The Committee met at 10:00 a.m.

MR. CHAIRMAN (MR. HEARN): I think we are just about ready to roll. First of all let me welcome the people from the Department of Education, the Student Aid Division, the Acting Auditor General and his staff and Members of the Public Accounts Committee. We are still waiting for a couple of people to come, but they will drop in, I hope, during the proceedings.

Today we are doing something that is perhaps a little bit different to some degree, it is the first time we have had a department back who had been here previously, although it is really not because their penance was not fulfilled. I suppose there are a few more issues. When we call departments or agencies in front of us it is not because you have done anything too serious. It is not like the old days when you did not know whether you were going to be exiled or crucified or whatever. Things are a bit different now. It is a matter of clarification and we give the Auditor General's Department a chance to explain concerns the Members will have about what is going on in departments or agencies and, of course, it is a great chance for the department or agency to explain why they have not conformed exactly, perhaps, with the wishes of the Auditor General or the Auditor's Office, and it does clear the air quite often.

I remember last year, I believe when we had the people from the Student Aid Division in, it was a tremendously a rewarding experience for not only the public who picked up some of the information, but certainly for the Members of the Public Accounts Committee, because we had a much better insight into the workings of the Student Aid Division. So I will not say we are glad to have you back, but it is nice for all of us to have groups and agencies come in to discuss certain points or problems that they might have. Hopefully, through the process and through our recommendations, problems that you might be experiencing yourselves, and certainly those of the Auditor, might be clarified at least to some degree.

With that, we do have perhaps some people who have not been sworn in, I believe Mr. McCormick and Mr. Snelgrove. That is worse than yesterday when somebody had Norm's name down as Harrison Snelgrove, and they were looking for Harrison Snelgrove. So, Norm, we are having problems with you. I am not sure if the third member of your panel has been sworn in. I do not believe she has.

AN HON. MEMBER: No.

MR. CHAIRMAN: Okay. So Elizabeth if you would. Then we will ask each group, each leader, to introduce the members for the sake of the press, and I will introduce the Members of the Public Accounts Committee.

Norman Snelgrove

Cyril McCormick

Daphne Stockley

MR. CHAIRMAN: Thank you, Elizabeth.

Mr. Hart, if you would introduce the people with you this morning.

MR. HART: Thank you very much.

On my immediate left I have Mr. William Drover, Audit Principal; Audit Senior, Wayne Moores, sitting next to Bill; and at the end of the table we have Audit Manager, Bernard Howlett.

MR. CHAIRMAN: Mr. McCormick.

MR. MCCORMICK: Thank you Mr. Chairman.

I have with me this morning Mr. Snelgrove, Director of the Student Aid Division, and Ms Daphne Stockley who is our EDP Specialist with the Student Aid Division.

MR. CHAIRMAN: Thank you very much.

I should mention, I suppose, once again for the press, Mr. Chris Hart is the Acting Auditor General and Mr. Cyril McCormick is the Deputy Minister of Education. I think it is a good time to publicly congratulate Mr. McCormick. It is the first time officially, I think, we have been together since he has been appointed. Congratulations, Sir.

MR. MCCORMICK: Thank you.

MR. CHAIRMAN: The Members of the Public Accounts Committee are: On my immediate right, the Deputy Chairman, also new in the field, Mr. Aubrey Gover, the Member for Bonavista South; on my far left is Mr. Bill Ramsay, the Member for LaPoile; two gentlemen have who just joined us, Alvin Hewlett with the beard, the Member for Green Bay and Glenn Tobin without the beard, the Member for Burin Placentia West; and on my left Elizabeth Murphy who is right now acting as our Research Officer in the absence of Mr. Porter, and Elizabeth is also the Deputy Clerk of the House of Assembly.

I would also like to welcome the press. It is good to see some of the press come out to our deliberations, and then if there are some points clarified at least we get all the facts out properly.

So with that, usually how we operate is we ask the Auditor's Office to make the opening statement listing the concerns raised and then we ask the department or agency, if they so wish, to make a response and after that we just throw it open to Members of the Committee or an interchange between the witnesses.

So, Mr. Hart, if you so wish or one of your Members to make the opening statement.

MR. HART: Thank you very much.

I would also like, before we start, to take this opportunity to congratulate Cyril on his recent appointment. I was just commenting to him before we came over that it did not take us very long to get him in here. He was appointed on July 1 and I think it is probably a week or so now, so he is off to a good start.

I would ask Wayne Moores if he would read the opening statement.

MR. CHAIRMAN: Just before you start, a reminder that when you speak try to be relatively near the microphone. It is not for amplification but only for the record. When you speak also it would be better if you identified yourself because when the script is being typed up it is rather hard sometimes to pick up the different people unless you say your name before you make your comments. Thank you.

MR. MOORES: Mr. Chairman, the Newfoundland Student Aid Programme is administered by the Student Aid Division of the Department of Education. The Programme was designed to provide opportunities for students of this Province who lack adequate financial resources to pursue post-secondary education. However, the intent of this Programme was to supplement, rather than replace, the financial resources of the parents and/or the student.

The Student Aid Programme consists of: One, loans provided by the Government of Canada under the Canada Students Loan Programme; Two, provincial allowances which are not repayable; and three, deferred bursaries. For the year ended 31st March 1990 the Province's expenditure on this Programme was $15,639,513 as reported in the Public Accounts for the year ended 31st March 1990.

Our review and evaluation disclosed the following: The Student Aid Division was not always in compliance with the Student Allowance Regulations and the Canada Student Loans Programme administrative criteria; reconciliation procedures were not adequate to ensure completeness and accuracy of financial records; cash was not always deposited on a timely basis and cheques were not stamped for deposit only; the accounts receivable section does not review the no-show, part-time withdrawal reports on a timely basis; the accounts receivable section does not monitor which educational institutions are providing no-show, part-time withdrawal reports, computer generated reports contained errors; the allowance for doubtful accounts was not adequate based on past collection activity and the age of accounts receivable; applications for financial assistance were sometimes processed without adequate documentation; supervisory review procedures were not adequate; student aid system overrides were not always authorized by an appropriate official; and the documentation for computer system security changes was not complete.

The new Student Aid System was implemented on 27th March, 1989. No reconciliations could be located at the Student Aid Division to ensure all files and records were converted to the new system.

The recommendations of the Public Accounts Committee of the House of Assembly pertaining to our 1986 Report item on the deficiencies in recording and collection of student aid overpayments have not been satisfactorily addressed by the Department of Education.

Government expenditures for student aid is significant. It is essential that an adequate monitoring and control system be in place to protect the Provinces interest. The implementation of our reported recommendations will improve the system of control over the Student Aid Programme and should ensure the completeness, accuracy and timeliness of the information produced by the system.

MR. CHAIRMAN: Thank you very much.

Mr. McCormick.

MR. MCCORMICK: Thank you, Mr. Chairman.

I will just make a brief statement because I think what we would be more interested in doing is to reply to any particular concerns that the Committee may have. I think we are very cognizant of the need for some of the minor accounting procedures to be a little more efficient and a little more, I guess, emphasized.

As you know, we have spent the major part of our efforts over the last two years in bringing about major changes to the student aid system. Last year we gave what I think was considered a successful demonstration of what these changes had brought about in terms of delivery of the service to the students. We now have a completely computerized system. We have status terminals in many of our educational institutions where students can go and find out the status of their particular applications by simply asking for the information from the institution and using computer terminals.

With respect to what we consider some of the elements of the audit this year that we have addressed, we have replied to the Auditor General's draft report and given him assurances on what we feel are the major issues. I will mention just two of them here, and we can look at the others probably in discussions later.

One is the question of the time for a particular semester. We have been administering the combined inter-session and summer school period at the university as a semester, and this was questioned in the Auditor General's report. As you know, we are the administers of the Canada Student Loan and the Provincial Grant Programme, and it is the Canada Student Loan criteria that we generally apply in this case. We undertook to discuss this with the Canada Student Loan people and they have now advised us that we are within our right to determine that and to assess it as a semester. So we will discuss this with the Auditor General again and indicate what our decision will be. It is a provincial decision to decide what prescribes a semester, so we would probably be inclined to make sure that we would not short change the students in any way, and if that is not contradictory to any Canada Student Loan regulations then we would give the student the benefit in this situation.

The other item that I wanted to address was the question of the appeals committee. We have taken action to now fill a couple of vacancies on that particular appeals committee, and that should be functioning this fall. On the question of the decisions made by that committee, we have indicated to the Auditor General where provisions are made in the Canada Student Loan Act to allow that committee to have discretionary judgement to waive certain areas in special circumstances. I think these were the two areas that we were concerned about.

I would also like to inform the committee, while I have the opportunity, that we did make a number of major improvements to the programme this year, particularly for certain designated student groups. This has to do primarily with the grant portion which the Province has control over. The provincial grant has been increased from $1,000 per semester to $1,120 for single students and from $1,250 to $1,600 for single parents. We have changed the definition of single parents to include all students with dependents. So we have made improvements for that category of student.

We have increased the day care allowance from $1,800 per year to $3,000. The allowance for the cost of room and board and transportation and books has been increased, and we have made assistance available on a weekly basis instead of a semester basis. We now have the provincial allocation of grant consistent with the Canada Student Loan allocation. We have increased the cost on the provincial allocation by $1.7 million. So we are concerned that we address the needs of the students as a first priority.

I thank you, and I am prepared to address the other items on questions.

MR. CHAIRMAN: Thank you very much, Mr. McCormick.

Mr. Gover.

MR. GOVER: It seems that some of these issues have been raised before and have been outstanding for a period of time, and it seems, from my reading of previous reports and this year's report, that some of the issues have been addressed. So I guess my first question is to the Auditor General.

I believe it was back in 1985-86 that there were questions raised with respect to the deferred bursary programme, and that does not seem to be a concern, at least directly, in the findings in the current year's report. So I wonder, have those particular concerns, concerns with respect to the deferred bursary programme, been taken care of, because there is no direct reference to that in your report this year?

MR. HART: Yes, I would like to say up front that there have been significant improvements in the overall system. In our report of a couple of years ago we pointed out a number of issues that had been addressed, and most of the areas have been addressed. Sometimes what happens in implementing any new system, particularly a computerized system, is there is a period of time it takes to get everything implemented as required. It is just a learning experience all around. So there has been a definite effort on behalf of the department to address those concerns.

The major concerns we have now, I guess, come down to compliance with guidelines, and in some instances it is a matter of interpretation, as Mr. McCormick pointed out. We can only go on the basis of the regulations that are in place and apply them from an audit point of view and that perspective. So one of the concerns we have, for example, is that in determining the eligibility of a student for a student loan there are certain income requirements and the guidelines are not always followed to the letter of the law. I can understand, as Mr. McCormick pointed out, that the interest of the student has to be of prime consideration, and from an audit point of view, we are not insensitive to that, but we have to look strictly at the guidelines that are in place and ensure that the department adheres to them as they are stated. Other than that, obviously there would have to be a review and a revision of those guidelines.

In terms of the bursary programme, I think I will pass that one off to the audit senior because he was more directly involved in that.

MR. CHAIRMAN: Mr. Drover.

MR. DROVER: Mr. Chairman, just to add to what Chris had to say, the bursary programme that was raised by us in the 1980s was addressed with the new system, and our main concerns in this visit to student aid result from the implementation of a new system.

What often happens is that in implementing a new system, certain controls are lost or we feel are lost, reconciliation procedures, reconciling input that is coming into a computer from outside. I think if you take most of the recommendations on page 101 of our report, you will find that they all address the issue of supervisory review and this is of the system itself. A lot of the policy areas, as Chris says, we have dealt with in discussions with the department and the department has implemented them.

Just one short comment, to answer the Vice-Chairman's question, to our mind, as a result of this review, the bursary system has been handled, the recommendations and so on.

MR. GOVER: Yes. This is what I would like to establish, I suppose, for the department's benefit and for the public's knowledge, that, although student aid is coming back before the Public Account's Committee, it seems that it is not a situation where it is coming back with deficiencies that were identified in 1986, and still remain uncorrected. There were at least two deficiencies identified in 1985-1986, one of them having to do with the deferred bursary, and as you have indicated, that has been corrected. What seems to have happened is, as a result of this new system that student aid has put in place, various, I suppose, transitional difficulties that have been associated with the new system. These are new concerns as opposed to old concerns which we are now addressing. Would that be an adequate assessment of the situation?

MR. DROVER: I think, Mr. Chairman, that is a fair comment. I guess the main emphasis here is on the system, controls within the system, reconciliation procedures, proper authorization, proper approval and so on. I do not think we are attacking the policy areas to the extent that we did in 1986. There have been some improvements in the system, yes, but there are certain weaknesses in the present electronic data processing system that we feel should be addressed by the department.

MR. HART: Mr. Gover, if I might add to that too, there are some common areas of concern, I guess, and they seem always to be there in relation to student loans. One is in the area of the adequacy of the allowance for doubtful accounts which reflects the uncollectibility of them, and the other one is in the collection effort in making sure that you recover those loans that are advanced. That is a perennial problem. It is not just common to Newfoundland, it is across the country, but from an audit point of view, it has to be pointed out and I guess will continue. Those are the only comments I would add to that.

MR. GOVER: Yes, I appreciate that, Mr. Hart. But I just want to establish that basically the department has made efforts to correct the situation. Now we have a new system, and like any new system there are going to be difficulties associated with that new system.

But as you indicated, there is one matter that was raised in 1985- 1986, which concerns the reporting by educational institutions of change in status of the students, whether the students drop or add courses, I guess, or fail to show or withdraw. That was reported in 1985-1986, and the Public Accounts Committee then made recommendations that educational institutions be required to provide weekly reports of withdrawals of students, and greater emphasis be placed in brochures on the responsibility of students and institutions with respect, I suppose, to change in status. I see in your report this year, what you have found is that the accounts receivable section does not review the no-show, part-time withdrawal reports on a timely basis.

Then you also go on to say, the accounts receivable section does not monitor which educational institutions are providing the no-show, part-time withdrawal reports. I gather one of the principal sources of overpayments to students is that, while the student applies on a certain basis and gets his loan and grant on a certain basis, i.e. being a full-time student, subsequently changes his status. These changes in status are not caught and as a result, the student winds up with an excess of funds over what they would, if the change in status was caught.

So that seems to be a persistent problem since 1985-1986. It was identified then and it seems to be identified now. I just wonder if Mr. McCormick or Mr. Snelgrove would want to indicate exactly what the nature of the problem is there and what is being done to rectify that particular problem.

MR. McCORMICK: I will certainly make a comment, Mr. Vice-Chairman, but it is one unfortunately where we have to depend on another agency other than ourselves to respond. We have not only advised institutions of this problem and asked that they report this on a timely basis, but we have gone so far as to send them forms to report it on. The next step, as recommended by the auditor, is that we probably have to now check on when they send us that form because we are still not getting it in the required time frames recommended by the auditor.

There are two or three problems that the institutions have. One is that students have, as you know, particularly at the university, a drop and add period. They also have the issue of whether the students get the courses that they applied for. So it could end up that the student applies for five courses and ends up with only three, and it could be that the student then opts to do some other courses. The other thing is that a number of institutions are allowing people to change programmes, particularly in the private sector, once they find out they are not suitable and want to switch to another. So all these require that they be reported to student aid because they may affect the amount of student aid that student would get.

There is another policy decision that we are actively pursuing and that is to make issuance of financial assistance to students on a semester basis instead of on a full academic year basis. We may be able to correct some of it in that way, but we need to get the institutions to fill in these forms and get them back to us.

Is there anything else you want to add to that?

MR. SNELGROVE: I just wanted to say that I think the auditor's concern is that the schools are not reporting. We send the forms out to the schools and tell them that if students withdraw to send the forms back to us. Now if we do not get them back we assume that there are no withdrawals in the institution. They would not report to us students who withdrew unless they had a student loan, so some of their withdrawals could be students without the loan.

MR. CHAIRMAN: How many institutions are covered by the Student Aid Programme?

MR. SNELGROVE: In the Province?

MR. CHAIRMAN: Yes.

MR. SNELGROVE: All the post-secondary institutions, I think all the community colleges, all campuses at the university, and six or seven private training schools, as well as the schools of nursing.

MR. CHAIRMAN: So really a lot of your decisions would depend upon this interchange of information, and you can understand that a lot of it would be late or not coming.

MR. GOVER: Just to pick up on that point as well, I can appreciate the Auditor General's concern on that particular issue from an audit point of view, and I am glad to see that perhaps steps are being taken to correct it. The last time, just from a practical point of view, shows what problems this causes in the form of overpayments.

The last time the committee met we were provided with a document from Robert Smart who indicated that the average number - the document was dated 89-09-01 - that the average number of student aid overpayments in one year would be about fifty. The average amount of these overpayments annually is about $40,000 to $45,000, and the total amount of overpayments for all students is about $300,000. On average the number of students who apply for student aid is about 14,000 applications. Would those figures be approximately right?

MR. SNELGROVE: The fifty overpayments he is talking about would be new accounts that we put in the system each year, it is not fifty students who are overpaid. We recovered, I think, last year somewhat over $300,000 of overpayment from the deferred bursary fund. These fifty students are students where there is no deferred bursary amount for us to recover from, and then we have to set up a new account. There could be as many as several hundred students who have changed courses or have withdrawn or gone to part-time which would cause an overpayment. We can do a recovery from the deferred bursary fund if there is any money in the fund, if we have an account on the student.

MR. GOVER: It seems that you take statistically. There are approximately on average 14,000 applications accepted for student aid every year, and of those 14,000 applications what number result in overpayment, and what number of those would be uncollectible? Do you have any idea of that?

MR. SNELGROVE: It is difficult to say what number. I would say maybe 600 or 700 a year would have some sort of overpayment through withdrawal or switch programmes where we would have to do recovery.

MR. GOVER: That would require an adjustment.

MR. SNELGROVE: Yes, these are adjusted applications.

MR. MCCORMICK: You would have to make a distinction, Mr. Chairman, as to whether you are talking an overpayment because we would not classify an overpayment if it is one that requires adjustment because they changed their program or the length of the program was shorter or longer. In the main our concern with regard to overpayment rests with the provincial grant, because the other is loan which is a federal collective responsibility. But the fifty that Mr. Smart is referring to, on average we would have fifty new accounts that would come up into this category. So the others would be part, and there could be anywhere from 400 to 600 that require adjustments in which we would pick up, but they would be people who are already in the system. On average, of the new people coming into the system, we find out that it would be on an average of fifty new ones that would result in that category.

MR. GOVER: So basically, on a roll over basis there are 14,000 applications a year and out of that batch of 14,000 applications at some point down the road 50 of those are going to result in a problem?

MR. MCCORMICK: It could be, on average, yes.

MR. GOVER: On average. Which is not even 1 per cent. I think, I worked it out today, it is .3 per cent. On 14,000 applications, 1 per cent would be 140, so it is approximately .33 of a per cent of the students accepted that eventually result in an overpayment to the Province.

MR. MCCORMICK: Provincial grant, yes. So it will end up in accounts receivable.

MR. GOVER: Yes. So while it is important from an audit point of view, and I agree with what the Auditor General says, as a practical point of view the system does seem to work accurately 99.5 per cent of the time. Would that be a fair statement?

MR. MCCORMICK: Yes. You are discounting the ones that we can pick up there on deferred (inaudible) which would be of interest to the Auditor General as well. Yes, I agree that we would not see that as a major problem, and I did not mention it in my opening statement because we would not see that as a major problem. One student overpayment is a problem, but I mean it is not a major problem in the numbers that you noted. I think we are satisfied that the system works very well in that regard. Until we have everyone covered, we will have to work on it.

MR. CHAIRMAN: Just out of curiosity then on the same thing, the same ratio certainly would not apply to the loan program I presume. It would be much more difficult to collect.

MR. MCCORMICK: That would be held by the Federal Data Bank. And I would suspect that it may be a little different than the provincial one, because they are (Inaudible). Do you have any idea on that?

MR. CHAIRMAN: Mr. Snelgrove.

MR. N. SNELGROVE: Well the Federal Auditor General reported this year that one out of every six students default under student loans. So that will be approximately 16 per cent?

MR. GOVER: Mr. Chairman, I just have one final question.

MR. CHAIRMAN: Mr. Gover.

MR. GOVER: What is the procedure the department follows when a student is found to have an overpayment? What procedure does the department follow to collect that overpayment?

MR. MCCORMICK: Mr. Snelgrove can address that.

MR. SNELGROVE: When we determine that an overpayment exists we revert first to the deferred bursary account of the student. If we owe a student some money from previous years we would do the recovery from the deferred bursary account. If there is no deferred bursary account we would notify the student of the amount of the overpayment and what caused the overpayment, and would ask for immediate repayment. If the payment is not made within a relatively short period of time there is an accounts receivable set up, and then on a quarterly basis we send a statement to the student advising him or her of the amount and try to collect it that way. We are not always successful in collecting it.

MR. GOVER: Do you have any idea what the average overpayment is in terms of dollars?

MR. SNELGROVE: It is approximately $300,000 out of the Province for about 800 accounts.

There are 734 accounts which comes to $313,000.

MR. GOVER: Seven hundred and thirty-four account, $313,000.

MR. SNELGROVE: And this dates back to the mid-1970s.

MR. MCCORMICK: This is accumulative.

MR. GOVER: So that is?

MR. SNELGROVE: About $450, I would say approximately.

MR. GOVER: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Tobin.

MR. TOBIN: Just briefly, Mr. Chairman, I have a few questions I would like to address to Mr. McCormick. I guess, when you look at the overall issue of what is taking place today in terms of the structure of student aid, I think for those of us who have been in political life - I know for the eight years that I have been around, apart from Crown Lands, Student Aid has been the other thing that has consumed most of my time as a district person, and I believe we all fall into that same category.

Every year it seems to be getting increasingly difficult for students to attend post-secondary institutions. As I understand it again this year, there has been an increase in the cost of tuition in most post-secondary institutions. While there has been some modification to the grant structure, I am wondering if your policy or if the situation affecting student aid is eliminating any people from attending university, if you have any understanding or any information that leads you to believe or understand that people are unable to attend post-secondary institutions because of the clause in the Student Aid Programme. I am not just talking about this year, I am talking about in the past.

MR. MCCORMICK: I cannot think of any situation where a student has approached our Department and said that they just cannot go to a post-secondary institution because the financing is not available. I have not had that experience. We have had situations where students feel they do not have enough money, they are there and they do not have enough money. I think that is because they initially thought that the Student Aid Programme would cover all their costs, and not be a supplemental aid. There are areas where, in the past, we did find out that people were having difficulty, and I identified them in my opening statement. We looked at single parents, who certainly had a problem, so we tried to increase the provincial side. We could not do anything on the federal side. So I think there are still categories of students who probably need access to more than the normal amount of allocation.

I cannot say that the people are not eligible. There is a changing environment, I guess, where there are students who, as they get older, figure they should be able to be dependent versus independent and these kinds of things, where parental contributions can be arguable. We have been in negotiations with the Federal Government now for a number of years on the fact that our administrative criteria for the Canada Student Loan Programme has not been updated since 1984. That presents problems for some students, but I really would not be able to say that there are students not getting to post-secondary studies. There may be students who think they are incurring more debt than they should, but I have no experience of people not getting a post-secondary education.

MR. TOBIN: In terms of the modification, as you said, and the improvements that you made to the Student Aid Division, does that offset the increase that has been allocated in tuition fees?

MR. MCCORMICK: The tuition fees are automatically included as an assessed cost. So, any increases in tuition fees would have no effect on the eligibility of students. That would automatically be allowed as a cost.

MR. SNELGROVE: We will pick up any increases.

MR. MCCORMICK: We will pick up any increases and allow that as an acceptable cost. So, they will get financing to counterbalance that.

MR. TOBIN: Does your Department have any figures on how much it would cost a student from outside of St. John's to come in and attend university, say for a semester.

MR. SNELGROVE: Approximately $3,000 a semester.

MR. TOBIN: Three thousand a semester?

MR. SNELGROVE: About $6,000 for the year.

MR. TOBIN: About $6,000 a year for two semesters?

MR. MCCORMICK: Yes. That is based on using resident fees.

MR. TOBIN: So, for someone to get a degree today in - I was going to say law, but I will not do that, they make too much money afterwards - commerce, like the Auditor General and his people probably have, you are looking at an expenditure of somewhere in the area -

AN HON. MEMBER: Five years.

MR. TOBIN: - of close to $40,000?

MR. MCCORMICK: Yes. It will be an investment in their future.

MR. CHAIRMAN: Mr. Hewlett.

MR. HEWLETT: Thank you, Mr. Chairman.

I must say, I am starting to feel somewhat dated, and this grey hair is giving me away, but I did a five-year programme at Memorial and got two degrees, and I think I came from a relatively poor family, and I racked up a total of, I think, $5,000 in student aid loans. I think I got the maximum grant just about every year. Inflation is certainly at work here.

MR. TOBIN: You're lucky to be out.

MR. HEWLETT: Yes. It is the first time I have felt lucky to be old.

When the House of Assembly was in session earlier this year, I had, I guess, an exchange of point of view with the hon. Minister of Education with regard to the Student Aid Programme, specifically with regard to the definitions of full-time student and part-time student and, I guess, the introduction of a computer system that can more readily identify on a timely basis, although according to the Auditor General, not timely enough, but can identify on a more timely basis the status of a student. I was given to understand by people I have talked to and by students, that in previous years if you took three or more courses you were deemed to be a full-time student and therefore qualified for student aid as if you were doing five courses. But in the last go around it was changed so that the grants and the loans that you got matched the exact number of courses you did. So this sort of threshold limit of three courses to be full-time appeared to have changed.

Now the Minister of Education sort of disputed that in our debates in the Assembly and indicated that no, computerization is now allowing us to do what the Public Accounts Committee has always said we should do, and that is exactly tailor the amount of the assistance to the number of courses. He disputed the fact that there was a policy change. Was there a policy change or was it a matter now of technology allowing you to implement a policy that was, for want of a better phrase, un-implementable before?

MR. SNELGROVE: Well it was not un-implementable before. It was done more or less on a manual basis and it was done over a period of time. With our new computer system we could identify the people doing three courses and adjust the applications in a couple of days. What we really did, with students who are doing three courses they just pay for three courses only, and we allowed them the full tuition that would cover five. So we had to do an adjustment there, but the adjustments were done fairly quickly. I think the problem was not doing the adjustments, it was the timing of it. The adjustments were done just shortly before the provincial grant cheques were issued. We did not have time to send a letter to the students so we drafted up a notice and attached it to each cheque. I think it was done within two or three days before -

MR. HEWLETT: You did the deductions from their upcoming share.

MR. SNELGROVE: Yes, so we would not cause anymore overpayments. I think it was the timing of it rather than the doing it. It was just a matter of efficiency.

MR. HEWLETT: So you have a system that is more readily attuned to doing that. But the question that I found difficult to get an answer on at the time was the whole notion of three or more being full-time as a matter of policy, or were we skirting the rules and regulations in prior years of the student aid system, or was it a matter of it being cumbersome and difficult to keep a timely tab on who was doing more than three courses or less than three courses? Was there a policy change? I could never get an answer.

MR. MCCORMICK: I think I would add to Mr. Snelgrove's answer, that we are dealing with separate items here. One is that students are assessed and are allowed expenditures that are educationally related in assessing what their financial assistance will be. Therefore, any expenditures that they incur are claimable. The expenditure they incur for tuition is fully reclaimable, whatever that is. The tuition for a full-time student at one time used to be a set amount, now it is based on courses. So in implementing the amount of money that the students are eligible to receive, we simply add up what their expenditures are. So the implementation is probably a little more efficient, but the policy is the same. If the tuition fees are increased, they are automatically allowed to claim whatever out-of-pocket expenses they have to make towards that, and they are allowed to use that to assess the amount they are eligible for. Therefore, what the Student Aid Division has done is only implemented the changes of any tuition fees that may be, in some places, I suppose, it gets up to a limit, I think it is four courses and the student pays the same amount as if they were taking five. So it works out sometimes to the student's advantage, and other times to their disadvantage. In the case of three courses it does not add up to the full amount, so some of them could not be allowed to implement a cost they did not incur. That is basically all we did.

MR. HEWLETT: One other question, Mr. Chairman.

MR. SNELGROVE: May I take this one step further?

MR. CHAIRMAN: Yes.

MR. SNELGROVE: At the time we are processing applications we cannot tell how many courses students will do. They are not even registered themselves. We are processing now for September so we assume they are going to do the full course load. So, we will have to come back and do an adjustment after, if they do less than, what you would call a full course load of five courses.

MR. HEWLETT: One other question. I was given to understand that the notion of part-time, full-time, three or more courses being full-time, probably grew out of the Federal Student Loan Programme. If there is any statutory or regulatory recognition of that categorization of people, full and part-time, it came from the Federal Programme of Canada Student Loans rather than provincially, Is that a fair comment?

MR. SNELGROVE: Exactly. The Canada Student Loans administrative criteria would define full-time for student aid purposes at 60 per cent of a normal full-course load - a full course load at Memorial University being five courses while 60 per cent is three. So, with three courses you could be considered for student aid as a full-time student.

MR. HEWLETT: With regard to a loan you mean?

MR. SNELGROVE: Well, a loan and grant. Our provincial student aid programme is the integration of Provincial and Canada student loan. We use the Canada Student Loan administrative criteria as a base for determining eligibility.

MR. HEWLETT: So, the basis for your making deductions after you find out a student's status is based on the expense claim section presumably of the student aid application rather than an upfront determination of full or part-time.

MR. SNELGROVE: That is right.

MR. HEWLETT: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: Thank you, Mr. Chairman.

With regard to MHAs dealing with student aid, and I know that you did mention that the criteria courses are a little more, for want of a better word, I suppose, a liberal application of the Federal guidelines that are there now, insofar as the qualifying of students. I note the Auditor General has mentioned that it should be a supplement to financial resources of the parents or the student. I find that in cases where students are not fully aware they are possibly eligible, even though the solid criteria would say they are not, and go through a lot of cases where we provide information on the financial background of the parents and thus have their rejection maybe adjusted to a certain amount of acceptance depending upon what portion would be allowed. I found that to be a bit difficult, I guess, because there was nothing ever in writing, it was always as was suggested by someone at student aid, 'Well tell them to do this and we will provide a form for you to do it.' It was rarely suggested to the student but more often with the prodding of an MHA you would get this information and assist them in arranging their appeal, I suppose, would be the right case.

I just wonder, with relation to what the Auditor General has stated about that, how does that apply, this situation where students can sometimes, I guess, apply on the basis of net income of their family once legitimate expenses have been deducted from their income, versus the application of say a T-4 or an income tax return that is often assessed?

MR. SNELGROVE: An application is processed based on the parents earning power for the previous tax year. In some cases the parent contribution assessed is so high that parents just cannot afford to make the contribution and we go through an appeals process where we review the parents income and their expenditures to determine if there is any flexibility in providing assistance. We have not documented the appeals process in our brochures anywhere but we are finding it difficult now to get students to read what we have already written. So, by putting more information there they may not read it anyhow.

The thing is what we do is send out a student contribution appeal form with the notification when it goes out, and we send a notification saying this is what your parents are expected to contribute. In the brochure we have a section on appeals which goes into some detail about the appeal, saying that if students are not satisfied with the results of the process they have the right to appeal. So we go back through the parent contribution or the parents income and family size and extenuating circumstances, hardship and things like that, and try to build a bit of humanity and decency in it by looking to see if there is some way that we could assist the student.

MR. RAMSAY: That would be accommodated, I suppose, on the provincial aspects of it as opposed to -

MR. SNELGROVE: Well, it applies to both because the Canada Student Loans administrative criteria says that there would be an appeals mechanism but they have not defined the mechanism. The mechanism is left to the provincial discretion.

MR. RAMSAY: Okay. One other one, Mr. Chairman, concerning the private institutions in the Province, although they seem to be assisted somewhat by federal training monies and also by other assistance through development agencies or whatever, do they add an additional burden - I would think they do - to the Student Aid Programme, although some may question it being a burden or an investment based on the capabilities of landing a job by the individuals who are trained in these institutions?

Secondly, what amount of the student aid budget, of say taxpayers' dollars provincially and even of federal loan dollars, would be provided to students going to private institutions versus the publicly funded institutions here in the Province?

MR. SNELGROVE: I wouldn't say that private training schools are a burden. They provide an educational service for the people. For the 1991 loan year which ends now the end of July, we awarded $3,270,000 in Canada Student Loans for students in private training schools, and approximately $2 million in provincial grants.

MR. RAMSAY: Two million in -

MR. SNELGROVE: Provincial grants.

MR. MCCORMICK: I guess I could add to that. Most students who attend private training institutions become eligible for the maximum amount, because the fees are relatively high.

MR. RAMSAY: So, in turn, the total then of $5.2 million of the total budget is $15.6 million, this year's (inaudible)

MR. SNELGROVE: No, no! It is $2 million. That would be the provincial budget. It would be approximately $2 million.

MR. RAMSAY: $2 million of the $15 million.

MR. SNELGROVE: Our budget this year, loans and grants for 1991, is $49 million.

MR. MCCORMICK: So, it is $5 million out of $49 million, then.

MR. SNELGROVE: It is $5 million out of $49 million, 10 per cent. Ten per cent is going towards private institutions.

MR. MCCORMICK: For students attending.

MR. SNELGROVE: Yes. Who in turn pay it to the private institutions?

MR. RAMSAY: Okay. Well, that is all I have right now.

Just one thing for the Department, for the Auditor General, I note in the first paragraph of your opening statement, you state in the last sentence, `However, the intent of this programme was to supplement rather than replace the financial resources of the parents and/or the students.' That part of the statement sort of leaves me hanging because I was looking for - I know it relates to a lot of the things you have identified, but it does not specifically state that this, in effect, is allowing students to get into the Student Aid Programme, not necessarily as a supplement only but as that would suggest, as a fully funded thing. I was just wondering where that was going, that part of the statement.

MR. HART: If I could answer that, that statement is basically taken right from the booklet issued by the Newfoundland Student Aid Programme. One of the objectives of the programme is intended to supplement rather than replace the financial resources of the parents and/or the students. Now, from our perspective we have somewhat of a concern, from an audit point of view again and realizing that practicality does not always enable an organization to do things the way we would like to see it done, one of the situations is that anyone applying for student aid is required to indicate the income of their guardians, if that is applicable in their particular case. We could not satisfy ourselves that there was any independent verification of the reported income levels, which would, in the end, determine how much student aid they were eligible for.

So, that is a concern, but to administer something like that obviously would impose great hardships in resource requirements at the Department level. There was no verification, for example, back to the income tax return or anything of that nature. So, if you, as a parent, applied on behalf of your son or daughter, I guess there would be the ability to not disclose your income fully, because there would be no systematic follow up of that income reported. So, I guess that is what it is alluding to.

MR. RAMSAY: Which you would think allow some people to, if they were so inclined, to mislead or use misleading information to allow the full granting, and you know people with high incomes still managing to get their students into the student aid program.

MR. HART: I think the potential is there, but I do not think it is, from a personal perspective, I do not think it is a major problem.

MR. MCCORMICK: Mr. Chairman, I must interject.

MR. CHAIRMAN: Mr. McCormick.

MR. MCCORMICK: The student aid people do demand income tax verification and have an arrangement with Revenue Canada to verify that. So there is a process in place to get that information and I guess we do it - there is a disclaimer on the form that allows us to do that.

I think from our perspective in reviewing what was actually happening the process may be in place, but it is not applied consistently at least.

MR. DROVER: Mr. Chairman, if I might add.

MR. CHAIRMAN: Mr. Drover.

MR. DROVER: What is accepted is a working copy of the tax return. And what Chris is pointing out is that the information that is contained there has not been verified by alternate means or anything of that nature. While the system is in place to, I guess, have support at the Revenue Canada level, and the individual who applies does sign a release form, we could not find evidence within the system at the present time indicating that these controls had taken place, when in fact they may. But we could not find verification procedures, evidence of such procedures taking place. The Federal Government may be able to, I guess, verify the procedures and that, but we could not find that was being done in our local student aid thing. We could not find evidence. Now they may be doing it in an informal manner, but the process that is acceptable is a working copy of a tax return. I guess as Chris pointed out you are really accepting the word of the individual who sits down and does that process, and that is all we are saying from a strict audit point of view. As auditors we are pretty well sticklers on detailed verification. In other words if you say something let us verify it outside your (inaudible).

MR. CHAIRMAN: Mr. Snelgrove.

MR. SNELGROVE: Mr. Chairman, we do accept working copies of the income tax returns. We will not accept an application from any dependent student unless there is an income tax return attached to it or if the parents did not file income tax returns a written statement of income. With regards to written copies we have identified a long list of people that need to be verified. The verification was not done for the last year or so because our verification officer was temporary assigned as the operations manager. Since January of this year that person is gone back to his job and verification is taking place.

AN HON. MEMBER: (Inaudible).

MR. SNELGROVE: Yes, we can do the verification. We can go back to six years to do a verification. So we have identified people with working copies and we are in the process of doing that.

MR. CHAIRMAN: Even though a number of complaints that I get as an individual member about student aid it is gone down since computerization, I think that has taken a lot of problems off the shoulders of the MHAs in particular. But when I do get them most of them are concerned about the amount of money that the parents are expected to put in. You know, a lot of them say my parents are expected to contribute X number of hundreds of dollars, and they had a bad year. Because it is basically based upon the income tax return. If I am going to university in September and I have my application in now which is being considered by the Student Aid Division, and if my parents income tax return, working copy or whatever, is in from last year when there was a good caplin fishery and my father made, say, $50,000, my mother worked twenty weeks on the plant and we had a good year. This year there are no caplin, the plant is not open, and my parents can't contribute anything, how do you rationalize the change? You know, if we are both working at the Department of Education or whatever, we know we have a steady check, and we did not get an increase, so there is no change, right. But certainly in rural Newfoundland where the income of a family could change, not only change but change drastically, be almost eliminated in a short time from year to year, how do you make that adjustment or do you depend entirely on the appeal process? And even in an appeal, how do you verify the fact that they made nothing when it is not income tax time?

MR. SNELGROVE: In the initial process we have to take your income tax return for last year to satisfy the requirements against the Student loans. We would look at it in the appeals process; we look at those cases on an individual basis; we rely on statements from parents, written statements to confirm that their income is substantially lower this year.

Where we have the option to defer parental contribution if we wish, we could process the appeal based on the new financial information you have given us, providing that the parents would sign a document to provide income tax returns later in the year when they are filed and promise to repay any overpayment. That is an option we have, it is something we have come up with ourselves, it is a deferred parental contribution. You know, we just cannot leave the student hanging in September.

MR. CHAIRMAN: So you can re-adjust and the student has access? I think we will take a coffee break for five minutes or so and come back and conclude.

RECESS

MR. CHAIRMAN: Order, please!

Shall we have the motion to adopt the minutes?

On motion, Minutes as circulated, adopted.

MR. CHAIRMAN: I should mention that our next set of hearings will be the 30th and 31st and probably the 1st pending and the witnesses at the time will be the Executive Officers I guess of the DECs, Denominational Education Committees and we will be talking about accountability in relation to school construction in particular and we also hope to have school trustees attending during that session. Get your tickets early, it should be an informative session.

Okay, that should be sufficient and we will pick up from there. Does anybody, either the Auditor General or the witnesses during the last round of discussions, was there anything that you wanted to clarify or comment on?

Yes, Mr. Tobin?

MR. TOBIN: Mr. Chairman, (inaudible) will have to come back this afternoon?

MR. CHAIRMAN: I think we have basically a few points that were raised and that is about it. Does anybody have any questions?

Mr. Ramsay?

MR. RAMSAY: I have (inaudible).

MR. CHAIRMAN: Mr. Hewlett, okay.

MR. HEWLETT: Part of the student aid process: the student, if my memory serves me correctly, is encouraged obviously to find summer jobs between semesters and so on, but is ordinarily deemed to have worked a certain amount, is that correct, No. 1. And No. 2, given the reality of the current economy out there now, someone is deemed to have earned a certain student income, is this sort of increasing the number of appeals that the student aid division would get, because obviously summer jobs for the students right now are becoming increasingly hard to find?

MR. SNELGROVE: When we process applications, most students are not aware, may not have jobs, some would have to have them; they are not really sure of how much money they make during the summer, so we assume that all students work at the minimum wage.

We assess the student contribution based on the minimum wage earnings, when we send out the notification we also send them a student earnings verification form, where they can report their earnings and we would do an automatic adjustment.

I am not really sure you could call it an appeal, it is more of an adjustment to your application based on your true earnings.

MR. CHAIRMAN: It is done up front with the application itself, is it?

MR. SNELGROVE: No, no. It is done after the fact; up front we assume the student made the minimum wage.

MR. HEWLETT: What kind of a delay in processing would that incur for a student who, you know, (inaudible).

MR. SNELGROVE: It really does not cause a delay in processing. The application is processed during the summertime. The adjustment, I guess we roll them over about every three weeks after we get the appeals done. Most of them are done in the first semester.

MR. HEWLETT: You mentioned earlier one other thing, that contributions vis-à-vis grants, to single parents and what not, there have been some increases in allowance for child care and so on.

During the last flurry of publicity with regard to the changes in implementation of the aid programme with the deductions and the grants, I had instances of getting some calls from single mothers who at that particular time had sort of gotten caught in the removal of their maintenance allowance from allowable social assistance plus being deemed as a part-time student and having certain tuition deductions taken out and this put them, by accident of timing, I suppose, in a rather unfortunate position very quickly. The increases that you mentioned with regard to single parents, would that accommodate the shortfalls there do you think?

MR. MCCORMICK: Mr. Chairman, I will ask Mr. Snelgrove to give the details. The adjustments that we made are applicable strictly under the Student Aid Programme and through the allowances that we permit the student to be assessed for. The maintenance income of parents who are on social assistance is an issue that is being dealt with through social services, and there is some question of what people like single parents are being assessed as resources. In terms of the Student Aid Programme we would only apply what we consider educational generated cost, and as referred to earlier, this is a supplement programme to a student's cost, so we give them the benefit of any cost that are deemed to be incurred as a result of having to pursue education studies. And what would happen in that case is that if they have to get day care, for example, by being out of the home to pursue studies, then, of course, they get allowed for what we give them. But the question of how much they can get through working with their social worker on social assistance is, I think, being addressed by a committee now. Maybe Norm might be able to elaborate on that, so the two are separate for us at the moment.

MR. CHAIRMAN: Mr. Snelgrove.

MR. SNELGROVE: The increase in the Provincial grant from $1,250 to $1,600 really was designed to offset some of the needs that were not met. Students, when their applications are processed, could have a certain level of need but because of ceilings on the loan and on the grant, $1,000 a semester saving, and then the $105 from the Provincial grant would leave you with a need that was not met. Increasing it from $1,250 to $1,600 was to reduce that need that was not met.

MR. HEWLETT: In your reduction, I guess, in your income now as a social services recipient would show up in your system as a reduction in income on the person's income as stated on the form. I presume that is where is that would show up.

MR. SNELGROVE: In a lot of cases students will apply to us for assistance before they would go to social services or we would not see any social services income or social assistance income.

MR. HEWLETT: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: Yes, I have just one question. I will mention a specific situation that I ended up in, and it brings to light something along the lines of what the Auditor General is speaking about as far as checking into, and, again, it is something that may be impossible to catch, but I would wonder about definitions of certain monies that students have made available to them. I had two students with very similar academic backgrounds, and very similar social backgrounds as far as their income situation with their parents. They were not very well off, and both having applied, both received something called a fellowship. One in placing this fellowship amount on their application mistakenly or otherwise called it a scholarship and it was not determined to be allowable income or whatever and that individual student received the full amount of a student aid grant, the whole works. The other student, like I say also from a relatively poor background financially, called hers a fellowship and it was considered to be income because it was a fellowship and then even though she knew her friend had the same thing, yet they were both treated differently in through the process and even after an appeal, it was an unsuccessful appeal, we had to go and try to get some money for her through short term organizations or whatever to enable her to continue, in which we were successful and she has done quite well and actually garnished a scholarship at the Institute that she attended. But it made me wonder about the catching of such a thing as a fellowship being called a scholarship and these sorts of different points that are possibly one in a hundred, even less than that, that may in fact effect the system but cause hardship for one and not necessarily for the other. She was adamant that it not be mentioned that her friend had this scholarship written in because that then might jeopardize her friends having garnished the full amount.

Anyway, I just wondered about that situation as far as Mr. Snelgrove goes and the kinds of checks and balances that are in the system to prevent that kind of situation from happening and hardship on one and not on another.

MR. SNELGROVE: Under our policy, fellowships and bursaries are taken where they are awarded based on need, they are taken in their entirety as a resource. For a scholarship, under the Canada Student Loan criteria there is an exemption of $600. So the first $600 scholarship is not counted anyhow. If the scholarship was $1,000 we would only consider $400 as a resource. If you had a fellowship we would apply the whole fellowship against your (inaudible).

MR. RAMSAY: So, in calling a fellowship a scholarship then that certainly does afford a much improved situation for the person that would call a fellowship a scholarship.

MR. SNELGROVE: Well, a scholarship is a $600 advantage.

MR. MCCORMICK: The rationale for that is based on that in general terms bursaries are given on some basis of need, student aid allowance is based on financial need. So, both of them are considered resources that are being provided individually. In terms of scholarships, these are rewards for academic achievement so there is a distinction made between the two and that is consistent with most of the Canada Student Loan policy across the country. Granted there is no way to guarantee that people will identify them under these categories.

MR. RAMSAY: They could accidentally call it a scholarship and therefore be afforded better opportunity (inaudible).

MR. MCCORMICK: In the main we will know. There are public awards lists from Institutions as to whether or not they are scholarships or bursaries. We can find from the student affairs office of both institutions whether or not these are based on need or academic achievement. But that is the only way, we have found no system to enable us to determine whether people are always telling us the truth yet.

MR. CHAIRMAN: I presume that the Student Aid Division is like every other agency, there is always somebody who knows how to beat the system.

A few points I would like to mention. Looking at the concerns raised by the Auditor General, the reason why we are here I presume, none of them are, as mentioned earlier, earth shattering in the sense of being the type that would point a finger and say you fellows are completely out of control or whatever, most of them are relatively minor but a lot of them are checks and balances that would assure, certainly from an auditor's point of view, that the system is up to par, but a lot of them are fairly simple things: the reconciliation procedures, cash not deposited on a timely basis, cheques not stamped properly, computer reports with some errors generated, supervisory review procedures not adequate. Some of these things listed would lead one to think that there might be a shortage of personnel and that leads to the question of whether or not you, like everyone else, were hit by the recent cutbacks and if so what effect it is having on the delivery of your programs?

MR. MCCORMICK: Mr. Chairman, on the Student Aid Division, when it made the major change to move from a manual system to a computerized system it was envisaged to be able to have efficiencies in terms of being able to produce a little more with a little less so we have attempted to apply that and we do have, I guess, this year two less positions in the Student Aid Division. Whether or not they are part of that efficiency or part of something that would have taken place whether or not the efficiencies were brought in is a matter of interpretation, I guess.

MR. CHAIRMAN: I presume the answer will come. If the checks and balances were not done the computers will not do them on their own so I presume the next report will determine whether or not you are able to handle them and then we can determine whether or not the loss of two positions will have an effect.

MR. MCCORMICK: We would certainly want to see if we can address them within a complement and if we cannot we will certainly recommend to Government that we do it with the necessary resources that we need.

MR. CHAIRMAN: I suppose this is to some degree hypothetical because decisions are always changed, but concerns about the amount of funding that will be coming from the federal side over the next few years for health and education, can you see perhaps severe problems in relation to the delivery of your program or are we going to be able to maintain enough dollars there to make sure that students are not deprived of the necessary loans or grants coming from the Province? Do you have any indication that there will be a drastic cut in that area?

MR. MCCORMICK: I can only say, Mr. Chairman, that we are at the moment collectively, the provinces through the Ministers of Education, are discussing with the Federal Government, specifically the Secretary of State, the Educational branch, are doing a total review of the Canada Student Aid Program. They have just released to us a copy of a consultant report that they had done on the system. I guess from my recent discussions it would appear that they wish to take some action to streamline the system and bring about anything they can do to make the system more effective. Our understanding is that there is not going to be any increased amount of money in terms of access to the students, but if there is to be any additions or increases to the caps on the weekly allowance, or on the administrative criteria, it will have to be found within the money that exists there at the moment, which means they have to find some more efficiencies and there will be things where they have to save the money in other parts of the envelop in order to make any changes, so we are operating under the assumption that if there are changes it will be within the amounts that are there.

MR. CHAIRMAN: We have in the Province a rapidly declining school enrolment at the primary, elementary and secondary levels. So far it is an advantage, I suppose, to the Province to see that many more of our students are staying in school and going onto post-secondary. Has there been any indication of a levelling off of the amount entering post-secondary institutions, or is it still fairly rapidly increasing with the new private colleges and the other post-secondary institutions this year?

MR. MCCORMICK: I will ask Mr. Snelgrove to address that, whether or not the increase this year was any different than last year?

MR. SNELGROVE: There is no significant increase in applications, neither have we seen much of a decrease. It is pretty well level. There are somewhere between 14,000 or 15,000 applications a year. It has been like that for the last two to three years.

MR. CHAIRMAN: So eventually we are going to get to the point where our post-secondary registration is going to start dropping, too, undoubtedly?

MR. SNELGROVE: I guess (inaudible).

MR. CHAIRMAN: No. I guess I am trying to point out that if we can hold the amount of money that the Province is putting in and even what we are getting from the Federal Government, well then our students will not be any worse off. The worst of it is if they start saying, `If you are students now you need fewer dollars,' and start going backwards. Because, without the Student Aid Programme very few of our students would be able to attend post-secondary institutions right now. It would be a shame to see them deprived because of the cost.

MR. RAMSAY: I have one question, Mr. Chairman.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: In a lot of our groups, as you just said, Mr. Chairman, is there a figure, as far as quantity of students that avail of student aid and provincial grant funding, who graduate. Is there a percentage rate? Say, do 70 per cent of people who avail of student aid graduate, do 50 per cent, or 30 per cent? Is there some quantification of that?

MR. CHAIRMAN: Mr. McCormick.

MR. MCCORMICK: Mr. Chairman, I am not sure if we have that. In a study that was recently completed there was a certain amount of data generated in terms of participation. I am not sure if we have the information regarding the number of students that complete, because most of it is geared around a maximum of twenty semesters per student who can access student aid. Because those might be students who are doing three credits a year, or could be doing six credits a year, I am not sure if we can say they have completed their degree or not. The only way we could indicate that is whether or not they started to make payments on their loans after six months, in which case they have stopped their studies. The completions, I do not think were in that data. If the member is interesting in following up, we could have the Division look at the report that was done to see if we have that data. I do not recall it.

MR. RAMSAY: Yes. Perhaps you could send it on the Committee and we will distribute it to the members, just as a point of interest.

MR. MCCORMICK: Sure. We will check and see if we have that data. The question is: What percentage of the students who are receiving financial assistance under the Student Loans Programme are completing their studies? Is that correct? Whether it is a degree or a diploma.

MR. RAMSAY: Yes. I am sure that might be extrapolated from the average figures of those who complete and the average number of students who might be utilizing student aid anyway.

MR. MCCORMICK: We might be able to get that straight from the Canada Student Loan Branch of the Secretary of State. That might be available. We will check that out.

MR. CHAIRMAN: One of the major problems, I guess, faced by members of the committee and other MHAs in relation to loan repayment - now, I know this is not your shop, it is on the federal side, but undoubtedly you are involved. The first call is always to the Student Aid Division and whatever. Where students are graduating, finishing, or leaving the institution and have been out for the six months and are expected to start repayment, but have not been able to find employment, what are the procedures there and what are the regulations in relation to repayment?

MR. SNELGROVE: Students are required to repay Canada Student Loans six months after graduation. The loans are interest free while they are in full-time study and for six months thereafter. After the six months, if they are still unemployed or have physical or mental disability, they can go back to their bank and apply for interest relief. What that means is the Federal Government will extend the loan payments for a period of up to eighteen months in addition to the original six. They will allow the interest relief in blocks of three months at a time. Every three months you would have to apply, but you could extend your payments and your interest free period for an additional eighteen months. But you have to go through your bank to -

AN HON. MEMBER: Is this a total of two years.

MR. SNELGROVE: Yes, twenty-four months of interest relief.

MR. CHAIRMAN: Mr. Ramsay.

MR. RAMSAY: Under collection you talk about the loans repayment, collection of, say, your accounts receivable. What methods do you use? Do you ever go the long arm of the small claims court or is it just the friendly notice that arrives quarterly and no other efforts made to reclaim it? How does that work?

MR. SNELGROVE: It is just a friendly notice so far. Last year we have gone through some recoveries through the teacher's payroll for people in that system and we are presently looking at the public service payroll to try and get some money back. If the accounts are not paid we keep them in view all the time. If a student applies for assistance and they are in the accounts receivable we just refuse the application until the account is taken care of. But we have not gone to the small claims court yet, that is an option.

MR. RAMSAY: I was just wondering, you mentioned that was back in 1975 and I am thinking of seventeen years ago almost, some of these must be very severely in arrears so there is no interest added, I would say.

MR. SNELGROVE: There is no interest on it but we are getting some of those back now so that people are coming back to school to re-educate and as they are applying we provide the notice, and the notices are in their file and we find that we are getting some payment back on it.

MR. CHAIRMAN: Mr. Snelgrove, how many people are employed at the Student Aid Division?

MR. SNELGROVE: We have thirteen full-time positions and four summer positions, seventeen positions in all, but we could do with twenty.

MR. MCCORMICK: We are efficient we do with seventeen what we normally do with twenty.

MR. GOVER: That is a perfect bureaucratic statement, we can do it with seventeen but we need twenty.

AN HON. MEMBER: But we might be able to manage with thirteen.

MR. CHAIRMAN: Mr. Hart do you have any concluding comments, Sir?

MR. HART: No, I would just like to say that we are not insensitive in the audit office we are very aware of the need of providing student aid and that sort of benefit within the Province.

Our concerns are basically systematic in nature, I guess, from an audit point of view. First of all, I guess, it starts with the eligibility for receipt of student aid. Again, from an audit point of view we have to look at the criteria in place to make sure that those are followed religiously in determining first of all the eligibility for it and from that point of view once the aid is granted the system has to be such that it would properly record and document and make sure the proper reconciliation and supervisory procedures are in place. I guess, the third element would involve the collection of that once it is granted and once it is properly recorded. So, we are looking at the past record of delinquent accounts and that sort of thing and we believe that probably some improvements could be made in the area of the collection of those accounts.

Again, as I mentioned earlier, it seems to be a common problem but I think the Department has made great advances in going from their

manual system to a computerized system and they are considering all of the recommendations that were made and addressing them. We are hopeful that things will improve considerably.

MR. CHAIRMAN: Mr. McCormick.

MR. MCCORMICK: Mr. Chairman, I would just simply add that in response to the Auditor General we will certainly make every effort to clear up particularly the administrative items that probably can be fixed relatively easily. We also have undertaken to address the two or three major issues that have been identified. I certainly thank the Auditor General for the acknowledgement that we have made an effort to comply and to be as cooperative as we can. Certainly if the Accounts Committee feels that we need to do things that we have not done, let us know and we will certainly make every effort to do it.

MR. CHAIRMAN: Thank you very much and I am sure the recommendations made will hopefully appease the Auditor General in relation to his concerns and hopefully help you and your Division improve in your own areas.

We certainly thank you for coming in and we also have seen tremendous improvements in the area and wish you all the best in your new position. Hopefully, we will see all kinds of wonderful things happening again in the Department of Education.

That concludes our present set of hearings, we have exhausted our witnesses.

Meeting adjourned.