Volume II Reports 
Our Financial 
Audit Work
1.1     	This volume of our Report deals with matters 
arising from our financial audits of the Province and 
its Crown agencies for the year ended 31 March 
2011. 
Interim Professional 
Restriction on 
Auditor General

1.2     	I was appointed Auditor General on 
December 1, 2010.  Prior to my appointment I was 
the Comptroller of the Province.  Since I was 
responsible for the overall accounting of the 
Province for nine months of the fiscal year under 
audit, professional audit standards prevented me 
from participating or influencing this year’s 
provincial financial statement audit.
New Deputy Auditor 
General Appointed
1.3     	However, I am pleased to report, with the 
appointment of our new Deputy Auditor General, 
Janice Leahy, CA, combined with other professional 
auditors in the Office of the Auditor General, the 
audit was completed in accordance with generally 
accepted auditing standards and the Auditor General 
Act.

1.4     	I acknowledge that, as the Auditor General, I 
am responsible to present this Report to the 
Legislative Assembly and, as Auditor General, I 
stand behind and fully support its contents.
August Release of 
PNB Audited 
Financial Statements
1.5     	We are pleased with respect to the timing of 
release of the audited financial statements. For the 
second year in a row, the statements were released in 
mid August.  We look forward to working with the 
government in its intention to move to earlier release 
dates in the future. The more timely the release of 
audited financial statements, the more useful it is to 
the public.


AG Concern with 
Province’s Fiscal 
Status



1.6     	The Province`s audited financial statements 
for 31 March 2011 show a deficit of $633 million 
and a $1 billion increase in Net Debt.  The Province 
now has a Net Debt of $9.5 billion.  Chapter 2 of this 
volume illustrates a number of disturbing trends:
Disturbing Trends
a.	Three consecutive years of deficits with a 
fourth one projected for 2011-12.  This trend 
is very concerning.  Significant changes are 
required to improve the financial health of 
the Province.

b.	When comparing the rapid growth in New 
Brunswick’s Net Debt to that of similarly 
populated provinces, our province had the 
highest percentage increase in Net Debt, Net 
Debt per capita and Net Debt per GDP from 
fiscal 2010 to fiscal 2011.  Therefore, with 
respect to Net Debt, this would imply New 
Brunswick’s declining fiscal situation is 
outpacing that of comparable provinces.

c.	Our historical trend analysis of the Province’s 
financial condition using CICA measures of 
sustainability, flexibility and vulnerability 
show the financial condition of the Province 
has worsened.

d.	If the Province continues in this manner, the 
financial health of the Province will continue 
to deteriorate. This will have an impact on the 
Province’s ability to meet its existing 
financial obligations both in respect of its 
service commitments to the public and 
financial commitments to creditors, 
employees and others. This illustrates the 
immediate need for the Province to develop a 
viable plan to improve the financial health of 
the Province. Interim 2011-12 projections 
indicate a worsening trend. To date, there are 
limited signs of the significant change 
required to deliver improved fiscal health for 
the Province.
Need for Action
1.7     	The results highlight once again the need for 
a clear explanation to New Brunswickers as to how 
government plans to improve financial operating 
results, curtail or eliminate growth in deficits and 
Net Debt, and in turn, reduce Net Debt. 
Financial Audit 
Recommendations 
1.8     	Chapters 3 and 4 of this Volume contain 
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.
Office Accountability 
Report
1.9     	Chapter 5 contains our Office’s 
accountability report.  This chapter assesses our 
performance against the indicators we established as 
part of our strategic planning process.  It also points 
out our need for additional resources in order to 
continue to provide objective information to the 
Legislative Assembly.  I intend to continue my 
efforts in obtaining additional funding at every 
opportunity such as presentations to legislative 
committees as well as government.
Acknowledgement
s

1.10     	My office is grateful for the continuing 
cooperation we receive from government 
departments and agencies during the course of our 
financial audit work.

1.11     	I want to thank all the staff of my Office for 
their professionalism and dedication.  This year in 
particular has been one of many changes.  In my first 
year as Auditor General I have been very impressed 
with their level of commitment in promoting 
accountability in government and willingness to 
adapt to new management. I would also like to 
acknowledge to the Legislative Assembly, I now 
have a much greater appreciation for the work they 
accomplish in a year, as demonstrated by the three 
Volumes of our 2011 report, particularly given the 
small size of our Office. 


                                             
                                              Kim MacPherson, CA
                                              Auditor General

  Introductory Comments                                                                                                                          Chapter 1	                                                                                                                          

Chapter 1                                                                                                                            Introductory Comments

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                                                                                                                    Report of the Auditor General - 2011
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Report of the Auditor General - 2011