The provincial auditor has rapped Saskatchewan Agriculture’s knuckles, saying the ministry must do a better job of keeping track of its money.
In the second volume of his 2010 report, acting auditor Brian Atkinson said the ministry didn’t collect enough money on land it leased for energy production.
“Agriculture has about 6,500 oil and natural gas leases with annual revenues of about $27 million,” Atkinson said. “Agriculture did not collect sufficient information on land use to charge the correct fee.”
Since 2007, when the fee was changed, the ministry had undercharged by about $600,000.
Agriculture minister Bob Bjornerud said the problem arose when different lease rates were approved for battery sites.
“They put regulations in place but never programmed them into the computer, so the bill never went out to charge them at that rate,” he said.
The mistake wasn’t caught until recently.
The auditor’s report said the ministry must develop processes to make sure it has enough information to charge the correct rates.
“It does not collect sufficient information about land use or situations,” said the report. “For example, it does not have complete information on the number and age of battery sites located on leased lands. It also does not have processes to know when lessees change land use or situations.”
The report noted that since 2007, amended legislation has created a separate rate for battery sites.
The auditor also said that the ministry must properly reconcile its detailed records to its financial records.
The ministry uses separate accounting systems for different activities because of the volume of transactions under certain programs.
While the ministry has written procedures requiring staff to reconcile, monthly, records for things such as land sales and payments to others those procedures weren’t always followed.
One situation in which the ministry’s procedures did work was in detecting a misuse of money in the Farm and Ranch Water Infrastructure Program.
“A third party vendor was building dugouts for producers and issuing receipts for more than the price of the work done,” the auditor said.
Under that program, producers who submit receipts are eligible to get half of their money back.
“Our guys did a good job in that case,” said Bjornerud. “They found problems within the billing system where producers were sending the bill in and they were inflated, so we actually paid out more than we should have.”
The problem was with the contractor.
As of August, the ministry had found overpayments to 13 producers worth $20,290.
Bjornerud said all of that money has since been recovered.
He added these examples show the ministry has to be more careful.
“It’s highlighting that we have to be a lot sharper than we have been in the past,” he said.
