Auditor general indicates uncollected receivables of provincial government doubled during the past decade05 December 2013
FREDERICTON (GNB) – The collection of outstanding amounts owed to the provincial government was a focus of the latest annual report of the auditor general, released today in the legislative assembly.
The report reflects audited financial statements for the fiscal year ending March 31, 2013. Auditor general Kim MacPherson took a closer look at collection activities because the balance of amounts owing to the provincial government has been growing since 2002. According to her report, amounts owing the provincial government more than doubled between 2002 and 2012, increasing to $2.6 billion from $1.1 billion.
"The uncollected amounts owing have cost the province an average of $95 million per year in carrying cost since 2003," MacPherson said of her findings.
The report noted that the provincial government has taken a number of steps to improve the collection of amounts owing. The Canada Revenue Agency Refund Set-off Program has been implemented in a number of programs, allowing the provincial government to recover amounts owing from New Brunswickers through offsets to their tax refunds.
The provincial government has also made a number of amendments to legislation to facilitate collection activities and is moving toward the creation of a central collection unit, which will focus on collecting outstanding accounts.
Recent amendments to the Limitation of Actions Act have, in fact, limited the ability of the provincial government to collect outstanding receivables. Beginning in May 2016, it will have only two years, instead of six, to make claims against debtors.
MacPherson also found that all debtors are not treated equally.
"Debtors are treated differently depending on the department that holds the debt and government efforts to date have been more focused on collecting from individuals rather than businesses," said MacPherson.
She noted collection of amounts owing from First Nations appear unique and less stringent than all other accounts reviewed.
"Government should treat all parties who owe money in an equitable manner," she said.
MacPherson said more work is needed to improve collection rates. She identified more than $2 billion owing from various sources as of March 31, 2012, of which nearly $550 million was considered unlikely to be collected.
"Collection efforts need to be a priority focus to ensure all money owed to government is collected," she said.
Today's report contains two volumes. Volume I focuses on matters arising from the annual financial audit of the provincial government and Crown agencies. Volume II reports the results of Value for Money projects completed during 2013. Both volumes are on the Office of the Auditor General website.
● Office of the Auditor General