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Auditor General releases Report to the House of Assembly on the Audit of the Financial Statements of the Province of Newfoundland and Labrador for the Year Ended 31 March 2004 John L. Noseworthy, C.A., Auditor General, today released his Report to the House of Assembly on the Audit of the Financial Statements of the Province of Newfoundland and Labrador for the Year Ended 31 March 2004. The report provides information on the financial condition of government measured by using indicators issued by the Canadian Institute of Chartered Accountants. The report also offers comments on government's compliance with generally accepted accounting principles and adherence to principles of sound financial accountability. Mr. Noseworthy highlights the following specific areas: Financial Condition of Government - For the year ended 31 March 2004, government recorded a deficit of $913.6 million - the highest deficit ever reported by the province. As well, the net debt at 31 March 2004 was $11.5 billion which, on a per capita basis, amounts to approximately $22,200 for each Newfoundlander and Labradorian. Interest costs amounted to $1.1 billion or 25.4 per cent of total revenue in that year - the highest interest costs as a percentage of total revenue of any province in Canada. Mr. Noseworthy stated: "It is encouraging that government has indicated its commitment to address the province's annual deficits and net debt. I will continue to monitor government's fiscal performance and report annually as to whether progress is being made to bring the province's finances in order." Retirement Benefits - Pensions - The unfunded pension liability at $3.75 billion continues to be a significant issue for government. The unfunded pension liability increased by $188.7 million during the year, even though government made special payments of $163.5 million. Mr. Noseworthy stated: "Addressing the unfunded pension liability should remain a priority for government." Retirement Benefits - Other Than Pensions - At 31 March 2004, the province's net liability relating to group health and group life insurance benefits was $1.058 billion and is projected to total $1.552 billion by 2009. Mr. Noseworthy stated: "Government should carefully manage its liability relating to group health and group life insurance benefits." Accounts Receivable - Government does not do a good job in collecting amounts owed to it. At 31 March 2004, government departments were owed $501 million of which $243 million is considered doubtful of collection. Mr. Noseworthy stated: "Government should be more diligent in collecting amounts owed to it and ensure that the initiatives identified by Treasury Board to improve collection of accounts receivable are implemented." Government Reporting Entity - Memorial University of Newfoundland should be included in the province's Consolidated Summary Financial Statements commencing in 2005-06. Mr. Noseworthy stated that, if the university is not included, "I will have no alternative other than to qualify my auditor's opinion and state that the province's financial statements are not complete." Environmental Liabilities - There is no complete central inventory of contaminated sites in the province and there is no liability recorded on the province's financial statements for remediation costs associated with these sites. Mr. Noseworthy stated: "Government should undertake a process to identify all contaminated sites in the province for which it is potentially liable, determine its share of remediation costs and record any resulting liability in the province's financial statements." Mr. Noseworthy's report is available on the Office of the Auditor General Web site at www.gov.nl.ca/ag Media contact: John L. Noseworthy, C.A., Auditor General, (709) 729-2700 2004 11 30 3:10 p.m. |
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