B.C. auditor general highlights $6B budget dispute with government

British Columbia's auditor general says he has a decade-long difference of opinion with the government over calculating the province's financial bottom line that now adds up to $6 billion.

Michael Pickup said the concern relates to the way B.C. reports money it receives from other levels of government for capital projects like roads and bridge, and it is now into its 10th year. 

"This means, in simple terms, we disagree with the government's presentation of its financial accounting to the tune of $6 billion," he said at a news conference following the release of an audit report by the independent office.

B.C.'s comptroller general, Carl Fischer, says in a response statement included in the auditor's report that the government prepares its financial statements under the province's Budget Transparency and Accountability Act.

Neither Finance Minister Selina Robinson nor the Ministry of Finance were immediately available for further comment.

Pickup said the $6 billion has accumulated since 2011-12, when his office first raised the issue with the government.

He said the "opinion" included in the audit of the government's public accounts for the 2020-21 fiscal year does not mean the money was not properly accounted for or somehow missed.

"It is rather a disagreement in how those finances are recorded in the government's accounts," he said.

But the audit did identify risks, challenges and misstatements worth hundreds of millions of dollars, Pickup said.

Risks with COVID-19 relief program

The audit identified budget calculation errors on the revenue and expense ledgers that resulted in an increase in the deficit of $550 million, he said.

"Simply put, this means that without an audit, there would have been errors significantly impacting the financial statements," said Pickup.

Robinson said in July that B.C.'s public accounts showed a $5.5-billion budget deficit for the fiscal year, almost $3 billion lower than originally forecast.

The audit also reported a budget writedown of $66 million in personal protective equipment purchased by the Provincial Health Services Authority that was found to be unusable by health workers during the pandemic, Pickup said.

"COVID-19 revealed the dangers and challenges the health sector faces when buying PPE in a globally competitive environment, and how important it is to have strong procurement controls in place and to obtain expert advice when purchasing specialty products," the audit says.

Pickup said the audit also raised concerns about the risk of fraud in several government COVID-19 relief initiatives that were implemented quickly, including the B.C. Emergency Benefit for Workers, which paid $700 million to people as a one-time, tax-free $1,000 payment.

He said the government will conduct audits to verify the eligibility of those who received the B.C. Recovery Benefit for Families and Individuals, Small and Medium-Sized Business Recovery Grant and the emergency benefit programs.

In the audit, Fischer said the B.C. government had to show adaptability in the benefits it offered during the pandemic and the auditor has pointed out the risks in such programs but found no expenditure concerns.