EDMONTON - Alberta's large greenhouse gas emitters annually claim $60 million in rebates for carbon offset projects that may not work, Alberta's auditor general said Tuesday.

Merwan Saher says the province is to blame because, despite an earlier warning, it is still not setting proper rules and directions on how offsets are to be quantified and verified.

"We expected more and better guidance to be in place," Saher told a news conference accompanying the release of his latest report.

His agency flagged the concerns in a report earlier this year.

"If the (emissions reduction) framework is to be respected, there has to be evidence this offset is element is well under control."

A spokesman for Environment Minister Diana McQueen says they have accepted Saher's recommendations and are working to implement them.

Carbon offsets are a way for large emitters to meet emissions-intensity targets to reduce greenhouse gas emissions.

Large facilities that emit more than 100,000 tonnes of carbon dioxide or more a year must limit the intensity of those emissions.

Those that go over the limit can make good by either paying into a fund to fight climate change or go on the open market and buy carbon offsets.

These offsets are paid directly to anyone taking steps to reduce emissions, like for a wind farm, or to farmers with more environmentally friendly tillage practices.

But Saher said an audit found the offset system in regulatory disarray, raising the question of whether the offsets being claimed actually occurred.

He said the rules and guidance aren't clear for the large emitters, for the offset project developers, or for the people who verify the offsets took place.

The government, he said, doesn't have one standard formula for how large emitters are to estimate or measure the emissions. Instead it tells them to choose from four different measurement formulas and five different calculation formulas.

The government still hasn't given a clear definition on what evidence is needed to support an offset claim for tillage, even though $24 million in tillage offset credits were claimed by large companies in 2009, he said.

When guiding companies on how to develop offset projects, the government gives out a list of calculations and criteria but doesn't make clear when and how they are to be applied, he said.

Opposition Alberta Liberal critic Hugh MacDonald said it's time the government got it right.

"Our national and our international reputation is at stake," said MacDonald.

"I hope the Ministry of Environment works on this starting tomorrow morning and straightens this out."

Danielle Smith, leader of the Wildrose Party, says the findings raise the question of what else is going wrong on environmental assessment.

"The government is spending $2 billion through their carbon capture and storage fund," said Smith.

"If we can't even measure whether or not we're having success in this program, how are we supposed to know we're getting any value for money for that $2 billion?"

Saher also reported Tuesday that the province is making satisfactory progress in monitoring standards in long-term care facilities.

But he urged the government to complete service agreements with facility operators to make sure the government gets proper information on what's being done for those in care.

He said Alberta Health Services is making progress on the care standards, "but it hasn't yet been able to demonstrate it has in its five zones a uniform and consistent method of inspection."

Saher also said he wants government-owned ATB Financial to provide evidence that its risk-control measures are working properly under the new banking system it put in place this fall.