Update: Government not hiding anything: Dunderdale

Steve Bartlett
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Acting auditor general concerned about being denied information from departments

Acting auditor general Wayne Loveys — File photo

Premier Kathy Dunderdale responded forcefully to the province’s acting Auditor General this afternoon, saying they are not hiding anything inappropriately.

In acting Auditor General Wayne Loveys’ report released Wednesday, he said his office couldn’t get documents needed to audit the province’s infrastructure spending choices.

“I think we’re very open and transparent,” Dunderdale said. “We make incredible amounts of information available to the Auditor General, as we should.”

Dunderdale said only a “narrow” group of documents asked for by Loveys, those which inform cabinet deliberations, were refused.

The government is drawing criticism for a lack of documentation around $5 billion in infrastructure spending. Both the Liberal and NDP leaders have said that the government should give Loveys whatever he needs to do his audit.

More coverage in Friday’s print edition and on our website.


$5B infrastructure strategy doesn’t exist

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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Recent comments

  • bert spracklin
    January 27, 2012 - 05:38

    Dunderdale cant even spell transparent , lets have the house opened for a start

  • Political watcher
    January 26, 2012 - 18:48

    The last time the AG was barred rom reporting on something was when Tobin and company kicked him out of the house. Don't worry people, he will get in and anybody who deserves it wi get theirs also. Ask Collins, Byrne, Hann etc...

  • Don II
    January 26, 2012 - 16:40

    If there is nothing to hide then open up the files and let the Auditor General review every document he wants to without any further delay. It appears that Premier Dunderdale just doesn't get it! Cabinet deliberations is and Cabinet confidentiality are just code words for secrecy and secrecy is just another word for cover up. It also appears that the Premier does not know what her subordinates are really up to and they don't want her, the Auditor General or the media to find out. Premier Dunderdale was too quick to defend her Government and she should be careful because she does not have all of the facts. Cabinet secrecy has its roots in medieval England at a time when the King and the English nobility were plotting against their enemies and their own people. National security is not involved here! This is the 21st century. The Premier is confused about what transparency in Government really means and to date the Government of Newfoundland has not even come close to becoming a transparent institution. The smoke and mirrors of transparency and access to information legislation which have so many caveats,restrictions and exemptions contained in them as to render them useless. I think Premier Dunderdale should quit taking bad advice from her old guard bureaucrats who are simply trying to cover their backsides. The Premier should order every Government department to cooperate fully with the Auditor General and let him see what ever documents or information he wants without exception. If Premier Dunderdale is prepared to do that, it will show that she has the courage and the right stuff to be a leader and not just another rubber stamp for the bureaucrats and their politician cronies who are doing the dirty work for lobbyists and people with hidden agendas. I have found that people are afraid to confront those in power and the abuse just continues unabated. I am very impressed with Mr. Loveys who has shown real courage and a willingness to challenge the old dinosaurs and their young boot kisser underlings who are running Newfoundland into the ground!

  • MBC
    January 26, 2012 - 16:15

    Kathy Dunderdale just stated on TV that she wants to get information out on INFRACTURE PROJECTS. But it's appears she wants to exclude the Auditor General from knowing about these projects.!!!!! The rest of Canada is laughing at her. By the way how much has she spent on news cloths and jewellery since become preimier???? And where was it spent , in NL or other provinces/states?

  • NowIsee
    January 26, 2012 - 15:31

    Just a question, can't Premier Kathy Dunderdale and/or her caucus be found in some kind of comtempt for not allowing the AG what is needed? This is making national headlines in Canada and it is looking more like our premier and her henchmen are hiding what we as citizens have a right to know about.

  • C-NLOP Boo
    January 26, 2012 - 15:16

    Review of the C-NLOPB is off? How pathetic is that! What are they truly trying to hide at the board. It has been too many years of secrecy, absolutely zero transparency and flying under the radar for the ill-skilled board employees. When will this end? What message does that send that 5 years of attempting to gather information has ended in failure? Give me a break! Let me ask the people this. What has truly changed at the Board since the tragic crash of the cougar helicopter? They finally were put under the lime light and their incompetency shined through and through. The best solution we could come up with was to seperate safety from the Board. Now all this time has passed, and many more projects have taken the lime light, while the Board has slipped back into its secret ways and low and behold, safety has not seperated and will not seperate in the future. Nothing has been accomplished and the incompetencies continue at the board. Time to make some cuts and changes at the dinosaur we call the Board

  • michael
    January 26, 2012 - 15:09

    no word on crown land's,think that must be very interesting department to have a look at considering all the give away's that's been going on and who is behind them and who is receiving!!!

  • David
    January 26, 2012 - 13:02

    Get ready people...when we eventually find out where a significant amount of provincial oil revenues ended up...well, let's just say its going to be "world class".....Bernie Madoff will drop down a rung or two on the ladder.

  • SR
    January 26, 2012 - 12:31

    When govt claims cabinet secrecy, that usually means something does not exist or they don't want anybody to know about it.

  • Cyril Rogers
    January 26, 2012 - 10:31

    It was clear to me for years that the Tories were running on voodoo economics and by hiding the details of their excessive spending habits. It is painfully obvious that they know only how to spend to make themselves look good....and get re-elected. There has never been a long-term strategy in most areas, despite all of the high-sounding rhetoric, but people simply wanted to believe it was great because they told us so. Sure, with all of the extra revenue, how could it not look good? However, a wise and competent administration would have and should be looking to build for the future by paying sown debt and building basic infrastructure. Way to much money is being wasted to prop up the civil service, money that will need to be injected year after year, unless they plan to lay off some of the extra staff hired on since Danny took power. We continue to lose population, yet the provincial bureaucracy keeps expanding, especially on Confederation Hill. This government is only interested in its mega-projects and doing it all behind closed doors. Too bad we don't have recall legislation!

  • tbaird
    January 26, 2012 - 08:55

    This government can't handle public scrutiny. Come out and join a protest today at noon at the Confederation Building to "Open the House"!

  • Puzzled
    January 26, 2012 - 08:45

    ??? If as the heading suggests the policy does not exist, the how could the Departments be holding it back?

  • Graham
    January 26, 2012 - 08:37

    Perhaps thats the 5 billion set aside for Danny Land...Come clean Premier Dunderdale..Try being open honest and transparent for a change. I do realise that may be hard since you were a big part of the Williams administration. Try anyway you just might like it.

  • Don II
    January 26, 2012 - 08:32

    The Acting Auditor General has done an excellent and well documented job of exposing the incompetence and culture of secrecy which borders on cover up inside the Government of Newfoundland. I commend Mr. Loveys for his courage. I suspect that he will not now become the permanent Auditor General due to Government retribution because he has spoken truth to power. Does Premier Dunderdale know what is going on inside her own Government? Does Premier Dunderdale know who is really running the show? Does Premier Dunderdale agree with the culture of secrecy inside of her Government? Will Premier Dunderdale now move to reform the way Government works in Newfoundland and Labrador? I am impressed with the depth of the Acting Auditor Generals inquiries but the investigations do not go deep enough. It appears that a lot of questionable activity or misappropriation was missed in this audit report. Cabinet deliberation is just a convenient excuse for a corrupt or incompetent Government to cover up its misdeeds and wastage of public funds. What is really going on with respect to the proposed Muskrat Falls project? What is really going on with respect to the offshore oil industry? What is it that the Government of Newfoundland does not want the Auditor General and the public to know? There are many examples of questionable Government actions that have gone undetected, uninvestigated and unreported. Was inquiry undertaken by the Auditor General into the circumstances which allowed hundreds of acres of land owned by the Newfoundland and Labrador Housing Corp. to be acquired by former Premier Danny Williams for a mega development project near St. John's and Mount Pearl? Was inquiry undertaken by the Auditor General to determine why millions of public dollars was spent to promote Cupids as the site of the Cupers Cove Plantation and to expropriate or purchase private land for the archaeological dig site despite the fact that the Government has evidence which proves that Cupids is not the site of the original Cupers Cove Plantation? Was inquiry undertaken by the Auditor General to determine why the Town of Cupids been allowed to take control of a public beach and operate an unlicensed and unapproved public Marina on Crown land? What other Government dereliction, malfeasance or incompetence has been undetected by the Auditor Generals Department because of a lack of cooperation from the Government in supplying information and access to documents? Mr. Loveys should be immediately appointed as the permanent Auditor General and the Auditor General Act should be immediately amended to allow the Auditor General and his staff to interview parties involved and to access and review every document, briefing note, minutes of meetings,Cabinet deliberations and all other information pertaining to every operation in every department of the Government of Newfoundland and Labrador. It appears that something is seriously amiss here and must be investigated thoroughly. The people have a right to know everything that their Government is up to without delay.

  • Randy
    January 26, 2012 - 08:04

    Dunderdale and Marshall's attitude is,what we taxpayers don't know won't hurt us, They need to be given the boot next election,so we can see the full extent of this wastefull government. I want to see a full audit of Nalcor,so i can see where our oil money has disappeared

  • sickening
    January 26, 2012 - 08:01

    Would somebody remind me of one beneficial thing that this Govt. has done, talk about being in over your head. Making no wonder Kathy does not want the house open, she would never be able to verbally defend the actions (or lack there of) of this Government. Anybody who is surprised by this must of voted for this regime simply because of Danny Williams. Well O'Danny boy is gone managing hockey and dreaming of Dander. And really, he would only spit and jump up and down at the AG.

  • Charles
    January 26, 2012 - 06:50

    This is nothing yet,wait until we see the final results of Mushrat falls.