It’s becoming increasingly difficult to trust the provincial government’s budget numbers and other financial data it publishes throughout the year.
A scathing report from Manitoba’s auditor general released Thursday revealed that there are so many errors in the province’s financial reporting, it may be nearly impossible in the future to even audit the books.
This is not the first time the auditor general has sounded the alarm over the province’s failure to properly record and publish accurate financial statements, so that taxpayers know what government is doing with their money.
Health Minister Uzoma Asagwara and Finance Minister Adrien Sala gave a provincial fiscal update at the Manitoba Legislative Building on Monday. (Mikaela MacKenzie)
It’s been a problem finance officials (and politicians under both Tory and NDP governments) have failed to adequately address for several years.
“We are concerned that the issues related to the preparation of the financial statements are not improving,” auditor general Tyson Shtykalo wrote in his year-end report.
“Without improvement, the issues may escalate further. This could result in the province not releasing its public accounts by the legislated deadline. In addition, appropriate support for the financial statements may become so inadequate that we would not be able to provide an opinion on the financial statements as a whole.”
Those are pretty dire words. And they raise questions about how outsiders, including credit rating agencies, may respond to such sloppy bookkeeping and accounting practices when assessing the province’s creditworthiness.
Shtykalo said his office found an unprecedented number of errors in the financial information and statements presented to him by the province. They range from numbers not matching supporting documentation (or having no supporting documentation at all) to mistakes made when consolidating government’s books with outside entities, such as regional health authorities, school divisions and universities.
Under Public Sector Accounting Standards, governments are required to include the financial statements of outside entities it funds and controls as part of its summary financial statements. Shockingly, the province still uses a manual system of entering numbers into hundreds of spreadsheets to consolidate those financial statements, increasing the risk of error.
There is also no documented process on how to carry out those tasks. Worse, because different people perform those tasks at different times, they may not always be following the same process, the auditor found.
“Errors may occur in this process due to missing adjustments, duplicated adjustments, or entries being reversed in error, due to individual accountants not seeing the full picture,” wrote Shtykalo.
The overall magnitude of the errors is not small, either.
“During the 2024 audit, we identified an unprecedented number of errors in the financial information and statements presented for audit,” the auditor wrote. “Hundreds of millions of dollars in accounting adjustments were required to correct the amounts presented in the summary financial statements.”
Fortunately the auditor caught many of those mistakes and the province corrected them before publishing its year-end audited financial statements. But were all the errors found? With so few controls over the recording an publishing of financial information, it’s hard to imagine that what the public (and credit rating agencies) are seeing is entirely accurate.
The other problem is that because the auditor general doesn’t audit provincial budgets and the province’s quarterly reports — which are widely reported on — the public may be getting faulty information from government throughout the year on the state of the province’s finances.
Just last week, Finance Minister Adrien Sala released his department’s second-quarter financial report, which showed the NDP government’s projected deficit has ballooned by $513 million since the 2024 budget was unveiled earlier this year.
But is that figure even close to accurate? Given the province’s sloppy bookkeeping, those numbers are almost meaningless at this point.
Even after the figures are audited and released in the province’s public accounts in September 2025, questions will remain as to whether the auditor found and corrected all of the mistakes.
“A deficient control environment can lead to errors not being detected until we begin our audit,” wrote Shtykalo. “While management may correct errors that we find, not identifying them earlier has several negative impacts.”
That includes ongoing decision-making by government, including adjustments to spending. How can cabinet make good decisions if it has faulty or unreliable financial information?
The auditor says the province needs to hire more qualified staff to do the work and to ensure processes and controls are developed and followed. That may be. But there is also a level of incompetency here that is startling.
There appears to be a culture of carelessness and indifference within the Finance Department that has become so ingrained and accepted, it won’t be easy to change. Hiring more qualified staff alone won’t fix that.
Somebody needs to come in and clean house.
tom.brodbeck@freepress.mb.ca
Tom Brodbeck
Columnist
Tom Brodbeck is a columnist with the Free Press and has over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.
Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
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