Auditor general finds government decisions had excessive risk with no clear benefit to taxpayers11 June 2019
FREDERICTON (GNB) –In Volume I of her 2019 report tabled today in the legislative assembly, Auditor General Kim MacPherson presented three performance audits of government programs and a special review.
The special review of the City of Saint John funding agreement found the $22.8 million agreement to address the city’s anticipated budget deficits created several risks and challenges for the province. Agreement terms created an inappropriate incentive for the city to report deficits to maximize funding. As well, negotiators allowed key safeguards protecting the province to be removed. The auditor general is also of the view, the agreement circumvented the Local Governance Act discouraging ongoing deficits and violated the Financial Administration Act.
The audit on outsourcing of highway maintenance and construction work found the Department of Transportation and Infrastructure does not have an outsourcing policy. MacPherson found decisions were guided by principles and objectives that included ‘philosophical’ reasons. She also found some outsourcing decisions were made for economic development reasons to support the private sector. This led programs to be knowingly outsourced at a higher cost.
The Medicare Cards audit found the automatic card renewal policy adopted in 2014 and the decision to outsource certain parts of the card renewal process have increased the risk of privacy breaches. MacPherson also found existing cardholders are not evaluated for ongoing eligibility under the new process. Overall, these issues have increased the risk of a usable Medicare card getting into the wrong person’s hands and has made it more difficult to identify ineligible cardholders.
The audit focusing on the collection and forgiveness of overdue property tax found that despite millions of dollars being forgiven at the discretion of the Tax Commissioner and Treasury Board, the Department of Finance has no policies and procedures to guide such decisions. Property tax forgiveness decisions are not publicly reported and without detailed policies and procedures these decisions may lead to unfairness and inconsistencies.
In total, MacPherson made 35 recommendations to various departments. This volume and one-page chapter summaries are available online on the Auditor General of New Brunswick’s website.