News Releases 2011

C-NLOPB Sets the Record Straight on AG Audit Request

For Immediate Release
July 4, 2011

The Chairman and CEO of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), Max Ruelokke, addressed comments made last week by outgoing Auditor General, John Noseworthy, regarding claims that he was denied access.

“We have not denied access,” said Mr. Ruelokke. “In fact, despite a legal opinion that he was not entitled to audit the C-NLOPB, he was invited to perform an audit, and his staff performed approximately 16 person-months of audit effort on our premises.”

“The Provincial Auditor General’s comments in the media are perplexing,” said Mr. Ruelokke. “We have been confronting a legal issue stemming from Section 119 of the federal Accord Act, which to date has impeded the Auditors General from gaining access to certain operator-supplied information. We are working with both Auditors General to find a solution that is satisfactory to all parties.”

The C-NLOPB invited both Auditors General to conduct a joint audit, an approach consistent with the Board’s unique mandate as a joint management agency reporting to Federal and Provincial Ministers of Natural Resources.

Mr. Ruelokke stated: “The Provincial Auditor General is aware that certain legal issues pertaining to Section 119 need to be resolved before access can be granted to information considered privileged under the Act. He is also aware that we are working to resolve those issues.”

The following summary describes the Board’s attempts to facilitate the Provincial Auditor General’s request to conduct an audit.

  • In January 2008 the Provincial Auditor General indicated he wanted to conduct a review of C-NLOPB operations. When the Auditor General contacted the C-NLOPB regarding his intention to conduct an audit, a legal opinion was sought as to whether or not the C-NLOPB is within the jurisdiction of the Auditor General Act. The legal opinion was that it is not.
  • Notwithstanding that, the C-NLOPB wrote to the Provincial Auditor General stating that it has no objection to a review of its operations, but such a review should be coordinated with the Auditor General of Canada. A single audit that meets the requirements of both governments would be appropriate and consistent with the C-NLOPB’s unique Federal/Provincial nature. The C-NLOPB has reporting responsibilities to both levels of government and information provided to one government is provided to the other.
  • On February 14, 2008, the C-NLOPB wrote the Provincial Auditor General again indicating, that “…any audit should be conducted jointly by the Auditors General of the Province and the Government of Canada.” At the same time, the C-NLOPB wrote the Federal Auditor General requesting that a joint audit be conducted by both Federal and Provincial Auditors General. The Federal Auditor General responded on March 20, 2008, that she had no plans to audit the C-NLOPB for the foreseeable future.
  • On May 12, 2008, the C-NLOPB wrote Ministers to advise that despite legal advice regarding the non-application of the Auditor General Act, it had invited the Provincial Auditor General to conduct its audit without the Federal Auditor General and that a meeting had been scheduled for June 2008.
  • On January 19, 2009, the audit team from the Provincial Auditor General’s office arrived and began auditing the C-NLOPB. Full access to C-NLOPB operational documents was provided as requested by the auditors. The Auditor General gave its Audit Plan to the C-NLOPB in February 2009, and indicated its plan to audit C-NLOPB practices in the areas of its regulation of offshore safety, environment, resource management and industrial benefits. Auditors were on site for almost four months. To date, the Auditor General has not released a report of his findings.
  • In November 2009 the Provincial Auditor General identified categories of documents which he wished to review in respect of petroleum activities of offshore Operators. As these documents are privileged under the legislation, we requested of Operators their consent to permit review by the Auditor General. Certain Operators declined to give their consent and the Auditor General was advised that he would be unable to review the documents.
  • On December 3, 2010, the Federal Auditor General’s office wrote the C-NLOPB to advise that they were planning to undertake an audit in conjunction with the Provincial Auditor General. On December 15, 2010, officials of the C-NLOPB met with representatives of the Federal Auditor General’s office. The Federal Auditor General has identified in a letter certain categories of information where the issue of privilege may result in denial of access.
  • On June 8, 2011, the Provincial Auditor General wrote the
    C-NLOPB confirming its participation in a joint audit with the Federal Auditor General.
  • The C-NLOPB continues discussions with both Auditors General to find a solution to the impediment created by section 119 of the legislation.

Media Contact:
Sean Kelly M.A., APR, FCPRS
Manager of Public Relations
(709) 778-1418
(709) 689-0713 (cell)

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