FREDERICTON (GNB) – In her 2012 Report released today, auditor general Kim MacPherson reported on her review of capital maintenance of New Brunswick 's nearly 20,000 kilometers of highways. The objective of the review was to determine whether necessary capital road repairs are made on a timely basis.

MacPherson concluded that although the department has the appropriate tools in place to identify and prioritize required highway maintenance projects, current funding levels do not allow needed work to be completed on a timely basis.
The review indicates that delaying capital maintenance to future periods will result in greater overall cost to the province.

“Spending $1 at the right time to keep a road in good condition can prevent spending $5-$6 a few years later to reconstruct it once it has fallen into poor condition,” MacPherson said.

In her report, MacPherson made recommendations to the department intended to enhance management decision-making processes. MacPherson also recommended, “to improve accountability, the department's annual reporting to the public should provide information on the condition of our highway network.”

In her introductory comments to the report, MacPherson elaborated on her concerns about the capital maintenance of provincial assets in general. She explained that over the last five years there have been two very different approaches to funding capital maintenance of provincial highways. Each approach has associated benefits and costs.

The current approach of reduced funding levels contributes to improving the short-term financial health of the province at the cost of deteriorating road quality and increased long-term costs.

Conversely, during fiscal 2009, 2010, and 2011, significantly higher amounts of funding were allocated to highway maintenance. During that period, departmental data showed an improvement in the overall condition of the highway network. However, the province's financial health suffered through increased debt and deficits.

The problems associated with adopting either of these approaches are magnified for the province as a whole, given other capital assets such as schools and hospitals that must be maintained over service lives that often exceed 40 years.
MacPherson suggested a sustainable middle ground between these two approaches.
 “Our province needs a comprehensive long-term infrastructure plan that will ensure the sustainability and safety of all essential infrastructure, including highways, hospitals, schools and bridges, while respecting the fiscal challenges faced by the province,” she said.

She further indicated that the success of such a plan will depend on government maintaining the fiscal discipline to adhere to it over the long term.
Today's report contains two volumes; Volume I focuses on matters arising from the annual financial audit of the province and Crown agencies. Volume II reports the results of Value for Money projects completed during 2012.  Both volumes are available on the Office of the Auditor General website.


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