HALIFAX, WEDNESDAY, FEBRUARY 19, 2003
STANDING COMMITTEE ON PUBLIC ACCOUNTS
8:00 A.M.
CHAIRMAN
Mr. William Estabrooks
VICE-CHAIRMAN
Mr. James DeWolfe
MR. CHAIRMAN: Good morning. I would ask the MLAs and our witnesses this morning to take their places if they could, please. This morning at the Public Accounts Committee we have witnesses here from the Nova Scotia Health Research Foundation and I will be asking them to introduce themselves in a moment. Before I ask my colleagues to introduce themselves, I would like to bring to your attention that we have one short item of business at the end and I'll allow five minutes or so for that, otherwise, we'll have a full exchange of questions and answers this morning. So if we could begin with my colleague, the member for Halifax Fairview.
[The committee members introduced themselves.]
MR. CHAIRMAN: Perhaps our witnesses could introduce themselves and then you can have the next 12 to 15 minutes, at which time I'll probably ask you to wrap up at that stage.
MS. KRISTA CONNELL: I'm Krista Connell, Executive Director of the Nova Scotia Health Research Foundation. With me is Mr. Eric Rushton who provides financial management advice to the foundation.
MR. CHAIRMAN: Thank you. I'm also aware of the fact that you distributed in advance - and I certainly appreciate it as the chairman - the text of your comments. I'm not going to ask you to stick to them verbatim but thank you for your thoughtfulness in advance. Ms. Connell, you may begin.
1
MS. CONNELL: Good morning. I would like to take this opportunity to speak with you about the foundation. We're making tremendous progress and I would like to share our success with you.
In 2000, the Nova Scotia Health Research Foundation organized just one provincial competition. Today, in addition to our annual funding competition, NSHRF has a Matching Grants Program and a Capacity Building Program. We host annual workshops to advance knowledge and enhance skills. We prepare reports and explore issues of direct relevance to health researchers. We are a cornerstone of support, financial and otherwise, for researchers across the province.
Our goal is to help create a vibrant health research community in Nova Scotia. That means developing the skills and expertise needed now and in the future. It also means getting the best return on investment possible and what better return is there, than drawing additional money into the province for groundbreaking research conducted here, employing staff here, and helping improve health care here.
Let me take you back for a minute to the first NSHRF competition held in the Spring of 2000. The lead time for organizing this competition was very compressed by research industry standards. As a result, most of the grants were awarded to established investigators, primarily from Dalhousie University and the large metro hospitals. Only two grants were awarded outside of Halifax.
That is no longer the case. In our most recent competitions:
- Acadia University received two major grants, and three capacity building grants;
- The Capacity Building Program competition also saw the first development grant for Saint Mary's University;
- Student awards went to Dalhousie, Acadia and Mount Saint Vincent University; and
- Nursing research, in particular, was highlighted. Approximately $750,000 was awarded to nursing-related research.
We still have capacity building to do, but in short, we have made some major headway.
To give you a sense of how far we've come, I have a few statistics I'd like to share with you. If I could draw your attention to your package, there are two tables in the package.
What these are are comparisons of our most recent two competitions, one for 2001-02 and the other for 2002-03.
The competition for 2001-02, serves as our baseline for comparative statistics and the reason for this is that this is the first competition where there was sufficient time for researchers to adequately prepare grant applications. There were the two review committees, that is our current process today, and staff were available to support development of the applications.
A few things I would like you to note - and we can talk about these a little later in detail - is if you look at the one titled Policy/Services/Outcomes, you will see at the very top that the percentage of the government grant, our regulations stipulate that 45 per cent of our government grant funding should be allocated for research in health policy, health services and health outcomes. In the 2001-02 competition we were only able to achieve 37 per cent of the funding but you will see in the competition held last year, we were actually able to meet the target of 45 per cent and that's a significant advancement.
I will also note that what we have is an increase in cut scores and now there's another page in your handout about cut scores and this is how research is evaluated. A cut score of 3.0 is the lowest you can have for fundable research and then it goes all the way up to 4.9. You will see that we were able to increase the cut score for the policy/services/outcomes competition, so what this means is it became more competitive and the calibre of applications was increased.
The other thing I would point out right now is that the number of students applying and the number of students we were able to fund increased over the two years. So we made significant advancement in that category.
In the Biomedical Category, we were also able to move toward the regulated percentage. In the regulations we are supposed to target 40 per cent of our funding and in 2001-02 it was at 49 per cent and in 2002-03 we were actually able to get to the target of 40 per cent. You will also see that we were able to increase the number of students applying for and funded in this category and again, the cut scores were increasing.
The Nova Scotia Health Research Foundation offers much more than one annual competition. In 2001-02, we expanded our Capacity Building Program to promote community involvement in research grants. This will enhance the relevance of research to Nova Scotians and enhance the usefulness and use of that research. Among the successful projects is one exploring the relationship of nutrition and exercise to preventing falls in older adults. Another is investigating the mid-life health and well-being of African-Nova Scotian women.
We are truly excited about the potential of this program to help Nova Scotia advance in the health research arena. Our researchers are conducting relevant research with a clear potential to contribute to the health system and, ultimately, to the health status of Nova Scotians. No other such program exists in all of Atlantic Canada.
Our legislation clearly provides direction to the foundation to build capacity. We consider this to be of paramount importance in all our activities. For example, we rely on a comprehensive peer-review process, not only to evaluate the applications, but also to build capacity in the following ways:
- We provide the most extensive feedback to our applicants of any other research agency in the country. This feedback gives applicants an opportunity to improve their application for resubmission to the Nova Scotia Health Research Foundation or to any other granting agency. Indeed, we time our competition so that the feedback we provide is received in time for researchers to submit proposals to two national competitions held in the Fall;
- We bring together new investigators with more experienced, successful investigators. The benefits are significant. Because of the relationship established at a peer-review committee meeting, for example, one of our younger investigators has partnered with a seasoned investigator from Quebec. The result: an award-winning proposal funded by the Canadian International Development Agency and Shastri Indo-Canadian Institute;
- We are designing a peer-review observer program that will let less experienced researchers and others see first-hand what goes on in a review of grant applications; and
- The peer-review process for the Capacity Building Program serves as a training ground for new investigators, enabling them to become peer reviewers on a larger scale and to compete successfully at a provincial and eventually a national level.
The NSHRF is committed to working collaboratively with the health research community and other stakeholders to invest the province's health research resources in a manner that produces the greatest benefit for Nova Scotians.
To that end, we have undertaken significant research and consultation to develop and refine our strategic focus and to implement a results-oriented action plan:
- In 2000-01, NSHRF commissioned studies to identify key issues and objectives, and to establish a baseline measure against which progress toward achieving those objectives could be measured. This included an overview of
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- the current status of health research in Nova Scotia. This document was subsequently distributed for comment through our Web site and directly to 83 individuals and organizations from the local research community, national funding agencies and provincial government departments; and
- A survey of public opinion perceptions of health research in Nova Scotia, involving over 400 adults in Nova Scotia.
In 2002, we commissioned an environmental scan and situational analysis to obtain stakeholder input with respect to key issues and strategic priorities. In addition, we held four regional workshops involving some 60 individuals representing a broad cross-section of interests, including health researchers, academics, provincial government planners and decision makers, front-line health care providers, members from regional and district health boards, and community-based health representatives.
Key findings from the research and consultation reflect:
- An overwhelming endorsement of NSHRF's approach and strong endorsement for the organization to continue;
- Tremendous support for NSHRF's foundation programs and widespread agreement they should be maintained; and
- A desire for NSHRF to expand its activities, particularly with respect to communication of research findings, including the development and implementation of a comprehensive knowledge translation strategy, and encouraging and facilitating collaboration among researchers.
Based on the results of this research, we developed a strategic planning framework and action plan to provide continued focus and direction for ongoing development of both the foundation and our activities.
We have put in place a three-phase strategy to design, build and implement the infrastructure required to develop and support a vibrant, sustainable health research community throughout the province. The third and current phase from 2003 to 2005 calls for building a stronger foundation by:
- Building a business case for health research investment;
- Designing and implementing a health research investment/ funding program;
- Designing and implementing a knowledge translation program;
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- Putting a program evaluation process in place; and
- Through effective foundation programs and refinement of our targets and measures.
Let me conclude by saying that the Nova Scotia Health Research Foundation is built on fundamental principles:
- To enable and support;
- To build sustainable capacity; and
- To make an investment in the future health of Nova Scotians.
These principles have guided the foundation throughout our development. They will continue to do so as we work to build an even stronger, more vibrant health research community in Nova Scotia. Thank you.
MR. CHAIRMAN: Thank you, Ms. Connell. Mr. Rushton, anything to add?
MR. ERIC RUSHTON: No, sir.
MR. CHAIRMAN: Thank you. I would like to point out that we have been joined by the MLA for Preston, Mr. Hendsbee. Welcome. It is now 8:15 a.m. and the next 20 minutes belongs to the NDP caucus. Mr. Steele, you have the floor.
[8:15 a.m.]
MR. GRAHAM STEELE: Mr. Chairman, I would like to begin my questioning with a bit of a preamble to explain what it is I'm going to be talking about. This is, of course, the Public Accounts Committee of the Legislature so our focus tends to be on financial issues. From all the material that we have read about the Health Research Foundation, it is a good organization, it was a good initiative. I'm sure, if I don't point it out, the member for Dartmouth East will point out, that it was brought in while he was Minister of Health. It's a good thing to do and it seems to be going well.
I want to focus on some of the financial aspects, rather than on the health research per se. There is one part of the foundation's finances that caused me a great deal of concern. This is in no way, shape or form a criticism of the foundation, because what I am going to be focusing on is the preparation of the estimates, the annual budget that's presented to the Legislature.
For three years in a row, the grant to the foundation has been misstated in the estimates. Now, I can accept that one year might be a mistake. I can accept that two years might be careless. But when the figure is misstated for three years in a row, I can't help but conclude that it is being done deliberately. It causes me a great deal of concern, as a member of the Legislature, when I identify a public document, a government document that is laid before the Legislature that contains what I take to be a deliberate misstatement of the truth.
I say deliberate because this year, in particular, the government had an interest in understating its expenditures because it was a political issue far over and above any concern of the foundation, that the government should declare that it had a balanced budget. The surplus that it had declared this year was so thin that if it had properly stated the foundation's grant, the government would have had to declare that it was in deficit. So it appears to me that the foundation is being used as a political pawn for purposes far beyond those of health research and it causes me a great deal of concern.
What I want to explore with you this morning, Ms. Connell, is how this state of affairs came to be. Let me ask you an open-ended, general question before I get into more specific questions. For each of the last three years, the foundation's grant has been $5 million, for each of the last three years, the provincial budget documents have misstated that amount as $2.5 million. In your view, as executive director of the foundation, what is going on?
MS. CONNELL: First, let me explain for the - it is not exactly the last three years. For fiscal year - when the foundation started in 1999-2000, there was a $2.5 million grant, most of which was not spent because there was no staff on-site and so forth. The foundation came into being in January 2000, so from 2000 to March, very little of that $2.5 million was spent. I think, if memory serves, it was in the neighbourhood of maybe $20,000 or so.
What happened then is a budget request was submitted by the then acting board of directors, through the Department of Health, for a $5 million budget, but what happened was, there was a $2.5 million grant allocated because the $2.5 million, unspent from 1999-2000 was put together with the $2.5 million for that year, accounting for a $5 million operating grant. That was when I came on the scene that August. So I had $5 million of which to deal with the foundation's obligations and administrative expenses and so forth.
Then, for the next two fiscal years, with my involvement and the permanent board of directors' involvement, we submitted a request for $5 million. What we received was two allocations of $2.5 million from the Department of Health; one being $2.5 million for half of the previous fiscal year, $5 million, and a $2.5 million grant for the current fiscal year.
So, essentially, for practical purposes we received a $5 million grant. But you are quite correct in that the Estimates Book reflected it as a $2.5 million grant. Why that is so, I can't really say. The board of directors nor myself had any involvement in the Estimates Book. Essentially, that is the process that we have followed.
MR. STEELE: Okay. Now, I want to pursue that point. I am aware that the foundation, itself, has no involvement whatsoever in the preparation of the Estimates Book. So what I am talking about today is not in any way a reflection on the foundation, it is a reflection on the Department of Health and the Department Finance who, together, prepare the estimates for the Department of Health.
Regardless of whether it is allocated in two parts or regardless of whether some was unspent in one year, from an accounting point of view, the grant in each of the last three years is $5 million and in each of the last three years, the allocation in the estimates was $2.5 million. At any point in your tenure as executive director, have you had discussions with officials of the Department of Health or the Department of Finance about that discrepancy?
MS. CONNELL: No, we have not. This issue has come up again in the Auditor General's Report. The board of directors and myself would be more comfortable if the Estimates Book reflected our actual grant because from the perspective of communication to our public, and transparency, it is difficult to explain. We have had situations where the research community actually was about to lobby the minister to ensure that we received $5 million and we had to go out and explain that, indeed, we were receiving $5 million but we have not taken it any further than an internal discussion at this point.
MR. STEELE: Now, if the official allocation in the books that are laid before this Legislature say that your allocation is $2.5 million, what made you confident enough to go out and tell your stakeholders that, no, no, the allocation was actually $5 million?
MS. CONNELL: Because we have been communicated directly from the Department of Health that we would receive $5 million for the fiscal year.
MR. STEELE: Okay, that's what I'm getting at, that communication. Who told the foundation that?
MS. CONNELL: Our primary contact is the chief financial officer.
MR. STEELE: So the chief financial officer - the name, again, is?
MS. CONNELL: Mr. Byron Rafuse.
MR. STEELE: Now if Mr. Rafuse contacted the foundation - if I'm understanding you correctly - to advise that the allocation for this fiscal year would be $5 million, is that correct?
MS. CONNELL: Yes.
MR. STEELE: Even though the Estimates Book said it was $2.5 million?
MS. CONNELL: Yes.
MR. STEELE: Did Mr. Rafuse have any explanation for the discrepancy?
MS. CONNELL: He explained to me that they would be able to give us $2.5 million from the previous fiscal year and then give us a grant of $2.5 million for the current year, meeting our request of $5 million.
MR. STEELE: But that doesn't explain why the Estimates Book says $2.5 million; $2.5 million plus $2.5 million is $5 million any way you cut it.
MS. CONNELL: Precisely. I have no explanation for why the Estimates Book states $2.5 million.
MR. STEELE: Have you, as executive director, or to your knowledge has any member of your board of directors had any discussions with anybody else within the Department of Health concerning this discrepancy?
MS. CONNELL: Not at this point.
MR. STEELE: Was the foundation ever requested to develop an operational plan to deal with a grant of $2.5 million?
MS. CONNELL: No.
MR. STEELE: You can see the difficulty that we are in here, is that it seems to be nothing more or less than a deliberate misstatement by the Department of Health in the Estimates Book, affecting the foundation. You were advised, confidentially, I assume, by the Chief Finance Officer of the Department of Health, you know, don't worry, the allocation is really $5 million. The foundation found it difficult to explain to stakeholders why the allocation was $2.5 million but you were able to say, because of the communication from Mr. Rafuse, that, in fact, don't worry about what the Estimates Book actually says, the truth is $5 million and that the foundation was never under any illusion that the grant would be anything other than $5 million.
MS. CONNELL: I wouldn't say it was - I never perceived it to be confidential and we do have documentation supporting that we would receive $5 million.
MR. STEELE: Have you, or to your knowledge, has any member of your Board of Directors had communication of this subject with anybody from the Department of Finance?
MS. CONNELL: Not to my knowledge.
MR. STEELE: I am sure you can see why it is a problem. It is a problem for us as legislators about whether we can trust the information we are given by the government. It is a problem for the foundation because the reality is at variance with the official records. What, if anything, does the foundation plan to do to deal with this discrepancy in the future?
MS. CONNELL: Part of our strategic plan, which unfortunately I don't have with me today because we haven't had an opportunity to give it to the minister yet, part of our strategy is to develop a business case for stable core funding. We intend to address all of these issues, plus the requirements of the foundation in that business case. Our plan is to submit that to the government this coming fiscal year.
MR. STEELE: If I could address my questions to Mr. Rushton, Mr. Rushton, you're down on our list of witnesses as a certified management accountant. Am I correct in thinking that you have primary responsibility for preparing the accounts of the foundation?
MR. RUSHTON: I just came on board with the foundation late last Fall. As of yet, I haven't had an opportunity to take over that aspect of it, although we are in the process.
MR. STEELE: You will be taking over the financial statements of the foundation, is that correct?
MR. RUSHTON: Internal. It will still remain the responsibility of external auditors to prepare the year-end financial statements.
MR. STEELE: As an accountant, what's your view of the discrepancy between the $2.5 million that's publicly stated to be the foundation's grant and the $5 million that is the actual grant?
MR. RUSHTON: That's a hard question because, like I said, I haven't really had an opportunity to delve deeply into the history. I'm kind of playing catch-up here. I hesitate to say one way or the other.
MR. STEELE: Mr. Rushton, in the Legislature I've questioned the Minister of Finance about this, I've questioned the now former Minister of Health about it, and now we have Ms. Connell here, and each time I asked the question - not today, it's not fair to put Ms. Connell in with the other two - each time I asked the Minister of Finance or the Minister of Health about this, they try to give an answer that assumes there's some accounting justification for what went on here. As an accountant, can you think of an accounting justification for granting the foundation $5 million every year but reporting $2.5 million?
MR. RUSHTON: Are you asking me my personal opinion, how it could happen?
MR. STEELE: I'm asking for your professional opinion. In your professional opinion, is there any justification for that kind of discrepancy between the reality and what's reported?
MR. RUSHTON: It's a good question. My only logical explanation that it could possibly be was if it was straddling fiscal periods.
MR. STEELE: That might possibly account for the foundation's very first fiscal year, which wasn't a complete fiscal year. Although, nevertheless, the grant that year was $5 million and the Auditor General records that in Paragraph 11.50 of his report, that even though it wasn't a complete fiscal year the grant was actually $5 million. So that might explain the first year, but presumably you would agree that it can't explain the second year and the third year as well.
MR. RUSHTON: Presumably, yes.
MR. STEELE: Mr. Chairman, that's the end of that particular line of questioning, which went more quickly than I had anticipated. Just by way of summary, I think the Health Research Foundation has agreed - and they can disagree if this summary is inaccurate - that in each of the last three fiscal years the actual grant has been $5 million. They've been advised that much by a senior official of the Department of Health, and yet the material given to this Legislature by the government misstated that amount and misstated that amount by enough that they were able to claim a surplus instead of the deficit that they should have claimed. That is of great concern to me as a member of the Legislature, that that should happen not just one year, not just two years, but three years running.
Ms. Connell, I wanted to move on to the granting process. Has the foundation done any kind of stakeholder satisfaction survey?
MS. CONNELL: We do one every year. We have done three, we're coming up on a fourth, and our last consultation process had an extensive component as well.
MR. STEELE: I wonder if you could tell us what the result of that process was.
MS. CONNELL: After the first competition, there was great concern - and that is way back, two competitions ago - from the qualitative researchers that there was too much emphasis on the biomedical element. I think that was a fair reflection of the process followed in the first competition. They were very pleased that the NSHRF had taken a consultative process and we subsequently made significant changes, and our satisfaction level is quite high at the moment, for the last two competitions.
[8:30 a.m.]
We also go out and conduct focus groups in addition to our satisfaction surveys. We conduct focus groups of both successful and non-successful applicants, so that we can understand if our support process is appropriate, what kinds of things can we do to improve. The level of satisfaction with that approach is extremely high. However, certainly we've gotten great input on areas for improvement.
MR. STEELE: Mr. Chairman, rather than start another line of questioning, I think I will just pass my time on to the Liberal caucus now.
MR. CHAIRMAN: Dr. Smith, are you taking the lead? Mr. Steele has ceded the floor. It's 8:31 a.m., and the next 20 minutes is to your caucus. Dr. Smith.
DR. JAMES SMITH: I understand Mr. Steele ran out of questions, did he, at the time?
MR. RUSSELL MACKINNON: He only had one. (Laughter)
MR. CHAIRMAN: We shall move on. Dr. Smith, you have the floor.
DR. SMITH: I'm just amazed that you ran out of time. I was caught unawares. Mr. Chairman, I apologize for the slight delay, I thought I had a few more minutes to collect my thoughts. I want to thank our witnesses this morning. The balance between staff and board is important. I'm just wondering, you have a board of directors. Was it discussed that they should come here this morning, your chair or someone representing the chair of the board?
MS. CONNELL: Was it discussed? Sorry, I didn't hear your question.
DR. SMITH: Was it discussed that someone representing the board should come with you this morning?
MS. CONNELL: I asked the coordinator who should come with me today, and she suggested myself and a financial individual. Being my first time before the committee, that's who's here.
DR. SMITH: I just happened to notice that. It gives me a little concern that the board is not represented at something that I think is reasonably important, where people can be requested to appear to discuss matters such as what our honourable colleague from the NDP caucus had discussed. I think the balance is really important, and I hope it doesn't reflect the way of doing business, is what I'm going to say. Some of my questions relate to heavy involvement with the board and a continuing monitoring. That has to do with private investment, ethical issues that have been highlighted as an area of modest concern, I guess I would say, by the Auditor General's department, and some other matters relative to the long-term strategy.
I don't mean that as a criticism, but I'm just observing that I would have anticipated a board member to have been here this morning. I think it's an opportunity to help awareness of this throughout not only the Legislature but for all Nova Scotians. The media is often in attendance, and that sort of thing. I would just mention that.
This report here, Strategic Planning Consultations, Mr. Chairman, could I just ask, what is this? Is this the initial step? I wasn't quite clear, and perhaps I should have been, from the briefing we had last week. The Final Report 2002, Strategic Planning Consultations, what is that document?
MS. CONNELL: It's the third and final step in the preparation for the board of directors to do the strategic planning. We've been conducting extensive consultations since the inception of the foundation. So this was the culmination of that effort.
DR. SMITH: Do you know how much that cost the foundation?
MS. CONNELL: That final phase? I did an RFP and it came in at $30,000.
DR. SMITH: I had glanced at it last week, and I read it again last evening. I was just wondering, I hope in planning the strategic plan there would be areas that would be more addressed. I was having a little trouble. In fact on Page 17, this document says, "The NSHRF should not link research priorities to Department of Health strategic priorities, because government priorities change too often." How does that strike you or what does that mean when you read that?
MS. CONNELL: That was feedback from individuals in the community and that isn't necessarily reflective of what the strategic plan will be. What I think that speaks to is the concern of the communities that the foundation be arm's-length from government, so I think that's really what it's speaking to. Clearly, the Nova Scotia Health Research Foundation must reflect the priorities of Nova Scotians and clearly, government priorities are an important element of that and, in fact, we certainly do.
We are aware of the Department of Health's priorities, research priorities published through various documents and in consultation with the department. It is very much a part of what we do but I think that particular statement reflects more so the concern that the foundation be arm's-length and all sorts of issues come to play when we determine priorities, as opposed to ignoring government. I don't think that's what the real intent was. I was actually present at all of the sessions so I feel fairly comfortable in providing that.
DR. SMITH: I can see that as being something that would come up at a so-called focus group, which are very popular these days in some circles and help do a lot of the work of the researchers preparing these reports. It just disturbed me a little bit because I think if you talk about measuring outcomes, outcome measurements in health care are pretty
important and the minister in this Chamber frequently refers to that. Has there been any research that has been provided on outcome measurements in health care that you've been able to provide to the department, that you are aware of?
MS. CONNELL: We are just actually receiving the results from the first competition right now, so we are in the process of preparing our fact sheets and getting information ready for our dissemination strategy and that's going to be a big focus of this year. I provided a few examples of some elements of research dissemination in your earlier package, with our newsletters and so forth but our strategic initiatives will be happening this year.
The first grants happened in 2000-01 and they have two years to complete them and then there's another year added on for dissemination, so we're now currently in that phase. From our competitions, we have had occasion to provide the minister and deputy minister's office and other people in the Department of Health, information from other research that has been prepared or synthesis papers from Canadian Health Services Research Foundation and that sort of thing.
DR. SMITH: Good. It's sort of an area that all governments need help on and I would think that would be a win-win there. I do apologize, I read most of the material, I'm not usually a member of this committee and we had a retirement yesterday, so I'm pinch-hitting again the second week in a row. It's of interest to me and I really want to thank you for that.
The reason I brought that up, not to be negative on this, but I really felt there were many areas that we had discussed with the Auditor General's Department - and we had a very excellent presentation, I thought, last week, and very fair and very little criticism, by the way. It's not like it was a witch hunt on where you're ferreting your money and hiding it away somewhere and that sort of thing, it was very positive.
I guess I go back to my original comment, the relationship between your office, as executive director, and the board because so much of the committee, the ethical review and the peer review, is really the involvement and the function of that board. Can you explain to me how the ethical impact would be looked at of say, a drug review or some project that Dalhousie, Acadia, or St. F.X., that would be sort of doing a drug experiment using animals and that sort of thing? Could you give a brief synopsis of some of the challenges you're facing so you don't end up with these research projects finding their way into the media, like the University of Toronto has done over the last several years and what you've learned from the experience say, in Toronto, or other universities that run into difficulties and the ethical issues of medication testing, pharmaceuticals, if you will, or immunizations or whatever, involving animals and what sort of process the board has set up for that?
MS. CONNELL: The governance model that we follow is one of policy governance, so the board of directors deals with issues at the policy level and provides the direction to the staff of the foundation regarding process. The ethical approval process is very much separate
from the board in that they must be independent evaluators, as is the peer-review process. What happens is through me, the recommendations go to the board of directors and I'm simply a conduit, I don't alter anything in any way, shape or form.
DR. SMITH: So those committees are not subcommittees of the board involving non-board members?
MS. CONNELL: No.
DR. SMITH: So the board doesn't have sort of control there at that juncture?
MS. CONNELL: No. According to national standards they really must be separate and distinct and there are national guidelines and rules for ethical research conduct existing in the country.
DR. SMITH: Responsible to the board eventually?
MS. CONNELL: The board requires those rules to be applied, yes, or we will not fund the research. So, ultimately, yes.
DR. SMITH: Do you see where I'm coming from? The buck stops at somebody, and it shouldn't be staff, it should be the board.
MS. CONNELL: The accountability rests with the board, ultimately, yes. How the process works is when a research grant is submitted, it must be submitted through the research office, first of all, of the academic institution. We will not fund research that isn't formally linked with an academic institution to ensure that this process takes place. We do definitely fund research that collaborates with communities and as a matter of fact, we encourage that, but it must go through an academic institution.
So it goes through the research office and the first thing that happens there is there is an internal review looking at a variety of issues: methodology; appropriateness; ethics requirement; and so forth. Then there is sign-off by, for example, the vice-president of research, before it is submitted to the Nova Scotia Health Research Foundation, indicating that all of this has transpired and that they will be in compliance with our regulations, rules and so forth. It then goes through the peer-review committee, where the peer-review committee, among other things, will look at the ethical requirements. If it comes with ethics approval, which happens on a few occasions but not very often, they will look at that.
There are regional ethics boards in place, for example, there's one at the Capital District Health Authority; the IWK; all of the institutions, Dalhousie University, St. Francis Xavier, et cetera, they all have them. They would actually send a document forth outlining their ethics approval, why, and if there's any issues, concerns or so forth. So the review
committee will look at that. If that doesn't exist they will look at it specifically with ethics and provide some direction to the investigators if they feel need be.
Prior to release of funding, assuming that it's a fundable level grant, the foundation requires written verification, that very same written verification to be submitted to the foundation before we will release funding to the academic institution. The academic institution also requires written verification of ethics approval prior to release of the funding to the researcher. So there are several checks and balances along the way to ensure that appropriate ethics consideration has been given. These ethics committees are comprised of senior scientists, philosophical individuals, community representatives and so forth. They have a fairly extensive representation on the regional ethics boards.
One of the challenges we face are issues like stem-cell research and what we have done, specifically with regard to the ethical parameters around stem-cell research is that we've adopted the requirements of the Canadian Institutes of Health Research and have superimposed those on any regional ethics board. So what they would do is, in addition to their own requirements, if it's funded through the Nova Scotia Health Research Foundation, they would apply those as well.
DR. SMITH: Great, thanks. It's comprehensive and it was a minor concern that was mentioned that that was in place and functioning. I think it is an issue that can give you some problems if it's not handled well. Everybody knows what we're talking about but I guess it's to get people in place to really carry out these functions.
[8:45 a.m.]
Going back to this consultation and planning strategy, in summary form, can you indicate - and you alluded to this - how you would access monies from the private side, essentially? One of the concerns I had, again, when I read this, they seem to be, go back to government to ask for more money. I'm not in government, so I can sympathize with government about what it's like. If that's what you're paying money to these people for, then I don't think it's very good advice. I didn't see too much other innovative private accessing of monies, in a variety of sources; that's families, foundations, other foundations and that sort of thing.
Do you have reports, describing in a summary form, how you have been able to access monies outside of government, and how that has returned your on-the-dollar investment that you've made from the foundation and realized that you're levering some monies other than government? I know one of the primary goals of the foundation, initially, was to access federal monies, which is good. When I read the report, and there are several places where it says - and I know this is not your final report, I understand that - you pay somebody a bunch of money and they tell you to go ask government for some more money. I don't know how the people on my right are going to feel about it, but I would say that's really not necessarily -
as we see, we've already had some innovative bookkeeping to get you $2.5 million extra, now your strategy report is saying, well, go get some more from government.
MS. CONNELL: I don't have any reports with me, but I can certainly speak to it. First of all, this is one piece of a much larger process. Since we were committed to transparency and this was recently released, I felt it might be useful for you to have a look at it. It's only one element. I just wanted to make that clear.
I know the message that the board of directors received from that was that the foundation needs to look at increasing its funding base. We didn't necessarily take it verbatim that we must simply go to government. Part of our . . .
DR. SMITH: I'm sure you didn't, no. I understand that.
MS. CONNELL: Part of what we have in place is we have achieved charitable status recently, and we are going to put in place a plan to look at fundraising initiatives, however, our constituents in the Health Charities Network are very concerned that we won't bring new dollars into health research, we will simply move it around. So we will be looking at a consultative process to ensure that when we look at fundraising initiatives, we're actually creating a larger funding base for research and not just reallocating what currently exists. That is a huge concern for the Health Charities Network and one they raised when the legislation was introduced. They're still very concerned, so we're very mindful of that. So we will be embarking on a process to look at that.
What we have done while we're getting that sort of thing in place is we have leveraged funds from federal and national agencies in the following manner. The Canadian Health Services Research Foundation has provided us funding for specific workshops and specific initiatives. We've also received funding from the Canadian Institutes of Health Research in the same way, so that way we are able to stretch our administrative dollars. We have committed a significant amount of funding to matching funds. To date, we're looking at a return in 2001-02 of one to three, so for every dollar we've spent, we were able to bring three in. We have actually, I believe, done better than that the last fiscal years, but I haven't actually done the analysis yet.
We certainly have been working to leverage funding from other sources in those ways. I think when we proceed with our colleagues in the charitable sector, we will be able to, again, complement the funding base even more so.
DR. SMITH: I just want to compliment the students. I was present when they received their awards, they were very enthusiastic and it was a great step in their education, so not to lose sight of that. I know our time has run out, I want to thank you. I guess having been a previous minister you look at the materials that come to you and the advice, and I really thought there were a lot of holes in this report. I thought it was there, I kept looking
for it and couldn't find it. I guess if we're talking dollar for value, you may want to strike a new deal for the $30,000 next time. That's my opinion.
MR. CHAIRMAN: Is there any response to that, Ms. Connell?
MS. CONNELL: Actually it was one piece, and what we were satisfied with and our constituents were was that it reflected the concerns of the constituents that we serve. It is very important that we hear their voices, so from that perspective we were pleased with the end product.
MR. CHAIRMAN: The next 20 minutes belongs to the members of the government caucus. Mr. DeWolfe, it's coming up to 8:51 a.m., and the time is yours.
MR. JAMES DEWOLFE: Welcome to the Public Accounts Committee. Ms. Connell, I want to go back to this budget. Mr. Rafuse is a financial adviser, is he, with the Department of Health?
MS. CONNELL: Yes. The chief finance officer.
MR. DEWOLFE: You claim that Mr. Rafuse and other officials, perhaps, have indicated that the foundation would receive $5 million. Well, I put it to you that your budget is in fact and was in fact $2.5 million, isn't that correct?
MS. CONNELL: Each year we put forth our request for $5 million, and each year we've been able to, through the Department of Health's efforts, achieve $5 million as an operating budget.
MR. DEWOLFE: Ms. Connell, I understand that, but your budget is in fact $2.5 million.
MS. CONNELL: Our auditors have verified that we have in fact $5 million as a budget, so I'm comfortable in . . .
MR. DEWOLFE: I understand that you have received additional funds each year, but the fact is that it's my understanding that you would receive the $5 million only if additional funds or an additional $2.5 million could be found from savings within the Department of Health, because they felt that the work that you're doing is very important, that this money, if possible, should be allotted to this. Is this also your understanding?
MS. CONNELL: At the beginning of each fiscal year it's been communicated to me that we would have $5 million, per our request.
MR. DEWOLFE: And is that communicated verbally or is that documented?
MS. CONNELL: I have both, a verbal is the first process, which, of course, is important to us so that we can proceed with our planning, and I also have documentation.
MR. MACKINNON: Mr. Chairman, on a point of order. I don't like to take from my colleague, but I would ask if the witness would table that document.
MR. CHAIRMAN: Ms. Connell, you have documentation to confirm what you just said. Is it possible that at a future time you could provide that to the committee?
MS. CONNELL: Absolutely.
MR. CHAIRMAN: I will give you an extra 30 seconds on that, Mr. DeWolfe.
MR. DEWOLFE: If you only receive $2 million additional or $3 million or $4.5 million total for the year, do you have any plan in place on how to deal with that funding shortfall, whether it be $0.5 million or $2 million? In other words, do you budget for a possibility of a shortfall?
MS. CONNELL: We will certainly always have contingency plans, yes.
MR. DEWOLFE: So you had plans in place that if the additional monies were not provided that you would be able to continue to operate?
MS. CONNELL: It would be extremely difficult, considering the fact that the regulations require us to split funding in a certain fashion, and we do have fixed administrative costs. So anything less than $5 million would really be very problematic for us to meet our obligations. But yes, we have certainly looked at that.
MR. DEWOLFE: The fact is that the foundation is an arm's-length body, and the budgetary priorities are already established by regulation, I believe. Isn't that correct? I think you indicated that earlier.
MS. CONNELL: Yes.
MR. DEWOLFE: And the restrictions are placed not in dollar values but in percentages.
MS. CONNELL: That's correct.
MR. DEWOLFE: And the foundation, through these regulations, for example, 40 per cent of the funding allocated goes to medical research?
MS. CONNELL: Yes.
MR. DEWOLFE: And 15 per cent goes to health outcome research, and no more than 15 per cent to administration, and so on. Do the provincial regulations, which determine the foundation's budgetary priorities, provide a blueprint for allocating new funding or finding new savings?
MS. CONNELL: No, it just states that we should actively pursue other funding sources.
MR. DEWOLFE: Which you do.
MS. CONNELL: Yes, and we will increase our efforts significantly.
MR. DEWOLFE: To what success . . .
MS. CONNELL: We really need to consult with the charitable foundations in order to really look at an achievable target. So we haven't actually established a target. We do have a minimal target of one to three return on matching funds. We do believe we can exceed that. We do actively look for partnering for supporting a variety of initiatives, workshops, travel support and all sorts of things like that.
MR. DEWOLFE: Would it be true that if government increased or reduced the financial annual commitment to the foundation, that you would require very little direction on how to allocate those funds? Because of the percentages that - you know, you work with percentages. So if your allotment for next fiscal year was $3 million, $4 million, you wouldn't require any direction from government on how to allocate those funds?
MS. CONNELL: I believe at this stage in our evolution that would be true, although we certainly would be alerting the government to some of the repercussions at this point in time of that sort of shortfall.
MR. DEWOLFE: Are you committing those funds prior to receiving the final allotment?
MS. CONNELL: No, we have actually received our grants in a very timely fashion so, no, not to this point. Although, as long as we have a firm commitment that they are coming, we certainly could allocate into the future because of the competition deadlines. But to date, that hasn't happened.
MR. DEWOLFE: Okay. Just to move on to verification of funds. You are indicating that certain verifications were required prior to allotment of monies. I was wondering about verifications of the grant funds that have been spent, the applicants reporting back to the foundation. Are you getting a clear indication that the monies were, in fact, spent where they were supposed to be spent and seeing some of the results?
MS. CONNELL: Yes, and not only that, we are seeing incidences where there were some cost savings and those funds will be returned to the foundation and, again, turned around to support future research. So now that those first grants are coming to completion we are seeing some activity there.
MR. DEWOLFE: First of all, I want to say that I am very pleased to see some of the work that you're doing. I think it's a very worthy cause and it's important for the future to continue this type of research. I'm just wondering, are you involved in biotechnology? Are you investing in biotechnology? There are some organizations working in biotechnology now and it is sort of new and exciting.
MS. CONNELL: I agree, it is very new and exciting. The research world is incredibly complex and diverse. What we have done to date is we have partnered with a variety of organizations to ensure that all sorts of aspects are addressed and the Life Sciences Development Association is really active in that area. We provide support to them and communicate with them. So it's more of an indirect kind of activity.
We do have some research funded in that area. The Nova Scotia Health Research Foundation Board of Directors decided to focus on capacity building, so our investment is primarily new scientists, new investigators. Their involvement in that area is a little bit limited because of the state they're in, in their career, so it's not quite as extensive as, perhaps, the Canadian Foundation for Innovation. I mean, clearly, they would be much more invested. What we do is we provide support for applications to that foundation and we provide capacity support, so it is more indirect.
MR. DEWOLFE: Well, thank you very much, for now. I may come back at a later time and I will pass to my colleague, the member for the beautiful Colchester-Musquodoboit Valley.
MR. CHAIRMAN: Mr. Taylor, you have 12 minutes.
MR. BROOKE TAYLOR: Mr. Chairman, I do welcome the opportunity to ask a few questions. We have talked a little bit, as a committee, about the grant protocol, the awarding institution and things of that nature. I would like to, if I could, shift gears a little bit and focus specifically on a couple of particular grants. I'm concerned about the outcomes.
[9:00 a.m.]
I understand, Mr. Chairman, that the package we received from the Nova Scotia Health Research Foundation is available, the information contained therein, to the public or could be, at least. I see where $147,000, by way of a grant, was awarded to a project entitled, Waiting Your Turn: Assessing the Process and Consequences of Queuing for Coronary Bypass Surgery in N.S. Obviously, that is a concern to people and their families that are
awaiting coronary procedures. I would like to know if, perhaps, you could enlighten us as to what the study discerned and what potential or possible recommendations came out of that study, if that is a fair question. That would be my question.
MS. CONNELL: Well, as you can imagine, I see a great deal of research across my desk and I really don't feel adequately prepared to be able to address that but I would be very happy to get that information for you.
MR. TAYLOR: Okay.
MR. CHAIRMAN: I understand the response, Ms. Connell, and thank you for getting back to this member, but to the committee, generally, on that particular project. Mr. Taylor.
MR. TAYLOR: Well, Mr. Chairman, I can appreciate our guest's situation regarding questions of that nature but, I guess I too - like my colleague, the member for Dartmouth East - would have preferred to see somebody from the board or somebody appropriate that could answer these types of questions. As has been mentioned many times at the committee level, one of the objectives of the PAC is to ascertain if Nova Scotia taxpayers are getting good value for their tax dollars. While we appreciate your situation and respect it, I think we have to be concerned that projects and consequences of those projects are understood by Nova Scotians. The fact of the matter is, probably 90 per cent of Nova Scotians, or maybe more out there, may not realize there is a Nova Scotia Health Research Foundation. We have a considerable list of documents here regarding grants, institutions and projects, and I think we should be able to, as a committee, get a handle and get an understanding on the outcomes of projects.
I think that the foundation probably should have realized that when it came to the Public Accounts Committee, that there would be questions of that nature, especially when the monies - you know, we can say, generally, don't worry, be happy, Mr. Chairman, and that's fine, but I think it is something that maybe we should possibly look at, at a future date for an agenda item.
Then I guess it wouldn't be fair to expect an answer to another question I had. A total award relative to a grant for $144,500 went to Menopause and the myth of the strong black woman: The health and well being of midlife African Nova Scotian women. I think it would be of interest to Nova Scotians to know the outcomes of that grant. Again, I suppose you couldn't answer that question but you could provide me with some of the recommendations and potential consequences of the study. Is that a fair question?
MS. CONNELL: Well, I can address your comments in a couple of ways. The research grants from the first competition are just finishing now. The results of those are all posted on our Web site. They are called Fact Sheets and they are readily available for the public. They are written in a readable format for the public. We do a fair bit of work with the
investigators to ensure that these things are communicated in a way that is relevant to our citizens. That is our first step in the process of dissemination.
I mentioned in my opening comments that we will be developing a dissemination strategy for research results. We agree with you that these are critical components and we are just now having results to be able to share.
The study you just mentioned is incredibly important and one we are very excited about. There is information on that in the annual report that you received. It has just started. It is in its very first year and it is a three-year grant, so there will not be results of that for quite some time. However, we can tell you that they are making significant progress and it is one that is very much community-driven. It is one that is going to be very exciting and of particular relevance to communities in Nova Scotia.
MR. CHAIRMAN: Ms. Connell, perhaps for the record you could mention your Web site to us so it could be on the public record here.
MS. CONNELL: It is actually on the bottom of the contact card in the packages that were distributed today. It is www.nshrf.ca. With regard to public awareness of the foundation, we conducted a telephone survey in 2001 so that we would have a baseline in which to compare when we go back and look at different ways of evaluating our dissemination strategy to ensure that the citizens in the province know of us, and what kind of research results are happening. So we do have a comparative basis for that. That is something we will be able to report on, hopefully starting next year and thereafter.
MR. CHAIRMAN: Mr. Taylor.
MR. TAYLOR: I did note, looking through some information, Mr. Chairman, and recognizing that health issues and behaviours are so diverse, it would be really difficult to possibly focus in one area more than another, but there don't seem to be a lot of projects that deal especially with cancer. I am wondering if the foundation acknowledges that or perhaps I misunderstood.
MS. CONNELL: What you are seeing are the results from the provincial competition. There are a few studies that do relate to cancer but we primarily are supporting more senior investigators through our matching funds with the National Cancer Institute of Canada and the Canadian Institutes of Health Research. We provide matching funds for those so we are very involved. It is just not reflective in these particular sheets, although there are some projects relating to it.
MR. TAYLOR: What type of tracking is done? I know earlier on you mentioned in response to another question about stakeholders being subsequently contacted or communicated with, but what type of accountability, I guess, is in place, not in terms of the
financial aspect of the grant but what type of accountability is in place in terms of - generally, I'm speaking now - and I would like to focus, Mr. Chairman, on specifics but, understanding the situation here this morning, we can't, I would like to know what type of mechanisms are in place to actually measure the outcomes of the specific projects?
MS. CONNELL: Part of each project application, they must have a dissemination plan which is research and uptake with an evaluative component. There is an individual project basis. Based on the dissemination and uptake strategy we will be developing, we will be putting in mechanisms as well to see, for example, if policy has been influenced by informed decision making. You can understand that that is not a simple task and we will be getting a fair bit of assistance from people who have been studying this for quite some time. Being able to measure informed decision making is incredibly difficult to do but that will be part of the dissemination strategy that we will be developing. Public accountability for research results is tough.
However, looking at clinical behavioural changes is not so hard to measure and those sorts of things are in place. So, for example, if there are advancements in drug technology, you can actually see if those have influenced behavioural changes, although, sometimes you need to do follow-up studies to do so, so it's not a fast process.
MR. TAYLOR: No, and I would concur with you. I appreciate that. I guess where this is basically a new entity by some standards that we do have some way of tracking whether or not procedures and behaviour and policy are impacted. It would be difficult to get something that's 100 per cent in place to track that sort of thing and to measure it, but that's extremely important. I don't want to simplify it by saying it's essentially no good to have a project and not be able to recognize what the outcome is, but it certainly makes it much more difficult to support and understand these very important projects, I would say, by the look of them.
I think there's a lot of good work that's being done. I just wish that the foundation could move a little quicker in perhaps putting some mechanisms inside to do the actual measuring of the outcomes, because I don't see that as being in place as of yet. Thank you for your answer.
MR. CHAIRMAN: We're going to begin round two, if that's the appropriate expression, the second round of questions, not to get into a sports analogy here. It will be about 12 minutes each, which would allow for a wrap-up and our short item of business. It's coming to 9:12 a.m., so the next 12 minutes belong to Mr. Steele.
MR. STEELE: Mr. Chairman, I would like to address my first question, actually, to the Auditor General or to Ms. Morash, if the Auditor General prefers to send the question over to her. A portion of this year's Auditor General's Report deals with this issue of the discrepancy between the reporting in the estimates and the actual grant to the foundation. We
have more information this morning from the executive director of the foundation. My question to the Auditor General - my first question at any rate - is, is there in his opinion any accounting justification for the way the grant to the foundation is reported in the estimates?
MR. ROY SALMON: That's a difficult question for me to answer. I don't audit the expenditure side of the estimates, so I don't know the basis on which those numbers are put together. In terms of the broader issue of the impact of giving the foundation a higher grant than was recorded in the estimates depends on where the money comes from. If it's simply a reallocation from within the Department of Health's budget, because of underspending in other areas, then there is no impact on the deficit because there is not an additional appropriation.
The other issue is that once this Legislature approves an appropriation through an Appropriations Act, that funding lapses at the end of the year, so there cannot be a carryover from one year to another. But recognize that the budget and the estimates are a plan put together by the government in terms of what its intentions are. The actual deficit or surplus depends on the results of the actual operations during the year. So if it's a reallocation from within the budget, it has no impact on the overall state of the government's finances. (Interruptions)
MR. STEELE: Mr. Chairman, I'm sure that in the next round of the government caucus the member for Preston, instead of barking from the back row, can maybe address the issue directly.
MR. CHAIRMAN: Order, please. Mr. Steele, continue with your questions, please.
MR. STEELE: Mr. Chairman, we can usually count on the member for Pictou East to read from the script supplied to him by the government and give an indication of what the government's defence is. The government's defence in this case, of an inexcusable year-after-year misreporting of the intended allocation to the foundation, is that the $2.5 million is the grant and then if things go well during the year, they will find another $2.5 million to give to the foundation.
[9:15 a.m.]
But the problem is that that's at variance, Ms. Connell, with what I heard you say this morning, that that is not the way the year at the foundation unfolds, that it has never been the case that the foundation was told, it's $2.5 million for now and we could bump it to $5 million if things go well. So I want to explore with you this question of the timing. You said that Mr. Rafuse, Chief Financial Officer, Department of Health, informed you verbally and then in writing that the grant, for example, this year would be $5 million. What was the timing of that assurance? When did it happen?
MS. CONNELL: It happens after our budget request submission.
MR. STEELE: When do you make your budget request submission?
MS. CONNELL: The end of February.
MR. STEELE: How long after that did Mr. Rafuse get in touch with the foundation to tell you that the budget request would be granted?
MS. CONNELL: I can say with almost certainty it's been before April 1st. I couldn't tell you exact dates, but I've always known before the beginning of the fiscal year that we would have $5 million for our operating budget.
MR. STEELE: You've told the committee that you would table the written assurances that you have from Mr. Rafuse, so presumably the date on that letter would tell us to a certainty when that assurance was received.
MS. CONNELL: Actually, the written information that I can provide is the allocation of the $2.5 million from the year previous.
MR. STEELE: That's a different matter. I thought what I heard you say was that you had assurances from Mr. Rafuse that for a given fiscal year the allocation would be $5 million.
MS. CONNELL: Which is the $2.5 million from the year previous and the $2.5 million that you refer to as in the Estimates Book.
MR. STEELE: So the contact that you have with Mr. Rafuse, you are virtually certain, is before April 1st?
MS. CONNELL: Virtually, yes.
MR. STEELE: Are you aware, off the top of your head, of when the Estimates Books are tabled in the Legislature?
MS. CONNELL: No.
MR. STEELE: It's after April 1st and has been for the past many years, except for one. Certainly last year it was after April 1st. So the chronology that I see is the foundation puts in its budget request in February, you're verbally notified by the chief financial officer of the department that the request will be granted at the requested amount, which is $5 million, and then after that the government tables the Estimates Books stating a different figure. That's where the government's defence of this goes awry, it is simply not the case that you're allocated $2.5 million and told you will get more if things go well.
Now, when I was questioning you earlier, Ms. Connell, I asked you if the foundation had an operational plan for dealing with a grant of $2.5 million. I thought the answer that I heard was no, it does not.
MS. CONNELL: Not for that specific figure, but we do have contingency plans.
MR. STEELE: So in response to the questions from the member for Pictou East you referred to contingency plans. Tell me more about these contingency plans, what are they?
MS. CONNELL: We certainly know what our fixed costs are for administration. So what would have to transpire, if we received a lower budget, was the programmatic element of that 15 per cent dedicated to administration would have to decrease. We know that we would have to provide less capacity support, for example. We know that should the percentage go down for the competition, the provincial competition, we would have less money to allocate. So, for example, we would probably have to reconsider our matching-fund contracts, our agreements with the national agencies and so forth. So we basically have a process in place, depending on what the amount is that we would receive. We can very quickly know what it is that we can offer and what it is that we cannot.
MR. STEELE: It sounds to me like it's in the nature of a priority list, that if you lose money you go to a list and say, okay, here's the order in which things can be cut and how much they can be cut.
MS. CONNELL: Based on the policy decisions that have already been made, yes.
MR. STEELE: But you've never developed a contingency plan to deal with a grant of $2.5 million?
MS. CONNELL: No, not that specific figure.
MR. STEELE: But if that's the amount that's in the Estimates Book every year, why don't you develop an operational plan to deal with $2.5 million?
MS. CONNELL: We have had no indication that we would not receive a $5 million grant, and indeed the former Minister of Health, Minister Muir, verbally, on many occasions, through press releases and so forth, has indicated that $5 million would be an annual grant. So we start from that, and then we work either way, depending on our scenario. We certainly have received very good responses from the Department of Health towards our progress to date, with no indication that we need to be concerned, other than being prudent and ensuring that we are in the position to respond to whatever scenario we might face.
MR. STEELE: I wasn't sure that I heard you correctly just now. Did you say that the foundation had received assurances from the minister, himself?
MS. CONNELL: Not directly but in press releases, speeches and so forth, that the annual grant for the foundation would be $5 million, but we never received a letter to that extent or anything like that. It certainly has been our understanding that that would be our base funding, based on those sorts of public comments.
MR. STEELE: But your actual direct contact with the Department of Health is the chief finance officer, is that correct?
MS. CONNELL: It has been, on this matter.
MR. STEELE: On this particular matter about the level of funding, has there been any contact with the deputy minister, the assistant deputy minister, the associate deputy minister, any of the other senior management at the department?
MS. CONNELL: Other than the submission of the budget and informal conversations, no. We have been very pleased with the level of support that we have received from the government to date and we hope that that continues. Essentially, we received what we asked for. I understand the process may be different but . . .
MR. STEELE: I hope the level of support continues too. I just hope the government properly reports it in the next Estimates Book. Now the informal conversations that you have with senior management, does this include a discussion of the level of funding the foundation would receive?
MS. CONNELL: In that, yes, they are aware that we've received $5 million grants and have asked various questions about program support and that kind of thing. They are pleased with the kinds of initiatives we have been able to implement and have had discussions on different plans to do different things. I'm certain when our strategic plan is tabled, there will be further discussions on those matters.
MR. CHAIRMAN: You have under two minutes, Mr. Steele.
MR. STEELE: In the informal discussions you have had with senior management of the department have you ever, personally, raised this issue of the discrepancy between the actual grant and the reported grant?
MS. CONNELL: No.
MR. STEELE: Why not?
MS. CONNELL: Basically, my attention has been taken with ensuring that the foundation gets off the ground and I have been quite busy in doing that and we're quite happy with the level of financial support. Quite frankly, we have proceeded with priorities and that
just hadn't been something that we had raised at this point, however, the board has discussed that we should address it in our business plan.
MR. STEELE: Would it be a fair assumption that one of the reasons you have never raised it is that there was never any question in your mind or in the mind of the board of directors that the actual grant in any given year would be $5 million?
MS. CONNELL: Yes, our expectations were met.
MR. STEELE: Thank you, Mr. Chairman.
MR. CHAIRMAN: The next 12 minutes is for the members of the Liberal caucus. The member for Cape Breton West.
MR. MACKINNON: Perhaps for the sake of getting as many answers as we can, if you can keep your answers as short as possible, I know that some of them were long and detailed. I'm just looking for succinct answers, if possible.
I was reading in the booklet with regard to section 3 of the board's mandate. It says, board, staff relationship, executive director's role. I read through all of the do's and don't's of the executive director and I couldn't help but come to the conclusion that the executive director has a tremendous amount of authority and power on how this entire council operates, access to information, control of information, the relationship with government and so on. Am I interpreting that correctly and perhaps maybe that's why you were decided to be the best person to come here today and not a member of the board?
MS. CONNELL: I came here today because I was told that I should come here today and when I asked if the board chairman should come it was, not really. So perhaps it's my newness to this process, is the only reason there are not more people here. I did actually ask who should come, so in answer to that . . .
MR. MACKINNON: Who directed you to come?
MS. CONNELL: I got a call from the coordinator.
MR. MACKINNON: But my understanding from the committee decision and so on was representatives of the board or somebody who would be best suited to speak on all the issues of policy and finance, am I correct? It wasn't necessarily, you come. Our clerk didn't direct you to come per se, did she?
MS. CONNELL: Yes.
MR. CHAIRMAN: If I may, just for a point of clarification, not to take your time, Mr. MacKinnon, a senior official was the request the committee brought forward. Do you have anything to add to that, Ms. Stevens?
MS. MORA STEVENS (Legislative Committee Coordinator): If I may, I called Ms. Connell, explaining the committee wanted to hear from them concerning the audit that the Auditor General had done and asked standardly for senior officials and that would include herself, of course, being the executive director. We did talk about members of the board and I said that wasn't the specific direction, it was senior officials, if they so chose to do that, if they wanted to. I mentioned that when there was discussion during the Auditor General's session that we had here it was mentioned about the budgeting process and she at that time mentioned Mr. Rafuse. I said it was senior officials from the Health Research Foundation that were requested.
MR. MACKINNON: To speak on the audit.
MS. STEVENS: Precisely.
MR. MACKINNON: So was that issue communicated to you, with Mr. Rafuse and members of the board, that somebody would have to come and speak to the issue of the audit?
MS. CONNELL: Yes, my understanding was . . .
MR. MACKINNON: So you see yourself as being qualified to speak to the audit?
MS. CONNELL: My understanding was that I was called before the committee.
MR. MACKINNON: No, no, that wasn't my question.
MS. CONNELL: And yes, I feel qualified to speak to the audit and I have prepared a response to that effect.
MR. MACKINNON: So your background is in finance?
MS. CONNELL: No it isn't, that's why I have our CMA with us.
MR. MACKINNON: That's fine, that's what I'm asking.
MS. CONNELL: I would also like to respond to your question about the board directives. We are a policy governance model and that's what you're seeing reflected in the executive director limitations but there's also an incredible requirement of accountability to
the board, so I report regularly to the board on all elements and so there's a real accountability side as well, but that's a policy governance model.
MR. MACKINNON: As I have said, I'm reading what's here in front of me and I can only interpret what I read and then listening to your answers today, there's a tremendous amount of confusion over the expectation of $5 million versus $2.5 million. We have a minister saying publicly that the budget is for $2.5 million and you're saying that clearly the board, the foundation, had a written undertaking and a clear understanding that it would receive $5 million. That's quite concerning, as you can appreciate from a public policy point of view and financial accountability, would you not agree?
MS. CONNELL: Yes.
MR. MACKINNON: So, at no point in time - I want clarity on this - did any official from the Department of Health, from the minister down to whatever level, ever communicate to you or anyone at the board that you would only receive $2.5 million?
MS. CONNELL: No.
MR. MACKINNON: That's correct, okay. I want to shift the focus just slightly with regard to research outcomes, measuring outcomes. One of the issues that we had before the Public Accounts Committee several months ago was the issue of, I believe it was, Seniors' Pharmacare. The deputy minister appeared at that time and indicated that there was no basis to support the government making a policy decision to fund Aricept for Alzheimer's patients. I notice one of the research grants was for a Kenneth Rockwood at the QE II Health Sciences Centre, $47,500. It said, A Novel Outcome Measure: Developing a New Outcome Measures for Detection of Disease Progression in Treated Alzheimer's Disease. Could you give us some detail on what that project entailed and did it, in any way, make any reference to the treatment of Alzheimer's using such medications as Aricept?
MS. CONNELL: Well, I can tell you that we just recently received the final report for that project and the information will be available on our Web site shortly. I don't believe it specifically mentioned Aricept, although I'm not completely certain on that but I do know that they certainly did make great progress on that and they are looking at alternative ways of evaluating the progression of that condition. But I can't specifically recall if . . .
[9:30 a.m.]
MR. MACKINNON: Would you make that report available to members of the committee?
MS. CONNELL: Absolutely.
MR. MACKINNON: I also notice, too, grants to a Josephine Enang and C. Faith Moffatt. I presume they must be seconded from the University of Calgary and the University of Toronto because these grants are for those two universities.
MS. CONNELL: Those are students and these are Ph.D. students who cannot access a Ph.D. program here in the province, but they are both affiliated with Dalhousie University. So we do support our faculty to enhance their education if the program is not available in Nova Scotia.
MR. MACKINNON: Well, why wouldn't it be identified as a Nova Scotia university and not a university from Calgary or Toronto?
MS. CONNELL: Because the tuition must be paid to where they are students.
MR. MACKINNON: I see. Then it is reimbursed to the Province of Nova Scotia?
MS. CONNELL: It's payment for the students and the students are then provided the stipend and tuition to the university. It actually goes through the university where they are enrolled because that is where they must get ethics approval for their projects. That is where their supervisors are located and so forth but they are both on faculty at Dalhousie.
MR. MACKINNON: I would ask if you would be willing to provide to members of the committee all documentation that has been exchanged back and forth between yourself or any other employee or board member of the foundation with the Department of Health on funding allocations for each of the last three years. Would you do that?
MS. CONNELL: Yes.
MR. MACKINNON: Because we are getting into budgets, have you received any indication that your budget is going to be, again, at the $5 million level, or are you moving up or moving down with the expectation of receiving funding from difference sources?
MS. CONNELL: We haven't had any communication on that at this point.
MR. MACKINNON: When do you usually commence your communication?
MS. CONNELL: Our budget submission is due the end of February.
MR. MACKINNON: Are you in a position to be able to give some sense of - without giving up all your budgetary confidential matters - that you will be in line the same as you were last year, or will you be seeking more funding from the private sector?
MS. CONNELL: At this point in time, the board of directors has instructed me to actually seek an increase to our base funding from the Department of Health.
MR. MACKINNON: Of approximately how much?
MS. CONNELL: About $2.5 million additional.
MR. MACKINNON: So that would bring you up to $7.5 million?
MS. CONNELL: Roughly. I say about that, the actual figures, but, yes.
MR. MACKINNON: So it's a 50 per cent increase?
MS. CONNELL: Yes.
MR. MACKINNON: You're looking for a 50 per cent increase in funding over the previous year?
MS. CONNELL: Yes.
MR. MACKINNON: Now, you use these research dollars for leverage. There's obviously an economic component to this, as well as a health component. Has there been any collaboration with other government departments, the Department of Economic Development?
MS. CONNELL: We have actually just started to reach out to some other government departments. We had to actually get a lot of our strategic planning in line first and our legislation clearly tells us we need to consult to do that, so we are now in a position to just start. That is part of our process for this coming fiscal year.
MR. MACKINNON: We are just talking government dollars here. Let's put ourselves in the box here and say, we have $5 million. This is taxpayers' money. What other monies have you secured from the private sector?
MS. CONNELL: We haven't secured any from the private sector to this point.
MR. MACKINNON: Why not?
MS. CONNELL: We didn't have a strategic plan, we didn't have a policy process in place that allowed us to talk about what parts of the private sector we would go to. We hadn't had an opportunity to consult with the Health Charities Network who were very concerned about where we might go.
MR. MACKINNON: But you have been in operation for three years. You would have thought that after - I could see the first year, you're just starting to gel and develop a focus, and the second year, well, you're getting your feet wet and really starting to get a sense of
the dynamics and parameters of funding, and programs and the partners and so on. You've now just about completed your third year, going into your fourth year, and you haven't secured $1 from the private sector. That's what you're telling us.
MS. CONNELL: Not from the private sector, but we have secured dollars from the federal government and from national agencies and from other resources, although I wouldn't call them private sector. HRDC has provided funding.
MR. MACKINNON: Would you provide us with a list of the detail on those funding packages as well?
MS. CONNELL: Yes.
MR. MACKINNON: Mr. Chairman, I realize I just have one minute left.
MR. CHAIRMAN: You have lots of time.
MR. MACKINNON: I will pass my time on to the Conservative caucus, I know they're just chomping at the bit there.
MR. CHAIRMAN: It's 9:36 a.m., and the next 12 minutes belong to the government caucus.
The member for Kings West. Mr. Carey, you have the floor.
MR. JON CAREY: When we're dealing with various organizations, I'm always interested in the administration costs. I think from the information that we were provided, your organization runs somewhere around 17 per cent of your budget as administration. Is that accurate?
MS. CONNELL: No, a maximum of 15 per cent of the government grant goes to administration. Just to clarify, we pay for all of our program support, so the actual office administration is between 4 per cent and 5 per cent, and the other goes to program support. For example, we're required to spend 5 per cent of the 15 per cent on communication. Our Capacity Building Program comes out of that 15 per cent and so forth.
MR. CAREY: How would this compare with similar organizations and foundations across Canada or in North America?
MS. CONNELL: The 4 per cent to 5 per cent is quite low. They're running around 7 per cent.
MR. CAREY: Obviously you're doing very well in the numbers . Do you have the administration staff that you require? Are you happy with what you have, to leave you in this range of expenditure?
MS. CONNELL: We have a staff of three. We're very committed to providing the resources into the research community. But I guess, depending on the pace of development, that's expected. We've done very well for three people. If we want to increase the pace, we would have to increase the staff.
MR. CAREY: In a previous meeting, we were given some information where the Auditor General's Department made some recommendations to your organization, and some of them, I understand, you've already fulfilled. Would you generally comment, maybe with some specifics, on how that is coming, how you feel it can be accomplished, is something that you can do, or where the pitfalls may be, or whatever?
MS. CONNELL: We've actually been able to act on almost all of the recommendations. Most of them are in place. The one thing we've made progress on but will take some time is the agreements with the academic institutions, and that's just historical issues that we need to sort through, but we have made initial contacts. Can I refer to Mr. Rushton here for a moment, on the financial stuff?
MR. CAREY: Surely, because that's really what I'm interested in. We're a Public Accounts Committee and we're interested in the money aspect of it.
MR. RUSHTON: Basically we have reviewed the Auditor General's Report and implemented most of the recommendations that he's put forth. We are in the process of expanding our reporting capabilities internally. Basically, we're quite pleased with what the Auditor General has pointed out, and what we've done so far to meet that.
MR. CAREY: Do you see a lengthy period to implement all of the requests or any difficulties that may arise?
MR. RUSHTON: No. Most of the stuff is already in place, most of the things that he has recommended. The only thing that we may have a time lag on is in fact the things where we have to go out and depend on external sources; for instance, as Ms. Connell was saying, the universities, in compliance with those recommendations of the Auditor General.
MR. CAREY: Just to maybe inform me a little better, from the information we were given I see you have had three competitions for organizations or individuals to avail themselves of grants. Now, just taking any one of them, say it's a $100,000 grant and it's
competition number one, what time frame do you put on the researchers or the people involved to complete this? Research to me, the completion, is not done until something is arrived at, a conclusion. Are these annual amounts of money a three-year plan, or how does that work?
MR. RUSHTON: I'm going to pass that over.
MS. CONNELL: It's a total amount. The amounts you are seeing are a total award. For the first and second competitions, they were for two-year time frames, with an additional 12 months. That additional 12 months is for receipt of ethics approval, delay in equipment, all kinds of things like that. So the vast majority of them, for those first two competitions, are over a three-year time frame, but the funding is actually for two years because of the delays in starts and that kind of thing.
MR. CAREY: For example, the first one on the list is $98,000, does that come out of budget year one, a particular budget year? It's already claimed and gone, even though it's going to be maybe two or three years . . .
MS. CONNELL: We allocate into the future, so that we never have an unfunded liability.
MR. CAREY: So you fund them as you grant them?
MS. CONNELL: Yes, well, we actually don't allocate the full amount to the researcher, because we need to ensure appropriate progress and so forth, but we allocate it from a budgeting perspective, into the future.
MR. CAREY: You just don't turn the funds over.
MS. CONNELL: Correct. Year by year.
MR. CAREY: That's pretty prudent, yes. Now, I see here and I must say I don't have the understanding that I would like to have of this, but it appears that the universities, Halifax and Acadia, one of the few other areas - I guess what I'm looking for is if an industry in Nova Scotia does research, do they get involved, can they get involved in the competition to share funding with someone at the universities? Is it spread over the province, or is it specifically done in these locations?
MS. CONNELL: Under our collaborative health research projects, there are opportunities for industry, any community groups, hospitals, to partner with academic institutions. Our charitable status requires us to filter the funding through the academic institutions, but certainly the institutions then, through the collaborative process, can do that. So, therefore, yes, the opportunity is there.
MR. CAREY: Does this happen very often? Do we get industry working with university people and research? Is it unusual or usual? Could that happen and does that happen?
MS. CONNELL: It's unusual for us right now in that we're focusing on new investigators, but it is an area we've targeted for capacity building. So we're hoping to encourage more of that activity.
MR. CAREY: In general, do you have any idea of the economic spinoff of research to the province? I realize you're interested in the research end of it, but from a financial standpoint, do you have any data that would say how the province is affected by the research and the foundation?
MS. CONNELL: There's a variety of information available on the general research industry sector, but a lot of it is contradictory. We've been trying to get a handle on that from the outset of the foundation. I can't say I have a definitive answer for you. It just varies. One of the things is that there is a fair bit of private research going on through pharmaceutical industries and so forth that just adds to the complexity of trying to answer that question. I am working with, primarily, people at Dalhousie University so that we can try to get a sense of the total amounts.
MR. CAREY: I will pass the rest of my time over to my colleagues.
MR. CHAIRMAN: Mr. DeWolfe, you have just under four minutes.
MR. DEWOLFE: I will be very brief then. I would just like to say that the NDP's rhetoric is somewhat confusing and misleading. It seems to be based on a false and cynical premise that the government knowingly underbudgeted for the Nova Scotia Health Research Foundation. I'm pleased that the Auditor General shed some light on this very subject, on the bottom line of this province. The fact is the government cannot grant the Department of Health's request for $5 million for the foundation during the budget process but, however, if the Department of Health can reallocate funds from their existing budget, then that is fine. You see, this government that I am involved with is putting forward balanced budgets, not to be confused with the NDP's fiscal plan for Nova Scotia. I would like to pass the final comments to my colleague, the member for Colchester-Musquodoboit Valley.
[9:45 a.m.]
MR. CHAIRMAN: Mr. Taylor.
MR. TAYLOR: Thank you, Mr. Chairman. I think my colleague, the member for Pictou East, does make a very valid point. I mean, estimates are estimates, as the Auditor General pointed out and balanced budgets are balanced budgets. If departments - and I would
like to think that all departments generate some internal savings in times that are, by some measures, quite difficult. There is no question about that.
For some time now, during different occasions, the NDP - in particular, that member for Halifax Fairview - has taken the opportunity or made the opportunity to challenge the government on the balanced budget. I think, Mr. Chairman, you, as chairman, recognize that the mandate, in terms of reference, in fact, of the Public Accounts Committee is to invite guests into any given hearing and discern as to whether or not Nova Scotians are getting good value for their hard-earned tax dollars.
Today, I would say, Mr. Chairman, that I am extremely pleased with the work, just looking at the projects of the health foundation. I think, the former Minister of Health - one of the former Ministers of Health - would agree, too, that the health foundation is doing extremely good work. This is health research, Mr. Chairman, and I am extremely pleased when I look at the list of projects. I would like a little more information on the outcomes and you have made the commitment that we can find that information on a Web site or you could make it available, probably, in hard copy.
I think, what Nova Scotians can say as a consequence of this hearing, is that the establishment of the Nova Scotia Health Research Foundation has been a good thing. It has been good for all Nova Scotians, especially those who have health issues and have concerns, disease and things of that nature.
Mr. Chairman, in conclusion, I would say thank you to our guest. I appreciate you coming in and being so forthright. It is appreciated and welcome.
MR. CHAIRMAN: Thank you, Mr. Taylor. With the time that has been given up by Mr. MacKinnon and Mr. Steele earlier, we have two minutes remaining. Does anybody have further comments, questions? Mr. MacKinnon.
MR. MACKINNON: Perhaps one short snapper in the spirit of cooperation with my colleague, the member for Pictou East. It would be in order to ask our witness that when she is preparing her budget for the Department of Health, that document asking for the $7.5 million, if you would ask the government if they would ensure putting down in their estimates, if they do approve it, $7.5 million, not $2.5 million.
MR. CHAIRMAN: Ms. Connell, do you wish to respond?
MS. CONNELL: I could certainly bring that to my board of directors.
MR. CHAIRMAN: Thank you. I would call upon our witnesses now for a wrap-up. I remind you that during your comments, Ms. Connell, you made a couple of commitments to Mr. MacKinnon, in particular, about some follow-up documentation, and if you can
provide that to Ms. Stevens at your convenience it would be appreciated. However, if either you or Mr. Rushton has a comment to make, I invite you to make it now.
MS. CONNELL: I would just like to conclude by saying that prior to coming today, I had a meeting with the board of directors and we discussed the information that we thought would be appropriate to convey to the committee. Among other things, they did ask me to ensure that the members understand that we are very pleased with the level of support that we have received from the government thus far, and that we feel that the legislation is very progressive and has been allowing us to really strive forward. We do believe that the high level of satisfaction of our constituents reflects that. Thank you.
MR. CHAIRMAN: Thank you. Anything to add, Eric?
MR. RUSHTON: I was just going to say thank you very much for allowing us to come in and address you today.
MR. CHAIRMAN: Thank you. Before we adjourn, I just have this item of business so if you could remain in your seats I think we can get very quick consensus on this.
Next week it is scheduled that we were going to have - and I say that with pluperfect past tense - an in camera session with the AG. Mr. Salmon has brought to my attention that
it is not necessary to have that in camera, that he would like to have it as a public session here in the Legislature, as next week we will be looking at the expenses or the plans of the Auditor General's Office.
Are we in agreement with Mr. Salmon's request?
It is agreed.
I hear consensus. We look forward to next week in this Chamber, Roy, with your staff. With that, I would call for a motion of adjournment.
MR. MACKINNON: I so move.
MR. CHAIRMAN: It has been so moved.
We stand adjourned. Thank you and have a good day.
[The committee adjourned at 9:52 a.m.]
