Shortage of qualified &#39acc;ountants; still plagues GN

Peterson 'welcomes' unflattering AG report


Keith Peterson, Nunavut's finance minister, says he "welcomes" a new report from Auditor General Sheila Fraser that says the Government of Nunavut made "little improvement" fixing financial management problems that she first spotted as far back as the year 2000.

"The government doesn't see these reports as a bad thing. It's good. It helps us identify where we have to improve and where we have to work. We welcome these kinds of reports," Peterson said.

Fraser's latest report, tabled April 1 in the legislative assembly, grades the GN on how they've done since 2005. That's when she issued a big, scathing audit that summarized the territorial government's numerous financial management failings.

That 2005 report listed 18 recommendations for improvement. The purpose of her latest report is to grade the GN on how well they followed that advice.

Her findings are not flattering. "The Government of Nunavut has made unsatisfactory progress since 2005 towards strengthening its financial management and controls," Fraser said.

And, the underlying cause, Fraser said, is that the GN suffers from a big shortage of financial workers who know what they're doing. At the time her staff worked on the report, 32 per cent of jobs within the finance department were vacant.

"Simply put, there are not enough qualified staff to properly carry out the basic financial functions," she said.

Peterson, who has been observing the finance department as MLA for Cambridge Bay since 2004, said he expected more progress.

But he said he isn't too surprised by the auditor general's latest findings.

He pointed out that staff from the auditor general's office have been working with the GN since last year, when her latest report was more or less finished.

"We didn't just suddenly get the report last Wednesday. We've been working away since last year to help address some of these recommendations. Things are happening," Peterson said.

He also praised Fraser for all the assistance – official and unofficial – that she's given the GN.

"She's been very helpful over the years. There's official meetings and then there's where she helps us behind the scenes in other kinds of meetings," Peterson said.

And he said that Fraser's critical scrutiny of the GN helps the government figure out how to gain credibility in the eyes of the federal government.

"We're always talking about devolution and the criticism is that the government of Nunavut isn't ready, so this helps us get to where we are ready," Peterson said.

And Peterson said he knows the GN's biggest problem is a shortage of qualified staff.

"That has to be an area we have to work at, getting more accountants into the government," Peterson said.

To do that, Peterson said the GN is looking internally for people with the potential to become designated accountants, then offering training to them.

But he said there are no quick, overnight fixes for the GN's financial management problems.

"We have to recognize the limitations of the department and the government overall. We just don't have enough qualified accountants and financial people," Peterson said.

It's well known that the GN has been battered by world-wide shortages of nurses and doctors.

But the government is also struggling to find qualified financial professionals within a highly competitive labour market.

A recent article in CFO Magazine reports that Australia, Canada, China, Japan, the United States, the United Kingdom and eastern Europe all suffer from a shortage of qualified accountants.

In the meantime, Peterson said the government should do more to strengthen financial systems throughout the entire government.

He said the GN is now trying to do that with the help of a $23 million fund that the Conservative government announced in 2006.

None of that money may be used for training. But the GN is using it to buy better computer systems and to hire outside experts.

On April 1, the auditor general also issued a critical report on the financial management practices of the Department of Health and Social Services.

What the auditor general found

In two reports recently issued to the public, Auditor General Sheila Fraser listed financial management shortcomings that she's been drawing attention to for nearly nine years.

These include:

  • the spending of money that has not been approved by the legislative assembly;
  • GN workers approving spending without proper authorization;
  • weak monitoring of financial activities;
  • poor collections, including little work aimed at collecting up to $45 million in revenues owed by the federal government and others;
  • violations of the Financial Management Act, especially the production of legally-required financial reports;
  • long delays in paying contractors, including a pharmaceutical supplier who stopped doing business with the GN because of late payments;
  • poor budgeting practices within the health and social services department, including the shifting of unpaid salary money to other programs.
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