Manitoba short-staffed on financial statements prep: auditor general

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This article was published 18/12/2023 (682 days ago), so information in it may no longer be current.

Significant financial control and accounting deficiencies continue to fester in multiple provincial government departments, says a new report from Manitoba’s auditor general.

Tyson Shtykalo released commentary on his audit of the public accounts and other financial statements Monday.

He found the provincial government did not dedicate enough resources to comply with an audit of its public accounts in a timely manner, which delayed the release of his office’s report.

“I am concerned about the pervasive lack of audit-readiness during this year’s audit of the (summary financial statements),” Shtykalo wrote.

“I am concerned about the pervasive lack of audit-readiness during this year’s audit of the (summary financial statements).”–Tyson Shtykalo

The auditor general routinely audits the province’s summary financial statements, which were released at the end of September. Financial statements from several entities that report to government are also audited as part of the process.

Shtykalo found the province was challenged to prepare audited financial statements by the legislated Sept. 30 deadline.

He offered a qualified opinion on the summary financial statements, owing to a “lack of sufficient audit evidence” for its asset retirement obligations — one of two new accounting standards adopted by the government.

The audit also found errors in the implementation of the new accounting standards, which had to be corrected and led to additional delays.

The province’s failure to be ready for an audit required additional resources from the AG’s office and increased overall costs.

According to the report, more than 100 errors were noted in the summary financial statements this year, building on a trend spanning several years. Shtykalo described the issues surrounding the province’s control over purchases and expenses, as well as its accounting processes as recurring and pervasive.

The auditor general is now conducting a performance audit to look into the causes of the control and accounting deficiencies.

Shtykalo also issued three recommendations concerning the government’s internal audit division, which had less than one-third of its budgeted staff positions filled.

“We found that the province allocated insufficient planning, time and resources to the preparation of the summary financial statements to ensure audit readiness,” Shtykalo wrote.

“During the audit, there were delays in the preparation of financial information, and in responding to our audit requests for supporting analysis and documentation.”

Manitoba Government and General Employees’ Union president Kyle Ross called the identified shortfalls extremely troubling.

“Years of cuts and contracting out have left the province without the staff needed to ensure effective financial management,” Ross said Monday in a release. “The latest warning from the auditor general is just one more reason why the new government needs to rebuild the civil service.”

“Years of cuts and contracting out have left the province without the staff needed to ensure effective financial management.”–Kyle Ross

In its response to Shtykalo’s report, provincial finance officials said the department plans to implement the recommendations.

The department was “constrained by ongoing systemic capacity and technology limitations” during this year’s audit. “The province continues to be challenged by inability to attract and retain professionally trained financial staff in the core government departments,” the province said.

Departmental finance divisions have job vacancy rates approaching 30 per cent and have lost staff to the private sector and other government-funded organizations owing to compensation levels, the province said.

Some compensation issues are expected to be addressed during collective bargaining for the province’s civil service, according to the government.

danielle.dasilva@freepress.mb.ca