Mr. Speaker, the Auditor General’s progress assessment took into account how long government organizations had to implement recommendations and how difficult the recommendations were to implement. The Auditor General cautions that a rating of satisfactory does not mean complete implementation. Similarly, a rating of unsatisfactory does not mean there were no improvements.

While the standing committee is pleased that enough progress has been made for the Auditor General to give the government an overall rating of satisfactory, there is much room for improvement. The audited organizations were considered to have made satisfactory progress in nine of 14 recommendations and one key issue reviewed for this audit, which amounts to a grade of only 60 percent. The committee considers this a bare pass, especially in light of the cautions mentioned earlier.

The Auditor General’s follow-up audit found that satisfactory progress had been made in the following areas:

• The Workers Safety and Compensation

Commission improved its processing of workers’ claims;

• The Northwest Territories Housing Corporation

improved its management of home ownership programs;

• The Department of Finance strengthened its

contracting policy framework; and

• The Department of Education, Culture and

Employment is improving its monitoring of education councils and adult education programming.

The standing committee commends the organizations for these efforts and encourages them to continue.

The Auditor General found unsatisfactory progress in the following areas:

• The Northwest Territories Housing Corporation

has not improved its monitoring of local housing organizations and it has not developed a strategic plan that identifies priorities and links actions to its mandate;

• The Department of Transportation and the

Department of Public Works and Services have taken steps to improve their contract administration. Nevertheless, preventable errors were found in one-third of the contracts audited; and most seriously

• The Department of Education, Culture and

Employment has made unsatisfactory progress in inspecting daycare facilities.

Members were horrified to learn that some ECE-inspected daycare centres were not following health and safety requirements. Worse, the department has no set procedure for following up when inspections identify problems. In the words of the Auditor General, “Without proper follow-up on instances of noncompliance, children are at risk.”

Matters such as a blocked fire exit, chemicals for cleaning left out, or an uncovered electrical outlet may seem trivial on a day-to-day basis, but they can have tragic consequences. The committee regards the safety of children in government-inspected facilities as a sacred trust. There is no acceptable excuse for safety deficiencies in the protection of our children.

Workers’ Safety and Compensation Commission

The Workers’ Safety and Compensation Commission of the NWT and Nunavut ensures compensation and pensions are awarded to injured workers or their dependents under the Workers’ Compensation Act. In 2010, the WSCC registered 2,233 claims for incidences in the Northwest Territories. The Auditor General identified the administration of the claims process as a key issue for review in the follow-up audit.

In the sample reviewed by the Auditor General, the WSCC made timely decisions and payments for approximately 90 percent of claims, and payments were accurate. The commission has improved its claims processing since 2006 with mandatory plain

language training for claims officers, an on-line training program for new employees and an on-line reference system for standards and procedures.

It was a pleasure to hear the commission’s vice-president, Ms. Gloria Badari, say at the public hearing, “Service to our clients is our top priority.” In 2006, the 15th Assembly’s Standing Committee on

Accountability and Oversight identified a bureaucratic, corporate culture as an underlying obstacle to service improvement. The WSCC clearly has worked hard to meet or exceed the Auditor General’s recommendations and the corporate culture has been reoriented to customer service.

The standing committee is also pleased to see that the WSCC is also continuing to work on service improvements. The Auditor General reported that the WSCC is now working to establish a complete quality assurance and control framework with standards and procedures to ensure claimants are treated consistently, fairly and equally. In 2011, WSCC developed and approved an organization-wide service standard and plan to implement them in 2012.

At the time of the follow-up audit, the WSCC did not have an established process for approving and communicating changes to procedures and standards, a mechanism for reporting errors to senior management, or a comprehensive mechanism to measure and monitor performance. The Auditor General recommended improvement in this area and the committee concurs.

Recommendation 2

The Standing Committee on Government Operations recommends that the Workers’ Safety and Compensation Commission:

• develop and implement a more complete

and consolidated quality assurance and control framework for the processing of claims;

• establish a process for approving and

communicating changes to its claims processing procedures and standards; and

• report in detail on its actions in this area to

the Legislative Assembly by the end of fiscal year 2012-13.

Northwest Territories Housing Corporation

The Northwest Territories Housing Corporation is mandated under the Housing Corporation Act to ensure there is a sufficient supply of affordable, adequate and suitable housing to meet the needs of NWT residents. Its operations are highly decentralized. The NWT Housing Corporation delivers home ownership programs through five district offices, while public housing is delivered by 23 independent local housing organizations.

Of all the matters reviewed to date by the Auditor General, the standing committee deems the fair provision of adequate housing to residents in need as a concern second only to the safety of children. The committee finds the number of outstanding deficiencies listed by the Auditor General for this agency to be unacceptable.

Members are aware that the Housing Corporation has experienced organizational upheaval since the 2008 Audit Report. The corporation had to manage the unexpected $150 million upsurge in construction and repair of homes resulting from Canada’s economic stimulus spending to counter the recession. In the same relatively brief period, the public housing rent scale was transferred to the Department of Education, Culture and Employment and then transferred back to the Housing Corporation.

Under the circumstances, it is not surprising, but it is regrettable, that the Housing Corporation was unable to implement many of the Auditor General’s recommendations. The Housing Corporation’s results in this audit provide examples of all three of the government-wide barriers identified by the Auditor General. Now that other major issues are receding and the Housing Corporation has new corporate leadership, the committee expects the Housing Corporation to move quickly to remedy the deficiencies identified by the Auditor General.

Management of the Homeownership Program

On the positive side, the Auditor General rated the Housing Corporation’s progress in the management of the Homeownership Program as satisfactory. The Housing Corporation has evaluated its Housing Choices Program and taken steps to ensure that outstanding mortgage receivables are collected. The corporation has also improved its oversight of home ownership assistance to ensure that policies and procedures are followed.

The committee is glad to hear of these improvements. Members, however, are not entirely satisfied with the Housing Corporation’s progress in collecting its mortgage receivables. In 2007, the Housing Corporation stopped offering mortgages to low-income clients and introduced its Housing Choices Homeownership Program. This left the corporation with a significant number of clients who still owed money on mortgages provided under the older program.

In the earlier 2008 audit, the Auditor General found that 81 percent of Housing Corporation mortgages were in arrears. The follow-up audit found that the Housing Corporation had taken the following steps:

• introducing a repayment options plan;

• engaging legal counsel to issue demand letters;

and

• contacting all clients with repayable mortgages.

By April 2011, 150 of 468 clients chose a repayment option. Committee agrees that the steps taken represent progress, but notes that only one-third of the clients had chosen a repayment option as of last year. The Government of the Northwest Territories and its agencies need every dollar of the amounts owing that they can reasonably receive. The president of the Housing Corporation also considers collection rates lower than acceptable.

Recommendation 3

The Standing Committee on Government Operations recommends that the NWT Housing Corporation:

• continue its effort to collect mortgage

receivables; and

• report annually to this House on the number

of clients who have chosen a repayment option, the total dollar amount of repayments and the total amount still outstanding as of April 1st of each year, starting with the data

as of April 2012.

The Auditor General rated the corporation’s progress in two other important areas as unsatisfactory: monitoring of local housing organizations and development of a strategic plan.

Monitoring of Local Housing Organizations

The Housing Corporation’s unsatisfactory progress in monitoring local housing organizations comprises what are, in the committee’s view, several serious deficiencies. Lack of annual assessments of LHOs, insufficient monitoring of public housing application assessments for compliance with policies, and inadequate reporting of public housing condition ratings

Lack of Annual Assessments at LHOs

The Housing Corporation has universal partnership agreements with local housing organizations which represent the LHOs, which require the LHOs to follow Housing Corporation policies and procedures. Under these agreements, the Housing Corporation is responsible for yearly assessments and the LHOs are required to provide annual audited financial statements and quarterly financial and administrative reports.

The standing committee was not pleased to learn that the Housing Corporation has flouted its own agreements with LHOs. The follow-up audit found that the Housing Corporation has not conducted any annual assessments of LHOs for policy compliance, nor does it have a strategy for doing so. The corporation says it does not have the capacity to conduct these assessments.

Instead, since 2008 the Housing Corporation has directed district offices to enhance their monitoring and reporting of LHO activities to ensure compliance with policies. In January 2011 the

Housing Corporation finalized forms to gather activity data, but did not provide guidance to district offices on when and how often forms are to be completed. In the two district offices the Auditor General’s staff visited, forms had been completed for two of 13 LHOs and partially completed for another two.

Annual assessments of operations are a key requirement of the corporation’s universal partnership agreements with LHOs. The Auditor General notes that by not conducting the required annual assessments, the Housing Corporation has lost the opportunity to have a structured and scheduled way to consistently and thoroughly monitor the LHOs.

Mr. Speaker, I would like to pass the reading of the report to my committee colleague, the Member for Range Lake, Mr. Dolynny.