Thank you, Mr. Speaker. The Standing Committee on Government Operations is pleased to provide its report on the review of the 2012-2013 Public Accounts and commends it to the House.

The public accounts are the Government of the Northwest Territories’ financial statements for a given fiscal year and, as such, represent one of the key accountability mechanisms of the government. The Standing Committee on Government Operations has a mandate to review and report on the public accounts. A review of the 2012-2013 Public Accounts of the Northwest Territories took place on January 23 and 24, 2014, with the assistance of staff from the office of the Auditor General of Canada and staff from the office of the comptroller general in the GNWT’s Department of Finance. The committee wishes to publicly thank these individuals for their contributions, which helped the committee to undertake another successful review.

The Standing Committee on Government Operations is pleased to present this report on its review. The committee intends to continue the practice of undertaking an annual review of the public accounts, so that GNWT spending issues are publicly examined and all relevant information is placed before the public.

Timeliness of the Public Accounts

This is the standing committee’s second report on a review of the public accounts in the 17th Assembly,

and only the second such report in approximately

10 years. Previous reviews have been hindered by the government’s inability to complete the public accounts in a timely manner.

In their last report on the public accounts, members of the committee indicated their preference to receive the interim public accounts, which are the non-consolidated financial statements for the GNWT, by August 31st of each year, to allow the

information contained in the public accounts to inform the committee’s review of business plans for the coming fiscal year. Last year the 2011-2012 Interim Public Accounts were tabled on October 18, 2012.

This year the 2012-2013 Interim Public Accounts were tabled on October 23, 2013. However, the documents were provided on an embargoed basis to the committee on September 12, 2013, less than two weeks after the August 31st deadline and in

time for review of the main estimates. The committee wishes to thank the Minister of Finance and the comptroller general for the early receipt of this information and reiterate its continued preference to receive the interim public accounts by August 31st in future years.

This year the 2012-2013 Public Accounts were signed off on October 30, 2013, and tabled on November 6, 2013, well in advance of the statutory deadline of February 20, 2014. This represents a one-month improvement in the sign-off date and an improvement of almost three and one-half months in the tabling date of the public accounts over last year. Members wish to acknowledge this achievement and to commend the comptroller general and his staff for their continued dedication to completion of the public accounts at the earliest possible date each year.

Having said this, however, the committee notes that there are particular agencies included within the government reporting entity that, for different reasons, were unable to meet the submission deadline for their audited public accounts.

The committee acknowledges receipt from the Minister of Finance, on January 23, 2014, of a list of these agencies that did not meet the deadline for completion of their public accounts. A copy of this list is attached to this report as Appendix B.

The committee believes that the timeliness of reporting as required by law is an important part of government accountability. Members thank the Minister of Finance for providing this list to the committee. However, the committee stresses the importance of appending the list to the public accounts, as part of the standard reporting process, so that it becomes part of the public record and offers further encouragement to public agencies to complete their financial statements on time.

Independent Auditor’s Report - A Clean Opinion

In reviewing the public accounts, the standing committee examined the Independent Auditor’s Report provided by the Auditor General of Canada.

Members were pleased to see that the Auditor General’s opinion on the public accounts was clean. In other words, it contained no qualifications. The Auditor General’s opinion was that the consolidated statements “present fairly, in all material respects, the financial position of the GNWT as at 31 March 2013, and the results of its operations, changes in its net debt, and its cash flows for the year, in accordance with Canadian public sector accounting standards.”

While this is a positive thing, it is important to bear in mind the purpose of an audit of the public accounts. The public accounts do not tell the reader about management spending decisions and they are not audited to critically assess why money was spent in a certain way.

The Auditor General, as required by the Northwest Territories Act, reported that Canadian public sector accounting standards were applied on a basis consistent with the previous fiscal year, except for a change in methods used to account for tax revenues and government transfers. These changes to accounting procedures were introduced this fiscal year as required by the Canadian Public Sector Accounting Board. The Auditor General also gave the opinion that proper books of account have been kept by the GNWT and that the consolidated financial statements are in agreement with those books.

It is worth noting, as well, that the NWT Housing Corporation received a clean opinion from the Auditor General of Canada for 2012-2013, as compared with the previous year.

Owing to the level of detail contained within the GNWT’s financial statements, the committee has opted not to attempt to summarize its review of this information within this executive summary. Interested parties are encouraged to read this report in full for the committee’s detailed review of the financial statements.

Recommendations

With respect to the review of the 2012-13 Public Accounts of the Northwest Territories, the committee makes the following recommendations:

1. The Standing Committee on Government

Operations again recommends that the Minister of Finance provide the committee with the interim public accounts by August 31st , in time

for committee review of the government’s business plans.

2. The Standing Committee on Government

Operations again recommends that, as part of the standard reporting process, the comptroller

general include a list of agencies in the consolidated public accounts that did not meet the deadline for completion of their audits.

3. The Standing Committee on Government

Operations again recommends that the Department of Finance continue to work with the Auditor General of Canada and GNWT departments, boards and agencies toward the completion of both the interim and final public accounts at the earliest possible date each year.

4. The Standing Committee on Government

Operations recommends that the NWT Housing Corporation submit its annual report within 90 days of the fiscal year end. If this does not prove to be possible, the NWTHC should seek appropriate approval for an extension to their deadline and provide the House with reasons for the delay.

5. The Standing Committee on Government

Operations recommends that the Department of Finance undertake the necessary audits and investigations required to ensure that revenues from self-reporting taxes are fully maximized and that the department report back to the committee with respect to its findings by August 31, 2014.

6. The Standing Committee on Government

Operations recommends that, in future, the public accounts include a detailed explanation of how the government has performed for that fiscal year vis-à-vis the Fiscal Responsibility Policy.

7. The Standing Committee on Government

Operations recommends that the Government of the Northwest Territories review its accounts receivable from Nunavut. The purpose of this review should be to develop targets and measures to improve collections, and to identify and write off those debts that are deemed to be uncollectible.

8. The Standing Committee on Government

Operations again recommends that the Government of the Northwest Territories monitor its loans receivable and develop targets and measures to improve collections, with a view to reducing the allowance for doubtful accounts to less than 30 percent.

9. The Standing Committee on Government

Operations recommends that the Government of the Northwest Territories continue to provide updated timetables or schedules for the environmental assessment of all known potentially contaminated sites for which the GNWT is responsible, to be included annually in the public accounts.

10.

The Standing Committee on Government Operations recommends that the Government

of the Northwest Territories provide a response to this report within 120 days.

The committee looks forward to receiving the government’s response to this review.