Thank you, Mr. Speaker. Mr. Speaker, the Standing Committee on Governance and Economic Development met from February 19 to February 25, 2004, to review the 2004-2005 draft main estimates. The GED envelope includes the following departments: Municipal and Community Affairs; Resources, Wildlife and Economic Development; Transportation; and, Public Works and Services.
The government's corporate planning process, or CPP, continues to be a concern of the Standing Committee on Governance and Economic Development. Despite concerns raised by previous committees, the government does not appear to have made any changes to this process. The criteria for prioritizing projects remains the same. The evaluation process continues to be done by the Capital Review Committee, which is entirely comprised of deputy ministers.
The committee has the following concerns with the CPP which are similar to those of its predecessor in the 14th Assembly: One, the prioritization process which is lead by the protection of people and the protection of assets unfairly penalizes less developed and less populated communities. Two, cost overruns on large projects, a lack of adherence to maximum construction costs in some cases and major increases to the scope of existing projects have the potential to impact funding and timelines for other projects. Members are concerned that there may be an incentive for contractors to purposely bid low if they are led to believe by past practices that overruns will be approved later.
The membership of the Capital Review Committee is made up entirely of deputy ministers. Regional representation on the Capital Review Committee is non-existent.
Travel, departments were asked to cut their travel budgets by 25 percent as part of a government-wide reduction of expenditures. From the travel expenditure reductions the standing committee noted some departments still have enormous travel budgets, even after the cuts. For example, RWED's 25 percent travel reduction amounted to $695,000. The committee believes further savings are possible. Suggestions from Members included using standing offer agreements, centralizing southern travel arrangements with existing resources, limiting the number of staff and others attending meetings and conferences, and making more use of telephone and video conferencing.
Members also noted that because travel is included in other expenses, the main estimates do not identify specific travel budgets. The committee understands that all travel needs cannot be forecasted a year in advance and that managers need some flexibility to allocate their
operations and maintenance budgets in response to the needs that arise throughout the year. However, Members believe that it should be possible to achieve greater transparency and accountability by instituting regular reports on all southern and international travel. Such reports would be a useful tool not only to committee, but also, one would hope, for Ministers and senior managers. The Standing Committee on Governance and Economic Development recommends that the government establish regular reporting for all southern and international travel.
New positions, Members noted increases to headquarters positions in some departments. For example, in RWED there is an assistant deputy minister's position that isn't on the organization chart and neither a director of informatics position. MACA has also overall increases of five headquarter positions.
New positions are of a particular concern both because of ongoing costs and because once positions are filled with permanent employees, it is difficult and expensive to cut positions later if priorities change. For this reason the committee would strongly urge departments to find money from within to fund any new positions that require new positions, perhaps by cutting initiatives that are no longer a high priority. The committee would suggest that if there are going to be position increases the effort should be made to locate them in the regional offices instead of Yellowknife. Finally, given our current fiscal outlook, the committee would urge the government to consider a freeze on new positions until the financial forecast is brighter.
Duplication of functions, committee Members noted several apparent duplications of functions and would encourage government to address these areas to realize some cost savings. Some examples include MACA's community governance division, which appears to overlap and duplicate some Aboriginal Affairs activities, some departmental information technology functions which have not been merged with the technology service centre, and the records management functions in departments which would perhaps be better coordinated across government. Other specific examples are explained in more detail later in this report under the appropriate sections for each department.
Accountability, as discussed earlier under travel, travel managers have the ability to move funding around between different categories of other expenses, such as travel, contracts, materials and supplies. The government is also able to reallocate surplus compensation and benefits funding resulting from vacant positions to other expenses. The committee recommends that in order to save costs the departments discontinue the practice of using funding from vacant positions for other initiatives.
The committee would welcome further discussions on whether the current financial administration guidelines provide the right balance between accountability and transparency on the one hand and allowing managers to manage on the other. Committee also has some concerns with this inconsistency on how some departments certain expenditures as it makes it difficult to evaluate program costs. Specific examples of this are: PWS and FMBS computer chargebacks, and how compensation and benefits for different programs are presented in the main estimates. This is further elaborated on under PWS compensation and benefits.
Finally, the committee would like to see a line item in the departments' budgets specifically for travel in order to better understand the magnitude of these expenditures. Mr. Speaker, that concludes the introductory portion of the report of the Standing Committee on Governance and Economic Development on the review of draft 2004-2005 Main Estimates.