VANCOUVER (NEWS1130) – Despite having clear documentation of all spending, Vancouver School Board trustees were too tied up in partisan politics, needed better financial planning policies and showed a lack of respect for staff, according to the findings of a much anticipated audit of the board.

The audit, written by special adviser Peter Milburn and released Friday afternoon, makes 28 recommendations including clearer conduct policies and performance expectation, in camera committee meetings to reduce politicking, creating multi-year financial plans and finding cost savings like transferring of a partial interest in the Kingsgate Mall to the Province.

The audit, made public 15 minutes before a news conference with Education Minister Mike Bernier, is supported by an Ernst and Young report, the same audit firm that did the VSB review in 2015.

“This report finds similar issues related to the Board’s governance, oversight, performance measurement, and budgetary practices that have been identified over the years,” the report reads. “However, the context of this review is substantially different, as this year, the Board of Trustees failed to pass a balanced budget.”

Education Minister Mike Bernier says what he finds most “disturbing” is how the VSB allowed money to be tied up in what he calls inefficiencies, rather than on classrooms, students and teachers”

“Stability has been put at risk by over-staffing compared to other school districts, labour agreements driving additional call out, duplication, and idle time, and a failure to use surplus real estate like the Kingsgate Mall to set a new path for fiscal sustainability,” he says.

Bernier dismissed the entire board two weeks ago, citing their failure to pass a balanced budget by June 30 and Milburn’s audit.

Milburn chastised the board for backing themselves into a financial corner, with excess real estate, inefficient labour agreements and restrictions on how to raise money, leaving them with limited options to balance their budget.

VSB is forecasted to have a $28.6 million deficit this year. VSB management had created a plan to balance the books with $21.8 million in cuts and $6.8 million from savings. The plan put up to 11 schools on a closure list. It was originally rejected by trustees in June, but they were supposedly going to approve it just hours after Bernier dismissed them.

Milburn called the plan “rational and achievable” but ultimately not self-sustaining because it continued to rely on savings for day to day expenditures.

He recommends the VSB has the chance to raise money by transferring a partial interest in the Kingsgate Mall to the Province.

Bernier hinted the district should sell Kingsgate.

“Why would you have commercial property when that money can be invested into students?” he says.

Milburn also concludes the district is “significantly overstaffed” but forced to maintain a staff of 101 people, because of labour contracts. He finds up to 30 staff are not needed for half the year and encourages the board to put those employees to work finding other efficiencies.

He recommends the board make three-year financial plans with 10-year goals and adjust at every budget.

The audit also found there were strained relationships between board members and a divide along party lines.

The Ernst and Young report found party members voted together around 95 per cent of the time and while Milburn writes there not all board members feel the same way about relationships among each other.

The report also gave a glimpse into what may be expected in an upcoming WorkSafeBC investigation into allegations of bullying and harassment of senior staff on the part of trustees.

“Trustees are not always being respectful in their interactions with VSB management during board meetings,” the audit says. “The Board of Trustees at the VSB is taking an unusual and ineffective approach in the depth and nature of their interaction with the operation of the Vancouver School District.

Milburn was quick to note that the allegations, and any recommendations in the area were not part of his report.

Bernier received the report Oct. 14, but it was unable to be made public before an Office of the Information and Privacy Commissioner investigation.

The minister said he wanted to get the audit out “as soon as possible,” and announced they would release the report 15 minutes before a news conference.

Former VSB Trustee Patti Bacchus says the entire audit process was expensive and only caused problems for the board.

“It destabilizes the school district and we now still have no superintendent and vice, no secretary treasurer, senior managers are still on leave two weeks after the board was fired and I think the minister needs to take some responsibility for that.”

She says the VSB still has the second lowest per student funding figure in the country.

Milburn’s 28 recommendations

1. The VSB develop a policy that allows for a reasonable allocation of costs to the individual trustees for the personal use of phones supplied by the VSD.

2. The VSB update and clarify its policies relating to governance to ensure that Trustees are bound to conduct themselves in accordance with their role as stewards rather than advocates.

3. The VSB publish their updated policies so that future candidates for the office of Trustee are aware of their obligations. These should be reinforced and acknowledged at the commencement of their term as part of their oath of office

4. The VSB engage an external professional to assist with team building and conflict resolution in order to reduce the impact of Trustee personality dynamics on both the Board’s relationship with management and the effectiveness of the Board as a whole.

5. The VSB engage the BC School Trustees Association (BCSTA) to facilitate discussion with other boards of education that have reduced the partisan atmosphere in order to understand, adapt and implement those successful policies and strategies.

6. The VSB update the Strategic Plan to include a clear description of the role of the Board of Trustees as one that focuses on the strategic vision, policies, and general oversight of the organization, and not the management of the day-to-day operations of the Executive, staff and district.

7. The VSB seek assistance from the BCSTA and other urban school districts in setting their Strategic Plan and governance structure.

8. The VSB implement better practices and procedures for Standing Committee and Board meetings to enable an oversight structure that functions effectively and efficiently, including: o Developing practices and policies to streamline attendance guidelines and receipt of input from persons who are not members of that committee, including stakeholder representatives and other Trustees. o An analysis of stakeholder representation to evaluate the effectiveness of these groups in both representing the community at large and providing equal representation at meetings

9. Consistent with best practices at other School Districts, the VSB designate committee meetings as in camera in an effort to depoliticize discussions and allow Trustees to focus on providing effective oversight.

10. The VSB delegate stakeholder consultation to VSB management with the results presented to Trustees at relevant Committee meetings.

11. The VSB comply with s72 of the School Act and take minutes of all proceedings of the Board, regardless of the nature of the meeting.

12. The VSB reconsider the cost and benefits of being a member in the BC School Trustees Association, particularly in the context of the recommendations contained in this report and the guidance that the BCSTA provides in many of the relevant areas.

13. The VSB implement a question and answer period at public Board meetings to hear from stakeholders.

14. The VSB create an Audit Committee, including in the membership of the committee external experts to provide recommendations on various strategies, financial situations, risk management scenarios, and other complex issues.

15. The VSB develop and implement a framework specifying the collective knowledge, skills and experience required to fulfill its responsibilities, and a corresponding process to assess the collective skills of the Board in order to: o Identify specific needs for the upcoming term’s orientation program. o Support the development of training and development plans for individual Trustees. o Identify the need for external advisors and expertise based on skills gaps. o Leverage resources and precedents from the BC School Trustees Association.

16. The VSB include in its Strategic Plan a framework and process enabling the District to set objectives, establish performance expectations, create metrics, and measure and report on employee performance. This framework should link to objectives in the Strategic Plan and be an active tool for both Vancouver School District management and the Board. This process should be conducted regularly and at least once per year.

17. The VSB develop a performance management process for the Board of Trustees that: o contains clearly defined criteria relating to the Board’s stewardship role and a self-assessment process to measure the performance of the Board in achieving its objectives and effectively providing oversight; o aligns with the planning and reporting cycle of the district’s overall performance measurement framework; o includes evaluation by Trustees, stakeholders, and management; and o is reviewed annually

18. The VSB create a performance management framework for the Superintendent, that: o has clearly articulated and appropriate timelines for achievement; o is developed collaboratively between the Board and Superintendent to promote transparency and open, two-way communication; and o is reviewed two to four times per year.

19. The VSB immediately update the Long Range Facilities Plan (LRFP) to reduce facility costs and align the space requirements per pupil with other comparable school districts.

20. The VSB immediately conduct an assessment of the other measures that are available to replace the lost income and foregone savings associated with the closure of the 11 schools.

21. The VSB immediately commence a review of its 14 collective agreements and develop a strategy to reduce them in number and modernize the language contained within them to limit or eliminate unnecessary inefficiencies resulting in high costs to the district.

22. The VSB immediately engage with the Public Sector Employers Council (PSEC) and the affected unions to identify opportunities for better service alignment and to develop options, well in advance of the commencement of the collective bargaining process, that will begin prior to the expiry of the existing collective agreements beginning in 2019.

23. The VSB immediately explore, in partnership with relevant unions, the opportunity to develop service agreements with other government or nongovernment agencies to better use underutilized staff.

24. In the event that underutilized staff can be put to work at other agencies or organizations, the VSB work together with the unions to approach the marketplace and secure service agreements or contracts that will maximize the financial recoveries back to the School District to support the fiscal plan.

25. The VSB conduct a strategic review of the real estate assets by a qualified professional regarding (i) the existing market value of the surplus lands (by way of sale or lease); and (ii) the closed and pending closed school annexes, proposed school closure associated with the LRFP, and non-school assets.

26. The VSB retain real estate professionals to assess the market rental potential and highest and best use of each of the school facilities proposed for closure in the LRFP, and adopt those recommendations that result in the best financial outcome

27. The VSB work with the Province to develop viable options for achieving early value (revenue) from the transfer of a partial interest in the Kingsgate Mall to the Province.

28. The VSB develop a three-year fiscal plan with a 10-year outlook, and update the plan on an annual basis.

The Forensic Audit of Board Expenses and Review of the Vancouver School Board (the report from Special Advisor Peter Milburn)

Review of the Vancouver Board of Education (District 39) (the detailed audit and reports prepared by Ernst and Young to support the report from Peter Milburn)

Review of the Vancouver Board of Education (District 39) – School Closure Supplemental Report (prepared after the suspension of the school closure process to examine the impact that decision had on the full Ernst and Young report)