Opening Statement before the Northwest Territories Legislative Assembly Standing Committee on Government Operations
Report of the Auditor General of Canada on the 2020–2021 Consolidated Financial Statements of the Government of the Northwest Territories
29 June 2022
Sophie Miller, Chartered Professional AccountantCPA, Chartered AccountantCA
Assistant Auditor General
Mr. Chair, thank you for this opportunity to discuss our audit of the consolidated financial statements of the Government of the Northwest Territories for the 2020–2021 fiscal year. I want to acknowledge that we are gathered on the traditional, unceded territory of the Yellowknives Dene First Nation. I am accompanied by Lana Dar, who was the principal responsible for the audit, and Kelsey Hogg, who was the director.
As the auditor of the Government of the Northwest Territories, our primary responsibility is to audit the government’s consolidated financial statements and express an opinion on them. As legislative auditors, we also report on the government’s compliance with financial and legal authorities, such as the Financial Administration Act.
The committee’s review of the Public Accounts of the Government of the Northwest Territories is an important step in ensuring accountability and transparency for how public funds are spent and how government finances are reported. I am pleased that the committee is holding this hearing to examine the government’s financial results.
The government carries out its accounting and financial reporting responsibilities through the Office of the Comptroller General within the Department of Finance. The Comptroller General will answer questions about the preparation of the financial statements. We will focus on our audit.
Our link opens a PDF file in a new browser windowindependent auditor’s report is on pages 10 to 13 in Section I of the Public Accounts of the Government of the Northwest Territories. We provided the government with an unmodified audit opinion on its 2020–2021 consolidated financial statements. This clean opinion means that the information in the statements is reliable.
The consolidated financial statements, which include the accounts of the government and its controlled entities, show that the government had a net debt of $1.3 billion as at 31 March 2021. Net debt is a key financial indicator. This is the amount by which the government’s liabilities exceed its financial assets. Being in a net debt position means that the government will need to take action in the future to rebalance its finances. The government’s acquisition of tangible capital assets over time has contributed significantly to the growth of the net debt.
In preparing financial statements, the government has to make estimates and assumptions that affect the amounts it reports. The government’s significant areas of measurement uncertainty are disclosed in the notes to the financial statements. As these amounts are estimated, it is possible that an amount appearing in the government’s financial statements could significantly change in future years.
As a result of the COVID‑19 pandemic, our auditors conducted the audit remotely again this year. Because of good relationships and communication with the government, departments, and public agencies, we were able to carry out sufficient and appropriate audit work to base our conclusions on. We expect to resume travelling to the territory to conduct our work in the future.
I would like to thank the Comptroller General, the Deputy Minister of Finance, and the staff of the departments and public agencies who were involved in preparing the government’s financial statements.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer the committee’s questions.