Scrap student ferry subsidy program, report recommends
Jonathan Fowlie, Vancouver Sun
Published: Monday, November 17, 2008
VICTORIA -- A $2.5-million provincial program to subsidize student ferry fares should either be scrapped or significantly improved, says an internal government audit obtained by The Vancouver Sun.
In a document produced earlier this year, auditors found the Ministry of Transportation's program for student ferry discounts has swelled well beyond its prescribed budget, and does not have the proper checks and balances to remain accountable.
"It is not clear to us why the ministry is subsidizing B.C. students' travel on BC Ferries, especially since the program cost exceeds the amount funded by Treasury Board," says the audit, which The Sun obtained through a request under the Freedom of Information Act.
Email to a friendEmail to a friendPrinter friendlyPrinter friendly
Font:
Auditors also found several instances where people not eligible for the program were given discounts, including a group of 61 students from Seattle who were clearly not residents of B.C.
"Fundamental risks and weaknesses in the BC Student Discount Program exist as a result of an inadequate accountability structure," says the report, produced by the government's internal audit branch in January.
The report makes five recommendations to improve cost-effectiveness, primary among which is "discontinuing the program."
The audit says that if the program is not cancelled, the ministry should consider negotiating a fixed funding model with BC Ferries so costs are predictable.
It also says the ministry needs to significantly improve the way the program is managed to ensure only eligible students get the discount.
The report also proposes an age-based discount, instead of the current program that gives discounts only under certain circumstances. It says this may be more expensive, but would be easier to manage.
The Ministry of Transportation now subsidizes full ferry fares for B.C. residents who need to take a ferry on a minor route in order to attend school.
On Wednesday, BC Ferries spokeswoman Deborah Marshall explained this happens mostly on smaller Gulf Islands that do not have the full range of school offerings.
The student discount program also subsidizes 50 per cent of fares for all B.C. students who travel on any ferry route to get to a school-related event.
Under the program, BC Ferries gives discounts to students at the point of purchase, then sends a bill to the Ministry of Transportation for the lost revenue.
The audit says that while the annual budget for student discounts is set at $1.6 million, the actual amount has grown steadily each year because of rising ferry fares.
On Wednesday, Ministry of Transportation spokesman Dave Crebo said the program cost $2.5 million in 2007-08.
Crebo said transportation and education ministry officials are discussing how to improve the program.
"The two ministries have been looking at ways to monitor the program use and the expenditures," said Crebo, adding representatives from the ministries met in the spring, and again in the fall to discuss the issue.
Crebo said no changes have yet been made, but added the audit was requested by the Ministry of Transportation so it could find ways to make improvements.
New Democratic Party critic for ferries Gary Coons called the audit findings more evidence the current ferry structure is flawed. He said it raises questions about the effectiveness of Premier Gordon Campbell's coastal ferry act. "It brings to question the direction we're heading with the new privatization model."
Coons, who saw the audit for the first time Wednesday, also questioned the effectiveness of other similar discount programs. "This is just the tip of the iceberg. This is a small piece of the puzzle. It's one audit on one social program."
Crebo said the government spends about $20 million per year on ferry discount programs for students, senior citizens, disabled residents and people travelling for medical reasons.
vancouversun.com