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Auditor General wants Province to better explain debt, program funding

The Office of Auditor General released its latest report Wednesday morning and has two recommendations for the next time BC’s Ministry of Finance puts together a budget.

This is the second report released on the matter. The recent document, Budget Process Examination Phase 2: Forecasting for Operation Expense, Capital Spending, and Debt, focuses on the Province’s expenses and capital spending and debt. The previous one, released in 2015, was centered around the government’s revenues. Auditor General Carol Bellringer says the three recommendations made in the previous report have all been implemented.

The first of the 2017 recommendations is to regulate debt balance presentation. The BC government has been using different methods to show its debt in the Budget and Fiscal Plan and in the Summary of Financial Statements.

“Consistency between these two documents is important so that readers can compare government’s planned versus actual financial performance,” says Bellringer.

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The second recommendation is more complicated. She’d like the Ministry of Finance to explain assumptions and projections that support any planned changes to statutory programs. Bellringer specifically focused on the Ministry of Social Development and Social Innovations temporary assistance program in her report.

“The program provides temporary income assistance for eligible individuals or families. To be eligible, recipients have to meet legislated requirements, therefore, the government has limited control over the number of people eligible, yet we know that the government forecasted an 18% drop over three years in the estimated annual caseloads for this program. There was no explanation of how or why government forecast is changing caseloads, hence our recommendation that governments share its key assumptions behind significant changes in caseload trends.”

She expects both of these recommendations to be in place by the next budget.

Bellringer ensures this report has nothing to do with the Province’s method of distributing funds; it solely addressed the BC government’s budget-creating process. Just like making a business or household budget, she says it’s always a “best estimate,” regardless of the quality of information or method used.

All things considered, she says the BC government has created its budgets responsibly.

“While we’ve made recommendations for improvement, government is generally doing a good job preparing and reporting the budget forecast. The overall budget process was sound for the two years we looked at in these reports.”

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