A new auditor general’s report has found contradictions and inconsistencies in the two policies governing financial transfers from the Yukon government to societies that provide services in areas including mental health, athletics and community facilities.
“In our opinion, this could result in inconsistent funding decisions and the inequitable treatment of societies that request funding,” said Casey Thomas, principal of the auditor general’s office, during a briefing March 6.
The problems relate to the types of funding societies can receive through government transfers.
In its written response to the auditor general, the Yukon government has promised “detailed work on policy changes,” to be completed by November 2018.
The report also chastises the government for reclassifying a controversial $750,000 payment to the Mountain View Golf Club as an “other expense” in 2011. It had originally been billed as a government transfer.
Thomas said there are no policy requirements for “other expenses,” meaning there was no way for her office to audit that payment.
“There was no way for us to look at what rules were in place to be followed,” she said.
In 2011, the Yukon government bailed out the golf course to the tune of $750,000, a deal it misleadingly framed as a payment for a land transfer.
During a government briefing on March 7, Clarke LaPrairie, assistant deputy minister of finance, said the payment should have been classified as a contract, since the Yukon government was receiving something from the deal — in this case, it was buying back land it already owned but was leasing to the golf course.
Contracts have to fall within one of a number of categories, which include supplies, advertising and electricity. But those that don’t fit any specific category are classified as “other expenses.” LaPrairie said that category is used regularly, and this particular payment was properly authorized by the finance department.
“They’re not really implying anything untoward,” he said.
But LaPrairie did admit that because the payment was first classified as a transfer, not as a contract, it never showed up in the contract registry, meaning the details of the agreement were not available to the public until after the fact.
“This is the first occurrence of something like this that I’ve been aware of,” he said.
The auditor general’s report found that some other transfers to societies should also have been classified as goods and services contracts, because the government benefited from the payments.
For example, one society received $5,000 to install signs and maintain government-owned pools.
The report focuses specifically on funding provided by the departments of Community Services, Economic Development, and Energy, Mines and Resources to 24 Yukon societies through three funding programs: the Community Development Fund, the Yukon Recreation Advisory Committee and Yukon Sport for Life.
It found that none of the three departments had evaluated the results of the funding programs, and that the Department of Community Services doesn’t always require assessments that show whether projects that receive funding meet their objectives.
In its written response, Community Services promised to require societies to complete a final evaluation to document whether objectives have been met.
“That’s one of the pieces that we’re putting in place to be in better compliance with the audit recommendations,” said Sarah Lewis, the department’s director of finance, systems and administration.
But LaPrairie said the government already employs more checks and balances than it used to for monitoring societies that receive government money.
For example, he said, full transfers used to be paid to societies upfront. But now, he said, the government uses “instalment payments” with progress reporting requirements after each instalment.
“We really have mitigated a lot of this,” he said.
Contact Maura Forrest at firstname.lastname@example.org