Audit Opinion Denied

Citing cabinet confidentiality and solicitor-client privilege, the government withheld from the Auditor General more than 200 documents related to business loans and other financial assistance provided through Nova Scotia Business Inc. and the Industrial Expansion Fund.

Jacques Lapointe said today, June 2, after the release of his June Report, that he has denied an opinion on his audit of the operations of NSBI and the IEF, and pointed out that denial of an audit opinion is the most severe audit sanction available to him.

"We have no way of knowing whether these two financial entities -- responsible for the distribution of millions of dollars of loans and other financial aid and incentives -- have appropriate financial or program controls in place to protect the public funds they disburse or are operating in compliance with legislation, regulations and policies."

The five-chapter report covers audits completed in the fall of 2009 and winter 2010, and cites some serious deficiencies in the operations of government.

Mr. Lapointe's harshest criticism was directed at what he called "government's pervasive policy of secrecy -- consistently hiding information from the Office of the Auditor General."

A second audit covered in the report was hampered by the same restrictions on information, Mr. Lapointe said. The Department of Health, under instruction from the Executive Council Office, refused to provide information on budget requests related to mental health services.

The auditor general also said the Health Department is failing its legislative responsibility to monitor and evaluate the quality of mental health services across the province and has no plan to achieve compliance with its own mental health service standards.

His report concludes that the lack of effective oversight and the failure to comply with standards significantly increase the risk of creating a disjointed mental health care system that fails the people who need it most.

The Department of Health accepted all 19 recommendations the auditor general made to improve mental health care services. However, Mr. Lapointe said the government has a poor record in implementing his recommendations.

Of 82 recommended efficiencies and service improvements the auditor general made in his June 2007 report, the government has implemented just 27 per cent. "This is the worst performance since we began tracking government response to our recommendations in 2002."

The Department of Health figured prominently in that June 2007 report and was the subject of 48 recommendations of which 13 have been implemented, leaving 34, or 71 per cent, outstanding.

The June 2010 report included the results of an audit of the Environment Department's management of contaminated sites across the province, and concluded that the risks associated with these sites are not being adequately managed to protect the public interest.

"The department is aware of sites that may pose a risk, but has taken no action to deal with them and it is aware of sites that have not been cleaned up that may pose an unacceptable risk to third parties, health or the environment. We made 17 recommendations to correct flaws and improve the management of environmental and health risks."

The complete report and related documents are available online at www.oag-ns.ca or by contacting the office at 902-424-5907.