BC Auditor General Michael Pickup issued a qualified opinion that parts of the government’s financial statements are not accurate.

In a press release, the Office of the Auditor General said a qualified opinion is “unusual” and should not be taken lightly. The advisory comes just a day after the government revealed a budget surplus of $1.3 billion despite a projected deficit of $10 billion. Finance Minister Selina Robinson

“When auditors issue a qualified opinion, they generally warn users of these statements of information on which they should not rely. Qualifications, such as those in this report, represent errors or omissions that the auditor considers to be so material that, if not corrected, could mislead a user of the financial statements.

Pickup noted three “deviations” from generally accepted accounting principles in the government’s summary financial statements.

The first is BC’s treatment of payments from other government and non-government sources. Pickup said Canadian public sector accounting standards specify that these payments should be recognized as revenue, but British Columbia records them as deferred revenue or deferred liabilities.

“Had the financial statements followed this standard, the surplus would have been $6.48 billion higher, while the liabilities would have been lower by the same amount.”

The second is that there are “incomplete disclosures” of agreements that commit the province to future expenditures.

“The government has chosen not to disclose many commitments below $50 million, which omits information about significant future obligations. They also do not disclose certain larger future obligations, such as those to the BC First Nations Gaming Revenue Sharing Limited Partnership.

Pickup said incomplete disclosures understate contractual obligations by $708 million in 2023 and $315 million in 2014.

The third limitation relates to accounting and disclosure errors related to the British Columbia First Nations Gaming Revenue Sharing Agreement. Under the agreement, the government is to pay seven percent of the BC Lottery Corporation’s net income each year to the BC First Nations Gaming Revenue Sharing Limited Partnership. Pickup said the arrangement should be accounted for on a gross basis, which means BCLC’s net income which is recorded on government statements should include all gambling income and the net income transfer of 7% should be recorded as an expense in government returns.

Neither revenues nor expenses have been reflected in the financial statements.

“In my opinion, the government’s method of accounting lacks transparency. It doesn’t accurately reflect how they structured the deal and the underlying transaction,” Pickup said. “A note in the statements calls the arrangement a ‘transfer,’ but it is not an accurate description of the transaction.”

This results in a $91 million understatement of revenues and expenditures in the government’s current statement of operations. Payments under this agreement are to be made annually for 23 years beginning in 2022. The Auditor General has reported that there is also a lack of disclosure on the Government of Colombia’s estimated $2 billion contractual obligations. British to BC First Nations Gaming Revenue Sharing Limited. Partnership.

Pickup will hold a press conference at 11:30 a.m. Thursday (September 1) to answer questions from the media about the audit opinion. Black Press Media has contacted the Department of Finance for comment.

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Government of British Columbia Finances