Thank you, Mr. Speaker. The Auditor General examined a representative sample of 47 public housing applications in four LHOs visited. Only 36 percent had been assessed according to key procedural requirements. While some of these discrepancies may be minor, the committee is concerned about the credibility of the public housing allocation process. Applications must be consistently evaluated according to the Housing Corporation policies and procedures by all LHOs, or people will not believe the process is fair.
In 2010, the Housing Corporation began developing a territorial housing information management system which would require LHOs to electronically record applications, point-rating forms and arrears checking. This new centralized system was expected to be operational by April 2012. At the public hearing, the corporation’s representative said the system represents a quantum leap in the Housing Corporation’s ability to monitor LHOs. The Auditor General agreed that this is a positive step but pointed out that the Housing Corporation still does not have a clear picture of the delivery of the public housing program, including LHO compliance and policies and consistency of delivery among LHOs.
The Housing Corporation has also modernized administrative manuals for the LHOs. The manuals, which had not been updated since the 1990s, were to be released in mid-April and made available on-line. Finally, resources were added through the business planning process to improve training and workshops for LHOs.
The committee hopes that these measures will enable the Housing Corporation to report that they are fully implementing the Auditor General’s 2008
recommendation on the regular monitoring and documentation of the public housing allocation process before the end of fiscal year.
Inspection and Reporting on Public Housing Units
The Housing Corporation is responsible for managing public housing and reporting on its condition. The Auditor General found that the unit condition ratings were being completed annually but there was no consolidated system to capture condition rating information. Further, the Housing Corporation was not conducting random inspections to confirm the LHO condition ratings.
The corporation agreed with the concerns expressed by the Auditor General. At the public hearing the president of the Housing Corporation said that this February the Housing Corporation implemented a new process for inspecting units, training inspectors, and monitoring and reporting on unit condition ratings. The new process provides support and training for those completing unit condition ratings. Monitoring and verification of the condition ratings is now taking place through the use of random inspections. Condition ratings will also be linked year over year to help identify major changes during the capital planning process.
In addition, the corporation plans to complete the replacement of its outdated maintenance management operating system, MMOS, in 2012. The new system will improve management and reporting capabilities and be integrated with the Housing Corporation’s financial systems.
The committee is pleased to hear that the corporation is starting to take measures to improve the consistency and accuracy of public housing condition ratings. However, Members are concerned at the length of time it has taken for the work to begin in this area.
The Auditor General noted, finally, that the Housing Corporation has not been monitoring or reporting publicly on the condition of its public housing, either in its annual reports or in separate reports. As of August 31, 2011, the Housing Corporation had not tabled an annual report in the Legislative Assembly since 2007-2008. The corporation was, therefore, noncompliant with both the Housing Corporation Act and the Financial Administration Act. The committee considers it unacceptable for a government funded agency to ignore the law.
The 2008-2009 Annual Report on the NWT Housing Corporation was tabled in February. The Housing Corporation president committed to tabling the 2009-2010 and 2010-2011 annual reports during this session of the Legislative Assembly. The Auditor General recommended that the GNWT should prepare and submit annual reports to the Minister in a timely manner. The committee concurs and includes this advice in the following
recommendation on monitoring of the local housing organizations.
Recommendation 4
The Standing Committee on Government Operations recommends:
1. That the NWT Housing Corporation meet its
obligations for consistent and thorough monitoring of local housing organizations under the universal partnership agreements, either by funding the resources to conduct annual assessments of operations or by changing the agreements to specify some other form of structured or scheduled monitoring with a follow-up in cases of noncompliance.
2. That the NWT Housing Corporation improve
its monitoring of and support of local housing organizations and allocating public housing to ensure all applications are consistently point-rated and adequate documentation is on file to support allocation decisions within the 2012-2013 fiscal year.
3. That the NWT Housing Corporation improve
its monitoring, verification and consolidation of public housing unit condition ratings, in order to obtain a complete picture of the condition of its public housing portfolio, within the 2012-2013 fiscal year.
4. That the NWT Housing Corporation fulfill its
statutory responsibility to ensure that the information on the condition of its public housing is publicly available by preparing and submitting annual reports to the Minister for tabling in this House in a timely manner, with all previous years’ reports submitted by the end of the 2012-2013 fiscal year.
The Housing Corporation does not have a complete strategic plan
The Auditor General concluded in 2008, that the NWT Housing Corporation would benefit from a strategic plan in dealing with issues such as budgetary restraints, arrears and vacant units. The Auditor General suggested, and the committee agrees, that a strategic plan should include:
• a clearly stated vision for the organization;
• clearly defined stages for realizing the vision;
• specific, measurable, achievable, relevant and
time-limited expected outcomes;
• high level direction or means to be pursued; and
• financial and human resources to put the plan
into effect.
In the follow-up audit, the Auditor General assessed the corporation’s progress on finalizing its strategic plan as unsatisfactory. The corporation had issued a Framework for Action 2008-2011 in response to
the 2008 recommendation, but this was described as an action plan and part of the strategic planning process rather than strategic plan.
In April 2012 the corporation issued a Building for the Future: Northern Solutions for Northern Housing, subtitled A Strategic Framework for Housing in the Northwest Territories. The document does not contain a detailed plan or clearly defined stages for accomplishing the Housing Corporation’s goals.
Since that time, the corporation has taken some initial steps in implementing its strategic priorities and has improved its annual performance measures reporting. While the Standing Committee on Government Operations would like to see the corporation take a more complete and comprehensive approach to strategic planning, Members are aware that the organization still has much work to do to remedy the other deficiencies identified by the Auditor General. The committee would not want the corporation to devote scarce resources to the production of more paper, rather than ensuring more and better housing for Northerners.
The Auditor General recommended that the Housing Corporation should develop implementation plans for recommendations from the 2008 audit on which progress to date has been unsatisfactory or incomplete. The Standing Committee on Government Operations concurs.
Recommendation 5
The Standing Committee on Government Operations recommends:
1. That the NWT Housing Corporation develop
detailed implementation plans for all of the Auditor General’s recommendations on which progress to date has been unsatisfactory or incomplete, including specific goals, targets, action items, timelines for achieving results, and indicators for measuring progress.
2. That the NWT Housing Corporation provide
information annually in its business plan on how its strategic priorities are being implemented.
3. That the NWT Housing Corporation revisit its
strategic framework within the life of the 17th Assembly, with a view to providing a more detailed plan with clearly defined stages after other deficiencies identified by the Auditor General have been addressed.
Contracting for Goods and Services
The Auditor General’s review of contracting in the Government of the Northwest Territories did not cover the awarding of the contracts, but rather their administration. The Department of Finance is responsible for contracting policy through its
Financial Administration Manual, FAM. Each department is responsible for its own contract administration. In the 2009 audit, the Auditor General found that most of the contracts examined had not been administered according to GNWT requirements, with errors in 57 percent of the contracts examined.
The contracting policy framework has been improved
The Auditor General rates the Department of Finance’s progress on contracting policy framework as satisfactory on balance. The committee encourages the department to continue its work in updating and improving the accessibility of the GNWT Contracting Policy.
In 2009, under the Financial Administration Act, contract authority was delegated to the deputy ministers to designate expenditure and accounting officers and Finance has revised the FAM accordingly. The Auditor General noted that improvement was needed in documenting these delegations. The deputy minister assured Members at the public hearing that this documentation has now been completed.
As well, a vendor complaint process was established in November 2010 to provide for independent contract dispute resolution. The standing committee learned at the hearing that only four complaints have been referred for resolution to date, and all those complaints concern the contract to work processes rather than administrative issues such as timely payment.
Improvement in contract administration is limited
In the 2009 audit, the Auditor General found deficiencies in the contract administration of the Department of Transportation and Department of Public Works and Services. These included:
• receiving goods or services before the contract
was issued;
• not issuing contract change orders according to
GNWT policy;
• exceeding spending authority; and
• approving payments before obtaining required
certifications.
In the follow-up audit, the Auditor General found that both Transportation and Public Works and Services, PWS, had taken steps to strengthen their internal processes through:
• training and procurement at Transportation;
• establishment of a checklist for procurement
files at PWS; and
• workshops across the GNWT on procurement
and contracting at PWS.
However, in a review of sample files from the two departments, the Auditor General found errors in 15 of 44 contracts, or 34 percent. The Auditor General rated progress in contract administration as unsatisfactory.
The standing committee also views this continuing rate of error as unacceptable. As the Auditor General points out, errors in contract administration place the GNWT at risk of overpayment or purchases of inappropriate goods and services. The government cannot afford such mistakes. The Auditor General recommends that these two departments strengthen their contract administration quality assurance processes, and the committee agrees.
Recommendation 6
The Standing Committee on Government Operations recommends:
• that the Department of Public Works and
Services and the Department of Transportation strengthen their quality assurance processes for monitoring adherence to applicable regulations and policies in the administration of contracts; and
• that
these
departments report annually to
the House on the measures taken and their results.
I will now pass the floor to my colleague, the Member for Inuvik Boot Lake, Mr. Moses.