A B.C. finance ministry audit of a $60-million, privately administered forest-investment program has found numerous problems, including some faced by the program's predecessor, Forest Renewal B.C.

When the B.C. Liberals announced the creation of a new forest-management program almost five years ago, they promised it would be significantly different from the much-ridiculed FRBC, a Crown corporation. Originally supposed to fund a range of forestry activities, such as environmental cleanup and reforestation, FRBC branched out into other areas, including job retraining. The corporation even paid to retrain some forestry workers as dog groomers and saxophone players.

At the so-called “open cabinet” meeting on October 24, 2001, then–forests minister Mike de Jong announced the demise of FRBC and its replacement by the Forest Investment Account (FIA). “We are going to try and be specific about what our objectives are, be accountable for achieving those objectives, and do so in a fiscally responsible way,” de Jong told the meeting, according to the official transcript.

Of the seven programs that are funded by the FIA, the largest is the Land Base Investment Program (LBIP). Since 2002, the LBIP has spent between $34 million and $76 million annually. For the 2006–07 fiscal year, its budget is $59.84 million.

Part of the Liberals' new approach to forests management was to have the private sector do as much as possible of the work previously performed in-house by public servants. Even the administration of the LBIP was farmed out, to PricewaterhouseCoopers Inc. For the 2002–03 fiscal year, the company was paid a flat fee of $2 million to administer the LBIP, plus an additional fee of up to $1.6 million to conduct required performance and financial audits.

According to an audit of the LBIP conducted by the Finance Ministry and completed last January, the LBIP marked a radical shift in direction from that of FRBC. The Georgia Straight obtained a copy of the audit under a freedom-of- information request.

“Within three years of implementation, there is wide-ranging agreement to the good work and value that LBIP provides,” notes the report, called Review of the Forest Investment Account””Land Base Investment Program. As well, there is better communication with and collaboration among all players, it says.

However, the auditors discovered a range of problems.

The official goal of the LBIP is to “improve the forest assets base and support sustainable forest management practices on Crown land.” Among the programs supposed to be funded by the LBIP is the reforestation of areas cut before 1987. But the audit reports that it's difficult to tell whether or not the money is going for the right purposes.

“The ministry was not able to advise us as to how much backlog reforestation has been done in each Tree Farm Licence or Timber Supply Area, how much still needs to be completed, and whether the ministry is aiming for full completion,” the report says.

To aid in future planning, the ministry should be able to measure results against pre-set benchmarks, but this is not happening. “We found a lack of tangible performance measures at the program level for evaluating sustainable forest management, making it difficult to measure the achievement of the program objectives,” it says.

The report also calls access to information “poor” and says the administration of information was “ineffective”.

And some timber companies are spending LBIP money just for the sake of spending money. “In addition, several licensees advised us that they undertook a use-it-or-lose-it approach, spending money on smaller, lower priority projects rather than have the money transferred to another licensee,” it says.

As well, the various forest companies holding tree farm licences within a single timber supply area (TSA) have little incentive to cooperate, the report notes.

“It was felt that TSAs, with licensees having no long-term responsibility for a region, did not fully assist with or facilitate long-term investment,” it says. “Both licensees and ministry staff raised the question as to how industry can possibly protect the long-term land base interest when they are more concerned with the shorter-term interests of their shareholders.”

NDP forests and range critic Bob Simpson (Cariboo North) also has concerns about the FIA, including the contracting-out of the LBIP's administration.

“I'm not convinced that when it's public dollars being assigned the way that these are, that the third-party involvement gets you any efficiencies,” Simpson said. “Under Forest Renewal B.C., at least it was under direct control of various line agencies.”

On May 8, the last day of Wayne Strelioff's six-year term as B.C. auditor general, the Straight asked Strelioff what he would do if he could change just one thing about the way the provincial government works.

Strelioff cited the reliability of the reports that are supposed to state how well public spending is accomplishing its purpose.

“There needs to be some assurance that the information in these performance plans and reports is accurate,” Strelioff told the Straight. “There's a lot of decisions made on the basis of performance information provided by the government. And there's no assurance that most of that nonfinancial information is accurate.”