The Standing Committee on Accountability and Oversight, the committee, met to review the Report of the Auditor General to the NWT Legislative Assembly for the fiscal years ended March 31, 2002, and March 31, 2003, on November 23 to 25, 2005.
The first day involved briefings and discussions with officials from the Office of the Auditor General, on issues raised in its report. Officials from the Auditor General's office included: Mr. Andrew Lennox, assistant auditor general, Office of the Auditor General of Canada; Ron Thompson, assistant auditor general, Office of the Auditor General of Canada; Mr. Roger Simpson, principal, Edmonton branch, Office of the Auditor General of Canada; and Mr. Dan Stadlweiser, director, Office of the Auditor General of Canada.
Public meetings were held November 24 to 25, 2005, during which committee members had the opportunity to hear from witnesses. The list of witnesses included: Mr. Lew Voytilla, comptroller general, Financial Management Board Secretariat, FMBS; Ms. Louise Lavoie, assistant comptroller general, FMBS; Ms. Margaret Melhorn, deputy minister, Department of Finance; Mr. Peter Vician, deputy minister, Department of Industry, Tourism and Investment; Mr. Fred Koe, president, NWT Housing Corporation; and Mr. Marsh Wilson, director, operations, NWT Housing Corporation.
General Comments
The Standing Committee on Accountability and Oversight considers the review of auditor's reports to be of utmost importance. Public accountability is the foundation of good governance. In this day and age, the public demands and deserves to know their tax dollars are being spent effectively and efficiently. The concerted efforts and the participation of all who are involved is an essential part of the process that ensures government accountability.
The auditor reports on issues that arise from the review of government accounts and provides recommendations for improvements. However, it is the forum for public review that provides an opportunity for further exploration of issues identified by auditors to find the root cause where problems exist and to ensure that improvements are brought about. An effective public forum requires that all parties come prepared.
Great importance is placed upon the public review process. The committee was, therefore, disturbed about lack of preparation. The committee feels that the laissez-faire attitude on the part of some of the witnesses indicates a lack of concern and respect for accountability towards taxpayers' dollars.
The committee reminds government officials of their accountability to the people of the Northwest Territories. All departments and corporations that are publicly funded are accountable to elected officials who are, in turn, accountable to their constituents for effective and efficient public spending.
Notably, the Housing Corporation was ill prepared to answer what the committee considered to be basic questions, taking them instead on notice.
Finally, during the course of the public review, the committee was presented with new information about a change to the funding agreement for the provision of Indian and Inuit medical care. Although the committee is always interested in being advised of any new developments, a public hearing on the review of the Auditor General's Report on Other Matters was not the appropriate place for such discussions. In future, committee members would request that if new information becomes available about an issue contained in the Auditor's report, it be provided in advance. If it is of sufficient importance, a separate briefing can be scheduled, so that time allocated on the public review can be used to discuss the specifics of the report.
NWT Housing Corporation - Shipment Of Unassembled Housing Units To Alaska
The Auditor General's report raised the issue of the Northwest Territories Housing Corporation's venture to sell housing units to Alaska. The report made recommendations about the corporation's exposure to loss and unnecessary risk when they shipped nine unassembled housing units to Barrow, Alaska, with only a verbal agreement in place, no signed contract and no insurance. The auditor also questioned the corporation's authority to undertake this venture and the ongoing issue of the interpretation of their mandate.
The committee had an opportunity to question the Housing Corporation about the venture. Members asked if changes to business policies, guidelines and practices had been made subsequently to ensure that the Housing Corporation would not be exposed to such risk and loss again.
On the whole, the committee was not at all satisfied with the ability of the Housing Corporation to adequately respond to the committee's questions and concerns.
Inquiries were frequently met with vague responses or with a commitment to provide details at a later date.
Given that the corporation had been in possession of the auditor's report for over a year, Members consider it an affront to the institution of the Legislative Assembly that the Housing Corporation would appear unprepared to answer questions relating to historic events. The committee was taken aback by the lack of detailed information the Housing Corporation was able, or willing, to provide.
The Housing Corporation was not prepared to answer the following questions and will provide details about:
- • the sequence of events and transactions involved in all sales of unassembled housing units to Alaska, including when contracts were signed;
- • the value of each of the eight remaining units today;
- • the profitability/profit margin for all sales of unassembled housing units in Alaska, including:
- • the exact values for all shipping, including the shipment of the units from Tuktoyaktuk to their final destination;
- • all legal fees involved;
- • ministerial travel to Alaska; and
- • administrative overhead, including staff time.
Ultimately, committee members do not feel confident that any specific actions were taken in response to the failed venture to ensure something similar will not happen again. More importantly, they are not convinced that policies and procedures intended to guard against exposure to risk will be consistently implemented with rigorous due diligence. Committee members are concerned with the Housing Corporation's past performance in the efficient and effective management of public funds.
Finally, some Members feel that in light of mismanagement in the Housing Corporation's venture in Alaska, the GNWT should examine the means by which employees are held accountable in such instances.
Recommendation
The Standing Committee on Accountability and Oversight recommends the Office of the Auditor General of Canada undertake a performance audit on the Housing Corporation.
With that, Mr. Speaker, I will turn over the conclusion of the report to deputy Robert Hawkins.