News Release Archive

Finance Minister Bill Gillis said he was pleased with the
comments of the auditor general praising his government for its
leadership role in accountability.

"Specifically the auditor general praised this government for
quality of information, accountability and general reporting. The
auditor general noted that Nova Scotia has assumed a leadership
role," said the minister. "That's very gratifying. It means that
we're providing more information, more relevant information and
that we've made great strides."

The auditor general went on to note that if the current day
accounting practices had been in place in the past, that fiscal
challenges might have been addressed earlier. "Our prudent
conservative approach is paying off in that the province's future
looks brighter and now here is the auditor general endorsing our
leadership in accountability," said Mr. Gillis.

Referring to capital spending the minister noted the province had
taken a very conservative position in 1995. "We chose to show the
deficit at the higher amount because we wanted to be very
financially conservative," said Mr. Gillis.

The issue arose after the government decided to end the practice
of giving departments authority to spend capital money over two
years. The change required a permanent adjustment in the
province's books to account for projects left hanging at the end
of 1995-96.

The government made a decision to include the cost of those
unfinished projects in the accounts for the year-end 1995-96. The
move, approved by the province's external auditors, Deloitte and
Touche, had the effect of increasing the deficit that year by
$50.9 million.

"By insisting that the departments live within spending plans
each year, we are able to have better project management and
better accountability," said the finance minister.

However, "by taking the most prudent course of recognizing the
commitments up front, we missed our deficit target for that year.
But we were not prepared to put the issue off to another year."

In a report released today, the auditor general completed his
audit for 1995-96 and looked at what could have happened if the
spending was shown in fiscal 1996-97.

However, Dr. Gillis said that analysis was based on information
that is now out of date. "We made our decisions to spend during
1996-97 within our fiscal plan. The surplus was larger than
originally estimated and could have been larger still.

"The surplus was reduced in 1996-97 because once again we
included approximately $7.5 million in capital project spending
commitments made but not completed at the end of 1996-97. If we
had not done that, the surplus for 1996-97 would have been even
greater than the $4.7 million we forecast."

Dr. Gillis also pointed to another sign of the province's prudent
approach to fiscal management in 1996-97: "We put aside
significant reserves in the amount of $69 million in 1996-97 to
deal with potential problems in the departments of Health,
Justice and Education and Culture. We were committed to giving
Nova Scotia sound financial management last year, and we did. We
maintain the same commitment for this year."


NOTE TO EDITORS: A backgrounder can be obtained by calling
1-800-670-4357 or 902-424-4492.

Contact: Bruce Cameron
         Department of Finance

trp               Apr. 23, 1997 - 5:25 p.m.