AG Repeats Call for Improved Accountability for Over-Budget Spending Not Approved by Legislature
For release February 11 – Auditor General Kim Adair is once again asking the Province to improve public accountability for the latest $1.38 billion in over-budget spending that was not approved by the legislature. Change is needed to ensure legislators and Nova Scotia taxpayers clearly know where public funds are going.
“Total revenue has exceeded the budgeted amount for four of the past five years and the Province has used the increased revenue to advance additional spending,” Adair says in her 2024 Financial Report.
The Auditor General cautioned that significant uncertainty has impacted the Province’s revenue estimates, noting there have been repeated and significant variances between budgeted and actual revenues over the past three years.
Over-budget spending has significantly increased in recent years with $1.38 billion approved in 2023-24, and a total of $7.0 billion approved in the last decade. These “additional appropriations” were 8.2 per cent of the Province’s total expenditures this year, compared to only 1.3 per cent a decade ago in 2014-15.
The real issue is the accountability process for over-budget spending in Nova Scotia is not in line with legislative practices in other provinces across Canada, where legislatures are required to review, vote on, and approve the extra amounts, says Adair.
To address this, the Auditor General has recommended a change to the Finance Act – the third year she’s done so – but the Minister of Finance and Treasury Board has so far refused to implement the recommendation.
The Auditor General’s 2024 Financial Report reveals both favourable and unfavourable trends in the Province’s financial performance over the past five years.
The Province has posted operating surpluses in four of the last five years, and the net debt to GDP ratio remains stable. However, net debt increased for the fifth year in a row and was $18.5 billion at the end of 2023-24, while unmatured debt increased in four of the last five years and totaled $17.6 billion in 2023-24.
A trend of increased net debt weakens a government’s financial position, cautions Adair: “More of its future revenues will be needed to pay its past debts and could negatively impact the ability to provide necessary services to Nova Scotians without additional borrowing or increasing revenues.”
The Annual Financial Report has two chapters and provides insights into topics of interest impacting the Province including:
Alternative Procurement:
- According to unaudited information provided by the Department of Service Nova Scotia, there was $2.4 billion in untendered contracts awarded by the Province and Nova Scotia Health since 2019-20. These contracts don’t go through a competitive bid process.
$7.5 billion in health-related spending and capital asset acquisitions:
- Six entities together reported $7.1 billion in healthcare operational expenses for 2023-24. Additionally, $457 million was spent on health-related capital assets during that same period, bringing the total spending to $7.5 billion.
Travel nursing costs increased by $95 million in 2023-24 to $154 million:
- The Province relied on travel nurses (who are being paid up to double the hourly rate of fulltime nurses) to fill vacancies while it awaits the hiring and training of more nurses. While they have been critical to maintaining the healthcare system, travel nurses have higher associated costs and do not have permanent contracts, leading to instability in staffing.
Government Received a Clean Audit Opinion on its Financial Statements:
- The government provided reliable financial information for 2023-24 within the legislated deadline. For the 24th year in a row, the Province of Nova Scotia received a clean audit opinion. That audit opinion means that the decision makers in Government, and all Nova Scotians, have assurance that they can rely on the financial statements.
- While the financial statements are reliable and many processes work well, underlying significant control weaknesses at one government department and one government organization need to be fixed. Significant control weaknesses increase the risk of unreliable financial reporting and misuse of assets in the future.