$5B infrastructure strategy doesn't exist

Steve Bartlett
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The province doesn't have a formal $5-billion infrastructure strategy, and departments are claiming cabinet secrecy prevents the release of details about how their infrastructure projects are assessed.Those were two of the major findings in the auditor general's annual report, which was released Wednesday.

Of the issues scrutinized, acting auditor general Wayne Loveys said the unsuccessful quest to get information from departments about infrastructure decisions raised one of the biggest red flags.

"The precedent-setting nature of that is very concerning," he told The Telegram.

Loveys elaborated on what happened regarding the much-touted infrastructure strategy, which was announced in 2004 and was valued at $5 billion last year.

His office asked for a copy and was told there was no formal infrastructure strategy document.

It then requested information from five departments about processes for identifying, evaluating and ranking infrastructure projects.

Preliminary details were provided, but it became apparent the needed information wouldn't be forthcoming.

Health and Community Services, and then Justice, said the information fell under a section of the access to information act protecting data that could inform cabinet deliberations.

Loveys said it clearly wasn't worthwhile to make further requests of the departments. Still, he didn't buy the rationale.

"We know that. We accept that, but their interpretation of deliberations is very widespread," he said. "They're saying any and all information, whether or not it goes to cabinet or the budget committee or anything, is off limits to us. Anything in the department. Obviously we don't agree with that."

Loveys noted the response is inconsistent with previous decisions because the auditor general has probed things like infrastructure and medical equipment in the past.

He indicated being denied the information was significant.

"If I go for a new project for this year and I go to the same departments and ask for something on another program, they could say any and all information could eventually end up in cabinet, so we can't give it to you."

C-NLOPB review off

Another red flag for Loveys also involved not getting access to information.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), a joint federal-provincial body, continued to stimy attempts to conduct an operational review.

Lovey's office has been trying to do the audit since 2008 and the board has continuously refused.

It did say it would provide unrestricted access to privileged information provided findings related to that information were not reported.

Loveys couldn't accept that condition and has decided the review will not proceed.

He said that was regrettable because the board will not be held accountable like other government entities.

"This just brings it to a resolution, and in the report, I say that it's been a lengthy and somewhat frustrating process, and that's true for all of us in the office," he said.

Political reaction

The 530-page report was released mid-afternoon.

Lorraine Michael, New Democratic Party leader, had only read two sections - the reviews of the infrastructure strategy and the C-NLOPB - when interviewed just before 5 p.m.

She said those sections showed the questionable openness of government and its entities.

"It really disturbs me as an MHA. What chance do I have, or what chance does the public have, or what chance does our caucus have, of getting information from the government on things when even the auditor general - who is protected by an act - can't get information that will help ... with doing his work."

The NDP leader added the lack of a formal infrastructure strategy will make her wonder what actually exists on paper when a government plan is mentioned.

Like Michael, Liberal Leader Dwight Ball had not yet read the entire document when he spoke with The Telegram.

But he said "we didn't have to turn too many pages to find out there's some alarming things coming out of this year's AG report."

He said he was taken back by the absence of an infrastructure strategy and the departments' denying information on their infrastructure planning.

"I was shocked to find out that the AG didn't have access to this information. Really, from an administration that has positioned themselves to be open and accountable, in this case, it's not the way we see it. That said, we've been seeing examples of this over the last little while. You need to look no further than the (Public Utilities Board), the House of Assembly being closed again ..."

There was no response to a request for a comment from Premier Kathy Dunderdale.

Financial audit

The report also included an audit of financial statements for the fiscal year ending March 31, 2011.

Loveys' look at the books found the surplus was $598 million, while the net debt was $8.1 billion.

He noted government's fiscal position has improved significantly over the past years, but cautioned that a number of factors need consideration moving forward.

Those include net debt, spending sustainabilty, dependence on oil, the aging population, increased capital spending, and the Muskrat Falls development, as well as increases in the unfunded pension liability and liability for group insurance.

In a release, Finance Minister Tom Marshall said the report's recommendations will be reviewed.

He noted government recognizes the need for a continued focus on debt reduction, while containing growth in expenditures.

"We must continue to spend within our means and focus on sustainability as we plan for the future of Newfoundland and Labrador."

Other items

Besides the findings on the infrastructure strategy, the C-NLOPB and the financial audit, the report also determined:

- environment and Conservation's industrial compliance section isn't consistently inspecting or monitoring industrial facilities, increasing the risk of environmental violations;

- the former department of Human Resources, Labour and Employment didn't follow government policy on hiring temporary workers;

- the Marble Mountain Development Corp. has run a deficit for the past several years, relying too much on a provincial operating grant and a $2.1 million line of credit, of which $1.9 million has been spent;

- among other issues at the Western School District, there were overpayments and underpayments to staff, purchases made without invoices, and hirings that lacked evidence of a job competition;

- required financial reports for provincial lottery licensing were being submitted late or not at all. The licensing auditor position was vacant for more than four years, resulting in financial reports not being properly reviewed and financial audits not occurring. Onsite inspections were not being performed and there were instances of lotteries operating without a licence;

- the cost of replacing all government buildings was found to have almost doubled since 2004 - from $1.03 billion to $1.94 billion - and incomplete ratings for building conditions were found for 478 of 854 government-owned properties;

- the Royal Newfoundland Constabulary could tighten up compliance with firearms policy. Among the concerns were inadequate storage locker security and an inaccurate firearms and munitions inventory system;

- better records need to be kept on the junior exploration assistance program, a grant program for small mineral exploration and development companies valued at about $2.4 million;

- some spending at three provincial commodity boards - regulating production, processing and marketing of eggs, milk and chicken - were highlighted as "inappropriate use of board funds;"

- the province has no solid plan on how to complete the Trans-Labrador Highway. Questions were also raised about how the route was chosen and why some contracts for paving work were extended multiple times. As well, the Public Tendering Act wasn't followed in a couple of cases;

- twenty-seven companies who received grants from the Growing Forward agriculture program were reviewed and there were inconsistencies in project approval, follow-up oversight and completion of paperwork;

- a number issues with Workplace Health and Safety, including a lack a clear guidelines to support inspectors in enforcing orders when there are less serious violations. There were also instances where important follow-up investigations were not conducted.

sbartlett@thetelegram.com Twitter: @SteveBartlett_

Organizations: C-NLOPB, Community Services, New Democratic Party Canada-Newfoundland and Labrador Offshore Petroleum Board Public Utilities Board Department of Human Resources Marble Mountain Development Trans-Labrador Highway

Geographic location: Newfoundland and Labrador

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