Auditor General: BC govt accounting practices unacceptable

[coffeeFreak]

B.C.'s fiscal transparency under fire by watchdog
Scathing report questions more than $80 billion in contracts

Rob Shaw, Postmedia News
Published: Friday, September 30, 2011

The B.C. government is crunching its financial books in an "unacceptable" way, providing too few details to the public, not properly explaining billions of dollars in spending and failing to address years of concerns raised by independent auditors, says the auditor general.

John Doyle issued a scathing annual report on government's financial statements Thursday, raising questions about the transparency of more than $80 billion worth of government contracts and whether billions more on the Port Mann Bridge replacement project are being properly counted by government.

Doyle once again offered a "qualified opinion" on the province's year-end bookkeeping process, called public accounts.

"In the auditing profession, a qualified audit report is a rare occurrence: It indicates to the users of the financial statements that some of the information is not auditable or is misleading," Doyle said.

"During the last 15 years, this office has issued qualified audit reports on the province's financial statements 12 times. For a government that strives for transparency and accountability, this is unacceptable."

Doyle zeroed in on the Port Mann Bridge replacement, a new 10-lane span set to partially open at the end of the year.
The government has classified the roughly $3-billion project as a self-supporting government business enterprise, arguing that drivers will pay a $3 toll to cross and, over the life of the bridge, cover its costs. By classifying it this way, the government avoids adding cer-tain project costs to the province's taxpayer-supported debt load.

But Doyle said that's improper because the bridge isn't even complete and any future revenue from tolls won't make the project profitable until at least 2017-18.

"No tolls have been charged to anyone at the moment," he said. "It is fully funded either by debt or working capital covered by government."

Doyle has raised similar concerns the past three years and expressed frustration at the lack of change.

Finance Minister Kevin Falcon called it a "somewhat esoteric debate on accounting principles" that doesn't affect government's bottom line. He said credit rating agencies agree with his interpretation that the bridge project is self-sustaining.
NDP finance critic Bruce Ralston said the government should listen to Doyle's advice.

"It's not coming out of the blue, his views are known and the government has heard those views and decided not to change," said Ralston. "I think you have to take it seriously."

http://www2.canada.com/nanaimodailynews/story.html?id=4cc4241b-3cff-4f7f-9227-957f824c871a

[butcher99]

No, it is ok. this is the government of fiscal responsibility remember? They promised. Don't worry.

[coffeeFreak]

Here are a few lines from another columnist as the complete one is a bit too long to place here:

Opinion: The government of ‘accountability’ taken to task for its bookkeeping

By Vaughn Palmer, Vancouver Sun columnist September 30, 2011

...He challenged the government’s recent decision to exempt itself from a key provision in accounting standards, thereby continuing the practice of deferring hundreds of millions of dollars in costs at BC Hydro. Without that escape clause the deficit would be half a billion dollars larger this year alone...

...The government reports a running tally in the fine print of the public accounts, a point noted here previously. It thereby meets the bare minimum requirements of public sector accounting standards, a point Doyle concedes.

But he goes on to say that’s not good enough to satisfy the broader public interest in accountability.

“The expected payment streams associated with these obligations directly impact the remaining amount of discretionary funds available to government to meet future needs,” wrote Doyle, as he urged the government to disclose considerably more detail to help taxpayers better understand the multi-billion-dollar commitments being undertaken in their name.

The Liberals insist that many of Doyle’s findings — he cites 77 errors of one kind or another — amount to no more than a clash of accounting philosophies between the auditor-general and the in-house comptroller-general.

Doyle acknowledges that sometimes “we agree to disagree.” Still he insists that all errors should be fixed: “Call me old-fashioned if you like.” According to the running tally in the report, only half of the identified errors were rectified, the rest being dismissed by the government as “not significant” (25) or a matter of opinion (14).

On the clash of philosophies, Doyle says “that’s a nice line,” but sometimes the government is “just plain wrong.”...

Read more: http://www.vancouversun.com/opinion/editorials/Opinion+government+accountability+taken+task+bookkeeping/5480274/story.html