CONTENTS
Standing Committee on Public Accounts
Financial and Consumer Affairs Authority
Immigration and Career Training
TWENTY-NINTH
LEGISLATURE
of
the
Legislative Assembly of
Saskatchewan
STANDING
COMMITTEE ON
Hansard
Verbatim Report
No.
23 — Thursday, December 14, 2023
The Chair:
— Well good morning, everyone. We’ll get rolling here with the Standing
Committee on Public Accounts. Thanks to everybody that’s joined us here today.
I’ll
introduce our committee members: Deputy Chair, Mr. Nerlien; Ms. Lambert; Mr.
Goudy; Mr. Keisig substituting for Mr. Lemaigre; Mr. Harrison; Mr. Fiaz
substituting for Delbert Kirsch; Ms. Aleana Young.
I’d
like to introduce our officials from the Provincial Comptroller’s office: Chris
Bayda, our Provincial Comptroller; Jane Borland, our assistant provincial
comptroller. Bayda, I thought you had a good choice in tie here today. Looking
sharp at the table.
I’d
like to welcome and introduce our Provincial Auditor, Tara Clemett, and I’d ask
her to introduce just briefly the officials that she has with her here today.
Ms. Clemett:
— Thank you. So with me to my left is Deputy Provincial Auditor Trevor St. John
and he is the deputy provincial auditor for the finance division. And then
behind me is Michelle Lindenbach. She’s our liaison with this committee so she
will be with us all day, and so I won’t reintroduce her for each of the various
sessions that we flip to this morning.
The Chair:
— Thank you very much, Auditor. Ms. Young.
Ms. A. Young:
— Thank you, Mr. Chair. I would like to move a motion. I appreciate
that . . .
The Chair:
— Just hold for a moment.
Sure,
if you have a motion, you can speak to it briefly and then you can move your
motion.
Ms. A. Young:
— Thank you, Mr. Chair. I think at the outset I’d just to note that I did
circulate this motion, as a courtesy and out of respect to all my colleagues
around this table, in advance. And I appreciate that this is a unique
situation, and it does bring me no great joy or pleasure to move this motion
but it is important.
As
I said I appreciate this is a unique situation and an important issue. Trust in
government and the management of public resources is of the utmost concern to
the work of public officials and to elected governments. As is noted by the
Office of the Provincial Auditor, for the parliamentary system of government to
work properly, it must have the public’s confidence. To merit this confidence,
the government’s programs must be effective, open, and accountable to the
public and one important responsibility of the Legislative Assembly is to hold
the Government of Saskatchewan accountable for its management of public
resources. We’ve endeavoured to move this issue forward through the Legislative
Assembly and now bring this motion forward to the Public Accounts Committee.
So
with those brief comments, Mr. Chair, I would like to move the following
motion:
That the Standing Committee
on Public Accounts, pursuant to subsection 16(1) of The Provincial Auditor
Act, requests that the Provincial Auditor perform a special
assignment investigation to examine the Ministry of Social Services’ policies,
expenditures, and procedures regarding the management of public funds through
the payment of hotel fees for clients and those in the care of the ministry.
I
so move.
The Chair:
— Okay, the motion’s been moved. Ms. Young has moved a motion. And should I
repeat the motion, or did everyone hear it?
A Member:
— No, as read.
The Chair:
— As read. Certainly others can speak to the motion now. Any other speakers?
Deputy Chair.
Mr. Nerlien: — Thank you, Mr. Chair. Ms.
Young failed to explain section 16(1) in her remarks. It’s not enough just for
this committee to request a special assignment. Subsection 16(1)(a)(ii) states
that this committee is responsible for providing the funding needed to
undertake the special assignment.
CTV
News reported on December 1st, 2023 that the Provincial Auditor is already
reviewing these matters as part of the 2024 audits. This audit is being done
within the scope of the auditor’s regular budget. I want to thank the auditor
for her work. I do not think it is responsible to duplicate the auditor’s
efforts by ordering a special assignment into what is already being reviewed.
This will only increase the cost to taxpayers at the expense of this
committee’s budget. Thank you.
The Chair:
— Any other speakers to the motion? I guess at this point then would members be
ready for the question on the motion?
Some Hon. Members:
— Question.
The Chair:
— Do members agree with the motion as read?
Some Hon. Members:
— No.
Ms. A. Young: — Yes. Can I request a recorded
vote, Mr. Chair?
The Chair:
— Sure can. A recorded vote has been called. The question before the committee
is:
That the Standing Committee
on Public Accounts, pursuant to subsection 16(1) of The Provincial Auditor
Act, requests that the Provincial Auditor perform a special assignment
investigation to examine the Ministry of Social Services’ policies,
expenditures, and procedures regarding the management of public funds through
the payment of hotel fees for clients and those in the care of the ministry.
All
those in favour of the amendment please raise your hand . . .
[inaudible interjection] . . . Oh sorry, yes. Thank you, sir. All those in favour of the motion
please raise your hand. I get to vote as a . . .
All
those opposed to the motion please raise your hand.
So
just a clarification. We don’t have the substitution form yet, so we aren’t
able to record a vote or participation yet for Mr. Fiaz. But as it stands, those
in favour of the motion were two. Those opposed to the motion were five. So the
motion is defeated.
Financial and Consumer
Affairs Authority
The Chair:
— Okay, folks. We’ll move along with our first agenda item here this morning,
the Financial and Consumer Affairs Authority. At this point I’d like to welcome
CEO [chief executive officer] Sobotkiewicz for joining us, along with Executive
Director Huyghebaert for joining us here this morning. What I’ll do is I’ll
turn it over to the auditor’s office for a brief presentation, then we’ll flip
it back your way for a brief response. Then we’ll open it up for questions.
I’ll
turn it over to the auditor.
Ms. Clemett:
— So good morning, Mr. Chair, Deputy Chair, committee members, and officials.
Today Trevor St. John, the deputy provincial auditor for the finance division,
is going to do a presentation highlighting both chapters that are on the agenda
together, given that they do cover the same topic, so one being the original
performance audit and the other one being the follow-up audit at the authority
with regards to regulating motor vehicle dealers to protect consumers.
The
first chapter does include four new recommendations for the committee’s
consideration. I do want to thank the CEO of the authority as well as his staff
for the co-operation that was extended to us during the course of our work.
With
that, I’ll turn it over to Trevor.
Mr.
St. John: — Thank you. The Financial
and Consumer Affairs Authority is responsible to regulate Saskatchewan’s
marketplace, including motor vehicle dealers. Without effective processes to
regulate vehicle dealers, the authority may not effectively protect
Saskatchewan consumers, public interests, and businesses. There were 841 motor
vehicle dealers in Saskatchewan at March 31st, 2022.
Chapter
7 in our 2020 report volume 1, starting on page 65, reports the results of our
audit of the effectiveness of the Financial and Consumer Affairs Authority’s
processes for regulating motor vehicle dealers to protect consumers. We
concluded for the 12‑month period ended December 6th, 2019, the Financial
and Consumer Affairs Authority had effective processes for regulating motor
vehicle dealers to protect consumers, except as noted in our four
recommendations.
Chapter
12 of our 2022 report volume 1, starting on page 159, reports the results of
the authority’s actions to implement these recommendations by February 2022. We
found it implemented two recommendations, partially implemented one, and made
no progress on the last recommendation. My presentation will summarize the new
recommendations and then provide the status at February 2022.
The
first original recommendation is on page 76. We recommended the Financial and
Consumer Affairs Authority select motor vehicle dealers for inspection based on
a formal analysis of key risks for non-compliance. In 2019 the authority had a
draft compliance policy and procedure manual and would require investigators to
assess each dealer’s risk, which would inform the frequency and content of
inspections. However the manual was not in use and did not document key parts
of the inspection planning process, including how to assess dealers’ risk level
when determining how many and which dealers to inspect in any given year.
In
addition the authority did not document its rationale for selecting the
licensed vehicle dealers it inspected. Authority management advised us it
informally considered factors such as the dealer’s history, previous
enforcement, and location, but did not consider other risk factors such as size
of the dealership or number of individuals impacted by past incidents. Without
clearly defined risk factors to select motor vehicle licence dealers, there is
an increased risk of an inconsistent selection process and not focusing inspection
resources on dealers of a higher risk.
By
February 2022, on page 160 of our follow-up chapter, we found the authority had
developed a well-defined risk framework it plans to use to select motor vehicle
dealers for inspection, but had not yet fully used this framework to select
motor vehicle dealers to inspect. We found the framework set out key steps in
providing a list of risk factors to consider. The authority planned to use the
framework once it obtained some additional information from motor vehicle
dealers and automated key aspects of their inspection rating process.
The
second original recommendation, on page 79 of our 2020 report, is that we
recommended the Financial and Consumer Affairs Authority update and implement a
policy and procedures manual for inspections of motor vehicle dealers.
In
2019 we found the authority gave inspectors some guidance such as objectivity
requirements and steps to initiate inspections. The guidance did not include
standard time frames to communicate inspection results, criteria for
development, determining enforcement actions, or requirement to leave evidence
of inspection file reviews. Not having finalized and approved guidance can
impede the authority’s ability to effectively and efficiently train and support
staff in the event of planned or unplanned turnover.
On
page 162 of our follow-up chapter we concluded the authority implemented this
recommendation. We found the authority implemented a new policy and procedures
manual that included appropriate and sufficient guidance to support the
authority’s compliance and enforcement efforts.
The
third original recommendation on page 80 of our 2020 report, we recommended the
authority formally monitor the completion of motor vehicle dealer inspections
compared to inspection plans. In 2019 the authority maintained a spreadsheet of
inspections completed each year, but did not document its comparison to planned
inspections and if not completed, why not.
We
found for 2018‑19 the authority completed 32 of 42 planned inspections,
and for the eight-month period ending November 2019, it completed 12 of 27
planned inspections. Not formally monitoring the completion of its annual
inspection plan increases the risk of the authority not using inspections as an
effective, proactive enforcement activity. This could lead to a loss of
confidence in the ability to protect consumer rights.
On
page 163 of our follow-up chapter we concluded the authority implemented this
recommendation. We found the authority’s inspectors tracked inspections
completed, compared to planned, and properly recorded an explanation when they
did not complete a planned inspection.
The
last and fourth recommendation is on page 81 of our 2020 report. We recommended
the Financial and Consumer Affairs Authority formally analyze the results of
its enforcement activities for motor vehicle dealers to support a risk-informed
enforcement approach. In 2019 we found the authority sufficiently reported to
senior management and the board on licensing, complaints, education, and
enforcement actions taken, but did not analyze and report information about the
results of its enforcement activities.
The
authority did not analyze the non-compliance identified to help it assess
whether inspections completed sufficiently promoted compliance and assessed
risks of non-compliance. Without formal analysis of motor vehicle dealer
enforcement activity results such as non-compliance trends, the authority does
not know if resources it is expending on enforcement and compliance activities
make the expected difference and whether it is focusing its efforts in the
right areas. A well-defined, risk-informed approach helps protect motor vehicle
purchasers and supports consumer confidence.
On
page 163 of our follow-up chapter we found the authority did not formally
document its analysis of non-compliance trends and other findings from
inspections and complaint investigations. The authority was working on a
process to document its analysis and expected to start reporting to senior
management in 2022‑23.
So
that concludes my presentation. Thank you.
The Chair:
— Thank you. Thanks very much for the presentation, the work, and the
follow-up. Thanks as well to FCAA [Financial and Consumer Affairs Authority of
Saskatchewan] for their work on these fronts.
I
want to table at this point PAC 112‑29, Financial and Consumer Affairs
Authority: Status update, dated December 14th, 2023. And I’ll turn it over to
them to provide a brief response. Then we’ll open it up for questions.
Mr.
Sobotkiewicz: — Thank you for inviting us
to speak to these important reports. The FCAA agreed with and accepted all of
the Provincial Auditor’s recommendations. As noted in the follow-up report in
chapter 12, 2022 report volume 1, the FCAA fully implemented the second and
third recommendations.
Regarding
the first recommendation, that we select vehicle dealers for inspection based
on a formal analysis of key risks for non-compliance, we consider this
recommendation partially implemented. As noted in the Provincial Auditor’s
follow-up report in 2022, we have designed and developed a well-defined risk
framework. The framework utilizes a robust risk assessment matrix that includes
a listing of all key risks and a weighting of those risks to emphasize more
severe risks.
The
follow-up report in 2022 also noted there were two remaining steps planned by
the FCAA to fully implement this recommendation. The first was to obtain the
additional information we need to utilize in the new enhanced risk assessment
from the licensed vehicle dealers because we weren’t collecting all the
information at that time. And the second was to automate key aspects of the new
risk assessment framework in our registration and licensing system or RLS.
Since
the follow-up report in 2022, we’ve worked with our RLS vendor to develop our
risk identification solution. The solution will expand the information
collected from vehicle dealers so that we have all the information when we need
to do the enhanced risk assessment, and it will also automate most of the risk
assessment process.
As
of the current date, the risk identification solution has been fully developed
in RLS and testing is substantially complete. The next step will be to go live
and launch the solution, which we expect to do at the end of the fiscal year.
Our vendor was not able to deliver the solution before that time because they
are currently launching an upgraded platform for all of their clients including
the FCAA’s RLS system.
While
the risk identification solution will be live and operational at the beginning
of the ’24‑25 fiscal year, we will not be able to use it in the way
intended to determine our inspection plan for vehicle dealers for ’24‑25
because we won’t have all the data yet. Vehicle dealer licensees’ annual filing
requirements fall due on the anniversary of their initial licensing date, so we
don’t get all of their annual filings at one time of the year. They’re spread
throughout the year, so we expect to have all of the data towards the end of
the ’24‑25 fiscal year. So the ’25‑26 fiscal year would be the
first year that we actually use the full solution to determine our inspection
plan.
Regarding
the fourth and last recommendation, that the FCAA formally analyze the results
of its enforcement activities for motor vehicle dealers to support a
risk-informed enforcement approach, we now consider this recommendation
partially implemented. As noted in the follow-up report in 2022, the FCAA was
working on a process to document and report our analysis of enforcement and
compliance trends. Through this work we identified a need to utilize our
digital systems to most effectively and efficiently identify the non-compliance
trends.
The
risk identification solution in RLS will play a significant role in this
process. The enforcement and compliance results that will be fed into the risk
identification solution is the same information we will use to identify the
enforcement and compliance trends. We plan to develop a separate report to be
run in RLS that will extract and summarize those trends for efficient analysis
and discussion.
The
RLS reporting function is expected to be live and operational at the same time
the risk identification solution is live, so the end of this fiscal year. But
as with the risk identification solution, we will not have all the data to do
the full analysis as intended. But once we get all the filings for the ’24‑25
fiscal year, we’ll have all the data and we will be able to do the full
analysis and reporting of enforcement and compliance trends to feed into the
’25‑26 inspection plan.
In
closing, I’d like to thank the Provincial Auditor and her officials for their
professional and diligent work, and the recommendations they made that will
improve the FCAA’s regulation of vehicle dealers in the province. Thank you.
The Chair:
— Well thank you, CEO Sobotkiewicz, for your presentation and the work of all
within the organization on these fronts. Thanks for detailing your actions in
this status update to us. That’s really helpful to clarify where we need to
focus with questions. I’ll look to committee members who might have questions
at this point. Ms. Young.
Ms. A. Young:
— Good morning. Thank you so much for being here and for the work undertaken as
well by your staff back at the office and working with the Provincial Auditor
implementing these recommendations.
I
understand, based on your status update and the comments that you’ve made here,
that the new automated risk identification solution is set to launch prior to
March 2024, but not all of the data points used in the solution will be
accessible until ’25‑26 fiscal. Just to make sure I understand, you
indicated that the vendor’s upgrading their platform. And am I right in my
understanding that it’s not necessarily specific data points that aren’t available,
but rather it’s due to the staggered nature of registration for vehicle dealers
that there is that lag?
Mr. Sobotkiewicz:
— It’s because we don’t have all of the data points, and we won’t get all of
them because of the staggered filing dates until towards the end of ’24‑25.
Ms. A. Young:
— Thank you. Having heard that, I believe it’s noted in the report that some
trend analysis did begin in ’22‑23. Can you provide some, like, general
statistics on that? You know, how many dealers were found in non-compliance
over the past three years?
Mr. Huyghebaert:
— How many dealers found not in compliance? I mean certainly with respect to
the risk matrix, we’re using the information that we have available to us right
now, you know, the basic requirements they have to provide as part of their
filing, so whether or not they’re a consignment dealer or do they lease
vehicles and that sort of thing. So we use that information to assist us in
identifying which vehicle dealers to inspect and why, along with some of the
complaints information available to us.
To
Roger’s point, we don’t have all the information available to us to do a
fulsome review. You know, a question that we have in our new enhanced one’s
whether or not they sell rebuilds, the salesperson turnover, those sorts of
things. So using the information we have available to us now is helpful in
terms of who to identify and who to inspect and where to inspect. In terms of
compliance trends, though, we haven’t seen to this date, you know, an increased
number of complaints or issues with those inspections based on the information
that is currently available to us.
Ms. A. Young:
— Thank you. And do you track or maintain records on how many vehicle dealers
are found to be non-compliant year over year?
Mr. Huyghebaert:
— Well we track the number of disputes that we receive. And so in general we
receive holistically up to 500 disputes in a year that are complaints that are
filed. Some of them are founded and some of them aren’t founded of course. In
regards to the number of vehicle dealer disputes, it’s around 55 per cent of
the total disputes that we have.
Yeah,
in terms of the inspection results, I mean certainly we see trends. We know how
many vehicle dealers aren’t in compliance with respect to the . . . Typically
we do 40 inspections a year, and as a result of those inspections, there are
dealers that aren’t compliant. I would say between 40 and 50 per cent of them
are not compliant. And it’s trends that we’re working on, you know, identifying
and educating them. And it’s the same, similar trends that we’ve seen in
previous years.
Ms. A. Young:
— So of those 40 inspections, I’m right in hearing like 18 to 20 of them are
found to be non-compliant every year, and that’s a trend that has held steady
over the past three years?
Mr. Huyghebaert:
— I wouldn’t say it’s held steady. But generally speaking, a portion of the
vehicle dealers that we inspect are non-compliant, yes.
Ms. A. Young:
— Right. Thanks. I’m just trying to get a handle on what a portion means in
terms of . . .
Mr. Sobotkiewicz:
— So just to add a little bit of colour to that too, the non-compliance that we
find could be small things and it typically would be, because if it was more
serious, we would escalate and take enforcement action. So it’s not necessarily
that 18 to 20 are rampantly non-compliant. Yeah.
Ms. A. Young:
— I understand that. Thanks. I guess maybe a last try at that question. So you
do have that information available in terms of each year how many vehicle
dealers are found to be non-compliant?
Mr. Huyghebaert:
— From the inspections that are undertaken? Yes.
Ms. A. Young:
— And sorry, how many is that for the past three years?
Mr. Huyghebaert:
— I’d have to go back. I don’t have that data available in front of me.
Ms. A. Young:
— Okay, great. Thanks. If that could be made available to the committee at some
point, that’d be appreciated.
The Chair:
— Just to jump in here then, thanks for the undertaking. That’s information
that you’ll be able to provide back to the committee in due course? Thank you
for that undertaking. You just do so through the Clerk, and then that’s
circulated to the committee. Thank you very much.
Ms. A. Young:
— So of that portion every year, having heard that you’ve said obviously
they’re not egregious violations that are found, but of those do you have
information in terms of how many are high risk each year?
Mr. Huyghebaert:
— I can state that a low number of them would be high risk because we would go
through our progressive enforcement discipline model if there were ones that
were egregious. So it could be something as simple as, you know, signage that’s
not in line with the signage that we have on file, or a disclosure issue that
wasn’t provided to the consumer, which is more of a concern of course. And so
we take steps to rectify that through our progressive enforcement model.
Ms. A. Young:
— Thank you. And do you track year over year the number that are found to be
high risk?
Mr. Huyghebaert:
— We do.
Ms. A. Young:
— Great. If that information for the last three years could also be provided,
that’d be appreciated.
[09:30]
Mr. Huyghebaert:
— Certainly.
Ms.
A. Young: — Thanks. And then how many
licences have been suspended for each of the last three years?
Mr. Huyghebaert:
— I’d have to provide that information to you as well.
Ms. A. Young:
— Thank you. So I guess maybe taking a step back, for the committee’s
understanding, what are the highest risk areas of non-compliance?
Mr. Huyghebaert:
— The highest risk areas that we’ve seen? Or the highest risk areas that are
contemplated in our new framework?
Ms. A. Young:
— Ooh, why not both?
Mr. Huyghebaert:
— Sure. So I mean, we see high-risk areas if a vehicle dealer is selling a
vehicle on consignment, right. That’s a huge issue. So if somebody is selling
their vehicle on consignment and there’s a delay in payment back to that
consumer.
We
see higher risk areas if they’re selling rebuilds, a vehicle that appears to be
totally written off, and they have to go through two different inspections
through SGI [Saskatchewan Government Insurance] — a light vehicle safety
inspection and then a body integrity inspection. So those are high-risk areas,
right, vehicles that have been in substantive previous collisions.
High-risk
areas where . . . Disclosure issues, or negative equity when people
are purchasing vehicles on a nine-year loan and interest rates the way they
are, right, and not disclosing that there’s negative equity within those
transactions. So those are issues that were being addressed through our matrix.
Certainly
lien payouts is a high-risk area that we spend a lot of time on right now. And
so when a person is refinancing their vehicle or financing a new vehicle, it’s
a payout of an original lien. It’s a high-risk area that certainly causes some
concern as well if there’s a delay in that payment being made . . .
[inaudible interjection] . . . Yes, multiple tax violations.
Ms. A. Young:
— Thank you for that. For the committee, can you explain what the process is currently?
And then I suppose if it isn’t expected to change, for when a motor vehicle
dealer is found to be in non-compliance? You spoke about this a bit in terms
of, kind of like a graduated level of intervention or discipline. Can you
explain to the committee what that looks like, practically speaking?
Mr. Sobotkiewicz:
— So it would be fairly consistent with regulation in the other areas that we
regulate as well. Typically when someone’s in non-compliance, depending on the
severity of it, if a consumer suffered harm, the first step is always trying to
get voluntary compliance through letting them know, you’re not in compliance,
you know; you’re expected to do these things. And then if they don’t come into
compliance, or not in a time frame that we’d asked them to, then we have a
number of enforcement tools. We can suspend a licence. We can impose terms and
conditions. We can cancel a licence. The more severe sanctions we have are
reserved for the more severe infractions.
Now
with that said, the first . . . If it was a severe contravention that
showed intentional dishonesty and a harm to consumers, something of that
nature, we might go to a stronger intervention. We do have the ability to
suspend a licence immediately and then provide a hearing within 15 days. And
that’s reserved for if we feel they pose an undue risk, that we have to prevent
them from harming consumers even before we actually give them a hearing. But
that’s reserved for very unusual situations.
Mr.
Huyghebaert: — Yeah. Just like Roger said,
the egregiousness of the situation really dictates where you proceed. I mean
obviously we want to work with educating licensees and informing them, giving
them an opportunity to address that consumer harm and then, you know, going
through our progressive tools, whether it’s a written warning or potentially a
suspension or notice of suspension with an opportunity to be heard. We want to
work with our licensees as much as we can to help with their voluntary
compliance.
Ms. A. Young:
— Thank you. And perhaps, hopefully, last question from me. Consumer protection
obviously being incredibly important and the work that you do really supporting
that, for the viewing public at home, I think the average consumer would
appreciate that there has been a significant shift in the vehicle market since
I suppose the start of the pandemic back in 2020 at the outset of the auditor’s
initial report. And I’m wondering what, if any, impacts this has had on the
work that you do day-to-day in this area or that you’ve undertaken in
implementing these recommendations.
Mr.
Huyghebaert: — There hasn’t been an
increase in the number of, volume of complaints that we’ve had.
Mr.
Sobotkiewicz: — For us, we’re not seeing
. . . There’s a trend there on sort of the consumer’s buying experience,
but it’s not necessarily translating into a material change in the regulatory
risk that we have to change how we approach things. And if we see that trend
happening then of course we would adjust.
Ms. A. Young:
— Thank you very much. No further questions from me, Mr. Chair.
The Chair:
— Good questions. Good responses. I think there was three different questions
that there was an undertaking to provide information back, so if you can just
have that provided back through the Clerk here. Is a month’s time from this
meeting reasonable? Thank you very much.
We’ll
kick it over, see if there’s other questions at this point. No? Keisig, you
bought a used truck or anything lately that you’ve got a question about?
Mr. Keisig:
— I’m perfectly fine. Thank you, Mr. Chair.
The Chair:
— All right. Well listen, thank you again for the work in these areas. There’s
four new recommendations that we need to vote on here. The first and
no. 4, I believe we’ve heard progress towards compliance or implementation
on that front. So I would welcome a motion to concur and note progress. Is
there someone who’d care to move that? Ms. Lambert.
Ms. Lambert:
— I concur with the recommendation and note progress . . .
[inaudible].
The Chair:
— Okay. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— Okay, that’s carried for recommendations 1 and 4. For 2 and 3, can we concur
and note compliance? Is there a motion to that effect? Mr. Goudy moves. All
agreed?
Some Hon. Members:
— Agreed.
The Chair:
— All right, that’s carried. Any final words on your behalf? And I just want to
say thank you so very much again for your time here today, all those involved
in this work as well.
Mr.
Sobotkiewicz: — Thank you for having us.
The Chair:
— Okay. Well thank you, CEO Sobotkiewicz and Mr. Huyghebaert. Thank you for
your time this morning.
We
will now move along and turn our attention shortly . . . Looks like
they’re not on deck here right now, so a very brief recess and up next is
3sHealth [Health Shared Services Saskatchewan].
[The committee recessed for a
period of time.]
3sHealth
The Chair:
— Okay, folks. We’ll reconvene the Standing Committee on Public Accounts, and
we’ll turn our attention to the auditor’s chapters focused on 3sHealth.
I’d
like to welcome all the officials and all the leadership that’s here for Health
and 3sHealth. I’ll turn it over briefly to Deputy Minister Smith to introduce
the officials that are here with her today. Maybe hold off on providing other
comments on the chapters at this moment because we’ll kick it over to the
auditor and then bring it back to you.
Ms.
Smith: — Thank you and good
morning, everyone. I just want to again thank, on behalf of the Ministry of
Health, want to thank the auditor for the opportunity to discuss the chapter that
we have in front of us. I do have with me today a few people from the ministry
and from 3sHealth with me to answer some questions and any follow-up on the
reports.
From
the ministry, we’ve got Greg Gettle, assistant deputy minister, just sitting
behind me; Norm O’Neill to my left, assistant deputy minister; Diana Fink, who
is our director of operations and internal audit; and Victoria Zhang, our
manager of internal audit. And also with me today I have from 3sHealth, I have
Mark Anderson, the chief executive officer for the organization; Alana
Shearer-Kleefeld, the vice-president of employee benefits; and Jade Lea-Wilson,
director of claims services. Thank you.
The Chair:
— Okay, thanks to everyone for their attendance and their work on the items we’ll
discuss here this morning. I’ll turn it over to the auditor for her
presentation and then we’ll bring it back your way.
Ms. Clemett:
— So thank you, Mr. Chair, Deputy Chair, committee members, and officials. With
me today is Mr. Jason Wandy. He’s the deputy provincial auditor for the health
division. Behind him is also Ms. Kim Lowe. She’s the senior principal who was
responsible for leading the audit that we’re going to discuss today.
This
morning Jason is going to present our chapter about 3sHealth’s processes to
manage disability claims which does include four new recommendations for the
committee’s consideration. I do want to thank the CEO of 3sHealth and all of
his staff for the co-operation that was extended to us during the course of our
work.
With
that I’ll flip it over to Jason to give an overview on the chapter.
Mr.
Wandy: — Thanks, Tara. Chapter 3
of our 2022 report volume 1 reports the results from our audit of Health Shared
Services Saskatchewan’s, or 3sHealth’s, processes to manage disability claims
for certain health care employees for the 12‑month period ending October
31st of 2021. This chapter includes four new recommendations.
3sHealth
is responsible for administering four disability income plans for certain
health care employees in Saskatchewan, such as those working in hospitals or
long-term care homes. At October 2021, there were over 40,000 health care
employees from various health care organizations among the four disability
income plans. 3sHealth staff assess and adjudicate disability claims and may
obtain advice from medical advisors to help guide adjudication decisions or
from physicians to help interpret medical information and the appropriateness
of treatment.
We
concluded 3sHealth had, other than the areas identified in our four
recommendations, effective processes to manage disability claims for certain
health care employees for the 12‑month period ended October 31st of 2021.
In
our first recommendation on page 30, we recommend Health Shared Services
Saskatchewan send completed disability benefit claim applications to
adjudicators on time. A claim application for disability benefits is complete
when 3sHealth receives both employee and employer applications and an attending
physician statement.
Upon
receiving a completed application, 3sHealth requires a benefit service officer
to set up a member profile in the claims management IT [information technology]
system and contact the member the same day, advising their application is
complete. The officer then submits the application to an adjudicator to assess
the member’s eligibility and coverage.
We
tested 30 applications and found the benefit service officers called and sent
emails to members advising their application was complete. However officers did
not always make timely application submissions to the adjudicator, causing
delays in decision making. For 12 applications tested, we found the delays in
submitting completed applications to adjudicators ranged from 4 to 11 business
days, resulting in some members not receiving a claim decision until up to 30
days later.
Delays
in processing incoming applications cause further delays in adjudicating, which
places more stress on members waiting for decisions on their disability claims
and subsequent payment of benefits.
In
our second recommendation on page 37, we recommend Health Shared Services
Saskatchewan follow its established timelines to complete appeal reviews on
disability claims and document reasons for significant delays. 3sHealth expects
staff to review and make a decision on all appeals within 30 business days of
their receipt.
We
analyzed 3sHealth’s appeals data and found it does not make timely appeal
decisions. During 2020 and 2021 our analysis found 3sHealth made over 80 per
cent of its appeal decisions later than the expected 30 days. Our testing of
six appeals found similar results. Without timely appeal review and decisions,
members may not be receiving benefits on time which may place undue stress on
plan members. Without knowing why appeal decisions take longer than expected,
management cannot address root causes of delays.
In
our third recommendation on page 38, we recommend Health Shared Services
Saskatchewan centrally track and analyze complaints from plan members regarding
disability benefit claims. When a member has a complaint or inquiry, the member
can contact 3sHealth via phone or email. 3sHealth expects adjudicators to
escalate complaints or inquiries to management, such as to a claims specialist,
who will contact the member to resolve the issue.
We
tested three complaints and found that all three were appropriately resolved
within three to eight business days. However we found 3sHealth does not
centrally track the number or specific nature of complaints related to plan
member disability benefit claims and subsequent resolution. Without centrally
tracking complaints, 3sHealth does not know the number and nature of complaints
it receives. As such, it is unable to analyze complaint information to improve
its disability claims management processes.
In
our fourth recommendation on page 42, we recommend Health Shared Services
Saskatchewan enhance its written reports to senior management and the board of
trustees about its disability claims management processes. We found that
3sHealth reports most of its key performance information to senior management
and the board of trustees, such as information about its two key performance
measures related to the delivery and quality of disability claims or the
results of member surveys.
However
we found neither senior management nor the board receive information on
3sHealth’s performance target for appeals; that is making appeal decisions
within 30 business days of receiving an appeal. Additionally, 3sHealth could
further improve its reports to senior management and the board by including
written analysis of the results. Having more information and analysis on its
disability claims process would allow senior management and the board to know
whether the claims management process is working as intended and make adjustments
as needed.
I’ll
now pause for the committee’s consideration.
The Chair:
— Okay, thanks for the focus of the chapter and the recommendations. Thanks as
well for the status update provided and the work that’s gone in on these
fronts. I’ll table at this point PAC 113‑29, 3sHealth: Status update,
dated December 14th, 2023.
Thanks
again for providing that to us. I’ll turn it over to Deputy Minister Smith for
a brief response to the recommendations and then we’ll open it up for
questions.
Ms.
Smith: — Thank you, Mr.
Chairperson. I’ll just maybe add that I just have some brief comments really at
the front end because there were just the four recommendations, just sort of
summing that up, and then appreciate we’ll go into questions. And again I want
to just thank the Provincial Auditor Tara and her team, Jason and Kim, for your
support on this audit. We do really appreciate the services and the oversight
that you help to provide to not only the Ministry of Health but to our partner
agencies such as 3sHealth Saskatchewan who is with us here today.
So
just to summarize, the Ministry of Health and 3sHealth, we have made good
progress on the four managing disability claims recommendations with two fully
implemented and two partially implemented. Work is under way to continue to
fully implement the outstanding recommendations and I am confident that ongoing
work will continue as a result of today’s review and discussions.
We
do appreciate the analysis and detailed audits provided by the Provincial
Auditor. You really do provide a very thorough analysis through the processes
that help generate some really important recommendations to ourselves and to
our other service sector partners as well. So we appreciate that, again the
ongoing dialogue that we have and some of the input that you give to us on the
services that ultimately, regardless of whether we’re talking about 3sHealth or
of our other partner agencies, which is really critical to delivering services
to the citizens of our province and to the patients who are receiving those
services.
So
I’ll just maybe conclude, just some comments that we, I know we’ll get into
maybe some questions on the recommendations in front of us, but we will
continue to work with the Provincial Auditor on a series of recommendations and
just really appreciate the input. So thank you.
The Chair:
— Well thank you, Deputy Minister Smith. I’ll look to committee members now for
questions. Ms. Young.
Ms. A. Young:
— Thank you, Mr. Chair. Thank you, Deputy Minister, for being here today and my
thanks as well to all of your officials as well as to the auditor’s office and
everyone who undertook to implement these recommendations. I know a great deal
of work goes on that is unseen by this committee on both sides, and I
appreciate it.
[10:00]
In
the status update, it notes the performance of 3sHealth was surpassing its
target of over 90 per cent within eight days and then starting from October
2023, this dropped 12 per cent below the standard, currently at I believe 78
per cent. Can you expand on this rapid decline in the performance on this
measure?
Ms. Smith:
— Thank you. I’m going to introduce again Mark Anderson who’s the CEO of
3sHealth, and he can provide a little bit more detail on the question that
you’ve asked. Thanks, Mark.
Mr. Anderson:
— Sure. So thanks very much. I think, you know, when you set a service standard
in any part of your business, its goal is to ensure we know what we’re
targeting, what we’re driving towards, and every single day we aim to achieve
it. And as you can appreciate, a variety of things can impact your ability to
deliver on that on a day-to-day basis. And it’s sort of our north star we
course-correct to.
So
in the last number of months we have seen our volumes increase in the number of
claims coming in. And that is of course one of the key drivers that would take
you in a slightly different direction and off of your standard, although I am
very pleased that we were able to be in standard for the majority of the year
and we’ve done a lot of work to get to that point.
The
other component is of course staffing levels, and since the audit, we have
increased our staffing levels significantly to ensure that we can maintain that
standard. You know, of course, we do suffer from the seasonal illness, some
turnover at times, and that of course has an impact as well.
So
I would say those are the two key drivers that have, you know, got us currently
off track, and we continue every single day to work back to that standard.
Ms. A. Young:
— Thank you, Mr. Anderson. You know, you noted in your comments that staffing
levels are a concern, and it is reflected in the status update that 3sHealth is
experiencing significant staff movement. I believe it notes departures and
internal transfers. Can you clarify why there is such high staff turnover at
this time, turnover and movement?
Mr. Anderson:
— So you know, the turnover I think in our organization is not necessarily out
of the norm. We are seeing that in lots of parts of, I think, our economy
generally where people are moving to other positions. And you know, as I just
chatted here with some of our staff, some of that turnover has actually been
internal promotions where we’ve had other opportunities available within the
organization. And so we are actively recruiting to fill those roles.
Ms. A. Young:
— Thank you. So the status update notes significant staff movement. Am I
understanding that that’s not the case? This is business as usual?
Mr.
Anderson: — I think, you know, in my
conversations with staff back here, I think “significant” is a relative term.
So for us it’s significant relative to the last number of months where we’ve
been in standard. But I’ll just check on our total adjudication team because I
think significant . . . When you think about the size of the team, even
a couple of movements can be significant for us.
Ms. A. Young:
— Sure. That was going to be one of my future questions: how many adjudicators
you currently have and what your staffing target is for that role specifically.
Mr.
Anderson: — Sure. So currently we
have 13 budgeted adjudication positions, and we have 12. So we have one vacancy
in that position as of right now. And on the benefit services side, which is
where that claim is set up in the first place, we currently have three
vacancies.
Ms. A. Young:
— And three vacancies out of a targeted staff team of what size?
Mr. Anderson: — On the BSO [benefit services officer] side, I’ll
just double-check again. Fourteen total.
Ms.
A. Young: —
Correct me if I’m wrong. I believe you said it’s really been the last couple
months that there’s been significant staff movement. Some departures, some
internal movement as well. Looking at the full staff component relevant to the
auditor’s chapter — so I’m not sure if it’s just the adjudicators in your consideration
or if it’s those two parts — how many employees have left out of what size of a
staffing component?
Mr. Anderson: — Today compared to the period that the audit
happened? Is that what your question is?
Ms.
A. Young: —
Oh, I’m curious. The status update talks about, and you’ve said I believe in
your comments that in recent months — so I’m not sure if that starts in like
August or if that starts in September, where you see the decline in the service
standard — but that there’s in recent months been significant staff movement.
So I guess my question would be like what time
period are we looking at? And then what has the
actual movement of staff been during that time period?
Mr. Anderson:
— Where we’ve come out of standard is the October, November time period. So I
believe we’re in standard for all of the months of 2023 up until the October
period. So that’s when we’ve come out of standard. And I’d have to get back to
you exactly about the turnover during this specific time period. And maybe my officials
can drum that up.
Ms. A. Young:
— That would be appreciated. Thank you. What’s the current adjudicator
caseload?
Mr. Anderson:
— So our current caseload is 111 files per adjudicator.
Ms. A. Young:
— And I assume that that’s like an average. What’s the highest caseload that
any one adjudicator would be carrying recognizing that, you know, there’s work
being done to levelize that across employees?
Mr.
Anderson: — 130.
Ms. A. Young:
— Thank you. In the status update and in your comments today, it’s been
indicated that there has been a significant increase in the volume of claims.
And it’s noted that in, I believe, October, there was a four-year high of
disability applications of 270, which was then again surpassed in November
with, I believe, 271 applications.
Historically
what has the high-water mark been for disability applications? And I should
note if any of this is tough to find immediately, or if you do require more
time, I think we would be happy as a committee to receive this at a later date
as well.
Mr.
Anderson: — I believe we have this
information handy. Okay, so our high, over the last five years anyways with the
data I have, was the month of June of 2021 where we had just over 300
applications.
Ms. A. Young:
— Thank you for that. If you have that information available in terms of the
trends or like the month-over-month claims levels for the past five years, I
think I heard you say, I’d really appreciate having that information provided
to the committee.
The Chair:
— Maybe on that, so we could receive that right now if you have that. You could
read it into the record. The other option of course would be that maybe within
a month’s time, you could supply that information back to this committee
through the Clerk. Whatever your preference. If you’ve got it there, that’s
great.
Ms.
Smith: — I think we’ll submit it
afterwards. We’ll just take a look at the information we have, make sure that
it all lines up with the questions that you’re sending, and we’ll put that
forward.
The Chair:
— That probably makes sense. I think we’re talking 60 months then in the end
anyway, so that’s probably the best course of action. Thank you very much.
Ms. A. Young:
— Thanks. So picking up on that, on your last comment, is it correct to assume
that this so far appears to be a bit of a trend, the increase in
. . . I mean we only have the two months here; I recognize that. I
think there’s been reporting going to the board since 2022 if I’m remembering
accurately.
But
I guess to focus, is this a trend that we’re seeing in terms of the ongoing
increase in disability numbers or is it really only October, November that have
been particularly significant?
Mr.
Anderson: — I think, you know, you
see normal variation throughout the year, so it’s tough to say whether a couple
of months represents a trend. And that’s what makes it difficult sometimes to
ensure staffing levels are exactly adequate because you don’t know how many
claims are going to come in in that particular month. Certainly it may end up
there, but I think two months is probably too early to call it a trend.
Ms. A. Young:
— So you’ve noted perhaps a seasonal nature to an ebb and flow of claims
trends. Can you expand on what you’d attribute to, even in the last two months,
a higher number of disability claims?
Mr.
Anderson: — You know, I don’t know
that we can attribute it to anything in particular yet. That would be probably
me, you know, guessing. But certainly we do see some seasonal variation there.
[10:15]
We
took a look at what were the types of things that people were submitting claims
for, and it has not changed significantly in the last, you know, several years.
So I don’t have an answer to that at the moment.
Ms. A. Young:
— Understanding that you do have data available over the past number of years,
can you speak to, like, who these people are putting in claims. Like I
understand the groups that participate in this disability program, but is there
anything you’d like to bring to the committee’s attention? Like are these folks
primarily, you know, long-term care workers? Are they EMS [emergency medical
services]? Are they health care workers? Are they spread across these
professions?
Mr.
Anderson: — Spread across. So our
plans cover, you know, as noted by the auditor, certain health care workers,
but I think I might say the majority of health care workers are covered by
these plans. So not physicians, you know, but the vast majority of other health
care workers would be covered by these plans.
Ms. A. Young:
— Okay. And I’m right in understanding then that this is kind of levelized then
across professions within the field? You’re not seeing like, for example, a
spike in EMS claims in particular, or any particular employee group or
categorization?
Mr.
Anderson: — Not that I could point
to, no.
Ms. A. Young:
— I suppose along a similar vein, understanding that, you know, this is a
sector that was really impacted on the workload side by the pandemic, we hear a
lot about ongoing levels of burnout. Hearing that this is kind of levelized
across the professions represented in your field, do you track or maintain a
breakdown of the nature of the claims?
Mr.
Anderson: — At a high level we do. So
our largest type of claim is musculoskeletal injury or problem. So that would
be, you know, the biggest one that we have. And then the other categories, I’ll
just verify that I have the right information.
So
we have really four categories that we’re able to report on. The first is, as I
mentioned, musculoskeletal injuries, so 36 per cent; then mental or nervous
disorders at 16 per cent; cancer oncology at 9 per cent; and then all other, 39
per cent.
Ms. A. Young:
— Thank you. And do you also track those numbers month to month or year over
year?
Mr.
Anderson: — Year over year, for sure.
Twice a year.
Ms. A. Young:
— Twice a year. Okay. And would you have that information available for the
same time period, at that five-year period you spoke of earlier?
Mr.
Anderson: — We do track it. We’ll
just have to confirm the specifics though for you.
Ms. A. Young:
— Great, yeah. Hearing that that is available, if that could be provided to the
committee as well, it would be appreciated.
So
looking at the four categories that you listed, which I believe were
musculoskeletal; nervous disorders; kind of perhaps mental health more
colloquially speaking for that second category, if that’s a
fair . . .
Mr.
Anderson: — That would be in that
category, for sure.
Ms. A. Young:
— Oncology; and then other, that remaining 39 per cent. Is there an increased
incidence of mental health claims in that second category?
Mr.
Anderson: — We have not seen that. We
checked the last two years anyway, and we have not seen that change. No.
Ms. A. Young:
— In the musculoskeletal category, I think in the public consciousness there’s
an awareness of, you know, concerns that this is really physical work that a
lot of health care workers undertake that can — you know, like many professions
— take a toll on people’s bodies, and then as a consequence lead to greater
increase in claims if it is potentially work that could be prone to injury or
security concerns.
In
that first category, do you have, do you track a breakdown of reasons that
members would be physically injured?
Mr. Anderson:
— We do not. And remembering that this particular program would be secondary
insurance to WCB [Workers’ Compensation Board], so if somebody was injured in
the workplace, that would be a Workers’ Compensation Board claim.
Ms. A. Young:
— For sure, yeah. You want people to go to all of their insurance programs —
whether WCB or SGI if it’s motor vehicle — and then to this program.
Mr. Anderson:
— Correct.
Ms. A. Young:
— So there’s no breakdown of reasons that members could be physically injured.
So if I was curious as to whether or not there was a trend, if this was
increasing or decreasing, that’s not information that you would have for the
committee.
Mr. Anderson:
— I don’t believe so, no.
Ms. A. Young:
— Recognizing that this is almost a tertiary plan, as you’ve noted, is there
work that 3sHealth undertakes to mitigate, to address root causes of injuries
or to mitigate the number of claims that comes into this plan?
Mr. Anderson:
— So just to confirm some of our protocols around communication, so we do
communicate statistics information to employers, the employers that participate
in these plans. And then it’s up to the employers to, you know, do with that as
they see fit.
Ms. A. Young:
— Thank you. So expanding on that perhaps a bit. As the administrator of these
plans, you simply provide the information to the employers who then, by your understanding,
are responsible for undertaking any kind of risk mitigations or actions to
decrease the incident of workplace injury or disability claims? I shouldn’t say
workplace injury. Disability claims.
Mr. Anderson:
— Yeah, and I think that’s the nuance though is, you know, those workplace
injuries again are covered by Workers’ Compensation Board. And I do understand
those conversations do occur with employers and WCB. These are, you know, areas
where you would become ill or injured outside of the workplace that we’re
covering. And so we certainly provide information to the employers about what’s
happening with these plans.
And
then we take a more active role on the . . . You know, if they are
injured, we basically have a program which we’ve called Path to Health which is
really around, you know, helping these folks who come into our plans return to
health and get back into a place where they’re feeling healthy enough to work
again.
Ms. A. Young:
— So just to make sure the committee is crystal clear on that, in terms of the
responsibility then for ultimately . . . I mean with any insurance
plan, with any program, obviously you want to decrease the number of claims
that go into that program. There are always going to be some, but you know, you
want to be proactive in terms of managing your risks and then the exposure of
organization members in the plan. With whom does that responsibility lie? Am I
right in hearing there’s none with 3sHealth? There’s none with the board of
trustees?
Mr. Anderson:
— I think that would be a fair assessment related to this particular plan, yes.
Ms. A. Young:
— Okay, great. So then kind of circling back to my earlier question around
attention to or addressing, you know, root causes of injuries, whether physical
or mental, I believe you said the root cause, this isn’t necessarily tracked
within 3sHealth. Is there like a central repository for that information? Do
the employer groups track that? Please correct me if I’m mistaken in my
understanding.
Mr. Anderson:
— So just want to reiterate sort of what our role is and what the plan’s role
are here. So our role is to, you know, receive the claim. So a claim will come
in. We then assess and adjudicate whether the claim is covered through the
insurance that’s provided. That’s typically done through medical information,
you know, that’s provided. And then if they are eligible, then we will pay the
claim, and we will work with that claimant to support them throughout the claim
in every way that we can to help them in that process. So we pick up at the
point that they’ve been injured or that they’ve had an illness, and not the
root cause kind of front end of that.
Ms. A. Young:
— And again, that’s with the employers then?
Mr. Anderson:
— I think the employer certainly, as I mentioned as it relates to the WCB
claims, but because these are often outside of the workplace, they can be more,
you know, societal types of issues that occur that cause these types of issues
in the first place.
Ms. A. Young:
— Okay. Interesting. Yeah, I thought some of that information would be
centrally tracked somewhere for a plan of this nature. But I am hearing that
it’s not at 3sHealth and that’s not part of your responsibility.
So I can
move on. In regards to the implemented central tracking and the analysis of
complaints from plan members as it relates to disability benefit claims, I see
in the report that documentation and central tracking has been implemented. A
similar vein of questioning, can you speak to any trends that you’re seeing in
these claims? Are complaints up, down, steady?
[10:30]
Mr.
Anderson: — So as pointed out by the
auditor, we did not have a central complaint reporting system previously. So I
can’t speak to trends, unfortunately. But we do now have it in place so we will
be able to on a go-forward basis. But I can indicate that, you know, we had 23
complaints come in 2022 and 16 of them were related to disability benefits.
Ms. A. Young:
— Can you remind me when that reporting began? Was it July 2023?
Mr.
Anderson: — 2022.
Ms. A. Young:
— So beginning of 2022. And do you have information available then, I guess,
for the past 15 months in terms of the nature of those or the prevalence of
those complaints?
Mr.
Anderson: — They have some. I’ll just
get clarity on the time period I have here. So I misspoke. The 23 were not from
2022. They were from the start. So it’s been since that July 2022 up until
current, we’ve have 23 complaints, 16 related to disability.
Ms. A. Young:
— Okay, so 23 complaints in — as she tries to do math on her feet — like 17‑odd
months, I guess.
Mr.
Anderson: — Ish.
Ms. A. Young:
— Ish.
Mr.
Anderson: — Yeah.
Ms. A. Young:
— Are you able, and you said of the 23, forgive me, 17 were . . .
Mr.
Anderson: — 16.
Ms. A. Young:
— Sixteen were related to disability benefits?
Mr.
Anderson: — Correct.
Ms. A. Young:
— Okay. With the new reporting, can you speak to how your claim management
process has improved?
Mr. Anderson:
— So as the complaints are identified and come in, the leadership team within
benefits — that’s the folks behind me here — they take a look at them. And they
look to identify, you know, specifically are there areas that they need to
respond to and/or are there systemic things that they would need to resolve
and, you know, that we might have a break in our process or something.
So
we’re very active in the continuous improvement space in our organization. And
so as we get feedback and information, we look to identify areas of
improvement.
Ms. A. Young:
— Thanks. And have any systemic concerns or breaks in process been identified?
Mr. Anderson:
— For the most part what we’ve seen are pretty, you know,
single-incident-related so far in the tracker. But that doesn’t mean, you know,
in the future we wouldn’t see some that we would look to make those
improvements.
Ms. A. Young:
— Having heard “for the most part,” are there other parts beyond “the most
part” that you can comment on, or is that just a turn of phrase?
Mr. Anderson:
— What phrase? I’m sorry.
Ms. A. Young:
— You said, “for the most part” they’ve kind of been one-offs, and I was just
curious if there was . . .
Mr. Anderson:
— Well you know, when I look at the complaints that we’ve gotten, there’s
certainly an area there around late payment that we may have something going on
more specifically. But I can’t speak to it becoming, you know, a systemic issue
with those type of things. They do happen from time to time. You know, there’s
a lot of claims coming through, a lot of payments coming through, and so
occasionally things do get missed.
And
we try to, you know, pin down our processes very clearly so that we have
standard work for our employees and are making sure they’re checking those
boxes each and every step along the way. And occasionally those steps get
missed. Occasionally you need to add a process step, and you say, well we need
to add this component in. And so I don’t think we’ve updated anything on the
late payment in that category to my knowledge.
Ms. A. Young:
— That was going to be one of my further questions. In recommendation 4 it’s
clear that reporting to the board has become regular and enhanced. And I was
going to ask if you could expand on any changes or direction provided by your
board of trustees to the organization in regards to the disability claims
management process, if there have been any.
Mr.
Anderson: — You know, I think
probably at every board of trustee meeting there are a variety of conversations
that the board, you know, would weigh in on and give influence to. And as we
provide these reports, they ask us questions that, you know, might change some
of our processes slightly. I think that happens at every board meeting.
Ms. A. Young:
— A sign of good governance. Have there been any specific directions from the
board?
Mr.
Anderson: — Not that I can point to
in this regard, no.
Ms. A. Young:
— Thank you. So circling back to where we began, with the past two months
obviously having high numbers of claims as well as some challenges around the
staffing in your organization for the folks who work to move those claims
along, obviously the longer individuals are off work, the harder it is for a
return to work. An increase in disability claims kind of paired up with even a
temporary decrease in that performance standard, recognizing the staffing
challenges you’ve spoken to, is not necessarily great.
I
have heard that you’re hiring. I’ve poked around on your website. I see there’s
some jobs posted, closing in the next couple weeks. Have there been resources
or direction provided by the board or senior management to help alleviate this
in the short term?
Mr.
Anderson: — We have always
immediately asked the team to fill vacancies as they come up. We’re actively
working towards level loading those cases to ensure that, you know, folks have
cases. And there’s some balancing that needs to occur based on complexity of
cases too because not every case is the same. Some are more complex than
others.
So
I think, you know, that making sure we have the right balance of staff to
handle these claims is really driven by that metric that I started with, that
true north, that turnaround time. And so if we’re adjudicating these claims in
time, then that says to me we’re sufficiently resourced. And if we’re not, then
we either have some process challenges we need to improve on or we have some
staffing levels that we need improve on as well.
And
you know, like I said, very pleased with our progress because we were not
meeting standard, as was pointed out. We got to within standard. It’s now come
a little bit out of standard, and we’re going to work hard every day to get it
back into that standard.
Ms. A. Young:
— So the caseload levels then, just to be clear, are manageable for the
staffing component once you fill those vacancies that have been identified?
Mr.
Anderson: — We believe they are, but
we’re always looking to ensure they’re balanced and load levelled.
Ms. A. Young:
— Okay. And there’s no intention or expectation at this point that you’d be
looking to increase human resources in order to lower those caseload levels or
expedite those processing times, get that standard back in order?
Mr.
Anderson: — Given that we’ve had the
positive results earlier in the year, we think that our staffing complement,
when full, is appropriate.
Ms. A. Young:
— Great, thank you. Moving on, related to the employee benefits plan team, it’s
noted in 3sHealth’s annual report that the EBP [employee benefits plan] team
implemented a new disability claims management system, claims health care
information program. I don’t know if you call it CHIPs. I’m okay if you call it
CHIPs.
Mr.
Anderson: — Indeed we do.
Ms. A. Young:
— I’m always cautious of inventing or claiming acronyms in this committee. So
with CHIPs, is this new software involved in tracking complaints from plan members?
Mr.
Anderson: — No.
Ms. A. Young:
— So hearing no, how is 3sHealth then tracking those? Kind of circling back to
recommendation no. 3 from the auditor.
Mr.
Anderson: — So as the complaints come
in, as per recommendation no. 3, we manage that centrally, and then the
team reviews it on a monthly basis for responses.
Ms. A. Young:
— And that central management system, is that like something formal? Is that an
Excel spreadsheet? I don’t have any value judgments on that. I’m just curious.
Mr.
Anderson: — Yeah, it’s the latter.
Ms. A. Young:
— Okay. So then can you maybe expand on what CHIPs is used for in terms of that
disability management piece?
Mr.
Anderson: — So CHIPs is really our
system where, when the claim comes in, it’s the place where we house all of our
claims and have all the information related to all of our disability claims. It
is the primary system to manage claims.
Ms. A. Young:
— Thanks. Who’s the provider of that? And what was the cost of implementation?
[10:45]
Mr. Anderson:
— Okay, so the vendor’s name is Penad, P-e-n-a-d. And the payments would be in
our payee disclosure that we do on our website and on our annual report. We’d
have to follow up with the specific question though about the cost.
Ms. A. Young:
— Yeah, if there’s a total cost for the implementation of that program as well
as payments to the vendor specifically, that’d be appreciated.
The Chair:
— I’m just going to jump in here again. There’s been a few different moments
when there’s been an undertaking to provide information back. That’s wonderful.
That can come again through the Clerk. Is it reasonable to have all the
undertakings provided within the next month? Is that a reasonable period of
time?
Mr.
Anderson: — So far, yes.
The Chair:
— Sounds good. Thanks so much.
Ms. A. Young:
— I only have one more line of questions, so hopefully we stay within that.
Moving on to the Path to Health, I believe in the auditor’s report it was
launched in 2019 as a three-year project, implementation in March 2022 if I’m
right in that. Can you provide an update on the Path to Health and where it’s
at since this publication?
Mr. Anderson:
— The Path to Health was a very exciting initiative for us. And I can proudly
say that we’ve concluded that as a program, but it’s now into our daily
operations. So the highlights were the implementation of the new disability
system, which you pointed out earlier. We’d redesigned our case management
processes. So the way I sometimes describe it is, previously we were more like
an organization that just, you know, we adjudicated your claim — we took a
look, you were either eligible or you weren’t, and we decided to pay it or not
— and that we handled, you know, everything around that.
Now
we are more hands-on. We are making what we call care calls throughout the
process. We’re interacting with the claimant on a more regular basis and we’re
helping them navigate their journey back to health. So it’s a much more
hands-on type of case management process.
We
simplified our forms and our booklets so that when people that were applying
for disability, when they came onto our website or tried to understand the
process, it was simpler and easier to follow for them. We increased our
staffing complement to manage that higher-touch case management, so we actually
doubled our staffing complement of adjudicators during that time period to help
reduce our caseloads. And then we also began to invest more significantly in
treatment funding, so to assist our plan members in their recovery efforts.
So
those are the highlights of Path to Health, and I’m pleased to say we’ve
embedded those changes into our daily operations as a result of that
initiative.
Ms. A. Young:
— Thanks so much. So can you speak to the experience of members through the
disability claim life cycle? Has it improved since this project?
Mr. Anderson:
— I believe it has, yes, and we certainly do hear many stories from our
claimants about their experience. And we actually use those to read out to
staff to encourage them to continue along that journey and, well, as we say,
“take care of our caregivers” is the tag line that we have.
Ms. A. Young:
— Thanks. And it’s noted in the auditor’s report that some of the performance
metrics do include those plan member satisfaction surveys. Those would align as
well in terms of member satisfaction with the process?
Mr. Anderson:
— Yes.
Ms. A. Young:
— Just one last question on this. You mentioned rehabilitation, return-to-work.
Who’s the rehabilitation service provider?
Mr. Anderson:
— Largely CBI is our rehab service provider. And then we have another smaller
relationship, but CBI is the primary provider.
Ms. A. Young:
— Okay, thank you. The last area of questions for me as it relates to the
various kind of, like integrated business systems that you use at 3sHealth. Is
there a relationship or will 3sHealth have a relationship with the AIMS
[administrative information management system] system?
Mr. Anderson:
— So AIMS is not a disability system. The CHIPs system will continue to be our
disability system.
Ms. A. Young:
— Right. And forgive me, I’m not our Health critic, so I’m out of my depth
here. All I can recall is it’s, you know, 80, 80‑odd, 82 different
business systems being integrated into AIMS. And so there’s no impact on 3sHealth?
There’s no relationship between any of your systems and AIMS?
Mr. Anderson:
— No. The disability-related system is not one of those 82 systems being
replaced.
Ms. A. Young:
— Okay. So there wouldn’t have been any disability claims impacted by AIMS at
all? Like, as you said, no relationship?
Mr. Anderson:
— So not related to the disability system, no.
Ms. A. Young:
— Okay. So not related to the disability system. What other systems — sorry if
this is obvious to everyone but me — would this have impacted?
Mr. Anderson:
— So the AIMS system is, you know, a sector-wide platform and it is, you know,
related to HR [human resources] systems, scheduling systems, supply chain
systems, financial reporting systems. So it is sector wide. But the disability
side of it is a separate system as I mentioned. So I think that’s the best way
I could describe that.
Ms. A. Young:
— Yeah, thanks. Sorry, in trying to figure this out and looking at the readily
publicly available information for AIMS and the business systems that it is
replacing, you need a log-in.
The Chair:
— Deputy Chair.
Mr. Nerlien:
— Thank you, Mr. Chair. I think the member is a little bit outside the
parameters of the audit report at this point.
The Chair:
— Yeah, I think we’re getting clarity. I think there’s responses we’ll see. I
mean, the scope of the committee is the work of the entity that’s before us. So
we’ll see where, you know, the questions are being brought here and listen to
the response there as far as how it connected to the disability systems.
Ms. A. Young:
— Yeah, thanks. I was just flagging it in trying to investigate this, and just
going to see if there was any impact in delays for members or with the AIMS
rollout, not being clear if it had impacted disability claimants. There doesn’t
seem to be any ability to look at the list of the business systems being
replaced online. You need a MyConnection log-in to see that list. So that was
kind of along the lines of my questions. It’s unclear I think to see what, if
any, systems the implementation of AIMS is going to replace at 3sHealth.
Mr.
Anderson: — There is no impact on the
disability claims as a result of AIMS. As I said, that system is separate and
will continue on.
Ms. A. Young:
— Thanks. No further questions.
The Chair:
— Thanks for the work and responses, folks. Looking to committee members to see
if there’s any further questions with respect to the chapter and
recommendations before us. Not seeing any further, with respect to
recommendations 1 and 2, I think we heard and have seen the path towards
compliance and timelines in actions on that front.
[11:00]
So
I would welcome a motion to concur and note progress with recommendations 1 and
2. Do we have a mover? Moved by Mr. Goudy. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— That’s carried. With respect to 3 and 4, we could note that implementation
has occurred and that . . . I would welcome a motion to concur and
note compliance. Moved by Ms. Lambert. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— That’s carried as well. Okay, those are the four new recommendations. At this
point I want to just say thank you very much to Deputy Minister Smith, to CEO
Anderson over at 3sHealth, and to all the folks that are with us today and all
those that are involved in the work that connects to the recommendations before
us here today.
So
are there any final words, Deputy Minister Smith, on your behalf before we kick
you out of here and bring in the SRC [Saskatchewan Research Council]?
Ms.
Smith: — We will get out of here
quickly. I do just want to say thank you for the questions and thank you for
the opportunity to be here. And to the teams for their responses, much
appreciated. So thank you.
The Chair:
— Yeah, thank you so much to everyone. And we’ll have a very brief recess, and
on deck next are Saskatchewan Research Council.
[The
committee recessed for a period of time.]
Saskatchewan Research Council
The Chair:
— Okay folks, we’ll reconvene the Standing Committee on Public Accounts. I want
to welcome the leadership from the Saskatchewan Research Council that have
joined us here today. We’re going to turn our attention to the chapters focused
on the SRC, and I’d welcome Ryan Hill, chief operating officer, to briefly
introduce his official that’s with him here today. Refrain from commenting on
the chapters just now. I’ll send it over to the auditor, and then bring it back
your way.
Mr. Hill:
— Beside me is Jocelyn Allard. She’s the associate vice-president of finance.
The Chair:
— Great. Thank you very much. I’ll turn it over now to the Provincial Auditor
to make presentation and we’ll go from there.
Ms. Clemett:
— So good morning. Thanks, Mr. Chair. Welcome Deputy Chair, committee members,
and officials. With me today is Mr. Jason Shaw. He’s the deputy provincial
auditor that is responsible for SRC. Jason will be making one presentation
highlighting both chapters noted on the agenda together because they are both
on the same topic.
The
first chapter does include five new recommendations for the committee’s
consideration, and I do want to thank SRC senior management and staff for the
co-operation that was extended to us during the course of our work.
With
that, I’ll turn it over to Jason.
Mr. Shaw:
— Thank you. The Saskatchewan Research Council purchases various goods and
services to deliver research and development services. Effective procurement
processes are key to ensuring purchases are transparent, fair, and support the
council’s achievement of best value. Not having effective procurement processes
increases the risk of not using public resources wisely and placing the
council’s reputation at risk.
In
’22‑23 the council incurred expenses of about $275 million. Chapter
10 in our 2020 report volume 1, starting on page 119, reports the results of
our audit of the effectiveness of the Saskatchewan Research Council’s processes
to purchase goods and services. We concluded for the 12‑month period
ended November 30th, 2019 that Saskatchewan Research Council had, other than in
the following areas, effective processes to purchase goods and services. We
made five recommendations to the council.
Chapter
21 of our 2023 report volume 1, starting on page 203, reports the results of
the council’s actions to implement these recommendations by December 2022. We
found it implemented one recommendation, partially implemented two, and made no
progress on the last two recommendations. My presentation for each
recommendation will summarize the new recommendations and then provide the
status at December 2022.
On
page 124 we recommended the Saskatchewan Research Council establish
expectations about when and how to communicate results of tenders for purchases
with suppliers. The council maintains a comprehensive set of written
procurement-related policies and procedures; however at November 2019 we found
the council did not provide staff with sufficient direction in two areas.
Council
did not indicate how it expects staff to communicate the results of its
evaluation of tenders to successful and unsuccessful suppliers. The Canadian
Free Trade Agreement requires making its contract award notices public, such as
posting notices on the SaskTenders website. In addition, the council did not
expect staff to keep track or document the results of debriefs with
unsuccessful suppliers.
Not
establishing expectations for communication with successful and unsuccessful
suppliers responding to public tenders increases the risk of the council not
demonstrating to suppliers the fairness and transparency of its purchasing
decisions. In addition, it risks violating requirements of external trade
agreements.
By
December 2022, on page 204 of our follow-up chapter, we found the council had
improved its processes to communicate the results of public tenders; however it
had not updated its policies to align with these processes. We found the
council posted all four tenders we tested on the SaskTenders website, including
the results of winning bidders. Also we found the council appropriately sent
letters of intent and regret to each successful and unsuccessful bidder for all
four tenders tested.
On
page 125 of our 2020 report volume 1, we recommended the Saskatchewan Research
Council establish guidance on setting the amount of time to allow suppliers to
respond to tenders. The council had not established a standard minimum amount
of time to leave tenders open to allow suppliers sufficient time to respond to
tenders.
Good
practice suggests 25 to 35 days and recognizes the time allowed may vary
depending on the complexity and size of the purchase. Without a minimum
sufficient time to respond, suppliers may choose not to respond to tenders or
provide incomplete responses, resulting in fewer viable options. On page 205 of
our 2023 report volume 1, at December 2022 the council had not developed guidance
or formal expectations to help staff establish how long to leave tenders open.
On
page 126 of our 2020 report volume 1, we recommended the Saskatchewan Research
Council monitor compliance with its policy for individual transaction limits
when using purchasing cards. The council’s purchasing card policy and
purchasing card procedure give staff clear and complete guidance on their use
including setting individual monthly transaction limits.
For
1 of 17 purchase card transactions we tested, an employee did not follow the
council’s policies by splitting a purchase transaction exceeding 5,000 into two
separate payments. The employee’s single transaction dollar limit was $5,000.
The employee did not have approval to exceed their single transaction limit.
There was no evidence the supervisor responsible for reviewing and approving
the employee’s monthly statement noticed the split transaction.
Adhering
to purchasing card policies and procedures reduces the risk employees make
inappropriate purchases on purchasing cards. Appropriately monitoring
purchasing cards allows management to confirm purchases are appropriate and
align with council policy.
On
page 206 of our follow-up chapter, by December 2022 we concluded the council
implemented this recommendation. We found it followed its policy for purchasing
card transaction limits for the transactions we tested.
On
page 127 of our 2020 report volume 1, we recommended the Saskatchewan Research
Council monitor the continued appropriateness of individual transaction limits
on purchase cards when approving temporary changes to dollar value limits for
special circumstances.
We
found the council did not reduce individual transaction purchase card limits
after granting temporary increases for a single purchase due to special
circumstances for 2 of 17 items we tested. For example, an employee had an
individual transaction limit of $10,000 for two months after the temporary
increase from $5,000. Not actively monitoring and timely returning temporary
transaction limits increases the risk of employees making inappropriate
purchases or purchases not in accordance with the council’s expectations.
On
page 206 of our 2023 follow-up report, by December 2022 we found the council
improved its processes to monitor purchasing card transaction limits by
periodically reviewing transaction limits. However further work was required.
We tested eight purchase card transactions up to December 2022 where staff
required a temporary transaction limit increase. We found three transactions
where the council did not reduce limits to previous limits within 60 days. Also
we found one transaction where staff did not obtain all appropriate approvals
before temporarily increasing the transaction limit to make the purchase.
[11:15]
On
page 133 of our 2020 report volume 1, we recommended the Saskatchewan Research
Council establish a formal process to assess and track supplier performance.
The council took an informal approach where staff verbally discuss issues as
they arise with suppliers and address performance issues as they occur.
The
council did not formally assess whether suppliers performed to a satisfactory
level after the conclusion of the contract or after its receipt of its goods
and services. Good practice suggests use of formal processes to assess supplier
performance. This allows for appropriate consideration of supplier performance
when making future purchasing decisions, which decreases the risk of the
council using unqualified or inappropriate suppliers. On page 207 of our
follow-up chapter, by December 2022 we found the council did not change its
process and did not formally assess the results of supplier performance.
This
concludes my presentation. Thank you.
The Chair:
— Thank you very much for the presentation. And then I’d like to thank as well
SRC for the status update on this front and the follow-up by the auditor’s
office. I’ll table at this point PAC 114‑29, Saskatchewan Research
Council: Status update, dated December 14th, 2023.
And
I’ll turn it over to chief operating officer Mr. Hill for a brief comment with
respect to the recommendations of the chapters, and then we’ll open up for
questions.
Mr.
Hill: — Thank you very much. We
agree with all the comments and all of the findings within the auditor’s
report, and subsequent to the most recent follow-up audit, we have fully
implemented all recommendations. Within all of these situations, we did perform
these as identified informally. However when they’re not appropriately
documented, not appropriately followed, it does make it difficult for the
purposes of determining it during an audit.
The Chair:
— Thank you for the words. Thanks for the work on this front. We’ll open it up
to members for questions. Ms. Young.
Ms. A. Young:
— Thanks so much and thanks for being here today. It’s been really exciting to
watch the expansion of SRC. I understand you’re the second-largest research and
technology organization in Canada these days, which is a remarkable
accomplishment for the province and, I think also speaks to the importance of
this audit and looking at the tendering that you do for goods and services,
having expanded from, I think, it’s 72 million in ’18‑19 up to
$275 million a year, I believe, was the number cited by the auditor’s
office most recently. So yeah, just wow and thanks for that. I think it really
underscores the importance of, as you said, proper documentation of all of
these policies as it pertains to procurement and purchasing and all of that.
So
where do I want to begin? So many questions. Love SRC. Maybe starting on PCards
[purchasing card]. Has SRC been monitoring compliance with the split
authorities between what is purchased on PCards and what is tendered through
your purchasing group to ensure that that $5,000 limit is adhered to?
Mr.
Hill: — Yes, we have been.
Ms. A. Young:
— And there’s no incidents of that not being adhered to?
Mr.
Hill: — No.
Ms. A. Young:
— Great, thank you. One of the audit goals was to assess SRC’s approach to
accessing feasible sources of supply for purchases that you make. And so
looking for real-world examples, perhaps one of the most prominent ones, can
you advise what you’ve done in relation to the source of or supply for the new
critical minerals processing facility?
Mr.
Hill: — With regards to the
critical minerals facility, we are in discussions with a number of entities
surrounding to the securement of supply. We do have supply already secured for
a year’s worth of operation.
Ms. A. Young:
— Okay, great. So was the first ingot poured in 2021? Am I right in remembering
that?
Mr.
Hill: — I believe so, yes.
Ms. A. Young:
— Okay. So when that first occurred, where did you purchase the raw ore from?
And what are the sources of supply going to be then for this test facility?
Mr.
Hill: — The initial ore secured
was from Brazil, from the state-owned company in Brazil for the nuclear entity
INB [Indústrias Nucleares do Brasil]. As far as the oxides that were used to
create the first metal ingots, they were secured I believe from Europe, those
oxides. Going forward of course with regards to supply, we are talking to a
number of entities within the United States, Australia, Vietnam with regards to
securing supply.
Ms. A. Young:
— Thanks. And in terms of Europe, do you have the specific countries from which
. . .
Mr.
Hill: — I apologize. I can’t
recall where we purchased those oxides from. They were a very small amount
because we were using it to be able to take and prove out the actual technical
viability, being able to create the metal alloys.
Ms. A. Young:
— That’s okay. If you have that information available and it could be provided
to the committee at a later date, that would be appreciated.
The Chair:
— Just a follow-up to confirm for the process around the table, is that
something you’re able to undertake and supply back to this committee?
Mr.
Hill: — Yeah.
The Chair:
— At a later date? Is a month’s time reasonable as a due date there?
Mr.
Hill: — Absolutely.
The Chair:
— And that can be sent through the Clerk here.
Ms. A. Young:
— Thanks so much. And then on a go-forward basis, I believe you mentioned the
United States, Australia, and Vietnam. Those are the three countries that SRC
is looking at for sourcing this from?
Mr.
Hill: — We’re looking at all
available areas, but those are the ones that we’ve had some advanced
conversations with regards to.
Ms. A. Young:
— Okay. Knowing little about this, what are the other countries that play in
that field, that you’d be pursuing?
Mr.
Hill: — With regards to monazite,
monazite is actually fairly broadly available and is available in a number of
areas. The whole consideration of rare earth elements being rare, it’s a bit of
a misnomer with regards to the name. They’re not actually that rare. They’re
rather common. It’s more the ability within the appropriate concentration to be
able to get them. And what we’re looking for is basically companies that are in
areas whereby we have a good relationship, we’re willing to work with them, and
more than anything we have security of supply.
Ms. A. Young:
— Thanks. So on that security of supply, given the policy framework for
purchasing that’s outlined in the 2020 audit, the use of sole-sourcing requires
like very specific management overrides, as it should. So can you advise how
many sole contracts above 25,000 have been awarded in the past, I don’t know,
three years?
Mr.
Hill: — Don’t have that
information available, but it is information that we can take and pull.
Ms. A. Young:
— Okay. Great, thank you. I’d be really interested in 2020‑2021, ’21‑22,
and then ’22‑23 if it’s available, as well as, of course, like what those
contracts were for and what amount those contracts were for as well.
The Chair:
— A similar intervention here just to make sure we have a good record of
things. That’s information that you’re able to undertake and supply back to the
committee in a month’s time as well? Is that reasonable?
Mr.
Hill: — Yes.
The Chair:
— Thank you very much.
Ms. A. Young:
— So maybe tying those two together, the processing equipment that goes into
that critical minerals facility, it must be like — I’m not anything close to
approaching an expert — but it must be fairly unique given this type of
processing facility is found in very few countries.
Mr.
Hill: — The equipment itself is
actually . . . The most unique portion is the solvent extraction,
which is one of the main value-added considerations. And it’s what we are
actually building ourselves.
Ms. A. Young:
— Oh wow. Okay. So that was going to be my follow-up question is, you know,
from a cost perspective of the actual equipment, how much of it is being
sole-sourced or has been sole-sourced?
Mr.
Hill: — Once again, don’t have that
information available on hand with regards to direct award versus RFP [request
for proposal], but it is something that once again we can obtain.
Ms. A. Young:
— Thank you. I appreciate that as well as, you know, any of those specifics
around if there’s equipment that’s being developed in-house versus, you know,
where other equipment may be originating from.
Mr.
Hill: — Yes.
Ms. A. Young:
— I appreciate that undertaking. Looking at the progress, the good progress
that has been made on the auditor’s recommendations and hearing your opening
comments that many of these existed in practice but perhaps weren’t documented
or necessarily always adhered to. The auditor’s first report was in 2020 I
believe and then the second in 2023, and by 2020 only one of five was formally
implemented. And now looking through, obviously there’s five out of five.
Can
we just go through them? And can you clarify when these were formally
implemented between, I guess, 2020 and now?
Mr.
Hill: — I’ll pass that over to
Jocelyn.
Ms.
Allard: — Sure.
Ms. A. Young:
— Thank you.
Ms.
Allard: — So on the first
recommendation on establishing when and how to communicate the results of the
tenders, those purchasing SOPs [standard operating procedure] that we follow
were formally updated in the summer of 2023. So they have been updated to
reflect our guidance effectively as of September 2023, our original appearance
date.
In
terms of, again, establishing the guidance on the amount of time to allow
suppliers to respond, that update again, the same purchasing set of procedures
or SOPs, as of September 2023.
The
monitoring of individual transaction limits for purchasing cards, that again we
were doing throughout this whole phase. We had implemented this back shortly
after the auditor’s report and have formally documented that on a monthly basis
now. So there’s evidence of that control being implemented.
The
formal process on assessing and tracking supplier performance, that process has
been implemented through key surveys of project leaders. And those surveys
started in our second quarter this year. So we are trying to do that on a
quarterly basis where we ask for any feedback, or in one-off situations where
there may be, you know, considerations where we’d like to document on a more regular
basis.
Ms. A. Young:
— Thank you. Thank you very much. Just a couple questions, and then I have
maybe one higher level question. We might be out of here early.
On
the second recommendation that SRC establish guidance on setting the amount of
time to allow suppliers to respond to tenders, recognizing that tenders can be
unique — sometimes there may be readily available off-the-shelf solutions;
sometimes it may be very, very specific — have there been any instances in
which purchasing was sole-sourced due to an abbreviated timeline?
Mr.
Hill: — Very few situations
whereby purchasing has been sole-sourced due to abbreviated timeline. Generally
if anything is associated with that, it’s actually work whereby we are doing
work for a client, and the client’s timelines and therefore the client’s
direction as to who we should be purchasing from, is built within that. We
don’t generally make considerations with regards to short timelines for the
purposes of direct award.
Ms. A. Young:
— So, forgive me, the clients that you’re working with can direct purchasing?
Mr.
Hill: — The clients that we’re
working with, if we were taking and actually delivering them a product, they
can direct the purchasing with regards to the product that we’re delivering
them.
Ms. A. Young:
— Hmm, interesting. Okay. Recognizing like SRC has an incredibly impressive
group of people working for it and, you know, board members with extensive
expertise specifically within the private sector, given that new
. . . And my understanding is like many of them continue to work in
the private sector which I think speaks again to the quality of board members
that you have. How do you ensure then that there are no conflicts of interest?
Mr.
Hill: — We have very stringent
requirements with regards to conflict of interest, going all the way from the
board of directors level all the way down to the employee levels. There’s
annual reporting with regards to potential conflicts of interest, annual
sign-off of potential conflict of interests. Within the board meetings, one of
the very first things we open up with is a declaration of conflict of interest.
And
then with regards to any new suppliers, or any new clients on the other side of
it, we actually perform a detailed review of the entities, going back to
beneficial ownership.
Ms. A. Young:
— Okay, so then in the purchasing processes regarding the companies that you
purchase products and services from . . . and the companies, are
there instances in which companies may be owned or operated by board members?
Mr.
Hill: — No.
[11:30]
Ms. A. Young:
— Okay.
Mr.
Hill: — No. In any situation
whereby there might be something such as that, it would be absolutely
identified. It would be taken and escalated for review. And if it was something
that would ever be escalated to the board in a situation whereby there’s a
board vote, of course the board member would take and recuse themselves from
anything associated with that. But it’s not something that we’ve had happen.
Ms. A. Young:
— Right. Okay. Interesting. Do you think, would it be possible to table any
guidelines that you have, or like send to the committee, any guidelines that
you do have for staff or board members as it relates to that, to conflict of
interest?
Mr. Hill:
— To conflict of interest? Absolutely.
Ms. A. Young:
— Great. Thank you.
One
specific question on the third recommendation, that SRC monitor the continued
appropriateness of individual transaction limits on PCards when approving
temporary changes to the dollar value limits for special circumstances.
It
was noted in your comments as well as in this that it is reviewed in full on a
regular basis. Can you just be a little bit more specific? Like what’s a
regular basis, and who’s ultimately accountable for that?
Ms. Allard:
— Right. So our typical process on purchasing cards, so if an employee requires
an invoice to be processed in excess of their $5,000 transaction limit, an
email is sent typically with support for the transaction to their manager as
well as to a finance person. And both those individuals are required to approve
the extension of the limit for that transaction to be processed.
Once
the transaction is processed, we ask the vendors to notify that the transaction
has been posted to the credit card or ask the employees to monitor. The
employees then notify our purchasing card group and that limit is reduced down.
On
a frequent basis, which I would say typically quarterly if not monthly, we go
back through the list of extended limits on our online banking system. We can
see which employees have extended limits at that point above the $5,000. At
that point if we’re not certain that the extension is still required, we ask
the employee, and the limit is reduced back down. So quarterly if not monthly
we are documenting that and have emails and such.
Ms. A. Young:
— Thank you so much. And then just on the last recommendation, that SRC
establish a formal process to assess and track supplier performance. It’s
indicated in your comments and in the update that the purchasing team has email
surveys of project leads related to supplier performance. Do you know, what’s
the response rate of those surveys? Or is it obligatory?
Ms. Allard:
— Right now we are making obligatory, yes.
Ms. A. Young:
— And is that documentation, how is that maintained? Is there like a central
location for it? How’s it shared with team members?
Ms. Allard:
— So our purchasing team has a SharePoint site that they retain all of the
responses on.
Ms. A. Young:
— Thank you. And it’s mentioned in the auditor’s report that your procurement
team, your senior leadership works closely with the provincial corporate
procurement committee. Is that information that’s shared at that level as well?
Mr.
Hill: — Yes. Within the meetings
that they have, they take and they share best practices with regards to all
procurement.
Ms. A. Young:
— Okay, great. And the same would be true for, you know, experiences with
suppliers?
Mr.
Hill: — Yes, absolutely. And
going beyond that, we’ve actually shared our templates with regards to a number
of situations with other entities to be able to use as a basis for the creation
of their own.
Ms. A. Young:
— Wow. So not reinventing the wheel every time. Okay, awesome. Thank you, Mr.
Chair. I have no further questions.
The Chair:
— Further questions from the committee members? I see Deputy Chair Nerlien.
Mr. Nerlien:
— I just have a comment, and I too want to congratulate you on the outstanding
growth at SRC and the quality of work that you’re doing. Really appreciate it
very much. Thank you.
Mr.
Hill: — Thank you.
The Chair:
— Thank you very much. Any further questions? No. Thank you for the work on
these recommendations, the time here today. We have four new recommendations
before us, and I believe the actions that have been taken will have implemented
the four recommendations. So I would look for a motion that concurs and notes
compliance with respect to recommendations 1 through 4. Do I have a mover?
Moved by Mr. Fiaz. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— All right, that’s carried. At this time, Mr. Hill and Ms. Allard, thank you
very much for your time here today. Best to all those that were involved in
this work as well and thanks to them as well. Do you have a final word before
you depart here today?
Mr.
Hill: — No final word. Thank you.
The Chair:
— Okay, thank you very much . . . [inaudible interjection]
. . . We should deal with the fifth recommendation as well. You know,
we’ll bring you back this afternoon. It’s good to make sure that the auditor’s
alert in these meetings here. So that was our little test there and she
certainly was.
And
so with respect to the fifth recommendation, that too has been acted on and has
been implemented, so I would welcome a motion that we concur and note compliance.
Moved by Mr. Goudy. And all agreed?
Some Hon. Members:
— Agreed.
The Chair:
— All right. That’s carried. Going back to those other parts, thanks so much
for all the work on these fronts and to your teams. Thanks for your presence
here today. And as a committee now, we’ll take a brief recess for lunch and
we’ll be back here at 1:00.
[The
committee recessed from 11:36 until 13:02.]
Executive Council
The Chair:
— Okay folks, we’ll reconvene the Standing Committee on Public Accounts here
this afternoon. We’ll turn our attention to Executive Council, or the chapters
focused on Executive Council. And I’d like to welcome deputy minister to the
Premier, Raynelle Wilson, and Ms. Fry for joining us here this afternoon.
I’ll
turn it over briefly to the auditor for presentation on her chapters and then
we’ll turn it back your way.
Ms. Clemett:
— Good afternoon. Thank you, Mr. Chair, Deputy Chair, committee members, and
officials. With me is Mr. Trevor St. John. He’s the deputy provincial auditor
that is responsible for the audit of Executive Council. Behind me as well is
Michelle Lindenbach. She’s our liaison with the committee and she’ll be joining
us for the rest of the afternoon. And then Mr. Jason Shaw is ready to present
for the next session.
Trevor
is going to make one presentation that does highlight all three chapters
together given that they’re all related to the same topic. And I do want to
thank management and staff for the co-operation that was extended to us during
the course of our work. I’ll turn it over to Trevor.
Mr.
St. John: — Thank you. The Office of
the Executive Council provides support to the Premier, cabinet secretary, and
cabinet committees. Our annual integrated audit of Executive Council looks
whether it had effective rules and procedures or internal controls to safeguard
public resources and whether it complied with authorities governing its
activities.
All
three chapters we cover today are from 2020 to 2022, report the results of
these annual audits, and identify that Executive Council had effective internal
controls and complied with authorities other than in one area we have reported
since 2018.
Executive
Council continued to set remuneration of legislative secretaries inconsistent
with the Board of Internal Economy directives. The Executive Government
Administration Act gives the Lieutenant Governor in Council or cabinet
authority to appoint members of the Legislative Assembly as legislative
secretaries with or without remuneration. However it does not give cabinet
authority to set remuneration rates for the legislative secretaries. Setting
remuneration is the responsibility of the Board of Internal Economy under The
Legislative Assembly Act. Executive Council needs to work with the
board to remunerate legislative secretaries at rates consistent with the
board’s directives.
Since
2018 we have not seen evidence of Executive Council working with the board such
as, for example, asking the board to reconsider how the rate is set out in the
directive, such as using “up to,” to ensure chosen remuneration rates align
with the board’s directives. We thus continue to report the recommendation as
not implemented. Not working with appropriate agencies to clearly operate
within the laws and directives increases the risk of decreasing public
confidence in government. That concludes my presentation.
The Chair:
— Thanks. Thanks so much for the attention. I recall having this before us in
2020. I’ll turn it over to Ms. Wilson to respond briefly and then we can open
it up to questions.
Ms.
Wilson: — Thank you, Mr. Chair. So
as reported, happy to discuss all three chapters and that outstanding
recommendation. Obviously the recommendation has been outstanding since the
2018 report and I can advise that no action has been taken. The Ministry of
Justice provided guidance on this issue in 2016 and again in the fall of 2019
and advised that the Lieutenant Governor in Council could appoint legislative
secretaries with remuneration on the condition that they agree to forgo the
amount set by the Board of Internal Economy and accept a lesser amount. The
appointment of legislative secretaries continues to be done through LG in C
[Lieutenant Governor in Council] and it’s based on this advice.
We
look forward to answering any questions from the committee.
The Chair:
— I’ll open it up to members for questions. Ms. Young.
Ms. A. Young:
— Thank you, Mr. Chair. And thanks for being here today and the ongoing work
that you do. Having heard what you said about consultation with the Ministry of
Justice, I am curious though. Why is there not payment in line with the proper
rates established by the BOIE [Board of Internal Economy]?
Ms. Wilson:
— I think that the remuneration that is the directive through the LG in C
instrument is set and determined and approved by cabinet, and so that lesser
amount is one that is agreed upon by cabinet. And that’s what we go with then
on an annual basis.
Ms. A. Young:
— Is there a reason then, you know, having a majority on BOIE as well, that you
wouldn’t change the rules surrounding remuneration to reflect practice?
Ms. Wilson:
— No, I think certainly the mechanism that we use, using that order in council
mechanism, we do feel is a transparent one to the public and one that again
allows cabinet to set that remuneration and again that the condition that they
forgo the amount set by the Board of Internal Economy and accept that lesser
amount is an equally transparent mechanism by which to remunerate the
legislative secretaries.
Ms. A. Young:
— Thank you. Can you just walk me through that a little bit? Appreciating that,
you know, the OCs [order in council] are available, of course, as are the
remuneration rates for BOIE, but what’s . . . Help me understand the
increased transparency. I appreciate there’s increased flexibility with cabinet
decision making and OCs, but what’s . . . Help me understand the
transparency piece and how doing this in contravention of the rates set out by
BOIE is more transparent than simply changing those remuneration rates.
Ms. Wilson:
— So well certainly, just to be clear, the remuneration paid to the legislative
secretaries is less than the amount set out by the Board of Internal Economy.
So that lesser amount — I think that’s 14,000, Kristen? — yeah, 14,000 set by
the Board of Internal Economy and the LG in Cs currently with remuneration is
3,000. And so I think the sense is that as you’ve stated, those orders in
council are made public and are publicly available on the website, so as a
mechanism for transparency in terms of recognizing that lesser amount for those
legislatives secretaries is fully available to members of the public for sure.
Ms. A. Young:
— In ’21‑22 two individuals were appointed without any remuneration that
I believe were paid that lowered rate of $3,000 that you quoted. Who were those
two members and what were their responsibilities?
Ms. Wilson:
— So we would need to get some clarification with respect to the two who
weren’t, but our understanding is is that if they were legislative secretaries
for more than one portfolio, they’d only be paid once for the duties of
Legislative Secretary. So to the best of our knowledge that would be the
reason. If someone was appointed and was also a Legislative Secretary under
another portfolio, they would only be remunerated the one time. So to the best
of our knowledge, that was that instance.
Ms. A. Young:
— And hearing that information is going to come back to the committee, for my
own understanding, for legislative secretaries who then received no additional
payment at all, what reason would there be for that?
Ms. Wilson:
— Yeah, our understanding is that they would already have been appointed as a
legislative, so they would already be receiving remuneration from a previous
. . . previous appointed in terms of those duties previously
assigned.
Ms. A. Young:
— Okay, understood. They’d be legislative secretaries for two portfolios and
only that.
Ms. Wilson:
— Exactly.
Ms. A. Young:
— So there’s no legislative secretaries with no top-up being provided?
Ms. Wilson:
— We’ll double-check that, but not to the best of our knowledge right now,
yeah.
Ms. A. Young:
— And then in May 2022 there were nine individuals who were appointed
legislative secretaries with pay rates of $3,000. Do you have available who
those members were and what their responsibilities were?
Ms. Wilson:
— No, we don’t have that on us but we can certainly follow up on that.
Ms. A. Young:
— Thank you.
The Chair:
— We don’t have the information as far as who the legislative secretaries that
are receiving, that are designated or the . . . And fair enough, but
that’s something that could be provided back to the committee, right?
Ms. Wilson:
— Yeah, we could certainly provide that back, yeah. Just in terms of
preparation to . . .
The Chair:
— Yeah, yeah.
Ms.
Wilson: — With respect to speaking
to the recommendation, we didn’t bring that material with us.
The Chair:
— Just on the undertaking to provide that information back — and I suspect some
of it will be publicly available — but if you can provide it, is a month’s time
reasonable to supply that back through the Clerk here?
Ms. Wilson:
— Absolutely reasonable.
The Chair:
— Just as a follow-up on that, I have one question. What kind of work do they
take on and what’s made public by way of reports? Are you able to then supply
back the work that they’ve taken on, any reports that they’ve presented as a
result of their work?
Ms. Wilson:
— So I think we can provide certainly some of that basic information. I think
with respect to any of that work, that might be more appropriately asked
towards those ministers responsible who have those legislative secretaries
under them. That’s not something we would necessarily report out on through
Executive Council.
Ms. A. Young:
— Thank you. How many legislative secretaries are there now? And I guess same
question: what are their responsibilities and what’s their rate of pay? That
needs to be provided afterwards as well then.
Ms. Wilson:
— Sure. I think we can confirm their rate of pay as being $3,000. But we could
certainly provide an updated list.
Ms. A. Young:
— Thank you. Last question from me. Seeing the consultation that’s gone on with
the Ministry of Justice from Exec Council in continuing with this practice
despite the recommendations from the auditor, is this a standard process for
Exec Council in considering BOIE directives, that there would be consultation
with the Ministry of Justice in reflecting on, I suppose in this case, ignoring
or going forward, changing BOIE directives?
Ms. Wilson:
— So I would say I think in the . . . You know, just with respect to
the normal course of business, I think that this is an example where in terms
of an interest in a lower remuneration than set by the Board of Internal
Economy would be one of the only instances that we would consult with Justice
on, on that type of issue. I don’t think we’d take that as a normal course of
business, certainly.
The Chair:
— Any further questions over here? I mean I was here for the discussion on the
20th as well as chairing that meeting, and I know at that point we sort of
canvassed this as well. And certainly the committee supported the auditor’s
recommendation after the understanding was established as well.
[13:15]
What
we weren’t calling for was for them to be paid more. So it’s a matter of, you
know, following the rule or the policy that’s in place. So it just seems
strange on my end that we haven’t as a Board of Internal Economy adjusted that
rate, you know.
And
I think there’s been different debate as well around the value or potentially
lack of value of the work of some of the legislative secretaries and the actual
payment. But at the very least we should have consistency in following the
policy. So I think us, we all flow out of here as members as well and can
contribute back to the Board of Internal Economy process.
It
just seems to me that the rate should be followed. Certainly the rate shouldn’t
be 14,000 bucks, and so it should be adjusted, you know, downwards. I don’t
know what, you know, the right rate is, if it’s zero or if it’s 500 or 1,000 or
if it’s 3,000. But I do think we need to, you know, work as a Board of Internal
Economy to fix that policy so that it’s consistent with the practice. But I’ll
leave it there.
We’ve
already voted on these recommendations, so not seeing any other questions, I
think you know, yeah, I can say thanks so much, Ms. Wilson. Any final remarks
to us here today?
Ms. Wilson:
— Just thanks for the committee’s time as always. Thanks so much to the
Provincial Auditor and her team for all of their work.
The Chair:
— Thank you. Then I would look for a motion to conclude consideration of these
respective chapters. Moved by Mr. Harrison. Is that agreed?
Some Hon. Members:
— Agreed.
The Chair:
— That’s carried.
[The
committee recessed for a period of time.]
[13:30]
Immigration and Career
Training
The Chair:
— Okay, we’ll reconvene the Standing Committee on Public Accounts, and we’ll
turn our attention to the chapters pertaining to the Ministry of Immigration
and Career Training. I’d like to welcome Ms. Ross, ADM [assistant deputy
minister] for immigration services, here today. Thanks, Ms. Ross, for joining
us.
At
this point I’ll turn it over to the auditor to . . . we’re going to
focus on the two chapters independent of one another, so to have presentation
on the first chapter. Then we’ll have opportunity for you to respond, and then
we’ll open it up for questions.
Ms. Clemett: — Good afternoon, Mr. Chair,
Deputy Chair, committee members, and other officials. With me today is Mr.
Jason Shaw. He’s the deputy provincial auditor who’s responsible for this
ministry. Jason’s going to present the two chapters noted on the agenda
separately, and there are no new recommendations for the committee’s
consideration in these two chapters.
I
do want to thank the ministry for the co-operation that is extended to our
office during the course of our work. With that I’ll turn it over to Jason.
Mr. Shaw:
— Thank you. The Ministry of Immigration and Career Training helps individuals
prepare for, obtain, and maintain employment. The ministry’s key tasks involve
delivering services and programs that address labour demand and undertaking
activities to fully engage Saskatchewan’s labour supply.
The
ability to understand and speak English is integral for newcomers to become
self-sufficient. It is important that the ministry coordinates English language
programs so that newcomers can secure jobs and contribute to the province’s
economy.
Chapter
19 in our 2021 report volume 1, starting on page 223, reports the results of
two outstanding recommendations we initially made in our 2014 audit of whether
the Ministry of Immigration and Career Training had effective processes for
coordinating English language programs to assist in employment and settlement
of recent newcomers over the age of 18 in Saskatchewan.
By
January 2021 we found the ministry partially implemented the two outstanding
recommendations. The ministry was updating its processes to estimate demand for
English language programming. It needs processes to anticipate the number of
program participants in order to plan and make enough capacity available. A
lack of documented methodologies increases the risk of inconsistent analysis of
needs for provincially funded English language programs.
During
2020 the ministry changed how it expects the six regional colleges to measure
outcomes and report on their delivery of English language programs. As of
January 2021 the colleges were in the process of implementing these
ministry-requested changes, and the ministry had not yet assessed whether they
meet the ministry’s program delivery expectations. Not actively monitoring and
assessing whether the regional colleges’ English language programs meet its
expectations means the ministry does not know if its funding for these programs
is achieving the results it expects.
[13:45]
This
concludes my presentation and I’ll pause for the committee’s consideration.
Thank you.
The Chair:
— Thanks so much for the presentation and the follow-up on this work. These recommendations,
you know, are from a ways back, and so thanks for the consistent follow-up on
it. Thanks as well to the ministry for the update, the status update, and the
actions that have been taken. I’d offer you certainly a chance to provide brief
remark if you care to, and then we’ll open it up for questions.
Ms. Ross:
— Sure. Thank you very much. I just want to echo the auditor’s comments, just
appreciation for the collaboration and the recommendations that came forward
for these and other audits too. Just the opportunity to be able to improve our
measurement, how we know our programs are achieving their outcomes, and then
obviously ultimately to provide better service for the people that we’re here
to serve. So I just wanted to reiterate our appreciation and the good
collaboration we have.
And
thank you for the opportunity to bring updates on the two items that were just
discussed. So I’m happy to report that we have made some additional progress
since the last review, and we would consider that both of the recommendations
have been implemented. And I can briefly describe some of that progress on
those two recommendations now.
So
with respect to developing a formal methodology including regional analysis for
assessing the demand for English language program needs, we do have a
methodology. You know, there isn’t a perfect science to trying to anticipate or
predict what the demand for English language training is going to be. And that
has become very evident — I would say, even more than it was before — over the
last couple of years, just with a few significant trends that are impacting
this type of service. One would be an obvious one probably, but the war between
Russia and Ukraine and quite a spike in the arrival of displaced Ukrainians to
the province. So no methodology is going to anticipate that.
Likewise
we’ve seen a significant increase in the number of new arrivals to Canada but
also to Saskatchewan over the last couple of years. And that’s really a result
of some additional federal measures to . . . They’ve set record-level
targets for themselves for the number of new permanent residents coming to
Canada over the last couple of years and for the next upcoming couple of years.
And they also took some additional measures to reduce some significant backlogs
that had accumulated, particularly in 2020‑2021, from just the impacts of
the global pandemic.
So
we saw record levels of arrivals over the last year. You know, with our
methodology we try to predict growth, but the growth that we’ve seen has far
exceeded what we would have been forecasting. Just to put it in context, a
normal year in 2022 would have been about 15,000 arrivals, and we actually saw
almost 21,000 arrivals in the past year.
So
just a bit more context in terms of . . . You know, we do have a
methodology, but it’s also important for us to remain flexible and adaptable to
some of the trends and shifts that I’ve just described for you. And our
methodology for English language training and the demand for it really mirrors
what the federal government does, who is the primary funder of English language
training across the country. And kind of the flaw to it is it looks backward,
so it looks at historical trends to try and predict the future. So there are
some obvious flaws with that.
And
how we remain flexible and adaptable to shifts in demand is just through our
approach to procurement and contract management for most of our English
language programming. Regional colleges are the exception there, but that’s
through going through a formal tendering and procurement process, which allows
service providers, community-based organizations to come forward with needs
that they have identified, which we can then validate against all of the
federal immigration data we receive on a regular basis for permanent resident
landings, but also temporary workers as well.
And
that’s kind of a key piece too because currently . . . I mentioned
that the federal government is the main funder of English language training,
but they don’t fund language training for temporary residents. So we have
started to over the last couple of years just because there’s certainly been a
growth in that need. And I would point again to the displaced Ukrainians who
are all arriving as temporary residents and increasing the need for English
language training there.
So
through our procurement we go through a needs assessment as we’re reviewing
proposals, validating that against the landing data we know or that we receive
from the federal government, as well as what we can predict based on approvals
and nominations through the Saskatchewan immigrant nominee program, which does
account for 70 per cent of newcomers coming to Saskatchewan every year. So it
does give us a pretty good sense of, you know, who’s arriving, what their
language needs may be, and where in the province they are going, so that we can
adapt our contracts accordingly.
And
then once we’ve entered into a contract with a third party to provide language
training, you know, throughout the course of that contract there’s opportunities
to adjust that if there are pressures that are identified and there’s a
particular need. Whether it’s new or just simple growth, we do have the
flexibility to adjust that as needed.
So
I think I can carry on to the second recommendation, or I can pause here and
see if there’s any questions about what I’ve just . . .
The Chair:
— I think that some quick, brief comments on the other recommendation and then
we’ll open it up for questions.
Ms.
Ross: — Okay, absolutely, thank
you. So the next recommendation, just about the language training that we
provide or the funding we provide to regional colleges in particular, and I
think the recommendation was really just getting that measurement and how we
know that the language training programming provided by the colleges is meeting
expectations.
We
have made some adjustments. So again this is another recommendation we consider
to have fully implemented at this point. Some of the more recent improvements
we’ve made is we have given regional colleges some more flexibility with
language training that they didn’t have before, just to blend it with other
skills training programming. So that creates opportunities for language
training but also some skills training and then some application of both in workplace
situations through work placements. So we’ve added some flexibilities there,
and I think we’ll see and we’re already seeing some preliminary results that
show better outcomes for newcomers with this type of blended programming.
We
also started to require a detailed ESL [English as a second language] plan from
regional colleges that is just a larger component or, I guess I should say, a
dedicated component of their overall business plan that they submit to us every
year just as regular process.
We
have set up reporting twice a year specific to ESL from the regional colleges
as well. So we are getting more updates and more outcomes reporting from them.
And then we have also created what we’re just calling an ESL committee with
regional colleges between the ministry and, as I said, the regional colleges
just to have an opportunity to review programming, reporting requirements, and
outcomes, and just identify areas for ongoing improvement as well.
So
I’ll leave my remarks there. Thank you.
The Chair:
— Well thank you. Thank you very much for the presentation and the work on
these fronts to implement the recommendations. I’ll look to committee members
now to see who has questions. Ms. Young.
Ms. A. Young:
— Thank you, Mr. Chair. Thank you for that incredibly thorough and thoughtful
update. I will start by begging your indulgence. I was following along closely
but had done a lot of my prep for this before obviously listening to your
comments and before seeing the update that came in yesterday. So if I ask something
you have already answered, please forgive me for not keeping up as adequately
as I would have hoped.
So
looking at the first recommendation from the auditor, noting of course it was a
follow-up to recommendations made in 2015, and then as of 2021 they still
weren’t implemented. I am hearing today that they are, which is great after all
of that time. And the recommendation obviously focused on the ministry
developing that formal methodology for assessing the demand for English
language program needs.
And
I saw in the update that the contract management handbook has been updated in
terms of guiding procurement and contracting process for English language
programs, correct?
Ms.
Ross: — That’s right, but it’s
also a broader update as well because we use outcomes-based contracting for all
of our third-party agreements. But English is . . . Yeah, English
language is a part of that, yes.
Ms. A. Young:
— Perfect. So that new procurement and contract process is fully implemented as
well as the broader one?
Ms.
Ross: — That’s right.
Ms. A. Young:
— Excellent. Thank you. Sorry, I’ve just lost my page of questions here.
Forgive me. Thanks. And this new process, is it generating the information that
you expected on program demand?
Ms.
Ross: — The new process. You mean
the new methodology or . . .
Ms. A. Young:
— Yes, new methodology.
Ms.
Ross: — So the methodology isn’t
necessarily helping in that regard. I think what’s helping is, at least when it
comes to the regional colleges, just that more frequent reporting and having
that more frequent touchpoint through this working group or committee that
we’ve established. So that’s giving us a sense of more, kind of, real-time
data, real-time outcomes, and any pressures or issues that need to be addressed.
And
then on third-party agreements with community-based organizations, it’s more
the contract management process, I would say, than the methodology we’re
applying that helps us to understand the outcomes that are being achieved,
because there is periodic reporting required throughout those agreements and
then obviously at the conclusion of the contract as well. So that gives us a
sense of the outcomes being achieved.
But
I think throughout the agreement life cycle there’s also more informal
opportunities to check in with the service provider and again just get a sense
of what the outcomes are so far and if they’re experiencing any pressures or
gaps or issues that we can help to address in the short term.
Ms. A. Young:
— Thank you. So can you expand on that a little bit in terms of like what new
information is available to the ministry now and how that’s helping you better
assess client needs and how the programs are meeting those needs?
Ms.
Ross: — Yeah, I think part of our
update . . . So when you read there that the outcomes-based handbook
was updated in 2021, part of that was also updating the metrics that we’re
using. And we recognize that something like language training, the outcomes
that we can expect in the short term and medium term don’t necessarily look the
same as say a skills training program. So an immediate outcome for language
training for everybody is not going to be, you know, they didn’t have a job and
now they have a job.
So
as part of our handbook update in 2021, part of that was adding more metrics
and more metrics that would be specific to some of our settlement services or
newcomer services, like the gateways, English language training, or settlement
advisor services that again don’t quite have necessarily an immediate and direct
employment outcome, but we’ve been able to add metrics that shows progression
towards employment as one example.
Ms. A. Young:
— Great, thank you. And so can you maybe expand a little bit further on that in
terms of the new information that’s available, specifically related to
assessing client needs and the programs as you go forward with this new
procurement model, as well as, like, your outcome-based model? Obviously it’s
of increasing importance to Saskatchewan, especially as it . . .
Ms. Ross:
— Yeah, yeah absolutely. So we have interim reporting from our third-party
organizations. So they wouldn’t necessarily be reporting on every metric or
outcome that we’ve agreed to in the contract with them, but there would be,
I’ll have to say, a handful of interim metrics that they would be reporting on
throughout the lifespan of that agreement, and that gives us an opportunity to
adjust.
And
I don’t know the exact number off the top of my head in terms of the number of
metrics we have in our handbook, but it’s pretty extensive. And again we’re
trying to measure kind of the full impact of the programs and services,
recognizing again as I said that not all of our programs and services are going
to lead to a direct employment outcome, you know, but they’re still tangible
benefits to the individual.
So
we have interim reporting on some metrics and then at the end a much more
thorough and comprehensive reporting done on a much larger list of metrics.
Ms. A. Young:
— Thank you. A simpler question. Is that outcome-based handbook, is that
available somewhere so I . . .
Ms. Ross:
— I’m pretty sure we have it posted on our website. But it’s certainly a
document that we share widely, so if it’s not posted, I can endeavour to
provide a copy.
[14:00]
Ms. A. Young:
— Thank you so much. That would be very appreciated. On the second
recommendation . . . And my understanding is the ministry changed how
it expects those regional colleges to measure the outcomes and report on the
delivery of these English language programs. And as of January 2021, the
colleges were in the process of implementing these changes and that the
ministry was planning on assessing whether colleges meet the ministry’s program
delivery expectations in the summer of 2021.
It
is also obviously noted by the auditor that not actively monitoring and
assessing whether these regional colleges’ EAL [English as an additional
language] programs meet expectations, because of course when the ministry
doesn’t know if the funding for these programs is achieving the results that it
expects.
Did
the ministry evaluate whether the colleges’ programming was meeting these
expectations as planned in August 2021?
Ms.
Ross: — Yes, and we went through
kind of our first full planning and reporting cycle for 2022‑23. So based
on the reporting that was done at the end for ’22‑23, there were no
adjustments needed in terms of any regional colleges or any programming that
weren’t meeting expectations.
Ms. A. Young:
— So beyond that could you expand on what some of the findings were from that
initial assessment?
Ms.
Ross: — Sorry, can you repeat
that?
Ms. A. Young:
— You said there were no changes needed from that first cycle. Can you expand
on . . .
Ms.
Ross: — Oh I just mean that in
the sense that, based on the outcomes that were reported by the regional
colleges that received funding for language training, they were all meeting
expectations.
Ms. A. Young:
— Okay, great. So hypothetically then, like, if the auditor were to go in and
perform another audit, you’re confident that her office would find that the
regional colleges are adequately measuring and reporting on English language
student program outcomes?
Ms.
Ross: — Yes.
Ms. A. Young:
— Okay, wonderful. Mr. Chair, maybe a question of clarification. This is now
chapter 19, which formerly was chapter 29.
The Chair:
— We’re going to be going into 29, bring folks in on 29 in a moment here.
Ms. A. Young:
— I just wanted to clarify that this was in the 2019 version of the auditor’s
report, chapter 29?
The Chair:
— I’m going to give it to the auditor.
Ms. A. Young:
— Coordinating English language programs?
Ms. Clemett:
— So this is 2021.
Ms. A. Young:
— Yes. This is chapter 19. It’s replacing chapter . . .
A Member:
— Previous follow-up . . .
Ms. A. Young:
— Yeah. Okay. Yes, so this is the follow-up of the audit recommendations made
in 2017, and then implemented as of 2021?
Ms. Clemett:
— Yeah. I understand that we did the original audit in 2015, a follow-up in
2019, a follow-up in 2021, and obviously one more to go, and it sounds like
we’ll be all done which is great.
Ms. A. Young:
— Great, great. Thank you. Sorry, it’s just . . . Yeah, thanks. The
status update, it says formerly chapter 29 so I just wanted to make sure.
The Chair:
— I think it’s the other . . . Chapter 15?
Ms. A. Young:
— We’re still going to have questions on chapter 29 of the 2021 report volume
2.
The Chair:
— We’re going to do that separate.
Ms. A. Young:
— Outcomes-based contracts.
The Chair:
— We’re doing that after we’re done this chapter, yeah. Doing them separate
this time.
Ms. A. Young:
— Yeah, great. Thank you.
The Chair:
— Any further . . . Mr. Keisig, any questions?
Mr. Keisig:
— I’m fine, Mr. Chair. Thank you.
The Chair:
— Okay. No further questions on that chapter.
At
this time I will table two documents: PAC 115‑29, Executive Council:
Status update, dated December 14th, 2023; as well as PAC 116‑29, Ministry
of Immigration and Career Training: Status update, dated December 14th, 2023.
We’ll
turn our attention now to chapter 29 of the 2021 report volume 2, and I’ll turn
it over to the . . .
Mr. Shaw:
— Thank you. The Ministry of Immigration and Career Training is responsible for
increasing employment opportunities for Saskatchewan’s people. The ministry’s
program is designed to develop skills for those under represented in the labour
market. For example, its adult basic education programs assist adults in
furthering their education and acquiring essential skills for the workplace.
Chapter
29 in our 2021 report volume 2, starting on page 221, reports the status of the
two outstanding recommendations initially made in our 2017 audit of the
Ministry of Immigration and Career Training’s processes to establish
outcomes-based contracts. By August 2021 the ministry addressed our two
outstanding recommendations.
The
ministry indicated a limited number of suppliers deliver programs, and tying
payments to outcomes could create hardships for those suppliers. Given the
ministry’s decision not to use financial incentives, aligning contracted terms
of payment with suppliers’ achievement of outcomes is no longer relevant.
The
ministry no longer uses outcomes-based contracts for its adult basic education
essential skills for the workplace program, but rather provides annual grants
to suppliers along with program and reporting requirements.
This
concludes my presentation. Thank you.
The Chair:
— Thank you for the presentation, and I’ll turn it over for brief response and
then we’ll see what we have for questions.
Ms. Ross:
— I guess I probably don’t have too much to say on these two recommendations,
as one was agreed to as being implemented and the other was agreed to as no longer
being relevant.
I’d
just point out that some of what is here also relates to what we just discussed
in terms of our outcomes-based contract management framework and the handbook
that we updated in 2021, which is a part of what you see in our response here,
our update on the second recommendation when we engaged a third-party
consultant to work with us and engage all of our third-party service providers
on kind of the next iteration of outcomes-based contract management. And that’s
when we had an opportunity to engage with them on the notion of financial
incentives and get some feedback on that.
So
I’ll probably just leave my comments at there, and just see if there’s any
questions. Thank you.
The Chair:
— Thank you so much. Mr. Harrison? Nothing here. Okay, Ms. Young.
Ms. A. Young:
— Thanks so much. Appreciating this is a follow-up of those recommendations
made in 2017 and then 2021, can you share what consultant was used and why that
firm was chosen and how much the work cost?
Ms. Ross:
— I won’t be able to answer how much the work cost today. I don’t have that
information with me. But it was MNP and we did go through a formal procurement
process. So I don’t know, I can’t remember back then who all submitted
proposals, but there was an open, transparent, competitive process.
Ms. A. Young:
— For sure. If that information is available and could be provided to the
committee at a later date, that would be great.
Ms. Ross:
— I’ll follow up with it, yeah. I just don’t have it here with me today.
Ms. A. Young:
— Understood. Thank you. So my understanding is that the ministry did invest
considerable work, or former ministry of Economy, into implementing the
outcomes-based contracts. Looking back, can you share what was the ministry
trying to achieve through this kind of outcomes-based approach?
Ms. Ross:
— I would say just generally trying to achieve better outcomes, and better
outcomes for our clients. It’s not to say that we weren’t achieving good
outcomes prior to this, but I think we wanted to shift the conversation with
our third-party service providers from one of outputs and being very
prescriptive in what we want them to deliver on our behalf to giving them a bit
more flexibility and room for innovation and for them to identify how best to
achieve the outcomes we agree to.
Ms. A. Young:
— So then can you expand for the committee on what some of those hardships
encountered by contractors were? Like tying payments to outcomes, what kind of
hardships did these create then for suppliers?
Ms. Ross:
— I wouldn’t say they’ve created hardships. I think, you know, it certainly has
resulted in us no longer working with some organizations or having to wind down
contracts where expectations or outcomes weren’t being achieved.
But
you know, that’s also just part of, whether it’s outcome-based contracting or
just procurement generally speaking, all of our agreements have an end date and
for various reasons we may choose not to renew or we might just shift to an
entirely different type of programming as well. So I wouldn’t say that there
have been any widespread hardships as we’ve moved to being more
outcomes-focused. But you know, there have certainly been instances over the
years where we’ve had contracts with third-party service providers where the outcomes
weren’t being achieved and so we wound down those contracts or did not renew
them.
Ms. A. Young:
— Okay. Sorry, I was pulling the language of hardships from the auditor’s
report. But hearing that’s not yours. So then I guess to clarify, was it the
ministry then that concluded that these potential challenges were of sufficient
concern to abandon outcomes-based contracting?
Ms. Ross:
— So we certainly haven’t abandoned outcomes-based contracting. Maybe the
hardship language comes when we’re talking more specifically about financial
incentives. So that looks a little bit different than how we manage our
contracts currently. But I think our response and our rationale has been that,
while we’re not using financial incentives per se, they’re built into our
approach to contract management.
So
what I was explaining about hardships and that, if outcomes aren’t being
achieved then we won’t renew those contracts or we’ll wind down the contracts
early if need be. So that’s where we would argue that there are financial
incentives built in. Just not kind of a performance-for-pay type of model,
which I think at the time is more what the Provincial Auditor was speaking to.
Ms. Clemett:
— So I’ll maybe just jump in here and make a few comments because I think it is just getting confusing
as to what we’re outlining here. It is the concept of, within the practice of
outcome-based contracts, you would have potentially more of a flat fee
guaranteed, and then as indicated, almost more bonuses paid in the event that
we meet our performance outcomes and targets that have been outlined.
The ministry decided to move away from that whereby
they are annually funding them as such, the various service providers. They
still have all of these performance expectations, measures, and targets that
they would be, you know, assessing I guess the service providers against, and
then they determine whether they continue to use that service provider in the
future. But the amount of payment the service provider got in the current year
for providing those services is not being impacted by . . . You know,
they still got the amount paid. It’d be probably going forward versus in the
year of payment. Whereas the overall model, it’s almost like bonuses are given
if you meet your targets.
Ms.
A. Young: —
Okay. So then of course like obviously on a go-forward basis in terms of
ministry response to programs, reporting requirements falling short, that’s
still part of business as usual. And I imagine if programs were falling short
of delivering, then the ministry would be re-evaluating those suppliers and
looking at those reporting requirements annually.
Ms.
Clemett: —
Yeah.
Ms.
A. Young: —
Maybe just one question kind of more broadly related to Public Accounts from
2021 and the Ministry of ITC. If you do have that, I was looking at contracts
through the ministry and it looks like since ICT [Immigration
and Career Training] was established
that there was about $42.7 million over five years paid to the Ministry of
Finance and SaskBuilds, but previously, Central Services. Do you have any
clarification around what that would be for?
Ms. Ross: — I don’t. Sorry, I don’t have that information
with me. I can follow up on it.
Ms.
A. Young: —
Sure. Maybe I’ll just, then for the sake of follow-up, just read kind of those
years, and if I’m incorrect on this, please let me know. But I had for 2018‑19,
I had 8 million; ’19‑20, I had 8.3 million; ’20‑21, I had
8.8 million; ’21‑22, 9.2; and ’22‑23, there was
$8.4 million, which is, if my math is right, how I got the
42.7 million over those five years.
So I was just really curious, like what this was
for. If this was a contract, who the contractor was?
[14:15]
Ms. Ross:
— And sorry, you said this is going to SaskBuilds?
Ms. A. Young:
— Yeah, this is paid to the Minister of Finance through the Ministry of
SaskBuilds, and prior to its inception, Central Services. I was just looking at
contracting through ICT, but curious if it was IT system related or
if . . .
Ms. Clemett:
— I would expect that it’s accommodations expense, like SaskBuilds and
Procurement would be. So I’d envision rent for your buildings as a ministry,
right? And then IT services as such, right?
Ms. Ross:
— Yes. We do have multiple offices. But sorry, I’m not the corporate person, so
I don’t know how all that works. But I can certainly follow up to provide some
clarification.
Ms. A. Young:
— Sure. If I had a couple other questions just about specific contracts, do
I . . .
The Chair:
— Maybe just on that — so appreciate the question; thanks for the undertaking
to provide the information back — is it fair then to provide that information
back to the committee through the committee Clerk within a month’s period? Is
that reasonable, I guess, to respond to the question that was there?
Ms. Ross:
— Yes, absolutely.
The Chair:
— Yeah, thank you.
Ms. A. Young:
— Is it okay if there were just like a couple more contracts if I’m curious?
The Chair:
— So the nature of the question, it should be within the scope of the mandate
of the committee.
Ms. A. Young:
— Yeah, it would have been the awarding of contracts in the time period covered
off by the auditor’s reports, but if not just let me know.
There
was I think 200,000 provided in ’21‑22 to Garven & Associates? I was
just curious about whether there was an RFP issued and what measures were
undertaken to ensure that there was no conflict.
A
million for Sask Hotel and Hospitality Association in ’21‑22.
And
then $176,000 to the Saskatoon Business College as well. And specifically around
that one, was just curious if it was usual to provide that funding to private
vocational schools and if that was maybe a signal in terms of how funding would
be provided for vocational schools in the future.
Ms. Ross:
— I’ll have to follow up with those details. On the private vocational school,
Advanced Education funds the private vocational schools, or any funding
typically comes from them. But it might be that they had submitted a proposal
on something that we had put on SaskTenders. But I can look into those three
contracts and provide some more information. I just don’t know it off the top
of my head.
Ms. A. Young:
— Very reasonable. Thank you so much.
The Chair:
— Yes, thanks so much, and so the question you’ve asked there, you would be
able to respond to it and can do so through the Clerk and within a month’s time
as well? Is that fair?
Ms. Ross:
— Yes, and just so to make sure I understand, you’re looking to, confirmation
if there was like a public procurement process and what, just the nature of
. . . what the funding was for?
Ms. A. Young:
— Followed usual processes, what the funding was for, yeah.
Ms.
Ross: — Okay.
Ms. A. Young:
— Thank you.
The Chair:
— Any more questions, Ms. Young?
Ms. A. Young:
— No further questions, Mr. Chair.
The Chair:
— Any further questions? Looks like they’ve surrendered over here. Not seeing
any further questions, I would welcome a motion to conclude consideration of
the two chapters that we’ve had before us this afternoon that pertain to
Immigration and Career Training. That would be the chapter 19 from the 2021
report volume 1 and chapter 29 from the 2021 report volume 2.
Do
we have a mover? Moved by Mr. Goudy. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— That’s carried. Ms. Ross, thanks for your time this afternoon. Thanks as well
for the undertaking to get some information back to us. Thanks to all those
that are involved in this work and all the work over in your ministry. Any
parting words our way before we close down this committee?
Ms.
Ross: — I’ll just say thank you
for the time and the opportunity to provide some updates and to provide
clarification and respond to some questions. So thank you.
The Chair:
— Thank you. Well thank you very much. Looking to our Clerk to make sure I’m
not missing anything here. I think I can seek . . . Thanks to
committee members for your time and attention here today, and to our auditor’s
office and our comptrollers and all those that are involved in the work today
with all the audit entities.
At
this time I would welcome a motion of adjournment. Moved by Deputy Chair
Nerlien. All agreed?
Some Hon. Members:
— Agreed.
The Chair:
— That’s carried. This committee stands adjourned until the call of the Chair.
[The
committee adjourned at 14:19.]
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