Thank you, Madam Speaker.

Frequency of in-year reporting

Frequency of in-year reporting refers to publishing information on government revenues, spending, and debt financing over the course of the fiscal year and comparing these results with the budget. Frequent and regular in-year fiscal reports are important because they provide information on progress implementing the budget. This helps inform budget preparation for the next year. In-year reports also require government to create and enforce procedures to collect and consolidate data across public sector entities.

The GNWT does not appear to meet the "basic" level on this international standard: to publish in-year fiscal reports on a quarterly basis, within a quarter. In fact, committee is not aware of any in-year fiscal reports that the GNWT regularly releases to the public. Though the GNWT released an in-year fiscal update in 2021, this practice is not routine. That document also did not offer data tables to compare the results with the actual budget.

Other jurisdictions produce regular in-year fiscal reports. The federal government releases quarterly and monthly fiscal reports. Yukon releases a detailed semi-annual interim fiscal and economic update.

Committee wants to see more transparency on the GNWT's in-year progress implementing the budget, and therefore recommends:

Recommendation 7: That the Department of Finance take steps to publish in-year fiscal reports on a quarterly basis, within a month, and provide a timeline for implementation.

Comparability of fiscal data

Comparability refers to how information is presented in the public accounts to make easy comparisons over time and with other fiscal documents, like the budget. Comparable fiscal data matter because they enhance the integrity and transparency of government finances.

A key aspect of comparability is the use of consistent classifications in fiscal documents. There are four main internationally adopted classifications used for fiscal data:

1. Administrative, which identifies the department responsible for a financial item;
2. Economic, which identifies the type of spending, such as salaries or travel;
3. Functional, which identifies the socio-economic objective of a financial item, and
4. Program, which consists of a set of activities to achieve a policy objective.

The GNWT's budget and main estimates documents use, more or less, all four types of classification. By contrast, the public accounts use only three types, leaving out program classifications. The discrepancy makes it harder for users of the public accounts to scrutinize how well the GNWT implemented the budget.

An additional barrier to fiscal comparability is publication format. To committee's knowledge, the only publication format for the budget and the public accounts is PDF. Each PDF is limited to a single year's data, making it onerous and even prohibitive for users to manipulate the data and assess long-term trends beyond those included in the discussion and analysis section.

Take, for example, a public accounts user trying to assess the GNWT's spending on child and family services over the past ten years. The user would have to locate, open, and search ten PDF documents. This task would be practical on only certain devices. While the user would find reference to spending at the Department of Health and Social Services, an administrative data classification, they would not find information on how child and family services, a program classification. This example illustrates how the current publication format and data classifications reduce the usefulness of the public accounts.

Other jurisdictions provide examples of digital publication formats that make it easier to use the public accounts. Ontario provides a searchable, web-based table of spending items broken down by program, as well as .csv data files highlighting five-year fiscal trends. Quebec displays web-based graphs of high-level fiscal aggregates with ten years of historical data and links to the relevant page in the traditional public accounts document. And Yukon's Department of Finance is implementing a recommendation from its public accounts committee to digitize its public accounts.

Committee wants to see changes to make information in the public accounts more comparable over time and with the budget, using user-friendly publication formats. Committee therefore recommends:

Recommendation 8

That the Department of Finance take steps to digitize the public accounts and provide a timeline for the implementation and anticipated costs. The digitized presentation of financial results should align with the administrative, economic, functional, and program classifications used in the budget and main estimates documents.

Conclusion

This concludes the Standing Committee on Government Operations' Report on the review of the 2020-2021 Public Accounts. The committee looks forward to the government's response to these recommendations.

Recommendation 9: The Standing Committee on Government Operations recommends that the Government of the Northwest Territories provide a response to this report within 120 days. Thank you, Madam Speaker.