A new report from Alberta's auditor general say the province has generally fairly presented its financial statements, but also required $1.6 billion in accounting adjustments. 

Auditor General Doug Wylie's report looked at the Alberta government's 2019-2020 financial statements. 

"We concluded the ... statements are presented fairly in accordance with Canadian Public Sector Accounting Standards,” Wylie said. “However, in our report, we highlight several significant findings that resulted in adjustments to the province’s financial statements."

MAJOR ADJUSTMENTS

The report outlines four major accounting adjustments required after audits. 

Auditors found the government's accounting analysis didn't reflect "the underlying economic substance" relating to 11 crude-by-rail contracts and resulting in a $637 million adjustment to expenses. 

The report also found there was a lack of analysis to assess accounting implications of Keystone XL pipeline agreements, resulting in a $100 million adjustment to assets and liabilities.

The Alberta Petroleum and Marketing Commission's cash flow model to value the Sturgeon Refinery processing agreement wasn't properly updated, according to the report. When it was, the update resulted in a $795 million adjustment to expenses. 

And, 11 months worth of benefit costs of Assured Income for the Severely Handicapped (AISH) didn't meet auditors' standards. The resulting adjustments caused AISH program expenses to grow by $102 million and Income Support program expenses by $50 million.

"While management did make all of the required adjustments, enabling us to offer a clean audit opinion on the province’s 2019-2020 financial statements, we felt it important to include these findings in our report, as they underscore the importance of having both effective financial control processes, and ensuring those processes are followed,” Wylie said.

The audit also found that a process was not in place to ensure that some grant expenditures under the Technology Innovation and Emissions (TIER) Fund actually fit the program's mandate.

Wylie says the errors have been or are being corrected by the United Conservative government, but highlights the importance of adhering to accounting rules so people have an accurate picture of what's going on.

RECOMMENDATIONS

Thursday's report also included four new recommendations for government institutions. 

Among them, that Alberta Treasury Board and Finance implement a review and approval of accounting changes that have affected the province's regular fiscal reporting. 

It also called for the Canadian Energy Centre, the so-called "war room," to improve its contract management processes after finding it used sole-sourcing that lacked documentation. 

Auditors also recommended the Alberta Energy Regulator adopt a better cloud governance model and that Alberta Environment and Parks better ensure all grants followed government environmental guidelines.

The auditor general is responsible for independently auditing every government ministry, department, regulated fund and most provincial agencies. 

The position reports to the 87 members of Alberta's Legislative Assembly.