February 2, 2000                                                                        PUBLIC ACCOUNTS COMMITTEE


The Committee met at 9:30 a.m. in Room 5083.

CHAIR (Mr. J. Byrne): Order, please!

First of all, I am going to introduce the Committee.

My name in Jack Byrne. For those who do not know me, I am the Member for Cape St. Francis and Chair of the Public Accounts Committee. To my right is Tom Lush, the Member for Terra Nova, who is the Vice-Chair. I would like the other members of the Committee to introduce themselves, starting with Bob.

MR. MERCER: Bob Mercer, MHA, District of Humber East.

MR. SHELLEY: Paul Shelley, MHA, District of Baie Verte.

MR. FITZGERALD: Roger Fitzgerald, MHA, District of Bonavista South.

MS M. HODDER: Mary Hodder, MHA, District of Burin-Placentia West.

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

CHAIR: Okay. I would like to ask the Auditor General to introduce her staff.

MS MARSHALL: To my right, Mr. Chairman, is John Noseworthy. John is Deputy Auditor General with the office. To my left is Mr. Claude Janes. Claude is Audit Manager with the Corner Brook office.

CHAIR: Thank you.

Would the witnesses like to introduce yourselves, please?

MR. BUTT: Calvin Butt. I am Chair of the Avalon West School Board.

MS BROWN: Lorraine Brown. I am former Chair of the Western Avalon Roman Catholic School Board and I was interim Board Chair when the new boards were formed - Avalon West.

MR. RIDEOUT: David Rideout, Director of Education for the Avalon West School Board.

CHAIR: Thank you.

I believe we have some people from the department in the back of the room.

WITNESS: Not yet.

CHAIR: No?

MR. DOODY: Jim Doody, Comptroller, Avalon West School Board.

MR. SNOW: Eric Snow, Assistant Director of Finance and Administration.

MR. LEWIS: Dave Lewis, Department of Education.

MR. HATCHER: Gary Hatcher, Department of Education.

CHAIR: We have to swear in the witnesses who were not sworn in before. I think Mr. Rideout was sworn in before. Mr. Butt and the lady were not sworn in yet.

Swearing of Witnesses

Lorraine Brown

Calvin Butt

CHAIR: Thank you.

We also have Mark Noseworthy here, who is the Executive Officer. He is in the back right now. Elizabeth Murphy is the Clerk of the Committee, and Kevin Collins is doing the recording.

The Public Accounts Committee is a Standing Committee of the House of Assembly. We are there basically to be the watchdog of the public expenditures, of government spending of public funds. This hearing is a continuation or reconvening of a hearing we had back in September with respect to the Avalon West Board, and actually the Avalon East the following day, which we will continue tomorrow. It arose basically from the Auditor General's Report and some of the concerns that she brought forward.

At the last hearing, for those people who were not here, we did not seem to be getting the answers; the reason being that there was some overlap with respect to the previous boards, the interim boards and the present boards. There was a report that was commissioned by the Department of Education that the boards had not received and that we had received, the PAC, the night before the hearings. We did not think it would be fair to conclude without the boards having the opportunity to review that report and have you people back, and other people who are here now, who we thought might add some light to the situation. Basically from there the information was sent out and received, we know.

With this hearing this morning, we are going to take a break around 10:30 a.m. and then continue on. We are not sure how long it will go. What we would like to do is ... It is going to be difficult not to repeat some of the questions and get some of the answers that we had at the last hearings, because we have three new Committee members and we have new witnesses. I will try to, I will not say control the debate but at least try not to be too repetitive with respect to the questions and answers, although there are going to have to be some.

What I am going to do now basically is ask the Auditor General if she would like to make a comment before I get into questions, and ask Mr. Rideout or any of the individuals, witnesses, if they would like to make any comments, and then we will start the questions.

Ms. Marshall.

MS. MARSHALL: Thank you, Mr. Chairman.

CHAIR: I am sorry, one thing just before we continue: When you are speaking, can you please turn on your mike and identify yourselves? Okay.

MS. MARSHALL: I would just like, for the benefit of the new committee members, to give a little bit of background to the reviews that I carried out of the school boards over the past couple of years.

In 1997 I did a review of the new executive salaries, and that was in my1997 report. There was a table in that report that I thought might be of benefit to the new members so I will give it to Mr. Noseworthy to give to new members. It indicates items which in my opinion were in excess of the amounts that were approved by the Lieutenant-Governor in Council. That focuses primarily on salaries.

In 1998 I did an additional review. What I looked at in 1998 was this: the twenty-seven old school boards came into ten new school boards and I wanted to make sure that all the assets and liabilities of the old school boards got carried forward over into the new school boards. There are three issues coming out of that review. The first was that the ancillary funds and the trust funds in the school boards, nobody really had a good handle on how much money was out there. That was the first issue I identified.

The second issue was that the control over the fixed assets in all the school boards was inadequate. I was especially concerned about the movable assets, so that was my second concern. The third area that I looked at, again, was compensation and other benefits paid to employees of the board. That was the third issue identified in my report.

My understanding is that based on the reviews I carried out in my office - my reviews were on a sample basis - the Department of Education contracted with an accounting firm to go out and do an additional in-depth review of at least some of the school boards. This resulted in the Kirby Report and that was the report that was discussed at our last meeting. So that is basically a little bit of an historical background.

CHAIR: Thank you.

Dr. Rideout, would you like to comment, leading into the hearing?

DR. RIDEOUT: Mr. Chairman, I will just make a comment, I suppose, that we do have a new chairperson of the board with us today. He may not be as well versed in some of the issues as the previous chair because he just came on recently. However, we are certainly pleased to try to offer whatever clarification we can, realizing that for some of the items we are in the same position as the Committee. They relate to activities of previous school boards before our employment in particular, but we will try to help wherever we can.

CHAIR: Ms Brown?

MS BROWN: No comments right now, Mr. Chairman.

WITNESS: No, not at the present time.

CHAIR: Thank you.

What I am going to do is this. I will not start the questioning but I wonder would Mr. Mercer?

MR. MERCER: Thank you, Mr. Chairman.

Perhaps if I could start with a couple of questions related to the former boards? I understand Ms Davis, you are the Chair of the former Avalon North.

MS BROWN: I am the Chair of the former Western Avalon RC Board. It is Lorraine Brown.

MR. MERCER: I am sorry.

MS BROWN: That is okay.

MR. MERCER: We do not have Muriel Davis here.

DR. RIDEOUT: Mr. Chairman, if I could? Ms Davis is ill and informed us late yesterday that she would not be able to attend.

MR. MERCER: So there is no one here to speak to the Avalon North?

WITNESS: No.

MR. MERCER: We will skip to the Avalon West School Board. I have just a couple of questions dealing with the AG's comments and the comments made by Mr. Kirby. You have the Kirby Report, I believe, before you, or you have access to that report.

The question I need to raise with you is the issue of the people who were with the former board and who were declared redundant. Those employees, were any or all of those re-employed by the new District #9? Have any of those been re-employed?

MS BROWN: Yes, sir. My recollection would be that most of them were throughout the month of January-February 1997. Actually, for clarification, when Western Avalon - and I cannot speak to Avalon North obviously - dissolved on December 31, 1996, all our staff had been notified that they were declared redundant and there would be jobs available or open at Avalon West for which they would have to apply, or actually indicate that they wanted to be involved in the competition. We knew we would hire from within both boards but we did not at the time know if in fact they would all get jobs. So as of December 31 they were redundant; no jobs provided at that point.

MR. MERCER: In her 1998 report on page 92, the A.G. makes the following comment:

"In accordance with Government policy, employees who transfer between government organizations are required to transfer their earned leave entitlement and are not permitted to be paid for earned leave entitlement at the date of transfer. Our review indicated that both of the former boards paid some of its staff for unused vacation days even though these employees continued their employment with the current Board."

Care to comment on that?

MS BROWN: Yes, sir. I guess what you are referring to is that Western Avalon did pay out holiday pay or annual leave pay to probably five or six, I do not recall the exact number of employees. We were governed by a directive that said that we could pay out up to fifty days to people who were severed or declared redundant. I think it was early December with Western Avalon. Probably the first week in December our board met and reviewed the list of people who had outstanding annual leave on the books, and by minute of meeting made a decision to pay out to these people. Some people it was fifty days, others it was less than that, because these people were declared redundant. It was the board's opinion at that point in time that these people had no jobs after December 31, 1996, and had no indication that these people would be rehired.

MR. MERCER: Would the A.G. care to comment on that?

MS MARSHALL: The fifty days that you referred to, that policy, that referred to executives of the school board which would be superintendents and assistant superintendents. There was no authority to pay out these amounts that we identified during the audit.

MS BROWN: If I may speak to that, we also had in place in our board a collective agreement for unionized employees. We also had staff who were - like, I think the other staff at the time were non-unionized employees and they had their own contracts with the board. The contracts that we had with these employees followed pretty much along the lines of the NAPE collective agreement. You know, what NAPE negotiated for its employees we pretty much offered to our non-unionized employees because they had no labour contract as such, so they had a contract with the board.

MR. MERCER: So despite the A.G.'s comments, you felt by the collective agreements that you were working under there was authority, if you wish, to pay for unused annual leave days for these employees.

MS BROWN: My recollection is that I think maybe the people - well, there was an assistant superintendent I would think, or maybe he was - now, this was a while ago. I'm sure we don't name names here, but we were discussing our business manager at the time who was an executive of the board, and I think the secretarial staff were non-unionized. These people had contracts with the board and we offered to them what would have been available to the senior executive members.

MR. MERCER: You mentioned the business manager. In the case of that individual, my information from the Kirby Report is that the individual was paid for up to fifty days -

MS BROWN: Yes, he was.

MR. MERCER: - and then was permitted to carry over an additional fifty-three days to the new board.

MS BROWN: Yes, Sir. Do you want me to comment on that?

MR. MERCER: Well, if the board terminated these employees, and in your opinion they had no jobs, I am just trying to find the continuity between the old boards -

MS BROWN: Okay, I think I understand what you are trying to find out here. Yes, it was our understanding that they had no jobs. We did not know if they would be hired when the hiring process took place in January month. Our understanding was that we could pay out fifty days annual leave. Anything in excess of that, if they were severed, would be lost. So obviously if our business manager did not get hired by the new board, the Avalon West Board, and he had days in excess of the fifty - I think quite a few days in excess of the fifty - that we paid out, it was our understanding as a board that he would lose them if he did not get rehired. At the time, I think - to go back then, for the benefit of the Committee, you have to understand the atmosphere that prevailed at the time of this. We were creating a system that had never existed before. We were governed by rules - the Schools Act and the Education Act, obviously - by legislation. We were governed by certain directives that were open to interpretation, I guess, directives from the Department of Education; directives on which we often sought legal opinion.

The legal opinion at the time was that if these people did not get rehired, any days in excess of fifty were gone; but these people who did get rehired were allowed - and the Department of Education did not question this at all - to transfer their sick leave benefits, no question; it was not in doubt at all. Sick leave benefits were earned benefits, just like annual leave benefits were earned benefits. So, at the time of hiring then, when the business manager was hired into a new position with the board - it was not the AED position, obviously, but he was rehired - he was allowed to transfer his sick leave benefits. Naturally, the new board thought: Well, if you can transfer an earned sick leave benefit, without clear direction from the department saying that you could not transfer your other days, the board automatically assumed that if you can transfer one earned benefit then you can transfer two earned benefits. So, if you can have your sick leave, why would we throw his annual leave in the garbage?

CHAIR: Can I interject here?

I thought, when going through that material, that there was some direction from the Department of Education with respect to that issue. Would the Auditor General like to comment on that?

MS MARSHALL: I think the policy we are talking about here is the policy relating to executive employees of the school board. It says that you could get paid for up to fifty days of your accumulated leave and then you would lose the balance.

What happened in the case we are discussing now is that the employee was not a member of the executive but that policy was applied to him, so he did get paid for his fifty days. Ordinarily that person would lose all their other benefits, but in this case the employee got paid for fifty days leave; plus, they were able to carry over a lot of their benefits when they went with the new school board so it was like a combination. It was almost like cherry picking.

CHAIR: Your mike is not working.

MR. COLLINS: (Inaudible). You can use the other one.

MS MARSHALL: Okay.

Could I just make one more comment? I do not recall seeing any policy directive from the Department of Education regarding non-executive employees. It is something that maybe the Department of Education officials may be able to comment on.

CHAIR: Could somebody from the department comment on that? You have been sworn in before, though, so it still stands.

Mr. Lewis?

MR. LEWIS: That is correct. There was no directive set out for non-executive. It was just for directors and assistant directors.

CHAIR: If that is the case, and there was nothing in writing to give you the authority to do what you did, you are saying there was nothing in writing to say that you could not do it?

MS BROWN: Exactly. What I am saying to you, Sir, is that there were things that we had to apply by collective agreement to unionized staff. There were directives for executive staff, and in the middle of all this little grey area, or this cherry picking as the Auditor General just referred to, we had another person for whom there was nothing written; so the board, in its wisdom, decided: We won't make chalk of twenty-odd people and leave this person with nothing. That is the basis of the board's decision there.

CHAIR: Mr. Mercer.

MR. MERCER: It does seem to me, though, that you did make chalk of one and cheese of the other. By your own admission, the board that you were chair of, terminated employees. The board wound up its activities; it ceased to exist. You say correctly that you did not know if any of those individuals would get re-employment; yet, for one employee, he was permitted to get his fifty days of entitlement as per the policy - dating back to 1989, as far as the correspondence I see here - and also to carry with him fifty-three days which, upon termination, he would normally have been required to relinquish.

MS BROWN: I understand what you are saying there, but we did not make chalk of one and cheese of the other. All of the employees who came to the new board did that.

MR. MERCER: Did - ?

MS BROWN: Brought forward their leave, what they had left, if they had any left.

MR. MERCER: So all employees who were with the former board, who had in excess of fifty days of annual leave for which they were paid for by the previous board, carried the balance with them to the new board?

MS BROWN: It is my understanding that if they had any days left, they did. Now, I don't know how many days that would figure to - maybe the AG picked that up in her report - but it is my understanding that if they had them, they brought them forward. I don't know if in fact they had any great amount.

MR. MERCER: The only one we have here is the business manager, I understand.

MS MARSHALL: That is correct. We just did a sample of employees sufficient enough to indicate that there was a problem at the school board, and we turned it over to the Department of Education.

MS BROWN: It is my understanding, as chair of that outgoing board, that a lot of employees - I should not say a lot, but some employees for certain - did have days in excess of fifty. We could only pay the fifty. If they had sixty or seventy days and they were allowed to transfer their sick leave benefits, it made sense to us that if you can transfer one earned benefit then they brought the other ones forward too. That was the basis of the decision. I think there were other days brought forward, Sir.

MR. MERCER: So there was a decision given to you by the Department of Education that they could bring forward sick leave days?

MS BROWN: I don't recall a directive or a piece of communication, a written piece of communication, but what I do recall is that we did not have any gripes from the staff about losing sick leave. Had they lost their sick leave, we would have had a lot of grievances because we were dealing with unionized people too. What we applied to the unionized people we thought was only fair that we would apply to these other people who were under contract to the previous boards.

MR. MERCER: I have some other questions but perhaps later.

CHAIR: You say there is no documentation with respect to the carrying over of this extra sick leave, but wouldn't that have been in some of the employment contracts?

MS BROWN: Exactly.

CHAIR: You are saying you treated these people the same as the union people, but if it was not in their employment contracts then did you have the authority to do it? That is what the bottom line is.

MS BROWN: Mr. Chairman, that is exactly a point I guess I am trying to make in a convoluted way and it is not coming across clearly. They were under contract. When the boards dissolved, this was a whole new situation for education and for school boards. It had never happened before that we - well, that's not quite true. When we amalgamated the Placentia-St. Mary's R.C. School Board with Conception Bay Centre and North, we carried forward these benefits. They were carried forward, so I guess this wasn't really groundbreaking stuff at that point in time, but I don't recall ever seeing a directive that in writing said to us from any authority in the department that these people could or could not carry forward. The only directive I ever saw was that we could pay out up to fifty days, and if they were severed it would be lost to the system.

I guess the grey area is the fact that they were not really severed because at some point in time within the month, within two or three weeks, these people came back to us as a new board, came back to the new board.

CHAIR: Just to comment on that, in actual fact, technically, they were severed from the previous board. There was a new board created, a new entity or whatever you want to call it, and they were rehired. I think that is what we have to wrestle with ourselves here.

Auditor General?

MS MARSHALL: The other thing, I would just like to repeat what I said earlier: The fifty day policy related to directors and assistant directors. It was for the executive of the school board.

CHAIR: Mr. Fitzgerald.

MR. FITZGERALD: Thank you, Mr. Chairman.

Ms Brown, in your answers to some of those questions, you used the word "assume" many times. I can fully understand that if you are doing something new then there are going to be problems and everything will not be clearly written in directives. Wouldn't you, rather than assuming something, pick up the phone and call the Department of Education in order to get advice and ask if you can or can't do this?

I recall being a mayor of a municipality. Everything is not written in the Municipalities Act, but before you would go and disperse taxpayers' dollars you would pick up the phone and find what you could do and what you could not, the perimeters that you should follow. Why didn't the Avalon West Board do that?

MS BROWN: We did, Mr. Fitzgerald. Probably to set the stage for you, we had legal counsel who was giving us opinions on just about everything that we did. Most of these questions about sick leave transfer - we did not have a lot of clear direction from government or from the department.

I would take you back actually to the time that the new boards were brought together or formed in July and appointed by the minister. I was elected chair of the interim board shortly after that, early August maybe, some time in August. We began a series of meetings with the Minister of Education at the time, Roger Grimes. Once a month at least he met with the chairs of the ten new boards. We had all kinds of questions. We were wondering what do we do here? How do we approach this? How do we deal with this? He kept telling us: We are breaking new ground, we are flying by the seat of our pants, we are making rules as we go along. I remember on several occasions the chairs of the ten new boards would say to the minister and his people, his ADs and his deputy: This is going too fast. There are too many unanswered questions. There is too much we do not know. Can we slow down this process? Can you give us a year to make this happen so that we can do it well and do without all this doubt?

I will quote the minister. The minister said to us, on more than one occasion, that we are on a roller coaster going at breakneck speed. This has to be done right away, done fast. So there were all kinds of things that we were looking for clearer direction on and some of these things I am sure you will probably raise shortly.

We had legal counsel opinion, the firm that our board employed, the firm that the former board employed. We were constantly on the phone to the department. There were letters back and forth. There were some things that were never, ever clearly covered off. So.

MR. FITZGERALD: Surely, if you were breaking new ground and if you could not get answers even from the Minister of Education, wouldn't the status quo be the order of the day?

MS BROWN: Which is pretty much -

MR. FITZGERALD: Would that be the time that you would now go out and give people raises and give them other benefits, that clearly, in the reports that I have here, you did not have authorization to do?

MS BROWN: That is a matter for some debate, I guess, and discussion when you get into specific questions on those sorts of things.

MR. FITZGERALD: The other question I guess that I should ask right from the beginning is do you agree with the Auditor General's report?

MS BROWN: No, sir.

MR. FITZGERALD: Do you agree with the Kirby Report?

MS BROWN: Parts of it. I did read it. Now I did not read the Kirby Report or the Auditor General's report in its totality. I read mostly what pertained to Western Avalon because I believed that was what I was being called - and the interim board, that first year.

What I would say to you, sir, is that the Auditor General's report is well put together. I don't know a whole lot about accounting. I would say that when Ms Marshall examined the accounts and the activities of the boards, the former ones and the current board, she was looking at it from an accounting perspective. What I am saying to you is that there was more to it than an accounting perspective, and you had to live in a school board atmosphere or a situation at that time to understand what we were dealing with, how little direction and clarification we got, how many legal opinions we sought, and that we were dealing with collective agreements too. You referred to the status quo. We were bound to transfer these collective agreement benefits. We were bound. There was no question about that. We knew we had to do it. We were bound to do what the government told us to do with the executive compensation package. In the middle we had some non-unionized employees who did not figure into either one of these contracts. The board thought we would treat them in a fair and equitable way, just like we were treating unionized people and executives.

MR. FITZGERALD: Do school boards receive block funding from the Department of Education to pay salaries, look after maintenance for schools, and what have you?

MS BROWN: Yes, sir.

MR. FITZGERALD: You do. You people had no problem in giving executive members raises in excess of $1,000, in thousands of dollars from a step 25 - from what I understand from reading this report - to a step 33?

MS BROWN: With respect, sir, that was after my time.

CHAIR: Can I interject here? Because that is a point now, just for clarification. On that very issue, because I was going to bring it up next, when we were questioning at the last hearings in September -

MS BROWN: Yes.

CHAIR: I stand to be corrected on this, but from memory, when we asked those questions with respect to salaries and salary top-ups and what have you, I was under the impression that it had been committed by the interim board and the new board were just following through on the commitments made by the interim board. Is that a fair assumption to make?

MS BROWN: No, sir. That is -

CHAIR: Wait now.

MS BROWN: I'm sorry.

CHAIR: From what was said at the last year's hearing.

MS BROWN: Okay. I am sorry.

DR. RIDEOUT: I do not know if you are getting confused with some of Avalon East and the trust fund issue because I understand that was an item with them. In terms of any relationship to the step salary payment for senior executive, the contract that was signed was signed by the previous board, the interim board of which Ms Brown was Chair. The application of the provisions of that contract were handled by the subsequent board, following her.

CHAIR: Okay, what I am saying is correct then, that there were commitments made by the interim board and followed up by the current board. Because there were some questions with respect to the top-up in the salaries at that time. Did you not just say that the interim board made the commitments and the new board applied it?

DR. RIDEOUT: The interim board signed the contract and that contract had provisions in it which the board, after Ms Brown's departure, examined and said: These provisions mean that we should be paying at step 33.

CHAIR: Okay. Sorry, Roger.

MR. FITZGERALD: No, that is okay. Because it bothers me to no end when I see a scale put in place that clearly stipulates what a person should receive, and when we look at the education system in our Province today and we see schools with garbage containers out catching leaks and students not being able to access an education comparable with other areas, that we can allow school boards, in isolation I suppose from the Department of Education, decide to take extra money to pay staff over and above what it clearly stipulates those positions should receive.

MS BROWN: I think, Mr. Fitzgerald, that maybe I should supply a little background here. At the time of our coming together as interim boards - and all these meetings we had with the minister and his officials and the nine chairs of the other boards - we were provided with a salary package for the director and the assistant directors at that point in time. When we hired our directors and our assistant directors - I think all ten boards were in the same difficult position - we had no salary package. It was open to negotiation. We were still waiting on one from government. So we interviewed and hired these people and told them: We still do not know what your salary is.

At some point in time, shortly after their hiring, probably a month, six weeks, even longer - I do not quite recall, it is that long ago - we were offered a package by government that said: This is the salary benefits package that we will apply to our directors and our assistant directors. I cannot even begin to describe to you the kind of reaction that was felt throughout the Province. Because in some cases - and I can only really speak for Avalon West - at that point in time when we saw the salary package and discussed it with our director - he was to be the director of the second largest board in the Province, but would be the lowest paid director in the Province, because of the way of this step progression and where he would be placed on the scale sort of thing. Naturally, every board had problems with it.

We met with the minister again and over the course of several meetings, several conversations on the phone with Ms Florence Delaney who was in charge of finance in education at that point in time, we expressed our concern about this. We had directors throughout the Province who said they would refuse to take jobs with this type of pay scale. We did not agree with the pay scale ourselves, as boards. We had people who would double their workload, double the geographic distance that they would serve, double everything, and you were going to be paying them at a salary less than a superintendent of one of the individual boards that made up that new board.

We had great problems with that. We had difficulty holding on to our directors. They threatened not to take jobs, so we entered into a series of meetings and negotiations with Roger Grimes. They were quite heated meetings and they were frequent meetings. Finally, what the minister did say to us was: Okay, you can put these people, start them off - in the case of our board and other boards - on step 25 of the salary scale. You can do that, but you will take the heat from it publicly. I guess, sir, Avalon West interim board was prepared to take the heat publicly because we believed that the benefits package was not sufficient.

CHAIR: I want to interject here again because this is an issue that when I was going through the material, since the last hearing and during the hearing, I have a bit of a problem with. That is some of the correspondence from the minister to the boards, especially with respect to step 25 and step 33.

I saw it again - I don't know what page here - but on page 6 of the document that you have in front of you, this Public Accounts Committee here - it is out of the Auditor General's Report actually - there is this. Under Executive Salaries Not in Accordance With Cabinet Direction, section 5, it says: "The Minister of Education communicated approved salary scales to the district school boards on 25 October 1996 and at that time indicated that the boards did not have the authority to ‘top up' the approved salaries." It goes on to say then: "...the Minister provided flexibility to the boards in placing executive staff at a step on the approved scale not in excess of step 25 as long as the boards had other funds to pay these salaries."

The Auditor General said they did not have the authority to do it; the Kirby Report indicates that the board did not have the authority to do it. In a letter from the minister - I think it was 25 October, that one there - it was, kind of to my mind, vague. I do not know if you have the letter. It is in the file here. He gave, to me, when I was looking at it, reading it, in one paragraph you could say you could go beyond step 25 but not to step 33, and then in another paragraph he said you did not have the authority to go beyond step 25. I don't know. I should have the letter here somewhere.

WITNESS: I think it is on page 66.

CHAIR: Page 66. Of the Auditor General's Report itself?

WITNESS: No, volume 2.

CHAIR: Volume 2. I wanted to get this straightened up because I have had problems with that from day one.

Here it is. They are talking about the 10 per cent.

WITNESS: The second last paragraph.

CHAIR: That is right, on page 67, the last page of the letter. It says:

"However, in light of concerns expressed by School Boards, we are prepared to provide School boards with the flexibility to appoint the new Directors/Assistant Directors at a step on the approved scale not in excess of Step 25 provided the Board is prepared to fund the difference in salary from other funds available to the Board. I have to point out that School boards will have to defend to the public, if it becomes an issue, any salary increases beyond those approved in my previous correspondence."

Here he is saying you cannot go above step 25, and yet we went to step 33 on it. Can someone explain exactly what went on there to me?

MS BROWN: If I could speak to that, Mr. Chairman, for a minute.

During my tenure as Chair of Avalon West, we placed our director on step 25 as per what Roger Grimes kind of gave us flexibility to do but told us to take the heat for. We placed him on step 25. I resigned as Chair of Avalon West on November 21, 1997. The first I heard of any step 33 was when I read these documents that Mr. Noseworthy provided to me. So that was after my time. Maybe Mr. Butt can answer to the step 33 because I can't.

CHAIR: Would you be able to speak to that?

MR. BUTT: I must point out right from the beginning that I am at quite a disadvantage here because I only became Chair of Avalon West a couple of months ago, approximately. I only discovered a couple of days ago that I had to appear today. I was only given these packages a couple of days ago and I haven't had time to digest any of this and I think it would be unfair.

CHAIR: Okay. Dr. Rideout.

DR. RIDEOUT: Mr. Chairman, I will try.

CHAIR: Yes.

DR. RIDEOUT: Could I just go back to a few other comments without belaboring them too much? They do have some relevance, I think. One relates to the context in which this change occurred in December 1996-January 1997. On January 1, Avalon West assumed responsibility for the operation of the schools. To say, I think, it was a roller coaster time in education was an understatement even for Mr. Grimes. At that time we were very concerned in bringing the elements of four different school boards together and creating one new cohesive social system. One of the major concerns that we had in doing that is all of the uncertainty with our employees in the respective boards that were coming together. We had to somehow find a way to treat them with a degree of sensitivity and compassion, I think, because they were all up in the air. They did not know if they had a job next month, or what their salary was, and all the usual things that would be associated with that.

We therefore, in December, as employees of the Avalon West Board, made a conscious effort prior to Christmas to make a determination of what would be happening to these individuals. Just before Christmas we were able to finalize what we would be offering to most of them in the new system, and rather then have them go through Christmas and not know if they had a job we met with them individually and said: Listen, we are going to be offering you this position in the new board and you will be rolling over into Avalon West as of January 1. We did not want that uncertainty. We really felt that common decency meant you had to give some kind of security to those employees, especially if you were going to try to now mold them into one new school district, and you would desperately need their support and help to take the challenge that was going to be before them.

That sensitivity, I think, was coupled with a notion on our part at least that we were going to be inheriting the liabilities of those previous boards. Those liabilities would be rolling over into Avalon West and both factors, I think - the sensitivity to employees' plight at that time in that context, coupled with our understanding that the liabilities transferred to Avalon West - caused us to try to deal with them with some degree of compassion and humanity in sorting that out.

Whether they should have rolled their annual leave over or not is something for, I assume, the judge at some point in time to have determined. We did not want to go through litigation with employees in that context of whether they should get twelve annual leave days brought forward or not. It did not seem that it would have been productive to us in that environment.

I have to go back and say repeatedly that you must remember the context in which all of this was happening at breakneck speed with no answers given and no direction provided. The board, having to make decisions in accordance with its legislative mandate at the time, did its best to make those decisions and judgments. We as staff at the time, having been going down a road that we had not gone down before, tried to offer the best advice that we could to the boards at the time. Legal counsel made a fortune giving advice to boards at the time because we would rely on them as well and, looking back in retrospect, I do not think there was a great degree of unfairness to the employees of the day. That is on the employees that we are talking about, the non-unionized employees who were not senior executives, those caught in the middle, and some of the unionized employees.

With regard to step 33 versus step 25, that is an issue with which I have some familiarity. The difficulty I had personally as a director of education and the difficulty that the school board had at the time related to the total structure of the compensation package. It was not a fair package in my point of view and when I communicated that to the Board of Trustees they agreed. I say it was not fair for a couple of reasons, when you apply the package to myself personally.

I was employed by a previous board as an assistant superintendent. It was a board of less than half the size of the board to which I was going as CEO. My board of the day did not provide me with a car allowance. They did not provide me with any kind of a top-up. There was no other advantage in my compensation package. Now, many of the other boards in the Province were providing those kinds of top-ups. So other assistant superintendents and superintendents with whom I was competing for a position would have had $5,000, $7,000, $10,000 salary top-ups, if you would, would have had a $300 or $400 a month car allowance included in their compensation, and things of this nature, which meant that they were anywhere from $10,000 to $15,000 above me even as an assistant superintendent in the previous system. The unfairness came in because my salary under that compensation package was not tied to the new job I was taking. It was tied to what I was making in the old system, and that just did not make sense from the point of view of justice or fairness, it certainly did not seem to us.

When you applied the principles, not only would there have been directors of education in much smaller boards getting paid more than me, there would have been assistant directors in much smaller boards being paid more than me. That is what we were struggling with as a board, and trying to seek some resolution on. Ultimately, I guess, in its deliberations there was initially a decision of the board that step 25 would be an appropriate placement. Then, when it was reviewed in the light of the context of the contract that was provided by the board and what was occurring in the Province, step 33 was deemed to be an acceptable option for the board to grant, based on legal counsel, based on the Minute in Council, the Order in Council that has been referenced. That said: up to step 33.

Now, there are senior executive members in this Province who are paid well above and beyond step 33, from what I can gather. We never asked to go beyond step 33 because the Order in Council made it clear: up to step 33. It was always within the context of up to step 33 was the uppermost limit that you could go. My contract, I would contend to my board if I wished to, makes a case that I can be paid more than step 33 if there are other individuals in the Province being paid more than step 33. We have never engaged that discussion with the board or with government officials in one instance; not for a minute, but it just reflects the unfairness of the compensation package that was structured and provided at the time.

You mentioned earlier the minister's letter of November 15, 1996, on page 66 and page 67. I was surprised when I got a copy of that same letter, which appears to me to be from the official record, and on the second page of the letter, in what appears to be the minister's handwriting, it says: up to 33. You copy does not say up to 33. If you look at this, and knowing the minister's handwriting, to me the minister wrote himself on his record: up to 33. So the up to 33 seems to have been unclear in his mind even as of November 1996.

CHAIR: The letter of October 25 that we were referring to from the minister (inaudible).

DR. RIDEOUT: What page, Mr. Chairman?

MS MARSHALL: Is it November 15?

CHAIR: No, October 25. There was a letter dated October 25 from the minister. (Inaudible).

MS MARSHALL: While we are waiting for that, I could I just make one comment, Mr. Chairman?

The Cabinet directive - and I have it here before me now - that Dr. Rideout was talking about did not give the authority carte blanche to go up to step 33. What it said was that the Department of Education is directed to ensure to school boards place employees on the approved scale at the step next highest to their current salary, but in no case above step 33. That was the absolute maximum. When we went through and placed everybody next highest to their current salary, it works out to the chart that I handed out to the members earlier.

CHAIR: That is the point I am getting at. When they said step 25 is the maximum that you could go on, then it goes ahead and says in no case above step 33.

MS MARSHALL: It did not even give the carte blanche authority to put everybody up on step 25. You had to put them next closest to their current salary. You could go to step 25 if you had other funds which you could use to pay the increase. You could not use government funds. If you had other funds, you could. The Labrador School Board argued that they received grants from the mining company, and therefore they were using some of that money to top up the salary of their director, so they received funds from other sources. Most of the school boards did not receive funds from other sources, therefore they did not have additional funds that they could use to top up the salaries.

The directors and assistant directors were supposed to be placed at the salary next to the current salary they were receiving under the old school board, and in order to come to what that current salary should be the Department of Education - I believe it was in 1996 - wrote out to all the school boards and said: Please tell us what you are paying your directors and assistant directors, include their bonuses and different types of miscellaneous payments, and come in and give us the numbers. The numbers they compiled are the numbers in the chart that I handed out this morning. Some of the school boards took the line that they could go up to step 25 which indicated that yes, they had a top-up, but they had no money; they had no additional funds from other sources that they could use to pay that top-up. Then some of the boards on top of that went even above step 25.

The concern I had when I did the review back in 1997 is that the Department of Education sent out the policies to the school boards. Some school boards complied, some school boards did not comply, so you have some people out there who comply with the direction of Cabinet and the Department of Education - they ended up with comparatively low salaries - while the people who did not comply with the policy direction ended up with very high salaries.

The review I did back in 1997 indicated one director was making $95,000 because they did not comply with the policy directives and some director got $70,000 because they did comply with the policy directives. Now you have a system whereby it is not equitable. Different boards picked and chose what they were going to implement.

CHAIR: I want to comment on that because to me it seems what is happening is that, again, we get into this situation that what is legally right from the board's perspective at the time, and what is morally right at the time, could be two different things. Again, we have to look at what was, I suppose, legally right.

I do not know if I have a mental block on this or what, but I am still not sure as to how this step 33 came into the picture. The board is saying it is referred to by the minister somewhere in the documentation. I think it is in that letter of October 25. That date sticks in my mind.

WITNESS: No, that is November's.

CHAIR: November.

WITNESS: Didn't you just show a letter (inaudible).

CHAIR: November 15 or November 16. To me, the question of step 25 and step 33 is referred to in that letter.

WITNESS: Mr. Chairman, was that from Wayne Oakley?

CHAIR: I think it was from the minister. Anyway, we will get that and we will come back to it if we have to.

Bob Mercer.

MR. MERCER: Yes, Mr. Chairman.

CHAIR: I am sorry. Did you want to comment first?

DR. RIDEOUT: Yes, Mr. Chairman. This conundrum over salary scale has been an issue for three and a half years now, I guess, or just about that. Last year, prior to the current minister coming into office, I made an offer through my Chair that I would be prepared to have a friendly referral to the court on the matter and let the case be presented to a judge, and I would willingly be governed by the interpretation of the court on it with no animosity towards my board, government, or anything of that nature, based on what we thought was the legal advice given at the time that contracts were entered into at the time. That offer was declined by the minister when it was given by the Chair of the board at the time. We may have had some resolution if it had gone forward in that format. That would have taken away some of the animosity that has accrued since then.

MS BROWN: Mr. Chairman, if I could, for clarification, refer you to page 65, step 33 of volume 2.

CHAIR: Volume 2.

MS BROWN: You are looking for where did this step 33 evolve from.

CHAIR: What page?

MS BROWN: Page 65. It is a draft letter from Roger Grimes.

CHAIR: That is the one I was referring to. Okay, that is the letter. Yes, because I had a note here for the Auditor General to comment on this.

It says here:

"In response to a number of inquiries with respect to the above matter, the following additional information is provided:

"1. Assistant Superintendents who have been successful in obtaining a Director position with a new school board should be placed on a step on the scale in accordance with the promotion procedure which would provide them with a maximum salary increase of 10 %. In no case, however, should the salary exceed Step 33 of the scale. This same procedure applies to individuals who have been promoted to the position of Assistant Director.

"2. Each Director/Assistant Director shall receive an increment upon completion of each twelve months of service with the new school board equal to four steps on their scale. Such increments shall not result in a salary which is in excess of Step 25."

So that, to me, is where the confusion came in. I think that is what the Board is hanging their hat on. Would the Auditor General like to comment on that?

MS MARSHALL: When I look at that step 33 there I would go back to the original MC. My interpretation of that is that if the employee - at the time the new salary scales were put into place - if his or her current salary was up around step 33, they could be put up at step 33. I would not interpret that to provide flexibility to the school boards to move their employees up to step 33, definitely not.

CHAIR: So that (inaudible) -

DR. RIDEOUT: Mr. Chairman, with all due respect, the Auditor General was not around to give advice to the boards at the time it happened. If she had been we might not have been in trouble like this.

CHAIR: To that point, the Kirby Report basically says the same thing as the Auditor General. I mean that was supposed to be an independent thing, right?

Just before Bob Mercer makes a comment, again it comes back then to the situation the board found itself in: what was legally right and what was morally right in their minds. Did they have the authority to do it is, again, the question.

Mr. Mercer.

MR. MERCER: Thank you, Mr. Chairman.

I realize I am usurping Mr. Fitzgerald.

CHAIR: Sorry.

MR. MERCER: This is an area of questioning I did not want to get into but since it has been brought to the floor, am I correct in assuming that this pay scale - is it modeled along the lines of the Hay system?

WITNESS: Yes.

MS BROWN: It most definitely is.

MR. MERCER: Just from my own experience in twenty-five years in senior management positions in the public service, I am a little bit familiar with the Hay system. Actually, too familiar with the Hay system. It as always my understanding that you could progress to step 25. You could not progress beyond step 25 unless for something extremely meritorious. Hence, the going to step 25 and then if someone in their wisdom - which they have never, ever did - decided that you should be step 26, 27, 28, 29, they could reward you, if you wish, for an additional salary, but in the public service you would stop at 25. Step progression stops at step 25.

I make that point because yes, I realize that during the period of the educational reform process things were turbulent. Decisions had to be made, but I would submit that the rules of procedure and the rules governing the boards in the administrative procedures that they would follow were perhaps not in as much disarray as the larger discussion and debate around educational reform. I just wanted to make that comment in reference to some of the comments that were made.

The last point I want to make before I give it back to Roger is that the contract on page 22 of volume 2 related to salaries, is very simple. It says: "The salary for this position shall be in accordance with the salary scale agreed upon by the Board and the Director, in accordance with provincial legislation including regulations." Now that contract states that it was brought into force somewhere around October 17, 1996. The issue with respect of going from step 25 to step 33 - and there was a discussion between the ministers and the board with respect to step 25 - took effect in Avalon West, according to the information I have, on the pay period ending February 27, 1998. There is nothing in the original contract entered into by the interim board to cause them to go to step 33 under terms of the contract, in my opinion. So I just offer that for clarification or whatever.

CHAIR: Dr. Rideout and then Roger. He might want to respond to that.

DR. RIDEOUT: Mr. Chairman, section 18 is the section of the contract under which the board made that decision.

MR. MERCER: "Other Standing Benefits" on page 23 of volume 2.

CHAIR: Is "whether written or unwritten" what you are hanging your hat on?

DR. RIDEOUT: Pardon?

CHAIR: Is that what the board is hanging their hat on, "whether written or unwritten, providing benefits to the Director respecting Board...," et cetera?-

DR. RIDEOUT: No, Mr. Chairman. I think the interpretation that the board gave to that article was that benefits accorded to other directors of education - I would be eligible to be considered for those same benefits. If there were other directors of education deemed to be eligible for step 33 or step 29, or a car allowance, or a new pair of socks, then I would be permitted that as well.

CHAIR: Roger wants one quick one.

MR. MERCER: Just to finish that off. Yes, I can see where that clause would come in, but if my understanding of the Hay system is correct, why would these steps from 25 to 33 come into effect anywhere?

DR. RIDEOUT: My understanding, Mr. Chairman, again from the best that I have been able to gather from our director's association of the Province, is it is a version of Hay that has been created in this instance. It is not the true Hay scale. There is still a lack of clarity, certainly amongst the directors of education, as to exactly how that Hay is structured and if it is consistent with the original Hay as contemplated and established. I have heard verbally and informally that one of the key individuals who basically created Hay has indicated it is not Hay in his opinion.

CHAIR: Thank you.

Mr. Fitzgerald.

MR. FITZGERALD: Just to continue with that, Mr. Chairman. We are certainly not talking about the minimum wage here. We are talking about salaries, I would think, that would be attractive to a lot of professionals in this Province. I am not certain if I quite understand it. I do not understand the Hay system like Mr. Mercer, but is step 33 the top step on that particular scale?

WITNESS: Yes.

MR. FITZGERALD: So you go from step 25 to step 33. Why wouldn't we look at steps along the way? What happened to the other eight steps? If we are going to give somebody a salary, why would we jump from the present salary right to the top of the scale? I am not sure. The other question I would like to ask is how are those decisions made? When I look through the book here and I see Mr. Maxwell Trask, District Superintendent, getting a $10,000 gift upon retirement, and Mr. Frederick Bullen, Assistant Superintendent, getting a $2,000 gift, and I see car allowances of $450 a month - and I would assume that that is probably in addition to mileage that you would get for using your own vehicle - who sits around the table and makes the decisions? Are there minutes of the school board meetings that show who made the decision and it is done by the majority of the board? I am lost.

CHAIR: Ms Brown wants to comment on that.

MS BROWN: Mr. Fitzgerald, I cannot comment on Dr. Max Trask's $10,000 benefit nor Fred Bullen's because that was Avalon North and Ms Davis is not here today because she is ill. I can comment on the $450 car allowance. Before I even do that I think, out of fairness to Dr. Rideout, the decisions made around his salary were made by the board. Any employee has a right to negotiate with its employer and I guess Dr. Rideout was in the process of negotiating. If the board in its wisdom - and I cannot speak for them, it was after my time - but I think in defense of Dr. Rideout that if the board in its wisdom decided that for some reason they would put him on step 33, I do not think he should be put in the position today where he should defend what the board did. Because the board was the ultimate authority.

Anyway, having said that I will go back to the $450 car allowance. At the time when Avalon West interim school board decided - and I do not know why there is not a minute of meeting. I do recall we did have one meeting where our recording secretary was not at the meeting and the board secretary, I thought, took minutes. Maybe that it where they went. I do distinctly remember a minute of meeting that the board did decide, yes, they would pay Dr. Rideout $450 a month car allowance. At that time when that decision was made you have to remember now we did not have a salary package for him, he was never getting a pay cheque. I think he went some six or eight weeks before we finally got a pay scale and we could actually issue him a cheque. What was happening around the Province - and the directors association to which Dr. Rideout alluded was telling all of us chairs that certain boards are paying car allowances. We sought clarification from the department. It took a while to get it, actually it took about two and a half months. We thought we were within our rights to pay Dr. Rideout a car allowance. The going rate around the Province was $300, $350, $400, depending on distance and the geographical size of the board. Our board decided: We will give Dr. Rideout $450 a month. Shortly after that we did get clarification because we had sought it from the minister and we were told in no uncertain terms: This must cease, you cannot do that. I think we were allowed to give him, I do not know, $80 or $85 a month which was in sync with what the teachers under NLTA were getting. As soon as we found out from the minister you can't do that it stopped. I think it was probably a couple of months, maybe; I do not think we got into the third month. We stopped as soon as someone finally decided to give us clarification. Clarification was often a long time coming.

You said you understand that the times were turbulent. I do not think anybody sitting in this room who was not involved with the reform process has any understanding of how chaotic and turbulent the times were, sir.

MR. FITZGERALD: Would Dr. Rideout be getting a mileage per diem as well as the set fee of a monthly per diem as well? What was the mileage -

MS BROWNE: Yes, the same as teachers would.

MR. FITZGERALD: What is that?

MS BROWN: Whatever the going rate is. I do not know if it was twenty-five cents a kilometer at the time or twenty-eight cents. Whatever the going rate for -

MR. FITZGERALD: What is it today?

CHAIR: It is twenty-eight cents, I believe.

MS BROWN: It is twenty-eight cents, yes, I would think, plus -

MR. FITZGERALD: Why would you get a per diem on top of the per diem that you would get for the use of your vehicle on a mileage basis? Is it because -

MS BROWN: Do you mean the $80 that they are allowed to have, why are they getting that?

MR. FITZGERALD: Yes, well it was $450, and now it is down to $80.

MS BROWN: It was $450 then. At the time, well, I guess some boards paid more than others because of the sheer geographical size. It was felt that twenty or twenty-five cents a kilometer, it would have been back then - because the twenty-eight cents is fairly recent - it would have been twenty-five cents - in no way would cover the wear and tear on a vehicle that a director would incur traveling a district the size of Avalon West, and most boards in the Province felt that depending on size. Actually, the NLTA negotiated in a collective agreement that there should be something over and above the kilometer rate. Dr. Rideout might be able to clarify it better.

CHAIR: Okay, I have just a quick comment. We are going to have a coffee break in a couple of minutes but I want to read this letter before I go on to that.

MR. FITZGERALD: No, I will just clue up by making a comment that I get twenty-eight cents a kilometer, and my district is far bigger than Dr. Rideout's district with the Avalon West School Board.

CHAIR: Dr. Rideout, you want to make a comment you said?

DR. RIDEOUT: Mr. Chairman, yes, probably just to give the context. It was common practice in many of the previous boards, prior to consolidation and reform, to provide car allowances as is common throughout Canada today. I mean, it is not an uncommon issue. I believe the superintendent of one of the boards which consolidated into Avalon West was getting paid about $300 a month car allowance, and the superintendent of the other board that consolidated into Avalon West was being paid $400 a month as a car allowance in addition to the mileage rate that was provided. So it was within the context of that being a standard issue at the time. Boards were used to paying car allowances. Avalon West just followed through with that trend, increased it slightly because of the size of the jurisdiction; it had increased geographically. That was the context in which it arose for about a two-month period until the minister gave a different directive.

CHAIR: Thank you.

Back to step 33 again. We were getting off that a bit. There are going to be more questions I am sure from the other Committee members after we come back from coffee break, but this is the letter that to me caused the confusion. We have the Auditor General saying one thing. We have the Kirby Report agreeing with it. In my mind, we had the minister in certain letters agreeing with what was being said. We had the legislation saying the same thing. Then the board goes, to my mind, from what I have seen, outside that, making decisions with respect to the salaries, vacation pay and redundancy pay, and what have you.

Here is the letter, and it is just a quick letter. I want to read it right into the record. This letter was sent to the Avalon East School Board but the Avalon West School Board received it also. It is dated October 25, 1996. It reads:

"RE: Compensation Package - Directors and Assistant Directors

"Attached for your information is the approved salary scales for Directors and Assistant Directors in your school board. Successful applicants for these positions should be placed on the approved scale at the step next highest to their current salary, but in no case above Step 33. I recognize that in many cases previous school boards provided employees with salaries which were in excess of the approved salary scale. Therefore, in placing former school board employees on scale, boards should consider the actual salary paid to the employee and not the approved salary.

"Details with respect to other benefits available to these employees are attached. However, I would like to highlight a few major points for your information:

"1. New school boards do not have the authority to ‘top up' the approved salary for the new Directors and Assistant Directors.

"2. If an individual is selected from outside of the public service for one of these positions, the board can determine at which point on the salary scale the successful applicant should be placed.

"3. Through normal step progression, employees can advance to Step 25 of the approved scale. If an individual is appointed at Step 25 or above, step progression does not apply.

"4. Leave and other benefit provisions will be in accordance with the executive compensation plan..."

That is what the minister wrote on October 25, and that is where step 33 came into it. I mean if he had said step 25 and not above and that is it, what would have happened? I do not know. To me, that is what I was trying to get straightened out in my mind: what gave you people the feeling or what you felt to be the right to go above step 25.

MS BROWN: Mr. Chairman, again I cannot speak because that was after my time. During my tenure as Chair we placed Dr. Rideout on step 25 of that scale. He wrote that letter in October. In November he wrote a further letter that said, and you read it into the record, the last paragraph, in light of our concerns, that he was prepared to offer us the flexibility to put them on step 25. We did not break any rules or regulations. The minister said: You can do it if you are prepared to take the heat. We were -

CHAIR: My question now is: Did the minister have the right to do that?

MS BROWN: Well sir, I do not know about the minister's rights. I only know that we take direction from the minister.

CHAIR: Or the authority, not rights, but authority.

I think what we will do -

DR. RIDEOUT: Could I offer one other clarification on the car allowance, Mr. Chairman? Because I offered with the Avalon West School Board to agree for them to lease a car for my use rather than mileage, allowance, and all that kind of thing. The board was prepared to do that but the minister would not allow it.

CHAIR: Thank you.

What we will do now, I think, is we will break for coffee and be back at 11:00 a.m. sharp. I'm sure there are other questions that will be asked, not necessarily with respect to the Auditor General's report, but other issues that may have come up to private members. We will break for fifteen minutes.

Thank you.

Recess

CHAIR: Order, please!

Before we continue, I would like to ask Ms Marshall if she would like to comment on that step 33 situation again, from step 25 to step 33, and what you believe actually happened there.

MS MARSHALL: Between step 25 and step 33, those steps are there to accommodate people who came into the new boards and already had high salaries. They did not want those people to have to take a cut in pay and go to step 25 or below. These eight steps were to accommodate people who were already at a very high salary.

Off the top of my head, I do not think really there was anybody in the system that that applied to. I think that step 25 to step 33 was there to accommodate the situations but there was really nobody there at the high salary, didn't really need to use it.

Mr. Noseworthy did some more detailed work on it so I don't know, John, if there is anything else you can add to that.

MR. J. NOSEWORTHY: Yes, I spoke with Department of Education officials too just to confirm our understanding. I guess to put, as an example, if step 33 on the approved scale was $75,000 and an incumbent was making $74,000, then that person would go to $75,000 on step 33 and they would not be penalized by having to go back at, say, $68,000 on step 25. That is why there was reference to step 33 in the letter, to accommodate those situations. It is not to have it available, it is just in certain situations.

CHAIR: Thank you. That is what I needed to clarify.

Mr. Fitzgerald wanted to clue up.

MR. FITZGERALD: Yes, I am not going to clue up with a question, Mr. Chairman, but I will just make a comment. It seems a little bit unfair, I suppose, that we are directing a lot of those questions at the Director of Education, Dr. Rideout, and having him justify why things were done. It would certainly be much more advantageous to the board and to this hearing if the people were here who were directly responsible for allowing it to be done. I do not blame Dr. Rideout. I would do the same thing, sir. If I could get a car allowance or if I could get a raise in my salary, I would justify it as well. I think the true people that we should have here are the people who justified those steps, the people who justified the expenses.

CHAIR: We did attempt to have those individuals here.

Mr. Joyce wanted to ask a question.

MR. JOYCE: I was just going to ask a few questions for clarification more than anything. The letter that we were just given from the Minister of Education was dated October 25, 1996. That mentioned step 33 and the Chairman mentioned if the education department had the authority or whatever for step 33. I will just go to page 65, that draft from November 1, 1996. Was that sent out to the school boards?

MS BROWN: If I could answer, Mr. Chairman? When I saw this in the package yesterday I remember seeing it before. It is stamped "draft" here but I have some vague recollection. I think I did see that before. That is three years ago, mind you, or a little in excess of three years.

MR. JOYCE: I know, yes. Because usually a draft is not sent out.

MS BROWN: It wasn't really unfamiliar to me.

MR. JOYCE: Okay. I am just going from progression from the letter to the draft to the letter that the minister sent out on November 15, 1996, page 66.

His first sentence reads: "I write in response to your letter of November 14, 1996...," from Mr. Vokey. We don't have a copy of that letter, of course, it is not here, but is that the final clarification for this step 33 or what people were allowed to pay? Because obviously it was an issue on October 25th and it went to November 1st where he wrote up a draft response. If that was sent out, Mr. Vokey - I'm just going on the sequence - wrote him on November 14th and then he responded with his final response on November 15th.

MS BROWN: I would make the assumption that it is but I do not know for a fact that it is. I would think, too, that that letter from Roger Grimes dated on November 15th to Myrle Vokey - Myrle spoke on behalf of the ten boards and usually his letters to the minister arose from meetings of the ten Chairs, I would say.

MR. JOYCE: The last letter that we have concerning all this was the November 15th letter.

MS BROWN: To my knowledge.

MR. JOYCE: To your knowledge. Okay.

The other question I was going to ask is this. Of course in the Auditor General's report there were some monies that were probably spent in a way that the Auditor General herself said wasn't within the guidelines. Was there ever any policy put in place after to ensure that this won't happen again in the school board?

MS BROWN: To which are you referring? Can you be specific?

MR. JOYCE: There is a number there. For example, people being paid money on the government credit cards, $1,000 or so. There was another example of boards being paid holiday pay which is over and above. Does the board now have guidelines put in place so that this does not happen again?

DR. RIDEOUT: That is indeed the case. I think in your package Mr. Noseworthy has provided a copy of the policy of the board on corporate credit card usage. We provided earlier a copy of our accounting procedures for schools, fiscal accounting reporting and all of that as an appendix to section 3.8, review of the Auditor General's report 1998, this booklet.

CHAIR: That is there, yes.

WITNESS: Okay.

DR. RIDEOUT: The short answer, Mr. Chairman, is yes, the Board has taken measures to ensure that the interest of the public is duly cared for in future activities.

MR. JOYCE: This is just a question that is not even noted in the Auditor General's report. Is there a person on the school board now whose role is to help out with government funding, federal funding or grants?

DR. RIDEOUT: I am not sure I understand the question. We have an Assistant Director of Finance who is responsible for all financial matters of the board, Mr. Snow. We have a Comptroller as well who assists him in guiding the operations of that division. Is that what you are referring to, the financial practices?

MR. JOYCE: Is there a person on your board now with specific duties to seek government funding?

DR. RIDEOUT: That is correct, we do. We do have a partnership coordinator and his mandate is to arrange various partnerships with government, with industry, businesses, HRDC and so on, to try to bring in supplementary funds to the board for its operations.

MR. JOYCE: Is that a teaching position that came from the Department of Education or is this over and above what is allocated by the Department of Education?

DR. RIDEOUT: This current year, that salary is being funded as - point eight five per cent of a teacher unit is covering his salary.

MR. JOYCE: It is a teaching unit?

DR. RIDEOUT: Yes.

MR. JOYCE: Thank you very much.

CHAIR: Who else wanted to ask a question?

MS M. HODDER: If I can ask him, in line with what (inaudible).

CHAIR: Ms Hodder.

MS M. HODDER: I was just noting - and this is in line with what Eddie was asking there a few moments ago - and that is which policy existed in the previous boards to govern spending. We know in volunteer positions as municipal councillors or whatever, we have been governed by policy. For example, spendings of over $500 would have to be by motion, and of course over $5,000 by tender or whatever, but noted here in the Kirby Report it says: "A review of the T4's and T4A's issued by District #09 for the 1997 calendar year indicates..." set amounts of an additional $3,290 in one instance and, in another, of $3,231. Further, it says: "During our review of the minutes of the Board we did not note any minute of authorization for these additional payments." Would there have been a policy in place that said that up to a certain amount of funding there would have to be minutes, a policy in place, or by motion, or anything of that nature?

MS BROWN: Ms Hodder, I think the very thing you are referring to now happened after my time, but I can speak to when the interim board - the superintendent has discretionary spending, obviously. I do not recall the exact amount before it has to come back to the board.

MS M. HODDER: Discretionary to a point.

MS BROWN: Yes, to a point. Those amounts you are referring to there I think were paid out on the salary and it was after I left. I really cannot speak to it. It would have to be Mr. Butt, or maybe the past year, my successor.

MR. BUTT: Again, I am probably not qualified to answer that because I have not seen any guidelines to that effect and I have not been tuned into that as yet.

MS M. HODDER: Can you answer?

DR. RIDEOUT: Could I ask what page that is on?

CHAIR: Page 8.

MS M. HODDER: It is page 8 of the Kirby Report in the Public Accounts Committee papers, volume 2.

DR. RIDEOUT: Is that, Mr. Chairman, the $3,290, that one?

MS M. HODDER: Yes.

DR. RIDEOUT: My memory is that was due to an understanding of the board that if we did not use ten days of annual leave prior to March 31, I believe it was, or it may have been August 31 -no, March 31, I believe - those ten days would be lost to us. That was a time when we were involved in an intense activity related to what was at that instance called a registration of the preference of schooling for interdenominational schools to determine uni-denominational or interdenominational status and what the parents wanted. That was the reform that was sort of occurring at that time within the interdenominational system that was caused after the first referendum before the second referendum.

At that time there was no way under the sun that I could have taken ten days of annual leave, it just was not possible. That was presented to the board and the board disagreed with the decision that you lost those ten days, because if I had left for two weeks and gone it would have been just chaos at that time. Therefore, they decided it was unfair, having been hired in mid-October, to be informed in February, or whenever the date that was done, that the ten days had to be taken and they just could not be taken. They were not allowed to be carried over into the summer, they were going to be lost, and the board then decided they would pay for those ten days rather than lose them. That was a decision of the board and there would be a record of that, I'm sure.

CHAIR: Mr. Lush.

MR. LUSH: Thank you, Mr. Chairman.

I want to first say that I can associate with some of the remarks made by the former Chair, Ms Brown, re the tumult and anxiety and frustration that surrounded your working environment during the period in question. I think you are all to be congratulated, particularly the volunteer members. I am a little less inclined to congratulate those who received pay. I always get highly charged or highly amused over people who, particularly during storms, come out and praise the utility companies for going out and fixing things for us when they are being paid to do so. Now if there were some volunteers out there I would react quite differently.

Anyway, they worked under difficult and challenging times, but that was what they wanted. That is what they are trained for and that is what we pay them for, so I do congratulate the members of the board for the great work that they did throughout the Province under difficult times and in uncharted waters for the most part. Though we have to question those things, it is not likely that we will ever go through such a dramatic change again in education. We hope some of the things we come up with today will serve as an example, I suppose, to the kinds of procedures that we ought to put in place to satisfy people like the Auditor General and the people who want good accounting systems and want the public's money to be spent in an appropriate manner, and an efficient and an effective manner. That is the process, the procedure under which we examine you today.

So I want to again congratulate you and say that even though a lot of us did not go through it in the detail that you did, from another forum we also can appreciate that there were some problems.

I just wanted to ask somebody, I do not know who, a question with respect to the Hay system. You have heard Mr. Mercer's description of it in terms of its application in the civil service. I am just wondering if that is the way that boards view it. The system, the Hay system, do we follow that system unadulterated? Is that the system that all school boards in the Province feel they are under with respect to their executive?

CHAIR: Ms Brown.

MS BROWN: Mr. Chair, if I could respond to Mr. Lush. I am no longer involved as a school trustee, it has been some two years since I resigned, but I recall the major bone of contention seems to be the directors and assistant directors' salaries. At that time when we had all these hot and heavy meetings with Roger Grimes about that system, we were told that it was modeled along the lines of Hay: modeled along the lines. Our major bone of contention with Roger Grimes at that time, and the department, was that this is nothing like the Hay system. Because the Hay system assesses what a person does, and one of the things it would assess would be his or her responsibility. If this system is modeled along the Hay system and is the Hay system, why then would the Director of Education of the second largest board in the Province be the lowest paid director in the Province? He has more responsibility than the directors in eight other boards. So it would seem like it was a hybrid of Hay. Now maybe Dr. Rideout or Mr. Butt or somebody can speak to it today, but at that time, even though they told us it was fashioned along the lines of Hay, our information and our legal counsel's opinion was that this is not the Hay system. It may be today sir, I do not know.

DR. RIDEOUT: Mr. Chair, the similarity to Hay as I understand it - until I am shown differently - is that Hay has thirty-three steps. Hay goes up four steps at a time and that is where the similarities stop. Am I allowed to say bastardized?

WITNESS: You can if you like, if the Chair allows that.

DR. RIDEOUT: Mr. Chair, it is not my word.

WITNESS: It is in the dictionary.

CHAIR: (Inaudible) recorded.

DR. RIDEOUT: It was described - pardon?

CHAIR: This is being recorded. It could be played on one of the local stations this evening or tomorrow.

DR. RIDEOUT: My mother is not going to read it, is she?

CHAIR: She might hear it.

DR. RIDEOUT: It was described to me using that word.

CHAIR: Okay, fine.

DR. RIDEOUT: That was the kind of Hay that it was described as. Because as Ms Brown pointed out, Hay assigns points based on a job description that has to be developed and agreed to by the permanent head of the organization; then that assesses the degree of responsibility, and points are assigned based on that. As I referenced before, the latest that I have heard concerning that from the directors of education who employed an individual that I am told was one of the creators of Hay is that that individual says it absolutely has no bearing to Hay beyond the fact that it was modeled, in that there are thirty-three steps and that you move up the steps to step 25. The point assignment and all of that which is fundamental to it is not consistent with Hay as I understand it.

CHAIR: Thank you.

Mr. Lush has one more question, then Paul Shelley.

MR. LUSH: I just wanted to make sure that Dr. Rideout was given a chance to clarify an item mentioned by Mr. Fitzgerald. I may have been wrong and if I am I certainly apologize, but I believe Mr. Fitzgerald was making reference to twenty-eight cents per kilometer, was it Mr. Fitzgerald? I think you said that you had a bigger area than Dr. Rideout. I know it is small, but it is important to Dr. Rideout to put the right perception on his area. Unless I misunderstand it, and unless Mr. Fitzgerald was talking about his responsibility for the Province, you do have a large area, don't you? It takes in a federal riding almost.

DR. RIDEOUT: Mr. Chairman, we go roughly about seventy kilometers east to west, from around Chance Cove to Holyrood. We go to Conception Bay North up around to Bay de Verde, Old Perlican area. We come down to Placentia, down to St. Bride's, over across to St. Mary's. It is a significant geographical area. I am not sure what the member's area is like. It touches on seven provincial ridings. Some are included totally and some are just peripheral attachments to it, so it is a fair sized geographical area.

CHAIR: Thank you.

Mr. Shelley.

MR. FITZGERALD: Just a point of clarification, and I think probably Mr. Lush might have backed up the reason I brought it forward. Because the way I would look at that is the bigger the area you have the more compensation you would get for gas mileage or for mileage rather than the use of your vehicle. I would see and I think that you would be able to justify giving a higher per diem off the top rather than a mileage per diem if you were into a relatively small area.

CHAIR: Point taken.

MS BROWN: Could I respond to that? I know you are directing this towards Dr. Rideout. When I was a trustee involved with traveling the school board district - and as Chair of the board I traveled that big district a lot in addition to my regular job. I wore out the car. I think in the course of a few years I may have, with my twenty-five cents per kilometer, gotten, I don't know, over four or five years, $4,000 or $5,000 in travel but I wore out a car. My car was worth $22,000 when I started using it. When I finished with that I had 226,000 kilometers on the car in four years and it was because of my school board travel. I guess the point I need to make is the twenty-eight cents is not enough Mr. Fitzgerald, or Mr. Lush, and it isn't, is it?

MR. FITZGERALD: It is the point I am making -

MS BROWN: Well, good for you, I'm glad to hear it.

MR. FITZGERALD: - but I think we should all play, Ms Brown, by the same rules.

MS BROWN: I agree with you totally, but I think what we also have to remember is the $80 or $85 is a negotiated benefit under a collective agreement. We can't find fault with people for getting $80 if your side and the union side agreed to do it.

CHAIR: Okay.

Mr. Shelley.

MR. SHELLEY: Just like in caucus, it is hard to get a word in (inaudible) Roger's (inaudible).

First of all, I want to apologize for having to step out for a second but it was unavoidable. Certainly I am a new member of this Committee and without being repetitious from the last time, and understanding today - like Mr. Butt, for example, being here today for the first time and just getting information and so on.

I too have listened to some questions and am very interested, but I want to echo something that Mr. Lush said and commend you too. Because the truth is that this must have been an horrendous experience. Talk about a roller coaster, but the dust is starting to settle, I guess we could put it like that, and certainly there are going to be questions. That is our job, to ask some of those questions and get the answers. I am more concerned about the situation as of right now, to be honest with you, at this point in time anyway, especially with new board members coming on stream. Like we say, the system is hopefully settling down for the better of everybody.

I don't think anybody asked the question - if they did you can jump on me right away - on how you control the assets. I know there were notes made about that in the past. Of course I would like to know if they actually all have been turned over. More importantly, is there a capital....

[Due to a technical malfunction, a portion of this committee meeting was not recorded.]

DR. RIDEOUT: .....and amalgamation. The school building stayed the same. So if we had fifty-eight school buildings, everything that was in those buildings just stayed there. January 1, there were no things moving from school to school. Everything just stayed there. The only move that occurred was a physical relocation of the district office equipment for the former Western Avalon Board that was moved to the new offices of Avalon West, and in that case those employees brought their equipment with them. Mr. Doody had a desk, for example, that would have been brought with him from the former Western Avalon Board. People who had computers would have brought that with them.

We would very much like to be able to have a salary unit called an inventory clerk or something of that nature to do regular annual updated listings of assets and all of that for the board. The difficulty we have is that the $50,000 or $60,000 it would cost is not $50,000 or $60,000 available to us. So we have been reluctant because we know - as you can appreciate, being a former teacher - teachers and principals at the local level are very meticulous, that what they have in their school stays in that school and they have a control on it. We have not yet seen our way to be able to afford to hire an inventory person to do that for us on an annual basis. We do some of it with computer equipment, for example because that is one of our most costly items. We have summer students who come in and help, doing that kind of an inventory check for us. Realizing now that people do not tend to like board offices - they do not like to see you bring new people into board offices when you have needs in schools, obviously - for us to hire a new person at the district office it means we have to lay off another person to do it because we do not have the money for it right now. It not something that we find we are able to do so we are operating with perhaps a little more of a less rigid inventory control system than we would like, but we are confident that the people at the local school level and the district office level have a handle on each of the respective sites and we are able to control it through that mechanism.

MR. SHELLEY: Have they been told that then, that the onus is going to be on them to control - this could be a lot of moving around of capital assets. Is it recommended by your board that you do have somebody there? I know you are saying an extra salary. Somebody that is already there who just controls that. Because one way or the other, either through your board, through a new salary or the onus is back on schools, somebody has to make sure that the focus is on that and that is controlled. That is the bottom line.

DR. RIDEOUT: Yes, Mr. Chairman, that would be the responsibility of the principal at the local school site and -

MR. SHELLEY: Are they aware of that?

DR. RIDEOUT: Yes, they would be aware of that. At the district site it would be generally under the assistant director of finance administration and he is responsible for it at the local level.

Now I know one of the other boards, for example, has made a request to the Department of Education to provide some salary support so they can have someone to at least get the initial - if we could get a salary unit for one year, we could get the first year done, and then it is a matter of just updating it every year which would not be so unreasonable. It would not be so difficult. I guess we will have to wait to see the budget when it comes down, if there is any kind of flexibility provided there. We agree that it would be very helpful to us administratively. The challenge we have is simply limited funding for it right now. Even for one year, a salary unit for one year could help us get a better handle on it, I think.

MR. SHELLEY: That was going to be my suggestion. Of course, they are using computers and so on these days with inventory, and how effective they are, that even a contractual job where if you put a system in place and the truth is - I think it would work anyway - that if you had a good computer system inventory in place that anybody with very limited amount of time could still access that information and make sure there is control. Again, the word is control of capital assets floating around. So it may be a suggestion for the board.

DR. RIDEOUT: Mr. Chairman, it is an excellent suggestion and we welcome the assistance to be able to do that. I think it would be good for the system.

MR. SHELLEY: Could I ask one more?

CHAIR: Sure.

MR. SHELLEY: I just read a little bit of this from the last hearings, which I was not a committee member for: ancillary funds again. Really, I am more interested from being a former teacher how all of that is again controlled and out of control, a lack of control. Any suggestions or any movement towards some control on that?

DR. RIDEOUT: Yes, Mr. Chairman. As I indicated the previous time, we are very pleased that we have a policy in place now that is going to attach to this document here and we have gone through an in-service with our principals, with our secretarial support people. We now have implemented, effective September, a computerized accounting system for all cheque disbursements and all monies coming in from canteen sales, fundraisers and all of that. Having a little bit of grief because of the workload it is creating for people but we are about halfway through it now, and that will address all of the issues related to ancillary funds.

MR. SHELLEY: Thank you.

CHAIR: Thank you.

Before we continue, I am not quite sure how long this hearing will continue. I don't think we are going to finish by noon. I have a number of questions myself here, I want to go into this material and highlight things, and some of them are going to be outside the Auditor General's report. To me, would the Committee, witnesses and the Auditor General's staff want to continue on until 1:00 p.m., or would you rather break at noon and come back at, say, 1:30? I am not even sure - we may finish by 1:00 p.m., we may not. That is the chance we take, because we don't know what some of the questions may be and we certainly don't know what the answers are going to be or how long.

MS BROWN: Some of us are fairly long-winded.

CHAIR: Some of us are fairly long-winded in asking the questions. Not me, now, but...

MR. SHELLEY: Especially people to your left.

CHAIR: What is the feeling around the table?

Mr. Mercer?

MR. MERCER: Go until we are finished.

CHAIR: Mr. Lush?

MR. LUSH: We must go until we are finished. The question is how we do it.

WITNESS: Without a break.

MR. LUSH: I am all for going until 1:00 p.m.

CHAIR: Do you have commitments to -

WITNESS: (Inaudible) as far as I am concerned..

CHAIR: I am prepared to go until 1:00 p.m. if need be and have another look at it at that time. Hopefully, it will be over by then.

WITNESS: Mr. Chairman, would there be permission for one of the witnesses to go to the washroom if he or she needed (inaudible).

WITNESS: She doesn't need to.

CHAIR: Committee members can go so I would imagine the witnesses can go.

Who is next? Mr. Mercer.

MR. MERCER: I would just like to make sure I have things straight in my mind. It is usually helpful when you make decisions.

Ms Brown, you were a member of the former board and the interim board.

MS BROWN: Yes.

MR. MERCER: You were the Chair when the contracts for the directors and the three assistant directors were prepared.

MS BROWN: I was, yes sir.

MR. MERCER: Two points. Who drafted those contracts?

MS BROWN: The salary (inaudible) benefits packages we are talking -

MR. MERCER: No, the contract itself.

MS BROWN: For the director?

MR. MERCER: We have contracts here for each of the directors and the three associate directors. Obviously, someone sat down and crafted that document.

MS BROWN: Yes, that is true. They were drafted in their entirety by the NLSBA, the Newfoundland and Labrador School Board Association - you see Myrle Vokey's name there, he is the executive director there - in consultation with legal counsel. Every time we got a draft they would bring it back to the Chairs - at the meetings of the ten Chairs - and we would discuss it and say: Go fix this or fix that. That is the origin of that.

MR. MERCER: Essentially by Myrle Vokey's organization -

MS BROWN: By the NLSBA. The final touches were in the individual boards' purview.

DR. RIDEOUT: Mr. Chairman, I just want to comment. The NLSBA, I understand, provided a sample contract as a template that the boards operated from so there might be a slight difference in the final version. There were also sample contracts provided by the Newfoundland and Labrador Directors of Education, their association. Sometimes there might have been a little element of one or the other that moved into it.

MR. MERCER: The contract document was taken then as a framework or as a template, as Dr. Rideout as said, and the board then, through a process of discussions and negotiations with the individuals, came to a consensus on the specific clauses?

MS BROWN: The executive committee of the board would have gone further with it in consultation and negotiation with the individual employees. Then it would have been brought back. They were - all of them - brought back to full board.

MR. MERCER: That was my next question. The information that we have seems not to find the paper trail to say that they were approved by the board.

MS BROWN: If I am not mistaken, I think I saw copies of letters that I had signed, on behalf of the board, before I resigned my position as Chair in November 1997. Yes, I'm sure I did. I saw Dr. Rideout's and I saw, I think, some of the assistants. Maybe it was in some of my own school board documents.

MR. MERCER: They were approved by the board in full.

MS BROWN: My recollection is yes, they were. That is my recollection now, but it is three years ago.

MR. MERCER: The information from the Kirby Report is that they can find no evidence that they were, and in fact they questioned the validity of the contracts where had not been approved by the board. That is why I ask you the question as being the former Chair.

CHAIR: I think Dr. Rideout wants to respond to that.

DR. RIDEOUT: Mr. Chairman, if I recall correctly the board authorized the executive to negotiate with the director and conclude a contract, and I believe it would have been the executive, with the authority of the board to do so, that did the actual final blessing to the contract.

MR. MERCER: So the board delegated its legal authority to the executive to consummate and to finalize the contract, is that what you are saying?

DR. RIDEOUT: That is my understanding right now.

MR. MERCER: Consummate and finalize?

DR. RIDEOUT: Yes. Negotiate. Consummate I am not sure. It has different connotations for me, but negotiate certainly.

MS BROWN: Also finalize.

MR. MERCER: Those of us who are less familiar with English (inaudible).

CHAIR: (Inaudible) can I interject a question? I do not if you were leading to this or not, and I do not want to jump in, but at what point in time were those contracts agreed upon? It was with the interim board?

MS BROWN: The interim board, yes, Mr. Chairman.

CHAIR: The interim board ceased to exist on January 1, 1997?

MS BROWN: No, the interim board ceased to exist some time in February with the election of the fully elected school board.

CHAIR: Okay. It was in -

MS BROWN: I think it was February 1998.

WITNESS: February 17, to be exact.

MS BROWN: In 1998? Yes.

CHAIR: There is a question I wanted to ask. There is a section, "Roles and Responsibilities of the Current Boards During the Transition Period."

MS BROWN: Which document?

CHAIR: On page 58 of the document, volume 2.

MR. MERCER: Mr. Chairman, for a second, if you do not mind?

So you are saying the interim board ceased its activities and wound up and was out of the system on what date?

MS BROWN: I think the election was in - Mr. Butt says February.

MR. BUTT: February 17 (inaudible) elections.

MR. MERCER: What year?

MS BROWN: In 1998. The interim boards were appointed in July 1996 and finished in February 1998 after the election.

CHAIR: Just a question on that. I want to get it straightened up too. On pages 57-58 there are two sections: "Roles and Responsibilities of the New Boards During the Transition Period" and "Roles and Responsibilities of the Current Boards During the Transition Period." It says on page 58: "The current board should not enter into any contracts or make any commitments after September 1, 1996 without the concurrence of the new board."

MR. MERCER: That being, I presume the interim board?

MS BROWN: No. The roles and responsibilities of the current boards - those boards would be the Western Avalon and the Avalon North, the two dissolving boards, the boards that would dissolve at the end of December 1996. That was -

CHAIR: Okay, fine. That is good. Sorry. Go on, Mr. Mercer.

MR. MERCER: So at the end of December 1996 the old boards were effectively gone. The interim board was now in place. These contracts were, in the case of the director, entered into in December, I believe, of 1996 and the other three were entered into in January or so of 1997.

MS BROWN: Yes.

MR. MERCER: Okay.

MS BROWN: I am agreeing with you. I think you are right. I do not have the dates in front of me but I -

MR. MERCER: Yes, (inaudible), okay. Again, going back to the comment on the salary provision in the contract, it is a very general statement in that the salary is to be in accordance with the rules and regulations of the provincial Legislature, and so forth.

MS BROWN: Regulations.

MR. MERCER: Yes, okay. There is a document which has not been referred to at this point in time and I believe it antedates your tenure as Chair, from December 1, 1998 on page 15 in the document. It refers to a special privileged board meeting whereby the board -

CHAIR: Sorry, Mr. Mercer. Which document, which volume? Volume 2?

MR. MERCER: Volume 2, yes. A special privileged board meeting which was called to discuss: "...the controversy surrounding the contracts in place for senior administrators with Avalon West." I am going to read the next statement to put the minister's previous correspondence in a bit of a context: "Concern was expressed over the Minister's threat to disband the Board if the contracts were not brought in line with Government's directives." Okay? Then the board, of course, made their decision that contracts entered into in good faith by the interim board were be honoured. I read the contracts entered into by the interim board and again, as I say, the section with respect to salaries is pretty generic. It is to be in accordance with provincial legislation, including regulations. I am just wondering how the board - and I do not know if you can answer this; maybe Mr. Butt can - and I am sorry to have put you on the spot, but why would the board conclude in December 1998 that they would be in violation of a contract negotiated in good faith by not extending the salaries to step 33?

The minister had always talked about step 25, and I understand the confusion that your Director of Education said about the Hay system, but everything that I read with respect to what the minister has written, given my background and knowledge of that system, is entirely consistent with what the Hay system is in pretty well every letter he has written. I can rationalize exactly what he is saying and understand that. I can understand perhaps where Dr. Rideout and the board might not have been able to understand that. The point I am trying to make here is why - at a special privileged meeting in 1998, where the minister was in fact threatening to disband the board if it did not roll back the wages - the board felt that a contract which was, at it says here on page 15, "negotiated in good faith" and which contained a very generic statement of salary, was almost a deal breaker. Then they had legal opinion there which said: You are in your legal right to go to step 33 so we suggest that you do. Letters were subsequently written to the minister asking to remove his threat and so on and so forth.

It all seems to me that the minister was very clear. Again, from my background - I apologize for that, because I have some knowledge of it - and understanding of the Hay system, everything he said was consistent entirely all the way through, right up to the letters which he apparently wrote to the board preceding December 1, 1998. Any comments on that?

MR. BUTT: I think I can identify with this somewhat. The general feeling around the table at that time was that this was quite a threat by the minister at that time, the hon. Roger Grimes. We really felt like resigning, everybody, and as far as I can recollect there was a fair bit of discussion. We were all convinced that a contract is a contract is a contract. He agreed with the terms under which these contracts were signed, especially the fairness of it and the legal advice that we were given. I think at that time also Avalon East was in a similar position and had taken a stance similar to this prior to our meeting. I think it was unanimously felt that we should follow suit.

MR. MERCER: I understand what you are saying. If the contract entered into in October or December, whenever it was in 1996, with the director had specifically stated a number, yes, I can buy into that, but when the statement in the contract is of such a generic nature, frankly if it were to be interpreted as the minister was interpreted consistently, it would never have gone beyond ste 25. That statement is never anywhere in the contract document in terms of a step or in terms of a salary. Like I said, I am just trying to get my head around why the board felt, as you suggest, inclined to resign over this as a matter of principle.

MR. BUTT: You could go to page 23, Other Standing Benefits. We thought at that time as well - as a matter of fact, we were convinced - that this was part of the contract as well, and a contract had been signed in good faith. It was signed on the basis of legal advice and we felt that we really never had a right to change the contract somewhere in midstream until probably the contract had terminated, and then we would take another look at it.

I think the present minister, the hon. Judy Foote, has written us since informing us that once this present contract expires with respect to the directors throughout the Province that the whole thing has to be taken a look at again. She was willing to live with it until that time.

MR. MERCER: Yes, I am aware of the letter from the minister, but at the time this action was taken that letter was not in place. I have been reading since section 18 was brought forward before. It still seems to me, and I guess what we are tying our hat to is, that if there were other "benefits of policies and practices currently in place, whether written or unwritten, providing benefits," as it says on pages 23 and 24, anywhere within the Province that were not now in this contract, they would be passed on to the individuals named in the contract. I guess that is where the board is hanging their hat.

I just question that a little bit to the extent that if the minister has been saying consistently, all along, that regardless of what might be happening out there - as the A.G. has indicated, some people were doing things that they perhaps should not have done - the fact that that clause is there, I am not sure how that would incline the board to believe that they should also adopt similar policies with respect to these contracts if, in fact, what was done in other places by "policies and practices currently in place, whether written or unwritten," were not, in fact, appropriate.

CHAIR: Dr. Rideout would like to respond. I saw his hand up.

DR. RIDEOUT: Mr. Chairman, I am in the position of probably being the only person who was at each of these points and junctures, and it is a bit awkward for me having to try to portray the sentiment of the board because I was an employee of the board. The only thing I could offer there is my understanding of section 18 of my contract was put in by the board largely because we were not sure what was going to come out at the end of the day in terms of contracts, benefits and all of that. It was still a cloud of uncertainty. We had no clear definition of what the executive compensation plan was when my contract was entered into. We did not know what would be contained in it. The board, therefore, inserted that clause so that I would not be shortchanged if something developed after the contract that other directors received. That was the context in which it was put in there. It was not to give you a glory clause or anything, it was just to give that kind of consideration.

The best that I could offer is that Mr. Michael Harrington, legal counsel for the board, met with the trustees. I believe I was present for all of the meeting. I asked if they wanted me to leave and they indicated they would prefer that I stayed. He went through all of the background and the history leading to this, up to reform and where it was at that juncture. His legal opinion differed from yours, and that was the advice that he gave to the board based on the sum total of the record from where it began back then to where it was at that point in time. It was, I think, out of consideration for what he was saying from a legal point of view, perhaps coupled with what the board was struggling with morally in trying to get it sorted out and an answer to it, that led them to reaffirm their initial decision on that salary placement.

CHAIR: Mr. Mercer, can I just -

MR. MERCER: I just want to finish off on that very quickly. The discussion here is not so much what has been permitted or not permitted, but the minister stated step 25, and when the contract was entered into, both in good faith by the interim board, that is what had been agreed to. What we are talking about in 1998 is a salary increase from step 25 to step 33.

CHAIR: I think we have had a fair bit of discussion on salary with respect to this issue and I think, to me, that question has been answered a while ago. I would like to move on to some other topics if we could. I don't want to cut you off -

MR. MERCER: If you wish.

CHAIR: I think that the interim board put him at step 25; the new board decided that to be fair, in their minds morally, that they should go to step 33 to be equivalent to probably the Avalon East director; and that is why that clause was put in there in the first place, to give them that latitude to do that. Right or wrong, that is what we will have to decide.

MR. MERCER: I do not disagree with your comment, Mr. Chairman. The information that is provided to us on page 15 makes reference to contracts negotiated in good faith by the interim board. There is nothing with respect to step 33, anything to do with the contract negotiated by the interim board.

CHAIR: All right, well, we will have a further discussion on that later on.

Mr. Joyce.

MR. JOYCE: I am going to bring up salary once more, but it going to be very brief. Were those positions publicly advertised?

MS BROWN: The directors and the assistant directors' positions were, yes.

MR. JOYCE: When the position was advertised, was the salary at step 25?

MS BROWN: No. I think the advert in the paper, if I remember correctly, said salary was to be negotiated.

MR. JOYCE: To be negotiated.

MS BROWN: We didn't know. We had no clue what it was going to be at that point.

MR. JOYCE: Because my concern, and I know I am going to get it from Corner Brook, is that of the contract with Dr. Rideout, number 11 of the salary, it says, on page 22 of volume 2: "The salary for this position shall be in accordance with the salary agreed upon by the Board and the Director, in accordance with provincial legislation including regulations."

It was earlier stated that the reason why you brought him up to step 33 is because other people across the Province had it, were up to that level, and he should go up; right or wrong, I am not sure. Was it within the regulations or was it because there were other people up to step 33?

MS BROWN: Again, I cannot speak for the step 33 one. When I finished with the board Dr. Rideout was at step 25 and the other trustees or people who remained - I do not know the rationale or the process that was involved with the step 33.

MR. JOYCE: There may have been other people who thought this could go up to step 33 where most people thought step 25 was the top. Other people may have applied if they thought there was a great increase in salary or whatever.

MS BROWN: Actually, Mr. Joyce, I think at the time that the advertisements were put in the papers nobody knew what the salary was going to be - step 25, step 26, step 30, nothing - because there was no legislation or regulations. We had nothing.

MR. JOYCE: Dr. Rideout, you mentioned earlier to Mr. Shelley about inventory control, capital assets. Earlier I asked a question about the person looking for HRDC funding and you mentioned that 8.5 per cent of a teacher's salary is going towards that.

CHAIR: No, zero point eight five per cent.

MR. JOYCE: Eight point five per cent, wasn't it?

CHAIR: Zero point eight five per cent.

MR. JOYCE: So it was not 8.5 per cent. Okay, fine, not a problem.

DR. RIDEOUT: Just a comment, Mr. Chairman. That individual is mandated to produce, annually, sufficient partnership activity that translates into benefits for schools and students and learning to justify his continued existence. There is an expectation there that he delivers, and if that expectation is not met the board then deals with it at that time. To date, in the three years that it has been in existence, it has more than delivered the expectation that the board has had and well above what the cost would be in providing the salary unit. It is something that the board has a very strong commitment towards seeing the continued success of the partnership role because it is translating into direct benefits for students and schools throughout the district.

MR. JOYCE: Okay, thank you, Mr. Chairman.

CHAIR: Anyone else? Mr. Lush. Mr. Fitzgerald, questions?

MR. FITZGERALD: Yes, I would just like to ask one other question. The Auditor General in her report noted that a senior employee of the board owed the board or the Department of Education in excess of $40,000 as of March 31, 1998. Number one: Is this an accurate figure? Number two: Has there been any effort made to recover that amount of money?

DR. RIDEOUT: As indicated in the previous meeting and confirmed by the Department of Education, it shows that amount was repaid at government's rate of borrowing. I think it was about 6.5 per cent or somewhere in that vicinity (inaudible).

MR. FITZGERALD: So the full amount has been recovered plus interest?

DR. RIDEOUT: That is correct.

CHAIR: Is that it?

I have a few questions then. Please bear with me. (Inaudible) just the man now, I will have to wait until he comes back.

WITNESS: It will not be a long wait.

CHAIR: Mr. Butt, you just recently became, they said, the Chair in the past two months with respect to the Avalon West Board but you do have a history with the board for some time, don't you, previous to that, and other boards?

MR. BUTT: Yes, just the interim board.

CHAIR: So, you were with the interim board. Were you with the Avalon North Board?

MR. BUTT: No, not as trustee, as an employee.

CHAIR: As an employee, okay. Then secretary-treasurer of the Avalon West, was it?

MR. BUTT: Yes, that is right.

CHAIR: Also, Vice-Chairman of the Avalon West, so you are not new coming into this position. You do have a fair history with what has gone on with the boards.

MR. BUTT: Yes.

CHAIR: Do you have the copy of the Hansard of the previous hearing? Did you receive a copy of this?

MS BROWN: I did receive it. I do not have it here but I did receive it.

CHAIR: In the Hansard of September 28, 1999, on page 5, Mr. White - he is not here now - referred to the $40,000 owed by the senior member of staff. Now we just hit on that. These are Mr. White's words:

"The salary advance - when the employee was hired there was some dispute as to where his salary would be. He had not received any salary from government, I understand, from the time of hiring until January; so, out of common decency and common sense, the board paid him in advance, knowing that the money would be recovered - not in advance, but gave him salary advances before it was settled. He did not receive any salary until January but this account has now been paid in full."

(Inaudible), okay. He is not here now. I asked a question - oh, he is there. Mr. White -

DR. RIDEOUT: Dr. Rideout.

CHAIR: Dr. Rideout, sorry. With respect to that $40,000, was there anything that had to be paid back with respect to it coming out of overtime? Did he pay it back that way, worked off the $40,000 with respect to overtime, or was there a straight deduction from his salary?

DR. RIDEOUT: Mr. Chairman, I believe there was one instance in which there was provision for weekend time to be credited towards the amount.

MR. FITZGERALD: Would that be normal for somebody who was on salary to be paid overtime in excess of what the negotiated salary would be?

CHAIR: When I asked that question the last time the answer, from page 6 of the same Hansard, from Dr. Rideout, was: "My understanding is that that was that $250 per pay period. The agreement with the Assistant Deputy Minister at the time, who approved that arrangement, included interest at government's cost of borrowing. I received confirmation in August that that indeed had been repaid and at interest."

So I asked the question. It was paid back strictly out of deductions from his salary because somewhere I was under the impression that he paid it back through working overtime and that type of thing. Which is it?

DR. RIDEOUT: There was one instance, I understand, Mr. Chairman, in which there was a credit applied to that amount - I am not sure the exact amount of time - for activities related to the functions of the board on several weekends. That would be in the records at the district office.

CHAIR: Maybe you would like to forward a response on that once you check it back.

I am going to leave the Auditor General's report now for awhile unless someone else has questions, or they can interject at any time. This concerns basically some correspondence, letters to the editor - Dr. Rideout? That is the response there, is it, to the last question?

DR. RIDEOUT: No, Mr. Chairman.

CHAIR: Some letters to the editor in local papers and what have you concerning some activities of the board and decisions the board have made, the current board and what have you. Just for clarification purposes for my mind, and for people who are asking the questions, I have a few notes made. I would just like to get your response and see what is happening here.

There have been some major renovations apparently at the school board offices that you are familiar with. I have been told that maintenance people with the board were paid, basically, overtime to complete the renovations. Some of the people that brought that to my attention, and in some of the letters that I have here, they were concerned that the maintenance people should have been and could have been putting their efforts into upgrading the schools, maintenance of the schools and that type of thing. Especially when you look at, in light of the fact that we have Mr. Hogan here this morning concerning Laval High School. Would you like to comment on that with respect to the renovations?

DR. RIDEOUT: Mr. Chairman, the details about the renovations you can find on our website. It is listed there for the public to view. The board took a decision June past, I think it was, that we were having difficulty in not having accommodations for meetings, workshops, in-service sessions and things of that nature. There was also concern expressed in terms of our inability to provide the appropriate technology support throughout the district. We had in excess of fifty employees operating out of district office. We had one kitchen for the staff that would have been, I suppose, roughly about six feet by fourteen or fifteen feet, something of that nature, and there were no facilities there. At the time, for various meetings, we were going out and renting outside facilities and going elsewhere, or going in on schools and taking over their libraries and things of that nature for that purpose.

The building that we inherited as a school district was a former building supply store. It had a fair amount of underutilized space down in the basement level. In looking at the needs of what we were trying to accomplish, that area was explored to see: Can we change this to: one, provide a boardroom for meetings of the board, and two, at the same time provide a training centre? So that if you were bringing in people to do computer training you could make a computer lab in that room and you would not have to go and take over a computer lab from a school. We were trying to create a support division for technology in all of the schools for doing computer repairs. We were offered a salary unit from Computers for Schools whereby we would be given a free computer technician at no charge to the board. That person would be available to refurbish computers and then donate those to the board to be distributed to schools.

In those instances, and looking at all of those factors, the board felt it was possible to literally - if I were speaking casually I would say gut out the basement, take all that area. The design was such that you had no choice. You couldn't just take out a little piece or make a little room here and a little room there. The only way to do it appropriately was to literally clean it out and redo that whole area. That was decided by the board I believe it was some time in June, but I would have to refer to the minutes to be certain.

The funding for that work came from a variety of sources including monies provided for district administration and administrative overhead that would have been associated with various funding projects that were implemented. The work was carried out over the summer in an attempt to get it done before school opened. Part of the reason for that is we operate a Distance Learning division in our district as well. In doing this cleaning out of the area down below that person lost their centre for Distance Learning where they would be working with students throughout the Province at different times.

In a sense there was a fair degree of effort given to try to have most of it done prior to school opening in September. If I refer you again to our website, I think something in the vicinity of 97 per cent of the maintenance work for schools was completed by the end of August, the first week in September, that was done.

I could not comment on the specifics. If at any point in time anyone got overtime to do that work that was not a common practice. It may have occurred on an incidental basis if there was something that just had to be done because someone else was coming in the next day to do some plastering or something, but it would not have been common practice.

CHAIR: You said 97 per cent of the work for the schools that was scheduled to be done, I would think, was done prior to the school opening. I do not think that it is the concern. I think the concern was the amount of money that was spent on the board offices, not only downstairs but apparently the total offices that were done since the board took it over.

I have a letter here to you dated January 19, 2000 from Lloyd George, School Council Chairman. I just want to read a couple of things here. I would like for you to respond to them. He writes:

"When we hear of schools having problems such as poor air quality, cold classrooms, hot classrooms, leaking roofs, leaking windows and overcrowding, we tend to ask, ‘Where is the child first philosophy?'"

Further on he says:

"When we have to reduce spending within our instructional budget, operational budget, and realize cutbacks in every aspect of educating our children, we feel projects of this nature should not be carried out without communicating the details to all stakeholders. This information should offer the following: Description of the project. Why is it needed? What is the cost? Where is the money allocated? Who will benefit?"

Would you like to comment on that? Since you took over the building, the Avalon West Board, how much money has been spent in total on the building?

DR. RIDEOUT: Mr. Chairman, I could not give you an answer on the spot like this, obviously. I mean, I can recall exactly what has been done over the years. The project undertaken this summer was certainly the largest that has been undertaken and ultimately we are of the opinion it will be a cost saving matter for the board rather than an expense in the long term, in terms of not having to go to outside facilities for work of that nature.

I recall when we came together initially the entrance to the district office was renovated to create a reception area. There was no reception area before. We felt, and the board felt, at that time that that was a necessary improvement that had to be affected. There were slight changes made to offices. They would have been varied. Generally we worked with existing walls that were there so it would be a minimum type of work done. For myself and the assistant directors, for example, we went with... I say the word suite, but I will use it loosely, in that the Director of Education and his or her administrative executive assistant has a little office before you get into my office; the same with the assistant directors. There is a little area for the secretary before you get into their area. That work was carried out. I believe that was what was done in the first year. The rest of it, again, would have been relatively minor.

The year after that, my recollection is that we renovated an area that had four washrooms and made it into two units of male and female, and made it handicapped accessible because it was not handicapped accessible before. I think that was the only major thing of that year, and that generated some criticism because you were seen as renovating a board office again, I would assume. The work that you have described this year has been carried out. In terms of the board's perspective, I suppose, the feeling is that in its total cost for housing its operation it is fortunate to have a building that it owns. It is not paying $250,000 a year in lease or anything of that nature, and an investment in that building is a good long-term investment, especially when we were not in a position, contrary to what Mr. George's letter may imply - we have not reduced instructional grants to schools. In fact, we have increased grants to schools. Any reductions that we have carried forward have been a result of reductions in allocations by government, such as a reduction in secretarial hours.

I would offer the same reply to Mr. Hogan's comments. Our staff has indicated to me that over the past four years there has been about $300,000 spent at that particular school, Laval High School. Just last year there was $16,000 spent on painting for the school and to imply that it is impossible to get four gallons of paint to do something when you are spending $16,000 for painting, well, I don't understand that. That same school has had windows replaced in it that have been in the vicinity of $45,000. There has been basically a paving project to do the school property of $60,000. There was an extension with a computer lab added of $93,000. Vertical blind have been replaced. Eaves have been replaced. Boys' washrooms were upgraded this year. Two sections of roof have been repaired by Works, Services and Transportation in the past and there are further repairs to be carried out now in the vicinity of $30,000. Interior renovations at the school - our estimates show $295,000 spent at that particular school. Mr. Chairman, $295,000 on any individual school is a lot of money even over a four year period for maintenance of that nature.

I don't agree with the statement that that school has been neglected. It is my understanding that funding to schools in Avalon West, for the most part, has been increased in the amount of maintenance that has been carried out over the past four years and the record is there to demonstrate what has been done over that four year period. Our buildings now, you will find, are in the finest condition of any buildings in this Province, bar none. There is no other district that would have better facilities than what we have when you factor in two new schools that will be opening in the near future and the closure of older buildings related to those.

I think in responding to your question, I'm not of the opinion that the board has been irresponsible in the work it has done. I'm of the opinion that it is taking a long-term view of its facilities and decided to do what it could with the funds available added. It did not take money from the instructional budget to do that. It took it from the general district administrative funds and other funds that were available to it.

CHAIR: Thank you.

I would like to get to the bottom of some of the accusations that have been made and this is the place and time to do it. I am going to throw out another few questions.

I have a copy of your press release here: The Avalon West School Board expands technology and supports the schools. Basically you are explaining or rationalizing the expenditure of the funds. The question that came to my mind when I was looking at that, reading it, is this. You are going to be utilizing it. I think somewhere upwards of forty people would utilize it at a given time. From my experience, wouldn't the schools themselves be available for that? Why would you need to put that kind of money into the board offices for meetings? I was going to ask that. How often would these people be meeting there?

DR. RIDEOUT: Mr. Chairman, the technology division is used. There are permanent offices, there is a repair centre, there is a computer depot. All of that is there and that is used daily.

CHAIR: By whom?

DR. RIDEOUT: By staff.

CHAIR: Okay.

DR. RIDEOUT: There are staff there, technology technicians and people of that nature. Some are on a long-term contract, some are on short-term, some are on job placements but we could have up to twenty people just in that technology division alone when you have students on work terms with us, for example, who would be working.

In terms of the boardroom, the boardroom is currently being used, I would say, around 80 per cent of the time or more because it is used for meetings of the board at night, it is used for hearings, it is used for training, it is used for teacher workshops and it is used for meetings. The difficulty we are having is we cannot get in there sometimes because of the demands on it, even as high as yesterday. We have a French competition that is going on this spring from across the Province that is being hosted in our district because it can be accommodated in that room and in that facility now. We could not do that last year. That would continue, I would assume.

CHAIR: A couple of other questions. This is all public information as you know and now is a good time to ask. Is there a smoking room constructed within the facilities? I don't know - Mr. Lush just brought up the point to me - but were you informed that these types of questions would be asked? I think the Public Accounts Committee can pretty well ask any questions it wants to ask.

MR. LUSH: People have to come prepared, though.

CHAIR: Yes, but he knows the answers to these.

MR. LUSH: I think it is only fair that if you are going to question them on something they should be informed. This is not the House of Assembly. I think witnesses should be told what they are going to be asked, but having said that -

CHAIR: Yes, fine. I think it is general -

MR. LUSH: - (inaudible) have a right to pursue our own personal agendas.

CHAIR: I'm not pursuing a personal agenda. What I am asking here is about information that has been in the media and has been responded to publicly in press releases by Dr. Rideout.

MR. LUSH: Okay.

CHAIR: With respect to the renovations themselves, we were told - it is in the media also - that they were really quite extravagant. What would you feel to say on that?

DR. RIDEOUT: We have a nice boardroom. It is conducive to the work of the board. It is multi-functional. Within thirty minutes we can have a computer lab to occupy thirty teachers for training purposes. When you are doing that for meetings of that size we can accommodate forty-five to sixty individuals for any workshop training that we have. We can accommodate full meetings of the board for training, for public hearings or board meetings. We can provide a gallery for twenty or thirty people to sit in on board meetings. In creating a room of that size we had to build in certain acoustical requirements, I suppose, so that you would be able to have appropriate sound in dealing with a group like that.

The biggest criticism I have heard, I think, relates to the ceiling structure where there was just a - I do not how you describe it, there is a word for it- but there are two divisions where it is hollowed like so and it provides - you do not have a flat low ceiling that gives acoustical problems. Beyond that, most other things there are normal things that you would require. It is set up as a boardroom. When we were doing, because you were starting from scratch, it was just as easy to mix in a few nice colours so that it looked good as it was to make it as bland as this room is. The additional cost to make gyproc look a little bit different and paint it a little bit of a different colour was not deemed to be excessive. Now, it looks excessive, but if you look at what is there, it is gyproc painted a different colour and styled differently.

CHAIR: Maybe the answer to that is when you provide the information with respect to the cost of the renovations in the building. I mean make it public.

You referred to the boardroom and the computer and the technology and what have you on that. Do you have a contract now agreed upon or about to be agreed upon with IBM to install computer software and what have you? What is the total cost of that, if it was tendered?

DR. RIDEOUT: No, Mr. Chairman, there is no contract as such with IBM. We are in the process of engaging a pilot project on one of their products that we are implementing in six schools as a pilot but that would not be -

CHAIR: That is in schools themselves.

DR. RIDEOUT: Yes, but that would be a particular product that we are - just as if you were bringing in a new textbook in social studies, you deal with the company for that product and assessing the merit of that for the whole district.

CHAIR: What would the cost be of the contract?

DR. RIDEOUT: I am not sure offhand, Mr. Chairman. I would have to check back in the records for that because that one in particular is a partnership with our school board, Memorial University and IBM. There is a three-way partnership for the application of this particular software program and the usage of that, both in a classroom setting and also with new student interns coming in for experience in the school system, and allowing them to communicate with the university and allowing our teachers to communicate with their parents through an Internet that is being established.

CHAIR: Basically, it was sole sourced out to IBM. It was not tendered. Other people did not have an opportunity to put a proposal in on that?

DR. RIDEOUT: It is not an item that anyone else has. It is a propriety product that is only available from that source. The pilot project that we are engaged in is to assess its merits for implementation throughout the district.

CHAIR: Thank you.

Does anybody else have any questions? Would the Auditor General like to make a comment before we clue up?

MS MARSHALL: No, I have no comments.

CHAIR: I think we have pretty well covered the issues that we wanted to cover. As I said in the beginning, there was some overlap with respect to the questions and possibly some of the answers.

I appreciate Ms Brown coming out, Mr. Butt, Dr. Rideout and members from the board, and people from the Department of Education. I think it was necessary that we have this hearing today to get to the bottom of it, especially with the interim board and having some representation here. It is too bad the other individual could not make it. What is the name? Muriel Davis.

I think we have enough now to be able to sit back and sift through all the material: the answers we have been given to the questions asked here, the Auditor General's report, the Kirby Report, correspondence between the Department of Education, the minister and what have you. I again would like to thank you for taking the time. We stayed a bit longer than we thought we would. Would you people like to have any comment before we clue up?

MS BROWN: Actually, I would, Mr. Chairman, if I could.

I think what I should do first is thank Mr. Lush for thanking us as volunteers. We are not used to anybody on the government side thanking us for the work we do for them, and a lot of it is their dirty work, too. I feel I have to say that, because it has been a bitter bone of contention with me for a long time, and there are still a lot of volunteers out in the system. I am no longer one of them so I guess I will speak for them, having been there. They do a lot of hard work and you can see it in the Province every day in everybody's district now. They stand at public microphones and have their faces practically torn off. I have been there. For eight years I did that.

Government has all kinds of authority. Boards only have total autonomy when they are doing the government's dirty work. I am not the only former trustee, and I guess current trustee, who feels that. It has been with us. When we went through this reform, this nightmare, this horrendous thing, I heard the minister say time and time again, when people appealed to him: Don't let them touch our school, don't let them do this, don't .... Oh, can't touch them; boards are totally autonomous bodies.

Then, when you make a decision based on legal advice, based on lack, if anything - and that sounds like a contradiction in terms - of clear direction from the Department of Education, you make the best kind of decision you can, given what little information is supplied sometimes. All of a sudden we do not have any autonomy; government has it all.

That was a major problem for us, and it looks like ... Mr. Chairman, if I could say, your questions to Dr. Rideout about the renovations - I am sitting back now as a former school trustee and I think the kind of stuff he has just described, this technology centre, is amazing, what he was just telling me. I have to make a trip to Spaniard's Bay to have a look at it.

We sat, as trustees, down in that hovel of a basement. We never got a cent - municipal councils get paid, get honorariums, they are allowed under legislation - did government's dirty work, took all kinds of heat. We sat under a ceiling that dripped on us sometimes - wooden chairs. We couldn't bring the big, fancy, comfortable board chairs down over the stairs; if we moved upstairs, the women all had hot flashes. We could not stay there because the room was - from the window - such a tiny little thing, so we would move downstairs, and now they have taken some steps. Again, where is their autonomy?

They have the authority to spend funds - they have to be answerable to the Public Accounts Committee, there is no doubt - but I thought, before they had to answer for that sort of thing, shouldn't the Auditor General have said: You made a mistake in what you built in this building. I have not seen a report where Ms Marshall said that what you have done is, you have overstepped your bounds here; you used money you never had the authority to use.

You get a political pundit like Bill Hogan, who is looking to score political brownie points, writing a letter in the newspaper. I represented Laval High School for all of the eight years that I was a school trustee. Most of that money that Dr. Rideout said was spent in the last few years was when I was a trustee. It is political football again. I think if anything has been gained or lost through this reform process, the board's autonomy now is more in question than it ever was, and only at the times when it is to government's benefit to question it. I think that is a scathing indictment of the whole system now, and what volunteer trustees are up against. I think, more than ever, volunteer trustees need to be told - like Mr. Lush just said to me an hour ago - we respect what you have done and we appreciate what you have done given the difficult times. I still know that everybody is accountable for the public trust and for the public money.

Maybe I should not have said that, but I have been a long time looking for an opportunity to say that. Thank you for letting me say it.

CHAIR: That is one of the reasons why we are here, basically. I appreciate your comments on the end here and I appreciate the answers that you gave during the hearings, because it did give some continuation to what we were trying to get at from the last hearing.

With respect to the last few questions I asked Mr. Rideout, I was thinking that he would pretty well welcome the opportunity to clear the air to a certain extent because, as you know yourself, there have been letters to the editor, there have been letters contacting the board members and what have you, and I thought that the questions - you have the answers. Hopefully now, when our report is done and the recommendations made, this will all be put behind the boards. That is one of the reasons why we are having it.

I would like to thank you people for coming in, thank you for your answers, and we will adjourn the meeting.

Thank you.

On motion, Committee adjourned.