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New accounting standards hurdle governments’ filing of public accounts

Committee hears that the Yukon government isn’t the only entity struggling with protocol
Officials from Canada’s auditor general’s office and the Yukon’s Finance department appear at a committee hearing on public accounts in the Yukon Legislative Assembly on Nov. 24. From left, principal David Irving and acting assistant auditor general Normand Lanthier from the Office of the Auditor General of Canada, while comptroller Ralph D’Alessandro and deputy minister Jessica Schultz are with the territorial Department of Finance. (Dana Hatherly/Yukon News)

The Yukon government’s very public missed deadline for tabling its public accounts for the previous fiscal year was the subject of an all-party committee hearing last week.

The Nov. 24 hearing was held by the Yukon Legislative Assembly’s standing committee on public accounts. MLAs from each party questioned officials from the Office of the Auditor General of Canada and the territorial Finance department who appeared as witnesses. The committee collectively devised most of the questions without having seen the public accounts.

During the hearing, acting assistant auditor general Normand Lanthier chided the Yukon government over a “recurring issue”: its lack of timeliness in preparing the consolidated financial statements and providing key supporting documents to the audit team.

In the previous two years, the government turned in the public accounts a few days before the statutory deadline. This year, it missed the Oct. 31 deadline and Finance Minister Sandy Silver didn’t table the required documents in the Yukon Legislative Assembly until Nov. 22.

While the financial statements were done in accordance with generally accepted accounting principles for the public sector, Lanthier attributed the delay mainly to staff turnover and difficulties in implementing new accounting standards.

“Overall, the government needs to ensure that sufficient resources with the necessary skills are available to improve its financial reporting controls so that it can meet the government statutory reporting deadline in the future,” he said.

Lanthier noted his office will be issuing a management letter with recommendations for addressing weaknesses it observed. Management letters are commonly issued to different entities, he said. The letter, which will be issued in the coming weeks, will focus on incomplete information, inaccuracies and timeliness.

Deputy minister Jessica Schultz of the Yukon’s Finance department told the committee that the primary reason for the delay related to asset retirement obligations for which the department has been preparing over the past few years, as well as four other complex accounting standards that had to be adopted.

Schultz addressed some recommendations that had previously come from the committee, noting the department has made “some modest progress in several areas” such as technological improvements. For example, she said the department is looking into new software in an attempt to automate some of the work that goes into compiling financial statements.

The committee had also recommended tabling the statements earlier, which obviously didn’t happen. Schultz said the department has hired new accounting staff to assist on this front.

The Yukon government isn’t alone in its struggles, according to David Irving, principal of the auditor general’s office.

“Many Canadian public sector entities face challenges adopting these new standards and implementing them,” he said, adding that sometimes historical information that is difficult to produce is required.

The auditor general’s office declined to comment on governments that haven’t completed their filings, noting that information is not yet in the public domain. The Yukon is the first territory to complete its public accounts.

For the federal audit, Irving said they noted weaknesses in the federal government’s process for analyzing and determining the amount of their asset retirement obligations. Similarly, he said federal organizations began their financial analysis only recently or waited late to complete them, despite the new accounting standards having come out five years ago.

As for the Yukon, Schultz offered some additional details on why the legislated deadline was missed such as including one-time transactions like the ratification of the Yukon Employees’ Union collective agreement and the additional work it took to calculate and record retro pay, revenues related to disaster financial assistance arrangements for the 2021 and 2022 floods, and the Minto mine abandonment and subsequent uncertainty on its operations.

The number of new staff in critical positions compounded the problem, she said.

Although it wasn’t the first time the Yukon government didn’t comply with the mandated deadline, the auditor general’s office focused on this year’s audit.

“Strictly put, in the current year, it was very public that you were going to miss the deadline, and this is the third year that has been extremely tight,” Irving said.

The committee has indicated a second hearing will be scheduled on the 2022-23 public accounts.

An upcoming committee hearing on the COVID-19 vaccine audit is slated for Dec. 12 at 1 p.m. in the legislative assembly. An independent report of Canada’s auditor general’s office will be the subject of that hearing. The report makes recommendations for improving how the Yukon government responds to emergencies.

Contact Dana Hatherly at

Dana Hatherly

About the Author: Dana Hatherly

I’m the legislative reporter for the Yukon News.
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