$550M in errors, and $6B 'under-reporting': Here's what an audit of the B.C. government's financial statements turned up
An audit of the B.C. government's spending revealed $6 billion in under-reported revenue, and $550 million in errors impacting the deficit.
The report from the provincial Office of the Auditor General, released Tuesday, looked into the Horgan Government's summary of financial statements.
And Auditor General Michael Pickup said the end result of the investigation was that the office disagrees with how the NDP has presented its financial accounts.
"It is important for government to record revenue according to (public sector generally accepted accounting principles) to create consistency in financial reporting and allow the financial statements of the Province to be more easily compared with most other jurisdictions. By under-reporting revenues by $6 billion, the government's summary financial statements do not give a clear picture of the Province's financial position," he wrote in a news release.
Errors made in the province's financial statements required adjustments, according to the report, but are considered to be unintentional. It is important to note that the AG's office did not identify any fraud during its audit.
“We have to have proper reporting and proper accounting,” said Mike Bernier, the finance critic for the BC Liberal Party. “When we go through the budgeting process, we’ve seen how far off (the NDP) have been on most of their projections.”
The full report is posted online for those interested in more information, but the following topics were highlighted by Pickup's office.
$6 BILLION IN REVENUE
The AG report suggests the province under-reported its revenues by $6 billion. As mentioned in the quote above, this was largely due to the way its financial statements were reported, which was not consistent with the way others in the public sector do their accounting.
At the end of every fiscal year, the government is tasked with combining all of its financial information and producing a consolidated set of statements. This information is used to diagnose the financial health of the province.
Among the key issues with the NDP's reporting were the consideration of which organizations should be included, the AG said.
There were also issues with personal income tax revenue estimates and the impact of the pandemic.
$550 MILLION IN ERRORS
The AG's office said the errors identified in the audit with an impact on the provincial deficit added up to $550 million.
These errors were fixed, Pickup said, but only after they were flagged.
"Simply put, this means that without the audit, there would have been errors significantly affecting the financial statements."
The AG wrote in his report that the Provincial Health Services Authority, which buys supplies for the health sector and sells them to B.C.'s health authorities, appropriately wrote off $66 million for the value of personal protective equipment (PPE) that ultimately could not be sold.
CTV News reported previously that the PHSA faced allegations of misspending in part due to this PPE, which was considered faulty.
$850-MILLION HOSPITAL SALE
Among the AG's "other financial matters of interest" is the sale of St. Paul's Hospital by Providence Health Care Society.
The Vancouver property and buildings were sold for $850 million, and the title will be transferred in 2027.
The AG's office looked over the aspects of the sale, and found that it agreed with how this was reported.
With files from CTV News Vancouver's Travis Prasad
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