2002 Public Accounts (Financial Statements) released

The Minister of Finance and President of Treasury Board, Joan Marie Aylward, released today the audited Public Accounts (Financial Statements) of the province for the fiscal year ended March 31, 2002.

"This government is committed to providing full accountability reporting to the people of the province, and having open and transparent books is a very important part of fulfilling that commitment," the minister said. Ms. Aylward said she is pleased that the auditor general has given the province an unqualified audit opinion. She also noted that the auditor general has commented to officials that our public accounts "are among the best in the country."

"Government did better than expected in its cash management, with an actual cash deficit of $47 million for 2001-2002 versus the revised budget forecast cash deficit of $63 million," she said.

"The Consolidated Summary audited financial statements (Public Accounts Volume I), which include the activities of the government departments and government organizations, report a deficit on the accrual basis of $473 million for 2001-2002. It should be noted that a significant portion of that amount relates to items for which cash payments were not required in 2001-2002."

The minister said that meeting the cash requirements of government operations is most important in providing essential public services.

The difference of $426 million between the cash deficit ($47 million) and the accrual deficit ($473 million) results from several year end adjustments which have been made in accordance with the standards of the Canadian Institute of Chartered Accountants. Of the difference:

• $242 million represents accrued interest on the unfunded pension liability. This accrued cost will continue to be a significant accounting adjustment in the future based on the unfunded position of the pension plan.
  
• The financial statements recognize sinking fund earnings as they are earned and not when they are received. Government received more in cash payments from the sinking funds during the year than it earned, thus requiring an adjustment of $82 million.
  
• There are various adjustments with respect to accrued salaries and employee benefits, capital spending by the health boards, school boards and other government organizations amounting to $95 million.
  
• Other items, such as accrued severance and vacation pay, had a net impact of $7 million.

The Public Accounts of the province for 2001-2002 will be posted on government�s Web site at www.gov.nl.ca/ComptrollerGeneral/pubs.htm. A brochure outlining the highlights of the Public Accounts is also available on the Internet.

Minister Aylward also commented on the upcoming budget for 2003-2004. She noted that budget practices vary among the provinces and continue to evolve. "Some do not include all/or any government organizations such as health boards and school boards; some do not include the interest expense on their unfunded pension liability and so on. This government has been preparing to include accrual-based information in its budget."

The minister said the Government of Newfoundland and Labrador will have an accrual-based budget for 2003-2004.

"Government will be including in its 2003-2004 budget, in addition to the current cash-based Summary of Borrowing Requirements, an accrual-based summary on a consolidated basis, which will include most of the government organizations that comprise government�s reporting entity."

"This clearly demonstrates this government�s commitment to being open and accountable to the public, telling it like it is," Ms. Aylward said.

Media contact: Josephine Cheeseman, Communications (709) 729-0329

2002 11 25                                        3:55 p.m.