The reaction to the announcement Monday of a forensic audit of the Muskrat Falls project drew comments ranging from supportive, to won’t change anything, to a waste of money.
But many people — whom The Telegram spoke with, and from a brief canvass of social media — indicate they will be interested in the results.
Justice Richard LeBlanc, commissioner for the Inquiry Respecting the Muskrat Falls Project, issued a news release Monday stating that an investigative and forensic audit is required in order for the commission to properly respond to its terms of reference.
The commission has selected Grant Thornton LLP following a request for proposals to conduct the audit.
The audit will be done in two phases.
The first phase will involve an investigation into the sanctioning of the Muskrat Falls project, including the options considered by Nalcor Energy to address the future electricity needs of the province, as well as the financial analysis conducted by Nalcor for the Muskrat Falls project and for the isolated-island option.
The second phase will involve an investigation of the costs incurred by Nalcor from commencement of project construction to the present, as well as current estimates of the costs to project completion. The actual costs and current estimates to completion of the project will be compared to the costs estimated by Nalcor at the time of its sanctioning.
Both phases of the audit will be completed in accordance with strict time limits.
Opposition Progressive Conservative MHA Keith Hutchings says his party welcomes the forensic audit, which the PCs had called for in past months. He said not only will it help the inquiry focus on key areas so it can complete its work, it will provide important detailed information for public discussion.
“Some time ago we had asked and called for a forensic audit and we are quite supportive of that, so we are very pleased that Judge LeBlanc has decided to call for an investigative and forensic audit,” Hutchings said. “We had indicated that a forensic audit was the route to go originally. Unfortunately, the current administration didn’t call it earlier.”
Hutchings said the PCs are happy with the two phases identified by LeBlanc and the information the audit will seek.
“We are pleased the audit reports will be entered as exhibits at the inquiry and become part of the public record,” he said. “It will be available to the public to examine that information and have discussions on what took place.”
LeBlanc stated in the news release Monday that while Grant Thornton LLP will conduct the audit independently of the commission, in order to reduce the time and cost for the audit and to ensure the least possible disruption to the project construction, the commission will use its legal powers to compel documents and other evidence to assist in collecting and producing documentation to Grant Thornton LLP.
The commissioner may accept all, some or none of the findings and conclusions of Grant Thornton LLP. In order to fully respond to its terms of reference, the commission may engage other experts, as required, the release noted.
Premier Dwight Ball issued a statement Monday saying that when the terms of reference for the inquiry into Muskrat Falls were drafted, it was important to ensure flexibility for Justice Leblanc to include a forensic audit.
“This is an important piece of work for the inquiry, as the financial implications of the sanctioning, as well as cost overruns, will affect the people of this province in the coming years,” Ball said. “There are many unanswered questions, and we deserve to know if the project the province was sold in 2012 by the Tory administration is the same project we are managing today. The people of the province can be assured that answers are coming and we believe that they have waited long enough.”
The Telegram asked some members of the public what they thought of the forensic audit being called for.
Brenda Howell of Grand Falls-Windsor said it likely won’t change anything because the project will be completed and electricity costs will still go up.
“I doubt it will change much, but it is needed to see how the cost got too high to begin with,” she said.
Tom Lewis of Paradise said a forensic audit is long overdue.
“Good to see it happening, but will it change much? I’m not sure,” he said. “There were a lot of doubts to start with, so I’d like to hear why those were ignored.
“Everyone needs to be held accountable, so, like I said, I’ll be interested in seeing the results.”
The inquiry was announced by the provincial government on Nov. 20, 2017. According to the government’s news release at that time, the inquiry is expected to provide a greater understanding of: whether all options were considered at the time of sanctioning of the project; why there are significant differences between the actual cost of the project and the estimated cost at the time of sanction; and whether it was justified and reasonable for the project to be excluded from oversight by the Public Utilities Board.
The inquiry is expected to take about two years, with the final report due Dec. 31, 2019.
Hutchings said the government should have called the inquiry sooner or set a deadline prior to the next provincial election, expected in the fall of 2019.
Hutchings said the audit will cover the period from inception of the project to the present day, and thus will bring all the facts to light, and it is important for the public to be aware of all the facts prior to the next election so they can draw their own conclusions as to what happened.
