The Committee reconvened at 2:30 p.m.

MR. CHAIRMAN (Windsor): Order, please!

I don't see any media present, so I don't need to go through my usual instructions to the news media. For the benefit of the witnesses who are joining us this afternoon I'll introduce the members of the Committee. To my right is Mr. Tom Murphy, who's the Vice-Chairman, MHA for St. John's South; Mr. Danny Dumaresque, MHA for Eagle River; and Mr. Garfield Warren, MHA for Torngat Mountains. My name is Neil Windsor, MHA for Mount Pearl.

I would like to ask Mr. Randell perhaps if you would introduce the people whom you have with you this afternoon who were not here this morning.

MR. CLARENCE RANDELL: Thank you, Mr. Chairman. The people with me this afternoon were not with me this morning. On my immediate left is Ms. Elizabeth Batstone, who is the Director of Cultural Affairs for the Province. On Mr. Frost's right is Mr. Wayne Guzzwell, who is the recently appointed Manager for the Arts and Culture Centre in St. John's.

MR. CHAIRMAN: Thank you very much. The Auditor General's people we've met and I assume the witnesses know most of the people involved. Do you want to go through it?

MS. ELIZABETH MARSHALL: Bill Drover, who I introduced this morning; Wayne Moores who is a Senior Auditor; and Bernard Howlett who's an Audit Manager.

MR. CHAIRMAN: Okay, thank you very much. For the benefit of the new witnesses the purpose of our meeting is basically to gather information. It's no more than that. We're here to listen to your views on the items that have been commented on by the Auditor General in this particular case. The Committee has a mandate to look at any number of things, things referred by the Auditor General's report, matters that the House of Assembly might refer to us, or items that we may, as a committee, feel are worthy of our consideration.

In this particular case, we're looking at an item from the Auditor General's report of which you are aware, no doubt, and we're simply here to gather information and ask questions and to try to get a better feel for exactly what happened. Our role of course is simply to report back to the House of Assembly.

The meetings are somewhat informal, although they're serious. As you see, we've taken our jackets off because it's warm in here. Feel free, if you have a valid point to make, to request an interjection, or if a question is directed to you and you think somebody else - Mr. Guzzwell or somebody - should answer it, please feel free to do that.

We have some witnesses to be sworn in, first of all, so we'll ask the Clerk to proceed with that.

MR. RANDELL: Mr. Chairman, if I may.

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: Before swearing in, I should point out that neither Ms. Batstone nor Mr. Guzzwell were employed in the department in any capacity at the time covered by this report. So I would suspect that most of the responses will have to come from Mr. Frost, with some help from Ms. Batstone.

MR. CHAIRMAN: Mr. Frost is not in the department now.

MR. RANDELL: No, thank heavens.

MR. CHAIRMAN: Are you still there?

AN HON. MEMBER: Yes, but I'm not with his department.

MR. CHAIRMAN: We have a hodgepodge of people from various portfolios.

I'm sorry for interrupting the Clerk.

Wayne Guzzwell

Elizabeth Batstone

MR. CHAIRMAN: Again, for the witnesses' benefit, we have a recording system. I ask you to speak into the microphones. Unless I identify you, which I try to do, identify yourself for the benefit of Hansard as those people will have to do the transcriptions later on. I'd just like to say to everybody, please speak fairly clearly, because this room is not great from an acoustics point of view, and some of our ears are not what they used to be twenty years ago.

The item that we're here to discuss this afternoon is a matter relating to the Cultural Affairs division, particularly the Arts and Culture Centres. Perhaps first I would ask Mr. Randell, do you want to make an opening statement as it relates to this particular item? Or Ms. Batstone?

MR. RANDELL: Since Ms. Batstone is more familiar, would you like to make any general comments about the operations per se?

MS. ELIZABETH BATSTONE: I'm not sure exactly what you might be looking for. I would certainly start by saying that I came into the position of Director of Cultural Affairs during early January of 1991. At that time, I think, Mr. Moores was already in our office, had been for I think some weeks or a month, and the audit was in progress at that time and continued on until I think it was some time around April. Wayne, I can't remember for sure. Around that time. So it was during the period that the audit was going on that I took over as Director of Cultural Affairs and, after the audit was over, obviously went through all the matters with Wayne at that time.

MR. CHAIRMAN: Thank you.

I normally go to the Auditor General first and ask for a statement from that side and then let you respond, so I have done it in reverse. If you wish to respond afterwards you may again, but I will ask the Auditor General if she has some opening comments to make to introduce this subject to us.

MS. MARSHALL: Thank you, Mr. Chairman.

Section 4.14 of the 1990-91 report to the House of Assembly deals with our review and evaluation of the Cultural Affairs Division and our audits of five Arts and Culture Centres within the Department of Municipal and Provincial Affairs.

The objectives of our review and evaluation were to ascertain compliance with legislation and also to review and evaluate the system of financial management and control.

Our audit disclosed several areas of concern relating to these centres, and I was not intending, Mr. Chairman, to go down through the fourteen items that are disclosed on pages 132 and 133 of the annual report, but they are there if anybody wishes to read them.

In addition to those matters, the following matters came to our attention. There were certain expenditures of the Cultural Affairs Division that were not in compliance with the Public Tender Act, 1984. Our review disclosed that no documentation existed to indicate quotes were obtained from at least three suppliers for certain purchases under $5,000 as required under Section 9 of the Public Tender Act.

Also, public tenders were not invited for purchases over $5,000 as required under Section 3 of the Public Tender Act, and the Minister of Works, Services and Transportation was not informed when a tender was not invited for amounts over $5,000 as required under Section 10 of the Public Tender Act.

The next matter that came to our attention was that complimentary tickets were issued to certain patrons of the Arts and Culture Centre, St. John's. Our review disclosed that the use of the complimentary ticket voucher was discontinued in 1988; however, complimentary tickets continue to be issued. Also, the guidelines for the issuance of complimentary tickets was not strictly adhered to.

As a result of our review and evaluation of the Arts and Culture Centres and the Cultural Affairs Division, we recommend that all legislation and operating guidelines and procedures should be strictly adhered to; the system of financial management and control should be strengthened; and the computer system control should also be strengthened.

MR. CHAIRMAN: Thank you very much.

Perhaps, unless you wish to make a statement or respond to any of that, we will move on with the questioning.

Mr. Murphy, would you like to open this afternoon?

MR. MURPHY: Yes, thank you very much, Mr. Chairman.

Ms. Batstone, I see on page 10 of the distributed document that you have already taken some action to correct some of the Auditor General's statements in a memorandum to all staff, dated March 27, to handle, of course, some of the discrepancies that were found through the audit. However, if you do not mind, perhaps a quick overview of pages 2 and 3, in responding to the findings of the Auditor General's Department, on the bottom of page 2 and continuing on into page 3, you might want to make some comment for the Committee there because I think a lot of the situations that were addressed by the Auditor General are contained in those two pages; so perhaps you might want to comment on that for us.

MS. BATSTONE: Yes. What I will do is run down through each of the findings and make a comment and give you some idea of the steps that we have taken in correcting some of the matters and problems brought to our attention by the auditor's report.

The legislation operating guidelines procedures mentioned in the first one, the legislation being referred to, I presume, is the Public Tender Act. Having gone through, in great detail with Wayne Moores after the audit was done, I subsequently set up a series of meetings with the Government Purchasing Agency, with Mr. Joe Day, and I think on one occasion with Larry Cahill, and discussed in great detail both with them and with my division staff present, exactly what these problems were and why we were encountering difficulties in adhering to the act.

We found that these meetings were very useful, and we have set up a relationship with the GPA that will allow us, whenever we are in doubt, to consult with them as to any particular thing that we have to do as to whether or not these particular circumstances warrant doing things in any particular fashion, and this has been pointed out in a memo of March 27 to the staff, that they are to have strict compliance with the act and where there is any doubt in their minds as to how to operate, they are to consult with Mr. Day, and clarify it before proceeding.

MR. MURPHY: Okay, thank you. Just one other thing in the memorandum that you issued. I suppose there is no one who is more familiar with complimentary tickets than the Chairman and myself with all the hockey we played over the years and what have you. We were always ready to put our hands out and take a couple of tickets for someone to come down and watch us make fools of ourselves. However, complimentary tickets I suppose can get carried away with in some instances. It is not specific on that. It says that complimentary tickets will continue to be issued according to the policy and guidelines already in effect. Would you be a little more direct for the committee?

MS. BATSTONE: During the time, I think in 1983, when Len Simms was the minister in charge of the department of which the Cultural Affairs Division was part, a policy was put in place concerning the issuance of complimentary tickets, not only for the St. John's Centre but all the centres in the Province and that has been in effect ever since and I think the Public Accounts Committee was sent a copy of that. I have reviewed it subsequently with my staff since taking the position of director and we have found that it is adequate. The problem I think being referred to in the audit, had to do with the process that was being used, in that complimentary ticket vouchers which were supposed to be pre-numbered and issued through the manager of the centre, that particular process was not always faithfully adhered to and this has subsequently been corrected and in discussion with Mr. Guzwell, we feel satisfied that we have a system in place now which will take care of that to the auditor's satisfaction.

MR. MURPHY: Okay, thank you. I will pass on to one of the other members.

MR. CHAIRMAN: Mr. Dumaresque, would you like to -?

MR. DUMARESQUE: Thank you, Mr. Chairman. I noticed when you said that the process is now in place, where this will not happen again in terms of the issuing of funds outside of the Public Tendering Act, have there been any instances since this, where, anything like this has come up? We have run across the situation as the last couple of days have shown where staff at various levels of the division seemed not to know the policy of the Public Tendering Act, or indicated ignorance for the benefit of their past experience, so are you happy that all the staff out there fully appreciate the limits of the Public Tendering Act right now?

MS. BATSTONE: One of the steps that I took immediately in consulting with the Government Purchasing Agency, and I think you will note in the memo I sent out on March 27 that all staff were to obtain a copy of the Public Tender Act, and that they were to familiarize themselves with it thoroughly and where they needed clarification they should seek it. I made it clear to them in the meetings with the Government Purchasing Agency people, that ignorance of the act would not be acceptable as an excuse for not complying with it.

MR. RANDELL: Mr. Chairman, may I just interject?

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: One thing I should point out is there was a suggestion in the process that we should be calling public tenders for the acquiring of any service, goods or services, in excess of $5,000; even to the point of suggesting that we should go to public tender for the various performers we book for the centres. I just cannot see any logic or reasoning in that. If you are going to bring in the Winnipeg Symphony Orchestra or the Ballet, you are not going out to tender how many are going to offer their services at what cost to come to Newfoundland.

MR. CHAIRMAN: No, I do not think we are suggesting that.

MR. RANDELL: I am not suggesting you are (inaudible).

MR. CHAIRMAN: While we are on this, that struck me as I was reading through the documentation here and we will get into further questioning later, but the concept of operating a bank account, paying the performers directly - maybe in some cases you need to do that but would it not be possible to have these performers issue an invoice and a cheque be issued through normal channels? I was just wondering why it is necessary to pay cash on the barrel head there for that sort of thing. You are not doing that?

MS. BATSTONE: There is no cash - are you talking about cash as in money or in cheque?

MR. CHAIRMAN: I was reading documentation here, and I remember from my reading last night that there was a bank account maintained. Is that no longer in existence?

MR. BATSTONE: Yes.

MR. RANDELL: Mr. Chairman, I should make one other point clear. Now I don't want to get into personalities here, but we had some serious problems with the management at the Arts and Culture Centre for a number of years past. There was disciplinary action taken, et cetera, and without bringing up any names, the people are no longer with us. I am confident now, even though they are no longer with our department, that with Mr. Guzzwell there as manager that a lot of the problems that were encountered before no longer exist, and that is certainly one of them, sir. There is no question.

MR. CHAIRMAN: But let me ask again. Are we still issuing cheques to set up a bank account instead of issuing a direct cheque from the centre for that, Mr. Frost?

MR. FROST: If I can respond, Mr. Chairman, the answer to your question is yes. We still use that method and there is a good reason for it, that is the operation of theatres is not your normal government operation, it is a little different. Basically what happens is performing arts companies come to our theatres and they enter into a contract with us previous to coming, and they are told that they and we get a certain amount of the ticket receipts for the performances. The scenario quite often is they will finish their show at 10:00 or 10:30 p.m. and they want their trucks loaded up with their sound equipment and their scenery and props and be out of there by midnight, and they want the cheque in their hands before they leave. That is the reason for this.

Quite often performers and performing arts companies are paid within hours after their last show when we can compute who owes who what. Therefore they are given their cheque and sent on their way.

MR. CHAIRMAN: Well I can see there certainly could be exceptions where that would be required, but it would seem to me that the general case would not have that kind of urgency, that they could be paid within twenty-four or forty-eight hours or something. Is that not possible? Surely you don't have all the performers skipping out of town in the dark of night. They are going to be around for a day or two.

MR. FROST: Mr. Chairman, quite to the contrary, many are gone the night or the afternoon of their performance. They have aircraft to catch, they have trucks to put their equipment in. While I see no problem in waiting twenty-four hours in many cases, and in many cases it may even be longer than that before they get paid, but quite often part of the deal is these people are on the road travelling all over the world, and they have their managers with them, and they want to clue everything up before they leave town. That is how it operates, as I have said. The theatre operation is rather different and does not conform to your typical government operations.

MR. MURPHY: Just for clarification I would assume then what you are saying is that in a lot of contractual arrangements with groups and or theatre companies, or what have you, they get a base rate guarantee for their performance and a cut, I suppose, on the tickets that are sold?

MR. FROST: Mr. Chairman, it can become quite complex. At times somebody simply hires the whole theatre. For instance VOCM may say we want to rent your theatre for ten nights because we are bringing down the Carlton Showband for ten evenings. We charge VOCM a standard preset rate to rent the facilities and there are variations there. Do they want us to issue the tickets through our own ticket office with our own staff or do they wish to issue the tickets through various venues around the city? There are different costs involved. Do they wish us to provide ushering services or are they going to do it? Do they want us to have the coat check service available? There is a set charge for all of this. So if that is decided upon there is simply a straight rental. It is none of our business, in a sense, how much money or revenue was earned as far as the Carlton Show Band is concerned. VOCM has paid its rental. We make money on that rental. We do it for profit. VOCM takes its share and gives the other part to The Carlton Showband. We're not involved in money changing hands.

The other scenario: it's where we ourselves enter into a contract directly with a performing arts group. We say: alright, the take will be 70-30. We know that perhaps they're a well-known group, they're very polished, they have a very good following here. We book them for five or ten nights, and it is a split of the actual ticket sales. In that case it's usually important to the group that finances be concluded very quickly after their last performance. It's a case where we take a split.

There's also the other case that you suggested, Mr. Murphy, whereby we'll agree on a set fee for a concert, and revenues over and above that fee will be split a certain way. This is often done particularly for Newfoundland performing arts companies when there is some fear that they will actually lose money. Part of our mandate is not just to put on performing arts for the Province, but it is to support our local, Newfoundland performing arts companies. We are once in a while prepared to take a loss on that, so that we will guarantee them so much, even though that revenue may not be achieved.

So there are quite a number of scenarios, but basically, that's how the system works.

MR. MURPHY: Okay. Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Dumaresque?

MR. DUMARESQUE: I'm finished.

MR. CHAIRMAN: Mr. Warren.

MR. WARREN: I just have a couple of comments to make. Ms. Batstone, you did say that now with respect to complimentary tickets, it's sort of better organized and better run now than it has been, and maybe it should be. I notice a letter here from Mr. Simms in 1983, page 21, and I notice number ten. It does say: "A monthly report shall be furnished from each of our Arts and Culture Centres listing the number of complimentary tickets...." Is that followed now?

MS. BATSTONE: Yes.

MR. WARREN: Are there any other criteria other than those ten listed that either he or she can receive a complimentary ticket?

MR. BATSTONE: I'm not sure that I get the impact of the question. Are you asking whether anybody other than those people listed here are authorized?

MR. WARREN: No. I'm asking if anyone can, other than for those ten reasons for a complimentary ticket being issued, are there any that are not within those ten groups, who could receive a complimentary ticket.

MS. BATSTONE: No. The ten instances that are listed here outline the scenarios that generally come up. The one that really covers the widest possible range is number 4. Papering. Which means that in the theatre business it is considered necessary and even desirable at times to ensure that the performance that goes ahead does not go ahead to an embarrassingly empty auditorium. There are instances where it is necessary, for whatever reason, to ensure that there is a good-sized audience in place. In that case, a large block of tickets might be offered to - it could be a senior citizens group, a couple of schools, a particular group that we would like to see there. That's referred to as papering.

This would only take place under specific circumstances where it was called for and where it was absolutely certain that these seats would not have normally been purchased by anybody. Outside of papering for that reason, the other ones that you see listed there are the ones - we get requests on numerous occasions that we turn down.

MR. WARREN: I guess it probably is a case where an individual is taking advantage of one of the ten criteria that have been listed. Again, I guess, you answered the question. When you need somebody to fill a particular section you may place a call and say: look, can you come down tonight, sort of thing. Which has happened probably - I don't know about other members here - but to me on a number of occasions.

MS. BATSTONE: Yes.

MR. WARREN: Is it very frequently that this will happen?

MS. BATSTONE: No, I wouldn't call it frequent, in the last couple of years we've been very pleased with the response to our programming. In the St. John's Centre we've been maintaining close to at least half house on most of our shows. Whenever there's a half house, papering is not necessary, asking other people to come along who we'd like to see there to make sure that they know what's going on in the Centres, that they're going to be able to speak about the programming and encourage others to come - yes, I think that's a tremendously good investment in the use of complimentary tickets when those seats would have remained empty outside of that.

MR. WARREN: Again I go back to Mr. Randell's comments earlier, without bringing any personalities into the picture, if you now get a call from a particular group or a particular individual asking if they can receive one or a number of complimentary tickets, can you outline very briefly the procedure that you're following now that was not followed twelve months ago, or two years ago?

MS. BATSTONE: Generally, the request for complimentary tickets goes to the manager. In St. John's it's also frequent that it might come directly to me or to our programming manager or one of our other staff. Mr. Guzzwell and I have been discussing as recently as yesterday that all requests that come through - whether they come through to Mr. Frost, to the minister or to me - be channelled for signing through the Manager's office. If there is any discussion to take place as to whether or not a request is legitimate, that Mr. Guzzwell would consult with me and we would make a joint decision as to whether this was appropriate.

MR. WARREN: Okay. Thank you.

MS. BATSTONE: By the way, this goes for the other managers in the other Centres.

MR. WARREN: I have a couple of other short questions, Mr. Chairman, if I can continue.

MR. CHAIRMAN: Go ahead, Mr. Warren.

MR. WARREN: Mr. Murphy earlier asked you to go down through the findings on page 2 to 3, but after you got -

MS. BATSTONE: We got sidetracked.

MR. WARREN: Yes, after you got through one or two I think we got just off course a bit. I noticed the last two items there on the findings, swimming pools. I would assume we're no longer with swimming pools.

MS. BATSTONE: No, the swimming pools are not under the aegis of the Cultural Affairs division and we, I think, have informed the Public Accounts Committee that we would not be answering for those two items.

MR. WARREN: Okay. Including the swimming pool in Happy Valley - Goose Bay?

MR. RANDELL: Yes, that's correct.

That was never under the Cultural division, Mr. Warren. That comes under the Sports and Recreation division, which is still with our department, in fact.

MR. WARREN: Still with your department, but not under the Cultural Affairs division. Okay. My final question. I go to the Public Tendering Act, particularly on page 14, where we did exceed $5,000 as required under the Public Tendering Act. In particular, Robinson Blackmore and Moore Business, and so on. I notice there are some notes taken there. This is probably a little bit unfair for you, Ms. Batstone, but maybe to Mr. Randell: weren't there any avenues open to other suppliers other than those listed there?

MR. RANDELL: In 1987, sir, I have no idea.

MR. WARREN: Maybe Mr. Frost.

MR. RANDELL: Mr. Frost might be best to answer that, but we didn't pay for these goods. They were purchased on behalf of the Provincial government.

MR. CHAIRMAN: Mr. Frost.

MR. FROST: Mr. Chairman, I'm unable to answer this with accuracy for the reason alluded to by Mr. Randell a little earlier. We had a difficult time in our history where we were without a Director of Cultural Affairs for two years. It's during this two-year period that this particular audit had taken place. I think it's fair to say that when someone as important as a director is missing, things within the organization can become rather loose. It's for this reason that I'm particularly grateful to the Auditor General's department for pointing out to us some of the deficiencies that were taking place.

As well we did have, as was said, particular difficulty with one particular employee, who was retrained by us and was also suspended without pay on several occasions. I think it's fair to say that that employee was the cause of many of the things mentioned in this report. That employee is no longer with us, and I have to say that I'm unable to answer Mr. Warren's questions directly, as I had no direct knowledge at the time of these things that had taken place.

Since the Auditor General's department brought these matters to our attention we have held staff meetings, we have gone over each item mentioned in the Auditor General's report, and made it quite clear to all our staff that they must comply with all rules and regulations. So I've been a little long to say that I apologize that I can't answer directly the question, but I hope you'll understand the reason for that.

MR. WARREN: Mr. Chairman, just one question to Mr. Frost. I understand there was a period of time that you never had a director. However, I think if we go back to October 30, 1987, was there not a Director in place at that time?

MR. FROST: I'm sorry, yes, in 1987 there was, Mr. Warren.

MR. WARREN: Yes. Okay. So we look at the Robinson Blackmore issue, we did have a Director in place at that particular time.

MR. FROST: Yes, that's correct. But I would not have been made aware of this as being a problem until someone brought it to my attention and obviously the Director at the time didn't do so.

MR. WARREN: Thank you, sir.

MR. CHAIRMAN: Mr. Murphy.

MR. MURPHY: Yes, Mr. Chairman. It would seem to me, even though I guess the letter of the law was not followed in this, what I read into the October incident at Robinson Blackmore was that our friends at Coca-Cola through an advertising promotion reimbursed the Arts and Culture Centres, six of them, for a total of 200,000 envelopes that would contain tickets. I really don't have a problem with that, because this was a recoverable amount and I can understand - you know, it would have been better if Coke had gone out and bought envelopes, obviously, then it wouldn't have gotten into the accounting system of the Arts and Culture Centre.

AN HON. MEMBER: We paid for half of them.

MR. MURPHY: Yes. We paid half of it, and I suppose, Mr. Chairman, it might indicate that - well, on page 14, it says: "Recoverable expense - Provincial Beverages were invoiced in two instalments of $6,399.60 each." So what I'm reading here if this is fact is that they paid the whole shot. Is that what I'm seeing here?

MR. FROST: I find your comments astute in that it is just unfortunate that the letter of the law was not applied at the time.

MR. MURPHY: Yes. If I just might make one more comment. I get a sense this afternoon from the enthusiastic responses by the Deputy and by the Assistant Deputy, and the confidence of the new Director, Ms. Batstone, that we're dealing with a different situation than we were this morning.

AN HON. MEMBER: Yes.

MR. MURPHY: I sense that these things seem to be well under control now, under the directorship of Ms. Batstone. I think that the audited statement by the Auditor General has been looked at extremely closely. Ms. Batstone, I understand that's what you've said to us., The purchasing situation seems to be clarified. You have a good liaison now, a satisfactory liaison with GPA as far as you're concerned. They've offered you advice and services. I would expect as a Committee member here that if we should be in this position again to look at what's taking place at the Arts and Culture Centres through your division, that we would see a dramatic change in the report from the Auditor General.

These are niceties, but they're niceties because that's the way I feel as a Committee member at this point in time. With that statement, Mr. Chairman, I have no more questions.

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: Mr. Chairman, I just want to make one point perfectly clear. This information is not coming forward to alibi for what transpired. We're still responsible, irrespective if we had four chimpanzees running the affairs for the last ten years. The bottom line is, it wasn't done correctly, we are responsible, and I certainly hope to God it's corrected now.

MR. CHAIRMAN: Thank you. Perhaps I can ask the Auditor General, in reading the documentation that was provided to the Committee there were numerous letters back and forth, it appears that matters had been dealt with. Are you reasonably satisfied now that corrective action has been taken on pretty well every item?

MS. MARSHALL: Yes, based on the information that has been relayed by the department, and by the Cultural Affairs Division, there is an indication that there has been significant improvements regarding the matters that were brought to their attention.

We have not carried out a subsequent audit to verify that the changes have actually been implemented, but I feel assured that there has been a significant amount of improvement.

MR. CHAIRMAN: Well I do not see much point in sitting here all afternoon talking about things that were in the past which these people were not involved in and that corrective action has been taken and everybody is happy with. It does not seem to make a lot of sense.

I do not want to get into the details because there are so many items here that have been dealt with that I do not think it serves a worthwhile purpose. I do want to ask a question about the passes at the pool in Gander. That matter has now been dealt with or something. The handling of the tickets, I think it is referred to here, for the swimming pool in Gander.

AN HON. MEMBER: Yes.

MR. CHAIRMAN: That has been dealt with?

MR. RANDELL: Yes it has.

MR. CHAIRMAN: I assume. It was very, very, loose according to the documentation we had here.

MR. RANDELL: We have colour coded the tickets; I think that is correct. The one problem we still have not been able to come to grips with is the matter of the turnstiles where you deposit the tickets in terms of whether it is an adult or a junior passing through that turnstile when they drop the ticket. I do not know if we are going to have to put in cameras there or what.

MR. CHAIRMAN: At least you can reconcile the number of people.

AN HON. MEMBER: Yes, the number situation has been taken care of.

MR. CHAIRMAN: And the cash should be reconciled with the number of tickets of each type and that.

AN HON. MEMBER: Yes.

MR. CHAIRMAN: So there is some control.

Ms. Batstone, you wanted to say something?

MS. BATSTONE: No, what I wanted to see was - you do not want me to go down through the rest?

MR. CHAIRMAN: I really do not see any sense. If the members of the Committee wish to ask any questions on it, or hon. gentlemen - if everybody is content that this happened in the past; we know it was wrong; it has been dealt with; we recognize the Public Tender Act has to be followed; proper procedures are now in place to give us better control over accounting and all the rest of it, then why are we here? It is too nice a day to be sitting here talking about history that has been corrected.

We can learn from history but I do not want to relive it.

Mr. Warren, you wanted to say something?

MR. WARREN: I just said to the Auditor General that we should have the meeting out in the park.

MR. CHAIRMAN: I agree.

Mr. Murphy.

MR. MURPHY: I just wonder if the Auditor General might be able to inform the committee: is it the Auditor General's intent to do a follow-up now?

MS. MARSHALL: Yes, we will be doing a follow-up on the Arts and Culture Centres and also the Cultural Affairs Division. There is no audit ongoing at the present time and the audit schedule for the next audit cycle will take place some time in early October. So whether it will be done in the next year or the subsequent year I do not know at this point in time. We sort of weigh what our priorities are.

MR. MURPHY: Well I would think that would be the flag, whether it be green or soft orange or red. Again, I do not anticipate it would be red, but that might be the flag that would wave in front of the Chair and he might very well want to, at that time, come back. But I would suggest that what I have heard this afternoon, and what I have heard from the deputy and assistant and director, that I am satisfied that things are now changed from where they were, and I would hope that my observations are correct.

MR. CHAIRMAN: I am not sure if you are looking for complimentary tickets (inaudible).

Mr. Warren.

MR. WARREN: My question probably is to Ms. Batstone. I notice you have a very small uncollectible account. Is this up-to-date uncollectibles, which is probably only about $200 or $300?

AN HON. MEMBER: What page are you on?

MR. WARREN: I am on page 43. Is this up-to-date uncollectibles? I must say, to see such a small amount for such a large business, it is very, very, small.

MS. BATSTONE: Those have been followed through by our administrative officer, Beth Ann Channing, and I do not have the details on each one of them but I know some of them have been written off, and I think one of them has been collected, but I do not have the details as to which ones.

MR. WARREN: But there are no other newer ones than this?

MS. BATSTONE: Sorry?

MR. WARREN: Are there any other newer ones?

MS. BATSTONE: Not to my knowledge today.

MR. CHAIRMAN: Mr. Randell.

MR. RANDELL: It is quite possible, Mr. Chairman, that occasionally you get an NSF cheque and you have to go back over and collect it, but generally if they are kicking around for two or three years and not able to be collected then we, as we have done quite recently, went back to Treasury Board for approval to write it off. Of course, Sir, as a former President of Treasury Board you can realize Treasury Board does not automatically write anything off.

MR. CHAIRMAN: Not very easily.

MR. RANDELL: No. They say: make sure you've gone through every process imaginable to mankind before you come to us.

MR. CHAIRMAN: Normally with great reluctance, on behalf of the departments, I might add, who would rather write it off.

May I just ask, on page 15 of the report it talks about payments to Appa Communications for services rendered. I would assume this was done without tender. These amounts were both over $5,000. How did Appa come to be the agency that does this creative work for us? Was there a proposal call or a tender call for those services? How long have they had this contract, and what is the term of the contract?

MS. BATSTONE: As I understand it, just previous to my taking this position, Appa Communications approached Cultural Affairs through our programming manager and made a proposal to them regarding developing a particular program cover and covers, and a showtime publication, which was vastly different and considered to be much more effective than what was presently being used at the time. They undertook, in conjunction with the Cultural Affairs division, to do a developmental process for these publications, whereby they would also solicit advertising and that sort of thing. So that part of the cost would then be picked up in that regard.

It was a developmental process, which is we're now I think almost to the end of. Once we're satisfied that what has now been developed is the kind of vehicle that Cultural Affairs wants to use, then the contract will be put to tender, as it would normally be.

MR. CHAIRMAN: So it was not tendered. When they came with a proposal to do this for you there was no proposal call then?

MS. BATSTONE: No.

MR. CHAIRMAN: Quite often, groups and agencies will come to government and say: we have an idea. They will be told: it's a good idea, and we appreciate your initiative, but we should invite proposals from other people who could do this as well. That is done. I take it that was not done.

MS. BATSTONE: I wasn't there at that time. This was during the period of time, I think, referred to when the Director's position was vacant. Again, discussions have taken place with staff as recently as this week concerning just where this process is right now. So that what you see here as having been expended without public tender will, when this process is finished that they've been developing, that this will then be going to public tender as required.

MR. CHAIRMAN: So this is fairly recent. This is 1990, according to this, that this took place.

MS. BATSTONE: Yes.

MR. CHAIRMAN: Any other questions?

MR. MURPHY: No, I'm fine, Mr. Chairman, I'm satisfied.

MR. CHAIRMAN: Mr. Warren? Does the Auditor General wish to make any -

MR. WARREN: Just one short -

MR. CHAIRMAN: Mr. Warren.

MR. WARREN: - comment, Ms. Batstone. Maybe it's probably out of the realm of this particular report, but approximately what revenue do you receive - or expect to receive - during the issue of parking tickets at the Arts and Culture centre?

MS. BATSTONE: That's under WST, we don't collect.

MR. WARREN: Is there any coordination with -

MS. BATSTONE: No, we don't involve ourselves in Works, Services and Transportation business.

MR. WARREN: No coordination at all?

MS. BATSTONE: No.

MR. WARREN: Okay.

MS. BATSTONE: If you get a ticket, it's not from us.

MR. WARREN: I don't.

MR. CHAIRMAN: Mr. Frost, you wanted to add something?

MR. FROST: I just wanted to point out, there is no coordination between us and the security people who work for Works, Services and Transportation, but there is obviously coordination when specific requirements are there for particular dignitaries and what have you who may be visiting. We have absolutely nothing to do whatsoever with the issuance or otherwise of parking tickets. That's purely Works, Services and Transportation's domain.

MR. WARREN: I know the biggest concern from the general public is when you have the Kiwanis Music Festival, or the school groups performing, because that's just a beehive of activity there. I'm sure you people are just as much concerned about it as Public Works is, and probably we as politicians are. Like I said, it's outside the realm of this particular issue. It is a concern that I'm sure that you're aware of.

MR. CHAIRMAN: Mr. Frost.

MR. FROST: Mr. Chairman, that point is very well taken. Every year there are discussions between ourselves and Works, Services and Transportation in anticipation of the Kiwanis Music Festival, and other large crowd-drawing events such as that, whereby it's made very clear as to what the parking problem was the previous year, what the need is this year. Then WST, which has the control, says: fine, there is a restricted area here, or an area that is really used for the University, that we will leave open that week because of the Kiwanis Music Festival, so there is good co-operation there but we do not pretend to try and tell them how to do their business.

MR. CHAIRMAN: I can assure you they are very efficient. Mr. Dumaresque.

MR. DUMARESQUE: Thank you, Mr. Chairman.

I just have a question and a comment I guess outside of this whole report, but I am just using this opportunity to ask the manager of the Arts and Culture Centre in St. John's about the emphasis that you play on seeking entertainment, certainly from various regions of the Province and I point that out because we just had four hours of tv and the Newfoundland show, and of the four hours, there was not five minutes of Labrador talent. I have had some submissions in the past from groups in Labrador about getting access to the various Arts and Culture Centres and I just wonder if you have a plan to see that Labrador culture, from my particular viewpoint, is a part of your program throughout the year, not unlike CBC who do not seem to want to take part in that.

MR. GUZZWELL: I won't answer for CBC anymore although I used to be a producer there. In the six months that I have been here, no one has made a presentation from Labrador, so I have not had a chance to hire them or not hire them. We do not seem to get many groups from Labrador presenting themselves to us, well in the six months that I have been there anyway; I do not know if Elizabeth knows of any in the past year and a half or so.

MR. CHAIRMAN: Ms. Batstone.

MR. FROST: Mr. Chairman, if I could comment?

MR. CHAIRMAN: Okay, Mr. Frost.

MR. FROST: I am sorry.

MR. CHAIRMAN: Go ahead.

MR. FROST: We do not have a mandate to choose performing arts from various regions of the Province. There is often confusion on this and if you listened to the radio yesterday morning, you would have heard comments about the St. John's Arts and Culture Centre versus The LSPU Hall in St. John's. They are completely different operations. One is for experimental theatre, where people learn to act, where people learn to write plays and what have you. The six arts and culture centres that we run are there to put on polished, highly professional acts that will respond to the needs and requirements of Newfoundlanders, as well, we do have a mandate to assist Newfoundland performing arts companies where feasible.

There is often a problem in finding Newfoundland performing arts companies with very high polished qualifications. To put on acts of poor quality destroys our reason for being there, people do not attend and we lose a fortune. However, Mr. Dumaresque's point is well taken in that we have made a special effort in the last couple of years to showcase good quality Newfoundland and Labradorian productions, to the extend where, I was very proud this past twelve months when our director had a showcase take place in Gander, a Newfoundland showcase.

The purpose of this was to allow Newfoundland and Labradorian performers, whether they be individuals or performing arts groups to come into Gander, and privately, in the theatre there, show our people what they could do and perform. Our people then chose from the best of those acts. I might say that they were all good, not all of them though were of main stage quality, so there is this problem that if a group does not advise us and let us see how good it is, it is difficult for us to make a choice. We have made, at considerable cost this attempt, by bringing groups into Gander and that has worked well for us, but I would caution that I would not want people to feel that we either have the mandate nor do we try to choose groups from various geographical areas of our Province.

MR. CHAIRMAN: Thank you. Mr. Murphy.

MR. MURPHY: I might comment, Mr. Frost, about your professionalism. When it comes to that review show and how polished it might be, you and I might want to debate that some time.

MR. FROST: Maybe not.

MR. CHAIRMAN: I think we have rapidly ground to a halt here. There are no further questions. Would the hon. gentlemen like to make a closing comment?

MS. MARSHALL: There is only one comment I would like to make on something that was referenced earlier, and that is there was some discussion on the fact that the centre was operating its own bank account. I just had some very brief discussions with my people as to whether it would even be possible for the Arts and Culture Centre to have its own set of financial statements. So I don't have a problem with them operating their own bank account from an audit perspective provided they follow government's policies and procedures and they have proper controls in place.

MR. CHAIRMAN: Yes. I pursued that line of questioning, and I can appreciate that there are a few situations there that need to be dealt with. I guess our only concern is that proper procedures are followed, and I am sure from what we have heard that can be worked out.

That being the case I want to thank the witnesses for taking the time in coming here this afternoon and giving us the benefit of their knowledge of the particular matters at hand. I thank the Auditor General and the members of her staff, the staff of the House of Assembly and my colleagues.

The meeting stands adjourned.