Province knew of $27M budget error before release: AG

The Nova Scotia government is defending itself against accusations from the auditor general that it knowingly delivered a budget last spring that was off by $27 million.

In his annual report on the province's finances, Jacques Lapointe said the government's spring budget included a deficit forecast of $211 million for 2012-13.

However, Lapointe said his office was advised prior to the budget's release that the deficit was actually $238 million, which was "significant enough to be corrected."

"It was already known that the deficit included as part of the 2012-13 budget was unachievable when the budget was presented to the public," read the report released Wednesday.

Lapointe said the "error could have been corrected but was not."

The updated figure was included in Finance Minister Maureen MacDonald's post-budget fiscal update in September. MacDonald, who took over the finance portfolio last June from Graham Steele, said she didn't think the public had been deliberately misled.

"I can tell you that having a projected deficit of $238 million would not have made one iota of difference," she said.

"I don't believe there was any intention to deceive anyone."

MacDonald refused to say whether the government knew the numbers were wrong ahead of time.

In explaining the discrepancy, she said staff do budget calculations based on information that is constantly changing. The budget presented last April was "pretty accurate," she said.

"We table budgets that are budget estimates," she said. "Then, as the year unfolds, we update that budget with new information we have.

"The auditor general's office has told my department that they are aware that most budgets contain some errors. That's why you do updates and forecasts as you go forward."

She said her department has accepted Lapointe's recommendation of choosing a date before which significant errors in revenue estimates are corrected.

Premier Darrell Dexter rejected Lapointe's assertion that his cabinet was informed of the error before approving the estimates.

"That's simply not true," he said. "I have no recollection or had no information about anything with respect to the question of a budget difference before us."

Lapointe's report also provided an update on the government's response to the political spending scandal that erupted three years ago.

Lapointe said the legislature has cleaned up poor financial management practices and that most of his recommendations made in 2010 to tighten spending controls have been implemented.

While he found no evidence of misuse of public funds, Lapointe said weak financial controls in government agencies and boards leave taxpayers money at risk through error and fraud.

Four politicians were charged with fraud following the spending scandal. Two have been convicted.

Lapointe's report also raised questions about the province's growing debt, saying Nova Scotia's net debt per capita remains one of the highest in the country at $13,960 per person.