Ontario's Bill 122, the Broader Public Sector Accountability Act, 2010 (the "Act") has received Royal Assent. Most of the Act came into effect January 1; the rest takes effect April 1. The Bill originally came on the heels of the Auditor General of Ontario's report, Consultant Use in Selected Health Organizations, that revealed spending and procurement irregularities in the Ministry of Health and Long-Term Care (the "MOHLTC"), some of the province's Local Health Integration Networks ("LHINs") and some hospitals. The Bill proposed new restraints on the use of lobbyists, new reporting requirements for expenses and new procurement rules for hospitals, LHINs and other public sector organizations.
Lobbyists and Consultants
Various organizations including hospitals, school boards, universities, as well as a number of other organizations are now prohibited from engaging a consultant lobbyist for compensation that is paid for with public funds. In addition, a subset of these organizations, such as agencies of the Ontario government, Hydro One Inc., and Ontario Power Generation Inc., are prohibited from using revenues generated by the organization to pay for consultant lobbyists. Additionally, organizations may not circumvent these prohibitions by paying public funds, or other revenues that may not be used for the purpose, to a third party to engage in lobbyist activities on the organization's behalf. Notably, the Act still permits in-house lobbying by employees of an organization.
LHINs, hospitals and any other organization prescribed by regulation are now required to prepare reports regarding their use of consultants. The MOHLTC may issue directives about the form of the report and what information should be included.
Effective April 1, LHINs and hospitals will be required to post information about their expenses claims on their public websites. The Minister of Health and Long-Term Care (the "Minister") will have the authority to issue directives setting out whose expense claims are to be public including, board members and senior management, what information must be posted, how often and for how long that information must remain posted.
The Act will give the Management Board of Cabinet the authority to issue directives requiring designated Broader Public Sector ("BPS") organizations to establish expense rules. These expense rules may dictate who may make expense claims, the types of expenses which may be made and specify the information that must be supplied to support the claims.
The Management Board of Cabinet already has a procurement directive, the BPS Supply Chain Guideline, that sets out procurement best practices, but it does not generally apply to hospitals. It contains mandatory requirements for procurement planning and approvals. Since April 2010, the Ministry expected hospitals, school boards, colleges and universities to follow the BPS Supply Chain Guideline when procuring goods and services.
As of April 1, The Management Board of Cabinet will be permitted to issue directives governing the procurement of goods and services by certain designated BPS organizations and publicly funded organizations, including hospitals. Those directives may incorporate by reference policies or directives already in place by the government of Ontario. It is anticipated any new procurement directives that are issued would be based on the existing BPS Supply Chain Guideline or future iterations of it created from time to time.
Compliance and Enforcement
The enforcement mechanisms put in place under the Act are worth noting. Starting April 1, all hospitals and LHINs will be required to provide attestations that they are in compliance with the expense claim and procurement directives. The Minister will be able to set out what information shall be included and the timing of the attestations.
Compliance with the Act is now made a term of every agreement or other funding arrangement between the organization and the Government of Ontario; compliance is also deemed to be a condition of all employment contracts for senior management in a LHIN or a hospital. Hospital and LHIN boards have been given the authority to reduce the salaries of senior executives in the event the board determines a senior executive has failed to comply with any of the provisions in the Act.