When we talk about the present and future prosperity of Newfoundland and Labrador, it is hard to overestimate the importance of oil revenues. One third of the total revenue the province collects to fund health care, educate our children and provide the services people expect and need comes from oil royalties.
Ensuring the people of the province get every single penny of revenue from these royalties requires government to complete audits of the royalty dollars collected to ensure the maximum amounts are paid.
To understand the importance of these audits simply look at audits carried out on the royalties that came from the Terra Nova oil fields from 2002-2005. Audits which resulted in an additional $45 million owed to the people of the province. These recovered dollars highlight the importance of timely and efficient audits being completed.
In 2008, the auditor general raised serious concerns about the audit timelines of the current government saying proper staffing levels were not in place and audits were at risk of falling behind because there are not enough people completing the work. Now in 2014, the auditor general is again saying it will be extremely difficult to finish these audits on time with the staff available. Last year government cut important public service staff that completed these audits leaving the timely closure of the audits at risk.
To further highlight government’s fiscal mismanagement you need only look at their practice of spending double or triple on outside consultants in an attempt to try and catch up on the hundreds of audits that need to be completed before deadlines expire. So, taxpayers pay more money for these audits and the audits take longer than necessary putting potential future oil revenue at risk. In the end the residents of Newfoundland and Labrador are covering the costs associated with this poor fiscal management practice.
Considering the value of the potential oil royalties to our province Government should be made to answer for their improper staffing levels, as well as the excess costs of hiring outside consultants. Surely systems and process can be established internally to efficiently and effectively audit oil royalties. Yet despite repeated warnings from the auditor general, Government’s inefficient fiscal management puts revenues at risk while also wasting taxpayers’ money.
Cathy Bennett — MHA, Virginia Waters
Opposition finance critic