P.E.I. auditor general's report finds spending, bookkeeping concerns despite strong economy
The province's annual report from the auditor general on government finances, released Friday, shows an economy that's performing well despite several concerns about spending and reporting.
Darren Noonan, P.E.I.'s auditor general, said the positive news is that the economy is strong and the government is taking these reports seriously.
"In our followup work, we've seen a positive trend in our recommendations getting implemented," said Noonan.
He outlined several concerns in the report, however, including the government using what are called special warrants too often for spending.
Spending trend 'going in the wrong direction'
A special warrant — as the name suggests — is only to be used in unexpected, unforeseen circumstances.
For the fiscal year ending in March 2022, Noonan's office found the government spent $163 million on special warrants — twice as much as during the previous fiscal year.
"It's a trend that is going in the wrong direction, I think," said Noonan.
"The Treasury Board policy says that special warrants are to be used as a last resort … sometimes it's just to cover cost overruns within departments, which comes down to managing your financial resources."
Lack of contracts
Another concern is a lack of formal contracts for grant money given to Holland College and UPEI — more than $100 million in total.
"So there are two big institutions, two extremely large funding agreements … that didn't have Treasury Board approval or contracts," said Noonan.
"You should have the conditions outlined because that way both parties to the agreement are aware of what the conditions are and what the money's to be used for."
The last such contract for the institutions' grant money was signed in March 2021, said Noonan.
Another issue Noonan raised is the fact that the government hasn't completed an environmental assessment on the former government garage site on Park Street in Charlottetown.
That site is now the home of a COVID-19 testing clinic and the Park Street Emergency Shelter units for those experiencing homelessness.
"[The government] acknowledges that there's probably contamination on that property just based on what that property was formerly used for," said Noonan.
"So the concern is that they do a phase two environmental site assessment and they find that there is contamination and that remedial work is required. And if remedial work is required, what does that do to what's being done on that property now?"
More reports coming
Until a site assessment is done, said Noonan, there is no way to know the extent of any possible contamination or the cost of remediation.
"It could become a big expense, or bigger than you think it is. So disclosing that so readers of the financial statements are aware that there could be a potential expense in the future."
Noonan also said 22 out of 25 reporting entities at the provincial level did not produce an annual financial report. And he'd like to see more details reported from agencies such as Atlantic Lottery and the P.E.I. Liquor Control Commission.
The auditor general said his office hopes to release six or seven other performance audit reports over the course of 2023.
"I'm looking forward to getting those done and get them out into the public," he said.