March 18, 2009        HOUSE OF ASSEMBLY MANAGEMENT COMMISSION        No. 15


The Management Commission met at 1:25 p.m. in the Chamber.

MR. SPEAKER (Fitzgerald): Good evening.

I welcome Members of the House of Assembly to our regular Management Commission meeting and staff of the House of Assembly as well.

We can start the meeting as we do every other meeting by having members introduce themselves for the sake of those people who are watching by television.

We will start to my immediate left.

MR. T. OSBORNE: Tom Osborne, MHA for St. John’s South.

MS E. MARSHALL: Beth Marshall, MHA for Topsail.

MS BURKE: Joan Burke, MHA for St. George’s-Stephenville East.

MS JONES: Yvonne Jones, MHA for Cartwright-L’Anse au Clair.

MR. KELVIN PARSONS: Kelvin Parson, MHA for Burgeo & LaPoile.

MS MICHAEL: Lorraine Michael, MHA for Signal Hill-Quidi Vidi.

MS KEEKE: Marie Keefe, Clerk’s Office.

CLERK: Bill MacKenzie, Clerk of the House.

MR. SPEAKER: Thank you.

My name is Roger Fitzgerald, and by virtue of being Speaker, the Chair of the Commission.

In light of the terrible tragedy that happened on March 12, last Thursday, I ask Members of the Commission if they would kindly stand to show respect for the seventeen members who lost their lives in that terrible Cougar helicopter crash.

I ask all members to respectfully stand.

[Moment of silence]

MR. SPEAKER: Thank you.

We were slated to start our regular Commission meeting at 10:00 a.m., I think it was, or 10:30 this morning. We had an in camera session prior to the meeting and the in camera session lasted much longer than we had anticipated and for that we apologize.

To report on the in camera meeting, I just want to say that there were a number of topics discussed, both personnel matters and legal matters, and there has been no decision reached on either one of the matters that was raised. For the sake of the viewing public, I might say that whatever matters are raised at an in camera session will eventually be raised right here in a public session when decisions are reached. So, there have been no decisions reached and we will review those matters as decisions are made known or have been reached and reported right here in a public meeting.

The first item on the agenda would be the approval of the minutes from January 27, 2009. Members have had an opportunity to read those minutes. I would ask, if there are no errors or omissions, that somebody would move that the minutes be adopted as written.

Moved by Ms Michael, seconded by Ms Marshall.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

On motion, minutes adopted as circulated.

MR. SPEAKER: The next item on the agenda would be the report on section 18(4) Member’s Resources and Allowance Rules. Here, again, it is a report where there was a sign that was approved and allotted for when the former Member for Baie Verte-Springdale was a Member of the House of Assembly. The cost of the sign arrived after that particular member had resigned, and the bill was not paid. The payment now of $1,600 was transferred to that member’s allowances and it is just being reported that this particular sign, while it was not paid for, is now paid for and the present Member for Baie Verte-Springdale will be using the same sign that was there for the former member. The only addition was to have the name of the member changed, with a $60 cost associated with it.

The next item would be the authorization under Section 43. It is a report, again, where the Member for Torngat Mountains had incurred expenses of $388 in costs associated in getting to and from her district. This is a situation whereby the hon. member, for scheduling of flights and for weather, had to absorb extra time in staying at a location other than the location to which she was traveling, for a cost of $388.

I spoke to members this morning, a couple of members, that maybe this is something we need to address as a commission as we move along because we have several members who travel and weather certainly plays a part. Right now, their only alternative in order to get allowance is to stay overnight, or not to travel or complete their travel, is to get in touch with the Speaker or the Clerk’s office. Neither the Clerk nor the Speaker wants to put anybody in a dangerous situation, and we do not think members should have to report or look for permission from either the Speaker or the Clerk. It can still be reported, but if it means them staying somewhere other than their destination because of conditions that do not allow them to travel, I think it is something that we need to address.

The Clerk.

CLERK: (Inaudible).

MR. SPEAKER: I thank the Clerk.

There has been an update for this same authorization under section 43 because February 10 was not included, and the total cost would be $522.47, which includes HST.

Again, for the Member for Torngat Mountains, for the reasons that I just explained, the media has been given this update and members have been provided with it as well.

Ms Jones.

MS JONES: Thank you, Mr. Speaker.

I guess before you move to get into a motion to approve these, I just wanted to raise an issue around section 43, to pick up on a comment that you made. Obviously, this is a regulation that has been quite an impediment for me as well in my district.

I would like to ask that the Management Commission review that particular section of the act to look at what amendments we can make to allow for travel for MHAs, like the Member for Torngat Mountains, like members such as myself and I am sure many others in the Province, that often incur very difficult situations in travel to and from our ridings.

You had the opportunity to travel with me just two weeks ago in my own district. You certainly got a good understanding of the things that we deal with on a regular basis when I could not land in my district and ended up in Happy Valley-Goose Bay. Those things we just cannot predict but when they do happen, the first thing that is required of us is to get authorization from yourself, as the Speaker, or from the Clerk of the House of Assembly in order to be able to stay in that community until the plane leaves again or there is another way to get out of it. I think it is inappropriate in most cases. I have had to try and contact the Clerk or yourself on weekends, late in the evenings when I have ran into problems, and I am sure there are other colleagues in the House of Assembly that deal with similar issues as they travel back and forth across the Province.

I would like to, at this time, make a recommendation that the Commission would undertake to look at section 43 of the act and look at some other possibilities or amendments that could occur there.

MR. SPEAKER: Thank you very much.

Further comments?

The next item on the agenda would be the proposed rule amendment for the constituency office leasing. At the last meeting, it was generally agreed that we would use the Public Tender Act. Members felt more comfortable having the Public Tender Act be the guide that we would use when we reach out to acquire office space.

What we have done is, we have made up – or, not made up - we have put forward a draft amendment here and asked for members’ indulgence to consider the draft amendment. Since this rule amendment is not changing the levels of reimbursement, the amending process of section 15(5) of the House of Assembly Accountability, Integrity and Administration Act certainly does not apply and there would be no need for this to be brought back for a second reading, or to appear in the Gazette.

If members have had an opportunity to read the draft amendment, if there needs to be some discussion before I read the amendment as drafted then we can have that discussion now. If not, I can read the amendment, the draft amendment, into the record and ask members to vote, but if there are changes that need to be made to our discussion then maybe we can have that first?

Mr. Parsons.

MR. KELVIN PARSONS: Just one comment, Mr. Chair.

On the third page of that submission, under the Draft Amendment heading, Clause 9 - in fact, (9.1) - talks about what would be included in the tender, and it refers to monthly costs, including utilities, taxes, insurance, security, janitorial services and signage. I would think we should include snow clearing there, because that is an issue and I think we need to specify that it should be there.

MR. SPEAKER: Do members have any problem with adding that wording?

Any further comments?

If not, I will read the Draft Amendment for the benefit of those people who may be watching. It reads:

"Paragraph 20(8)(c) of the Members’ Resources and Allowances Rules is repealed and the following is substituted:

"(c) where accommodation referred to in paragraph (b) cannot be obtained, the member shall decide in which community his or her office will be located and the member shall obtain in that community commercial office accommodation in accordance with the tender process for leasing commercial space under the Public Tender Act.

"Subsection 20(9) of the Rules is repealed and the following is substituted:

"(9) A tender for accommodation under paragraph (8)(c) shall stipulate that the lease shall be terminable at or before the expected date of the next general election.

"(9.1) Proposal documentation submitted by a landlord responding to a tender made under paragraph (8)(c) shall include the total monthly cost, including utilities, taxes, insurance, security, janitorial services, signage and snow clearing.

"Subsection 20(10) of the Rules is repealed and the following is substituted:

"(10) A lease contract for office accommodation acquired under this section shall be prepared between "Her Majesty the Queen in Right of the Province of Newfoundland and Labrador, represented here by the Honourable the Speaker of the House of Assembly" and the owner of the office space and the cost of that preparation shall, unless stipulated otherwise by the Speaker in exceptional cases, be paid directly by the House of Assembly in accordance with the approved office lease."

All those in favour?

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against?

The motion is carried.

The next item on the agenda - maybe we can move forward - we have had Mr. John Noseworthy, the Auditor General, waiting for some time to appear before the Commission. Mr. Noseworthy has now arrived and I would ask if the committee members would turn to Tab 2, item 9, when Mr. Noseworthy takes his seat.

I would like to welcome the Auditor General, Mr. John Noseworthy, to this meeting of the Commission. I would like to ask the Clerk if he would introduce the topic to be discussed, and questions asked, in order for the Commission to prepare itself and to ask questions of the Auditor General.

Mr. Clerk.

CLERK: Thank you, Mr. Speaker.

I will just sort of briefly go through this covering briefing note which tries to summarize all the correspondence and issues that have been surrounding this issue since Green’s report came out. So I will just quickly go over that covering briefing note.

When the Review Commission on Constituency Allowances and Related Matters, the Green Commission, was doing its work it discovered that there were audits for a couple of years left undone for the Legislature and they brought it to the attention of the Internal Economy Commission, the predecessor body to this body. The Commission members, at the time, were concerned and engaged in correspondence with the Auditor General to see what his views were and if the Internal Economy Commission Act had been complied with, with respect to annual audits. So that correspondence begins March 15, 2007, and that is attached to this note. Subsequently, from that time, two more letters were sent to the Auditor General and the Auditor General responded, and those letters are also attached. As a result of those three letters to the Auditor General and the Auditor General’s three responses, we did a briefing note which came to this Commission in January 2008, and that is the briefing updated November 22, 2007, and that too is attached.

The Commission considered the briefing note at its January 23 meeting but felt because Green had recommended that these two audits be done, that they should be preceded. So the Commission asked the Auditor General to conduct those audits. Speaker Fitzgerald wrote the Auditor General explaining the Commission’s request.

The Auditor General and I had a number of discussions following that February 1 letter on all the difficulties that attend to trying to conduct audits for these two years, and finally on April 2 I wrote the Speaker outlining these difficulties. My letter to the Speaker is also attached to the package.

A couple of days later the Speaker forwarded that letter, the letter I had written to the Speaker, to the Audit Committee for their advice on the matter. Subsequent to that, then Ms Marshall, the Chair of the Audit Committee, the Auditor General, myself and others discussed all the issues surrounding trying to do audits of those two statements. Finally, in November, following all these discussions, I wrote the Auditor General and tried to summarize the dilemma we were facing. So, I summarized it as best I could and asked the Auditor General to reply to me, if indeed I had summarized it adequately, and that was his letter on the fifth.

In general, and Mr. Noseworthy can speak to it, the public account statements as they currently exist, Mr. Noseworthy feels that no certified accountant following the rules of professional conduct can touch those because he believes, categorically, there are errors and misstatements in them. The only way then that we could audit statements, if those statements are not the ones to be audited because there are clear errors and perhaps fraudulent misrepresentations there - the only other way would be to reconstruct the statements for those two years from scratch, item by item by item, and there are significant challenges around that. Anyway, that is the sort of - to set the stage of where we are here. We are still left with a Green recommendation, but to accomplish that Green recommendation is very difficult.

So I guess with that Mr. Noseworthy, I will turn it over to you and questions from the Commission.

MR. SPEAKER: Questions to start the process.

Ms Marshall.

MS E. MARSHALL: Now, Mr. Noseworthy did write to the House of Assembly on a couple of occasions outlining problems with regard to him undertaking the audit. Would he be able to indicate to us whether he would be able to give any kind of opinion on those financial statements? I know from his correspondence that it would be unlikely we would get what we would call a clean opinion, but could we end up with a denial of opinion or qualified opinion? Perhaps if you could just discuss that issue.

MR. SPEAKER: Mr. Noseworthy.

MR. NOSEWORTHY: The public accounts as they exist, we will call that the financial statement that would be presented for audit, as they exist we know are incorrect and likely there are significant issues with regards to what was recorded in that time.

So as a result of that, it is my opinion, based on research I did on this, is that in accordance with rule 205 of the Chartered Accountants of Newfoundland, I would not be able to be associated with those financial statements. I could not sign those financial statements. I could not even give an adverse opinion or any other opinion. I would not be able to be associated with them as they exist.

The other part that you have to keep in mind is that in order for me to undertake an audit I need a management representation, that is a standard piece of any audit, where the people in charge of the entity have to say that we present to you this financial information and in our opinion we think it fairly represents the transactions of this entity, et cetera. The Clerk is on record as saying that he is not prepared to sign that with those old public accounts. So without any representation from management, that is one issue - we could not do it anyway - but the rules have it that I know that they are not correct. So I cannot even be associated with it. Then the only alternative, if you want somebody to audit this, would be to recreate. Now, if you go to recreate we still have transactions that potentially could be fraudulent. So you are still left, even in a recreation scenario, where you know that the information is not correct, even though it is recreated. You can try to do some redistribution s better than it was but you are still not left with what you consider to be really good information. Again, somebody would have to be prepared to sign a management representation on this. This is eight, nine years old now. When you would get that then we would have to look at exactly what was done, how it was done and who did the work. Based on that, we could try to determine what sort of opinion we could give, but in the current state, I do not think I could even be associated with it.

MR. SPEAKER: Ms Marshall.

MS E. MARSHALL: Could I ask a follow up question, and sort of probably backing into the issue?

If the Management Commission was determined to get an opinion on financial statements for those two years, what would you suggest we do? Is the only option to go back and recreate that financial information? Even if we were able to do that, the fact that nobody would sign a letter of representation, would that prohibit you from expressing any kind of opinion?

MR. SPEAKER: Mr. Noseworthy.

MR. NOSEWORTHY: In order to have anything done with those two years, as a minimum, I think you would have to recreate the information. Now I do not even know if that is practical but that is what you would have to consider, trying to recreate.

Once it was recreated, then - I do not know if the Clerk or somebody would be willing then to sign a management representation saying that this information is now suitable for audit. We present it to you and they sign off saying that in our opinion this is good information. I do not know if anybody is prepared to do that. I do not know if anybody could even put it together. But, if it was put together and I did have a management representation, and I did proceed with the audit, likely there would be some sort of qualification. I do not see ever having a clean opinion on these financial statements, ever.

The position I tried to make in the correspondence – if I might just add this – was that, in my opinion, I think the work that we did legislatively over that period is more than sufficient. That is what I tried to put in in response to the Speaker.

MS E. MARSHALL: Yes. I noticed you indicated that a number of times.

MR. NOSEWORTHY: It is more than sufficient to meet the requirements of the act, in my opinion, and I thought that it is just a waste of money.

MS E. MARSHALL: But, you have been intimately familiar with those years and you have done an extensive amount of work. What would your opinion be on the practicality or the possibility of going back and recreating a new set of financial statements, which we would hope would be more reliable?

MR. NOSEWORTHY: In my opinion, I really do not think it can be done. That would be my guess. I do not think it could be done. My understanding is that somebody went for a proposal to get an estimate of how much it would cost to audit and couldn’t even get that, after going for a proposal. The best, I think, that came back was that we would be charged a certain amount per hour just to have a look to determine whether or not anything could even be done. I don’t think anyone could ever do it. I personally just don’t think it is practical, and I don’t think it is worth the money. That would be my opinion.

MR. SPEAKER: Mr. Parsons.

MR. PARSONS: Mr. Noseworthy, Chief Justice Green, as I understand it, had an accountant as part of his review committee. I am not sure, but I believe his background is in accounting as well. How do you reconcile the fact that the Chief Justice, in his report, said we should get these two years done? I am assuming he had the opportunity to see that information, the same as you did, review whatever he wanted to, and he came to the conclusion that it could be done or should be done, and you, as the Auditor General, are suggesting that it is a waste of money.

How do we, as a commission, deal with those two opposing opinions?

MR. NOSEWORTHY: Well, I certainly cannot speak for the Chief Justice and how he came to his conclusions, but in my opinion, based on the work that I did, my office did, I don’t think it is practical to recreate. If you look at the recommendation from Chief Justice Green - and in the preamble it talks about the completion, the reconstruction – it was my interpretation of a set of financial statements for audit, an acceptable set. I just don’t think it can be recreated. Even if it was recreated, we still know that there are significant issues with that data.

I don’t think you will ever get a clean opinion, and I just don’t see the benefit, other than being able to put a tick mark by saying that, yes, 2000 is done and 2001 is done. Other than that, there is nothing coming of this. There is nothing coming out of this report. You are not going to get a clean opinion if you could recreate, and I don’t even think you can recreate.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Mr. Noseworthy, could you, in a general way, give us some information about why you think they couldn’t be recreated? Is it lack of documentation? Is it lack of verification of documents that are there. You know, what are the general reasons for your saying that the recreation could not happen adequately?

MR. NOSEWORTHY: Certainly quality of documentation would be part of it, the quality, and then the distribution. It is almost impossible nine years later to determine whether or not the distribution of an expenditure is in the right account.

I saw, from work I did at the other statutory offices, where salary costs were charged to a statutory office but should have been charged to the Assembly. Equipment rental costs were charged other places, not the Assembly. I don’t think, nine years after the fact, you could ever figure that out. The audit trail was not great, the documentation was not real good, and the accounting records available are not good. I just don’t think it is practical to try to redo it.

If you did undertake it, a massive undertaking, at the end of the day you are still left with data that - I think we are starting to understand that there may be some fraudulent activity within this data. So you still have that. How can you identify all of that and separate it? When you present the information to somebody to audit, you have to know that it contains this information that is not correct, so you are never going to get a clean opinion on this. That is, if you can find somebody to undertake it.

MS MICHAEL: Thank you.

MR. SPEAKER: Further questions?

Ms Marshall.

MS E. MARSHALL: Just one more question.

If we were adamant that we wanted the two years done, and we asked you to do it, can you just go through the steps now? The next step, you would say: Yes, I will do it but I will need…. Can you just bring us from beginning right to the end on when you give us an opinion that we probably could qualify?

MR. NOSEWORTHY: Well, I should say I would be only too happy to do the audit - not a problem - however, what I would need: you would have to recreate all of the accounting records, recreate the financial statements, give me a management representation saying that this now is good information and ready to audit. I would take that information, and I would go and talk with whoever recompiled it. I would look at what they went through in order to recompile it, and I would sit back and reflect on that information and see what I had in here and try to determine what sort of opinion I could give. I could give some sort of an opinion, but I can tell you it would not be a clean opinion.

MS E. MARSHALL: Okay.

Do you have any idea, based on your knowledge of the accounts, how long it would take, and the cost?

MR. NOSEWORTHY: No, but I can guarantee you one thing: I cannot give you a number, but I can tell you it would be hundreds of thousands of dollars - easily, hundreds of thousands – and you would have something in the end that still would not serve much purpose.

MS E. MARSHALL: So the hundreds of thousands would be for the audit, would it, not for our compilation of the new data?

MR. NOSEWORTHY: No, that is for the accounting.

MS E. MARSHALL: That is for the accounting.

MR. NOSEWORTHY: The audit would be relatively cheap, from my understanding (inaudible).

MS E. MARSHALL: What kind of opinion do you think we will end up at the end of it?

MR. NOSEWORTHY: Pardon me?

MS E. MARSHALL: What kind of opinion do you think we will end up with?

MR. NOSEWORTHY: It would certainly be, as a minimum, qualified; it would have to be. You will not get a clean opinion. That would be my opinion.

MS E. MARSHALL: Thank you.

MR. SPEAKER: Any other comments or questions?

Concluding remarks, Mr. Noseworthy?

MR. NOSWORTHY: No, just thank you very much for asking me here.

MR. SPEAKER: Thank you very much. We apologize for the wait, and for your patience we thank you.

MR. NOSEWORTHY: Thank you.

MR. SPEAKER: We have had an opportunity to ask some questions, further questions, and members have had an opportunity to read the correspondence as it went back and forth, before the speaker prior to me, and in my term here, regarding a decision that we had made regarding the financial statements for 1999-2000 and 2000-2001.

I ask for members’ comments in light of the new information, or if members have changed their opinion or have other thoughts toward that particular accounting that we have asked for.

Mr. Parsons.

MR. KELVIN PARSONS: Mr. Chairman, I would make a motion, in view of the commentary today by the Auditor General, that we not proceed in attempting to have those two years done. I think, notwithstanding the good intentions of Chief Justice Green in suggesting that we do it, we have to apply some common sense to this thing.

The Auditor General, who has already looked at a lot of the existing information and the data, has stated here today, as he has stated in letters – that is all public knowledge now – that it is not practical to do it, that it is a waste of money, that it would be based on fraudulent data in a lot of cases, that there is missing data, and the end result would be a qualified letter of opinion that is of little value. Now, I do not know why – and it would cost hundreds of thousands of dollars to do that.

Maybe it is just an exercise we are going through to try to show the public that we are attempting, the best we can, to do what Chief Justice Green said, but it has to be done within the context of a bit of common sense. I think we ought to accept the opinion of the Auditor General that it is virtually impossible to do this, to have any worthwhile result. In view of that, I would move that we not proceed with the audit for those two years.

MR. SPEAKER: Before we continue with debate, is there a seconder for that motion?

It is seconded by Ms Michael.

Further comments?

Ms Burke.

MS BURKE: It would be my opinion that, before we voted on such a motion or made a decision - we did hear the Auditor General say that it could cost hundreds of thousands of dollars. Unless we have to vote on this today, what I would like to see is that we could really have a true breakdown of the cost, to see where the cost is and how much, exactly, it would be.

That is probably the most vague piece of information that we have had here today, and in light of the fact that it has been recommended by Chief Justice Green, and with all due respect to the Auditor General’s opinion here today, I would still like to see a breakdown of the cost before we actually make that motion, to see: are we talking – this could be $200,000 or $900,000, what we are discussing here. I think I would like to see that piece of information before we proceed.

MR. SPEAKER: Further comments?

Ms Marshall.

MS E. MARSHALL: Mr. Chair, I would agree with that. I would like some information on what exactly is entailed in preparing information for audit. Perhaps the Clerk and Ms Lambe, the Chief Financial Officer, could undertake to get that information?

MR. SPEAKER: Any other comments?

Ms Jones.

MS JONES: Mr. Speaker, I don’t necessarily have a problem with committee members who want to get a price quote on recreating the financial accounts for that period of time, but whether it costs $30,000 to do this or $300,000, we have already been told that the information and the data that we will get will not be an accurate indication of what transpired.

We have also been assured by the Auditor General, the same individual we will be asking to undertake this work, that he feels, in his opinion, the investigation and the auditing that he has done from the year 2000 up until 2007 has sufficiently covered all details and aspects that were required, and certainly feels that section 9 of the act has been complied with under those particular actions.

I do not see what the cost of doing this – where the relevance of that is. Simply, if we cannot get a fair and accurate picture, if all of the books have to be recreated, if there is no management representative who is prepared to put their name to this, to sign off on it, I cannot see how we can do this and get a clear indication of what the auditing or the financial situation was at that particular time. I think it would be an exercise in which we would be wasting taxpayers’ money at this particular stage and would certainly have results that would not be founded on anything substantial.

MR. SPEAKER: Any further comments?

If there are no further comments, I guess we can vote on the decision, or the motion that was made by Mr. Parsons and seconded by Ms Michael. The motion made by Mr. Parsons, seconded by Ms Michael, is that we not have any further debate, I guess, or not seek further auditing of the accounts for 1999-2000, 2000-2001, and that we accept the information that is provided by the Auditor General.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

SOME HON. MEMBERS: Nay.

MR. SPEAKER: Three and three. I guess the Speaker would have to vote.

The Speaker raised issues regarding this, and I think I may have been one of the people who asked for it to done in the first place. I will just recite again; that normally the Speaker will vote to keep an issue alive and not go in another direction until all the facts are shown. So I vote that we continue seeking information regarding the decision that was made with the minute of 2008-2009 and that we seek further information and maybe ask the Comptroller General to provide us with the figures in order to give all members some comfort in knowing how we proceed here, since it was an issue as put forward by Chief Justice Green.

So the motion is defeated.

The next item on the agenda would be under Tab 2, the appointment of an auditor for 2008-2009 and a report from the Chair of the Audit Committee, Ms Marshall, whereby the House of Assembly appoint the Auditor General to do the audits for the House of Assembly for the year ending March 31, 2009, as section 43 of the act outlines.

All those in favour of appointing the Auditor General to be the auditor for the House accounts for the year ending 2009, signify by saying ‘aye’.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: Against?

The motion is carried.

The next item on the agenda would be the Audit Committee report to the House of Assembly, it is the second report. I pass it over to Ms Marshall, the Chair of the Audit Committee, for comments on the second report made to the Management Commission to the House of Assembly.

MS E. MARSHALL: Thank you, Mr. Speaker.

I would like to just start off by indicting that the Audit Committee is comprised of four members. Myself and Mr. Kelvin Parsons sit on the Committee, but there are also two outside members, Mr. Don Warr and Ms Janet Gardiner.

It took a little while. We have had, I believe, probably about six meetings since the Audit Committee was established. There is a requirement that the Audit Committee meet four times a year, but it is my intention that after each meeting I will be reporting back to the Commission as to the activities.

I just wanted to briefly go over some of the issues that were discussed at the last meeting of the Audit Committee. That meeting was held on February 5. As most members are aware, with Justice Green’s report there is a very stringent audit regime now put in place for the House of Assembly. It includes audits by the Auditor General, audits by the Comptroller General of Finance, and there is also an annual management certification process. The Audit Committee oversees all of these activities. I just wanted to report back to the Commission, Mr. Speaker, that we are receiving these reports and we are actively following up on them. I would just like to briefly go over some of the issues we talked about at our last meeting.

The management certification process, which is carried out annually, there was a report delivered by Grant Thornton who carried out this work. They have highlighted some weaknesses in the systems within the House of Assembly and we are presently following up on them. We are aware of what the weaknesses are but we are presently in the process of discussing with staff of the House of Assembly as to what corrective action they are taking to remedy those deficiencies. As a check on this, there is a subsequent management certification project going to be undertaken this year. So we will see how much progress we are making.

The second point I would like to raise is the Comptroller General’s Office is also very active in carrying out internal audits within the House of Assembly and a number of reports have been received from them in recent months. They do quarterly review or seek out duplicate or double billings by Members of the House of Assembly, and we do receive a report every quarter. These are followed up by the Audit Committee. They did carry out a review of direct travel agency invoices and there were some recommendations arising out of that report, and those recommendations are also being followed up. They also carried out a review of the payroll system in the House of Assembly. Again, those recommendations are being followed up. So once the Audit Committee follows up on the recommendations and ensures that the House of Assembly staff are taking corrective action, there will be reports filed with the Management Commission.

In addition, we are all aware of the Auditor General’s management letter for the year ending 31 March 2008, and that was tabled in the House of Assembly. Of course, we have met with the Comptroller General, and the Audit Committee has also met with the staff of the House of Assembly.

At the last meeting we also reviewed the financial reports for the nine months ending 31 December 2008, and these are included as an agenda item today. No major items were identified at the Audit Committee meeting but I do have some questions here for staff later.

The fifth item, the appointment of the Auditor General for the 2008-2009 fiscal year was just approved by the Management Commission. So the report is in your binder, and of course it is publicly available.

Thank you, Mr. Speaker.

MR. SPEAKER: Any further comments on the second report of the Audit Committee? If not, it is for reporting purposes only.

The next item on the agenda would be under Tab 3, New Business, and it would be a Signage Policy.

At a prior meeting of the Commission this topic came up for discussion several times. Members were aware that some members who had elected to have their offices in their constituencies were using signs that were far more advanced and far more technical and far more expensive than what other members were using. It was requested at that time that the House of Assembly services would bring forward a signage policy that would have all members, not only treated equally, but members’ signs would be readily identified with what we thought should be included on the sign and the size of the sign, not necessarily the location, but since we also included government owned buildings and private residences, we thought - because members are allowed to have offices in their own private residence if they want to. They are not allowed to charge for the space but they can certainly have their offices there. We thought that it was only right to try to develop a policy where all members would be treated equally and all constituents would have the exposure of knowing where their member was located.

There is a recommendation for a signage policy brought forward here. Members have had an opportunity to review the recommendations. We have also put forward an action, if members see fit to accept what is brought forward, but we open it now for comments and suggestions on what members’ opinions are on the signs that have been proposed.

Any comments?

Ms Jones.

MS JONES: I would like to say I think it was a very detailed piece of work and it was very well put together. I don’t think there should be any dispute in the future over the size or the details that are required on signage, and it should keep the costs consistent with all the MHA offices so we don’t see things like we did before, some signs at $250,000 and others at several thousand dollars. I think it was a good detailed piece of work to be honest with you.

MR. SPEAKER: Further comments?

If not, the motion is, "Pursuant to subparagraph 20(6)(b)(ii) of the House of Assembly Accountability, Integrity and Administration Act, the Commission approves the Standard Signage Policy for Constituency Offices, dated March 2009."

Would somebody make that motion?

Moved by Ms Michael, seconded by Mr. Taylor.

We are joined by Mr. Taylor who was not present when we did the introduction of members who were present.

All those in favour, aye.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against?

The motion is carried.

The next item on the agenda would be Inventory Policy for the Legislature. Here again, under subsection 25(2) of the Members’ Resources and Allowances Rules, it states that, "All purchases within the standard office allocation remain the property of the government of the Province and shall be identified by appropriate markings as House assets."

I understand that inventory software has been purchased and will be used in order to record those assets, and we are looking at putting forward an action whereby a policy should be directed and required to provide direction for the accounting and control of such items.

The Clerk has put some work into this particular item. I know he has some comments, and I would ask him for his input.

CLERK (MacKenzie): I should start by saying that actually Ms Lambe put some work into this, Mr. MacKenzie didn’t.

In short, as the Speaker said, under the rules now we have to inventory the various assets that we purchase for members and all the furniture and equipment that members use remain the property of the House. They cannot become the personal property of the member. We must manage them in a certain way beyond acquiring them in a certain way, and we must dispose of them as per other government assets.

Under the old regime, if you remember, there was a certain depreciation and at a certain point members would get ownership of that particular asset. That is no longer the case.

Once we are required under section 25 of the rules to do this, we now need policies to do it. While we have a software system to track the inventory – because, as the note mentions, the Oracle Fixed Asset module is designed for much more expensive and larger capital assets. I mean, we are talking about desk, coat rack, water cooler, things in the standard office allocation, and government’s system is not designed for that. They are using it for their much more valuable capital assets.

So we have bought our own software system, but before this year ends, in conjunction with the management certification issue that Ms Marshall mentioned, auditors will want to see that we have a policy as well. It is not enough simply to tag the asset, put it in a system, describe its location, its cost and so on; there has to be a policy around it, so that is the work that Ms Lambe has done, putting together this inventory policy.

As I understand it, it is relatively standard. There were a few decisions that we had to make, but the same sorts of processes, I guess, are available in any inventory policy.

I do not know, Ms Lambe, if there are certain items that you want to highlight for the Commission or just open it up to questions.

MR. SPEAKER: Ms Lambe.

MS LAMBE: I don’t think there is much I can add, but certainly if anyone has any questions….

MR. SPEAKER: We are joined by Ms Lambe, the Chief Financial Officer of the House of Assembly, as well.

Ms Jones.

MS JONES: I have one question under section 4.1. "For the purposes of this policy, inventory is defined as…." In section (e.) is says, historic and cultural assets.

Are MHAs permitted to purchase artwork or paintings? What would you be referring to in that category?

MS LAMBE: The policy is to cover all of the Legislature: the members, the House of Assembly service and the statutory offices, so we are actually right now recording all of the inventory, all the desks located throughout the House of Assembly service and the statutory offices. The historic and cultural assets would be more what is here in the House, like the Mace and those types of things.

MS JONES: Okay.

The other thing is, under office furniture and equipment you are setting a limit of $200 per item. What does that mean in cases where there is software purchased for offices that might be $150, or printers or something of that nature that would fall below the $200 category? How are those things catalogued or inventoried?

MS LAMBE: Under number 4.1 a., we are saying that all of the furniture and equipment that is part of the standard office package that was purchased should be inventoried, so that means even the coat racks that might be $30 each; however, members can purchase, through their constituency allowance, other furniture and equipment.

We chose the $200 limit because that is in line with the purchasing policy, that members can purchase on their own. It is really an arbitrary number, and we did choose it because of that reason, but it could be any limit.

Normally, you would try to set a lower limit so that you do not have a large inventory of very invaluable items. We would not want to pick up every calculator and every garbage can that is in the House of Assembly service and stat office, so we are trying to leave out those types of items.

MS JONES: Okay.

Is there going to be a separate inventorying, then, for purchases that are made through constituency allowances? I guess I am thinking about things like books, for instance, reference books and materials that would be purchased through an MHA’s office that would not go through – any package for the House of Assembly, for example, that is not disposable, that it would be an asset of some kind.

MS LAMBE: If it was purchased with government funds and it had a value over $200 then it should be inventoried.

MS JONES: Okay.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: I am just curious as to where cameras would fit. I notice in 4.2 you are a bit more explicit as to what was included in equipment, but I noticed cameras are not mentioned. I thought it was part of the office package.

MS LAMBE: Cameras would fall under (a) under the standard office allocation package, so we did not actually list each item. Under 4.2, we just tried to give some idea of the types of things that we would be putting in inventory. That is why we said "not restricted to" there.

MR. KELVIN PARSONS: Why wouldn’t we be specific and include cameras in 4.2, then, so there is no uncertainty?

MS LAMBE: The reason we did not do that is: since this is a policy, if items were added to the standard office allocation then they would automatically fall under the policy and we would not have to keep changing the policy. We said the standard office allocation is defined in subsection 25(1) of the rules. That way, if at any time the office allocation changes then those purchases would be caught underneath this policy.

MR. KELVIN PARSONS: Maybe I am not being clear here. All I am saying is, I understand what you are saying in (a), you have a standard office package, but you took the trouble of putting in 4.2 of getting specific as to what was included in office furniture and equipment and you have listed quite a few things. All I am saying is, for greater certainty, why wouldn’t we include cameras in 4.2 so there is no question at all, that anybody who has a camera, that belongs to the government?

MS LAMBE: We can list it. There are other items in the standard office allocation that are not listed, but we certainly can add cameras just for greater certainty.

MR. SPEAKER: Are you finished, Mr. Parsons?

MR. KELVIN PARSONS: Yes.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Just a minor point also related to 4.2, the first bullet. Usually, laptops are said separately from computers. It is just a practice, so I think laptops should go in as well.

MS LAMBE: Okay.

MR. SPEAKER: Ms Burke.

MS BURKE: Just for clarification, it talks about the member being responsible and it lays out, as you go through the policy, a lot of responsibilities for the member. At some points it also refers to the custodian. Who is the custodian? Are you talking about the member or the House in general, or…?

MS LAMBE: Whoever has the actual asset, so it would be the member if it was located in the member’s office. In the government caucus offices that are located in the building, they would be considered the House of Assembly service because it is not in a separate location.

MS BURKE: Okay.

I have one more question on that as well. Now that we have this policy in place, and there is software purchased and we are going to be using it on a regular basis, will there be any training provided for the members or the constituency assistants so that everyone understands the process and this new policy, and follows it in a uniform fashion?

MS LAMBE: We can certainly do that. We did not have that planned.

MS BURKE: Do they have to use it?

MS LAMBE: Not really. All the purchases will be identified when the House of Assembly either makes the purchase themselves or it is reimbursed through a member’s claim, so all the amounts will be identified by House administration staff and then added to the inventory. The intent would be, then, if it was a location outside the building, you would send them the asset tag to attach, and ask them to acknowledge that they have received the tag and it is done.

MS BURKE: I understood, though – so when we purchase it you will send the tag out, so you will do the recording in here, but what about if it is required that you have to do your inventory on demand? Is that written there? I thought I had seen that here.

MS LAMBE: What we would do is to send out a list of all the assets that have been purchased, say, for a particular constituency office, and ask the member or the assistant to verify that you still have all those assets.

MS BURKE: Okay.

I had anticipated it would be more than that –

MS LAMBE: No, it is just verification.

MS BURKE: - that we would be entering in information and monitoring it and sending in regular reports or anything. There is none of that? Okay.

MR. SPEAKER: Ms. Marshall.

MS E. MARSHALL: Ms Lambe, could you just speak to the implementation as to whether you know the system is fully operational now or if you are still inputting the data? If it not completely operational, could you give us some timelines?

MS LAMBE: We have a target date of the end of March and we seem to be on target for that. We have sent out the listings and the asset tags to all the constituency offices located around the Island and asked them to verify it. I think the date was some time this week actually for them to get back to us. I think we have tagged most, if not all, the items in the House of Assembly service, in the staff offices. So, it looks like it is on target for the end of March.

MS E. MARSHALL: For the end of March. I notice on page 3 where it does reference the physical counts will be conducted by Corporate and Member’s Services on a periodic basis and at a minimum once every four years. Could you speak to that? I do not know if you have information there on the total dollar value of those assets that are recorded in the system but perhaps you can just give us a short discussion of that.

MS LAMBE: No, I really do not have any dollar amounts yet.

MS E. MARSHALL: Okay.

MS LAMBE: We are in different stages of getting the information actually in the system and while a lot of it is in there, I will be honest, I did not ask the total dollar amount. Some of the assets, because they were purchased previously, we have to estimate a historic value. So, you know, that can be a challenge some times. We suggested doing physical counts every four years in conjunction with the election dates. That was our intent, that at least before each election we would have someone go out and do a physical count of all the assets in each of the constituency offices.

MS E. MARSHALL: That would be supplemented by the annual reports that are coming in?

MS LAMBE: Yes, exactly.

MS E. MARSHALL: Okay.

Thank you.

MR. SPEAKER: Ms Jones.

MS JONES: I was just wondering if the inventory will also apply to the Opposition Office, the Third Party Office, and Government Member’s Offices, all of those offices as well?

MS LAMBE: Yes, we are in the process of doing that right now.

MS JONES: Okay.

MR. SPEAKER: Ms Lambe, it is my understanding, while we mention Corporate Services or its designate, what did you have in mind there that we would probably get, if there is some remote office - if Ms Jones has an office in her district that we would get somebody from Works, Services that would be employed by government in the area to do the physical count there rather than us sending somebody?

MS LAMBE: Yes, that was our hope. Apparently that is a common practice in government, that Transportation and Works employees, if they are located in an area, perform some work on behalf of different departments, something minor like this. So, we wanted to leave that option open. That is why we put it in the policy that, if needed, we could have a government department do the count in some of the more remote locations.

MR. SPEAKER: Any further comments or questions? I am not sensing any, and I am not sensing any objections to the recommendations that were made by members present for additions.

The motion would be: Pursuant to subparagraph 20(6)(b)(ii) of the House of Assembly Accountability, Integrity and Administration Act, the Commission approves the Inventory Management Policy, dated March 2009, for the House of Assembly and the Statutory Offices.

Could somebody make that motion?

Made by Minister Taylor; seconded by Ms Burke.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

Motion carried.

MR. SPEAKER: The next item on the agenda would be under Tab 4 and it would be the Financial Reports up to December 31, 2008. It would be the review of the financial performance of the House of Assembly and Statutory Offices, along with the actual expenditures of Members of the House of Assembly for the period of April 1, 2008 to December 31, nine months.

This is for reporting purposes only, but I am sure that there are questions to be asked and interests to be provided in comments.

I ask members for their questions or comments regarding the Financial Reports of the House of Assembly Statutory Offices and members allowances.

Ms Marshall.

MS E. MARSHALL: Mr. Speaker, perhaps Mr. MacKenzie or Ms Lambe can just speak to the projected savings under allowances and assistance in Caucus Operations and Members Expenses. Right now we are projecting savings of $2.2 million, but I think the last time we discussed projected savings it was less than that. We are getting near the end of the fiscal year now. I know these statements are for December 31, but the $2.2 million, is that still a good number?

MR. SPEAKER: The Clerk.

CLERK: Yes - and I will defer it, I guess, to Ms Lambe because she has some of the details. I think it was $1.5 million projected savings, as you say, at the half-year mark.

MS E. MARSHALL: Yes.

CLERK: Now we are at the December 31 three quarter, and I think this is the figure we have actually used for the full year that we have provided the budget division. Ms Lambe has a bit of a breakdown from the different categories within Allowances and Assistance, so perhaps I will ask Ms Lambe to explain the details of it.

MR. SPEAKER: Ms Lambe.

MS LAMBE: It is our projection based on the expenditures to date, but we also have built in there, in actual fact, that there are likely to be a lot more claims received in the last month, although there is only a two-month period. We did try to build in, I guess, conservative projections there even at this point even with saying it is $2.2 million. I wouldn’t be surprised if it was more, based on the expenditures to date.

MS MARSHALL: It is really noticeable because the original budget was $3.5 million and we are projecting savings of $2.2 million on $3.5 million. I mean, it stands out, yes.

MR. SPEAKER: Further comments?

The Clerk.

CLERK: I think we have probably discussed some of this during the Budget meeting. The figure we have in there is really what came out of the Green Commission, that $3.5 million. His estimate was, I think we have seen after a couple of years, probably on the high side. He predicated for instance on, I think, a constituency office for essentially every member, whereas, of course, not every member has chosen that. So, we have significant savings under the office accommodations piece.

We also have savings under the Intra & Extra-Constituency Travel, believe it or not. The House in Session travel which is not subject to any sort of numbers of trips, he predicated that, I think, on the House being open twelve weeks a year, which would be twelve return trips by forty-eight members. It was always predicated on the Allowances and Assistance cost irrespective of whether some members don’t go home every weekend. Some may do ministerial business on the weekend and they are not going home. Whatever it is, it was sort of a maximum estimate. It seems clear we will not require the full $3.5 million.

We still haven’t had a lot of experience. We have had now about a year and a half. Some of the rules have been changed and so on.

You will remember during the Budget discussions we talked about this particular account, Allowances and Assistance. We don’t want to reduce it too dramatically but it does appear that Green’s estimates will probably not be needed and it may well be able to be reduced as we go forward.

I do not know, Ms Lambe, if you wanted to talk about those individual categories.

MS LAMBE: Like you say, the two highest ones - we are identifying savings of $828,000 in the office allowances. Again, as the Clerk said, that would be because we have nine or ten offices in leased premises versus forty or whatever that Green would have estimated. That is a significant reduction. Of course, with each office then are all the associated costs that go with that. So, it flows through to the operational resources allowance because you don’t need as much for phones and heat and any other things that are associated with opening an office.

MS E. MARSHALL: Given the amount of the projected savings – like, I know when you discuss each activity in the salaries you make reference to the fact about the 8 per cent salary increase funding; it is going to come over from CFS Services. Do we still expect to receive that, considering we have all those savings?

MS LAMBE: We have received it.

MS E. MARSHALL: We have received it?

MS LAMBE: They automatically transferred it to each department and the House of Assembly.

MS E. MARSHALL: Regardless of projected savings.

MR. SPEAKER: Ms. Jones.

MS JONES: Marlene, I think it is fair to say there were some cost savings in every aspect of the offices of the House of Assembly, not just with the MHAs. I know we have a budget, as MHAs, of nearly $11 million, and I realize from these figures that there is going to be a savings of about $2 million under that particular budget which would account for a substantial amount of it.

It seems like the other statutory offices, while there were some savings, I recall when we met with those particular offices they were able to explain why those savings were there. Either they had vacant positions over the last year or they had other travel that did not get taken up because they were busy doing other functions within their office and so on, so I think they did provide a good explanation.

I know, for myself, in terms of looking at constituency spending, I am one MHA who did not use up the office budget, for example. I am one of the MHAs who did not use up a large portion of my travel, because I hold dual positions in the House of Assembly. I have travelled under the Management Commission, under the Public Accounts Commission, and as the Leader of the Official Opposition; so, under those circumstances, I normally would not be able to use up the amount of monies that were allocated anyway.

I know, just in my own circumstances, when I look at this budget, it does not mean that money should not be budgeted for that constituency office. Because, if I were holding only one position, and that was the MHA for that district, I can assure you that I would have very easily spent the budget that was allocated on an annual basis; but, because we travel under various other roles, that was not possible for me.

I am sure, in looking at some of the other MHAs’ spending - because all of the reports are attached here - obviously there were a number of other MHAs who were in the same boat where they did not relocate offices to their districts so they did not have those expenditures and so on, as well.

It does not mean that the circumstance would not change on an annual basis, either, so I think we had better be careful in terms of what decisions are made with the slippage that we have this year. I do not think we could easily just say that, because we did not use it this year, we need to change the allocations or that there is room to shift numbers on a go-forward basis. I think we would need to be very cognizant of that.

MR. SPEAKER: Further comments?

Ms Lambe, in the last page for the total Legislature there it shows a projected savings of $3,870,000. Is that up until the end of the fiscal year or is it savings up until December 31? It is projected savings until the end of the year?

MS LAMBE: Yes, it is projected savings until the end of the year.

MR. SPEAKER: How accurate is that, now that we are at March month?

MS LAMBE: Now you are putting me on the spot. I will be honest. I know in a few areas where it needs to be adjusted - not a lot - but I would think it is fairly accurate. In the last three years we have been within $30,000 or $40,000 in our projections for our expenditures. I somehow do not think we are going to be that close this year, but I did look back at the last three years and we were fairly close with our projected expenditures.

MR. SPEAKER: Continuing under the same tab would be the expenditures summarized by category for each individual member. Each member is listed under the expenditure category and shows the percent of expenditure to date and in what categories. Does anybody have any comments on individual members - themselves?

There being no further comments on that, we will move on to the Letters of Appeal. This is a note whereby, at a former minute of the Commission, we brought in a clarification amendment whereby members who had received receipts, or had gone over the sixty-day period of applying for refunds under their constituency allowance or under any other account, whereby they would be entitled to a refund, could appeal to the Speaker; and, by the mere fact of the Speaker not being able to make a ruling, he would take the appeal to the Management Commission.


We have two appeals: one from the Member for the District of St. John’s Centre for $166.19, and another one from the Member for Burgeo & LaPoile for a total of, in his case, $120. Those are all eligible expenses. It was a situation where both members did not have an opportunity to submit their receipts within the sixty-day time frame. The letters are attached. I have reviewed the documentation and they are certainly eligible expenses.

Any questions or comments?

Mr. Parsons.

MR. KELVIN PARSONS: Just a comment, Mr. Chair.

The reason, I think, is relevant. The reason we could not comply, in my case, with the sixty-day rule was, in the case of the wreath, for example - we purchased a wreath from the Royal Canadian Legion - you pay for it with a cheque on your constituency account, and you get the receipt from the Legion showing that you paid them, but by the time the bank does the turnaround and you get the cancelled cheque back…. We had our claim filed within the sixty-day period, based upon the receipt, but the people in the Corporate Services office said: We cannot let that go; we have to have the actual cancelled cheque.

It is the bank who did not get the cheque back to us in time enough to comply with the sixty-day rule. It was not a case of tardiness on the part of the member. It was the bank that did not give us the information.

MR. SPEAKER: In each case, I think, that we have approved this in the past it was exactly the same thing, where members were confined as to when they could submit it because of getting receipts back that were acceptable by Corporate Services in order to provide the refund.

Any further comments or questions?

Ms Michael.

MS MICHAEL: Thank you, Mr. Chair.

I would just like to note in the letter from the Member for St. John’s Centre that he points out at the end of the second paragraph that indeed the cards, for which the costs are, were mailed less than sixty days ago. When you look at February 3 which was his letter - and I am assuming he probably got his cards out after December 3 - he is quite right. So I am just wondering, was this a bit of an error that he did not get paid? Because if he is correct, he actually put his application in within sixty days, put his claim in within sixty days.

MR. SPEAKER: My understanding, in reading the letter, is that it was probably a situation where a staff member was out of the office at the time.

MS MICHAEL: Well, that is what he says first, Mr. Speaker.

MR. SPEAKER: That is what he indicates.

MS MICHAEL: But then he goes on and says at the very end of that paragraph that, indeed, they were mailed less than sixty days ago.

MR. SPEAKER: Does the Clerk have further comment?

CLERK: Yes, I have the details. In his letter he said approximately two hundred. As the Speaker said, it was $166.19. But there were actually some Christmas cards purchased in September; two different dates in September, the fourteenth and the twenty-sixth and then postage was purchased in November. So they may not have gone out until after December 3 but the postage was actually purchased in November.

I should say as well, because I know sometimes this seems like Corporate and Members’ Services is being rather picky on this, but I harken back to what Ms Marshall said with her Audit Committee report. The internal auditors are equally picky with Corporate and Members’ Services when they show up at the door. Of course, one of the internal audits that Ms Marshall mentioned, they condemned us rather soundly in the period from October 9, 2007 to March 31, 2008 because we did not rigorously apply the sixty days; we let it go beyond. So we were condemned by the internal auditors for doing that. So within all the checks and balances of this, the staff in Corporate and Members’ Services have to have one eye looking over their shoulder for the internal auditors who are going to show up to see if they are in fact doing it properly. They are not deliberately being mean-spirited; they are simply trying to follow the letter of the law.

MS MICHAEL: If I could have just a further comment.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Thank you.

It is sort of minor, and it is not going to stop me from approving that the $166 be reimbursed, but it is also a sign of why we have made a decision here in the Management Commission that MHAs may have constituency assistance replaced when they are on an extended leave because there is ongoing business that has to be done, both for constituents themselves as well as for the MHA, and I think this is a clear example of why we do need to have people replace our constituency assistance, to help keep business going well.

MR. SPEAKER: Your comments are well taken.

Any further comments?

If not, would somebody make a motion that we reimburse the hon. Member for St. John’s Centre for $166.19, and the hon. Member for Burgeo & LaPoile for $120 for expenses legally incurred.

Ms Burke, seconded by Ms Marshall.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

Motion carried.

MR. SPEAKER: Ms Jones?

MS JONES: I would just like to be excused. I have another engagement, and I think there is still a quorum. So that should not be a problem, is it?

MR. SPEAKER: Thank you.

The next item on the agenda would be Budget Transfers. While the policy does not require budget transfers to be approved by the Commission, I think we have agreed, to ensure transparency, that we would bring all transfers of funds back to the Commission and those transfers are showing in the amounts indicated in your folder.

I would ask members to take a look at the budget transfers, and if there are any questions or concerns, to direct your questions to Ms Lambe.

It is for reporting purposes only, but members have every right to make comments or ask what a particular sum of money was transferred for and transferred from.

Ms Michael?

MS MICHAEL: Because this is such a large one, and there are a couple of large ones, but they are explained clearly, Property, Furnishings and Equipment, but this one is budget adjustment HOABT00088. It has to do with the transfer with regard to the Office of the Information and Privacy Commissioner for purchased services.

Was that something that was not anticipated, the service that was purchased there?

MR. SPEAKER: Ms Lambe?

MS LAMBE: They did have funding in their budget for furniture, but they moved to a new office this year and they required additional furniture for the setup of the new space they moved into.

MS MICHAEL: Okay, so it was moved into – no, it was a transfer from Purchased Services – oh right, into. Got it.

MS LAMBE: Into.

MS MICHAEL: Okay. Yes, for the furniture. Right.

MR. SPEAKER: Further comments, questions?

If not, moving right along into the last item on the agenda today, under Tab 4, which would be Status on Implementation of Green Report Recommendations, as members know, there were 275 recommendations included in the Green Report. At a former time, I think we were bringing in a report as to where we were with the recommendations by Chief Justice Green, but members thought we should bring in a report that shows where we are not, and what has not been done. That is what you see laid out before you here: the number of recommendations made by Chief Justice Green that are not necessarily not attended to, but some of them are a work in progress and some are under review, but it is a list of recommendations that we are still attending to.

Members should be free to make their comments. Maybe one like recommendation 71(2) might be of interest, where Ms Michael may want to speak and make a comment, because I know it is an issue with her. It is an issue with other government members as well, and it is one that we have been trying to work through and deal with, in order to provide some office space that is suitable and usable and convenient for members to carry out and do their work.

I will open it up for comments. By all means, express your opinion.

Ms Michael.

MS MICHAEL: Thank you, Mr. Chair.

I will take up the invitation to speak to that. I have a couple that I would like to speak to. It is quite right as it has been written here by the staff that, although improvements have been made, the recommendation with regard to equality with regard to the quality and size of office accommodations has certainly not been met yet.

I do commend the House of Assembly service; they are certainly trying, but there are major limitations within this building with regard to meeting this recommendation. Now that caucus offices have more resources with regard to staffing, that has made a big problem for us in particular; I will speak for the Third Party. What we are coming up with is certainly not ideal. We do not have privacy, as a political party. We really do not. We have staff on two sides of a hall. We do not have a dedicated space as the other caucuses have, caucuses where they have locked doors going into the space. You have to ring a doorbell to get in there. We do not have anything like that. Even when it comes to a meeting space, we are always going around. We have a space right now down the hall that we can use, but even that is not great at the moment.

I have to tell you, it is embarrassing sometimes when we have inadequate space to hold meetings with people from the outside in particular. It feels embarrassing, to have people sitting in cubbyholes in meetings. In my own office, I cannot have more than three people meet there with me, and when we do that the door has to be closed so we can put the third chair in. It is a very, very, small space.

As I said, the House of Assembly services staff have been working with us and I hope that what is being projected for the building happens, because the projection is some significant departments moving out of this building within about a year’s time and a whole redoing of the building, better meeting the needs of those of us who are part of the House of Assembly. Because, of course, all of the new staff who have been hired to meet the recommendations of the Green Report with regard to the House of Assembly services is what is making the building so crowded as well - staff that we needed to hire - so now the section of the fifth floor that the Third Party is on is seeing a major influx of House of Assembly service staff who are moving up to the fifth floor. The empty space that has happened on the fifth floor had nothing to do with the Third Party; it had to do with the House of Assembly administrative staff.

What we will have happening is fine as an interim measure, but it does not give us privacy. We will continue to be in the situation we are. We will get an extra room, but it is on the other side of the hall where we have our two researchers so it does not take care of a lot of our needs.

If the plan goes as planned, that is to have a major department move out and turn over - my understanding is, what I have been told anyway, that one wing of the third floor would be government caucus and the other wing of the third floor would be Opposition caucuses, whoever they are at any given time. Then we could work towards ensuring that the quality and size of office accommodations in the Confederation Complex are of an equal nature for all caucuses.

I commend my staff. They do work under circumstances that are not as good as they should be, and we are trying to improve it, at least for the next year.

I am glad that is was put in here. I recognize the limitations, but I also recognize that what has been told me is that it needs to happen, that the plan for the building really does need to happen or else we will not get what is written here.

That is my comment on 71(2). If anybody has questions around that, I guess the best one to go to is the Clerk of the House with regard to what I said about departments moving out and what the hope for the third floor is all about, the two wings of the third floor.

The other thing I would like to look at is number 65(2), and I guess it is probably 65(1) and 65(2). I speak to this from the position of Leader of the Third Party, because I do come under this, because the Leader of the Third Party and the Leader of the Official Opposition do have expense reimbursements under the regime for ministers. I think the double claiming - certainly a lot of effort has been put into making sure that does not happen, especially for ministers. I think that is pretty well taken care of, making sure that it is only under one regime that you do mileage claims, for example, that kind of thing.

The area where we do have a benefit, and I think it has been pointed out by the Clerk - I do not know if it is pointed out under 65(2) or not - has to do with the cars, and the fact that under the ministerial expense it is a better regime that is offered than what is offered for MHAs. There is not equality with regard to the mileage that MHAs receive, and the options that are under the ministerial.

The other thing is - and this is pointed out as well somewhere in the documents, and the Clerk may speak to it because I think he is the one who has pointed it out, and this does bother me - that my expenses as leader do not show up in these reports anywhere, because those expenses are governed by the rules for ministers and there is nowhere in our reporting where – it is not a lot, but I have extra expense rules, if I do expenses under leaders’ travel, that is not my constituency travel, but there is nowhere publicly under the House where that shows up. That would be the same for others, but I will only speak from my own experience and the fact that I would feel better if that expenditure was also visible in my expenditures, that people could see. I think what Ms Jones pointed out earlier is a fact that it is not – people will not say: oh, she does not use very much of her money on constituency travel; no, but she is getting travel under different headings. That does not show up in our reporting when that happens. So I just wanted to make those points.

MR. SPEAKER: Yes, I will ask the Clerk to make some commentary.

CLERK: Thank you.

Yes, you are quite right. This issue arose, and Ms Lambe and I have discussed it. We are reporting the forty-eight members under the Members Resources and Allowances rules, and we are doing that diligently, as is required. But last - whenever the ministerial reports first came out, last summer perhaps, with all the ministerial expenses; so all the ministers’ expenses came out. So now you have the ministers captured under the reporting of ministerial expenses, and under MHA, and lo and behold, we realized that you and Ms Jones and the Speaker were not part of that. So even though the three of you are following the same rules, it was not part of the reporting.

So it is something Ms Lambe and I have looked at. I do not know if we have a solution to this and I do not know if ECMS is going to help in this at all, but you are right, there is a gap there, and you three would be the only ones of the forty-eight who would not have a complete public reporting of all your expenses under any expense regime. So it is something we do have to address. Yes, there is a gap there.

Ms Lambe, is there anything you can add?

MS LAMBE: Not really. I mean, it is something that we can address. I do not think the iExpenses are going to help in this situation because of the nature of the reports under the ministerial. You do not automatically get those reports from the iExpenses module, but we can provide reports. It is just, I guess, what they look like. There are reports you can get from the system that shows all that information, and we print those and give them to your caucus every month. However, they are not in the same report format, I guess, as the ones that go on the Web, but I do not see any problem with it, it is just something we need to work on.

MR. SPEAKER: Further commentary?

Ms Michael.

MS MICHAEL: Yes, just one more question to Mr. MacKenzie or Ms Lambe.

With regard to the ministerial expense policy and the fact that it does not – with regard to mileage, which I have mentioned, that it does not complement the floor of allowances applicable to MHAs as members. Does anybody have the right to mention this to the Executive Council? Is there any kind of onus on the Executive Council to see whether or not it is complying with Green recommendations? I guess that is it. We feel we know, as a Management Commission, that we have to make sure that we are all in compliance as MHAs with the Green recommendations, but what about the Executive Council?

MR. SPEAKER: The Clerk.

Ms Burke.

MS BURKE: I can provide some commentary on it, I guess, being a minister.

One of the areas where there are different policies is certainly with the mileage, and there is a vehicle allowance as a minister. As a minister you are entitled to a car allowance of $8,000 a year, which is taxable. So it is about $5,800 a year, and then you can also claim for the fuel that you use in that car.

As an MHA you are on a different system where you can either rent a car or put in your mileage, whatever. The option is, if ministers take the car allowance they can claim fuel but they cannot come in under an MHA. So we do not claim any mileage as an MHA; we have to stay consistent within that one policy. Other ministers have opted out of the car allowance and fuel and will put in the mileage either as a minister or as an MHA, depending on where they are doing their work or what it is. We can take one option or the other, but you cannot be claiming mileage and taking a car allowance all the one time. So you go under one policy or another.

I cannot speak for all the ministers but I would think, given the option, that some are one option and some are on the other.

MS MICHAEL: I know that because I am permitted to choose those options and I have made my choice under the ministerial travel.

I guess my question then is to Mr. MacKenzie. We have in our note that, in actual fact, the ministerial expense policy with regard to mileage does not complement the floor of allowances applicable to MHAs as members. Are you making the statement because you know how much MHAs are getting under mileage and it looks less than the car allowance plus fuel for example?

MR. SPEAKER: Mr. MacKenzie.

CLERK: To your last question. No, that was not really the reason that we want to bring it forward. We have been discussing this with Executive Council really since Green came out because they struggled to try to find a system to reimburse ministerial expenses which would complement, which would dovetail with the Members’ Resources and Allowances Rules.

I think the detail and some of the aspects of the Members’ Resources and Allowances Rules, they really found it made it impossible for them to try to find a ministerial regime which dovetailed neatly with the Members’ Resources and Allowances Rules. So, they developed the one they had, but we have talked to them right through this. I have talked to them recently in fact, when we were doing an update on Green, because they want to know, they always want to know: Well, how are the recommendations coming? What ones are left to do and so on? So, I do not know if there is any possibility of them changing it. The issue arises for us really because of the three individuals in the House. Other than that, like the ministers have their system arranged as Minister Burke described. So they are settled. They choose this and then they never again submit the mileage claim. They will just take the gasoline costs, but there is a little quandary here which has come up in discussions with the Comptroller General.

The Members’ Resources and Allowances Rules is subordinate legislation under the accountability act. So it has a certain priority in our view and it says mileage will be paid to the forty-eight members. Now if a number of the members do not choose to submit claims, of course that is their business. We do not force people to submit claims. But, if, in fact, they were to submit a claim, our view of life is the rules are subordinate legislation. We would have no basis on which to refuse the claim. Now ministers are not doing it, as Minister Burke said, but were they to do it, we would say: Well, we have this policy on minuscule expenses but counter to that we have subordinate legislation which says mileage claims will be honoured. We would have to honour the claims. So it is just a little quandary. It has not caused serious matters. It affects the three of you; you, Ms Jones and the Speaker. So we are working through it. I do not think it is a serious matter but because it was not exactly what Green said, I just felt that we should make note of it that is all.

MR. SPEAKER: Ms Burke.

MS BURKE: Just for the record on that topic. Just so that an Auditor General does not come in and tell us, I will say it here now publicly what is wrong with it. Is that when we take the car allowance and can claim fuel, which I do in my case, we in essence cannot claim mileage. So it goes into your department as fuel as opposed to coming into the House of Assembly. But there are many times when you are in your district as a member that you have to put in your receipts for fuel to your department, although there is no departmental business going on whatsoever. That is the policies; that is where we are into it. I disagree with it but I will follow it because I am told to follow it, but it absolutely does not make any sense.

MR. SPEAKER: The other part of it, Ms Burke, as well, you indicated that the car allowance is taxable and your fuel is taxable, so while you go out doing work as a minister or as a leader, the fuel that you consume you are paying taxes on it. So it is still costing you money. Not only do you pay taxes on it, but you also pay CPP on top of it, so you are out-of-pocket money by serving your duties as leader and as a minister.

MS BURKE: I guess my point only is that we are putting it in because we are told to do so and we have to follow the policy, and there is no other remedy for us to put district expenses on to our department. So down the road, when some Auditor General picks it up, you are going to come back and say that. Then we can go back through the minutes and say yes, we heard it here first.

It is there; it is something that has not been rectified. I will follow the policy as I am told to follow it, but I think that should be noted that it is a problem.

MR. SPEAKER: The Clerk.

CLERK: It is very difficult to get 100 per cent precision on these rules and the ministerial policy. It is the same quandary Minister Burke just described in that a department is covering some small degree of constituency business expenses, which is not what a department should do. Conversely, we in the House have purchased the Blackberries and cell phones for ministers in most cases, and we are covering the monthly costs. So, if a minister is using that Blackberry to conduct ministerial business, the House is paying for that. It is not proper, we should be paying just for constituency business, but it becomes very difficult to slice absolutely cleanly when you are a minister and a member, so that same issue arises with some of the telecommunication costs.

I will point out that one of the rules talks about pro-rating expenses, like for members who are on other expense regimes. It is very difficult for the ministers to do that, but it is one of the things Green said we should try to pro-rate, so, instead of the entire gas bill going to the department, estimate how much should be ministerial and how much should be the member’s.

MS BURKE: I understand we cannot put in any fuel bills - it is only mileage - so it does not matter.

CLERK: As a member, that is right. You would have a certain cost for the tank of gas. You could charge so many litres to the department, and then a corresponding mileage.

MS BURKE: No, we were told we are not allowed to do that.

CLERK: You cannot do that.

MS BURKE: We cannot do that.

CLERK: That is the ministerial policy, yes. If we were just dealing with the rules, the members’ rules, you could only do mileage. You could not do a gas receipt. So you cannot reconcile the two, really, which was sort of the point of the explanation.

It is not a serious matter but it should be brought up in case - as you say, if nothing else, if an auditor starts to look at it, we have at least acknowledged there is a discrepancy.

MR. SPEAKER: Further comments or suggestions?

Ms Burke.

MS BURKE: I have one further comment which has nothing to do with the agenda. It is new business.

I notice that, on the Web site, when you go in and look up a member’s name, they often have the minister’s phone number there as opposed to our constituency office phone numbers, and in some cases we have our constituency office number plus our 1-800 numbers. I know in particular on my site it is the ministerial number that is listed under the House of Assembly Web site. I did not check all members, but I think that should be corrected to have our constituency offices there.

CLERK: Yes, we may have taken that off a list somewhere and did not check that it was actually the constituency ones.

MR. SPEAKER: That will be rectified.

Mr. Parsons.

MR. KELVIN PARSONS: I am just curious, Mr. Chairman, about numbers 62 and 63. What is the status on the Members’ Compensation Review Committee? We are two years out now from Green, you know.

MR. SPEAKER: That is right. The Members’ Compensation Review Committee has to be struck once during every General Assembly. It has not been struck yet. I think it is supposed to be done in consultation with the Leader of the Opposition, the Speaker, and the Government House Leader.

CLERK: The composition of the committee is to be discussed in consultation with the party leaders, yes.

MR. SPEAKER: With the party leaders, but there has been no discussion that has taken place (inaudible).

MR. KELVIN PARSONS: I just think it should be given some priority. I mean, we have serious issues there. There are members who have been here since October 2007 and they do not know what the situation is on their pensions and so on. It is going to take some time. If we have not yet worked out the composition of the committee, let alone talk about appointment of the committee, we are not going to get this done in this sitting if we do not be more proactive on it. I just think we ought to make it a priority.

MR. SPEAKER: Thank you.

Ms Burke.

MS BURKE: Based on those comments, I am wondering if it would be a recommendation that we could put this on the next agenda item for the Management Commission; and, in preparing for that, if there are some issues that we need to think about as caucuses or Opposition Leader or Government House Leader or Speaker, that those questions be forwarded to us so we can prepare for the discussion for our next Management Commission meeting.

MR. SPEAKER: Regarding the structure? Because it is stated quite clearly what the structure will be.

MS BURKE: Well, however we need to start to proceed, maybe it could be on the next agenda for us to start, however we need to start the discussion or however we need to proceed, but it is something that is there and it has to be done in this Assembly. We have not started the process, so maybe we could certainly start the dialogue and make our plans as to where we are going to go with that.

MR. SPEAKER: I just want clarification because I am not sure that the Commission plays a part here. I need to be clear. We can certainly make a recommendation that the committee be struck, but I think we are wading into something again where the Commission does not really have a part to play. I could be wrong, but I do not think….

Comments?

The Clerk.

CLERK: Essentially, yes, section 16, I think it is, in the act, is all about that Members’ Compensation Review Committee, so a lot of the issues around it are defined in the act. So, as you say, you could always sort of encourage and endorse and recommend, but a lot of the matters are already in the statute.

MR. SPEAKER: Ms Michael.

MS MICHAEL: That was what I wanted to say, Mr. Chair, that I remember bringing this up before and that was the answer: that, in actual fact, it is not our responsibility to put the committee in place. It is either by Cabinet or Executive Council, one or the other. I think we should express urgency around doing it, to whichever body it is, and it is not us. That is my memory, because I did raise it before and that was the answer.

I do think there is urgency both from the perspective of the pensions and also from the – you know, our members who are going to come under the new regime may have some questions around this recommendation, or parts of the recommendation in the Green Report based on what just happened with investments, although I do not think it mattered whether it was RRSP or whether you are in the pension plan, although there is a difference, you see. This might alert people to the difference of being in the pension plan and having RRSPs, so maybe it will benefit them that this downturn has happened before all of this is worked out, as the discussion goes on.

Besides the pension, there have been a number of things that have come to us that we have said are not our purview and we have said it has to go to this committee when it is put in place, so there are members waiting for decisions on a number of things, not just on the pension.

I do think it would be good if the Chair, on behalf on the Management Commission, did speak to the urgency, whether it is Cabinet or Executive Council, speak to the urgency of the committee that these steps start to be taken for the committee to be put in place.

MR. SPEAKER: What we can do is include that on the agenda for the next meeting, and if members want to make a motion that we recommend this - and that is all we can do, I think, is recommend that it be done - then it can certainly be entertained at that time. There is a big piece of work to be done there, and I think the committee would have 120 days, if my memory serves me correctly, from the time that it is struck, to report back. I think it is about 120 days.

MS MICHAEL: Yes, I think so.

MR. SPEAKER: Ms Burke.

MS BURKE: As Government House Leader, I will certainly take it upon myself to look into this further, so we can start the dialogue on it.

MR. SPEAKER: Okay.

MS BURKE: Again, it probably would not hurt to be at our Management Commission meeting, at least for an update, to oversee the process.

My only comment beyond that is, obviously this is very new process for us, as the House of Assembly, to undertake this role or this committee and how we oversee it. In fairness to that, there obviously has been a change in Government House Leaders since this session started, as well. In the meantime, we are certainly moving towards the halfway mark of this mandate so I will undertake to have some dialog and be able to speak to the Leader of the Opposition and Leader of the Third party and see how we commence the process and where we go with it.

MR. SPEAKER: We can add it to the next agenda for an update, or – I am not willing to entertain a motion to put anything forward now, because it is new business, but we can certainly add it to the agenda and we can move forward with it from there.

Any further comments or suggestions?

It has been a long day for a meeting. I think we have been here now in excess of six hours. I thank members and I thank staff for their involvement and their patience. We have dealt with a lot of issues. Thank you.

What we will do for the next meeting is, again, arrange a time and contact each member and come up with a time that is agreeable to most of us, and we will proceed and continue as in the past.

I guess the adjournment motion is in order. Would somebody make a motion that this meeting now adjourn?

MS MICHAEL: So moved.

MR. SPEAKER: It is moved by Ms Michael, seconded by Mr. Parsons.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: This meeting is now adjourned.