Public proceedings of the Board

Meeting of the Board of Directors on June 8, 2016

Attendance

Board members present

John McCamus (Chair), Christa Freiler (by teleconference), John Liston (by teleconference), James McNee, Derry Millar, Michel Robillard (by teleconference) , James Yakimovich, David Field (CEO/Ex Officio)

Staff present

Vince Correia, Sue McCaffrey, Stephanie Mealing, Michelle Sguin

Guests

Kathi Aspros, Engagement Associate Partner, Ernst & Young; Laura Bell, Director, Office of the Auditor General

1. Meeting agenda

The vice-president and CAO requested moving the Audit Findings Report to the beginning of the agenda. The meeting agenda was approved subject to this amendment.

2. Disclosure of conflict of interest

No conflict of interest was identified.

3. LAOs final financial statements for the year ended March 31, 2016

The Vice-President and CAO presented LAOs financial statements for the year ending March 31, 2016. She highlighted:

  • the Board is required to approve the year-end financial statements before the Auditor General releases her Audit Report
  • staff request approval to transfer $1.8 million from the internally restricted reserves to cover the cost of co‑locating the specialty clinics
  • Legal Aid Ontarios operating deficit for the period ending March 31, 2016, was $13.8 million. Of this, $5.6 million was related to over-expenditure in the financial eligibility program, while $1.8 million was due to the funding of the specialty clinic co-location project
  • the operating deficit is $6.4 million with those two items excluded
  • Legal Aid Ontario will continue to track its actual expenditures on financial eligibility against revenues, with the expectation that they will balance over time

Decision

The Board approved the transfer from internally restricted assets of $1.8 million relating to the cost of the build-out of the specialty clinic co‑location, and further approved LAOs final financial statements for the year ending March 31, 2016.

4. Audit results report

Laura Bell, Director, Office of the Auditor General, provided regrets from the Auditor General on her absence from this meeting. She reported the following:

  • the Legal Aid Ontario audit went very smoothly
  • the Auditor General will issue an unqualified opinion on the 2015/16 financial statements
  • the audit does not report trivial reporting errors
  • there were no significant changes in accounting policies this year
  • there were estimates, which were reasonable and disclosed appropriately, in a few areas, such as allowance for client accounts receivable, legal services accrual for work not yet billed, and accrued pension benefits
  • the auditors will review the Annual Report to ensure it is consistent with what has been approved
  • the Auditor Generals Value-for-money Report had said Legal Aid Ontario and other agencies had submitted previous annual reports after the deadline
  • Legal Aid Ontario provided the 2015 annual report within the statutory timeline, but the Report was tabled late
  • Legal Aid Ontario management cooperated fully in answering the Auditor General Offices questions during the auditing process
  • reporting errors, based on materiality of $8.46M, set a $423,000 threshold
  • Legal Aid Ontario has significant internal controls in place

With respect to fraud and illegal acts, she identified one instance‑a panel lawyer with fraudulent billing activity. She asked whether Board members present were aware of any other fraudulent activity that should be reported, and they all said no.

With respect to the draft management letter of representations, she noted that:

  • the Audit Report recommends creating a plan to deal with Legal Aid Ontarios current deficit, particularly on use of the contingency reserve fund
  • the Auditor Generals office will assess Legal Aid Ontarios Internal Audit Unit, as requested by Legal Aid Ontario

Legal Aid Ontario Board members met in-camera with the Audit team.

Decision

The Board received the Audit Findings Report covering the fiscal period ending March 31, 2016.

5. Legal Aid Ontarios final employee pension financial statements for the year ended December 31, 2015

The Vice-President and CAO reported as follows:

  • Legal Aid Ontario has two separate pension plansa defined benefit plan (which is drawn down and has few employees left in it) and a defined contribution plan
  • Legal Aid Ontarios $90.6 million in pension assets is substantially higher than assets a year ago because contributions have increased and investment income has been added to the defined contribution plan
  • this report is an audit of assets only; the liabilities are covered in Legal Aid Ontario`s financial statements
  • a report on the future of the defined benefit pension plan will be presented to the Audit and Finance Committee

Decision

The Board approved Legal Aid Ontarios Final Employee Pension Plan Financial Statements for the Year Ended December 31, 2015.

6. New items

6.1 Lync conferencing

The vice-president and CAO reported as follows:

  • two years ago, Legal Aid Ontario instituted video-conferencing
  • among other benefits, Executive Management Committee members across Ontario use video-conferencing to participate in Executive Management Committee meetings
  • within the past year, Legal Aid Ontario moved to the Skype for Business model as part of its contract with Microsoft
  • it is being rolled out throughout Legal Aid Ontario, starting with the north, central and eastern regions
  • this program enables virtual meetings with anyone in the organization, including Board and committee members
  • this program will contribute greatly to Legal Aid Ontarios agile workforce strategy

6.2 Award to Board member Michel Robillard

The Chair congratulated M. Robillard on his award for contributing to the impact of education in literacy and basic skills on Ontario Francophone minorities.