Thank you, Mr. Speaker. As I stated, it's news to me that we have potential nurses out there who are not getting some feedback as to whether they were successful or not. I am happy to work with the Member and try to work with each specific case. I will work with the authorities and with my deputy in the sense of where these issues are and come up with some corrective action. Thank you.

Thank you, Mr. Roland. Final supplementary, Mr. Menicoche.

Thank you, Mr. Speaker. I thought all applications were going to your department. Just with that, I would be glad to share a couple of incidents that have come to my attention with the ministry. My initial question is, can we start tracking that, because it's very important that people at least get acknowledgement letters. Mahsi.

Thank you, Mr. Menicoche. Mr. Roland.

Thank you, Mr. Speaker. Yes, Mr. Speaker, I am happy to work with the Member in a specific area and the tracking area. For example, we are tracking areas of terminations, retirements, pensions, records of employment, leaves, pension recoveries and a number of those other areas, as well as audits. We can look at adding this situation or this reporting mechanism in, as well. Thank you.

Thank you, Mr. Roland. Oral questions. Written questions. The honourable Member for Sahtu, Mr. Yakeleya.

Thank you, Mr. Speaker. Mr. Speaker, my written question is to the Minister responsible for the Northwest Territories Housing Corporation.

1. Will the Minister outline specific plans to implement any northern regional mobile manufacturing plants for the Novel manufactured homes in the North?
2. Can the Minister outline specific trade training programs in the regions and a communication plan to notify the communities regarding trade training programs supported by Education, Culture and Employment?
3. Will the Minister notify this House should any alterations to the Novel manufactured homes concept be made prior to the sign-off of the final deal with the parties involved?

Thank you.

Thank you, Mr. Yakeleya. Written questions. Returns to written questions. Replies to opening address. Petitions. Reports of standing and special committees. The honourable Member for Nahendeh, Mr. Menicoche.

Thank you, Mr. Menicoche. Mr. Hawkins.

Diamond Loan Guarantees

The Auditor General's report addressed the issue of government loan guarantees to companies in the diamond manufacturing industry. Specifically, the report dealt with the default on the loan guarantee for Deton'Cho Diamonds Incorporated.

The GNWT originally provided loan guarantees to three companies in the diamond industry: Deton'Cho Diamonds Incorporated, Sirius Diamonds Ltd. and Arslanian Cutting Works (NWT) Ltd., to allow businesses to obtain private financing that might not otherwise be available at a total of $24.2 million dollars. The intent of the loan guarantees was to encourage economic development by supporting business ventures that banks would consider too risky without government backing.

At the time the auditor's report was written, only Deton'Cho Diamonds had defaulted on their loan. The report notes that although a deal was ultimately reached to sell Deton'Cho Diamonds to Deton'Cho Corporation, and the $2.6 million principal will be paid to the government in twenty equal, interest-free, yearly instalments, the foregone interest using a modest discount rate of four percent would amount to $800,000 over 10 years. The committee notes, however, that it remains to be seen exactly what the total cost to taxpayers will be for the Deton'Cho loan guarantee.

Subsequent to the auditor's report, the remaining two loan guarantees went into receivership. The net loss for Sirius Diamonds Ltd. is estimated at over $6.5 million.

Members had an opportunity to question the comptroller general about the events leading up to the default on the Deton'Cho Diamonds. The comptroller general's position was unequivocally that the global diamond industry is inherently risky and no amount of due diligence can change that.

The committee understands that loan guarantees are inherently risky. The inherent risk is not what was at issue. Of concern to Members is if the Diamond Review Committee and the Financial Management Board did everything within their power to minimize the loss of public funds. In other words, was due diligence adequate? Ultimately, the committee did not find the witnesses' testimony to be persuasive. Members remain uneasy that the due diligence process and the monitoring was not as rigorous as necessary.

In light of what has been learned from the loan guarantees for the diamond manufacturing industry in the NWT, some Members are hesitant to endorse the use of public funds to back high-risk experimental industries. Some Members feel government investment would be better put towards ventures with demonstrated markets and viability; for example, strategic infrastructure projects. They are of proven benefit to NWT residents, are less vulnerable to volatile global markets and, therefore, risks can be more accurately assessed.

Consolidated Budgets

A consolidated financial statement is one in which all the revenues and spending for a government department or agency is recorded together in the same document. A consolidated financial statement includes all like items of assets, liabilities, revenues and expenses from a government department, including any revolving funds and corporations that fall under its mandate.

The auditor noted a number of reasons consolidated budgets can be helpful to managers and Members of the Assembly. For one, it's easier to compare budgets to year-end financial statements when both are consolidated. It also focuses attention on the broader activities of

government; for example, consolidated accounts would more easily reveal how much is spent on salaries and administration. Consolidated budgets would also provide more detailed information on housing and post-secondary education spending.

The GNWT bases its accounting standards on recommendations of the Public Sector Accounting Board, PSAB. So far, these rules require consolidated financial statements but not consolidated budgets. However, the trend appears to be increasingly towards consolidated financial documents. The committee notes that PSAB has changed their guidelines so that, as of April 1, 2005, a government's 'reporting entity' includes all entities that are controlled by the government. This change means that, for the first time, the 2005-2006 public accounts will be consolidated, including government boards and agencies. The committee is of the opinion that this change makes it all the more pressing for the GNWT to move towards consolidated budgeting.

The standing committee understands that the government is opposed to providing consolidated budgets, including the concern that it could potentially render budgets so complicated they would no longer be of use to anyone outside of the accounting profession, notably decisions-makers and the public at large. The committee points out that there are ways of ensuring this concern is addressed. For instance, in addition to consolidated budgets, more detailed information could also be needed, such as a breakdown of component parts, in order to facilitate understanding.

Recommendation

The Standing Committee on Accountability and Oversight recommends that the GNWT prepare consolidated budgets for the 2008-2009 budget cycle.

Conclusion

Recommendation

The Standing Committee on Accountability and Oversight requests the Executive Council table a comprehensive response to this report within 120 days in accordance with Rule 93(5) of the Rules of the Legislative Assembly.

Mr. Speaker, I move, seconded by the Member for Tu Nedhe, that Committee Report 8-15(4) be received by the Legislative Assembly and moved into Committee of the Whole. Thank you, Mr. Speaker.

Thank you, Mr. Hawkins. The motion is on the floor. The motion is in order. All those in favour? All those opposed? The motion is carried.

---Carried

Committee Report 8-15(4) will be moved into Committee of the Whole. Reports of standing and special committees. Reports of committees on the review of bills. Tabling of documents. The honourable Minister responsible for Health and Social Services, Mr. Miltenberger.

Thank you, Mr. Speaker. Mr. Speaker, I wish to table the following document entitled NWT Health and Social Services System 2004-2005 Annual Report. Thank you, Mr. Speaker.

Thank you, Mr. Miltenberger. Tabling of documents. Notices of motion. Notices of motion for first reading of bills. First reading of bills. Second reading of bills. Consideration in Committee of the Whole of bills and other matters: Bill 18, Committee Reports 5, 6 and 7. By the authority given the Speaker by Motion 9-15(4), the Committee of the Whole may sit beyond the hour of adjournment until it's prepared to report, with Mrs. Groenewegen in the chair.

I would like to call Committee of the Whole to order today. What is the wish of the committee? Mr. Menicoche.

Thank you, Madam Chair. Committee wishes to consider the new Department of Human Resources.

Thank you. Does committee agree?

Thank you. We will do that right after lunch.

---SHORT RECESS

Committee, we are about to start with Human Resources' main estimates. I would like to ask Minister Floyd Roland if he could please provide his department's opening comments.

Thank you, Madam Chair. I am pleased to present the Department of Human Resources' main estimates for the fiscal year 2006-2007. This department will be created effected April 1, 2006.

The department's 2006-2007 main estimates propose O and M expenditures of $29.237 million which represents a $120,000, or about .5 percent, increase over the revised 2005-2006 Main Estimates. We are using the revised estimates for comparison purpose as the human resources amalgamation was not reflected in the government's original 2005-2006 budget. The net increase primarily results from Collective Agreement adjustments offset by the sunsetting of some equal pay activities.

The proposed capital expenditure of $500,000 will support the first year of a two-year upgrade of the human resources information system. Based on the experiences of the past year, it has become clear that one of the steps required to improve human resource service is to make better, more efficient use of the PeopleSoft system. This upgrade to version 8.9 will involve conversion of

processes and approaches to increase the functionality of the system and reduce duplicate manual processes.

The Department of Human Resources' main estimates includes 188 positions: 54 in regional service centres and 134 in Yellowknife. There is no net increase in positions for fiscal year 2006-2007, although some positions have been deleted and some added as we continue to fine tune our organizational structure through the implementation period.

After nine months of operation, human resources has made significant progress in identifying issues around the people, processes and systems needed to provide a consistent human resource service to assist managers in effective management of the government's human resources. However, it is clear that there is still work to do. To assist in moving forward towards best practices, human resources is currently engaged in a full review, lead by a firm that specializes in supporting business and organization transformation to achieve excellence in service.

This review is very intensive and will be complete by early April. The results of the review will help guide revisions and adjustments to the processes, staff competencies and systems for human resources in the years to come.

In addition to taking action on the results of the current review, there are initiatives the department plans to continue working on in 2006-2007:

1. the action plan to implement the future management and direction of the public service;
2. strategies and policies on a northern public service for consideration by Cabinet and the Standing Committee on Accountability and Oversight;
3. the GNWT's compensation policy;
4. specific approaches to better support the promotion of northerners and the disabled in all sectors of government;
5. a GNWT statement of ethics for employees; and
6. a GNWT human resource plan.

Fair and consistent GNWT recruitment and retention practices are critical to the success of our programs and services. This needs to be driven by effective human resource planning that looks beyond today. With the amalgamation of human resources, we have made significant strides towards creating the environment for effective management of the public service and will continue this work in 2006-2007.

That concludes my opening comments. I would be pleased to answer any questions Members may have. Thank you.

Thank you, Mr. Roland. I will now ask if Mr. Menicoche could please bring up committee's comments with respect to the Department of Human Resources. Mr. Menicoche.

Thank you, Madam Chair. Members of the Accountability and Oversight committee had an opportunity to meet with the Minister responsible for the Financial Management Board on September 28, 2005, to review the draft business plan for the centralized human resource unit, prior to the creation of the new stand-alone Department of Human Resources.

The Standing Committee on Accountability and Oversight met with the Finance Minister on January 17th to be briefed on major changes within the new stand-alone department.

Committee members made note that the department is proposing to spend $29.237 million in operations expense in fiscal year 2006-2007, and $500,000 on capital projects in fiscal year 2006-2007.

Members note that consolidation of human resources is finalized with the creation of the stand-alone Department of Human Resources. Important policy issues relating to human resources and the future direction of the public service had previously been put on the backburner while the prerequisite organizational change took place. Now that reorganization is complete, Members look forward to turning their attention to this matter. Some of the priorities Members look forward to discussing with the Minister responsible for the Human Resource department include: employment equity and the importance of attaining a public service that is representative of the population it serves; the changing demographic of the public service and the need for secession planning; and attaining increased efficiency and effectiveness in government administration. That concludes my comments, Madam Chair.