NB Auditor General’s Report Causes A Stir
FREDERICTON – New Brunswick’s auditor general Kim MacPherson created a stir in Fredericton today as she highlighted the province’s debt, the New Brunswick Lotteries and Gaming Corporation and Atcon in her latest report tabled in the legislature.
Atcon
The contentious Atcon issue resurfaced as MacPherson said she plans to find out what happened to $70 million in taxpayer funding for the now-bankrupt Atcon Group of companies.
She noted in her report the provincial government is working to implement recommendations from her March 2015 report on Financial Assistance to Atcon Holdings Inc. and Industry. Her report concluded the government of Liberal Premier Shawn Graham provided loan guarantees to Atcon despite numerous recommendations to reject Atcon’s request for assistance, and then compounded the province’s risk of loss by giving up its first security position on Atcon’s assets in favour of Atcon’s bank.
Following Atcon’s bankruptcy the province was left with close to $70 million in unrecovered funds.
“My hope is that 100 per cent of the recommendations will be implemented in order to reduce the risk of a similar situation in the future,” said MacPherson. “However, the implementation of our recommendations has not yet been verified by my office.”
She intends to pursue the matter further, saying, “it is my intention to table an independent report responding to a number of the unanswered questions, including the most common question my office receives from concerned citizens on the Atcon file, ‘where did $70 million of taxpayers’ money go?’”
New Brunswick’s Finances
For the year ended March 31, 2015, the province reported its seventh consecutive deficit. With net debt of more than $12 billion, the auditor Ggneral says there are no long-term targets in place to curtail or reduce this debt, although the provincial government is in the midst of a high profile “strategic program review” to find up to $600 million in new revenues or savings.
Though New Brunswick’s credit rating remains stable, the report shows this province’s public-debt-to-GDP ratio is outpacing the “all provinces” average. MacPherson found there is no immediate risk of default on the province’s debt, but cautioned the province is more vulnerable given its current weak economy, high unemployment and an aging population.
“While there is no immediate risk of default, now is the time to prepare for the future and address the province’s financial challenges,” said MacPherson.
Lotteries and Gaming
MacPherson also found that the New Brunswick Lotteries and Gaming Corporation (NBLGC) made some questionable decisions such as participating in the Atlantic Lottery Corporation’s (ALC) troubled Geonomics game, which cost the province about $4.3 million.
The auditor general also found that VLT profit calculation errors led to $14 million in overpayment to seven First Nations. The calculation errors were discovered in 2013 and according to the auditor general, have not been corrected as of October 2015.
“NBLGC is knowingly continuing the overpayments at the rate of $172,000 per month,” said MacPherson “In my opinion, NBLGC should discontinue making unauthorized overpayments to First Nations immediately.”
The auditor general was also pointed to her 2013 audit that found there were more than 300 unauthorized VLTs operating throughout the province.