Turnover contributes to mistakes in Manitoba’s financial reporting: AG

A report by Manitoba’s auditor general says errors continue to occur in the province’s financial reporting.

“The preparation of the public accounts is inherently complex and requires a co-ordinated effort across government,” Tyson Shtykalo said in his 60-page report. “It is not an easy task, and reducing the number of errors and deficiencies will require sustained focus from both the office of the provincial comptroller and departments.”

The auditor general looked at the public accounts from April 2020 to September 2023 and has since followed up to determine whether problems it identified have been corrected. Thursday’s report made 18 recommendations to reduce errors and improve reporting.

Shtykalo said the system, in which deputy ministers oversee departments, is decentralized, and there’s the need for ongoing guidance and training.

“When deputy ministers are managing their department during the year, they’re concentrated a lot on cash flow and other decisions that they have to make,” Shtykalo explained. “When the financial statements come together at the end of the year, you have to have things like estimates of future liabilities or measurement evaluations of certain things which may not be part of the day-to-day business… It’s those types of things that we think the department needs a little bit more guidance or direction on,” the auditor general said.

The provincial comptroller is in charge of gathering the departments’ reporting for the public accounts. The auditor general issues an audit report on the public accounts every December.

Shtykalo said the comptroller has made efforts to improve its financial reporting processes, enabling the auditor general to issue “a clean audit opinion” for the first time in seven years for the 2024-25 fiscal year. Still, the errors continue and the auditor general has to get them corrected, causing delays and creating more more work, he said.

Part of the problem has been staff turnover in departments and in the comptroller’s office. “People move on, they get promoted, new people move in. That also calls for well-defined guidance,” Shtykalo said.

Finance Minister Adrien Sala blamed the former Progressive Conservative government for the errors that warranted the auditor general’s review.

“We have cleaned up a lot of the financial mismanagement that we saw under the PC government but of course there is more work to do,” Sala said in an interview Thursday.

Work is being done to ensure that public-sector employees are getting the training that they need that will help to drive down errors, he said.

“This past year, we received our first clean audit opinion in Manitoba since 2017, which is the best signal of the good work that we’re doing to improve reporting in Manitoba,” Sala said.

Tory finance critic Lauren Stone said the problems persist.

“There continues to be a record level of inconsistencies in financial reporting under the NDP,” she said in a prepared statement.

“Manitobans need to have the highest level of confidence in the accuracy of these public accounts. I would call on the government to take action on the AG’s recommendations,” Stone said.

Sala said the problems date back to the former PC government’s cuts to the civil service to save money.

The NDP has reduced the number of vacancies, he said. “We’re making great progress staffing up roles across government.”

The president of the Manitoba Government and General Employees’ Union said the effects are still being felt after the public service lost nearly 20 per cent of its workers.

“It didn’t matter which position left, they just didn’t fill it and expected the people around them to take it up,” Kyle Ross said Thursday. “That caused a lot of burnout and a lot of people to leave,” the president said. “When you have the person who’s been there 15, 20 years and understands the process leave — and if they don’t get to train whoever’s coming along — it creates a lot of inefficiencies,” Ross said.

The auditor general said he’s seen a commitment from the government to improve training and reduce reporting errors.

“They want to improve because it’s hard for them, too, with the auditor coming back to them for two months, with questions and additional input,” Shtykalo said.

“I am confident that they will take our recommendations seriously and try to implement them because it makes both our lives easier.”

carol.sanders@freepress.mb.ca