B.C. deficit underestimated by $73M: AG

Thursday, August 19, 2010 | 11:34 AM PT CBC News:

B.C. Auditor General John Doyle says the province's budget deficit should be $73 million higher than reported after his review of financial statements for the 2009-2010 fiscal year. The 62-page report released on Thursday concludes B.C.'s budget deficit should be $1.852 billion as opposed to the $1.779 billion reported by the government. Doyle's report includes three reservations regarding the government's method of accounting as opposed to the accounting norm, known as generally accepted accounting principles. He notes royalty credits for oil and gas producers are being subtracted from revenue rather than being reported as expenses, and the government is not recording liabilities for deep-well credits owed to oil and gas producers. Doyle's report says the method the government is using to consolidate its financial statements for its Transportation Investment Corp. results in significant differences on the balance sheet.

B.C. Comptroller General Cheryl Wenezenki-Yolland's response, which was contained in the report, says the government believes its accounting methods are informative, cost effective and timely. "We are mindful that too much detail can obscure the informative value of the financial statements, that the cost of additional information should not be greater than the benefit received, and that to be useful, financial statements must be presented on a timely basis so that users have the benefit of reliable information that is relevant to their information needs," wrote Wenezenki-Yolland.