In your correspondence with the private auditors tha t you referred to earlier are u not, in fact, asking them to do that? Fl. ZIPRICK: No, we presently are going to do it ourselves. =t MERCIER: This has been your decision? =!.

ZIPRICK: The Act, the way I prepared, was that they would do this and report to me. The ivate auditors feel tha t reporting to the Board and reporting to me may put them in a somewhat ficult position, so they prefer not to report to me. So I'd be looking at the reports of the private ditors in the agency and then carrying out what, in addition, I was required to comply with my Jislative requirement with my own staff. =!. MERCIER: What do you have to do in addition? =!. ZIPRICK: Well, the addition, such things as tendering, budget systems and these kinds of ·erations. =!. CHAIRMAN: The Honourable Member for St.

James. =!. MINAKER: Mr. Chairman, it's my understanding tha t the intent of

Section 17 is to safeguard 1at the Honourable Member for St. Johns is concerned about, that it gives the Auditor the overview looking at the audit and safeguarding any situation which migh t occur, where he would approach Board or a commission and make requests for certain items, and if they were refused that he uld then proceed to the LGC. So I think the Honourable Member for St. Johns recognizes that 1 are dealing with professional people who have ethics like he and I have as professional people, 1t they presumably would do a proper audit. But if there is a situation tha t occurs, the authority 109

Law Amendments Thursday, June 14, 1979 of the Provincial Auditor is there, that gives him the independence so it doesf't place him in jeopard that under these sections he can do the proper procedures to make sure that a proper audit i followed through. And then further to tha t, later on in the Act there are sections dealing with th special audits that further safeguards any situation which the Honourable Member for St. John might consider himself occurring. MR. CHAIRMAN: The Honourable Member for St. Johns. MR. CHERNIACK: Mr.

Chairman, I appreciate the response and I really appreciate the fact th< the Attorney-General was listening and is reacting because I really think this is important, M Chairman. lt is not a question in my mind of the ethics of the private professional doing the audi He will be doing it with all his ethics intact and with all his skills, no doubt to the best of his abilit' but he will be doing it in the light of a private audit in the commercial sense is done.

And M Ziprick has made it clear that that may suit the shareholders of a private corporation but it doe not suit the requirements of government as set out in The Financial Admin istration Act and he woul1 therefore, have to have additional input and he said so and the Attorney-General got that fror him. So, Mr . Chairman, if the government is intent - and I believe it's intent - and I think the the government is ... I never know what it means but I think it's "ho ist with his own petard, I must find out just what tha t means and it will not back away, at this stage, from its decisic to employ private auditors.

You know, I think they did wrongly and I think that they're trappe1 They can't admit that they did wrongly. So I accept the fact that the y're going ahead with it. But Mr. Ziprick pointed out that he had suggested - and that's why I made it a point to attem1 to correct the Minister of Finance when he spoke on Second Reading - Mr. Ziprick says that t had suggested that the reports be sent to him. And tha t was not done in this bill and they ar not reporting to him, and ther efore he has to use special powers to go back and review what they'r doing and ask questions.

Now, I am now in a position where I have to deal with a government that's in control and who' I want to try to influence to improve the system. This is a bill in the inter ests of the House ar the people and is not here to serve government. I wish I could persuade government to acce1 Mr. Ziprick's original request and make these reports tha t they have to report to him I wish thE would do it. But if they don't do it then I would want to say tha t he shall be required to revie them.

Well, it's not quite the same thing but I don't want it to slip between two stools and, firstl that they don't report to him and, secondly, that he may overlook the need to look over tt statements. I don't mean Mr. . Ziprick; I mean the Provincial Auditor, whoever he may be. I would point out that under the sections we have yet to deal with , dealing with specifically name Crown corporations, we will be taking away from him entirely the responsibility for the audit becaw we will be saying tha t the Lieu tenant-Governor-in-Council may appoint, "sha ll" appoint an audit1 who "may" be the Provincial Auditor.

Now, we know the intention is tha t he should not be appointe lt will be a private corporation appointed. That's the reason for the change. And once that's appointe then I have to point out to the Attorney-General tha t indeed the audit is expected by Mr. Zipri( not to be adequate, and he then expects that he would have to broaden it. Now, I don't question the competence of private auditors; I don't question the ethics of priva auditors.

I do say they have, by tradition and by practice and by their own professional requirement don't have the extensive obligation to review accounts to the same extent and the same mann' as the Provincial Auditor has in dealing with public moneys. Let us remember that the Provinci Auditor is not there to look for the greatest savings and the greatest profit,

whereas in the commerci corporation it is more related to savings, efficiency and profit, and the Auditor has to make su that the will of the Legislature and the will of the Minister is carried out to carry out program not to produce a profit. And obvi ously the motivation is slightly different and he has to c more.

Now, since I assume - and I wish somebody would stop me and say I can persuade governme to change it - since I assume I cannot persuade them to change their minds about appointme of private auditors, at least agree that their reports shall be made to the Provincial Auditor ar then the euphemistic expression used by the First Minister that they are there to help him ma in some way, prove to be a prediction and truthful, by making sure tha t they report to him ar then he will review it and add what is on it. The extra cost is the burden of government.

But the point I am making I think has great validity and I would really like to persuade governme to have a good look at what we're doing and improve the bill, and tha t's what Law Amendmen is about, not just to slap down the Opposition when it makes a point but rather - and this he been done often - I shou ldn't have put it that way. I want to persuade government to have look at this from the standpoint of the best method of achieving accountability and the best methc 11 0

Law Amendments Thursday, June 14, 1979 f having proper reporting in a proper system, rather than proceeding with what has been the 1ange. IR. MINAKER: Mr. Chairman, it's my understanding that this particular

section has been drafted accordance, basically, with what the Government of Canada operates under and tha t what the onourable Member for St. Johns is requesting is similar to the way that the Province of Ontario operating under, and I understand that Canada's legislation is operating quite satisfactorily where 1e Province of Ontario isn't. I would maybe ask thr ough you, Mr. Chairman , to the· Provincial Auditor, that's the same understanding that he has and this is why, basically, that the bill has been drafted this manner. R. CHAIRMAN: Mr. Ziprick. R.

ZIPRICK: Ontario's Act is pretty tight and really the Auditors are working for the Provincial uditor of Ontario and where they are having difficulties, as I understand it, is the work papers. 1e Auditor has to review the work papers and really direct the audits very closely, and that's getting )mewhat unwieldy. R. CHAIRMAN: 71- pass - the Honourable Member for St. Johns. R. CHERNIACK: Mr. Chairman, have we not persuaded that we don't have to go all the way 'r Ontario, but the fact that Canada doesn't, doesn't make it right or the fact tha t Mr. Ziprick ould advise to recommend that they report to him is a fact.

He said so. So that this Act is not accord with his recommendations and rather than have to look at work papers shouldn't it be minor change of saying that the report shall be made to him? Now he says they don't like it c�t that doesn't mean tha t we have to make our law in accord with what the private auditor wants. should be in accord with what we think is right. And if we ha ve respect for Mr.

Ziprick's opinion 1d his integrity and you do know that I'v e accepted his opinion on some matters in this bill where 1ad a different point of view, but I accepted it because I believe in his independence and objectivity, want to ask again whether the Attorney-General or Mr. Minaker would be prepared to make the 1ange to provide that the report shall be to the provincial auditor. That then means tha t he has 1e responsibility and the obligation to look it over.

Not that he may intrude, which is the way I 1a these sections, he has the right to intrude hims elf there and I don't think he sholJid have to :�.ve that right to intrude, he should have the right to receive and review. Now I - you know, it's late enough. I don't want to make a big issue of it if I'm not being 1 all persuasive. Let's hear tha t my point is rejected and the responsibility is no longer mine. JR. CHAIRMAN: 17 {1) -pass; 17 {2)-pass; 17 {3) -pass; The Honourable Member for St. )hns. JR. CHERNIACK: Mr. Chairman , have we passed everyt hing up to here? JR. CHAIRMAN: 17 {3) were at. JR. CHERNIACK: Okay.

JR. CHAIRMAN: 17 {4)- pass; 17 {5)-pass; 17- pass;

Section 18, Subsection 1- pass; 3{2)- pass;

Section 18 -pass;

Section 19 -pass; Now 16- pass; 17 -pass; 18 {11) {iii)-pass - 9 Honourable Member for St. Johns. JR. CHERNIACK: Mr. Chairman, I'l l make this statement and it is to apply to

Section 19 and 1 the others. Mr. Chairman, I think it's really a disgraceful show that we have before us. We've 1lked about private auditors. We've talked about their supposed assistance to the auditor, the 1dependence, it's all nonsense, Mr. Chairman . This government in its dogmatic way has decided tat a private auditor is better to use than the provincial auditor and has thought up excuses which ·e not correct, which they have not supported, they've just made the statements. lt is proven now tat it is more expensive. it is proven to my satisfaction and supported only because Mr.

Ziprick :�.id so, because I don't know anything about audits, that their audits aregoing to be less extensive nd less complete than his, that they are being brought in because the government dogmatically so committed to the private enterprise system that the y can't even recognize that a provincial Jditor who is the appointed servant of the people, is more capable of doing an objective job than 1e private auditors and I want the Attorney-General to know that to be consistent he ought to 111

Law Amendments Thursday, June 14, 1979 fire each and every one of the people who works for him and go out and get the law firms the: he favours for whatever reason and let them do the law work for him. MR. CHAIRMAN: The Honourable Attorney-General. MR. MERCIER: Mr. Ziprick, you've indicated the private auditors will go as far as certification c accounts, was tha t . . . MR. ZIPRICK: Financial statements. MR. MERCIER: Financial statements. You're not suggesting tha t those will be done to any les extent or less ably than your own auditors would do it? MR. ZIPRICK: No. MR. CHAIRMAN: The Member for St. John s. MR.

CHERNIACK: But, Mr. Ziprick in your audit you go beyond that which you know the priva1 auditors employed by the government will do. Is that correct? MR. ZIPRICK: Yes, we go beyond the certification of the financial statements, and we would can out the requirements of The Provincial Auditor's Act. MR. CHERNIACK: And unless there is some change in these amendments you cannot expect tt private auditors to have to carry out the audit to the extent tha t you are required to under Tt Provincial Auditor's Act. Is that correct? MR. ZIPRICK: That's correct. MR. CHERNIACK: Your turn. MR.

ZIPRICK: But I will be carrying out under

Section 17, the remainder so that the accountabili to the Legisla ture will not be dimi nished. MR. CHERNIACK: So, Mr. Ziprick, it will be necessary from your standpoint to have the priva audit done by the private auditor, and then you will have to add to that your input in order · have compliance. Is tha t correct? MR. ZIPRICK: Yes and that will basically consist of an overview of the financial statements ar their reports and certain areas that would be a requirement of my Act. MR.

CHERNIACK: And you have told us tha t the Crown agencies will be paying about $10 0,0( more for the privilege of having private auditors than they have been paying to you. Tha1 correct? MR. ZIPRICK: That would probably be about right except that it must be appreciated that n costs are not all costs. MR. CHERNIACK: 1 think we also appreciate the fact that your costs are not any less becau: of the fact that you're not doing the audits except to the extent of the personnel tha1 involved. MR.

ZIPRICK: Yes, but 1 just want to make sure that this $10 0,000 is not an overcharge by tl private auditors, that their charges are quite reasonable and the dif ference arises because wh we charged were not all the costs. MR. CHERNIACK: Yes, because we ha ve confirmed tha t the space you occupied, the telephon you use, the lights, the power that you use are all continuing whether or not you do the priva audits. Is that correct? 11 2

Law Amendments Thursday, June 14, 1979 R. ZIPRICK: Well they're continuing but no billing is made for this. We are not billed , my )propriation isn't billed and we didn't bill it out, and tha t's set out by the Lieutenant ; to how the billing is supposed to be made. R. CHERNIACK: Right, and your charges do not include a profit which the others do and for hich neither you nor I begrudge them. R. ZIPRICK: They have to operate at a profit or otherwise there would be no business. IR. CHERNIACK: All right, so now we've agreed.

We've agreed and I don't quarrel with your atement that from their standpoint they are not being unreasonable. The fact nevertheless is it ill cost $1 00,000 more, more or less $1 00,000 more, and in addition thereto you will ha ve an input hich will also cost some money. Is that correct?! IR. ZIPRICK: There will be some costs but not significant. IR. CHERNIACK: All that in order to comply with the government's decision to have private uditors and at the same time produce the same finished product tha t they would get if you did 1e audit. Is that correct? tR.

ZIPRICK: As far as I'm concerned there's the two systems, that I do the audit or the private uditors, and I do whatever else is needed. I find both systems to be satisfactory and there is no oubt tha t with having private auditors involved there is a broadening of involvement, and some lement of check involved. I can't deny it. Now how much that's worth I won't pass on. IIR. CHAIRN: The Honourable Member for St. Vital. IIR. WALDING: Mr. Chairman, I'm glad that the Attorney-General is involving him self in the liscussion on these matters because I'd like to ask him a question if I may through you. I note, ilr.

Chairman, .. 11R. CHAIRMAN: . . I'll have to - with his permission you - because he is not sitting at the able here tonight as the Minister � MEMBER: No he's just right here. III R. CHAIRMAN: He's sitting across the table from you, Sir, and if he cares to answer the question hat's his prerogative, but it's with leave that we must give you the permission to ask the question >f the Attorney-General. III R. WALDING: Really, Mr. Chairman! III R. CHAIRMAN: Right - we're not dealing with the Attorney-General's department here. He's 10t the Minister of Finance -(Interjections)- You have the leave of the Chair, Sir.

You can question :he honourable member here or the Provincial Auditor . . . !II R. JENKINS: Mr. Chairman, on a point of order. Either the AttorneyGeneral will answer it here )r answer it in the House. I mean if you want to get sticky about it . . !II R. CHAIRMAN: Well, I'm sticky about it, I am the Chairman of MR. JENKINS: At this time of night I think it's dam ridiculous. MR. WALDING: Well, Mr. Chairman ... 11 3

Law Amendments Thursday, June 14, 1979 MR. CHAIRMAN: Just let me clarify how that I as the Chairman of this Law Amendments Committe dealing with Bill No. 3, can give the Member for St. Vital the right to question the AttorneyGenero Now if you show me -(Interjection)- under this vehicle . . . MR. CHERNIACK: it's the

section dealing with The Lotteries Act which come under him. MR. CHAIRMAN: Order please. I'm not dealing with the Honourable Member for St. Johns. I' dealing with a point that's raised by the Honourable Member for St. Vital, and if the members the committee are prepared to let me allow that, I'm prepared to allow the question. But I dor see how I have that permission. MR. WALDJNG: But to the same point of order, Mr.

Chairman, you are very aware I'm sure ' we all are that all comments made at the committee and in the House are directed to the Cha and tha t when I ask the question I will direct it to the Chair, but indicating that the Attorney-Gener might wish to take particular heed of it and might wish to respond to it. So in order to attra his attention to the quettion that is coming up, I use his title in the

preamble to the question. Th was really the only reason for it. I didn't want to get into any technicalities as to whom I may may not add ress a question, Mr. 6hairman. That completes my point of order. If I may now go to the question to ask you, Mr.

Chairman , given the fact that I notice that tl bill comes into effect on the day it receives the Royal Assent which may be in a few days tim we know from replies from the Minister of Finance and from other spokesmen from the governme that the government has in the past entered into contracts and agreements for the auditing of vario1 Crown corporations with persons other than the person who is presently as of today, required do tha t audit. My question to you, Mr.

Chairman, is, is this not in conflict with the present legislatio and I would seek a legal opinion from any member around the table who is prepared to give as a Law Officer of the Crown or anything else; whether the government has been in breach its own legislation in awarding these contracts outside as is allowed by this bill but prohibited I the Act? MR. CHAIRMAN: May I suggest to you, Sir, that you raise that question in the ho use tomorrc - (Interjections) - Well, the Legislative Counsel if you so desire. MR. BALKARAN: Mr.

Chairman, I don't know if I can satisfy the members of the committee exce to say that my information is tha t there's been no formalized contracts yet, you know, there's be1 letters of intent, but that no formal contracts have been entered into so that technically in my viE anyway, the re's been no breach of the existing legislation. MR. CHAIRMAN: My apologies to the Honourable Member for St. Vital. I apologize, and acce his question. The Honourable Member for St. Vital. MR. WALDING: Mr.

Chairman, we have been informed that all but one, in all cases but one, th an agreement - and I believe that was the word - has been entered into with different auditir companies, and that in at least one case where we've been told of it directly - that is the TelephOI System - that the auditors have commenced to do their work. Now, what the legalities are actually signing a contract, not being a lawyer, I couldn't give an opinion on.

But the fact that i agreement has been entered into, and one of the parties has begun to do the work that he hi agreed to do, suggests to me a contract in facts, if not into the last final letter of the law. Now, that's what I am questioning here, is the government not in conflict with its ov laws? MR. CHAIRMAN: Mr. Balkaran. Can you answer that question? MR. BALKARAN: Mr. Chairman , I'm not so sure that the Honourable Member for St. Vital wou be satisfied with what I have to say. I think, in the Civil Service itself, as an ongoing thing ve often Civil Servants are recruited from various parts of the country.

Recently there was at lea one person to my knowledge who came from the federal government and the formal appointme wasn't made until maybe a month later, after he was already in the government service here. 1\ information is that Letters of Intent, or part-performance, if you like, of some of these contrac1 have taken place but tha t formalization of the terms, and final terms, migh t probably take pla1 after this bill has been passed. 11 4

Law Amendments Thursday, June 14, 1979 R. CHAIRMAN: The Honourable Member for St. Vital. R. WALDING: Mr. Chairman, I wouldn't dream of entering into a legal argument with Mr. Balkaran. Jt if, in the case that he quotes, if his friend had agreed to work for the government, and was �ing paid by them, and the government had agreed to employ that person, and was paying him, d thut not constitute a contract, just as surely as if it had been written down in black and 1ite? R. BALKARAN: Mr. Chairman, in the instance cited, no payment was made until a formal contract employment was signed and the Order-in-Council passed.

R. WALDING: The question still stands, Mr. Chairman, since the agreement had been made by >th parties, did that not constitute an agreement, just as much as if it had been set down in 'iting? R. BALKARAN: That's true, Mr. Chairman. That's true. R. WALDING: Then the original question still stands, Mr. Chairman. Has not the government �en in br each of its own legislation, in entering into such a constract with firms of private auditors, begin and actually do the work, in auditing the books of Crown corporations? R. CHAIRMAN: Mr. Balkaran. Mr. Ziprick. R. WALDING: And, in posing the question originally, Mr.

Chairman, you will recall that I mentioned e Attorney-General, hoping that I would get a response from him. R. CHAIRMAN: I apologize to the honourable member. The Attorney-General, this is not his Bill, 1d if he wishes to answer it, that's his prerogative. In the meantime, if he doesn't, I only have e alternative of Mr. Balkaran or Mr. Ziprick. The Honourable Member for St. Vital. R. WALDING: I realize that, Mr. Chairman. I'm sure that the record will show that the ttorney-General did not respond to my question. R. CHAIRMAN: Mr. Ziprick. R.

ZIPRICK: In these particular instances, the Letter of Intent is with me, not with the government. 1d in all these the proposal's been made to me, and I accepted the proposal, and that would � on individual employee, or indi vidual auditor basis. So that just like in any other situation, the wernment approves the rates, but the Letter of Intent, or the proposal letter, was add ressed to e, and I'v e accepted it. And they are working for me. R. CHAIRMAN: The Honourable Member for St. James. R. WALDING: I ha dn't finished. R. CHAIRMAN: The Honourable Member for St. Vital. R.

MINAKER: I was going to answer the question to the Honourable Member for St. Vital, but R. CHAIRMAN: The Honourable Member for St. Vital. R. WALDING: I want to see if I ha ve Mr. Ziprick's comments clear. He is saying that a contract cists between - or a Letter of Intent, between the government and the Provincial Auditor, but ere is no agreement or contract between either the government or th<> Provincial Auditor on the 1e hand, and the private auditors on the other - is that wha t he's saying? R. CHAIRMAN: Mr. Ziprick. R.

ZIPRICK: No, I'm saying, in these cases where I'm the Auditor of record, the private auditor's ·oposal is to me and the acceptance is by me. The government approve the rates to be paid, 1d that would be the same as the government approves the pay that I'm going to pay any auditor 11 5

on my staff. law Amendments Thursday, June 14, 1979 MR. WALDING: Mr. Chairman, is Mr. Ziprick telling us that a proposal came from a firm of priva auditors to him, saying that they were prepared to do a certain job at a certain rate, and th2 on the instructions of Cabinet, or the government, that he agreed that they would so do? MR. CHAIRMAN: Mr. Ziprick. The Honourable Member for St. James. MR. WALDING: Can I repeat the question, Mr. Chairman? MR. CHAIRMAN: He says he has the answer, too, so I ... Okay, now, Mr. Ziprick. MR. ZIPRICK: I'm sorry, I was distracted. MR. CHERNIACK: it's 1: 45; you're entitled to be.

MR. WALDING: Is Mr. Ziprick telling us that he received a letter from a number of different priva auditing companies, suggesting that they would be prepared to do this work for a certain ra1 a certain fee, and that the Cabinet, the government, agreed with that rate, and that this is tl basis for the work being done? MR. ZIPRICK: That's right. MR. WALDING: So, in that case the contract would then be between private auditing firms ' the one hand and the Provincial Auditor on the othe hand. MR. ZIPRICK: That's correct. MR.

WALDING: Is the Provincial Auditor satisfied that he had the authority to enter into agreement with an outside company to do work that he was required by statute to hims elf? MR. ZIPRICK: That's the point we dealt with at the start, that I can't enter into agreement w a company, but I can enter into agreements with individual auditors. And this is the kind of r tape that we have to go through, and the amendment here that's gone through will make it possil for me to also contract. Because I' ve done it on a number of occasions, and I have to contrc with the individual , not the firm.

So, in this case, I'l l have to contract with the individl auditors. MR. WALDING: Mr. Chairman, I'm trying to get clear what happened in the past. The Auditor s: that his contracts were with individuals. Is he now suggesting to us that he received letters fn individual auditors who worked for a company, that those individual auditors were prepared to the auditing work on various Crown corporations, at a certain rate? MR. ZIPRICK: No, I' ve got a letter that the firm will do that, and will make the auditors availa - qualified auditors available.

No w, the auditors are working, I know which auditors they a because they are working under the direction of my auditor, and I see no particular problen MR. WALDING: So the Letter of Intent came from the company in each case, to you, I Ziprick. MR. ZIPRICK: That's right. MR. WALDING: So the contract MR. CHAIRMAN: The Honourable Member for St. Vital. Would you just give me a chance to it in the record, please. The Honourable Member for St. Vital. MR. WALDING: Yes, Mr. Chairman.

So, the contract that we have agreed earlier exists verb if not down in writing, exists between the company who wrote to you, on the one hand, and yours on the other. 116

R. ZIPRICK: That's correct. Law Amendments Thursday, June 14, 1979 R. WALDING: So, then, Mr. Chairman, I come back to asking Mr. Ziprick, is he satisfied that , had the authority to enter into a contract with a private company to audit these books, when a statute requires him to do it personally? R. ZIPRICK: I can't do it personally, under any circumstances. I have to have staff, and whether a staff is provided by contract, or by permanent appointment, as long as it's qualified staff, it •esn't matter to me. · R. WALDING: Mr.

Chairman, when I said "you, the Auditor" I was using a similar expression what is used in the Act, that requires the Auditor to audit the books. Now, I realize that Mr. prick doesn't sit down and do the work personally, that people in his department, or his employ, , out and do the work. But it's still under his responsibility. Now, the question still remains, was r. Ziprick entitled, under the statute, to contract with a private company which had written to 11 asking for the work, when the statute says tha t the private auditor shall do the work. R.

ZIPRICK: Well, my understanding is tha t I can contract, as long as it's for specific dividuals. R. WALDING: But, Mr. Ziprick, you have told us earlier that it was a private auditing company at wrote you a letter, offering to do tha t work at a certain fee, and tha t's with whom you ha ve e contract. R. ZIPRICK: I've been doing this for quite a while, and any assistance I' ve been getting from iVate firms, I' ve arranged with the firm, and then they designate the person, and that's the pers on, the agreed rates that I'm paying for his service.

And and the government does that, and has Jen doing - hiring people on contract from firms for years, and I see no particular oblem. R. WALDING: Let me ask a little different question, Mr. Chairman. The Minister of Finance made e announcement by press release, back in December, perhaps, that certain companies which he 1d named would do the auditing work for certain-named Crown corporations. Now, did tha t news lease come about subsequent to Letters of Intent from private companies or was it the other ay around? R. ZIPRICK: The companies were contacted, and they said that they would submit proposals.

Jt when the news release came out, it was still not accepted, because we had no quotations of es or anyth ing. So it was just a release that the negotiation will take place. If the rates were 1tisfactory, fine; if not, then there'd be negotiation with somebody else. R. WALDING: Mr. Chair man, I'm trying to get clear whether the government specified the >mpanies and then the companies wrote their Letter of Intent to Mr. Ziprick. Was tha t the order which these events happened? R. ZIPRICK: Yes, the government specified the companies.

And the only condition I put is as ng as they're a firm, or auditors in good standing with the Institute of Chartered Accountants, 1d there's a large enough group to be able to handle the situation, it was quite acceptable to e. IR. CHAIRMAN: The Member for St. James. IR. MINAKER: Mr. Chairman, in reply to the Honourable Member for St. Vita l's question, it's my 1dersta nding, Mr. Chairman - maybe Mr.

Ziprick can comment on it - that if, in fact, this bill asn't passed by the Legislature, it's my understanding that you would have the authority - the tct tha t there was a Letter of Intent tha t you could not enter into agreement with the company -that you would still ha ve the authority to enter into agreement with them, or contract on an ,dividual by individual basis. Is tha t correct? IR. ZIPRICK: That's right. That's right. 117

Law Amendments Thursday, June 14, 1979 MR. MINAKER: So that really, Mr. Chairman, the intent of the bill is to clarify this, and make more simple and less red tape as the Provincial Auditor has indicated to the committee tonig tha t if he chooses to employ outside auditors, that he will be able to do so in an easier fashi( I think there's no argument that it's the government policy that we feel that outside auditing proper and in the best interests of the people of Manitoba.

So, we're not going to debate th That was debated this afternoon, I think, to a great extent, that particular subject, so that to ans\11 the Honourable Member for St. Vital, my understanding is that, should -this bill not be pass that the Auditor has full authority to enter into an agreement on an individual by individl basis. MR. CHAIRMAN: The Honourable Member for Winnipeg Centre. MR. BOYCE: Mr. Chairman, ... what the Legislative Assistant to the Minister of Finance just sa but nevertheless, we are trying to understand what is happening at the moment in one sense, a harkening back to what the Member for St.

Johns said a little while ago about understanding ab( how the pre-audit was carried out in the past, and the post-audit, and bringing into juxtapositi the questions asked by the Member for St. Johns and the Mem ber for St. Vital; the fact that earl when we were considering the Estimates of the Provincial Auditor, we discovered I think it VI 11 vacancies in the department. And you know, I'm not a lawyer, Mr.

Chairman, albeit we've learn around here to th row around a few ipso facto's and mutatis mutandis's and a few other terr I'm not a lawyer but nevertheless, as a lay person, I understand a contract exists in law if th( is a meeting of minds. But from the Provincial Auditor's response to the questions, it would appear that there exi contracts. I have onespecific question and then a more ·general one. Have these people actuc been paid any money in reference to the work tha t they have already been performing, the fir themselves?

Have cheques been issued by the provincial government to the firms for the wo1 done albeit by individuals? MR. CHAIRMAN: Order please. I wish the honourable gentlemen would take their conversatic someplace else because I don't see how possibly the rovincial Auditor can hear the point th� being raised by the honourable member. Proceed, sir. MR. BOYCE: Thank you very much, Mr. Chairman, I appreciate your assistance. Perhaps · Provincial Auditor heard me. MR. CHAIRMAN: I doubt if he did because I couldn't hear it. MR. ZIPRICK: Yes, I did hear it. I think that there has been one progress payment made in c situation.

MR. CHAIRMAN: The Honourable Member for Winnipeg Centre. MR. BOYCE: Well, of course, that further complicates it. How can you make an advance paym on a non-existent contract? But nevertheless you see, our apprehension .. MR. CHAIRMAN: On a point of order, the Honourable Attorney-General. MR. MERCIER: Mr. Chairman , there has been a lot of discussion go on which is really irrelev. to the clause before us. I think the discussion really that's taken place is with respect to the I clause, 24, as to whether this bill comes into force on the day it receives Royal Assent or whetl it is to come into force retroactively.

MR. BOYCE: Well, 1 thank the Attorney-General for demonstrating his prowess to point out obvious and this is exactly what I'm trying to ascertain. I believe it is my right of the commit to ascertain it albeit not so in my way, sophisticated as some lawyer perhaps. Mr.

Chairman , when we're talking about the Provincial Auditor's vacancies, I would assume t in those areas where there has not been legislative authority for outside auditors to perform function of the Provincial Auditor, tha t they are changing the Acts in the Legislature to allow t to be done, that the work that has been going on over the past several months is being de as if this bill had already been passed. Is that not true? MR. ZIPRICK: No, the work tha t's being done now in these particular cases is under my direct 118

Law Amendments Thursday, June 14, 1979 1d I have a senior auditor assigned and he's working with the auditors, the auditors are oversee n. e are satisfied how much time they put in and the work they're doing and so we can certainly ty on the basis that we're satisfied that the work has been performed, and we know what people 1rformed it. R. BOYCE: Well, Mr' Chairman, I'm not questioning the Provincial Auditor in that area that the 1b lic won't be protected as well as, you know, his staff is able to perform in this new change, 1t nevertheless, ... well, if I can come at it perhaps from another direction, Mr.

Chairman , and ntend to be brief; I know the hour is getting late. As I understa.nd it, in the past the Provincial Jditor's office was involved in one of two ways: in being involved in the pre-audit or afterward, ' in auditing the books after they had already been audited? Is tha t correct? Well, the Crown agencies; it's always been after. We never did any pre-audit on Crown 1encies. R. CHAIRMAN: 11 (3); if you read the

section we're dealing with. We're dealing with: "The accounts the Corporation sha ll, at least once in each year be audited and reported on by an auditor, 10 may be the Provincial Auditor, or appointed by the Lieutenant-Governor-in-Council and the 1sts thereof shall be paid by the Corporation." That's the matter that's before the committee. ould you please just discuss tha t section; 11 (3). R. CHERNIACK: On a point of order. R. CHAIRMAN: The Honourable Member for St. Johns. R. CHERNIACK: Mr. Chairman, we have been discussing whether or not that is the law now whether tha t is the law that is being proposed.

And the questions that have been asked as I lderstand it are: how is the law now - today's law - being applied, and the suggestion seems be coming about that the practice is being carried on as if this were the law; the amended law, erefore it seems to me that's in order to be asking the questions. R, CHAIRMAN: I don't think the Honourable Member for St. Johns has a point of order because e honourable member was straying widely from 11 (3) what we're dealing with at the moment. 1e Honourable Member for Winnipeg Centre. R. BOYCE: Well, I guess, Mr.

Chairman, we were trying to elicit answers from the Provincial Jditor, whom I would sugge st everyone at this table has a profound respect, and without going to perhaps a royal commission or perhaps Mr. Tritschler isn't busy again, to see exactly how e government functions - I don't question the Provincial Auditor, I am questioning the government r the past two years experience on how they do things. They fire people before they ha ve authority , do so. R. CHAIRMAN: Order please, order. I, again, have to rule the honourable member. Let's deal ith 11 (3) tha t's before us.

We will deal with the other matters later on, on the report stage of e bill, but let's deal with 11 (3) if we can, please. R. BOYCE: Well, as pointed out by my colleague, the Member for St. Johns, I thought we all 1d been dealing with the import of this particular amendment and we're trying to ascertain whether 1is is correcting retroactively that which the government has been doing. But we're not going to �t the answer, so I will shut-up at the moment. R. CHAIRMAN: 11 (3)-pass - the Honourable Member for St. Vital. IR. WALDING: Mr. Chairman , I just wanted to reply to the Member for St.

James, who made couple of comments there which were very germane to the

section that we were speaking of hen he said that what we are talking about is a matter of government policy. We realize only 10 well, Mr. Chairman, that it is a matter of government policy and that's why this change has )me about, because tha t is what the government wants to do. The Member for St. James said, further, tha t if this were not passed that the Auditor could 1ter into contract or employ individual auditors. But that is exactly what has not happened. The uditor has told us here this even ing that he has entered into contracts or agreements, whatever 1e official term is, with corporations to do the auditing of MP IC and MHR C and various others 1at we will get to later. 119

Law Amendments Thursday, June 14, 1979 So what the Member for St. James is saying to us is that we need these sections of the , to legalize what the government has been doing illegally up to this time. That's the whole pc of my question, Mr. Chairman . MR. CHAIRN: The Honourable Member for St. James on a point of order. MR. MINAKER: Mr. Chairman, I did not say that it was illegal or to legalize, and I think Honourable Member for St. Vital recognizes that when the Auditor was questioned on the subj he indicated tha t he had the author ity to hire auditors on an individual basis.

The legispative solic also indicated that nothing had been done illegal, in his opinion, to date and tha t all I was indicat that what we were arguing was half a dozen of one and six of another, really, at this point in ti1 and what we had before the committee was to clarify the situation and make it completely cl to everybody the authority of the Auditor at this time. MR. CHAIAN: lt is not a point of order. 11 (3) - the Honourable Member for St. Vital. MR. WALDING: Mr. Chairman , I believe that the matter was crystal-clear. Members can lool the statutes for any of these five different . companies . MR.

CHAIRMAN: Well, let's stay with 11 (3), if we can. MR. WALDING: ... including 11 (3), MPI C, and they will find there tha t there is a legisla requirement for the Provincial Auditor to audit the books of MP IC. Now, he has told us that he has contracted with a private company to do that, to do wha1 is obliged to do under the Act and what this bill is doing is to make retroactively legal what been illegal, in my opinion, Mr. Chairman. MR. CHAIRMAN: Mr. Ziprick. MR. ZIPRICK: With regard to MPIC, there has been no contract because we finished the a not very long ago and. the new audit is still not due.

So there is nothing with MPI C. MR. CHAIRM AN: The Member for St. Vital. MR. WALDING: Mr. Chairman , I would pick the one where there was no contract contract, woul I? MR. CHAIRMAN: 11 (3)-pass; 11 (4)- pass; 18 -pass; 19

Section 4(2)- -pass; 4(2.1) -p. 19- pass;

Section 28 subsection (3)-pass - the Honourable Member for St. Johns. MR. CHERNIACK: I just wondered about it A COUNTED VOTE was taken, the results being as follows: Yeas 9, Na ys 2. MR. CHAIRMAN: 1 declare the motion passed. 28 subsection (4)- pass. (Sections 21 to 24 were read section-by-section and passed) Title-p

Preamble- pass. Bill be Reported-pass. Committee rise. 120

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-la4
Type	hansard
Volume / chapter	31st 3rd hansardpdf la4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	f0190717285b9c650e8cecdac321e860d09947d7

Source file is stored in the law ingest library (pdf).