Introduction

1.1	In my introductory comments each of the last two years, I 
have focused on the four things that the government should do to 
improve the integrity and transparency of its reporting on the 
Province’s financial situation. I believe there is still room for 
improvement in three of these four areas.

Release of financial 
statements

1.2	One area I have mentioned in the past is the timing of the 
release of the Province’s financial statements. The Financial 
Administration Act requires the Province to release its financial 
statements no later than 30 September in each year. The Province 
released its audited financial statements for the year ended 31 March 
2009 on 28 September 2009. The financial statements for the 
previous two years were released on 28 September 2007 and            
26 September 2008. 

1.3	These dates are interesting because subsection 2(4)(a) of the 
Legislative Assembly Act requires that the next provincial general 
election be held on 27 September 2010. I believe the government 
should make a clear statement of whether it intends to release its 
financial statements for the year ended 31 March 2010 in advance of 
27 September 2010.

Year end grant payments

1.4	Another area that I raised in our 2006 Report, and again in 
both the 2007 and 2008 Reports, was the government’s practice of 
accelerating the payments of operating grants to the Maritime 
Provinces Higher Education Commission. These accelerated 
payments stopped in the year ended 31 March 2009, thereby making 
the operating grant look artificially low – the financial statements 
indicate that the grant for the year ended 31 March 2008 was $274.0 
million, but for the year ended 31 March 2009 it was only $123.4 
million. It is my opinion that the government finally stopped the 
practice of advancing these operating grants not because it was the 
right thing to do, but because it was already facing a significant 
deficit for the year. My concern with the prepayment of these grants 
is that it obscures the normal operating results and I sincerely hope 
the government will not resume the practice any time in the future.

Future oriented information

1.5	In the past I have asked the government to provide more 
future oriented information. Both the 2009-2010 and 2010-2011 
budgets included tables of projected revenues, expenses and surplus 
or deficits for a multi-year period. The 2010-2011 budget 
presentation of these projected numbers was much clearer than the 
2009-2010 presentation, and I was also pleased to see the 
government presented its 2010-2011 budget well in advance of the 
beginning of that fiscal year – I believe this to be a best practice.

1.6	However, the future oriented information released by the 
government is still limited. While the 2010-2011 budget shows 
projected deficits for the fiscal years 2010-2011 through 2013-2014 
before returning to a surplus in 2014-2015, the budget only projects 
Net Debt to 31 March 2011. The projected Net Debt expected at      
31 March 2011 is almost $9.6 billion. Readers are left on their own to 
estimate the level of Net Debt beyond 2011. The budget indicates 
further deficits of $1.5 billion beyond 31 March 2011, but it does not 
provide estimates of future capital spending. It is obvious however 
that Net Debt is expected to rise to at least $11.0 billion.

1.7	The following table shows the actual percentage growth in 
revenue and expenses for the year ended 31 March 2009 and the 
estimated annual percentage growth through until 31 March 2015:



1.8	These numbers show that the growth in expenses was 
significantly above the growth in revenue for the year ended 31 
March 2009, and they show the gap is expected to increase in the 
year ended 31 March 2010. The government then expects it can 
reduce the growth in expenses to a level below the growth in revenue 
for the next five year period, including two years where revenue 
growth will exceed expense growth by almost four percentage points. 
The budget is signaling significant expense restraint in the future, but 
it does not provide much explanation about how this restraint will be 
achieved. This illustrates that the government has not yet reached the 
level of transparency necessary for people to understand how the 
government intends to eliminate annual deficits, and how and when it 
intends to start paying down its Net Debt. The government still needs 
to provide more future oriented information.

Public-private 
partnerships

1.9	One additional transparency concern I have this year is about 
the approval of public-private partnerships or P3s. The government 
has announced a number of P3 projects, however I am not sure how 
they are reflected in the Province’s Capital Estimates. I believe if the 
government is going to enter into contractual arrangements for P3s, 
they should be obtaining approval of the legislature through an 
appropriation before the contract is signed. 

Information in this 
volume

1.10	This volume contains a lot of information including 
management letter recommendations we made as a result of our 
financial audits, the results of our information systems work, and 
detailed analysis of certain financial information.

Acknowledgements

1.11	I am grateful for the cooperation that we receive from 
government departments and agencies during the course of our 
financial audit work. Our financial audit work is becoming more 
complex and cooperation from the organizations we audit is 
essential.

1.12	I want to specifically thank all of the staff of the Office of the 
Auditor General for another year of hard work; they truly are 
dedicated to improving government’s accountability and 
transparency.



Michael Ferguson, CA

Auditor General