HomeNewsIsland & CoastBC’s auditor general criticizes province’s latest financial statement

BC’s auditor general criticizes province’s latest financial statement

BC Auditor General Michael Pickup is criticizing the province’s accounting practices after his investigation into BC’s 2022/23 financial statement. It’s the 16th year in a row the province has received scrutiny following an independent auditor report.  

Each year, the Auditor General’s office is required by law to review the province’s financial statements and report to the legislative assembly whether the government’s financial statements are fairly presented and in line with generally accepted accounting principles.  

Pickup submitted his report in August, and in a media briefing yesterday he said the goal of the report is to provide clarity for MLAs to criticize government spending.  

“I hope MLAs will find this useful as they consider how the province’s financial reporting can be improved in the interests of transparency and sound decision-making.”  

In the 2022/23 fiscal year, the province reported $80 billion of annual expenses by public sector organizations. The report was based on financial activity from provincial ministries, special offices, health authorities, universities, and crown corporations.  

But Pickup and his office say there were multiple accounting errors in the report. Pickup said in the media briefing the corrections would add an additional $134 million to the surplus.  

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“We found that there were three areas where BC fails to meet Canadian public sector accounting standards. The province’s reports do not indicate whether those financial statements are fairly stated in accordance with generally accepted accounting principles. Government accounting is different from public sector accounting standards, which is what our issue is.”  

Pickup says the province has been inaccurately reporting funding from non-provincial sources, such as the federal government for a specific purpose. He referred to funding for a new hospital, which if correctly reported would be considered a “restricted contribution.”  

Canadian standards require non-provincial funding to be counted as revenue once the project is complete, but BC has been reporting it differently, instead counting a portion of the revenue each year across the entire lifespan of the investment.  

Pickup says the inaccurate report gives the illusion that the province has greater financial obligations than it already does, which resulted in last year’s revenues being understated by $6.97 million. 

His next issue was with the province’s future financial commitments. He says the province’s report inaccurately disclosed money committed under contract for future spending; his report found a $4.9 million understatement. Because of this, Pickup says MLAs aren’t accurately receiving information on the government’s financial commitments for future budgets.  

His final issue is with the province’s accounting of gaming revenue under the BC First Nations Gaming Revenue Sharing Agreement.  

He said the province didn’t include gaming revenues earned and transferred under the agreement in the financial statement, revealing a $113.6 million understatement in the province’s report.  

“These issues could have significant impacts on the use of those summary financial statements. Appropriately accounting for these issues would require the government to record all transactions and estimates accurately.”  

He is scheduled to release a second follow-up report in the new year with more of his findings. 

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