Mr. Speaker, I am in receipt of a return to Written Question 26-15(4) asked by Mr. Braden on February 10, 2006, to the Honourable Floyd Roland, chairman of the Financial Management Board, regarding diamond certification revenue.

The Government of the Northwest Territories offers a Diamond Certification Program to participating Northwest Territories diamond manufacturers. This is managed by a third party, Gemprint Corporation, who charges factories $15 per certification. GNWT, in turn, charges Gemprint $6 per stone. The GNWT charges factories $15 for reprints of certificates, on an as-needed basis. In exchange for this fee, the GNWT has undertaken to provide a diamond manufacturing, monitoring, certification and marketing program. The certification fees are paid into a special purpose fund from which monitoring, certification and marketing disbursements are made. Special purpose funds are authorized pursuant to section 20 of the Financial Administration Act and in accordance with directive 807 of the Financial Administration Manual. As the disbursements are from an approved special purpose fund, they do not require the establishment of an appropriation.

The Minister of Industry, Tourism and Investment's predecessor requested Financial Management Board approval for the establishment of a special purpose fund in 1999 and this approval was granted. As a result, the treatment of diamond certification fees as a special purpose fund is in accordance with the Financial Administration Act

Pursuant to Financial Administration Manual directive 807, special purpose funds are to be disclosed as information items in the annual main estimates and public accounts. In reviewing past accounting treatment of diamond certification fees, it has been determined that there were some inconsistencies in how revenues and expenses were recorded. Up until the 2004-05 fiscal year, diamond

certification fees were recorded as revenue, and disbursements were charged as expenditures to a voted appropriation. Although this not how special purpose funds are normally accounted for, it is acceptable practice as full disclosure is achieved. In 2004-05, the department intended to move to a normal special purpose fund accounting, but did not complete the full conversion and ended up netting the revenues and expenditures. For the 2005-06 fiscal year, the conversion to normal special purpose fund accounting will be completed and the operations of the fund disclosed in the public accounts as required.

There are a number of approved special purpose funds from which disbursements are made without an appropriation. For example, all projects on behalf of third parties -- vote 4/5 -- constitute special purpose funds. There are also internal chargeback arrangements and authorized revolving funds from which disbursements are made without appropriation. Thank you, Mr. Speaker.