Expert panel to review Ontario accounting standards

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Ontario’s Annual Report and Consolidated Financial Statements for 2015-16 show Ontario’s deficit is $3.5 billion lower than the $8.5 billion projected in the 2015 Budget, with the province’s deficit for 2015-16 at $5 billion. This is $0.7 billion lower than the $5.7 billion in the 2016 Budget interim projection.

The government has received the Auditor General’s opinion on the 2015-16 Public Accounts of Ontario, enabling it to release them. The results reported in the Public Accounts are identical to the unaudited financial statements released earlier this week. They confirm Ontario has beaten its annual deficit target for the seventh year in a row.

Liz Sandals, President of the Treasury Board, said: “I wish to thank the Auditor General for providing her audit opinion of the 2015-16 Public Accounts. The Public Accounts confirm this is the seventh year in a row that Ontario has beaten its annual deficit target. Ontario remains committed to balancing the budget in 2017-18 while remaining balanced in 2018-19.”

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The Auditor General has provided her opinion, which says that the 2015-16 results are fairly stated but qualifies her opinion for lack of restatement of the 2014-15 results.

In preparing the Public Accounts, the province’s professional accounting staff and the Auditor General’s Office engaged in discussions about the appropriate application of the Public Sector Accounting Board’s (PSAB) standards, specifically in relation to pension accounting for the province’s jointly sponsored pension plans.

Pension assets

A regulation was made to allow the public service to sign-off on the impact of the Auditor General’s view on accounting for pension assets in Ontario’s 2015-16 financial statements. The Province filed a time-limited regulation, which legislates the accounting for pension assets of two jointly-sponsored pension plans for 2015-16 in a manner that is consistent with the fiscal outcome proposed by the Auditor General. The impact of the change resulted in an additional $10.7 billion being added to the net debt and accumulated deficit and an increase in the annual deficit of $1.5 billion.

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The Auditor General’s qualified opinion is based on the government’s decision to report the accounting change in 2015-16 without restating the prior year’s results. Restating the previous year’s results would have had no impact on the financial results for 2015-16, including the annual deficit and net debt.

The Auditor General’s qualification relates only to the presentation of the 2014-15 comparative financial information. There is no impact on the 2015-16 annual deficit, accumulated deficit or net debt as illustrated in the table below.

Independent Panel

The government is forming an independent expert panel to deliver advice and recommendations to the government as to the application of public sector accounting standards to Ontario’s pension assets.

Panel members will also provide advice on how to value pension assets reported on the province’s books, taking into account future decisions which might be made by the plan’s sponsor or sponsors. The report is expected later this year.

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Responsible financial management is part of our plan to create jobs, grow our economy and help people in their everyday lives.

  • Public Accounts are a retrospective report that compares Ontario’s actual performance to what was planned in the Budget.
  • Treasury Board Secretariat prepares Public Accounts in accordance with the accounting principles for governments recommended by the Public Sector Accounting Board. – CINEWS
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