16 Apr Battle lines being drawn for budget debate

Critics charge funding for Acadia, NSCAD disguised as previous year’s spending

The Chronicle Herald
April 5th, 2013

Talk of prepayments and accounting practices can make the eyes glaze over, but get ready to hear lots of talk about those points from the opposition in their budget attacks in the days and weeks ahead.

While Premier Darrell Dexter and the NDP are armed for an election, likely this year, with a balanced budget, the Liberals and Tories were quick to discredit it as a “fabrication” and “smoke and mirrors.”

The documents released Thursday show a $16.4-million surplus, but $34.8 million for 2013-14 operations at Acadia University and the Nova Scotia College of Art and Design was paid in the last fiscal year, not this one.

Progressive Conservative Leader Jamie Baillie said the payment was made March 28, the last business day of the fiscal year, when it just as easily could have been done this week.

“That was done for only one reason, and that is to create the appearance of a surplus in the budget, and that’s wrong,” Baillie said at the legislature Friday.

Acadia spokesman Scott Roberts said the university has been getting prepayments from the government for years.

Roberts said at some point in regular discussions with government, university officials would have checked whether it was necessary to change their budget process to account for no prepayment.

Roberts said it would be possible to do that, but the university would need appropriate notice. He couldn’t say how much notice would be required.

“I think that would be embedded in some of the ongoing discussions that we’re having.”

Roberts also said it is too early to say whether Acadia may ask for its 2014-15 money in this fiscal year. He said discussions between officials at all universities and the province are ongoing about funding and reducing costs.

A NSCAD University spokeswoman could not be reached for comment.

Liberal finance critic Diana Whalen said the prepayments were government “manipulation” and something Dexter criticized the Tory government for in 2009. That year, the Tories made $256 million in payments to universities on the last day of the 2008-09 fiscal year.

Dexter said the prepayments simply addressed the needs of the universities.

Ava Czapalay, a senior bureaucrat in the Labour and Advanced Education Department, said the universities wrote and asked for the prepayments on Feb. 28.

“It is part of the fiscal plan for these institutions to have provincial operating costs prepaid,” she said in an email. “Prepayment requests would continue to be made on an individual basis as has been our practice, where universities make a specific request.”

Baillie, a chartered accountant, and Whalen, a certified management accountant, also both took issue with accounting changes the government adopted under new standards from the public sector accounting board.

They said the government came out $50 million to the good in 2013-14 by having to account for advance payments differently.

For example, an income assistance payment made at the end of March for April used to show up as an April expense. Now the payments are recorded when they are made.

So the province booked 13 months of income assistance payments in 2012-13, and will only book 11 this year.

Whalen said the government took advantage of wiggle room in the timing of adopting the new rules.

“Perhaps it was a gift that the accounting rules changed this year,” she said in the legislative chamber.

Dexter said his government is working with stricter accounting rules that past governments didn’t have. He said the overall impact of them in 2013-14 made it tougher to balance the budget.

“We lost on it by almost $8 million,” he said. “Did it work in favour for you at some point and against you in others? Yes, but on net, it actually cost us money.”

Whalen also took issue with the estimate for $300 million in revenue growth, including a seven per cent increase in personal income tax. She thought it was too optimistic.

The debate over balance will continue next week as the opposition starts its line-by-line examination of the budget.

With Paul McLeod, staff reporter