School District 83 - British Columbia · 6/3/2016 · The Minister appointed Elizabeth Watson, QC of WATSON as a Special Advisor to the Board effective April 20, 2016 with a requirement

SchoolDistrict83

SpecialAdvisorReport

June3,2016

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SchoolDistrictNo.83

SpecialAdvisor’sReportJune3,2016

TABLEOFCONTENTSE X E C U T I V E S UMMA R Y I A . B A C K G R O U N D 1

1. ScopeofourReview 12. Process 23. Acknowledgement 2

B . WOR K I N G D E F I N I T I O N O F “ G O V E R N A N C E ” 3 1. MeaningofGovernance 32. BenefitsofGoodGovernance 43. ComponentsofGoodGovernance 44. GovernanceFramework 4

C . S C H O O L B O A R D G O V E R N A N C E I N B R I T I S H C O L UM B I A 6 1. Kto12GovernanceRegime 62. MinisterofEducation 63. BoardofEducation 64. IndividualTrustee’sRoleinGovernance 85. Superintendent 86. SecretaryTreasurer 97. LieutenantGovernorinCouncil 9

D . S C H O O L D I S T R I C T 8 3 , O V E R V I EW 1 0 1. MissionStatement 102. VisionStatement 103. CoreValues 104. BoardofTrustees 115. BoardChair 116. GovernancePolicies 117. MeetingProcedures 118. Superintendent 129. SecretaryTreasurer 12

E . S C H O O L D I S T R I C T 8 3 , O B S E R V A T I O N S A N D R E C OMM E N D A T I O N S 1 3 1. BoardFunctioning 132. AlignmentofVisionandGoals 143. ConstructiveRelationshipsandTransparency 184. RolesandResponsibilities 215. SkillsandExperience 236. CommitmenttoContinuousImprovement 277. FinancialManagementandAccountability 288. EthicalConductandConflictofInterest 339. GovernanceFramework 34

A P P E N D I X A – T E RM S O F R E F E R E N C E ( E X C E R P T ) 3 5 A P P E N D I X B – L I S T O F R E C OMM E N D A T I O N S 3 6

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E X E C U T I V E S U MM A R Y

PursuanttoanappointmentmadebytheMinistryofEducationonApril20,2016,wecompletedareviewof the governance practices at North Okanagan Shuswap School District No. 83 (District). Under ourappointmentasSpecialAdvisortotheMinistry,ourrolewasto:

§ evaluatethegovernancepracticesoftheDistrict’sBoardofEducation(Board);and

§ evaluate the Board’s capacity in respect of financial matters and effective fiscalmanagement.

WecarriedoutourreviewbetweenthedatesofApril20,andMay18,2016. Incompletingourreview,we:

§ considered the governance framework for school boards within British Columbia,includingtheSchoolActandRegulations;

§ reviewed District documentation related to the Board’s governance framework andpractices,includingmeetingminutesforthepriorfiveplusyears;and

§ interviewed a broad range of stakeholders including trustees, senior management,parents,teachers,andothers.

In addition toour interviews,we consideredanumberof letters received from interestedpartieswhowishedtosharetheirviews.

We would like to acknowledge and thank those who participated in the review. All individualsinterviewedwerecandidandforthcominginsharingwithustheirthoughtsandexperiences.

SummaryofKeyFindings

This review arose from concerns raised in the District as a result of the recently constructed Districtoffice.Theunderlyingissuethatgaverisetoconcernwastherealizationbymembersofthecommunitythattheofficewasfinancedthroughlocalcapital,asignificantamountofwhichhadbeentransferredintothefundinrecentyearsfromoperatingfundsurplusesatthesametimetheBoardhadbeencuttingitsoperationalbudget, citingbudgetpressures.Costoverrunson thebuildinghaveescalated thesenseofoutrageinthecommunity.

Our interviewsdiscoveredthattheconcernsurroundingthefundingoftheDistrictoffice isonlypartofthestory.Deepphilosophicalissuesexistrelatedtoeducationdeliverystrategiesinthefaceofdecliningenrolment – including striking the right balance between urban and rural schools, the level ofcommitmenttomiddleschools, the issueofpotential schoolclosuresandtherelated long-termfacility

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plan,theprioritizationofprograms–allcompetingforthesamelimitedresources.Wewerestruckbythecomplexityofthesestrategicoptionsandfindingtherightbalancetomeetcommunityneeds.

The realizationofhow theDistrictofficewas funded servedasa lightning rod togalvanize communityconcernabouthowtheDistrictwasbeinggovernedandmanagedanditstransparencywithstakeholders.StakeholdershavelosttrustintheDistrict’strustees(Trustees)andthesuperintendent(Superintendent).Three(ofnine)Trusteeshavegiventheirnoticeofresignation.Boardmeetingshavedegeneratedtothepoint where there appears to be little decorum. The ability to carry on District business is seriouslyhampered.

WhilemostoftheunderlyingchallengestheDistrictfacesmightnotbeuniquetothisschooldistrict,theemotions experienced by individual Trustees, central staff, and stakeholder groups in the District areprofoundandtroubling.

There are several deep underlying factors contributing to the current turmoil. Several of these areintertwined.Someofthechallengesinclude:

§ lackofastronggovernanceframeworkfortheDistrict;

§ lackofclarityastotheroleoftheBoardandindividualTrustees;

§ lackof sufficient skills andexperienceamongTrustees toprovide strategic,operational,andfinancialoversight;

§ absence of a long-term strategy and vision, making the decision-making process morechallengingintheabsenceofasetofguidingprinciples;

§ astronglyheldviewby intervieweesthat individualTrusteesoftenputtheneedsof theregiontheyrepresent,andwhoelectthem,beforetheneedsoftheDistrictasawhole;

§ a complete absence of financial expertise on the Board, and a very minimal level offinancial literacy,whichhascontributedtopoorunderstandingbytheBoardof financialresultsandactivities;

§ alackoftrustamongstTrustees,andanerodingleveloftrustthatsomeTrusteeshaveintheinformationandrecommendationsbroughtforwardbyseniormanagement;

§ lackoftrustbystakeholdersandthebroadercommunityintheTrustees;

§ aviewheldbykeystakeholdergroups (includingNOSTA,CUPE,DPACandparents) thatthereisactualorperceivedlackofconsultationwithvestedpartiesonkeydecisions;

§ lackofperceived transparencyby theBoardwhich is compoundedby thenumberof incamera meetings coupled with insufficient time and mechanisms to respond to thepublic’squestionsandotherrelatedfactors;

§ no formal evaluation processes for the Board or Trustees nor any formal performancemanagement processes (goal setting and evaluation) for the Superintendent andSecretaryTreasurer;and

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§ a lack of comprehensive approach to governance education for Trustees and seniormanagement.

SummaryofKeyRecommendations

We have made a number of recommendations to help lay a more solid foundation to strengthengovernance practices at the District in the future. However, implementing these recommendationssuccessfullyrequiresafreshstart.

Our review highlighted that this Board is not functioning well, and the situation would appear to bedeterioratingrapidly.

ThecommunityhaslostconfidenceinthisBoard.Aby-electionforthethreevacanciesisnotexpectedtosignificantly change current dynamics. As a result, we recommend that the Board be dissolvedwith aMinistry-appointed trustee appointed in its place.We recommend that theMinistry-appointed trusteeholdofficeuntilthenextregularlyscheduledelectionofschoolboardtrusteesfortheDistrictinthefallof2018. We also recommend that the Ministry-appointed trustee complete a formal evaluation of theSuperintendent’sperformanceoverthenextsixmonths.

Prior to thenextelection,werecommendthat thecurrentnumberofTrustees,alongwith the regionstheyrepresent,berevisitedwithagoalofreducingthenumberofTrustees,andrebalancingtheregionalrepresentationtobetterreflectpopulationintheDistrict.

Otherkeyrecommendationscontainedwithinthereportincludethefollowing:

StrategicPlanningandPerformanceManagement

§ Develop and implement a new strategic plan coupled with a comprehensive riskassessmentandimplementationofanenterpriseriskmanagementprogram.

§ AdoptaBoardandTrusteeperformanceevaluationprocess.

§ Implementaformalperformancemanagementprocess(includingestablishinggoals,andconducting a formal performance review) for the Superintendent, which would alsoextendtoothermembersofcentralstaffincludingtheSecretaryTreasurer.

SkillsandExpertise

§ DevelopformaltermsofreferencefortheBoardandTrusteesandenhancedgovernancetraining.

§ Ensure that the Board has necessary financial expertise, notwithstanding the importantrole that the Secretary Treasurer plays in supporting the Board in delivering on itsresponsibilities.

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§ Formalize an Audit and Finance Committee, including the necessity that at least onememberofthisCommitteebea“financialexpert”.

ConsultationandEnhancedTransparency

§ WiththenewBoard,takestepstohavetheBoardandmanagementdiscussandagreeonthe expectations of how theywillwork together and the process for assigningwork tomanagement.

§ Review theDistrict’s consultation strategy to ensure it is, and is perceived tobe, open,engaging,andconductedpriortodecisionsbeingmade.

§ Ensure greater openness and transparency of Board business (e.g., conduct of Boardmeetings, distribution of meeting materials, protocol for responding to questions, andenhanceddisclosuresontheDistrict’swebsiteincludingattendancerecords).

FinancialOversightandSupportingFrameworkofPoliciesandProcedures

§ Enhance the budgeting processes to ensure theBoard has a higher level picture of thecombined operating and capital budgets, along with a greater understanding of thebudget’ssensitivitiesandrisks.

§ Providemorefrequentreportingandanalysisofactualfinancialresultsduringtheyear.

§ Establisha“SurplusPolicy”,includingaprovisionthatanyinter-fundtransfersbeformallyapprovedbytheBoard.

§ Implement a more formal control framework, including policies and procedures, adelegationofauthority,andaninternalauditfunction.

§ Incorporateanannualsign-offbyTrusteesontheCodeofConduct.

§ Implement a Conflict of Interest Policy and a Whistleblower Policy, along withconsiderationoftheTaxpayerAccountabilityPrinciples.

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A. B A C K G R O U N D

ThisreviewarosefromconcernsraisedintheNorthOkanaganShuswapSchoolDistrictNo.83(District)and a request by the District’s Board of Education (Board) that the Minister of Education (Minister)appointaSpecialAdvisorunders.171.1oftheSchoolAct(Act).

TheunderlyingissuethatgaverisetoconcernwastherealizationbymembersofthecommunitythattheDistricthadtransferredover$10millioninoperatingsurplusfundsoverthepastfiveyearstofundcapitalprojects,most notably including a newDistrict office, at a timewhen theDistrict had been cutting itsoperational budget, citingbudgetpressures. Concerns raisedat the time included lackof transparencyandaquestionastotheBoard’sroleinthesematters.

TheMinisterappointedElizabethWatson,QCofWATSONasaSpecialAdvisortotheBoardeffectiveApril20,2016witharequirementtoreportbyMay20,2016(laterextendedtoJune3,2016).AnexcerptoftheSpecialAdvisor’stermsofreferenceisattachedasAppendixAtothisreport.Undertheappointment,theSpecialAdvisor’srolewasto:

§ evaluatetheBoard’sgovernancepractices;and

§ evaluate the Board’s capacity in respect of financial matters and effective fiscalmanagement.

1 . S C O P E O F O U R R E V I EW

OurreviewfocusedontheBoard’sgovernancefunctioning,includingcapacity,structureandculture;theBoard’s relationships with District management and external stakeholders; Board accountability andevaluation mechanisms; and the Board’s capacity with respect to financial matters and fiscalmanagement,includingthebudgetingprocess,capitalplanning,andmonitoringoffinancialresults.

Our review was not designed to be a comprehensive assessment of financial planning and reportingpractices;thuswedidnotcompleteareviewofexistingpoliciesandprocedures,orinternalcontrolsnordidweconductanauditorforensicreviewofpastfinancialtransactions.

During the course of our review, we heard feedback from several stakeholders on the substance ofdecisions made by the District. Our review was not designed to focus on the substance of Districtdecisions and therefore we have made no comment on the substance of any decisions made orcontemplated.

Giventheparameterssetoutinthetermsofreference,ourrecommendationsarespecifictotheDistrict.


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2 . P RO C E S S

Tocarryoutourreview,we:

§ considered the governance framework for school boards within British Columbia,includingtheActandrelatedregulations(Regulations);

§ reviewed District documentation related to the Board’s governance framework andpractices,includingmeetingminutesforthepriorfiveplusyears;and

§ interviewed a broad range of stakeholders including Trustees, senior management,parents,teachersandothers.

In addition toour interviews,we consideredanumberof letters received from interestedpartieswhowishedtosharetheirviews.

Withrespecttotheinformationobtainedfrominterviews,itistobenotedthatwedidnotconductanyinvestigation in relation to the information provided and make no findings of fact in relation to theinformation.Thisreportshouldbeconsideredinlightofthismethodology.

Inaddition,noneoftheinformationinthisreporthasbeenreviewedwiththeindividual(s)whoarethesubject of the information and such individuals have not had an opportunity to respond to thisinformation.Assuch,anyallegationsdescribedinthisreporthavenotbeentestedandforthepurposesofthisreportareunproven.

3 . A C KNOW L E D G EM EN T

Wewould like to thank all thosewho participated in the review.We found everyone involved in theprocess to be forthcoming.We thank District staff in particular for setting upmost of the interviews,answeringourmanyquestions,providinguswithrelevantdocumentationandgenerallysupportingthereviewprocess.Wethankallparticipantsforsharingtheirviews.


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B. WO R K I N G D E F I N I T I O N O F “ G O V E R N A N C E ”

1 . MEAN I N G O F G O V E R N AN C E

Becausethisreviewisaboutgovernance,itishelpfulthattherebeaworkingdefinitionofgovernanceasafoundationtothediscussionandrecommendationssetoutinthisreport.

The word “governance” has a long history and derives from the Greek word meaning “to steer”.Definitionsofgovernancevaryaccordingtocontext;inthecontextoforganizations,governancereferstothestructuresandprocessesbywhichanorganizationisdirected,controlledandheldtoaccount.

Good governance structure specifies the distribution of rights and responsibilities among the differentparticipants (e.g., Ministry of Education, District Board of Education, Board Chair, Trustees,Superintendent,SecretaryTreasurer,staff)andmakesclear:

§ Whoisinchargeofwhat?

§ Whosetsthedirectionandtheparameterswithinwhichthedirectionistobepursued?

§ Whomakesdecisionsaboutwhat?

§ Whosetsperformanceindicators,monitorsprogressandevaluatesresults?

§ Whoisaccountableforwhat–andtowhom?

Governance processes spell out the rules and procedures for making decisions and how the variouspartiestogovernanceinteract.

The governing body of an organization is responsible to set direction, set policies and managementperformance expectations, characterize and manage risk, oversee progress towards stated goals andensureaccountabilitytostakeholdersthroughtransparencyandreporting.Thegoverningbodydelegatesresponsibility tomanagement tocarryout theactivitiesnecessary toachieve thedesireddirectionandmonitorsmanagement’sperformance.

InaSchoolDistrictsetting,theboardoverseestheactivitiesofthedistrictbutisnotinvolvedintheday-to-day running of it. The board employs staff to administer the activities of the district. Thesuperintendentisthemostseniormemberofstaffandisresponsibletotheboardforcarryingoutboarddecisions, ensuring policy is followed and managing the operations. The secretary treasurer is thedistrict’s financial officer. The secretary treasurer is hired by the board although often reports to thesuperintendent.TheBoardmayconstitutecommitteestoassisttheboard’sworkincertainways.


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2 . B EN E F I T S O F G OOD G O V E R N AN C E

Inthe2013reportbytheBCAuditorGeneralonSchoolBoardgovernance1,theAuditorGeneralstated:

“Whetherintheprivateorpublicsector,goodgovernanceisachievedwhenanorganization’sstructures,processesandactionsenableitto:

§ delivergoods,servicesorprogramseffectivelyandefficiently;and

§ meettherequirementsofthelaw,regulations,publishedstandardsandcommunityexpectationsofaccountabilityandopenness.

“Goodgovernanceisthefoundationfromwhichanorganizationcanachieveitsobjectives.Goodgovernanceensuresthatanorganizationisallocatingresourceswiselyandservingthepublicinterestopenlyandtransparently.Inturn,thisbuildsandmaintainscitizens’confidenceintheorganization.

“Poorgovernanceincreasestheriskthattheorganizationwillnotdeliveronitsmandateeffectivelyandefficiently.”

3 . C OMPON E N T S O F G OOD G O V E R N AN C E

While governance is not “one size fits all”, there are certain componentsof goodgovernance that areapplicableacrossalltypesoforganizations.Theseinclude:

§ Alignmentonvisionandstrategy

§ Clearrolesandresponsibilities

§ Competentleaders

§ Effectivereviewanddecision-makingprocesses

§ Constructiverelationships

§ Positivecultureanddynamicsacrosstheorganization

§ Accountabilityandtransparency

§ Self-reflection,withacommitmenttocontinuousimprovement

4 . GOV E R N AN C E F R AM EWOR K

Goodgovernancedoesn’tjusthappen.Highperformingorganizationscreateanexplicitapproachtogoodgovernancebyestablishingaframeworkthataddresseseachcomponentofeffectivegovernanceoutlinedabove.

1 SchoolDistrictBoardGovernanceExamination,OfficeoftheAuditorGeneralofBritishColumbia(April2013),p.7


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Anorganization’sgovernanceframeworkisthesystemofstructuresandpracticesputinplacetodefinehow authority, decision-making and accountability are exercised within the organization. A cleargovernance framework enhances the ability for an organization to perform at a high level, achieve itsobjectivesandenjoypublicconfidenceinitsdecisions.Agovernanceframework:

§ definesthedivisionofpowerthroughtheallocationofauthoritiesandresponsibilities;

§ includes processes used to make decisions and direct and manage an organization’soperationsandactivities;

§ includespoliciestoguidepositivebehaviour;and

§ establishes mechanisms to achieve accountability between the governing body,management,andstakeholders.


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C. S C H O O L B O A R D G O V E R N A N C E I N B R I T I S H C O L U M B I A

1 . K T O 1 2 G O V E R N AN C E R E G IM E

The K to 12 education governance regime in British Columbia is set out in theAct. It is amulti-partysystem of governance – the Province sets the curriculum, negotiatesmajor collective agreements andprovides funding. Locally elected school boards appoint district leaders (Superintendent and SecretaryTreasurer),setpriorities,developstrategicplans,establishpolicies,approvetheallocationofresources,provideoversight,andaccounttotheProvinceandstakeholdersforstudentachievement.

OtherthantheActandRegulations,thereisnospecificgovernanceregimeorofficialguidanceforschoolboards. While the BC Best Practice Governance Guidelines provide a foundation of good governancepractices for public sector governing boards, and have been used as a reference point for previousreports2, theyarenotspecifictoSchoolBoardsandthereforedonotprovideguidancearoundsomeofthe more complex areas of school board governance. The BC School Trustees Association providessupportandguidancetotrusteesinavarietyofmatters,includingsomeaspectsofgovernance.

2 . MIN I S T E R O F E D U C A T I O N

Pursuant to the Act, the Minister “has charge of the maintenance and management of all Provincialschools”3andmaymakeavarietyofordersforthepurposesofcarryingouttheMinister’spowers,dutiesorfunctionsundertheAct.

3 . BOA R D O F E D U C A T I O N

TheActprovidesforaboardofeducationforeachSchoolDistrictcomposedofTrusteeswhoareelectedorappointed.Theboardistoconsistof3,5,7or9TrusteesasdeterminedbytheMinisterofEducation.TheMinistermaydeterminewhether elected Trustees are tobe elected at large, fromelectoral areaswithinthedistrict,oracombinationofmethods.Theboardelectsitsownchair.

The board is responsible for the improvement of student achievement in the district. To carry out itsresponsibilities,aboardmay4:

§ establishcommitteesandspecifythefunctionsanddutiesofthosecommittees,

2 AuditorGeneralReport,2013;ComptrollerGeneralReport,20103 SchoolAct,s.1684 SchoolAct,s.65


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§ establishadistrictadvisorycouncil,and

§ delegatespecificandgeneraladministrativeandmanagementdutiestooneormoreofitsemployees.

Aboardmustestablishproceduresgoverningtheconductofitsmeetingsandmayestablishproceduresrespectingtheprovisionofadvicebyadistrictparents’advisorycouncil.5

UndertheAct,schoolboardshavebeengivenvariousspecificpowersandduties6,including:

§ subjecttotheorderoftheMinisterofEducation,opening,closingorreopeningaschool;

§ managing schools “and for the custody, maintenance and safekeeping of all propertyownedorleasedbytheboard”;

§ managingstudentenrolment;

§ providingandevaluatingeducationalprogramming;

§ managingclasssize,schoolcalendarsandstudentrecords;and

§ submittingapprovedachievementreportstotheMinister.

Theboard isresponsibleforpreparinganannualbudget.ThebudgetmustbeapprovedbyJune30thofeach year and must be balanced (i.e., estimated expenditures must not exceed estimated revenues)unlesstheboardhasobtainedpriorapprovalfromresidentspursuanttoareferendum.

TheMinisterprovideseachboardwithanannualoperatinggrantandmaypayafacilitygranttobeusedforannualfacilityprojects.

Boards are required tomaintain budgetary control over expenditures, keepproper accounting recordsandsubmitfinancialreportsandstatementstotheMinister.7Surplusesaccruinginrespectofoperatingexpensesofaboardmayberetainedasanunappropriatedoperatingreserveoftheboard.8

Eachboardmustappointanauditor. InthecaseofSchoolDistrict83,theBCAuditorGeneralhasbeentheDistrict’sauditorinrecentyears.UndertheAct,theauditormustreporton,amongotherthings,“anyirregularityrespectingtheassets,liabilities,accounts,fundsorfinancialobligationsoftheboard.”9

5 SchoolAct,s.676 SchoolAct,Division27 SchoolAct,s.1568 SchoolAct,ss.156(6)9 SchoolAct,s.162


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4 . I N D I V I D U A L T R U S T E E ’ S R O L E I N G O V E R N AN C E

Tobeeligibletoserveasatrustee,apersonmustbe18,aCanadiancitizen,aresidentofBritishColumbiaforatleastsixmonthspriortotheelectionandnotbedisqualifiedundertheAct.InBritishColumbia,alltrustees are elected pursuant to elections that are held every 4th year in conjunction with municipalelections.

TheActprovideslittleguidanceonthedutiesandresponsibilitiesofindividualtrustees.Ontakingoffice,alltrusteesarerequiredtotakeanoathofofficeonelectionthatrequiresthetrusteetoabidebytheActandfaithfullyperformthedutiesoftheoffice.10

TheBCSchoolTrusteesAssociation(BCSTA)describestheworkofatrusteeasfollows:11

“School Trustees are elected to govern their districts in the interest of improving studentachievement. They do this by engaging their communities in building andmaintaining aschool system that reflects local priorities, values and expectations. They listen to theircommunities, and guide the work of their School District by setting a strategic plan,amending policy as necessary, helping build an annual budget that is aligned with thestrategicplan,andreportingbacktothepublicontheprogresstowarddistrictgoals.Theyhire senior staff, approve job descriptions and administrative objectives, delegateresponsibilityforadministrationandday-to-daymattersconsistentwiththosedescriptionsand objectives, and monitor staff and district performance on a regular basis. Workingwithinthepolicies,regulationsanddirectivessetbytheprovincialgovernment,Trusteesactas co-governors of the provincial education system by setting the local direction forachievement,allocatingavailableresources,andmonitoringlocalperformance.”

Asamemberoftheschoolboard,itisourviewthateachtrusteehasadutyofloyaltytotheDistrictasawhole(alsoknownasthefiduciaryduty)andmustexercisereasonablecare incarryingouttheirduties(thedutyofcare),muchthesameasanymemberofagoverningboard.

5 . S U P E R I N T E N D E N T

Pursuant to theAct, a boardmust appoint a superintendent who, under the general direction of theBoard:12

a. hasthegeneralsupervisionanddirectionovertheeducationalstaffemployedbytheboard;

b. isresponsible:

i. totheboard,forimprovementofstudentachievementinthatschooldistrict;

10 B.C.Reg.382/9311 BCSTAResourceManualforBoardsofEducation(http://www.bcsta.org/content/successful-governance)12 SchoolAct,s.22


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ii. for the general organization, administration, supervision and evaluation of alleducationalprogramsprovidedbytheboard;and

iii. fortheoperationsofschoolsintheschooldistrict;and

c. mustperformotherdutiessetoutintheRegulations.

TheSchoolRegulation provides that the superintendentmustassist inmaking theActeffective, adviseandassisttheboardinexercisingitspowersanddutiesundertheAct,investigatemattersrequiredbytheMinisterandperformthosedutiesassignedbytheboard.13

6 . S E C R E T A R Y T R E A S U R E R

TheActprovides14thattheboardmustalsoappointasecretarytreasurerwho“isitscorporatefinancialofficerandmustperformthosedutiessetoutintheregulations.”

TheSchoolRegulation15providesthatthesecretarytreasurermust:

a. comply with the accounting and administrative procedures specified by the minister andkeeparecordofboardproceedingsandperformtheotherdutiesassignedbytheboardinrelationtoitscorporateaffairs;

b. perform the duties specified for a secretary treasurer by theActand regulations, rules orordersmadeunderit;and

c. performthosedutiesassignedbytheboard.

7 . L I E U T E N A N T G O V E R NO R I N C O UN C I L

Pursuant to theAct,16 theLieutenantGovernor inCouncilmayappointanofficial trustee toanyschooldistricttoconducttheaffairsoftheschooldistrictif,intheopinionoftheLieutenantGovernorinCouncil,

a. “thereissubstantialnon-performanceofthedutiesoftheboard,

b. thereisarisktostudentachievementinthedistrictanditisinthepublicinteresttodoso”

Ontheappointmentofanofficial trustee toconduct theaffairsofa schooldistrict, the trusteesof theschooldistrictceasetoholdoffice.

13 BCRegulation265/89,s.614 SchoolAct,s.2315 BCRegulation265/89,s.716 SchoolAct,s.172


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D. S C H O O L D I S T R I C T 8 3 , O V E R V I E W

SchoolDistrictNo.83 (District) isanareaof8,500squarekilometers locatedaroundtheShuswapLakeandNorthOkanagan.TheSchoolDistrictencompassesthedistinctcommunitiesofMalakwa,Sicamous,Grindrod,Enderby,AshtonCreek,Kingfisher,Armstrong,Spallumcheen,Falkland,Ranchero/DeepCreek,Silver Creek, SalmonArm, Tappen, Sorrento, Celista and Seymour Arm. The district has 16 communityelementaryschools,threemiddleschoolsandfoursecondaryschools.

ThefollowingsetsoutkeyaspectsoftheDistrict’sgovernanceframework.

1 . MI S S I O N S T A T EM EN T

TheDistrict’s statedmission is“toengageall students inmeaningfuland relevant learningexperiencesthatdeveloptheirknowledge,skills,attitudes,creativityandthepursuitofpersonalsuccess.”

2 . V I S I O N S T A T EM EN T

TheDistrict’s statedvision is“forall students todevelop social, personal, thinking,and communicatingcompetenciesinpreparationforlife.Thisincludesbutisnotlimitedto:

§ literacyandnumeracyskills

§ criticalandcreativethinkingabilities

§ responsibilityforwellnessofselfandothers

§ effectivecareerskillsandhabits

§ thedesiretoparticipateinlearningthroughoutlife.”

3 . C O R E V A L U E S

TheDistricthasadoptedthefollowingcorevalues:

1. Forlearningtooccur,ourrelationshipsinsideandoutsidetheclassroomneedtoberespectfulandcaring.

2. Joy,fun,satisfactionandcelebrationareessentialtolearning.

3. Tonurturecreativityandinnovationistomotivateandencouragecommitmenttolearning.

4. It is important to approach all issues and problemswith a positive attitude focused on findingsolutionscollaboratively.

5. Studentsandtheirlearningareourprimefocus.


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6. Weneedtobuildonthediversityandstrengthsofstudents,staff,andfamilies.

7. Thepursuitofbothexcellenceandparticipationareworthyofourattentionandsupport.

4 . BOA R D O F T R U S T E E S

TheBoardiscomposedofninetrustees(Trustees)whoareelectedregionallyfromsevenelectoralareas.SeveraloftheTrusteeshavebeenre-electednumeroustimesandhaveservedforover20years.WehavebeenunabletolocatetermsofreferencefortheBoardorindividualTrustees.

5 . BOA R D C H A I R

TheBoardChairiselectedbytheBoardforaone-yearterm.ThecurrentChairhasservedinthispositionsinceDecember2009.TherearenocomprehensivetermsofreferencefortheBoardChairposition.TheDistrict’s Procedural Bylaws provide that the Board Chair (called the Chairperson) shall preside at allBoardmeetings,ruleonallpointsoforder(subjecttoanappealtotheBoard)andactasaspokespersonindiscussingmatterswithadelegation.

6 . GOV E R N AN C E P O L I C I E S

TheDistrict’sPolicyManualoutlines the followingpolicieswith respect toSchoolBoardGovernance&Operations.

§ PublicParticipationatBoardofEducationMeetings

§ PolicyDevelopment

§ HotelAccommodation

§ Spouses’Expenses

7 . MEE T I N G P R O C E D U R E S

TheDistricthasadoptedasetofProceduralBylaws(lastamended2014-04-08)whichcoverthefollowingtopics: InauguralMeeting,AnnualElectionofOfficersof theBoard,RegularPublicMeetings,Closed In-Camera Sessions, SpecialMeetings, Chairperson,Vice chairperson&PresidingOfficers, Rules ofOrder,Motions,ReconsiderationandRescind,Debate,Voting,Committees,BylawsandResolutions,ProcedureonBylaws,andCodeofConductforTrustees.


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8 . S U P E R I N T E N D E N T

School District 83 adopted a job description17 for its Superintendent which provides that “theSuperintendentofSchoolsshallbetheChiefExecutiveOfficeroftheBoardandshallbeheldresponsibleand accountable to the Board for the total operations of the school system. He shall have generalresponsibilityforadvisingtheBoardofmattersarisinginallareasofBoardjurisdiction,forimplementingappropriatepoliciestotheBoardintheseareasandforimplementingthepoliciesadoptedbytheBoard.”

Thereareanumberof responsibilities setout in the jobdescription, including the followingwhicharemostrelevanttothisreview:

§ DeterminingpresentandfutureeducationalneedsoftheSchoolDistrictanddevelopingshortandlong-termplansformeetingtheseneeds.

§ EvaluatingtheoperationofallaspectsoftheeducationalsystemandprovidingreportstotheBoardwhichwillkeepitinformedonschoolsystemfunctioning.

§ Co-ordinating and integrating educational programs, physical facilities and financial andhumanresourceswithintheSchoolDistrict.

9 . S E C R E T A R Y T R E A S U R E R

ThecurrentSecretaryTreasurerstartedinherpositioninSeptember2015.AlthoughhiredbytheBoard,shereportstotheSuperintendent.

ThereisnoformaljobdescriptionfortheSecretaryTreasurerinplace,howeverasthecurrentSecretaryTreasurerwasrecruitedtothepositionlastsummer,thejobpostingservesasausefulreferencepointinoutliningtherolesandresponsibilitiesofthisposition.Theserolesandresponsibilitiesinclude:

§ Overall responsibility for thebusinessoperationsof theSchoolDistrict includingbudgetplanningandmonitoring.

§ Financial reporting to theMinistry of Education and the financial accountability of theSchoolDistrict.

§ ResponsibilitytoassistandfacilitatetheBoardofTrusteesinitsrole.

§ Assisting theHumanResourcesDirectorwith labour relations,collectivebargaining,andcontractinterpretation.

17 Thejobdescriptionisentitled:NorthOkanagan-ShuswapSchoolDistrict#83SUPERTINTENDENT(ChiefExecutive

Officer)GeneralDutiesandappearstobedated1996-11-25.


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E. S C H O O L D I S T R I C T 8 3 , O B S E R V A T I O N S A N D R E C O MM E N D A T I O N S

The following summarizes our major observations and recommendations with respect to the Board’sgovernance practices and capacity in respect of financialmatters and fiscalmanagement. A full list ofrecommendationsisattachedtothisreportasAppendixB.

1 . BOA R D F U N C T I O N I N G

1.1. BoardPerformance

Our review included interviews with a broad range of stakeholders – Trustees, senior management,parents,teachers,andothers.VirtuallyallintervieweesdescribedtheBoardfunctioninginunfavourableterms.Descriptionsprovidedincluded:

§ Dysfunctional

§ Disrespectful(ofeachotherandmanagement)

§ “AGongShow”

§ “AZoo”

§ Noteam

§ Frustrating

§ Nobigpicturethinking

§ Trusteesallhavetheirownagendas

§ NoDirection

ConsistentfeedbackalsoidentifiedthatBoardfunctioningisgoingfrombadtoworsewithnoexpectationthatthiswillchangeintheforeseeablefuture.

Three of nine Trustees have already resigned, and many of the remaining Trustees have consideredresigning.There isastrongsensebythose interviewedthatconductingaby-electionnowforthethreevacancies would not improve the current environment as the majority of Trustees would remainunchangedandthesameunproductiveworkingdynamicswouldcontinue.

The current environment is having a significant impact on Central Staff (Superintendent, SecretaryTreasurer,twoDirectorsofInstruction,andDirectorofHumanResources).Manyofthesestaffmembersarenewintheirroles;forexample,theSecretaryTreasurerstartedinSeptember2015.Theyhavebeeninundatedwith informationrequeststhatrequireextensivetimeinordertorespond,theyareaskedto


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explore alternate strategies which they expect will be voted down by the Board regardless of theirrecommendation and they are embarrassed by the tone and conduct in Board meetings. There is asignificantriskofcompleteturnoverofCentralStaff.

ThecommunityhaslostconfidenceinthisBoard.

Recommendations:

#1 DissolvetheBoardImmediately

The Board of School District No. 83 should be immediately dissolved and replaced by a Ministry-appointedtrustee.TheMinistry-appointedtrusteeshouldbe inplaceuntil thenextregularlyscheduledelectionofSchoolBoardTrusteesinthefallof2018.

2 . A L I G NM EN T O F V I S I O N A N D G O A L S

2.1. RegionalRepresentationandBoardSize

ThenineDistrictTrusteesareregionallyelectedasfollows:

Region #Trustees

SalmonArm 2

Armstrong/Spallumcheen 2

Enderby 1

Sicamous/Malakwa 1

Falkland/DeepCreek/Ranchero 1

Carlin/Sorrento 1

NorthShuswap 1

Theregionalrepresentationhassomehistoricalcontext(forexample,Armstrong/SpallumcheenhaditsownDistrictuntilthelate1990s)andisintendedtorepresentthedifferingneedsofcommunitieswithintheDistrict.

Intervieweesnoted that thenumberof Trusteesby regiondoesnot alignwellwith currentpopulationnumbers.Forexample,weweretoldanecdotallythatSalmonArmhas50%ofthepopulation,butonlytwoofnineelectedTrustees.


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WewerealsotoldstoriesofhowtheregionalrepresentationisimpactingdecisionmakingbytheBoard,particularlyinanenvironmentofdifficultdecisionsregardingschoolclosuresandprogramcuts.Weweretold that in some situations Trustees representing smaller communities support each other by votingagainst school closures in other smaller regions, on the presumption that if andwhen the questionofschoolclosuresintheirowncommunitiesarebeingdebated,thoseothersmallerregionallyrepresentedTrusteeswillinturnvoteagainstclosuresinthatcommunity.

Recent votes on school closures and program cuts are normally five/four or six/three split votes. ThechallengeiscompoundedbythelackofvisionanddirectionfortheDistrictasawhole.

TheoverridingconcernisthatwhiletheTrusteesareelectedtorepresenttheDistrictasawhole,theyareoftenconflictedinalsorepresentingtheneedsoftheircommunities,whoinfact,electthem.

Thecurrentstructureisbroken;andtheallocationofTrusteesbyregionisunbalanced.

Interviewees offered different views on the merits of Board elections being population based (i.e. allcommunities vote the same slate of candidates) versus the current regional representation. There is asignificant risk that transitioning to a population-basedmodel could result in all Trustees representingone community (i.e. Salmon Arm), meaning smaller communities would lose their voice. The DistrictcoversawidearearequiringdifferentviewsandperspectivesattheBoardtable.

WealsoconsideredthenumberofTrusteescurrentlyontheBoard.TheAct,Section30(2)requiresthataschoolboardbecomposedofthree,five,sevenornineTrustees.WeseenoreasonwhySchoolDistrictNo.83,giventhesizeofitsbudget,orcomplexityofinfluencingfactors,shouldbeatthehighorthelowend.

Recommendations:

#2 SimplifyRegionalRepresentationandReducetheNumberofTrustees

WerecommendthatthecurrentregionalrepresentationmodelberetainedbutsimplifiedandthattheallocationofTrusteesberevisedtobetterreflectpopulationwithintheregion.

WerecommendthatthenumberofTrusteesbereducedtofiveorseven.

Thisrecommendationshouldbeaddressedandimplementedinadvanceofthenextelection(2018).TheeffectivenessoftherevisedBoardcompositionandBoardsizeshouldbereviewedandassessedwithinsixyearsafterthatelectionandfine-tunedifneeded.


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Theoutcomeofthisrecommendationcouldbealongthefollowinglines18:

Region #Trustees

SalmonArm 2

Southernregion(Armstrong/Spallumcheen/Enderby) 1

Northernregion(Sicamous/Sorrento/NorthShuswap) 1

Atlarge 1

We note that the District has had discussions in recent years focused on its board size and regionalrepresentation.AJune2014special incamerameetingoftheBoardwasheldtodiscusstheresultsofaTrusteeVariationReviewwhichproposedsevenTrusteesrepresentedregionallyasfollows:

Region #Trustees

SalmonArm 2

Armstrong/Spallumcheen 1

Enderby 1

Sicamous/Malakwa 1

Falkland/DeepCreek/Ranchero 1

NorthShuswap/Carlin/Sorrento 1

2.2. StrategicPlanning

SchoolDistrictNo.83hasbeenfacedwithdecliningenrolment inrecentyears.That, togetherwiththenearing end of funding protection, is putting pressure on revenues and driving the need for difficultdecisions related to school closures, program cuts and other cost savings initiatives. The geographicalspread of the District and the regional representation model add a significant level of complexity tomakingthesedifficultdecisions.

18 Thisisprovidedforillustrativepurposesonly.Priortothenextelectionin2018,furtherconsultationandanalysis

shouldbeundertakentodetermineregionalboundariesandTrusteeallocations.


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Furthercomplicating thedecisionmakingprocess is theabsenceofaclearvisionandstrategicplan fortheDistrict.Fundamentalquestionssuchasthebalancebetweenruralandurbanschools,andthelevelofcommitmenttomiddleschools,continuetobedebatedwithnoapparentresolution.

Consequently, theBoard finds itself in anever-endingprocess of debating cost containmentmeasureswithout understanding, or being guided by, the long-term goals and vision of the District. A properlydevelopedvisionandstrategicplanwouldhelpprovideaframeworkformakingdecisionsthatalignwiththelong-termdirectionoftheDistrict.

Recommendations:

#3 DevelopaStrategicPlan

SchoolDistrictNo.83shouldundertakeastrategicplanningprocessthatculminatesinthedevelopmentof amore specific visionanda long-term (e.g., three to five years) strategicplan.Management shouldhave responsibility for developing the plan under the direction of the Board. Specifically, the Trusteesshould:

§ providedirectiontomanagementontheirlong-termvisionandexpecteddirectionfortheDistrict;

§ reviewandprovidefeedbackonthedraftplanpreparedbymanagement;and

§ formallyapprovethefinalplan.

The final plan should includemeasurement criteria to help assess progress in its implementation, andmanagementshouldbechargedwithprovidingregularstatusupdatestotheBoardonactivitiestakentoaddresstheplan.

Finally,therenewedvisionandstrategicplanshouldbeaguidingforceinthedevelopmentoftheannualbudget.

2.3. RiskManagement

Successfulorganizationsembraceriskmanagementmethodologiesthatcontainthefollowingelements:

§ thoroughunderstandingofkeyoperational,financial,strategic,andcompliancerisksthatcouldimpedetheorganizationfromachievingitsstrategy;

§ careful consideration of the level of risk the organization is prepared to assume (riskappetite);and

§ fullunderstandingofriskmitigationactivitiesthathelpmanagetheidentifiedriskswithintheorganization’sriskappetite.

SchoolDistrictNo.83hasnotadoptedaformalriskmanagementprocess.


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Recommendations:

#4 RiskAssessment

It is recommended that initially, the District complete a comprehensive risk assessment, including anunderstandingofriskmitigationactivitiesinplace.Overalongerperiodoftime(e.g.,threetofiveyears),moreadvancedEnterpriseRiskManagement(ERM)practicesshouldbeadopted.

3 . C ON S T R U C T I V E R E L A T I O N S H I P S A N D T R A N S P A R E N C Y

3.1. ConstructiveRelationships

In recent months, there has been a significant deterioration in trust amongst all stakeholders in theDistrict. This has had a major impact on the perceived level of consultation, integrity of informationprovided,robustnessofanalysiscompletedinsupportofdecisions,andstrategicdirectionoftheDistrict.Thesituationhasdeterioratedtotheextentthattoday,thereislittletrustbykeystakeholdergroupsofinformationorrecommendationsbroughtforwardbymanagement,orintheTrustees’abilitytooverseeissuesandmakedecisions.SomeTrusteesalsodonotappeartotrustmanagement.

As a result of the lack of trust, stakeholders are in some instances directly involved in the analysis ofinformation and direction of staff time. While well intended, the boundaries between the roles andresponsibilitiesofmanagement,theBoard,andotherconstituenciesareblurred.Theimpactissignificanton management, resulting in a major impact on workload, hours worked, morale, and perhaps mostimportant,theriskoflosingtheabilitytofocusonthelonger-termprioritiesoftheDistrict.

Recommendations:

Goodgovernancereliesstronglyonconstructiverelationshipsandtrustamongkeyparties.Withouttheseessentialelements,itwillbeverydifficultfortheDistricttocreateaproductiveworkingenvironmentandforwardmomentum.

Asstatedearlierinthisreport,werecommendthattheBoardbedissolved.Whenlookingtothefuture,itwill be important that the District take an intentional approach to building trust among Trustees,management and stakeholders. Underlying elements of trust include honesty, open, proactive andtransparentcommunication,andreliability.

#5 SetMutualExpectations

AsbetweenthefutureBoardandmanagement,webelievetheywouldbenefitfromadiscussionontheirrespectiverolesandresponsibilitiesandtheirexpectationsasbetweenthemselves(i.e.,amongTrustees


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and among management) and of each other (i.e., the Board’s expectations of management andmanagement’sexpectationsoftheBoard).

#6 ConsultationStrategy

AnotherimportantrelationshipisbetweentheDistrictandstakeholders.

The District should revisit its consultation strategy to ensure that it is, and is perceived to be, open,engaging,andconductedbeforedecisionsaremade.

#7 DefinetheProcessforAssigningWorktoManagement

Oneof theelementsof establishing constructive relationships is tohavea respectful andagreed-uponprocesstoengage,provideinformationandanswerquestions.

Aprocess shouldbeestablished for the receiptofBoardand stakeholder requests tomanagement forinformationandanalysis,theprioritizationofthoserequests,andthereportingbackbymanagementtotheBoardandstakeholdersontheresponsestorequests/questions.

3.2. Transparency

Weheardmuchthroughoutourinterviewsabouttheneedtoensurefulltransparency,andthatinrecentmonths,processesmaynothavebeenastransparent(orperceivedtobeastransparent)astheyoughttobe.Thesecomments relate toallaspectsof theBoard’sbusiness, including incamerameetings, timingandavailabilityofmeetingmaterialandrespondingtoquestionsfromthepublic.

Recommendations:

#8 BoardMeetings

UnlessthereisaclearlysensitivematterfordiscussioninvolvingonlytheTrustees(e.g.,staffperformanceevaluations,potentiallitigation,Boardgovernanceassessments),Boardbusinessshouldbeconductedinapublicsetting.

#9 MeetingMaterial

Meeting agendas andmaterial are often not available until the day before, or at the Boardmeeting.While therewill be occasionswhere agendas andmaterialmay not be ready in advance, best effortsshouldbemadetohaveBoardagendasandmeetingmaterialavailableforpublicviewingatleastthreetofourdaysinadvanceofeachmeeting.Inaddition,sufficienthardcopiesofmaterialshouldbeavailablefordistributionatmeetings.


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#10 ProtocolforQuestionsfromtheFloor

Recent Board meetings have been well attended, and many questions have been asked fromconstituents.Weunderstand the Trustees havenot always respondeddirectly to thosequestions, andthatonoccasioninsensitivecomments/reactionsmayhavebeenmade.Protocolshouldbeestablishedtoensurethatallquestionsarerespondedtofullyandwithproperintent.Attimes,meetingtimelinesmaynot always allow for sufficient time to properly respond to all questions. In these situations, alternatemechanismsshouldbeestablishedtoensureadequateresponsesareprovidedinresponsetothepublic’squestions.

#11 AttendanceRecords

VotersexpectthatthecandidatestheyelecttorepresentthemarecommittedtothejobandpreparedtoputthetimeandenergyintopreparingforandattendingBoardandcommitteemeetings.Onemeasureof transparency that canbeprovided to thepublic is todiscloseBoardmemberattendance records, apracticewhichhasbeencommonlyadoptedbymanypublicinstitutions.WerecommendthattheDistrictmaintainBoardattendancerecordsforeachTrusteeandthatthesebepostedontheDistrict’swebsite.

#12 Website

Opportunitiesexisttoenhancecurrentdisclosuresonthewebsiteinordertoprovidemoretransparency.Efforts should be taken to identify information that should be disclosed, compare this to what isdisclosed, and then provide that additional information. Currently, the District provides a copy of itsPolicyManual (which includes theGovernance Policies), upcomingBoardmeeting dates,with agendasandmeetingmaterial andBoardminutes.Potential additional informationwhich shouldbe consideredfordisclosureonthewebsiteincludes,butisnotlimitedto:

§ Trusteeandmanagementbackgrounds;

§ BoardCodeofConductandConflictofInterestguidelines;

§ SuperintendentandSecretaryTreasurerjobdescriptions;

§ BoardandCommitteeTermsofReferenceandmemberships;

§ ExpandedBoardgovernancepolicies,includingmeetingpractices;

§ Quarterlyfinancialreports;and

§ Trusteeattendancerecords.


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4 . RO L E S A N D R E S P O N S I B I L I T I E S

4.1. RoleofTrustees

PriortoconductinginterviewswithTrustees,wereviewedtheActtogainbackgroundinformationontherole and responsibility of a Trustee.Wenoted that, throughout theAct, expectationswere setout forTrustees, butmost of these are of a compliance/appointment/approval nature and they are scatteredthroughoutthe177-pagestatute.

WealsoaskedTrusteeswhattheyunderstoodtheirresponsibilitiestobe.Wereceivedawiderangeofresponsesthatincluded:

§ attendanceatPACmeetingsandgraduationceremonies;

§ engagementwith constituents to understand their concerns/wishes, andbringing thosemattersforward;and

§ overseeingpolicyandbigpicturedecisions.

A few noted that their responsibilities extended to financial oversight, but this was not a consistentresponse andwas likely driven by the recent issues of surplus transfers and the investment in a newDistrictbuilding.

Weunderstandthattherearevariousreferencesourcesavailableto individualsconsideringrunningforSchool Trustee, as well as for those elected, that help set out expectations for the roles andresponsibilitiesofTrustees.Theseinclude:

§ anominationpackage;

§ aformalpresentationprovidedbytheDistrictthatismadetointerestedcandidates;

§ anorientationsessionrunbytheDistrictfornewlyelectedTrustees;and

§ orientation training offered by BCSTA along with educational resources available onBCSTA’swebsite.

Despite these available resources, expectations for Trustees and the Board are not clear, resulting inTrusteesoperatingundertheirownunderstandingoftheirroleandresponsibilities.

Inadditiontotheabove,wewereunableto identifytheexistenceofformaltermsofreferencefortheBoard.WeunderstandtermsofreferencefortheCommitteesoftheBoardhavebeenestablished.


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Recommendations:

#13 RoleofTrustees

TheMinistryshouldprovidemoreclarityonitsexpectationsfortheroleofaTrustee(includingexplicitlyaddressingwhether the role is primarily one of providing input on program delivery, ormore broadlyaroundoverseeingallaspectsofaschooldistrict’sstrategic,financial,andoperationalinitiatives).

Theseexpectationsshouldbecodifiedandcommunicated,witheducationandtools inplacetosupportTrusteesinexecutingagainsttheseexpectations.

Candidates running for election as a Trustee should explicitly acknowledge their understanding of theassociatedrolesandresponsibilities.

#14 MandatoryOrientation

Mandatory orientation training should be delivered to all Trustees (newly elected and re-elected) thatspecifically addresses the responsibilities for Trustees, along with methods to help them successfullyoperate against those expectations. The training should encompass at a minimum, the followingcomponents:

a. governancegoodpracticesandexpectations;

b. financial literacy (including the division of financial accountabilities between the Board,management,andauditors;elementsofahealthyfinancialcontrolframework;howtoreadfinancialstatements;aspectsofasoundbudgetingprocess,etc.);

c. overviewoftheeducationalsector(includingresponsibilitiesofstakeholders,andresourcesavailable);and

d. overview of the District itself (including history, demographic trends, geographicaldispersion,challenges,andopportunities).

#15 FormalBoardTermsofReference

TheDistrictshoulddevelopformaltermsofreferencefortheBoardandindividualTrustees.

#16 PublicDisclosureofTermsofReference

Onceinplace,thetermsofreferencefortheBoard,alongwiththetermsofreferenceforitsCommitteesshouldbepostedontheDistrict’swebsite.


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#17 RoleofBoardChair

Thechairofaboardplaysakeyleadershiproleintheworkoftheboard,includingmanagingtheboard’swork, chairingmeetings, liaisingwithmanagement on behalf of the board and engagingwith externalstakeholders. Individualswhostepuptochairschoolboardsmaynotcomewithsignificantboardchairexperience.

InadditiontothenormalTrusteetraining(#14above),specialtrainingandeducationshouldbeprovidedtoTrusteeswhoserveorplantoserveinachairrole(BoardorCommittee).

4.2. RoleofSuperintendentandSecretaryTreasurer

There is currently a minimal job description for the Superintendent and no job description for theSecretaryTreasurer(althoughresponsibilitiesforthisroleweresetoutinajobpostingusedintherecentrecruitment efforts of the current Secretary Treasurer). As the Board’s twomain employees, and theindividualswho support theBoard andprovide leadership to theDistrict, it is important that therebeclarityontheirrespectiverolesandtheirobligationstoeachotherandtheBoard.

Recommendations:

#18 FormalJobDescriptions

There should be a comprehensive job description for the Superintendent that reflects the balance ofresponsibilitiesbetweeneducational,operationalandfinancialleadershipoftheDistrictandsupportfortheBoard.Thereshouldalsobeasimilar jobdescriptionfortheSecretaryTreasurerthat,amongotherthings,clarifiesthereportingrelationshipvisàvistheSuperintendentandtheBoard.

5 . S K I L L S A N D E X P E R I E N C E

5.1. TrusteeQualifications

OurinterviewshighlightedthatcitizenswhodecidetorunforschoolboardelectionarepassionateaboutensuringaneffectiveeducationsystemforthechildreninBC.However,thereisnomechanismtoensurethat those elected to a school board collectively possess all the necessary skills and experiences thatwouldbehelpfultocarryouttheboard’sresponsibilities.

Districts operate in a complex environment, requiring the management of multi-stakeholder groups,multi-million dollar budgets, competing demands on limited resources and delivery of modern andchanging curriculum and pedagogical strategies. Trustees need to be able to meet and exceed theexpectations of those who elected them through sound and reliable governance practices. To do so,schooldistrictboardsrequireafullsuiteofskillsandexperiencesattheirdisposal.Thecurrentelectoral


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model neither guarantees nor even addresses the requirement that each school district boardhas thecollectiveskillsandexperiencesnecessarytoprovidesoundgovernance.

SpecifictoSchoolDistrictNo.83,intervieweesnotedthatthenineTrusteesare“justregularfolks”.Theyare individualspassionateaboutmakingadifference in theeducational system.Theyall eitherhad,orhave,childrenintheschoolsystemandfeltcompelledtorunfortheBoardtomakeapositivedifference.None would be considered a financial expert, the closest being a mortgage broker. Yet they haveoversightresponsibilityforabudgetwithannualrevenueapproximating$70million.

Weaskedthequestion“ifnooneontheBoardisafinancialexpert,howdoyouknowwhatquestionstoaskaboutthefinancialstatements/performanceoftheDistrict?”Frequentlytheresponsetothisquestionwas“theSecretaryTreasurer”.ItisunderstandablethattheSecretaryTreasurerisanimportantresourcetotheBoardinunderstandingfinancialmattersimpactingaSchoolDistrict,andinfact,recognizingthis,theActprovidesfortheBoardtoappointtheSecretaryTreasurer.19However,theSecretaryTreasurerispartoftheseniormanagementteam,andthustheBoard’scompleterelianceonthispositionforfinancialgovernancerepresentsaconflictofinterestbetweentheBoard’sjobtogovernandmanagement’sjobtomanage.

WhilefinancialexpertiseisthemostobviousskillabsentfromtheBoardofSchoolDistrictNo.83(andwewould expect this to be the case for many other school districts in the province), other skills will berequiredbyaschooldistrictfromtimetotimethatarenotrepresentedontheBoard.Theseskillsmightincludetechnology,humanresources,andcapitalmanagement.Mechanismsarerequiredtohelpensureschoolboardscaneasilyaccesstheseskillsonanas-neededbasis.

Recommendations:

#19 BoardCompetencyAssessment

Eachschoolboardintheprovinceshouldberequiredtocompleteaskillsmatrixwithinthreemonthsofelection that identifies the skills the board requires to provide effective governance, as well as anassessmentofthecollectiveskillsthetrusteespossess.Forgapsinrequiredskillsanddemonstratedskills,the school board should develop a strategy to retain those skills. The skillsmatrix, assessment againstthatmatrix, and skill retention plan should be submitted to theMinistry and uponMinistry approval,implementedbytheschoolboard.

Regardless ofwhether this is aMinistry requirement, School District No. 83 should implement such aprocess.

19 SchoolAct,s.23


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#20 BoardContinuingEducationPlan

InordertoprovideTrusteeswithasmuchsupportaspossibletocarryouttheir job,theDistrictshoulddevelop,implement,andupdateonanannualbasis,aformalBoardcontinuingeducationplan(Plan)thatis specific to the needs of the Trustees. The Plan should consider the training requirements of newlyelectedTrustees,returningTrustees,theannualBoardandTrusteeevaluationresults,District-wideandeducational challenges, emerging risks (i.e. cyber-security), governance considerations, and financialliteracy,amongotherareas.

#21 Information

InordertomakesureTrusteesareaseffectiveaspossible,informationshouldbepresentedtotheminaformatthattheycandigestandunderstand.Specificallywerecommendthatseniorstaffmakesurethatfinancialstatementsandotherfinancialplanningdocumentsarepresentedassimplyaspossibletohelpnon-financialexpertsunderstandtheircontentandimplications.

5.2. Committees

The new Secretary Treasurer has recently set up Committees of the Board, including Finance andOperations (whichalsohasaBudget-Advisorysub-committee)andEducationDirection. Inaddition, theLabour Relations Committee has been re-activated. A Policy Committee was already in place andfunctioning.

These Committees are considered Committees of the Board, and include Trustees as part of theirmembership. For a couple of these Committees, other constituency groups (including NOSTA, CUPE,Principals/Vice-Principals,andDPAC)alsoattendmeetingsorarepartoftheCommitteemembership.

WhileaFinanceandOperationsCommitteeoftheBoardnowexists,itdoesnotappeartohaveafinancialexpert as part of its composition (other than the Secretary Treasurer who is not independent ofmanagement).Asaresult,although itenablestheBoardtoconductsomeof its financialanalysismoreefficiently, with lengthier and more detailed discussions, the issue of the absence of independentfinancialexpertiseontheBoardremains.

Recommendations:

#22 AuditandFinanceCommittee

The Ministry should require every school board in the province to establish an Audit and FinanceCommitteeof theboard. Termsof reference for this Committee should includeoversight of audit andfinancialreporting, includingreviewandapprovalofquarterlyandannualfinancialstatements,transferofsurplusbetweenfunds,riskmanagementandinternalcontrols.TermsofreferenceforthisCommittee


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should require that it meet on at least a quarterly basis. The Committee should be comprised of aminimumof three individuals,at leastoneofwhomisa financialexpert.ProvisionshouldbemadeformembersofthisCommitteetoincludeindividualsotherthanelectedTrusteestoprovideadviceandhelpensurethepresenceofnecessaryfinancialexpertise.

#23 DistrictFinanceandOperationsCommittee

The District should revisit the terms of reference and composition of its Finance and OperationsCommittee to ensure appropriate financial expertise and financial oversight. If there is insufficientfinancialliteracyamongtheTrustees,theBoardshouldconsidertheappointmentoffinanciallyqualifiedadvisorstotheBoardandFinanceandOperationsCommittee.

#24 OtherCommittees

TheDistrict should review its committee structure anddistinguishbetween committees that assist theBoard in carrying out its governance responsibilities (which typically include committees related tofinance,audit,labourrelations,humanresourcesandgovernance)andcommitteeswhichareadvisoryinnaturetotheDistrict.

5.3. Superintendent

WenotethattheActrequiresallsuperintendentstoholdacertificateofqualificationasateacher.Atthesame time, a superintendent is expected to be the chief executive officer of the district, withresponsibility for a wide range of management responsibilities plus support for the Board. To ourknowledge,thereisnodedicatedprogramorpolicywithintheDistrictthatprovidestheSuperintendentwith access to training and education relevant to the required management and governanceresponsibilities. We believe the Superintendent of School District No. 83 and appropriate senior staffwouldbenefitfromthistypeofeducationandsupport.

Recommendations

#25 SuperintendentEducation

The District should support the Superintendent, Secretary Treasurer and senior staff in obtaining theeducationnecessarytoassistthemintheirmanagementandgovernanceresponsibilities.


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6 . C OMM I TM EN T T O C O N T I N UOU S I M P R O V EM EN T

6.1. BoardandTrusteeEvaluation

Good boards understand the importance of looking forward and anticipating future challenges andopportunities.Theyalsounderstandthatinequippingthemselvestobeabletoproactivelypositiontheirorganizationstoleverageopportunitiesandmanageuncertainties,thattherearelearningsfromlookingbackwards to assess what they did well, and what they could have done better. A formal evaluationprocesssupportsthiscommitmenttocontinuousimprovement.Agoodevaluationprocessprovidestheboardwithdedicatedtimetoreflectonitsfunctioningandeffectiveness,andconsiderwaystoimprove.

Our interviewsdiscovered that there is no formal evaluationprocess at theDistrict for theBoard as awhole,norforindividualTrustees.

ThecurrentSuperintendenthasbeeninhisroleforclosetothreeyearsanditisapparentthattheDistricthashadnoformalprocessforsettingperformanceobjectivesfortheSuperintendent,norevaluatingtheSuperintendent’s performance. The current Superintendent has recently asked the Board for a formalevaluation,andwhilethewheelswereinmotiontobeginthisprocess, ithasbeenputonholdpendingthe results of thisGovernanceReview. The result is that the Superintendent has beenoperating in anenvironment with little clarity over his roles and responsibilities, which combined with the Boarddynamics, and stakeholder requests, has resulted in changing priorities depending on the crisis of themoment.

Itisalsoourobservationthatthereisnoformalprocessforthesettingofannualperformancegoals,noraformalevaluationprocessforcentralstaffotherthantheirownperformancegrowthplans,whichtheysetwithminimalinputfromtheSuperintendent.

Recommendations:

#26 AnnualBoardandTrusteeEvaluation

TheDistrictshoulddevelopanevaluationprocesstoassessBoard,Committee,andTrusteeperformance,with the objective of driving improved performance. To support the evaluation process, the followingelementsshouldbeincorporated.

§ Theevaluationprocessshouldbeconductedonatleastanannualbasis.

§ Theresultsoftheevaluationprocessshouldbeusedwiththepurposeofimprovingfutureperformance.

§ FeedbackobtainedfromtheevaluationprocessshouldbeusedintheannualBoardandTrusteegoalsettingprocessfortheensuingyear.


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#27 AnnualPerformancePlanandEvaluationofSuperintendent

Animportantpartofmaintainingahealthyboard/superintendentrelationshipistoensurethereisawell-designed performance management process for the Superintendent. A good process sets clear,measurable and aligned goals for the Superintendent, clarifies the Superintendent’s role/priorities andthe Board’s expectations, provides a way for the Superintendent to be evaluated on fair objectiveinformationandbuildstrustandtransparencybetweentheBoardandSuperintendent.

Atthebeginningofeachfiscalyear,theBoardandtheSuperintendentshouldestablishgoalsthatsetoutexpectations for theSuperintendent for that year, aswell as longer-termobjectives (e.g., threeyears).Thegoalsshouldbealignedtothelong-termstrategicplanoftheorganization,andincludeparametersrelatedtoorganizationalleadershipandBoardsupport.Clearmeasurementcriteriaandtimelinesshouldbedevelopedalongsidethesegoalsthatcanbeusedtoassessthelevelofprogressinachievingtargets.Uponcompletionofthefiscalyear,aformalevaluationoftheSuperintendent’sperformanceshouldbecompleted.Theevaluationshouldinclude(amongstothersourcesoffeedback)anassessmentofprogressmadeduringtheyearagainsttheagreed-upongoalsandmeasurementcriteria.

#28 AnnualPerformancePlanandEvaluationofCentralStaffPerformance

Similar to the annual goal setting and performance evaluation process recommended for theSuperintendent,werecommendthattheSuperintendentinitiateacomparableprocessforcentralstaff.TheSuperintendent shouldconfirm to theBoardonanannualbasis that signed-offperformanceplansandformalyear-endevaluationsofeachcentralstaffmemberhavebeencompleted.

7 . F I N A N C I A L M ANAG EM EN T A N D A C C O UN T A B I L I T Y

The impetus of this Governance Reviewwas driven by the community reaction to the realization thatfundswere transferred from theDistrict’s Operating Fund to the Capital Fund (Local Capital), and theresultingconstructionofanewDistrictbuilding.CompoundingthepublicoutcryhasbeenthefinalcostoftheDistrictbuilding,includingcostoverruns.

Aspreviouslynoted,ourreviewwasnotdesignedtobeacomprehensiveassessmentoffinancialplanningandreportingpractices,thuswedidnotcompleteareviewofexistingpoliciesandprocedures.Wealsodid not conduct an audit or forensic review of past financial transactions. However in trying tounderstandthechainofeventsrelatedtothesurplustransfer,anddecisiontobuildanewDistrictoffice,wedidgainanunderstanding,atthehighest level,ofpractices inplacearoundbudgetingandfinancialreporting,aswellasavailablepolicies,procedures,andmonitoringtoolsthatexist.


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7.1. BudgetingProcess

Therearetwomainbudgetstreams:theCapitalBudgetandtheOperatingBudget.

Thebudgetprocess forSchoolDistrictNo.83 is setoutbelowataveryhigh level.Weunderstandthisprocessiscomparabletothatfollowedbyotherschooldistricts.

CapitalBudget

The Capital Budget is a rolling five-year budget that sets out capital spending priorities for which theDistrict requests funding from theMinistry. Theannual five-year capitalplan is approvedby theBoardbeforebeingsubmittedtotheMinistry.

TheCapitalBudgetdoesnot includeprojects that theDistrict intends to finance through LocalCapital.BecauseLocalCapitalrepresentsfundsgeneratedbytheDistrict(asopposedtobeingfinancedthroughtheMinistry), spending from this fund is at the discretion of theDistrict Board andmanagement. TheprocessforbudgetingforLocalCapitalwouldappeartobelessdefinedthanthatdescribedabovefortheCapitalBudget.

OperatingBudget

The annual Operating Budget process is supported by the Budget Advisory Committee. The BudgetAdvisory Committee is not a decision-making body, but provides input into the budgeting processincludingoptions that theSchoolDistrictmight take inorder tobalance thebudget.ThisCommittee isguidedbythreedocuments:

§ TermsofReference

§ GuidingPrinciples

§ BudgetDevelopmentTimelines

ThesedocumentsarereviewedandapprovedbytheBoardonanannualbasis.

Developmentof theannualOperatingBudget is a lengthyprocesswithmultiplephasesanddeadlines.TheheavyliftingbeginsintheJanuarytimeperiodwiththeDistrictcompletingsomepreliminaryanalysisbased on estimated Ministry funding (which is influenced by expectations of student enrolment, thenumbersofwhicharesubmittedtotheMinistryinFebruary).LeadinguptoMarch,whentheamountoftheMinistrygrantisannounced,Districtstaffanalyzeexpectedcostswhichtypicallyreflectsuchfactorsashigherbenefitcosts,utilitycostincreases,etc.

WiththegrantannouncementinMarch,theDistrictisinapositiontounderstandanyshortfallinfunding.BeginninginApril,thepublicconsultationprocessbeginstoidentifyopportunitiestobalancethebudget.


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Theprocess togatherpublic inputhasundergonesome revisions this springwith theestablishmentoftheBudgetAdvisoryCommittee,anditwillcontinuetobetweakedinthefuture.

Throughout the budget development process, budget packages are prepared for Boardmeetings thathighlight expected revenue decreases, cost increases and the resulting expected deficit. The budgetpackagesleadinguptoJune(whenthefinalbudgetisapproved)largelyaddressspecificchangesinyear-over-year costs, as well as the impact of potential cost savings. In the past, where cuts have beenproposed, supportingdocumentation focusedona stand-alone list of proposed cuts. It is notuntil thefinalbudgetpackageispresentedforapprovalinJunethatthecompletestatementofbudgetedrevenuesand expenses, operating surplus/deficit, appropriation from accumulated surplus and inter-fundtransfers,ispreparedandpresented.

The budget process described above focuses only on the operations of theDistrict. The impact of theCapitalBudget(includingamountsspentfromLocalCapital)isnotincorporatedintobudgetpackagesanddiscussionsuntilthefinalbudgetisapprovedinJune.

UnliketheCapitalBudget,theOperatingBudget isfocusedontheensuingyearwithnorollingthreetofiveyeartimeframe.

Recommendations:

#29 OperatingBudget

TheOperatingBudgetpackagescouldbestrengthenedandenhancedbythefollowing:

§ Earlier in the process, present the budgeted Statement of Operations, includingappropriationsfromaccumulatedsurplusandinter-fundtransfers;

§ IncorporatekeyelementsoftheCapitalBudget(includingLocalCapitalactivity) inordertosetoutthefullfinancialpicture;

§ Specificallyidentifycontingenciesandreservesthatarebuiltintothebudget;

§ Completeand include sensitivityanalysis that shows thepotential impactof changes tokeyassumptions;

§ Riskassessment;and

§ StatementofFinancialPosition(atthehighestlevel).

Inaddition,whilethebudgetsubmittedtotheMinistryisaone-yearbudget,werecommendthatinthenear term,theDistrictbegintheprocessofestablishingarollingthree-yearbudgetthat isalignedwiththestrategicplan.


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#30 LocalCapitalBudget

We recommend that the process for developing and approving the Local Capital Budget be defined,approvedandimplemented,withclearmilestonesforBoardreviewandapproval.ThiswouldbepartoftheDistrict’sgovernancepolicies.

7.2. FinancialResults

Historically, actual financial results were not presented to the Board until year-endwhen the auditedfinancialstatementshavebeenpresentedforapproval.Thisprocesshasbeenrevisedduringthecurrentyear,with the newpractice being to present to the Board (commencing in February) actual results todate, coupled with projected results for the balance of the year; along with analysis comparing thebudgettoprojectedresults.

WhilewewereabletoseeaBoard-approvedmotiontotransfersurplusfundsforthe2010/11fiscalyear,currentDistrictmanagementhavenotbeenabletoidentifysubsequentyears’motions.Weheardfromacoupleof individualsthatthediscussionandsurplustransferapproval in2010/11was intendedtobeastandingmotion.

Inlookingatpastyears’meetingmaterials,wedidnotfindreportingthatindicatesaspecificcommentaryonsurplus,althoughwecannotsaythatthediscussiondidnottakeplace.Pastyears’inter-fundtransfersareshownontheannualauditedfinancialstatements.

Recommendations:

#31 QuarterlyReporting

Under practices adopted by the new Secretary Treasurer, the Board now receives a monthly reportcommencinginFebruaryofeachyear,actualyear-to-dateresultsandprojectionsforthebalanceoftheyear.Werecommendthat,inadditiontothismonthlyreport(whichonlyprovidesfinancialreportingonthe last five months of the year), the Board be provided with quarterly results and projections as atSeptember30,andDecember31ofeachyear.ThiswillallowtheBoardtomonitortheDistrict’sfinancialpositionthroughouttheyearonanongoingbasis.

Includedinthequarterlyreportsonactualresultsshouldbeupdatesoncapitalspendingagainstbudget.For significant capital projects, status reports should be provided that set out progress on spendingrelativetobudget,achievementofkeymilestonesandrisksrelatedtodeliveringtheprojecton-time,on-budgetandagainstidentifiedprojectspecifications.

Inadditiontofinancialreporting,quarterlyreportingshouldalsohighlightsignificantoperationalresultsandachievementagainstkeyperformancemetrics.


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#32 EstablishaSurplusPolicy

TheBoardshoulddiscussandapproveasurpluspolicythatguidesfutureyears’inter-fundtransfers.Thepolicy shouldconsidergeneralguidelinesas tohowmuch (e.g.,percentageordollaramount) couldbetransferredtootherfunds,howmuchwouldbeaddedtoAccumulatedSurplusandhowmuchmightbeallocated for current year’s initiatives and spent in that fiscal year. In addition to developing a policy,annualdiscussionsontheexpectedsurplus/deficitfortheyearshouldbeheldstartinginthethirdquarteroftheyeartohelpinformdecisionsrelatedtotheapplicationoftheSurplusPolicyforthatfiscalyear.

#33 FormalApprovalofInter-FundTransfers

Eachyear’s inter-fund transfers shouldbesubject todiscussionandapprovalby theBoardprior to thetransferbeingmade,withaformalmotionforthetransferofthatyear’ssurplus.

7.3. SupportingFrameworkofControlsandPolicies

OurdiscussionswithDistrictstaffsuggestthatwhilepartsofacontrolframework,includingpoliciesandprocedures, may be in place there has been no formal review of the completeness and continuedrelevanceofhistorical policies, procedures and internal controls. In addition, anyguidingmaterial thatmay exist does not appear to be widely known and referenced in the day-to-day management andoperationsoftheDistrict.

Recommendations:

#34 ControlFramework

A review of the District’s control framework against a recognized and robust framework (such as theCommitteeofSponsoringOrganization’s(COSO)InternalControlFramework)shouldbeundertaken.Keycontrolsshouldbedocumented,andwheregapsinthecontrolframeworkareidentified,stepsshouldbetakentoclosethosegaps.

#35 FinancialandOperationalPoliciesandProcedures

Management should identify financial and operating policies and procedures that should be in place,compare them towhat exists, and implement anddocument those policies andprocedures that don’texistbutshould.

#36 DelegationofAuthority

Weenquiredabouttheexistenceofaformaldelegationofauthoritypolicythatsetsoutspendinglimitsand required approvals, including spending requiring Board approval.Wewere unable to identify that


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such a policy exists. A formal delegation of authority (e.g., spending authorization matrix) should bedeveloped,approvedbytheBoardandimplemented.

#37 InternalAuditFunction

School District No. 83 should establish a formal internal audit function, charged with reviewing theefficiencyandeffectivenessofDistrictprocessesandcontrols.Inestablishingthefunction,considerationshouldbegiventooutsourcingthefunctiontoanindependentaccountingfirm.

8 . E T H I C A L C O N DU C T A N D C ON F L I C T O F I N T E R E S T

TheDistricthasasetofProceduralBylawsthatprovidesomeguidancetoTrusteesonmeetings,electionofofficersoftheBoard,etc.IncludedintheProceduralBylawsisaCodeofConduct(Code).TheCodeisalsoincorporatedinpresentationmaterialthatismadeavailabletoindividualsinterestedinrunningforTrustee. There is no requirement for Trustees to formally acknowledge that they have read the Code,agree to abide by it, and will bring forward any potential breaches of the Code. There also does notappear to be any practice for its periodic review to assess ongoing completeness, relevance andappropriatenessofcontent.

TrusteesinterviewedwerenotfamiliarwiththeBCGovernment’sTaxpayerAccountabilityprinciples.WealsodiscoveredthatthereisneitheraConflictofInterestPolicynoraWhistleblowermechanism.

Recommendations:

#38 Review,Update,andProvideforAnnualSign-OffontheCodeofConduct

The Code of Conduct embeddedwithin the Procedural Bylaws should be reviewed and updated on aregularbasis.Stepsshouldbetakentoensure it isalignedwithreferencestoconflictsassetout intheAct. In addition, each Trustee should be required to review and formally sign-off on an annual basis,acknowledgingtheiragreementtoabidebytheCode.

Given the importance of the Code, we recommend that the Code be reconstituted as a stand-alonedocument.

#39 TaxpayerAccountabilityPrinciples

The BC Government’s Taxpayer Accountability Principles (TAP) are intended to apply to the broaderpublic sector,which includes school districts. All Trustees andmembers of central staff should receivetrainingontheexpectationsofTAPandtheexpectationsestablishedbyTAPshouldbeincorporatedintotheCodeofConduct.


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#40 ConflictofInterestPolicy

AConflictofInterestPolicyshouldbedevelopedandtrainingprovidedtoTrusteesandcentralstaff.TheConflictofInterestPolicyshouldalsobesignedoffonanannualbasisbytheTrusteesandcentralstaff.Inaddition,amechanismshouldbeestablishedforthereportingofactionsthatare,orcouldpotentiallybeperceivedtobe, inviolationof theConflictof InterestPolicy.TheConflictof Interestpolicycould formpartoftheCodeofConduct.

#41 WhistleblowerMechanism

Therecurrentlyisnomechanismfortheanonymoussubmissionofcomplaints.Awhistleblowerprocessshould be established that provides for the anonymous reporting of suspicious or inappropriatebehaviour/activity.Animportantfeatureofthedesignofawhistleblowerprocessisthatthesubmissionofmattersforinvestigationmustbedoneingoodfaith,withramificationsforindividualswhouseitforpurposesforwhichit isnotdesigned.It isrecommendedthatthewhistleblowerprocessfortheDistrictbeopentostaffandemployees,aswellasexternalthirdparties.

9 . GOV E R N AN C E F R AM EWOR K

Oneofthewaysgovernanceofanorganizationisembeddedisthroughthearticulationofagovernanceframework–writtenpoliciesthatoutlinethegovernancestructure(rolesandresponsibilities),expectedstandardsofbusinessconductandgovernancepractices(howthevariouspartiesinvolvedingovernancefulfilltheirresponsibilities).

While the District has some governance policies, they are minimal and do not provide the type ofguidanceonhowtheBoardperformsitsworkandhowtheBoardandmanagementinteract.

Recommendations:

#42 DistrictGovernanceFrameworkandPolicies

TheDistrictshouldestablishamorecomprehensivesetofgovernancepoliciesthatoutlinetheDistrict’sapproachtogovernanceandincluderolesandresponsibilities(e.g.,fortheBoard,Committees,individualTrustees,theSuperintendentandtheSecretaryTreasurer),acodeofconduct,andimportantreviewanddecision-making processes that guide the Board’s work (e.g., the approach to strategic planning,delegationofauthority,Superintendentreview,meetingpractices,andstakeholderengagement).

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A P P E N D I X A – T E R M S O F R E F E R E N C E ( E X C E R P T )

3.TheSpecialAdvisorwill:

a. evaluatetheBoard’sgovernancepractices,including

i. capacity

ii. structure(e.g.,leadership,committees)

iii. roleandresponsibilities

iv. practices(includingmeetings,policiesandorganizationalstewardshipprocesses)

v. cultureandfunctioning,includingapproachtoconflictofinterest

vi. relationship with district management, including management support for Boardgovernance

vii. relations with stakeholders, including local governments, parent associations andotherkeystakeholdersidentifiedbythespecialadvisor

viii. relationswiththeprovincialgovernment

ix. compliancewithlegalandregulatoryrequirements,and

x. accountabilityandevaluationmechanisms;

b. evaluate the Board’s capacity in respect of financial matters and effective fiscalmanagement,including

i. budgetingprocess-annualandlonger-term,includingoperatingandcapital

ii. capitalplanningprocess

iii. procurement/disbursement/contractingprocesses

iv. year-endfinancialreportingprocesses

v. monthly/quarterly/annual-actualtobudgetrevenuesandexpensesanalysis

vi. trusteeandseniormanagementperquisites,expenses,benefits,and

vii. thecapacityofthedistrictmanagementtosupporttheBoard’sfinancialplanningandgovernanceresponsibilities;and

c. anyothermattersarisingfromthisinspectionandevaluationasrequiredbytheMinister.


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A P P E N D I X B – L I S T O F R E C O MM E N D A T I O N S

RECOMMENDATIONS

BOARDFUNCTIONING

#1 DissolvetheBoardImmediately

The Board of School District No. 83 should be immediately dissolved and replaced by a Ministry-appointed trustee. The Ministry-appointed trustee should be in place until the next regularlyscheduledelectionofSchoolBoardTrusteesinthefallof2018.

#2 SimplifyRegionalRepresentationandReducetheNumberofTrustees

Werecommendthat thecurrent regional representationmodelbe retainedbutsimplifiedandthattheallocationofTrusteesberevisedtobetterreflectpopulationwithintheregion.

WerecommendthatthenumberofTrusteesbereducedtofiveorseven.

Thisrecommendationshouldbeaddressedandimplementedinadvanceofthenextelection(2018).TheeffectivenessoftherevisedBoardcompositionandBoardsizeshouldbereviewedandassessedwithinsixyearsafterthatelectionandfine-tunedifneeded.

ALIGNMENTOFVISIONANDGOALS

#3 DevelopaStrategicPlan

School District No. 83 should undertake a strategic planning process that culminates in thedevelopment of a more specific vision and a long-term (e.g., three to five years) strategic plan.Management should have responsibility for developing the plan under the direction of the Board.Specifically,theTrusteesshould:

§ providedirectiontomanagementontheirlong-termvisionandexpecteddirectionfortheDistrict;

§ reviewandprovidefeedbackonthedraftplanpreparedbymanagement;and§ formallyapprovethefinalplan.

Thefinalplanshouldincludemeasurementcriteriatohelpassessprogressinitsimplementation,andmanagementshouldbechargedwithprovidingregularstatusupdatestotheBoardonactivitiestakentoaddresstheplan.


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Finally, the renewed vision and strategic plan shouldbe a guiding force in thedevelopmentof theannualbudget.

#4 RiskAssessment

Itisrecommendedthatinitially,theDistrictcompleteacomprehensiveriskassessment,includinganunderstandingof riskmitigationactivities inplace. Overa longerperiodof time (e.g., three to fiveyears),moreadvancedEnterpriseRiskManagement(ERM)practicesshouldbeadopted.

CONSTRUCTIVERELATIONSHIPSANDTRANSPARENCY

#5 SetMutualExpectations

AsbetweenthefutureBoardandmanagement,webelievetheywouldbenefitfromadiscussionontheirrespectiverolesandresponsibilitiesandtheirexpectationsasbetweenthemselves(i.e.,amongTrusteesandamongmanagement)andofeachother(i.e.,theBoard’sexpectationsofmanagementandmanagement’sexpectationsoftheBoard).

#6 ConsultationStrategy

AnotherimportantrelationshipisbetweentheDistrictandstakeholders.

TheDistrictshouldrevisit itsconsultationstrategytoensurethat it is,and isperceivedtobe,open,engaging,andconductedbeforedecisionsaremade.

#7 DefinetheProcessforAssigningworktoManagement

Oneoftheelementsofestablishingconstructiverelationshipsistohavearespectfulandagreed-uponprocesstoengage,provideinformationandanswerquestions.

AprocessshouldbeestablishedforthereceiptofBoardandstakeholderrequeststomanagementforinformationandanalysis,theprioritizationofthoserequests,andthereportingbackbymanagementtotheBoardandstakeholdersontheresponsestorequests/questions.


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#8 Boardmeetings

Unless there is a clearly sensitive matter for discussion involving only the Trustees (e.g., staffperformanceevaluations,potentiallitigation,Boardgovernanceassessments),Boardbusinessshouldbeconductedinapublicsetting.

#9 MeetingMaterial

Meetingagendasandmaterialareoftennotavailableuntilthedaybefore,orattheBoardmeeting.Whiletherewillbeoccasionswhereagendasandmaterialmaynotbereadyinadvance,besteffortsshould bemade to have Board agendas andmeetingmaterial available for public viewing at leastthreetofourdaysinadvanceofeachmeeting. Inaddition,sufficienthardcopiesofmaterialshouldbeavailablefordistributionatmeetings.

#10 ProtocolforQuestionsfromtheFloor

Recent Board meetings have been well attended, and many questions have been asked fromconstituents.WeunderstandtheTrusteeshavenotalwaysrespondeddirectlytothosequestions,andthat on occasion insensitive comments/reactions may have been made. Protocol should beestablished to ensure that all questions are responded to fully and with proper intent. At times,meeting timelinesmaynot always allow for sufficient time toproperly respond to all questions. Inthese situations, alternate mechanisms should be established to ensure adequate responses areprovidedinresponsetothepublic’squestions.

#11 AttendanceRecords

Voters expect that the candidates they elect to represent them are committed to the job andpreparedtoputthetimeandenergyintopreparingforandattendingBoardandcommitteemeetings.One measure of transparency that can be provided to the public is to disclose Board memberattendance records, apracticewhichhasbeen commonlyadoptedbymanypublic institutions.WerecommendthattheDistrictmaintainBoardattendancerecordsforeachTrusteeandthatthesebepostedontheDistrict’swebsite.

#12 Website

Opportunities exist to enhance current disclosures on the website in order to provide moretransparency.Effortsshouldbetakentoidentify informationthatshouldbedisclosed,comparethistowhat isdisclosed,andthenprovidethatadditional information.Currently, theDistrictprovidesa


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copyof itsPolicyManual (which includestheGovernancePolicies),upcomingBoardmeetingdates,withagendasandmeetingmaterialandBoardminutes.Potentialadditionalinformationwhichshouldbeconsideredfordisclosureonthewebsiteincludes,butisnotlimitedto:

§ Trusteeandmanagementbackgrounds;

§ BoardCodeofConductandConflictofInterestguidelines;

§ SuperintendentandSecretaryTreasurerjobdescriptions;

§ BoardandCommitteeTermsofReferenceandmemberships;

§ ExpandedBoardgovernancepolicies,includingmeetingpractices;

§ Quarterlyfinancialreports;and

§ Trusteeattendancerecords.

ROLESANDRESPONSIBILITIES

#13 RoleofTrustees

The Ministry should provide more clarity on its expectations for the role of a Trustee (includingexplicitlyaddressingwhethertheroleisprimarilyoneofprovidinginputonprogramdelivery,ormorebroadly around overseeing all aspects of a school district’s strategic, financial, and operationalinitiatives).

These expectations should be codified and communicated, with education and tools in place tosupportTrusteesinexecutingagainsttheseexpectations.

CandidatesrunningforelectionasaTrusteeshouldexplicitlyacknowledgetheirunderstandingoftheassociatedrolesandresponsibilities.

#14 MandatoryOrientation

MandatoryorientationtrainingshouldbedeliveredtoallTrustees(newlyelectedandre-elected)thatspecificallyaddressestheresponsibilitiesforTrustees,alongwithmethodstohelpthemsuccessfullyoperate against those expectations. The training should encompass at a minimum, the followingcomponents:

a. governancegoodpracticesandexpectations;

b. financial literacy (including the division of financial accountabilities between the Board,management, and auditors; elements of a healthy financial control framework; how to readfinancialstatements;aspectsofasoundbudgetingprocess,etc.);


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RECOMMENDATIONS

c. overview of the educational sector (including responsibilities of stakeholders, and resourcesavailable);and

d. overview of the District itself (including history, demographic trends, geographical dispersion,challenges,andopportunities).

#15 FormalBoardTermsofReference

TheDistrictshoulddevelopformaltermsofreferencefortheBoardandindividualTrustees.

#16 PublicDisclosureofTermsofReference

Once in place, the terms of reference for the Board, along with the terms of reference for itsCommitteesshouldbepostedontheDistrict’swebsite.

#17 RoleofBoardChair

The chair of a board plays a key leadership role in thework of the board, includingmanaging theboard’swork,chairingmeetings,liaisingwithmanagementonbehalfoftheboardandengagingwithexternalstakeholders. Individualswhostepuptochairschoolboardsmaynotcomewithsignificantboardchairexperience.

In addition to the normal Trustee training (#14 above), special training and education should beprovidedtoTrusteeswhoserveorplantoserveinachairrole(BoardorCommittee).

#18 FormalJobDescriptions

ThereshouldbeacomprehensivejobdescriptionfortheSuperintendentthatreflectsthebalanceofresponsibilitiesbetweeneducational,operationalandfinancialleadershipoftheDistrictandsupportfortheBoard.ThereshouldalsobeasimilarjobdescriptionfortheSecretaryTreasurerthat,amongotherthings,clarifiesthereportingrelationshipvisàvistheSuperintendentandtheBoard.

SKILLSANDEXPERIENCE

#19 BoardCompetencyAssessment

Eachschoolboardintheprovinceshouldberequiredtocompleteaskillsmatrixwithinthreemonthsofelectionthatidentifiestheskillstheboardrequirestoprovideeffectivegovernance,aswellasanassessmentofthecollectiveskillsthetrusteespossess.Forgapsinrequiredskillsanddemonstratedskills,theschoolboardshoulddevelopastrategytoretainthoseskills.Theskillsmatrix,assessment


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RECOMMENDATIONS

against thatmatrix,andskill retentionplanshouldbesubmitted to theMinistryanduponMinistryapproval,implementedbytheschoolboard.

RegardlessofwhetherthisisaMinistryrequirement,SchoolDistrictNo.83shouldimplementsuchaprocess.

#20 BoardContinuingEducationPlan

In order to provide Trustees with as much support as possible to carry out their job, the Districtshoulddevelop,implement,andupdateonanannualbasis,aformalBoardcontinuingeducationplan(Plan)thatisspecifictotheneedsoftheTrustees.ThePlanshouldconsiderthetrainingrequirementsof newly elected Trustees, returning Trustees, the annual Board and Trustee evaluation results,District-wide and educational challenges, emerging risks (i.e. cyber-security), governanceconsiderations,andfinancialliteracy,amongotherareas.

#21 Information

InordertomakesureTrusteesareaseffectiveaspossible,informationshouldbepresentedtothemina format that theycandigestandunderstand.Specificallywerecommendthatseniorstaffmakesure that financial statements and other financial planning documents are presented as simply aspossibletohelpnon-financialexpertsunderstandtheircontentandimplications.

#22 AuditandFinanceCommittee

TheMinistry should require every school board in the province to establish an Audit and FinanceCommitteeoftheboard.TermsofreferenceforthisCommitteeshouldincludeoversightofauditandfinancial reporting, including review and approval of quarterly and annual financial statements,transferofsurplusbetweenfunds,riskmanagementandinternalcontrols.TermsofreferenceforthisCommittee should require that it meet on at least a quarterly basis. The Committee should becomprisedof aminimumof three individuals, at least oneofwhom is a financial expert. ProvisionshouldbemadeformembersofthisCommitteetoincludeindividualsotherthanelectedTrusteestoprovideadviceandhelpensurethepresenceofnecessaryfinancialexpertise.


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#23 DistrictFinanceandOperationsCommittee

The District should revisit the terms of reference and composition of its Finance and OperationsCommittee to ensure appropriate financial expertise and financial oversight. If there is insufficientfinancial literacy among the Trustees, the Board should consider the appointment of financiallyqualifiedadvisorstotheBoardandFinanceandOperationsCommittee.

#24 OtherCommittees

TheDistrictshouldreviewitscommitteestructureanddistinguishbetweencommitteesthatassisttheBoard in carrying out its governance responsibilities (which typically include committees related tofinance, audit, labour relations, human resources and governance) and committees which areadvisoryinnaturetotheDistrict.

#25 SuperintendentEducation

TheDistrictshouldsupporttheSuperintendent,SecretaryTreasurerandseniorstaffinobtainingtheeducationnecessarytoassistthemintheirmanagementandgovernanceresponsibilities.

COMMITMENTTOCONTINUOUSIMPROVEMENT

#26 AnnualBoardandTrusteeEvaluation

The District should develop an evaluation process to assess Board, Committee, and Trusteeperformance,withtheobjectiveofdrivingimprovedperformance.Tosupporttheevaluationprocess,thefollowingelementsshouldbeincorporated.

§ Theevaluationprocessshouldbeconductedonatleastanannualbasis.

§ The resultsof theevaluationprocess shouldbeusedwith thepurposeof improvingfutureperformance.

§ Feedbackobtained fromtheevaluationprocess shouldbeused in theannualBoardandTrusteegoalsettingprocessfortheensuingyear.

#27 AnnualPerformancePlanandEvaluationofSuperintendent

Animportantpartofmaintainingahealthyboard/superintendentrelationshipistoensurethereisawell-designedperformancemanagementprocessfortheSuperintendent.Agoodprocesssetsclear,measurable and aligned goals for the Superintendent, clarifies the Superintendent’s role/prioritiesandtheBoard’sexpectations,providesawayfortheSuperintendenttobeevaluatedonfairobjective


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RECOMMENDATIONS

informationandbuildstrustandtransparencybetweentheBoardandSuperintendent.

Atthebeginningofeachfiscalyear,theBoardandtheSuperintendentshouldestablishgoalsthatsetoutexpectations for theSuperintendent for thatyear,aswellas longer-termobjectives (e.g., threeyears).Thegoals shouldbealigned to the long-termstrategicplanof theorganization,and includeparametersrelatedtoorganizational leadershipandBoardsupport.Clearmeasurementcriteriaandtimelinesshouldbedevelopedalongsidethesegoalsthatcanbeusedtoassessthelevelofprogressinachievingtargets.Uponcompletionofthefiscalyear,aformalevaluationoftheSuperintendent’sperformance should be completed. The evaluation should include (amongst other sources offeedback) an assessment of progress made during the year against the agreed-upon goals andmeasurementcriteria.

#28 AnnualPerformancePlanandEvaluationofCentralStaffPerformance

Similar to the annual goal setting and performance evaluation process recommended for theSuperintendent,werecommendthattheSuperintendent initiateacomparableprocessforcentralstaff.TheSuperintendentshouldconfirmtotheBoardonanannualbasisthatsigned-offperformanceplansandformalyear-endevaluationsofeachcentralstaffmemberhavebeencompleted.

FINANCIALMANAGEMENTANDACCOUNTABILITY

#29 OperatingBudget

TheOperatingBudgetpackagescouldbestrengthenedandenhancedbythefollowing:

§ Earlier in the process, present the budgeted Statement of Operations, includingappropriationsfromaccumulatedsurplusandinter-fundtransfers;

§ Incorporate key elements of the Capital Budget (including Local Capital activity) inordertosetoutthefullfinancialpicture;

§ Specificallyidentifycontingenciesandreservesthatarebuiltintothebudget;

§ Completeandincludesensitivityanalysisthatshowsthepotential impactofchangestokeyassumptions;

§ Riskassessment;and

§ StatementofFinancialPosition(atthehighestlevel).

Inaddition,whilethebudgetsubmittedtotheMinistryisaone-yearbudget,werecommendthatinthenearterm,theDistrictbegintheprocessofestablishingarollingthree-yearbudgetthatisalignedwiththestrategicplan.


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RECOMMENDATIONS

#30 LocalCapitalBudget

WerecommendthattheprocessfordevelopingandapprovingtheLocalCapitalBudgetbedefined,approvedandimplemented,withclearmilestonesforBoardreviewandapproval.ThiswouldbepartoftheDistrict’sgovernancepolicies.

#31 QuarterlyReporting

Underpracticesadoptedby thenewSecretaryTreasurer, theBoardnowreceivesamonthly reportcommencinginFebruaryofeachyear,actualyear-to-dateresultsandprojectionsforthebalanceofthe year. We recommend that, in addition to this monthly report (which only provides financialreporting on the last five months of the year), the Board be provided with quarterly results andprojectionsasatSeptember30,andDecember31ofeachyear.ThiswillallowtheBoardtomonitortheDistrict’sfinancialpositionthroughouttheyearonanongoingbasis.

Included in the quarterly reports on actual results should be updates on capital spending againstbudget. For significant capital projects, status reports should be provided that set out progress onspendingrelativetobudget,achievementofkeymilestonesandrisksrelatedtodeliveringtheprojecton-time,on-budgetandagainstidentifiedprojectspecifications.

In addition to financial reporting, quarterly reporting should also highlight significant operationalresultsandachievementagainstkeyperformancemetrics.

#32 EstablishaSurplusPolicy

TheBoardshoulddiscussandapproveasurpluspolicythatguidesfutureyears’inter-fundtransfers.The policy should consider general guidelines as to howmuch (e.g., percentage or dollar amount)could be transferred to other funds, howmuchwould be added to Accumulated Surplus and howmuchmight be allocated for current year’s initiatives and spent in that fiscal year. In addition todevelopingapolicy, annualdiscussionson theexpected surplus/deficit for the year shouldbeheldstarting in the third quarter of the year to help inform decisions related to the application of theSurplusPolicyforthatfiscalyear.

#33 FormalApprovalofInter-FundTransfers

Eachyear’sinter-fundtransfersshouldbesubjecttodiscussionandapprovalbytheBoardpriortothetransferbeingmade,withaformalmotionforthetransferofthatyear’ssurplus.


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RECOMMENDATIONS

#34 ControlFramework

AreviewoftheDistrict’scontrolframeworkagainstarecognizedandrobustframework(suchastheCommitteeofSponsoringOrganization’s(COSO)InternalControlFramework)shouldbeundertaken.Keycontrolsshouldbedocumented,andwheregaps in thecontrol frameworkare identified,stepsshouldbetakentoclosethosegaps.

#35 FinancialandOperationalPoliciesandProcedures

Managementshouldidentifyfinancialandoperatingpoliciesandproceduresthatshouldbeinplace,comparethemtowhatexists,andimplementanddocumentthosepoliciesandproceduresthatdon’texistbutshould.

#36 DelegationofAuthority

Weenquired about the existenceof a formal delegationof authority policy that sets out spendinglimits and required approvals, including spending requiring Board approval. We were unable toidentifythatsuchapolicyexists.Aformaldelegationofauthority(e.g.,spendingauthorizationmatrix)shouldbedeveloped,approvedbytheBoardandimplemented.

#37 InternalAuditFunction

SchoolDistrictNo.83 shouldestablisha formal internal audit function, chargedwith reviewing theefficiency and effectiveness of District processes and controls. In establishing the function,considerationshouldbegiventooutsourcingthefunctiontoanindependentaccountingfirm.

ETHICALCONDUCTANDCONFLICTOFINTEREST

#38 Review,Update,andProvideforAnnualSign-OffontheCodeofConduct

TheCodeofConductembeddedwithintheProceduralBylawsshouldbereviewedandupdatedonaregularbasis.StepsshouldbetakentoensureitisalignedwithreferencestoconflictsassetoutintheAct.Inaddition,eachTrusteeshouldberequiredtoreviewandformallysign-offonanannualbasis,acknowledgingtheiragreementtoabidebytheCode.

Giventhe importanceoftheCode,werecommendthattheCodebereconstitutedasastand-alonedocument.


SchoolDistrictNo.83


RECOMMENDATIONS

#39 TaxpayerAccountabilityPrinciples

TheBCGovernment’sTaxpayerAccountabilityPrinciples (TAP)are intendedtoapplytothebroaderpublicsector,whichincludesschooldistricts.AllTrusteesandmembersofcentralstaffshouldreceivetrainingontheexpectationsofTAPandtheexpectationsestablishedbyTAPshouldbeincorporatedintotheCodeofConduct.

#40 ConflictofInterestPolicy

AConflictofInterestPolicyshouldbedevelopedandtrainingprovidedtoTrusteesandcentralstaff.TheConflictofInterestPolicyshouldalsobesignedoffonanannualbasisbytheTrusteesandcentralstaff. Inaddition,amechanismshouldbeestablishedfor thereportingofactionsthatare,orcouldpotentiallybeperceivedtobe, inviolationof theConflictof InterestPolicy.TheConflictof InterestpolicycouldformpartoftheCodeofConduct.

#41 WhistleblowerMechanism

There currently is no mechanism for the anonymous submission of complaints. A whistleblowerprocess should be established that provides for the anonymous reporting of suspicious orinappropriatebehaviour/activity.An important featureof thedesignofawhistleblowerprocess isthat the submissionofmatters for investigationmust bedone in good faith,with ramifications forindividuals who use it for purposes for which it is not designed. It is recommended that thewhistleblower process for the District be open to staff and employees, as well as external thirdparties.

GOVERNANCEFRAMEWORK

#42 DistrictGovernanceFrameworkandPolicies

The District should establish a more comprehensive set of governance policies that outline theDistrict’s approach to governance and include roles and responsibilities (e.g., for the Board,Committees,individualTrustees,theSuperintendentandtheSecretaryTreasurer),acodeofconduct,andimportantreviewanddecision-makingprocessesthatguidetheBoard’swork(e.g.,theapproachto strategic planning, delegation of authority, Superintendent review, meeting practices, andstakeholderengagement).

Documents

School District 83 - British Columbia · 6/3/2016 · The Minister appointed Elizabeth Watson, QC of WATSON as a Special Advisor to the Board effective April 20, 2016 with a requirement