First Nations' politics

2016 Sask Auditor’s Year-End Report: What You Didn’t Hear

On December 8th, 2016 the Provincial Auditor (PA) of Saskatchewan released her year-end report. The PA’s office generates two (giant) reports per year, one in June and one in December, plus any ad hoc reports she’s asked to deliver.

The mid-year report and the year-end report each cover a plethora of issues involving all things Government of Saskatchewan, including ministries, agencies, Crown Corporations, regional health regions and school divisions.

Typically, when the report is released, the PA highlights a handful of issues deemed of significant public interest, and generates a media-friendly package from which the subsequent news stories tend to spring.

For example, her most recent report included three news releases: one focusing on the Cypress Regional Health Authority’s need to better manage its ambulance services; one focused on the gong show that is provincial corrections (which earned the majority of the news coverage), and one that’s a general backgrounder.

What doesn’t make it into the news cycle is the bulk of the report, which is totally understandable given it is roughly a bazillion pages long, and our understaffed, decimated newsrooms can barely get to the single-page news releases they receive daily.

It’s an important document, however, especially at year-end, because it contains an audit overview of every Ministry, plus a few important agencies. Let’s have a look at some of the issues that made my eyebrows go up, and might make yours do the same.

IT Controls Need Improvement

Recently the bowels of the provincial government ground to a halt when some mysterious “bug” shut down government servers, and thereby websites and email, and who knows what other internal systems.

Yes, I’m suspicious, because that never happens.

On the same day that the Sask government goes dark, the PA releases a report stating that no less than eight ministries and organizations need to get a grip on their digital infrastructure, particularly when it comes to scenarios precisely like the one they were in at the time.

“We recommended that the Ministry of Advanced Education sign an adequate agreement on disaster recovery of computer systems and data with the Ministry of Central Services,” was the PA’s recommendation in 2008, to the Ministry of Advanced Ed and a bunch of other Ministries, and so far it hasn’t happened.

Therefore, the auditor recommends again in 2016 that they get their shit together, because while some progress has been made, “without an agreement on disaster recovery services, neither Advanced Education nor Central Services knows whether Central Services can restore Advanced Education’s key IT systems and data in the event of a disaster.”

She repeats this recommendation to the ministries of Advanced Ed.; eHealth (which manages the vital statistics registry of all births, stillbirths, marriages, deaths and name changes, so kind of important); Finance; Government Relations; Justice; Regina Qu’Appelle Regional Health Authority; Sunrise and Mamawetan Churchill River Health Regions; SIGA and SaskWater.

I’m fairly confident there are not many multi-billion dollar corporations out there without disaster recovery plans for IT, primarily because shareholders would lose their minds. So should we – this needs to get done.

Prompt Removal of User Access Needed

This one is another doozy; a whopping fourteen Saskatchewan ministries or organizations do not promptly remove former government employees from sensitive systems, including those with personal details of private citizens.

“We recommended that the Ministry of Agriculture follow its established procedures to properly remove unneeded user access to its computer systems and data,” reads the recommendation, originally introduced in December 2014. Random testing shows that users were able to log in to government systems anywhere from two to forty-two days after they left their job.

This recommendation was made to the ministries of Agriculture; Economy; Finance; Government Relations; Health; Highways & Infrastructure; Justice; Parks, Culture & Sport; the Public Service Commission; Regina Qu’Appelle Regional Health Authority; SIGA; SLGA and Social Services.

Shared Ownership Agreements Accounting

This one I don’t really understand, and I think we knew this already – basically the government isn’t reporting the reality around what they owe on P3 projects.

The Finance Ministry Needs to Figure Out How to Estimate Near-Term (Quarterly) Resource Revenue

In fact, the PA told the Finance Ministry five years ago to get this sorted out, and they haven’t.

In 2014-15, they did develop some kind of crystal ball for uranium and potash prices, which delivered reliable, accurate estimates on an annual basis, but not on a quarterly basis.

Doesn’t matter because as of August 2016, they’d never used that annual crystal ball anyway.

In the meantime, Finance has been dabbling in creating models to estimate resource revenues for oil and gas, but nothing has worked so far – but they’ve reassured the PA that they’re going to keep trying their very best in 2016-17.

This is important, because as the PA pointed out this time, “Without effective processes to estimate and record revenues each quarter, future financial statements of the Government may contain significant errors.”

“…significant errors?”

You mean like when Kevin Doherty forecasted a $400-million deficit in June, but then announced a $1-billion dollar deficit in November?

Because resource revenue – who can know it?

I’ve long opined that lack of proper resource revenue forecasting has enabled the provincial government to pump out cheerfully optimistic, self-congratulatory, sound-byte-friendly “balanced” budgets, then spring reality on us in bits and pieces throughout the year via quarterly reports, while throwing their hands in the air and blaming unpredictable resource revenues.

I’m not going to look for it, because this piece is going to be long enough, but I remember a recent budget where the government forecasted oil for the next year at something stupid like $90 per barrel, when it was already below that, and in free-fall, when the Finance Minister stood up to read his budget speech.

But, it was a “balanced” budget.

It would be ideal if the Finance Ministry wasn’t managing the public purse using a strategy of willful blindness.

The First Nations’ Trust (AKA The Black Hole)

In 2002 the provincial government and the Federation of Saskatchewan Indigenous Nations (FSIN) signed a deal called the 2002 Gaming Framework Agreement, which in tandem with the Saskatchewan Gaming Corp Act, in part dictates the flow of Saskatchewan casino profits into funds established for the benefit of indigenous communities in our province.

Weirdly, this process is governed by the Ministry of Government Relations (as opposed to the ministry responsible for gaming, or for First Nations’ affairs).

In 2015-16, the Ministry of Government relations provided $78.8 million in funding to two entities: Saskatchewan’s First Nation’s Trust fund (FNT), and Saskatchewan’s Community Development Corporations (CDC).

The FNT was established in 2002 between the FSIN and province of Saskatchewan. Its Trustees are supposed to meet quarterly to review and allocate the cash to First Nations’ communities for:

  • Economic Development
  • Social Programs
  • Justice Initiatives
  • Education & Education Facilities
  • the Development & Operation of Recreational Facilities
  • Senior &Youth Programs
  • Cultural & Spiritual Development
  • the Development & Maintenance of Community Infrastructure
  • Health Initiatives
  • Governance Activities
  • Treaty Protection
  • Any Other Charitable Purpose

… a bit broad, but that’s okay, because every almost every (more on that to follow) year the FNT’s Annual Report presents information about how each First Nation used the Trust monies they received to fulfill the needs of their community.

The PA’s beef with Government Relations is that two years ago it became aware that the FNT planned to fork over millions of dollars to the FSIN to cover its operating costs. According to the FSIN’s 2015-16 Annual Report (which is also a piece of shameless campaign propaganda for Chief Bobby Cameron, IMO), the FNT gave the FSIN almost $5-million, or over half the FSIN’s operating revenue.

Now this may not be a problem. It may be perfectly appropriate for the FSIN to self-fund its existence from the FNT.

The issue is that the Ministry of Government Relations has never bothered to establish any documentation or proof that it actually did its due diligence to determine if that funding is allowed under the law.

From the report:

“Without a formal, documented process, the Ministry may not be able to show it sufficiently monitors compliance with the Agreement. Without adequate monitoring, there is increased risk that the FNT or CDCs may inappropriately distribute funds or make payments for purposes not intended by the Agreement.”

And while it’s not mentioned in the PA’s report, perhaps we ought to be just as concerned about the fact that the First Nations Trust hasn’t posted its annual report, financial statements, or even an updated greeting to its website since 2013.

So let’s add these two factors together:

The ministry responsible doesn’t appear to have a process showing it sufficiently monitors this multi-million dollar FNT fund…

+

The multi-million dollar FNT fund appears to have quit updating the public about its affairs, including its financials or even who is on its board…

= what could possibly go wrong?

With indigenous communities all over the province suffering massive infrastructure deficits, its stunning that the FNT might be flying under the radar of the compliance structure established to ensure money is being channeled where its needed most.

PS – I called FNT’s office and asked if they could send me copies of its last three annual reports. Whoever answered the phone mumbled something about being out-of-date, then could not get off the phone quick enough. She told me she’d call me back, but never did.

And Then There’s the Northern Municipal Trust Account (NMTA)

With everything Saskatchewan residents are facing in the north, this one makes me really angry. I’ll just let you read it for yourself:

screenshot-877

$29-million in the bank, and no one has any f**ks to give.

Which sucks, because the purpose of the fund is rather important:

screenshot-878

According to the Northern Municipalities Act, the fund is governed by a Board, appointed by Cabinet, which gives the Minister of Government Relations (today, Donna Harpauer) advice on where to allocate the funds from the NMTA. I would love to know how that Board does that, given they apparently have no idea what’s actually in the account.

It gets better though. According to the PA:

“For each month during 2015, the Ministry did not properly reconcile the (NMTA’s) bank account to the accounting records. It did not investigate and resolve differences between its bank account balances and accounting records…In the December 2015 reconciliation, a significant unreconciled difference existed. Management incorrectly adjusted its financial records for this difference.”

Eventually, this “incorrectly adjusted” (by management!) and “significant” discrepancy in the financials was eventually caught and resolved.

And finally,

screenshot-879

Remember, there are a TON of people responsible for this quagmire, including that Cabinet-appointed board of directors, Minister Harpauer, an Executive Director, two managers and a pantry chock full of important sounding planners and analysts.

And this is the best they can do? Really??

Northern Health Regions – Anyone ?

Staying in that vein of No F**ks to Give, the PA’s report reveals that the health regions serving Northern Saskatchewan, which I think we can all agree is suffering a health crisis, are dysfunctional at best.

First of all we have the Prince Albert Parkland, Mamawetan Churchill River, and Keewatin Yatthé, which combined paid $1.1 million to various health care organizations (HCOs) to provide services to residents – without written agreements. These three health regions were warned about this by the PA in 2013, as by doing so, they’re not in compliance with Saskatchewan’s Regional Health Services Act.

Secondly, in 2008 – or EIGHT YEARS AGO – the PA recommended that the Keewatin Yatthé Regional Health Authority count and reconcile its inventory of capital assets.

Nope.

At it’s 2016 year-end, Keewatin Yatthé reported that it had capital assets totalling $20.3 million – but how the hell would they know? They haven’t counted or recorded those assets for almost a decade, so basically they’re making shit up.

In addition to buildings and real estate, we’re talking about millions of dollars worth of items like iPads, laptops, and other electronics; vehicles; lab equipment and other medical supplies: the health region has no idea if they exist, or if they do, where they are.

Oh, and of course, executives in the health region earn six figures, yet apparently couldn’t figure out how to get this handled.

Screenshot (880).png

Meanwhile, the Mamawetan Churchill River health region has made little progress, after the PA recommended in 2014 that it establish a process to control overtime costs. As of March 2016, this health region was not ensuring time sheets were approved prior to processing payroll and paying out wages.

That’s the least of their problems, however, because after three years, Mamawetan still hasn’t fully implemented the PA’s recommendation that they develop a process relating to their finances.

Seriously. The Mamawetan health region does not have complete financial policies or procedures, increasing “the risk of staff not having a full understanding of their responsibilities relating to the key financial procedures and reporting processes.”

REALLY?

Once again a group of well-paid executives oversee this organization… you know, the one without financial policies.

Screenshot (881).png

The Keewatin and Mamawetan health regions serve a population in Saskatchewan that is by all accounts in the midst of a gripping health crisis, encompassing everything from  tuberculosis to HIV rates to suicides. Residents are crying out for help – for better resources and more services.

But this is the best the people in charge can do?

To me, these deficiencies in such key areas scream WE DON’T GIVE A F**K. Both of these health regions, in addition to well-paid executives, have boards of directors supposedly providing oversight. Ultimately, though, the buck stops with the Ministry – and Minister – of Health – how can he allow this to continue?

Someone in charge, and with a conscience, needs to demand better for the sake of the residents relying on these health regions to keep them ALIVE. Meantime, it’s no wonder the state of health services in northern Saskatchewan is a national disgrace – it starts at the top.

Social Services: WTF & OMG

“We recommended that the Ministry of Social Services follow its established processes that ensure only eligible clients receive assistance and that they receive the correct amount of assistance” – IN 2001!!

Yes, fifteen years later Saskatchewan Social Services, which is currently slashing critical funding to organizations vital to people living with disabilities or in poverty, still doesn’t really know if it’s paying the $372-million it did in 2015 to the right people, and the right amounts.

Here’s what the PA determined:

screenshot-882

So, for example, if 40 per cent of Social Services clients did not have their needs properly assessed, that means roughly $150 million was paid out by Social Services to people who hadn’t proven they needed assistance.

Approximately $60 million was also seemingly paid out without appropriate approval.

Look, I know Saskatchewan social workers have intensely stressful jobs. I cannot imagine doing their jobs, and my hat is off to them for going to work every day. This is not on them.

The Ministry of Social Services is dysfunctional – diseased right to its core – and again, this starts at the top.

How dare the Ministry slash funding to disabled residents of this province, when it may be paying out millions of dollars with wanton abandon to those who don’t require it?

The Saskatchewan NDP had six years and the Sask Party has had almost a decade to figure this out, and they haven’t.

***************************

To be fair, the provincial government has fully implemented some of the provincial auditor’s historical recommendations – you can find the list of those here.

But the deficiencies outlined in this post – some of them impossibly long-standing – negatively impact some of our province’s vulnerable residents.

It’s about priorities.

For those of you who care, I’m Tammy Robert. I’m a writer, but pay the bills specializing in media and public relations. Email me anytime at tammyrobert@live.ca.

 

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1 reply »

  1. Of course, all the brou-ha-ha about the Health Regions is now irrelevant. The problems were solved by rolling all the mess into one big pot. Imagine taking poisoned dishes and mixing them all together in one big stew-pot. It makes me shiver just thinking about it.

    I’ve been doing bank reconciliations for over forty years involving records for multiple branch companies, small and medium businesses, on manual and computerized systems and that whole section of your report thoroughly upset me.

    Thanks for all the hard work you did on this article!

    Like

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