Report of the Auditor General of Canada on the 2022–23 Consolidated Financial Statements of the Government of the Northwest Territories

Opening Statement before the Northwest Territories Legislative Assembly Standing Committee on Public Accounts

Report of the Auditor General of Canada on the 2022–23 Consolidated Financial Statements of the Government of the Northwest Territories

16 April 2024

Sophie Miller, Chartered Professional AccountantCPA, Chartered AccountantCA
Assistant Auditor General

Mr. Chair, thank you for the opportunity to discuss our audit of the consolidated financial statements of the Government of the Northwest Territories for the 2022–23 fiscal year. I would like to respectfully 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.

As the Government of the Northwest Territories’ auditor, 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 specified authorities.

The Government of the Northwest Territories Public Accounts is a key government accountability document that can help legislative assembly members understand the results of the government’s financial transactions. Therefore, our audit of the consolidated financial statements supports the legislative assembly’s oversight of the government, promotes transparency, and encourages good financial management.

The committee’s review of the Public Accounts is an important step in ensuring accountability and transparency for how public funds are spent and how government finances are reported.

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 financial statements. We will focus on the results of our audit work.

Our link opens a PDF file in a new browser windowindependent auditor’s report is on pages 10 to 13 of Section I of the Government of the Northwest Territories Public Accounts. We issued an unmodified audit opinion on the consolidated financial statements. They conform in all material respects with the Canadian public sector accounting standards, which means that the information in the statements is reliable.

The 2022-23 financial statements were completed on 19 December 2023. While the statutory deadline was met, we do recognize that the completion of the financial statements was several weeks later than in the previous year. The reasons for the delay include challenges in implementing new accounting standards as well as the summer wildfires in the territory that caused evacuations of Yellowknife and other communities.

The evacuations caused significant operational disruption for the government, and as a result, we adjusted the timelines for our audit work. We paused communications with the government during the evacuation period and worked closely with the Department of Finance to determine when to resume our work.

The other challenge that I mentioned was the implementation of the new standard on Asset Retirement Obligations in 2022–23. The new standard required the government to record a liability in relation to any legal obligation that will result in future costs when tangible capital assets are retired. The government has tangible capital assets that are subject to this standard, such as buildings and infrastructure. For example, the government may have to remove asbestos from buildings. As a result of implementing the standard, the financial statements show that the government has a liability for asset retirement obligations of $140 million as at 31 March 2023.

The standard was a challenge for the government to implement and a significant area for the audit. There is complexity in estimating future costs and the government had to analyze relevant information and make certain assumptions. As we were conducting our work, we proposed adjustments to the estimate which management made. We also provided a management letter with recommendations for the government to consider as it continues to refine the estimate.

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.