Auditor scolds Sask. government over 'pervasive' accounting errors

Acting Saskatchewan auditor Judy Ferguson speaks during a news conference in Regina on Dec. 4, 2013.

Saskatchewan's auditor has issued an adverse opinion on the government's general revenue fund financial statements for "pervasive" accounting errors.

Acting auditor Judy Ferguson tabled her first report in the legislature Wednesday.

"There are so many errors it's too hard for the general person to make the adjustments, to figure out what the right information is," Ferguson said at a news conference.

She said her adverse audit opinion is the first ever issued in Saskatchewan.

The auditor said the government isn't following accounting principles generally accepted in Canada. If it had, she said, the general revenue fund would show an annual deficit of $590 million instead of the government's reported $58-million surplus.

Ferguson said the government hasn't include pension-related debt or long-term debt funding for things such as schools in its statements. She said the government has also, inappropriately, counted transfers from its rainy-day fund as revenue and recorded funding for capital projects as assets instead of expenses.

"I think really from a public (perspective), you should expect to receive accurate and reliable financial statements and accurate and reliable financial information from the government," she said.

"And so what we're saying in this case -- these statements aren't reliable."

The province has been repeatedly criticized by the auditor for using two sets of financial books: one for the general fund and another summary statement, which several provincial auditors have said more accurately covers all areas of government.

"The (general revenue fund) can be a management tool, but it shouldn't be something that's front and centre that the government focuses on," said Ferguson.

"It's just one little piece, albeit their biggest bank account. But it's like if you looked at your net worth, would you look at just part of what you're doing?"

Saskatchewan Finance Minister Ken Krawetz took issue with the report and the adverse audit opinion.

"What the auditor wants to see happen to the general revenue fund, is she wants it to be the summaries. And I've said for years, it's been the position of the former government, of this government, that we do not include the pension liabilities, that we do not include the growth and financial security fund transfers," said Krawetz.

"So that's a point of disagreement with the auditor. It's been around for a long, long time and, as we said, we are not trying to make the general fund the summaries. They are a chequing account. They are the public side of public monies."

Krawetz also says the government does not believe it is giving people inaccurate information.

"Our accountants say we are following accounting principles and this is a dispute between accountants."

The auditor's report also raised concerns about regulations for landfills.

The report said the Ministry of Environment needs to set standards for landfill design and ensure they are built according to those standards. It also said the ministry needs to do more frequent

inspections.

Four out of five landfill constructions or expansions that the auditor's office tested "lacked documentation" to show that they were built according to plans.