Double books mislead voters

No amount of spin from Finance Minister Ken Krawetz will suffice to counteract the blunt assessment by provincial auditor Bonnie Lysyk that the government’s insistence on using two sets of books to present Saskatchewan’s financial picture is “poor practice and misleading to the public.”

Even though it might seem an esoteric argument among bean counters, any citizen should be able to appreciate the wider point being made by the independent watchdog, whose job it is to ensure that we get a true picture of public finances.

The gist of Ms. Lysyk’s argument is that the government of Saskatchewan needs to adopt the common standard used by all other provinces in Canada to report its financial position — the reliable summary financial statements that encompass all facets of government operations.

She takes exception to the government using its general revenue fund, or GRF, to communicate to the public about its financial results, because the GRF’s bottom line can be adjusted at ministerial whim for political advantage — usually to convey the impression that the books are balanced.

Questioned in the legislature this week about the auditor’s report, Mr. Krawetz said he “humbly disagrees” with Ms. Lysyk on moving to a single summary financial statement, and would continue to produce both statements for the “benefit of the people.”

It’s mind-boggling that a minister of the Saskatchewan Party, which in Opposition advocated for the NDP administration to adopt the very practice he’s now rejecting, would see any benefit to misleading citizens about their books, as the auditor’s reports is happening now.

“The ‘creative accounting rules’ that the government uses for the GRF allows it to communicate to the people of Saskatchewan that the GRF budget is balanced and there is a surplus, when in actual fact there is not,” Ms. Lysyk noted.

For instance, she pointed out that the GRF statement for March 31 excluded $6.12 billion in pension liabilities and $100 million in related expenses — saying that it’s akin to a private company withholding from shareholders the fact that one of its mines is losing money.

Proper accounting would reveal that the GRF surplus of $352.3 million reported for last year should have been a loss of $46 million, while the surplus of $56.2 million forecast in last week’s mid-year budget report would actually have been a deficit of $528.3 million.

Further, she notes, the government is trying to keep some liabilities off its GRF statement, such as a total debt of $31 million incurred by four school divisions that were told the government would cover their principal and interest costs. A further $43.5 million may be added to the total once she reviews loans of other school divisions. The loan the University of Saskatchewan is incurring on its Health Sciences project could be another.

Even though Mr. Krawetz says he had absolutely no intention to mislead citizens, it’s impossible to dispute Ms. Lysyk’s contention that the double set of books does exactly that. Saskatchewan people, like those everywhere else in Canada, can understand the numbers when they are presented without spin. Mr. Krawetz should listen to the auditor. The editorials that appear in this space represent the opinion of The StarPhoenix. They are unsigned because they do not necessarily represent the personal views of the writers. The positions taken in the editorials are arrived at through discussion among the members of the newspaper’s editorial board, which operates independently from the news departments of the paper.