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REGINA, June 7, 2012 – Failing to follow Canadian generally accepted accounting principles for the public sector has resulted in inaccurate reporting of government pension expenses and liabilities, says Provincial Auditor Bonnie Lysyk. The Auditor’s 2012 Report – Volume 1 was released today and includes recommendations that the Government record the proper pension expense and debt of the Teachers’ Superannuation Plan in the General Revenue Fund Estimates (budget), in the General Revenue Fund financial statements and in the Ministry of Education’s Annual Report.
In 2011, the Ministry of Education’s Annual Report stated that the teachers’ pension and benefit expenses were $184 million instead of the correct amount of $407 million. In its budget the Ministry had reported an estimated teachers’ pension and benefits cost of $177 million. The Ministry reported the wrong amount in its Annual Report and budget because it follows a Treasury Board policy instead of following independently-set Canadian generally accepted accounting principles.
The use of a Treasury Board policy that sets the accounting rules for pension expenses has resulted in the Provincial Auditor having to issue a qualified audit opinion on the General Revenue Fund financial statements. This inaccurate accounting understates the expenses in the General Revenue Fund budget and financial statements used for public reporting. According to the Auditor, over the past five years, the amount of debt related to teachers’ pensions that is not included in the total debt reported in the General Revenue Fund financial statements has grown from $2.8 billion in 2007 to $4.1 billion in 2011.
“Legislators and the public need accurate information to understand the impact of pension obligations on the Government’s budget decisions,” said Lysyk. “Independently-set, Canadian generally accepted accounting principles for the public sector exist. The Government should follow them. Although the Provincial Summary Financial Statements contain the correct amount of pension expense and pension debt, this does not diminish the importance of other public documents including the correct public information.”
The Office of the Provincial Auditor is an independent office of the Legislative Assembly of Saskatchewan. The Office serves the Members of the Legislative Assembly and the people of Saskatchewan by providing independent assurance and advice on the management, governance, and effective use of public resources.
Information regarding the Office of the Provincial Auditor and the full 2012 Report – Volume 1 can be found on the Internet at www.auditor.sk.ca.
For more information, contact:
Ms Bonnie Lysyk, MBA, CA
Provincial Auditor Saskatchewan
1500-1920 Broad Street
Regina, Saskatchewan S4P 3V2
Telephone: (306) 787-6398
Fax: (306) 787-6383
2012 Report - Volume 1: Teachers’ Pension Debt of $4.1 Billion $200 Million Not Recorded in General Revenue Fund Budget and Financial Statements (PDF)