Public proceedings of the Board
Meeting of the Board of Directors on June 9, 2017
Board members present
John McCamus (Chair), Christa Freiler (by teleconference), Carol Hartman (by teleconference), John Liston (by teleconference), James McNee, Derry Millar, Michel Robillard (by teleconference), James Yakimovich, Ann Marie Yantz (by teleconference) David Field (CEO/Ex Officio)
Janet Budgell, Mary-Ann Cocchetto, Vince Correia, Stephanie Mealing, Michelle Séguin
Laura Bell (Auditor General's Office), Michael Hawtin and Juliane Cooke (PwC)
1. Meeting agenda
Subject to two amendments to the agenda, the meeting agenda was adopted.
2. Conflict of interest
No conflict of interest was identified.
3. Staff announcement
The President and CEO reported that, effective July 4, 2017, Michelle Séguin, LAO's Vice-President and Chief Administrative Officer, has accepted a secondment at the Deposit Insurance Corporation of Ontario.
4. Board reports
4.1 Audit findings report
Laura Bell presented a verbal update on the status of the audit findings report. The Auditor General is reviewing Legal Aid Ontario's financial statements for fiscal year 2016/17, and the audit did not identify any issues, errors or internal control deficiencies. Subject to the approval of the Auditor General, an unqualified opinion will be issued as of today's date. PwC is independent and is retained to conduct the audit of Legal Aid Ontario on behalf of the Auditor General of Ontario. In the current year, there were no changes in accounting policies, with the exception of a difference in the break-down of expenses. All of the estimates were reasonable and the work performed has been done in accordance with the audit plan. Legal Aid Ontario management and staff were very cooperative. Legal Aid Ontario's deficit issue will continue to be monitored.
The Board received the verbal update with respect to the audit findings report from the audit team.
4.2 In camera session
At this point in the proceedings, Legal Aid Ontario staff left the meeting and the Board had an In Camera discussion with the audit team.
4.3 Legal Aid Ontario's unapproved financial statements to March 31, 2017
The chief financial officer presented the unapproved financial statements to March 31, 2017. He highlighted that the:
- forecasted deficit is in the amount of $25.5M
- operating deficit is attributable to the over-expenditure in the financial eligibility program of $13M and the unfunded component of the tariff increase of $10.3M
- cash flow situation and the mitigation plans developed to address this
He referred to the summary of revenues and highlighted the increase, year-over-year, in financial eligibility funding as well as an increase in Law Foundation of Ontario (LFO) revenues. Under the expenditures column, he noted that the biggest increase is in the certificate program.
The Board discussed recommendations for the use of cash remaining in the Internally Restricted Funds (IRFs) and the Contingency Reserve Fund (CRF).
- authorized the use of $4.081M of LAO's Internally Restricted Funds $1.163M for the clinic co‑location and $2.918M for the unfunded component of tariff increases
- authorized the use of $1.4M of the Contingency Reserve Fund to offset the unfunded component of tariff increases
- approved the Financial Statements for the fiscal year ended March 31, 2017:
- subject to the review by the Auditor General of Ontario of the unapproved Legal Aid Ontario financial statements, and
- subject to the final audit findings being not materially different from the verbal audit findings presented by Laura Bell, Audit Director Office of the Auditor General of Ontario
4.4 Legal Aid Ontario's unapproved pension plan financial statements to December 31, 2016
The chief financial officer presented the unapproved employees' pension plan audited financial statements to December 31, 2016. The chief financial officer reported that:
- the financial statements represent an audit of the investments only, not the liabilities
- the net assets in the defined benefit component did not perform as well as the previous year and the value has decreased on a calendar basis
- this is a mature plan and that over the past four years, returns in excess of 10% have been achieved
- the defined contribution component performed significantly better than the previous year as a result of asset gains as well as an increase in employer/employee contributions for 2016
The Board approved the audited financial statements for the employees' pension plan for the calendar year ended December 31, 2016.