Auditor general sounds alarm over province’s accounting

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This article was published 22/12/2022 (1041 days ago), so information in it may no longer be current.

Manitoba’s auditor general says the province has spent hundreds of millions of dollars without using purchase orders — a practice both bureaucrats and opposition parties blame on a high job-vacancy rate.

Tyson Shtykalo says six departments, which he did not identify, spent a total of $264 million without using purchase orders. The information was contained in a report released by his office Thursday.

Shtykalo said because of that, and numerous other errors and accounting problems he uncovered in the province’s books this year, he will put all government departments under the microscope next year to determine the scope of the problem.

“Without the proper accounting controls in place, there is a greater risk of errors in financial reporting,” Shtykalo said.

“We’ve been finding more deficiencies in these controls. It has caused us to do more work and more testing. Because it is getting worse, I decided to bring it up this year… the numbers are right, but we needed to do a lot of work to do that.”

He said the problem is getting worse despite the fact it was flagged to management in recent years.

Shtykalo said the problem has become worse in the last two to three years.

“We’ve made recommendations in management letters, but not publicly. We’ve seen no movement, so I’ve included it in the public report.”

Shtykalo said managers explained the problem can be pegged on job vacancies, a high rate of turnover and the lack of adequate accounting knowledge in government departments.

“Regardless of these issues, it remains the responsibility of the province to ensure appropriate controls are in place,” he said.

Liberal Leader Dougald Lamont said he doesn’t understand how six departments could have spent $264 million without purchase orders.

“You’re talking about a quarter of a billion dollars,” Lamont said. “Aside from being a huge amount of money, that’s a big chunk of the provincial budget where it wasn’t budgeted for in a single year It seems to be increasing and getting worse, not better.

“It’s a reflection of a government that’s just making things up on the fly. But it also completely runs against the idea that PCs are sound financial managers… from the point of view of not just transparency, but accountability, it is a disaster.”

NDP finance critic Mark Wasyliw blamed Tory cuts, which have reduced the public service by 18 per cent since they took office in 2016.

“Now they’re having trouble recruiting and retaining,” he said.

“This government is struggling with basic financial accounting… they are breaking down and it’s bad.”

Finance Minister Cameron Friesen countered that the auditor’s report is “not an indictment.

“It is a regular audit that is conducted on finances and it is not citing some kind of a problem. Rather, what it is doing, it is citing the potential of a problem because of a weakness they identify.

“Clearly, we acknowledge these things. We are not contesting them; we rather acknowledge them and we want to respond to them… look, if controls are not strengthened here, something could go wrong in future.

“We welcome this audit.”

After reviewing the auditor general’s report, Friesen said, the government hired an external accounting firm to help strengthen departmental control, while reviewing salaries the government pays to staff accountants.

“We know when it comes to financial professionals, we need to be competitive or we are simply going to become a training ground for young accountants to come in, thank us for the experience, and depart too soon.”

kevin.rollason@freepress.mb.ca