Saturday, November 25, 2006

Goodbye accrual world(?)

One of the great buzzwords leading into the last provincial election and since this government has taken office has been accrual accounting of the government books. This has come mostly from one Loyola Sullivan, the man of a billion numbers and the province's current finance minister.

Mr. Sullivan's concern with accrual accounting had much to recommend it. Let me explain a bit.

Over the years, government established a slew of regional bodies to take care of one thing or another. Most notably, we're talking about health and social services (through the regional health boards) and education (through the regional school boards).

An ongoing problem has been previous governments' shell game in not counting deficits and liabilities of those bodies in the overall books of government. And since the province is ultimately on the hook for any liabilities or deficits these bodies take on, it's only right that the province should account for that.

Think of it this way: when you co-sign for a credit card for your minor child, you had better get used to the idea that their liabilities are also your liabilities unless and until your child hits the age of majority and, chances are, even after that you'll continue to shell out.

One way the government keeps these matters in control is to limit the ability of regional boards to spend beyond its means and to ruthlessly make internal changes to clear out deficit problem when they do happen. Think about the times the province has called in outside management consultants into the western regional health board to see what I mean.

Then this staff pharmacist issue comes along. My understanding is that the situation was rapidly hitting a breaking point. It had long gone past from having enough staff pharmacists to having too few. There were places where going from having too few to having none in place at all was staring them in the face. The matter had to be dealt with and dealt with right now.

Then when the Health Board makes a move to put the issue to bed with a $1 million bonus payout, CBC said:
The largest health board in Newfoundland and Labrador has made a unilateral move to stop hospital-based pharmacists from moving away.

Sounds like a great piece of initiative on their part - brave and courageous, in fact.

All this is a long way to get to a simple question: has the province and Loyola Sullivan given up the faith of accrual accounting, and the basic lines of implicit accountability, in allowing the Eastern Regional Health Board to pony up an additional $1 million for pharmacist bonuses?

Is Minster Sullivan allowing the Boards to run their expenditures as they want without consideration of government's priorities?

Well, no, not quite. On November 16, CBC reported that:

Sullivan, who is scheduled to give a fiscal update Thursday afternoon that is expected to show the province is running a current account deficit, said the government cannot afford to deal with the pharmacists' issues this year.

However, he committed to review salaries next year.

More than a month before, on October 14, CBC reported that:

Health and Community Services Minister Tom Osborne said he is aware of the shortage, but asked them to postpone any job action.

"I would ask them to hold off on immediate action until at least I have an opportunity to contact the regional health authorities and we can put contingency plans in place," Osborne said.

So what we have in place today is a different kind of shell game than we've seen previously; we have a government that has performed the political equivalent of cheque-kiting.

You see Minister Sullivan wants to go through his pre-budget consultations "managing" expectations (playing them down so people/organizations/interests won't ask for more money) and preparing the ground his own priorities.

But the province is bleeding away pharmacists now.

So the shells start to move across the table: the stakes are the health of patients in the hospital system and the prize is $1 million in pharmacist bonuses.

Government wants to resolve this matter now with appearing to have too much money in a time when government announces a paper deficit. The Health Board wants to solve this problem because it really has to in order not to jeopardize the health of patients.

So was this truly a "unilateral" move as CBC described it? Was the Health Board brave and courageous in taking this bull by the horns? There's no reason to believe that.

I expect the Board went ahead and organised the bonus payouts to pharmacists with the tacit agreement of government. I expect it was also with the understanding that the Board will be reimbursed by government in the upcoming budget.

It's worth keeping in mind that no board in this province can make any decision anytime on any matter without at least the tacit approval of the Minister responsible or the Premier himself; any decision made by any board can be unmade at a stroke of a Confederation Building pen.

Sometimes it's convenient to rein in regional boards (overturning a school closing) and other times it's more convenient to let them run ahead until you are ready to announce a solution of your own.

There is nothing counter to any law, statute or regulation in any of this but it does show the willingness of government to play shell games with employees (pharmacists), very sick patients including cancer victims and with the boards to whom it entrusts to deliver services to the province.

And it's all for the political goal of managing the expectations of the upcoming budget.

And while it's not illegal, it does strain to the breaking point the ideas of openness, transparency and accountability; it's just another reason to look behind the news just a little bit closer.

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