On November 21, 2019 Auditor General Doug Wylie presented his annual fall report to the Legislative Assembly, including commentary on the 2018-2019 Consolidated Financial Statements of the Province of Alberta, and followup reporting on five previous audits by his office.
Highlights of The Report of the Auditor General – November 2019 include:
The Report of the Auditor General – November 2019 includes information on the audit to provide a better understanding of the financial statements. The report also includes a section on key risks the Auditor General examined within the context of the consolidated financial statements.
One of the risks reviewed in the context of the 2018-2019 consolidated financial statements was government contracts with the North West Redwater Partnership (NWRP) – through the Alberta Petroleum Marketing Commission (APMC) – related to the Sturgeon Refinery.
The Auditor General found that the disclosures of the agreements, term loan, and contractual obligation to pay a monthly toll over the 30-year contract terms are reasonable. In accordance with the processing agreement, APMC had to start paying the debt toll effective June 1, 2018, irrespective of whether the refinery operator accepts delivery of or processes bitumen. The debt toll related to the debt servicing costs that the NWRP incurs to finance the construction of the refinery.
“APMC started paying debt tolls in June 2018 and had paid $261 million by March 31, 2019. The AMPC continues to pay for this cost,” Wylie said. “As the refinery is not yet in operation, and APMC has not received any significant revenue to cover these costs APMC incurred a net loss for the year.”
“We found that AER’s approach meets the intent of the risk-focused plan to monitor and verify the sufficiency of mine financial securities,” Wylie said. “Alberta Environment and Parks has yet to implement our July 2015 recommendations to improve the design of the MFSP program.”
“Ten years after our original audit, the processes for reclamation monitoring and enforcement are still inadequate, and so is reclamation security,” Wylie said. “Security collected by the department does not cover reclamation costs, and Albertans may have to cover the shortfall if operators fail to reclaim the land.”
“In following up on our previous audits we found the department implemented our recommendation to update its methodology for 2018 and 2019 to more accurately estimate healthcare costs from motor vehicle accidents,” said Wylie. “This change in methodology resulted in the government being able to recover costs of $28 million a year.”
“We found Alberta Indigenous Relations implemented our recommendations and improved its processes to administer the FNDF program,” Wylie said. “This is important because, when administered carefully against the grant agreement, the FNDF program represents an opportunity for the government to support self-determination of First Nations in Alberta.”
“Albertans require and expect that these IT applications and systems are restored as soon as possible after a disaster,” said Wylie. “We found Service Alberta has made process improvements since 2014, and progress has been made in assessing criticality of applications. However, our findings indicate more work needs to be done for this recommendation to be considered implemented.”