1999 ANNUAL REPORT, PROVINCIAL AUDITOR
MINISTRY OF THE ATTORNEY GENERAL

CONTENTS

Wednesday 23 February 2000

1999 Annual Report, Provincial Auditor: Section 3.02, office of the public guardian and trustee

Ministry of the Attorney General
Ms Andromache Karakatsanis, deputy minister
Ms Louise Stratford, acting assistant deputy minister, family justice services division;
public guardian and trustee

STANDING COMMITTEE ON PUBLIC ACCOUNTS

Chair / Président
Mr John Gerretsen (Kingston and the Islands / Kingston et les îles L)

Vice-Chair / Vice-Président

Mr John C. Cleary (Stormont-Dundas-Charlottenburgh L)

Mr John C. Cleary (Stormont-Dundas-Charlottenburgh L)
Mr John Gerretsen (Kingston and the Islands / Kingston et les îles L)
Mr John Hastings (Etobicoke North / -Nord PC)
Ms Shelley Martel (Nickel Belt ND)
Mr Bart Maves (Niagara Falls PC)
Mrs Julia Munro (York North / -Nord PC)
Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)
Mr Richard Patten (Ottawa Centre / -Centre L)

Substitutions / Membres remplaçants

Mr Michael Bryant (St Paul's L)
Mr Gerry Martiniuk (Cambridge PC)
Mr Jerry J. Ouellette (Oshawa PC)

Also taking part / Autres participants et participantes

Mr Richard Patten (Ottawa Centre / -Centre L)
Mr Erik Peters, Provincial Auditor

Clerk pro tem / Greffier par intérim

Mr Douglas Arnott

Staff / Personnel

Mr Ray McLellan, research officer, Research and Information Services

The committee met at 1032 in room 151, following a closed session.

1999 ANNUAL REPORT, PROVINCIAL AUDITOR
MINISTRY OF THE ATTORNEY GENERAL

Consideration of section 3.02, office of the public guardian and trustee.

The Chair (Mr John Gerretsen): Good morning. I wonder if we could get the hearings started, please. Thank you all very much for attending. I'd like to call to order the standing committee on public accounts to deal with section 3.02 of the 1999 annual report of the Provincial Auditor on the public guardian and trustee. We'll have an opening statement of approximately 15 to 20 minutes, and after that I will divide equally between the caucuses the time between now and 12 o'clock.

Welcome once again to our hearings, Deputy Attorney General.

Ms Andromache Karakatsanis: It's my pleasure to be back again before this committee. I'm Andromache Karakatsanis, the Deputy Attorney General. With me today is Louise Stratford; she's the Ontario public guardian and trustee.

I am pleased to return to the committee to discuss the auditor's report on the office of the public guardian and trustee and the ministry's response. In our society we believe that people who are unable to make their own decisions deserve to have someone to help them. This is the OPGT's role when there is no one else to act.

Our largest program is property guardianship. It currently serves about 10,000 people. Most of the people we serve suffer from mental illness, dementia, developmental disabilities or head injuries. They come from a variety of cultural and language backgrounds. Many were the victims of neglect or abuse before the OPGT became involved. Often their finances are in disarray, having declined as their faculties diminished over a period of years.

Just over half of our clients live in institutional settings, and many receive social assistance. Some 44% are able to live in the community, and we work hard to keep them there-often a challenging and difficult task. Our goal is to see that the people we serve have the best quality of life possible in their circumstances.

We truly do see ourselves as the last resort. In situations where a person's incapacity comes to light, our staff make every effort to find a relative or other party to become a private guardian. We believe that families should take responsibility for their loved ones whenever possible and that such a family connection is in everyone's best interest. We've had some success with this effort, but in some cases there simply is no one else. What is especially sad are situations where there are relatives but they can't or won't come forward.

The result is that the OPGT handles the more difficult and complicated cases. While our caseload has not been increasing in number, it has been increasing in complexity. Clearly, our face staff face a demanding job, day in and day out, as they work to meet the unique needs of the people they serve.

We believe we have been doing well in what we think of as our social support role. By this I mean helping people find a place to live, seeing that they get medical attention or linking them up with community services. Many a time, one of our staff members has rushed to the scene to help someone who was being evicted or was found wandering in the street or was experiencing some other personal crisis. Providing this sort of direct human support is how our guardianship staff spend much of their time.

It takes a special kind of person to do this work effectively. We are proud of the staff of the office, who bring great sensitivity and compassion to their efforts to help.

In recent years, we have been improving our financial management role, another aspect of guardianship. Problems in this area were the main focus of the auditor's recommendations. We were aware of, and had already begun working on, many of the issues the auditor raised. We take these issues seriously because we understand that quality of life is affected by how carefully finances and other assets are managed.

As background for our discussion, let me outline the mandate of the office more fully. There are currently 14 programs under the umbrella of the office of the public guardian and trustee. The OPGT delivers a series of programs for mentally incapable adults who are without family support. In addition to property guardianship, which I've mentioned, these include programs to make substitute decisions concerning medical treatment, long-term-care admission, litigation and personal affairs. In about 3,000 cases last year, for example, the office made vital treatment decisions. This is a relatively new function, created under legislation in 1995 and 1996. The auditor concluded that the office had adequate policies and procedures in place to ensure treatment decisions were appropriate and supported by the information obtained.

Within the OPGT a special unit is legally mandated to investigate allegations of abuse, neglect or financial exploitation. The findings of investigators can lead to an informal solution or, as a last resort, can trigger a guardianship application. The auditor indicated that the OPGT was properly geared up to act on investigation results. Procedures for receiving documents, setting up new files and obtaining initial guardianship of property were generally satisfactory and in compliance with legislative requirements.

A capacity assessment office provides education, certification and information to independent health practitioners who specialize in assessing mental capacity, and a screening program reviews and processes applications when relatives or others seek private guardianship appointments for incapable family members.

Other responsibilities include the administration of property left by dissolved corporations, maintenance of trust accounts for cemeteries, the operation of the accountant of the Superior Court, the administration of the estates of deceased persons and the monitoring of charities.

The office now has 312 full-time employees-that compares with 269 positions last year-and a budget of $23.9 million, up $3.5 million from the 1998-99 budget.

The OPGT has made significant progress since 1995. Since that time, the mandate and organizational structure of the OPGT were substantially transformed. The Substitute Decisions Act, the Health Care Consent Act and a merger with the accountant of the Superior Court required major structural changes. The office has made solid progress.

Let me review some of the service improvements over the past five years. Prior to 1995, the OPGT was not providing for regular inspection or maintenance of real estate owned by clients. We now have nine local property management contracts in place and there are no problems in this important function.

Prior to 1995, there were major shortcomings in the way clients' bills were paid. Early in 1999, the office concluded a complete overhaul of the procedures for handling more than a million payments to more than 7,000 service providers. We are now doing that right. The office used to have no personal contact with the people it served. The OPGT is now more accessible. It has six offices across the province which some clients are able to visit.

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In addition, in the past 12 months, OPGT staff have personally visited more than 4,200 people in their residences. That represents 48% of our people, almost double the percentage visited a year earlier. We intend to continue increasing the number of visits. Prior to 1995, the average caseload per client representative was 600. Today it's 250. As I will explain, we are reducing average caseload to 150 effective April 1.

As we review the auditor's recommendations, it is important to be entirely clear about what the figures regarding errors mean. The figures used by the Provincial Auditor were based on the review of guardianship files by an internal auditor on the OPGT staff. The office has had an extensive internal audit program since 1996.

When we talk about a file being audited by staff, we aren't referring to a file folder with some papers in it. A single client's file often consists of volumes encompassing dozens of activities and hundreds, often thousands, of entries. Since, in our average caseload, a case is open for 11 years, a typical file contains information covering this entire period. Given the 11-year average, errors picked up by internal audit could have occurred more than a decade ago.

Our internal audit process scrutinized every activity, procedure and transaction in the audited file.

In 33% of the files we found an error had occurred in one or more of the possibly thousands of transactions entered over the whole period of guardianship. We are not saying that one third of the transactions were incorrect, but that one third of the files contained an error. The number of errors as a proportion of total transactions would be very, very small. While our goal is to avoid all errors, obviously some have a more direct impact on the client's daily life than others. Most of the errors involved a lack of timeliness; that is, we did the right thing, but it took too long.

Apart from citing overall statistics, the auditor's report lists a series of specific examples where clients' assets had not been properly handled. The office and the ministry, of course, find these cases totally unacceptable. We were aware of most of them through our internal audit process and had already begun to take action. In all cases, the problem has now been examined and resolved. As inexcusable as these incidents were, I think it would be unfair to leave the impression that they were typical. They are not. They are the worst cases.

We have already begun to reduce the errors. Our last internal audits, conducted over the first nine months of this fiscal year, reviewed 888 files and found errors in 22% of the files-still far too high, but a solid improvement from the 33% in the internal audit two years earlier. This trend suggests that recent performance has improved and that what we are finding are mainly old errors. As the initiatives we have underway gain momentum, we are confident this trend will continue.

Now let me tell you how we are changing things. To improve the operations of the OPGT, we are adding and training staff, balancing and reallocating workloads, strengthening management, introducing new procedures and putting more emphasis on technology. We have just completed the process of hiring an additional 43 staff, enabling us to increase our front-line guardianship staff by about 35%. A 12-week training program is now underway for these new employees. Caseloads are being transferred to the new positions on a gradual basis during February and March. In addition, we plan to provide training for all existing guardianship staff again in March and April to put extra focus on the problem areas identified by the auditor.

A key role of the OPGT is to investigate when allegations of abuse, neglect or exploitation are made. We have just hired three more investigators to respond to the steadily increasing number of cases and to do so more quickly. All in all, we expect to be fully staffed and operating under the new organizational structure by April 1. We are confident that this will provide a foundation for significant service improvement.

To balance our workload, match resources with client needs and ultimately provide better service, we are assigning guardianship files based on the complexity and the volume of work involved. Cases that are highly complex and subject to a higher risk of error will be assigned to senior staff. In this category are cases that involve real estate, securities, extended health care benefits, legal problems. Also included are clients who reside independently in the community and therefore need more time and expertise for brokering social services. These more intensive caseloads will be relatively small, averaging 95. Each of these senior staff will have a clerical staff person assisting with matters such as bill paying and benefit applications.

On the other hand, clients with straightforward finances and who reside in protected settings will be grouped into larger caseloads of 250.

We're also defining caseloads based on the geographic area or the facility in which clients live. This will make it easier for staff to maintain closer relationships with caregivers and to visit in person more often.

Taken together, the smaller and larger caseloads will give us an average of 150, compared to 250 at present. This restructuring will bring workloads to manageable levels so that we can provide better services to all of our clients. Not only will we give due attention to the financial management areas identified by the auditor, we will also strengthen our direct, front-line work with people and community partners.

As deputy minister, I am especially concerned that in some cases management apparently did not follow up when errors were identified through internal audits or complaints. To rectify this, we have strengthened the management structure at the office and introduced better management information systems. We have increased the number of supervisory positions in programs serving vulnerable people from eight to 17. The objective is to ensure appropriate monitoring and follow-up on the progress of people's situations.

In the guardianship area, the number of supervisors has increased from four to 12, with the addition of seven team leaders and a manager of quality assurance and asset control. The team leaders will assist the four existing managers in supervising casework, tracking correction of errors, providing day-to-day oversight, training, direction and support to staff on particular cases. In addition, we are recruiting team leaders for the investigations and estates program.

To provide feedback to management we are improving our internal audit and quality assurance processes. We're recruiting for three more positions in this area. This is in addition to the new manager of quality assurance and asset control who will be responsible for producing regular performance and case management reports.

To support field investigations to identify and secure clients' assets, a computerized logging and tracking system is under development. It will more effectively monitor cases and will be fully implemented by June 30. The office has also developed computerized reports that will help to speed up the 7,000 benefit applications and income redirections that must be processed for people each year.

Though we've made major changes in OPGT staffing and management, to sustain the process of continuous improvement we will rely on information technology, as almost every public and private sector organization today is doing.

Last summer, we brought in consultants to review the computer systems. They completed an analysis of business processes and recommended a series of technology enhancements to improve efficiency. As a result, the office is phasing in new technology, starting with a user-friendly tool for access to client data. Eventually, in future, we would acquire a case management system. This will ultimately automate a large number of transactions, eliminate duplication of tasks and trigger early identification of potential errors.

Let me highlight the progress we've already made by taking action to change process and procedures.

We've made changes to respond swiftly and decisively to urgent situations where people need our help. Each risk investigation is now assigned a priority level when opened. This ensures that those involving the highest risk are dealt with first. Progress is reviewed weekly by managers, and all cases open for 45 days or more are reviewed by senior management. If an investigation concludes that the OPGT should act, we move quickly. At present, 90% of guardianship applications have the necessary legal work begun within our two-day target, compared with 80% at the end of 1998.

In private guardianship cases, we are now meeting our target of processing applications within four weeks 94% of the time. That's up from 40% of the time during the audit period. Last summer we did a complete audit of every piece of real estate owned by guardianship clients and gave staff instructions to act. This audit will be repeated annually to ensure proper oversight of real estate data.

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In the area of estate administration, the auditor acknowledged the changes made in 1996 and the efforts to locate potential errors for files opened since then. He suggested, however, that the office should go back into the earlier files and do a similar review. We are working on this and have initiated searches which will be complete by the end of March on all estates worth more than $10,000.

Finally, the auditor also expressed concern about the notification of minors who become entitled to collect funds held with the accountant of the Superior Court. Although there is no legislative requirement to do so, we have implemented a notification process this month to improve our customer service.

In closing, let me return to my opening comment about the challenging nature of the work of the OPGT. Our staff are dedicated to the well-being of the people they serve, and by and large they do a good job of helping people attain the best quality of life possible in their circumstances. I am confident that with the additional resources and organizational and other changes I have described, the office will steadily improve the quality of service to the people it serves.

The Chair: Thank you very much. We have approximately 66 minutes left before the 12 o'clock recess so we'll divide it, 22 minutes for each caucus, and we'll start the day with the Liberal caucus.

Mr Michael Bryant (St Paul's): Mr Peters, you've said that the situation in the office of the public guardian and trustee has gone, over the course of the last 10 years, from very poor to poor. Can you just sum up briefly why that is and what's still poor about it?

Mr Erik Peters: Our main concern at the time was that we did the audit in 1992, and we found that action was taken only most recently to really start to improve it. There was a long period in which action could have been taken but I guess was not. It's gratifying to see that there is an improvement now in the error rate in the files. That is good, but the timeliness of actions-and the other concern was that where the internal audit had brought matters to their attention, action was not taken. Our main concern was the timeliness of taking effective action, both in disposing of assets, opening case files and doing the basic things.

Mr Bryant: So it sounds like there's an internal auditor and the internal auditor is not always listened to. But when you come along they listen because they know it's going to become public. Is there a problem there in terms of the auditor playing a "gotcha" role and internally there's really no effective audit taking place?

Mr Peters: Well, I hope that we're not playing a "gotcha" role, but we certainly hope that our report, as it was in this case, apparently, from what just heard from the deputy, was a catalyst for action. The concern was that the internal audit also should be a catalyst for speedy remedial action.

Mr Bryant: And it has not been to date?

Mr Peters: At the time when we did the audit we found many cases where they had bought matters to the attention of senior management and action was not taken.

Mr Bryant: Deputy Attorney General, I want to continue with this questioning about the timing of things. I know that you've hired 43 more front-line workers and added seven team leaders to the office. Was that a result of the audit report, or was that a result of the internal audit?

Ms Karakatsanis: We had identified a number of areas in which we needed to make improvements as a result of the internal audit. That resulted in us looking at better procedures for providing information to management, but also identified the need to proceed with not only using our current resources effectively but identifying the need for additional resources. That was approved early in 1999. We have been recruiting staff and that new organizational system will be in place by April 1.

Mr Bryant: My concern is that the internal auditor doesn't seem to be listened to, but if the auditor comes along, then in fact you get action. Are we supposed to believe that it's just a coincidence that 43 people were hired after the auditor's report?

Ms Karakatsanis: I'm sorry. The decision to hire the staff was made prior to the report of the auditor.

Mr Bryant: So it's just a coincidence.

Ms Karakatsanis: The internal audit function was created in 1996. As a result of the extensive audit done internally, we were able to identify problems. In some of those instances, management did not follow up as promptly as they should. I've indicated our commitment to ensure that doesn't happen again, with the addition of supervisory resources and management reports to ensure there is timely follow-up. These are problems that had been mostly identified by internal audit, and solutions were being sought at the time.

Mr Bryant: Staffing is not the only answer, increasing numbers, of course. This is probably a case study in that regard. We've had a 100% increase in staffing since 1992, yet the error rate under the auditor's report, by the office's own admission, was 33%, which as I understand it means a 100% increase in staffing but a very slight decrease in error rate. How do you account for that?

Ms Karakatsanis: The error rate as found by internal audit, which was 33% at the end of 1998, has since been reduced as of the end of 1999 to 22%. In fact, with those existing resources, we have looked at ways of making more effective use of them.

I've talked about the increase in supervisory capacity, the reallocation of workload to reflect the complexity and location of the people we served. I've perhaps not touched on some of the management reports that were introduced in 1997-98 and some of the other improvements as well, and I'd be happy to go into that in some detail.

Mr Bryant: But a 22% error rate, as you're reporting here, you're not accepting that? That's not satisfactory.

Ms Karakatsanis: No.

Mr Bryant: My understanding is the industry standard is 5%. Is that right, Mr Peters?

Mr Peters: According to the ministry, yes,

Mr Bryant: Right. So again, let me get back to this question. We have, I guess, now more than a 100% increase in staff resources with the 43 additional people, but the error rate seems stuck at somewhere between one in three and one in five. How are we going to get it closer to the industry standard? Surely just throwing more people at the problem is not going to do it.

Ms Karakatsanis: I understand from the auditor that the industry standard was obtained from ministry staff. We have made recent inquiries and in fact we are not satisfied that there is an industry standard from the inquiries that we made with trust companies.

The error rate has-

Mr Bryant: Which would mean there's another error, I guess, another error to add to the 22% rate: the error in terms of reporting as to what the industry standard is.

Ms Karakatsanis: As I indicated, our recent information is that there is no industry error rate standard. The improvement from 33% at the end of 1998 to 22% at the end of 1999 is a significant improvement and I believe reflects many of the improvements that were started during that period of time.

It's important to remember that the error rate does not reflect the percentage of transactions that were made in error. Our internal audit system reviews files that are on average 11 years old and that contain hundreds and thousands of transactions. If one or more error is identified, that is identified as an error.

As I indicated earlier, our goal was to have no errors and we are working toward that goal. The improvement that we have accomplished even over the last year is significant, and I believe we've laid the foundations to improve that even more.

Mr Bryant: Just so I understand the numbers, Mr Peters, is the 22% number in terms of the error rate something that's in your report or is that a subsequent development?

Mr Peters: The 22% is new. The 33% was in our report; it was identified. But when we talk about a serious error, we talk about the kind of errors that we highlight in our report, like a failure to get income entitlements and stuff like that.

Mr Bryant: Sure, and I do want to turn to that at some point, but more on this question. You said, and this has to be true, that a special kind of person is involved to deal with the issues that come into your office. If throwing people at the problem is not lowering the error rate, then perhaps it's a training issue. Is there anything different being done in the office in terms of training or education or otherwise that would try to help the people who work in that office fulfill that role of being that special kind of person?

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Ms Karakatsanis: I'll start by repeating that there has been significant progress in reducing the error rate and that the error rate does reflect very much a historical picture of cases that are in many cases 11 years old. I will ask the public guardian and trustee to detail the extensive training that is ongoing right now in the program.

Ms Louise Stratford: We have a very comprehensive training course for certainly the new staff that we've hired, and the staff that we have in place already receive regular training programs, information that's relevant to the work they do, as well as-

Mr Bryant: I'm sorry. I want to give you an opportunity to address the specific question, which is, what has happened since the audit in terms of changes in training? Have there been any changes whatsoever?

Ms Stratford: Since we hired the new staff, we have had a very comprehensive training program. Starting in November of last year there was a four-week, in-classroom instruction for the new staff to teach them the basics of the business and to give them all of the foundation information they would need. All of the areas that were covered through our own internal audits and by the Provincial Auditor and identified as difficult issues were addressed in the training to make sure they were aware of those problem areas and had the tools to fix them.

There is more training planned in March and April for the new and existing staff that will, again, highlight the problem areas, make sure they understand where they are, where there might be opportunities for these problems, and to make sure they know how they can resolve them and how they can meet the timelines that we've set for the various functions.

Mr Bryant: So there are new training programs, then?

Ms Stratford: Yes.

Mr Bryant: Why weren't they in place before? Why did it take an auditor's report to start these new training programs?

Ms Stratford: There has been ongoing training throughout the course of the program. There is a learning curve, though. There were a lot of new functions introduced in 1995 and 1996, and staff take time to become familiar with the new areas of the mandate and the new procedures that are in place to operationalize the program. That's why we say that when we're finding errors in the files now, they tend to be older errors, and that's how we've been able to reduce the error rate even without the new staff being on board, because our current staff, through the training that we provided and through their own experience, have been able to climb that learning curve and be much more effective in their performance now. So training is ongoing all the time and we have, as I say, a specialized training program for the new staff and to highlight the areas that we know have been issues for current staff.

Mr Bryant: Let me get to something I know is particularly troubling that comes out of this report, and that's the $13 million in assets belonging to these 1,300 former minors, now over the age of 25. Deputy Attorney General, is there a legal obligation on your ministry to contact these people?

Ms Karakatsanis: There is no legal obligation to contact these people. We have started a process of notifying those who come of age who are legally entitled to receive the money and who may be unaware of the existence of the account. That notification process was instituted in early February of this year. There is no legal requirement to do so. We are doing so to provide better customer service and in response to the issue raised by the Provincial Auditor.

Mr Bryant: I don't think these people are customers. I mean, the office is called the office of the public guardian and trustee. That would suggest to me that they are trustees. I don't want to get into the minutiae of fiduciary law, but that would suggest that they are a fiduciary and that in fact these are beneficiaries. If your office doesn't have an obligation to notify them, who does?

Ms Karakatsanis: We have, as I said, instituted a process to notify them. It is not because we feel we have a legal obligation to do so, but because we have chosen to do so.

Mr Bryant: What I'm saying is, why would you not have a legal obligation to do so if your office is the trustee?

Ms Karakatsanis: I'm sorry, Mr Bryant. We do not have a legal obligation to do so, but we feel that it is appropriate to do so and are now doing so.

Mr Bryant: Well, how are these people going to find out? If it's your assumption that in fact you're the public guardian and customer service office, then how are they going to find out that this money is there, held, I thought, in trust by your office for these people? How are they going to find out if your ministry doesn't take the position that there's an obligation to notify them?

Ms Stratford: Generally the minors are aware of the money because they have a guardian who has been appointed for them, in the event that it was litigation that led to the payment in, and the guardian would inform them about the payment. The parents may be aware and would inform the minors. Generally speaking, there is someone who knows. Most of the money that we have is claimed by the minor when the minor turns 18, if they're able to do it, if there aren't other conditions attached to their ability to claim the money upon reaching the age of majority.

Our function is to keep the money safe for the minor and to invest it appropriately so that there is some return to the minor at the time when they do come to collect the money.

Mr Bryant: This is what I don't understand. If there is an obligation to act in the best interests of the minor-which makes sense; that's what a trustee should do-surely the obligation carries with it a notification obligation. Other offices have an obligation to notify these people. You say some of these people have parents. You're assuming that the office takes a passive role. What about these 1,468 people?

Ms Karakatsanis: Four hundred to 500 notices are being issued each week, and by the beginning of April all cases will have received notices. In those cases where we don't have current address information, we'll obviously have undertaken the search but it may not yet be completed.

Mr Bryant: On what basis does the ministry take the position that it has no active legal obligation as the fiduciary to contact these minors?

Ms Karakatsanis: As I've already said, we have taken the position that we have no legal obligation to notify these minors, but we are now notifying them.

Mr Bryant: I'm saying why, though. Why? I've heard you say that you're going to, but why do you take that position? Why does the ministry say that they do not have an obligation to notify the minors?

Ms Karakatsanis: That is our legal assessment of the obligations involved. We have chosen, nonetheless, to proceed with-

Mr Bryant: Could you share that assessment with the committee?

Ms Karakatsanis: We have chosen to proceed with the notification. I would just be repeating myself.

Mr Bryant: So you won't share the assessment with the committee as to why you do not feel that you have that obligation?

Ms Karakatsanis: I'm stating what the legal opinion is, Mr Bryant.

Mr Bryant: So the answer is no.

Let's get to the delays. We have a case in which two years elapsed before the office became aware that a relative of one of the office's clients had misappropriated more than $100,000. What's now in place to guarantee that won't happen again?

Ms Karakatsanis: A number of improvements are in place since the last audit which we are confident will ensure that won't happen again. We have more staff. Their caseloads are more manageable. They have the time to not only follow up on the personal needs of the people they serve, but they have more time and more assistance in dealing with the financial and other issues. We also have more supervisory capacity. I've mentioned that we've increased in the area of property guardianship from four to 12 supervisors. We've instituted the new quality assurance and asset control unit. There are now more management information systems. In addition, as part of the management performance system each one of those supervisors will have as a part of their management performance contract the obligation to follow through and act on the reports and ensure that timely action is taken.

All of these efforts in providing better management information, more supervisory capacity, better training and more staff will have the effect of providing us with a better use of resources, more time to focus on people who need us and the financial transactions.

In addition, we have doubled our internal audit capacity and we do have, as I mentioned, new performance management monitoring in place, including the use of technology and logs, some of which will be ready by the end of June.

So there are a number of important systems in place that make me confident that we will be able to take more timely action and to follow up when errors are identified.

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Mr Bryant: I know you'd agree as a manager that sometimes to solve the problem you have to know how on earth it happened. There's one problem that was highlighted in the auditor's report which I know you'll be aware of: the failure to sell the house of a client who had been confined to a nursing home since 1994, despite repeated requests for the sale of the property from the client's out-of-town children. By early 1999, the house still had not been placed on the market and $23,000 in taxes had been spent in the interim. How on earth did that happen?

Ms Karakatsanis: There are no excuses for the incidents and cases that were highlighted by the auditor. We are confident, because of our internal audit capacity, that these are the extreme examples. They are not typical cases.

The workload realities at the time meant that when staff were faced with a choice of having to respond to an urgent personal need-someone is being evicted; someone needs medical attention; they need to be connected with some service support in the community-staff would respond to that direct human need and sometimes let the paperwork go. That's not acceptable. The measures I've outlined will correct that and these kinds of cases will not recur.

Mr Bryant: This particular case is quite a horror story. I'm wondering, in this particular example, is this an individual who was responsible for this or was this a result of the systems that were in place at the time? I understand that there are exceptions to the rule, but some exceptions are particularly egregious, and if you had somebody in the ministry who was embezzling millions of dollars, then you'd have to say, "Here's how it happened." In this case we're not talking about embezzling millions of dollars, but we are talking about somebody who was in a nursing home for five years when she in fact should have had the house put on the market. Was this an individual person? Or what happened in this case that would permit this to happen?

Ms Karakatsanis: I think I outlined some of the systemic issues and some of the workload pressures. Often there were different individuals who were involved in cases. As I indicated, often staff were forced to make choices between dealing with a direct urgent need and following through on some of the paperwork. I don't believe there was a particular individual who was responsible in this case. These are systemic issues that we have addressed by hiring more staff, by training them, by changing our processes and procedures, reallocating workload, and making more effective use of the resources.

The Chair: Thanks very much; we'll have to leave it at that. Ms Martel.

Ms Shelley Martel (Nickel Belt): Thank you for joining us this morning. I want to begin with the issue of minor children who are now 18 who are owed money, and I want to ask the auditor a question first.

Erik, is it your view, in the cases you reviewed, that those minors who had now attained the age of 18 or older were generally aware that they had money owed to them?

Mr Peters: Well, certainly there were T3s mailed out. That part of the trustee's duty was carried out, so I guess the income tax was complied with. What we found, though, is that on the T3s that were returned "address unknown" etc no follow-up action took place; they were just filed and that was accepted. To the extent that the T3s were accepted and addressed to somebody, somebody must have known, because the T3 records income on the assets held by the individual so that would be therefore known. But to the best of our knowledge, no action was taken when a T3 was returned "address unknown."

Ms Martel: So would it be your view that in order to deal with those, certainly there had to be more direct intervention on the part of the office to follow up and to make these clients aware they had money owing to them?

Mr Peters: Yes. I'm a little unclear still in my own mind on this point that there's no legal obligation. I happen to be, on personal matters, a trustee, and I know that I consider that a very serious obligation on my part, whether it's legally or not, to ensure that the people I act in trust for, who happen to be family, are getting the assets and know of their entitlements. So I'm not sure of the legality of the issue.

Ms Martel: Deputy, on that point, are you arguing before this committee that you feel you have no legal obligation because, in the legislation that this office operates under, it doesn't clearly state that there is an obligation? Is that your legal basis for saying you don't see that you have any kind of responsibility that's a legal responsibility?

Ms Karakatsanis: We have a legal opinion from counsel involved that we don't have a legal obligation to provide this notification. However, we have made the decision that we will provide notification, and we are providing notification.

Ms Martel: Before I get to that, when was the legal opinion obtained by the ministry with respect to this particular issue?

Ms Karakatsanis: I don't know when it was initially obtained. It was certainly reconfirmed at the time of the audit.

Ms Martel: I didn't hear your response to Mr Bryant's question, so I would ask if you'd be prepared to table a copy of that legal opinion with this committee.

Ms Karakatsanis: I'm stating the legal opinion that was provided to the ministry.

Ms Martel: I understand what you're stating. I'm asking if you would be prepared to provide a copy to this committee. No?

Ms Karakatsanis: The actual opinion itself would be subject to solicitor-client privilege. I am stating the nature of the opinion.

Ms Martel: OK. With respect to your saying that you are taking it upon yourself now to notify these minors who have now passed the age of 18, I want to get to that process. The auditor completed his audit in February 1999, essentially, and he has stated that in his document that we have before us. You are telling this committee today that in February 2000, a full year later, the ministry is finally doing what it said it would do in the auditor's report, which is to take some proactive action in notifying these clients. Can you explain to this committee why it has taken a full year before your ministry has finally responded to one of these concerns of the auditor, which was a major concern?

Ms Karakatsanis: I indicated a number of initiatives that have been implemented over the past year. In this particular area, we are relying on technology changes, and as a result of the Y2K freezes and the needs to work on Y2K, it wasn't until the freeze was lifted in February of this year that we were able to institute the changes and start the notification process.

Ms Martel: If I might, Deputy, you would have files where you would have T3 slips returned, and that wouldn't require any kind of Y2K or technology improvements whatsoever to at least start to go back to those T3s and find proper addresses for people.

I'm finding it hard to believe that nothing has gone on on this merely because of technology. There must be other information in the file which would have allowed you to start to contact some of these people to find them.

Ms Karakatsanis: The technology does allow for the most effective way in which to provide those notices. There is a project team dealing with the existing account holders. Where further search is necessary, that search is being undertaken. As I mentioned earlier, all the notices will be out by April 1, and all searches are to commence by that date.

Ms Martel: Maybe I can ask this in another way. What is it about the technology that is so special that it required a full year of delay before it was in place to contact these people? What is so special about what is happening that these people couldn't be contacted in any other way until now?

Ms Stratford: The decision was made to embark on a full-scale notification process last summer. At that time, you're right, there may have been some indication that in some cases we didn't have current addresses. But rather than go out piecemeal, just on the very bare information that we had, we thought it would be much more efficient and be more fair to everyone if we could undergo a full program of notification. In order to do that, we need to be able to tag the accounts where the minors have turned 18 and track where they are in our systems, look and see whether they are entitled to a payout at that time, because sometimes there are other conditions. That required looking at our technology and making some refinements so that we could get the reports issued in that way and so we could get that information. That's what there was a delay in getting.

Ms Martel: Can you tell us what happens now in terms of this project? You'll send notification out; you expect that that will be done by April. What will be the follow-up on the part of your office with respect to that notification?

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Ms Stratford: It will depend on what the results are. Obviously, if the address is current, then there's no problem; the minor will have been notified. If we find that we don't have a current address, if our notice is returned, we'll have to embark upon various kinds of searches to try and track down where that person has gone.

Ms Martel: What does the notification include? What are you saying to potential clients?

Ms Stratford: I don't have a form of it with me, but we're basically telling them of the existence of the account, the balance of the account and the paperwork we would need in order for them to get a payment out.

Ms Martel: If you have a significant number of people who reply positively, what will be the effect on your staff resources to then disburse these assets?

Ms Stratford: We'll have to see what the volume is, but we recognize that this is a priority for us and we will ensure that we put in place the resources to provide a timely kind of response to any requests that are made.

Ms Martel: How many staff do you have targeted for this particular initiative?

Ms Stratford: We have eight staff who work in the accountant's office and we have many of them deployed to this task. I'm not exactly sure how many you might say are exclusively deployed to it, but there are others in the office in the finance area whom we can call upon to assist the accountant function, and we have done so in the past, if there are workload issues there.

Ms Martel: How many people are you notifying?

Ms Stratford: We're sending out about 400 or 500 notices a week. We have at this point about 5,000 accounts that we are providing notices on altogether.

The Chair: I'm sorry, 5,000 accounts in what? I missed that.

Ms Stratford: Accounts that we have where the minor has turned 18. That was as of December. As of now we have 6,140 accounts where the minor has turned 18 and we have accounts for them.

Ms Martel: What is the total asset worth for those 6,140 accounts?

Ms Stratford: It is $65 million.

Ms Martel: That's a lot of money for a lot of people. That is far higher than anything that was identified in the auditor's report. I'm having trouble understanding the difference between what the auditor reported on, which was in the order of $13 million for about 1,200 clients, and this figure. Have I made a mistake in my question?

Ms Stratford: I think the auditor was looking at age 25 and over at an earlier point in time, and that was that smaller universe.

Mr Peters: If I may explain, the 25 seems to be in certain trusts a magic date, or 21, but sometimes people have left the 25. Many people have; that's why we took that as the cut-off.

Ms Martel: In actual fact, for everyone over 18 who would be entitled to something, or partial entitlements, we're looking at about $65 million.

Ms Stratford: Right. Some of those may not be entitled. That's the gross amount of money we have on account for minors generally. As I said earlier, there may be some conditions attached to the payoffs. There may be certain things they aren't able to satisfy and therefore they can't get the money immediately. But that's the gross amount.

Ms Martel: If some of those people start to come forward, you will need to hire some staff to deal with the situation.

Let me follow up on two other commitments that you gave the auditor to see where those are as well. The second one had to do with the pre-1996 cases for locating heirs. The audit showed that in the cases after 1996, you had contracted with outside firms to locate those heirs, but virtually nothing had been done on the cases pre-1996. You gave a commitment to the auditor to undertake a special project to determine how you could improve on conducting these searches for the pre-1996 files. Can you tell the committee what's happening with that special project?

Ms Stratford: We have a group of files open from 1990 to 1995 where previously we had not undertaken heir searches. There are about 450 files that are worth over $10,000 in that category, and for every one of those files we will have initiated an heir search by the end of March of this year to see if there are heirs who are entitled to make some claim on those monies.

Ms Martel: There are 450 files, the value of which is?

Ms Stratford: Each of which is worth over $10,000.

Ms Martel: What about the cases where you have a value that is less than $10,000 but it is a pre-1996 file? What are you doing on those?

Ms Stratford: At this stage we haven't planned a similar kind of initiative, but we are prepared to look at that as the second phase of our exercise.

We have to consider, in doing an heir search, whether the cost of the search is going to make the whole search exercise worthwhile. If it is going to be an extensive search and a costly one, then of course the value of the estate is relevant, because the estate would be bearing the cost of the search. So for a very small estate it may not be worthwhile to undertake the search. After the search there may be nothing left of the assets that were in there in the first place.

Ms Martel: How do you base the cost to the estate? What is it based on, a percentage of the entire assets?

Ms Stratford: We use internal staff to do searches to the extent that they can. We also have sometimes had to contract with genealogists if the search is more extensive. We pay them an hourly rate, which is charged back to the estate.

Ms Martel: I notice there was a change from a certain percentage of the estate being requested to an hourly rate. Has that saved money for heirs or has it cost them more? Do you have a sense of that?

Ms Stratford: I think you're referring to heir tracers and their practice of charging a percentage, which is why we try to find the heirs ourselves before we actually apply for administration of the estate, because at that point the heir tracers become aware of the file, and it is their practice to charge a percentage, often a very large percentage. In order to try to protect the inheritance, we try to undertake the search, as much as possible, internally ourselves or through our own privately contracted genealogists who charge by the hour instead of as a percentage. We've found that to be much more cost-effective.

Ms Martel: But with respect to the post-1996 files, I understood that you were contracting with outside firms to locate those. Are you doing that in all cases, and continuing to do so?

Ms Stratford: Only where we aren't able to find them ourselves internally or through our genealogists. An heir search using heir tracers is really the last resort.

Ms Martel: For the 450 files that you are looking at now, how many staff are dedicated to that operation?

Ms Stratford: I'm sorry; I don't have the exact number. I can find out.

Ms Martel: OK. And how many files would be left that are less than $10,000 where there might be no activity ongoing at all, pre-1996 files?

Ms Stratford: I don't think I have a number for you. I'm sorry. I can find out.

Ms Martel: Can you tell the committee, of the 450 files with a value greater than $10,000 in terms of the estate, what is the total value of the money that's outstanding for those 450 files?

Ms Stratford: I just don't know that either at the moment but can certainly find out.

Ms Martel: Let me just be clear on where you are in this process. If I understood you correctly, you have started this process and you hope that by March you will start to have some initial results. Is that correct?

Ms Stratford: Yes. We're planning to have initiated searches on all the files by the end of March. Then it's a matter of receiving feedback from where we are in the search to that extent, and heirs or potential heirs coming forward and their ability to prove their claim.

Ms Martel: When did you start this process?

Ms Stratford: We began the process last October, I believe.

Ms Martel: This was another instance where the auditor reported in February and the ministry had said they would undertake this particular initiative, and it would seem it was about a six-month delay to get that underway as well. Was this another technology problem?

Ms Stratford: No. We had certainly recognized that there was a universe of files for which we hadn't undertaken thorough heir searches. It was a matter of prioritizing work and using the resources we had according to those priorities. With heir tracing, you are obviously going to have better results the newer the estate file. The fresher the history, the easier it is to locate and identify heirs. So we began with the newer files and concentrated on those because we thought we would get the best results from those. It was only after we were able to get that workload up to a current status that we were able to then go back and look at the earlier files.

Ms Martel: I want to back up, because in the auditor's report he made it clear that since 1996 you were contracting with outside firms and that work was proceeding. But at the same time, when the auditor did some work, they looked at a number of cases that were older than 10 years where it seemed that nothing had gone on. It was at that point that the ministry made a commitment to look at the pre-1996 files. As I understand it, there was at least a six-month delay between the end of the auditor's work and the ministry's commitment to start the work on the pre-1996 files and before that work actually started. I'm not understanding you telling this committee that you were dealing with some of the other cases; we knew that at the time the auditor made his report. That was not something new that was going on in the ministry.

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Ms Karakatsanis: I referred to quite a number of procedures and processes and management reports and organizational changes and the recruitment of new staff and training. These are all initiatives that have been occurring over the last year and two years. Obviously, we can't do all of those things at once. We have been doing all of those things over the last number of years and implementing them as we were able to in the most effective way possible.

Yes, this was a priority. It was something that was begun. But we were also working on implementing other improvements and other changes to the program. As a whole, there was immediate response in many different areas.

Ms Martel: Was it a staffing problem, Deputy, that staff couldn't be allocated for this particular project?

Ms Karakatsanis: Throughout last year, the office was involved in determining how to reorganize, what positions needed to be recruited, recruiting for those positions, providing training for those positions, examining the process and procedures in a number of cases. Risk investigation, for example, is an area which would receive priority. In that area, there have been changes made to the process so that investigations and referrals, as they come in, are prioritized. The higher-risk cases are acted on immediately.

As the office has looked to implement many of the changes, it's had to make choices about which ones needed to be acted on first. As many of the improvements have been rolled out, they've been done so with regard to the other changes that were happening as well.

Ms Martel: There is an issue as well of compensation fees that would be paid once the heirs are located. The auditor certainly made it clear that in a number of these cases people would be assessed fairly significant fees through no fault of their own because there had been a delay in dealing with these cases. Is the office going to waive the compensation fees for the pre-1996 files once you start to process them and track down heirs?

Ms Stratford: Where we think there's been an undue delay in dealing with an estate, we do waive our compensation fee. The various files will have to be assessed to determine whether we think there was undue delay in those cases. If so, then we would consider waiving compensation.

Ms Martel: How do you describe undue delay?

Ms Stratford: Depending on the circumstances of the file, it would vary. It would depend on the complexity of the file, what actions had been taken, what actions were in the hands of third parties, what kinds of things we had to do to follow up. It really does depend.

Ms Martel: Generally, if there was a lack of staff to make this initiative a priority, and most pre-1996 files were sitting without action, would that be a case where there was undue delay?

Ms Stratford: Possibly.

Ms Martel: You can't tell the committee that right now all of those cases where virtually nothing was done before 1996 will in fact have that compensation waived. You're still going to look at it on a case-by-case basis as you locate the heirs.

Ms Stratford: That's right.

Ms Martel: The other project that you gave a commitment to the auditor on had to do with the distribution of funds once you found someone. The auditor noted that in many cases at least one third of the files had delays of more than two years. There were more excessive delays for other files as well. You said to the auditor in February that you were going to retain some temporary help to clear the backlog of the older files. Can you give the committee an idea of what's happening with that initiative?

Ms Stratford: We have set up a special project to deal with those files. We have made some very good progress in complying with our timelines for distribution. Of the older files that we had on hand that were ready for distribution, by April we will have distributed all of those estates. Estates that we have on hand for further follow-up will have been actioned for follow-up.

Ms Martel: Can you tell the committee when this project actually started?

Ms Stratford: We introduced a number of procedures in 1998 to make the entire distribution process generally more efficient. We have improved in our timeliness since that time. We have recruited some additional estate officers to assist in the front-line work in distributing estates. At this stage the backlog project which was commenced last summer is making good inroads into reducing the backlog, to the point where the estates that are ready to distribute will be distributed by April.

The Chair: This will be the last question, Ms Martel.

Ms Martel: How many estates are we dealing with?

Ms Stratford: At present there are 43 files that have been pending for a year or more. Those 43 will be cleared by April.

The Chair: Mr Martiniuk.

Mr Gerry Martiniuk (Cambridge): I'll lead off, followed by Mr Maves and Mrs Munro.

I'd like to deal with the notification of minors. I'm curious; is this a new initiative on the part of the ministry? You've already stated, I believe, that the legal opinion of the ministry and its solicitors is that there is no legal obligation, but the ministry has chosen to now notify minors that money is being held. Is that correct?

Ms Karakatsanis: That's correct.

Mr Martiniuk: And not only notify them, but in the event that letters are returned, to attempt to trace them in order to notify them.

Ms Karakatsanis: That's correct.

Mr Martiniuk: Was there a time when that new policy was in force in the past?

Ms Stratford: A notification policy?

Mr Martiniuk: Yes.

Ms Stratford: No.

Mr Martiniuk: I see. So for instance, when Ms Martel's government was in power, from 1990 to 1995, did their ministry notify minors, as we are doing at the present time?

Ms Stratford: I'm not aware of any such policy.

Mr Martiniuk: OK. And when the official opposition was in power up to 1989, was there a policy of notification at that time?

Ms Stratford: I'm not aware of such a policy.

Mr Martiniuk: Thank you.

The Chair: A very effective cross-examination.

Mr Martiniuk: I think I knew the answers.

I would like to deal with the 1996 internal audit. I'm just curious. I assume that the internal standards had been created prior to the 1996 internal audit, or were they created afterwards?

Ms Stratford: Performance measures were set officially in 1998, in the office. There had been various procedures and policies that had different timelines recorded in them that we might consider as rules of thumb and that kind of thing, but official performance measures were not set until 1998.

Mr Martiniuk: So the 1996 internal audit could not deal with them, obviously.

Ms Stratford: That's correct.

Mr Martiniuk: Could you elaborate as to the procedure that was followed in 1998 in determining these performance standards-the use of other institutions as comparables, their standards if they were available-and who actually established the standards?

Ms Stratford: We did a great deal of consultation to try and establish the performance standards. However, we did have difficulty with respect to particular standards for public trustee offices like ours, because there are no other such offices in the country that had standards then or that have them currently. Some are talking with us about developing their own and hoping to learn from our experience, but we weren't able to draw upon any precedents from like operations in the country.

So we could only look to things that were kind of similar operations, social service-type operations, those kinds of things, to give us some guidelines and ideas of what we might consider reasonable, talking to investigators in other kinds of programs to see what might be reasonable, for example, as an investigation standard, or just using common sense in some cases to try and determine what might be a reasonable and adequate standard in the circumstances and then just going from there.

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We did set our standards quite high. We wanted to be sure that the standards we had set were things that staff would strive for. We knew that we wouldn't achieve them all immediately. We set targets that would incrementally move us more towards the standards we had ultimately aimed for, but clearly we were looking for a program of continuous improvement towards those standards.

Mr Martiniuk: You can help me with some confusion in my mind, because if there were no direct comparables, therefore the standards were in effect arbitrary in the sense that they were unique to this institution. We've heard discussions regarding a management standard of 5%. Could you explain what that management standard is, and when you established your standards, did you have cognizance of the management standard of 5%?

Ms Karakatsanis: Perhaps I can answer. The 5% was a reference to a trust industry standard for errors. Recent inquiries have indicated that trust companies do not have such standards. They don't measure error rates and they don't have a standard in place.

From our perspective, our goal is to have zero errors. That is our goal. What we have done is set performance measures for the timely action taken on issues and measure our progress in steadily improving the timeliness of our actions. Those measures are showing steady improvement.

To take a few examples from the Provincial Auditor, in terms of client visits, we have now visited 48% of our clients in the last year, which is double the year before. In terms of processing private guardianship applications within the four weeks: At the time of the audit, we were achieving that standard 40% of the time and now we achieve it 94% of the time. The initiation of legal proceedings within two days: There were only two cases this past year where we didn't meet that two-day standard-one was three days and the other was seven days.

Performance standards are a way of measuring progress to our goal. Our ultimate goal is perfection. That may be unrealistic, but we don't want, and we don't believe there should be, any errors. I just want to emphasize that we are the only public guardian-trustee in this country which has established performance measures and which measures its progress against those measures. That's a very important tool of accountability and it's one we believe in.

Mr Martiniuk: I'd like to key in on errors, because "error" is a nebulous word. When you're measuring errors, how do you qualify those errors? We're talking about a quantitative number of errors, but are all the errors of some severe impact in that the estate-I'm talking about the money-would be adversely affected, or are there errors that would not lead to a pecuniary impact on the estate?

Ms Karakatsanis: It is a problem with the way we are measuring errors. All errors are counted as errors, whether they ultimately have a direct impact on the well-being of a client, whether they're a delay in a payment or something that has more serious impact. Every activity, every transaction on files that are an average of 11 years old are scrutinized. If there is one error, then we count that as a case on which there is an error, and that might be one error out of hundreds, often thousands, of transactions.

Obviously, the impact of errors varies. In many cases, the nature of the errors relates to the timeliness of action taken. In the past, there have been some extreme examples which we are satisfied we are eliminating. But we need to look at the way we measure errors to do a better job of defining those that have a significant impact on the well-being of the people we serve.

Mr Martiniuk: One last short question. We've heard that some standards may have been modified since their inception in 1998. Can you tell me who would do the modification? Is there a committee, and how often would they meet and consider the standards in place?

Ms Stratford: We have a senior management committee in the office which represents all the business areas in the office. We meet biweekly and we review those performance measures every quarter. We have an internal reporting system on the measures that reports quarterly. At that point we look and see whether the results we're getting are, first of all, satisfactory, whether there are some improvements we need to make. But we also look at the measures themselves to ensure that we're measuring the right things, to ensure that the things we intended to measure are being captured by the particular measure we've chosen.

In some cases we have found that we need to describe it a different way to really capture what we're after. In some cases we have determined that the measure is incorrect, that it isn't an appropriate measure, and now, with the benefit of experience and having heard from the various managers and their experience talking to the front-line workers and how it actually works on the ground, we have determined in some cases that we need to make adjustments. So in those cases, we make the changes that are needed.

We also have an external advisory committee, the guardianship advisory committee, which is composed of external experts and people who work in the area of the clients we serve and stakeholder group representatives, people from the college of nurses, people from the OMA, others who would have interest and experience in the area. Where we have issues about what our measures should be, we can take them to that group and ask for their advice as well. As we've said, it's difficult because there don't seem to be really good comparable measures available externally, but we're certainly interested in people's thoughts and feedback on what we do have. So we have a regular review internally and we have the external potential for review as well.

Mr Bart Maves (Niagara Falls): Just a question for clarification off the start. Deputy Attorney General, how long have you been in that position?

Ms Karakatsanis: Just a little over two years.

Mr Maves: Ms Stratford, how long have you been in your position as the public guardian and trustee?

Ms Stratford: About 14 months.

Mr Maves: The first question I wanted to ask is going back to some of Ms Martel's questioning, when she was talking about finding people, heirs and minors. There's one thing that I find interesting: that there seems to be difficulty in locating people. I wonder what kind of access to information you have from Revenue Canada, the Ministry of Transportation, the Ministry of Health and so on and so forth. I would think that to find an 18-year-old I would simply call the Ministry of Transportation and ask for the person's address. It seems that maybe that's not the case.

Ms Stratford: I don't have the answer for you of exactly what our procedures are. I'd have to talk to staff and find out exactly what avenues they pursue. I don't want to mislead you by guessing, so I will have to find that out.

Mr Maves: At the Ministry of Community and Social Services we've got reciprocal agreements with credit bureaus, with Revenue Canada-we never had them before; we have them now-with the Ministry of Transportation and so on. I can't imagine, if we have them, that your office wouldn't also have them, and therefore locating those people should be easy, I would think. I'm happy to have you follow up with that, unless you have more on that.

Ms Karakatsanis: No. Obviously those are areas that we would pursue. Those sources of information subject to any privacy concerns are areas that we would look into to assist us in locating minors or heirs.

Mr Maves: I can't imagine there being a privacy concern when you're trying to locate someone and give them money that is their money.

You talked about some of the cases that the auditor identified and that Mr Bryant talked about, and you said they are extreme cases. I accept that some of those cases that have been publicly highlighted were extreme cases. What I want to know is, did you comprehensively review these cases after they were brought to light?

Ms Karakatsanis: All of the cases that were highlighted by the Provincial Auditor have now been examined and resolved.

Mr Maves: My next question is a little more difficult for you to answer, and I apologize for that. What kinds of corrective measures have you taken? Have there ever been employees dismissed over some of these cases or is it just, "We're going to retrain them and hope it never happens again"?

Ms Karakatsanis: The problems that were outlined were based on systemic problems in the program-their workload pressures. As I indicated, where staff had a choice between dealing with often daily crises and personal needs of clients, those took precedence to the financial transactions and paperwork that was required.

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The new staff that's being hired is resulting in a lower caseload, a more manageable caseload. In addition, we have reorganized the way in which we allocate caseloads to ensure that it does group together cases by complexity, by location and by where the people reside in the institutions.

As part of the overall accountability of the program for following up on errors, we have, as I mentioned, new supervisory capacity. It is going to be in the performance contracts of all the new supervisors, and existing ones, that there is an obligation to monitor and follow up. There will be accountability in that way.

Mr Maves: I appreciate that. I appreciate some of the steps you've been taking since the auditor came back. I appreciate that you're bringing in performance measures. I think they're absolutely necessary.

I take it from your answer that there hasn't really been any turnover as a result of some of those cases that were unveiled. It doesn't sound like there's much.

Ms Karakatsanis: There actually has been turnover in the office, but-

Mr Maves: Well, as a result of those-

Ms Karakatsanis: No, my understanding is that the problems were systemic in nature and that there was no individual staff member who was involved in any one of the particular cases. That's my understanding.

Mr Maves: It's hard to understand how no individual employee could have been involved in any of the cases. Surely some of them had responsibility for handling some of these cases.

Ms Karakatsanis: Yes.

Mr Maves: So obviously there were individual employees. Have any of them-

Ms Karakatsanis: Oh, yes. There were individual employees; I didn't mean to suggest that there weren't. It varies. It's not always the same employee who deals with any particular case. And as I said, caseloads were such at the time that staff focused on the crisis situations, the personal needs, sometimes to the detriment of their financial needs.

Mr Maves: Has anybody who may have been identified as having some human error involved in some of these poorly handled cases-I know you've got some more management and supervisory positions. Have any of those people been promoted, to the best of your knowledge?

Ms Karakatsanis: I don't know the answer to that question.

Mr Maves: OK. The reason I'm asking some of these questions is that my experience with bureaucracy quite often is that when the Provincial Auditor will find errors or glaring mistakes over the years, not just in your department but in many departments, I end up finding out that the people who were responsible end up getting promoted. I always think that's somewhat astonishing.

The Provincial Auditor has said, after he did your review, and I'll quote him from a newspaper article, "It's not just the numbers"-when we talked about the new employees-"it's also the kind of people they have engaged. Are they good trust administrators?"

My question is, when you went out and hired 43 new people, what were the key qualifications that you looked for in those people?

Ms Karakatsanis: The public guardian and trustee will answer that question directly.

Ms Stratford: There were a number of skill bases that we were looking for. We were interested in seeing experience in like kinds of operations. We were looking for people who had some education in the area. We were looking for people who had the ability to communicate, analyze and problem-solve. We were looking for the ability to work in the various areas that we have, because the client representatives perform a number of functions. There is a financial component to the job. There is also, as you've heard, a social service kind of component to the job. So we're looking for a unique person who can perform both of those functions, who can not only deal with the finances but also have enough of the social skills and the ability to empathize and to understand our client base so that they could do both sides of the job, the financial and the social service.

We were looking for a very unique person and we were able to attract a large number of applications for the positions and to select people who we think were uniquely qualified for the work.

But it is a very broad mix of skills and we were very mindful of the fact that we needed to hire people who did have the background or the potential to be the type of client representative that we want to have in place to serve our clients the very best that we can.

We're quite satisfied that the candidates we attracted and interviewed did have those credentials, and we feel the people we ultimately selected do meet the qualifications that we were looking for for those positions.

Mr Maves: Chair, just because I know the auditor was concerned about this, and I share that concern, I'd like to request at the end of our proceedings that we request from the office of the guardian and trustee maybe some copies of resumés of people they actually hired into those positions. I'm perfectly happy for them to black out any parts that would identify people. I would like to satisfy in my mind the auditor's concern about the type of people who have been engaged to continue on in this.

The Chair: Is there any problem with respect to that request?

Ms Karakatsanis: Perhaps we could provide the job applications and qualifications which are listed in there. Would that serve to highlight the qualifications we were looking for in the recruiting?

Mr Maves: I would like to see if the people who were hired were suited for it. I don't want to know any names or anything like that; I'm just curious as to that component.

The Chair: We can discuss that later.

Mr Maves: I'm happy to discuss that when we go in camera. That's fine.

The Chair: That's the 22 minutes, Ms Munro, according to my watch anyway. It's 12 o'clock now. We'll recess until 1:30, because there are some more questions that members have. The hearing stands adjourned until 1:30 this afternoon. Thank you.

The committee recessed from 1157 to 1333.

The Chair: I call the committee to order. We'll start with a new round of questioning from the official opposition. I'm proposing that we go in the same rotation as this morning and that we limit the questions to 20 minutes at this stage. Then we can see what we do after that.

Mr John C. Cleary (Stormont-Dundas-Charlottenburgh): I know that we heard a lot here this morning about new staff and trained staff. I would just like to know how your number of staff compares to 1990.

Ms Karakatsanis: I don't have that information. I can tell you that in 1993-94, there were 207 staff. Last year there were 269 and this year there are 319 funded positions. I don't have the earlier year that you mentioned.

Mr Cleary: Could you get that information to us?

Ms Karakatsanis: Yes. It was for what year?

Mr Cleary: I want to know how many staff you had in 1990.

Ms Karakatsanis: OK.

The Chair: Could you pull the microphone a little closer to you, Deputy, please?

Ms Karakatsanis: I'll pull my chair in.

Mr Cleary: My other question: You said there are 6,140 accounts and there is $65 million. Where is that money right now?

Ms Stratford: That's on account with the accountant of the Superior Court, which is a program that we operate.

Mr Cleary: You have control of that money right now?

Ms Stratford: Yes, we do, and we invest it in accordance with the investment policies that we set in the public guardian and trustee's office. We set those policies in conjunction with our investment advisory committee, which is a committee of external experts who advise us on what kinds of investments would be prudent for the money that we hold in our various accounts.

Mr Cleary: Where does the interest on that money go?

Ms Stratford: We credit the interest to the accounts of the people for whom we are holding the money.

Mr Richard Patten (Ottawa Centre): The auditor should take a look at Air Ontario. That's twice in two weeks I've been late. I missed your presentation and the first round of questions, except the last part of that, so you may have addressed this question. The auditor's report identifies a high number of negligence claims, which I presume to mean that those are court challenges or legal challenges. How numerous are those?

Ms Stratford: In 1997 there were seven claims; in the 1998 fiscal year there were eight.

Mr Patten: Were they settled?

Ms Stratford: They were.

Mr Patten: If I might just clarify with the auditor, when you say "negligence claim," that's what we're talking about? These would be legal proceedings?

Mr Peters: Yes.

Mr Patten: There were examples of situations where, because of the handling, some of the proceedings went awry. I wonder if you have a protocol or a set of procedures that prioritizes, for example-I won't identify the specific claim, but there was an instance in which someone actually had considerable money in a bank account and yet the guardian's office was proceeding with selling someone's furniture prior to liquidating any assets in the bank for tax bills that had come in from the city, and these were relatively small amounts. Have you addressed that sort of issue? In other words, what would be your approach in identifying what you do with assets that may have to address certain liabilities?

Ms Karakatsanis: I have addressed some of these issues with some of the other members of the committee, but I'd be happy to address your question.

First of all, I would like to make clear that we take very seriously the issues that were raised by the auditor. We have implemented some measures that are already showing improvements and have laid the foundation for more improvements in this area. We are absolutely committed to correcting that.

There were at the time issues around caseload and the amount of supervisory staff who were available to take corrective action once errors had been identified. We have improved this by adding 43 new staff to the office. All of those positions will be filled as of April 1. There has been recruitment over the past year.

The increase of supervisory positions in this area of property guardianship is from four who were in place at the time to 12 now. Many of the procedures and policies have been reviewed. They are being constantly updated. There are management reports that highlight when certain actions should be taken and when it appears that someone is not receiving the income that they should.

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The increase in management supervisory capacity, increased training, particularly focusing on the areas identified in the audit, the reallocation of workload and caseload will help us to have more effective use of the existing resources as well as to allow us to draw on the availability of the additional staff.

The caseload has been reallocated in a such a way that those complex cases where people have assets, where they're in the community, where there are legal issues or where there are other factors that make them a complex case, those are being grouped together with relatively small caseloads of 95 and given to very senior client representatives who will be assisted by staff. By being able to focus and provide smaller caseloads in those areas where there are assets that need to be tracked and dealt with and where there is more complexity in the cases, there will be more time for the client representative to spend on those cases. In addition, they have now been grouped geographically and by institution, which allows the staff to be able to visit more frequently and to deal directly with the caregivers in those institutions.

We have enhanced our internal audit capacity. We have created a new service: quality assurance and asset control unit. In the past year there was an audit of all real estate that is held and detailed instructions were given. The audit capacity, the quality assurance unit, will be issuing management reports that indicate where action is necessary, and it will be part of the performance contract and the performance expectation of all staff that corrective action is taken.

Those are just some of the improvements that we have been implementing, and there are more. In a couple of areas where we think there is particular risk, and the risk investigations is a good example, we have revised the process to ensure that priority is given to those cases that have higher risk so that they're dealt with first. As well, we have increased the number of investigators by 30%. There is an automated tracking system that's being developed and will be implemented by the end of June. We are the only province that has performance measures, so we're the only province where the public guardian-trustee has performance measures.

Mr Patten: Given your experience-

Ms Karakatsanis: So we can improve in those measures. If I can perhaps just point specifically to those examples that were highlighted in the audit, I can give you some comparisons with today.

The processing of private guardianship applications within four weeks: We were meeting that standard 40% of the time. We now meet it 94% of the time.

Legal proceedings being reviewed and initiated: We used to meet that within the two days' period, commencing the work. We used to meet that 80% of the time. It's now 89% of the time.

The 90-day file review, which we were only achieving 60% of the time, we are now meeting 82% of the time and, effective April 1, there is an enhanced and more expanded 90-day file review that is being implemented with the new staffing structure.

Visits have increased from 25% to 48%: We visited twice as many of the people we cared for last year than previous years.

So the performance measures themselves I think indicate substantial improvement in those areas that were highlighted by the auditor.

I don't want to leave this without acknowledging the concern we have for the issues that were raised, and I want to indicate that we are committed to rectifying them.

Based on our internal audit-and we have audited many files; in the past year alone, we have audited fully the 888 files-we're satisfied that those examples are not typical. They are extreme cases, and we are committed to ensuring that they don't happen again.

Mr Patten: OK. I have three very short questions here. Based on your experience and your review and the establishment of your performance standards, have you identified a particular set of procedures-in other words, if you have to liquidate anything to address liabilities, you deal with cash first rather than property, that every effort is made to find or concur or discuss with relatives of the individual concerned any possible-you know, whatever those procedures are. I'm looking at whether you have a set of procedures, because some of the mistakes that have happened in the past have tended to be, "Why would you do this rather than this when there are assets over here?" that there are liquid assets, or there are situations of taking many years to place a house on the market or certain assets etc.

I don't want a long answer. I'm just wondering, have you established now a particular approach? I'm assuming that these investigations you have are all in-house, or do you have some of these sent out to private consultants to manage?

Ms Stratford: I'm sorry, the last part I didn't quite hear. You're asking about investigations?

Mr Patten: Yes. Are the investigators internal?

Ms Stratford: Yes, internal. We have investigators on staff who carry out the investigation.

In answer to the earlier part of your question, we certainly do have procedures that are followed in determining how to manage the finances of one of the people whom we look after. Our mandate is to act in the best interests of the people we serve. That would include, in the area of their finances, making sure that the decisions we make make the most sense in the circumstances. So certainly if there are assets that can be easily liquidated to meet the client's needs, we would turn to those assets before we would look at real estate and other assets, unless it's been determined that the client has no further need, for example, of real estate.

If there are family members around who are willing to be involved at least to the point of consultation, even if they won't be involved in taking care of the person's finances, then we would consult with them and certainly consider their views on subjects like what kinds of assets to liquidate and how to go about managing that person's finances.

Mr Patten: You talked about increasing visits and you've somewhat divided up your caseloads on a regional basis, or however that breaks out. Is that handled through some of your regional offices? Is this now a regionalization of the program? Are there actual people being dispersed to areas or is it being handled by some of your AG offices in different parts of the province?

Ms Stratford: We have a number of regional offices. We also have investigators who are based centrally. So there are some investigators in the regional offices and they would handle the investigations in that area. There are client representatives in every regional office, so the clients in that area would be served by the client representatives in that area. We also have treatment decision consultants in each of the regional offices who serve those clients who require treatment decisions.

Mr Patten: Before I pass it over to my colleague, I'll be interested to see whether the increase in personal contact visits etc will be supportive and helpful in your program. I suspect it will, and therefore I find it somewhat ironic-and I know this wasn't your decision, either of you, because you weren't in the office at the time-that the family support program, which also has a high degree of necessity for personalization or personal interface, where possible, with extremely sensitive circumstances, has been totally centralized and has taken away the element of some of the regional offices, which I certainly hear about in my office. That's just a comment. You may or may not want to react to that.

Ms Karakatsanis: I'll react to part of it, if I may. In terms of the social work and the personal support we provide to many of our property guardianship clients, many of their needs relate to their day-to-day living decisions, so if they need emergency medical treatment or if they need new living quarters or if there is any kind of personal crisis, that's part of what we do to respond to their needs. About a third of the time of our client representative is spent on dealing with those direct human needs of the clients, particularly in those cases where the clients are in unregulated settings or are in the community. These are people who are challenged in many ways and who have special needs, so particularly in those cases we do feel it's important to visit them.

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I have to say that when I talk about the number of clients that we visited, I'm not including repeat visits. There are some clients who have very many visits. We're not including visits by members of the staff other than the client representative. There are some clients who are in very regulated settings whose financial affairs are very simple, where a personal visit is not absolutely essential to the management of their financial affairs. Other provinces-

The Chair: You've got four minutes left.

Mr Bryant: We're willing to concede that point. I'm going to have no time left unless I go forward.

Ms Karakatsanis: Just very quickly, other provinces didn't have similar policies for visiting. They're just slowly now coming to that.

Mr Bryant: Excellent. Getting back to this legal obligation, my concern is this: I understand that you're now notifying minors. The concern is that the government believes that it is at their discretion, and previous governments have believed that it was at their discretion, to notify these people. You have a legal opinion that supports that. My concern is that the legal opinion is wrong.

I went to the library on my break. Donovan Waters, who I don't need to tell you is the guru on trusts, has said, "If there is a discretionary power or trust to perform," which obviously the public guardian and trustee has, "that trustee should not only consider whether or how he should exercise it"-we know that that happens-"but in the first place inform the potential beneficiary of the beneficiary's interest and outline the terms of the trust," suggesting that in fact it's the primary duty to inform and to advise.

The problem is that what we have with this office is a legislated conflict of interest. I understand it's permitted. As you know, under trust law, the trustee can never profit from the beneficiary-can never profit. But that happens. After 10 years' holding this money, the trustee gets it back; in this case, the province. The trustee takes a percentage of the assets that come into the public guardian and trustee's office in order to administer it.

The appearance-and I'm talking about the appearance, and appearance is important when it comes to trust-is that there's a potential for a boondoggle for the government. If they do nothing for 10 years, they get the money. So the incentive would be to do nothing for 10 years so they get the money, because of course it reverts to the trustee at the end of the 10 years. If, on the other hand, there's an obligation for them to notify and move forward, then that is going to remove the appearance of the boondoggle.

Can you tell us now, upon reflection, what is the legal analysis that refutes the god of trust, Donovan Waters? Was it a written opinion? Was it an oral opinion? Why won't you table it with this committee when you know very well there's no privilege that attaches to a document that you've already made the subject matter of our conversation. You've waived privilege already.

Ms Karakatsanis: I have earlier stated the legal position of the public guardian and trustee. I also stated that notwithstanding that, the government has now taken on this obligation to inform the holders of these accounts once they reach their age. As you know, the specific opinions are subject to solicitor-client privilege. That is something that the government-

Mr Bryant: You've waived privilege. We're the client. The people of Ontario are the client. We waived it.

Ms Karakatsanis: I have stated the position. In any event, the point here is that we have taken on this obligation to notify them. We do notify them.

Mr Bryant: You can take off that obligation too.

Ms Karakatsanis: In fact, 75% of those who reach the age of majority and are entitled to receive their money do in fact access their money, or they're aware of it and choose to leave it there. The money does not revert to the crown. In the case of an estate where they have not been claimed for 10 years, that does revert to the crown, but if the heir ever shows up, the money is still there.

Mr Bryant: He shows up, but you have to rely on them to show up. This is my concern. Was it-

Ms Karakatsanis: If I could finish-

Mr Bryant: Mr Martiniuk asked you some pointed questions and I want to ask you a pointed question. Yes or no, do you have a written opinion that contradicts what Professor Waters is saying?

Ms Karakatsanis: I don't want to engage in further debate about this, Mr Bryant.

Mr Bryant: Yes or no, do you have it or don't you?

Ms Karakatsanis: I stated the-

The Chair: Let her answer, Mr Bryant.

Mr Bryant: Okay.

Ms Karakatsanis: I've stated what the position is of the-

Mr Bryant: What is your office hiding? Why would you not table this opinion?

Ms Karakatsanis: It is clear that we've taken on the obligation. This is something new that we've agreed to do, to notify those holders of accounts of the-

Mr Bryant: But if you have no obligation, then you can withdraw that willy-nilly next year. That's my concern. It's in your hands. I don't want to leave it to your discretion.

Ms Karakatsanis: I've given my answer.

The Chair: Thank you very much, Mr Bryant. Do you have any final comment, because the time is up.

Ms Karakatsanis: I've given my answer.

Mr Martiniuk: Mr Chair, it might expedite things if we permit Mr Bryant, with the approval of Ms Martel, to have an additional few minutes to follow his line of questioning. I'm willing to give him three or four minutes more.

The Chair: Does everybody agree that Mr Bryant can have three or four minutes more? Do I hear any objection? No. Continue then, please.

Mr Maves: You're generous.

Mr Bryant: This is my last kick at the can on this, I understand. That's what that means.

Three questions. Firstly, is it the concern of the ministry that if they acknowledge the legal obligation to notify, pursuant to the law of trusts, that in turn they will incur some legal liability? In other words, they will increase their exposure and what it's going to mean is more lawsuits and not unlike the ones that were the subject of Mr Patten's questions. Is that the concern?

Ms Karakatsanis: The ministry responded to the issue that was raised by the Provincial Auditor. We looked at the issue and determined that it was appropriate to provide notification to minors who were eligible to recover their funds. That was the motivation.

Mr Bryant: The procedures and protocols when a call comes in or when a case is being dealt with-there must be a protocol as to what is done and so on. Are there procedures and protocols that you table so that we can see what the protocol is? Rather than going through job descriptions and resumés, we can see what hoops are jumped through. Is there something in writing on that front?

Ms Stratford: I'm sorry, on which point?

Mr Bryant: With respect to an estate when it comes in and documenting a file and dealing with a file.

The Chair: Is there a procedural guideline?

Ms Stratford: There would be procedures, yes. There are various procedural manuals.

Mr Bryant: Would you be willing to table those manuals?

Ms Karakatsanis: I understand there are volumes of manuals and they are under review. Some of them have been reviewed more recently than others. We would have to take a look at them and ensure there was no reason why they shouldn't be tabled.

Mr Bryant: OK, thank you.

The Chair: For the record, then, you would be prepared to table them? Just so that we're clear, either one way or the other.

Ms Karakatsanis: I think that we would like to take another look at them before we make the final decision.

The Chair: You'll let us know, then?

Ms Karakatsanis: We'll let you know.

Mr Bryant: Also, there is some issue as to the diverging opinion provided by your ministry with respect to what the industry standard is in terms of errors: 5% and then apparently now there's been a change of heart. I take it that the auditor wouldn't cite an industry standard unless there was one. There is an industry standard.

Mr Peters: We are attributing the standard actually to the ministry.

Mr Bryant: Would you table those diverging opinions so that the committee can say, "We think that in fact the 5% standard is right or we think that in fact the 20% standard is right"?

Ms Karakatsanis: My understanding is that the original information came from ministry staff who felt that was an industry standard. We don't have the documentation to substantiate that. I understand that the Provincial Auditor didn't do any independent review of what that statement was. Recently we did informally contact a trust company to determine what the standard was and how they calculated it. We were advised at that time that they don't have it. I've told you all we know.

Mr Bryant: You're saying that there is no documentation either backing up or refuting a 5% industry standard?

Ms Karakatsanis: There was some documentation initially stating that, I believe.

Mr Bryant: Would you be willing to table that?

Ms Karakatsanis: But I don't think there was anything specific backing it up. Just a second, I'll check. There's nothing specific that the guardian and trustee has seen that backs that up.

Mr Bryant: You don't know?

Ms Karakatsanis: I don't know.

Mr Bryant: If there are such documents, perhaps you would be willing to consider them and table them to the committee?

Ms Karakatsanis: As I say, I know it was reflected in the documents, but the backup, any basis for that, we don't believe there are any documents.

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Mr Bryant: OK. There are no documents.

My last question is to the auditor. Are you concerned that there is an obligation on the trustee to inform the beneficiary of the beneficiary's interests, and it is not being fulfilled by the government? Is that a concern of yours?

Mr Peters: I have to be careful how I answer your question, because we're not lawyers.

Mr Bryant: Right.

Mr Peters: We accepted the assertion that there was a legal opinion, and we wrote in our report that the public guardian and trustee said they had a legal opinion to that effect.

Mr Bryant: Did you see it?

Mr Peters: No, we did not see it. I am concerned about that, quite frankly. I think we should see it. If we don't see it, the committee should see it, and if the committee can't see it, I think some steps have to be taken to ensure that the legal position is correct that is taken in this particular regard. That was your question. I have another comment on the 5%.

Mr Bryant: With respect to the 5%?

Mr Peters: The 5% comes from documentation of the public guardian. I think if you look at your records, you will find a document.

Mr Bryant: We'd better see those documents, then.

Ms Karakatsanis: I know the assertion was made in an internal document. I don't believe there was any documentation to support that assertion.

Mr Peters: No, not an external-the public guardian and trustee had no documentation from a trust company to support the facts for this.

Ms Karakatsanis: No documentation to support that assertion. I'm not aware of any documentation that does that.

Mr Bryant: I understand. But that document in and of itself, have we seen that or have you seen that?

Mr Peters: We have seen the document, and the document was actually prepared in order to make a submission for funding for the public guardian and trustee.

Mr Bryant: So it contains some findings and analysis.

Mr Peters: Not findings and analysis. It contains the assertion of standards that they would like to achieve and that they have resource problems achieving.

Mr Bryant: Do you think it would be helpful for this committee to see that document?

Mr Peters: I think it would have to be made available to you by the ministry, not by us.

Mr Bryant: OK. Could we have that document?

Ms Karakatsanis: I'll have to review the document and make that determination.

Mr Bryant: OK. Thank you very much.

Ms Martel: Just to be clear about what we're talking about: Is this the document that was prepared for estimates purposes?

Ms Karakatsanis: I believe the document was prepared for proceeding to obtain further resources internally.

Ms Martel: So, for estimates, a submission to Management Board?

Ms Karakatsanis: I believe so.

Ms Martel: OK. I'm a little confused about why the office would give information to the auditor with respect to a 5% standard when it appears there's nothing to back that up. Is that a silly question to ask?

Ms Karakatsanis: I'm surprised by that too.

Ms Martel: OK. Let me go back to the issue about staffing and training, if I might. In the audit that was done in 1996, which you've identified was an internal audit, was the issue of staffing raised in that audit?

Ms Karakatsanis: The internal audit function began in 1996. That was an audit of the files, the guardianship files. Those files, and they are files that go back some 11 years on average, were reviewed and each and every transaction in those files was examined by the internal audit. As a result of that, the internal audit identified some areas where either further actions were required or where errors had been made. It was as a result of that information that staff were to take further steps.

Ms Martel: Deputy, just so I'm clear: There was no specific reference in that audit with respect to additional human resources being required to tackle any of the issues you identified in the review itself?

Ms Karakatsanis: That internal audit was focused on auditing the files, and the work that was done on those files and the various transactions was the focus of the audit. It didn't deal with resources at the time.

Ms Martel: When the auditor reported, the report clearly showed that the ministry itself had identified a need for additional human resources. Can I ask when that need was identified?

Ms Karakatsanis: I'm not aware of when precisely that need was identified. It was identified, and we went through the normal course, and ultimately government made a decision to provide more resources. We have been recruiting in the last year to fill those.

Ms Martel: I suppose it's the year to recruit that I'm wondering about. The audit was completed by the auditor in about February 1999, and the ministry responses may have come in before or after that. But certainly the ministry response is that staffing requirements were identified even before this audit was complete, so I'm having to assume that was sometime in 1998.

If I heard you correctly, you said you have just hired 43 more staff. I'm not sure if that was just early in the year 2000 or not, but it seems that there's about a year-and-a-half, two-year delay from the point of time where you made it clear in this report that additional resources were going to be hired and when it seems they are actually being hired. I'd like to get some more specific responses about when you started to identify these needs and why it has seemed to take at least a year and a half to fill some of these positions.

Ms Karakatsanis: The additional resources were made available for the fiscal year 1999-2000, so early in 1999 there was a decision. Those monies were added to the budget. I know there has been a lengthy and thorough recruitment process as well as a reorganization of the office, the management structure and the caseload.

Ms Martel: Deputy, on the additional resources, can you give me that number again?

Ms Karakatsanis: There were 43 additional staff who were hired.

Ms Martel: But the additional amount of money that you would have received in order to do that hiring?

Ms Karakatsanis: Yes; $3.4 million.

Ms Martel: Was that request part of a submission through the estimates process to Management Board to get additional staff? Is that how that came about?

Ms Karakatsanis: I'm not sure what the exact form was, but it was certainly through the process of determining what the budget would be for 1999-2000 that that decision was made.

Ms Martel: So even though in 1998 you clearly would have identified a need, because you've said so, there just weren't the financial resources flowing from any particular source to allow those people to be hired.

Ms Karakatsanis: I didn't say that we identified a need at any particular time. I said that we went through the process of doing so and we were given more resources, and that we have moved to hire and we have hired, and that effective April 1 the new management structure will be in place.

Ms Martel: Your reply to the auditor's report said that the staffing needs had been identified pre-audit, so that would have put us at some time into 1998-maybe the end, maybe the summer. I'm not sure which.

You have recruited now 43 more staff. Is that the total combination between your supervisory staff and your front-line staff, or are those all front-line workers?

Ms Karakatsanis: It's 43 more staff in total. The public guardian and trustee can give you the breakdown.

Ms Stratford: There are actually others we have recruited, because in addition to the new positions there were some positions that we were reallocating in the office to redirect resources to the areas of highest need. So there were some vacancies that were moved around to make sure that we were putting people where they could do the best work.

To the exact figure: We had 43 new positions that were created with additional funding, which was received in the beginning of the 1999 fiscal year. We had 39 positions that we've recruited for as a result of these reallocations of staff and reorganization of staff. So there were actually 39 vacancies that we had available to us already that we had not filled. So we undertook a recruitment of 82 staff. Yes, some of those were supervisors. That includes the supervisory staff as well as the front-line staff.

Ms Martel: If I'm correct, you've said to us that the front-line investigative staff-to establish guardianship you've hired three more there? Do you have the breakdown by-

Ms Stratford: We have the current group of nine investigators, including two that do screening. We're adding four new investigators, one of whom will be the team leader.

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Ms Martel: And your front-line guardianship workers?

Ms Stratford: We are adding 24 new client representatives to the current total of 43, to give us 67. We're adding 12 client representative assistants to the current total of 36, which will give us 48. In addition, we're adding seven team leaders in the guardianship area.

Ms Martel: And the seven team leaders are management staff.

Ms Stratford: Supervisors.

Ms Martel: OK. The report said your internal audit capacity doubled, but we didn't know how many you started with. So what's your total there?

Ms Stratford: We're adding one additional internal auditor, we're adding a manager of the quality assurance area, and we're adding, I think it is, two assistants.

Ms Martel: So in your quality assurance unit, what would be your total staffing capacity? And that's a new unit that has just been established in the last number of months?

Ms Stratford: Six.

Ms Martel: A total of six in that office. Can you just describe for the committee again your training initiatives? I tried to listen carefully. I heard both a four-week reference and a 12-week reference. If you can just provide to us again some information about what that training process is for the new people you've brought on, especially for your new employees who are coming on front-line, because I want to distinguish between front-line and supervisory to determine if there are different training patterns or techniques.

Ms Stratford: We began the training for our new guardianship front-line staff on November 29, 1999, and the training program runs right through until April 1 of this year.

Supervisors are receiving that training because team leaders also carry a caseload, but they will in addition be receiving training specific for their needs-team leadership skills, that kind of thing. There is a program planned for them as well, and I believe they've already had one instalment of that.

A component of the training that started on November 29 is a four-week, formal classroom training session. That has been completed. We've brought in all of the new front-line staff in the guardianship area, and we've provided them with training through workshops and direct presentations from existing staff, existing managers. Outside experts were brought in to provide further details in some of the more complicated areas. Various methods of presenting the material were employed, so that all of the various learning methods that adults really benefit from were used.

That was the four-week session that I was talking about. But ongoing from that is a range of things. There are special workshops dedicated to particular functions of the job. There will be job shadowing so that newer staff can work with more experienced staff and gain experience just by watching them, seeing how it's done in real life, and one-on-one training with experienced staff in particular areas.

We've focused on, as I said, the full range of activities that would exist in a typical guardianship case. We have focused particularly on areas that were raised through our own internal audits and by the Provincial Auditor as areas of concern, to make sure that the new staff as well as the existing staff are very clear about what those issues are and what they need to do to address them. We have more staff training planned for March and April, which will also focus on those areas, and we're also training the new investigators and the estates officers as well.

Ms Martel: Are all your positions now filled, of the 82 that you were recruiting for?

Ms Stratford: By and large. There are always one or two that may be issues for us, but the recruitment drive, if you will, has occurred and the people have been hired. Our target has been to have everyone trained and ready to take on the work by the end of March. My information is that we are on track with that. There may be one or two-some of the people who were successful in the competitions were from the organization internally. They were at a more junior level and they were able to secure a position of a more senior type, so then there would be some domino effect as you go to fill those positions.

Ms Martel: The $3.4 million that you received beginning in the fiscal year 1999 is in addition to the base budget?

Ms Stratford: Yes.

Ms Martel: And what is the final base budget now? Sorry; you may have mentioned that earlier. I apologize if I missed that.

Ms Stratford: It's $23.9 million.

Ms Martel: I'd like to ask just quickly about the fee structure. As I understand it, fees are made payable by the client for the services that the office renders, and fees are charged as well for the administration of the estates. Are the fees in both of those cases applied as a percentage of the assets that you are managing?

Ms Stratford: There are two kinds of fees. There is a transaction fee which is charged on the transactions, the incomes and disbursements, and there is an annual care and management fee that is payable as a percentage of the annual average value of the assets that are held.

Ms Martel: When you talk about the transaction fee, how would that be applied? Are you talking about an individual transaction in a bank account?

Ms Stratford: Payments that are received in to the credit of a client-

Ms Martel: That would be a pension?

Ms Stratford: That's right-would be subject to a transaction fee. Likewise, payments out are subject to a fee.

Ms Martel: Do you know what is your total, perhaps for 1999-2000? What would your total have been that would have been collected in fees?

Ms Stratford: In 1998-99, we collected altogether about $12 million in fees.

The Chair: Sorry, if I could just ask one question. What would the average transaction fee be? What are we talking about in dollars and cents?

Ms Stratford: The current amount that we charge on transactions is 2.5%.

The Chair: That's on both money coming in and money going out?

Ms Stratford: That's right.

The Chair: And then on the total estate it would be what, as a management fee?

Ms Stratford: It's 0.4 of 1%.

The Chair: Thank you.

Ms Martel: Do you have the figures for 1999-2000?

Ms Stratford: No, I'm sorry.

Ms Martel: Do those fees go directly to the consolidated revenue fund, or does the office retain any portion of that?

Ms Stratford: No, we remit the fees.

Ms Martel: With respect to the 888 files that you reviewed, you talked about the 22% error rate, and I guess we can go back and forth about whether or not those were significant errors. You've talked about all the changes that you've made in staffing and procedures etc to deal with that. It would be an annual review that you will do then to look at some of those files to try and determine if that error threshold is being reduced? Is that what your plan is?

Ms Stratford: On all new files we will be doing a review at the 90-day point-we're already undertaking reviews like that; we're planning to expand the scope of the review-to go through a checklist to make sure that we have attended to the proper details that are required in that file.

Ms Martel: If I was clear before, all of the files at least have been reviewed at this point, both new and outstanding files, to go through all the errors, to make a note of errors?

Ms Stratford: No, not every single file in the office. The way we're approaching this is to first review the files that we are reallocating from the more senior client representatives, the less complicated files. You'll recall we described how we were reallocating caseloads so that the senior client representatives would have the more complicated cases but would have fewer of them. They will be handing over to the more junior client representatives the files that are less complicated.

As they hand them over in batches of about 25, that's part of the training program for the junior client representatives. They will be required to review each of those files, checklist in hand, and look for those kinds of issues that have been identified as things that need to be watched and need to be ascertained as having been done in the file.

The files that are being kept behind by the senior client representatives, the more complex ones, will also be reviewed. We are looking at a schedule of review. We haven't quite finalized a target date for completing the review but we're hoping to undertake that review at the rate of about one or two a week by the various senior client reps who are holding those files.

Ms Martel: Can you tell us how many cases would be in the second category for review, the cases that are being held by the senior management?

Ms Stratford: I'd have to do the math on that; I'm sorry. I don't know for sure. But we will, of course, be continuing our internal audit process which, as we said, has a target of 600 internal audits every year. We've exceeded that target this year and we've done over 800. But we will be able to step up that work with additional audit strength and those audits will certainly continue whether or not these files have been reviewed in the way I've just described.

The Chair: Mr Peters had a comment before I go to the government side.

Mr Peters: I just have a quick question. There was reference made frequently that we used "extreme cases." I just wanted to make sure I understand the definition of "extreme" in this case, because the cases we found, many of which were brought to our attention, were either cases where we found that action was not timely or where we found that client assets had either been lost or put at risk. Would that be your definition of "extreme" as well?

Ms Karakatsanis: Those cases are obviously unacceptable. They were extreme cases. It's just that, based on the internal audits that we have done, we are satisfied that those are not typical cases, that they are extreme cases. Yes, we accept that the cases that you've highlighted were totally unacceptable.

Mr Peters: I agree with you on that, but I don't quite agree that they came out of our regular-these were cases we found in the audit, so I would not consider them unusual.

Ms Karakatsanis: Some of them were, and some of them came from the internal audit as well.

Mr Peters: That's true.

Mr Martiniuk: Assuming that we have concluded all questions, I move that we adjourn to in camera hearings, Chair.

The Chair: There is a motion to adjourn at this point in time. Before we adjourn, and it has nothing to do with the motion as such, I just want to make the committee aware of the fact that a notice of motion has been filed by Mr Gravelle, which I understand is the tradition of this committee, to deal with the matter that we're dealing with tomorrow, the Ministry of Transportation matter. I understand that it's a tradition to file a notice of motion the day before with this committee. He has done that. So just for the record, there it is.

With that, I'll call the question. All those in favour of adjournment? Opposed? We're adjourned.

Thank you very much for attending today and for attending last week as well with the members of your staff. We appreciate it.

The committee continued in closed session at 1423.