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Under section 37 of the Fiscal Transparency and Accountability Act, the Lieutenant-Governor in Council makes the following Regulation:

Citation

1This Regulation may be cited as the Disclosure Statement Regulation -Fiscal Transparency and Accountability Act.

Definitions

2The following definitions apply in this Regulation.

“accountant” means an accountant as defined in the Political Process Financing Act.(expert-comptable)

“Act” means the Fiscal Transparency and Accountability Act.(Loi)

“candidate” means a candidate as defined in the Elections Act.(candidat)

“election officer” means an election officer as defined in the Elections Act.(membre du personnel électoral)

“minimal disclosure statement” means a disclosure statement described in paragraph 23(1)(c) of the Act.(document d’information minimal)

“official agent” means an official agent as defined in the Political Process Financing Act.(agent officiel)

“registered district association” means a registered district association as defined in the Elections Act.(association de circonscription enregistrée)

“spouse” means a spouse as defined in the Elections Act.(conjoint)

Publication of disclosure statement

3Subject to subsections 4(2), 6(2) and 7(4), when publishing an election commitment, a registered political party shall ensure that a disclosure statement that complies with the requirements of the Act and this Regulation is published with the election commitment.

Cost estimate

4(1)In addition to the information set out in the Act, a cost estimate shall include the following information:

(a) the name of the election commitment;

(b) a description of the election commitment;

(c) the anticipated timeline for implementation of the election commitment;

(d) each significant assumption made in determining the financial consequences of the election commitment;

(e) the sources of information used in preparing the cost estimate;

(f) the computations done to prepare the cost estimate; and

(g) with respect to all election commitments for which a cost estimate or a maximum cost statement has been published and filed,

(i) the sum of the financial consequences for the operating budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years, and

(ii) the sum of the financial consequences for the capital budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years.

4(2)A cost estimate published with an election commitment may include only the information set out in paragraphs (1)(a) and(g) and in subsections 24(1), (3) and (4) of the Act if

(a) all other information required to be included in the cost estimate is included in the version of the cost estimate filed with the Supervisor and in the version published on the website of the registered political party, and

(b) the version of the cost estimate published with the election commitment includes information that is sufficient for a reader to locate the version referred to in paragraph (a) on the website of the registered political party.

Statement of accountant

5When a cost estimate is published and filed with the Supervisor, the cost estimate shall be accompanied by a statement from an accountant prepared in accordance with the guidelines set out in Schedule A.

Maximum cost statement

6(1)In addition to the information set out in the Act, a maximum cost statement shall include the following information:

(a) the name of the election commitment;

(b) a description of the election commitment;

(c) the anticipated timeline for implementation of the election commitment; and

(d) with respect to all election commitments for which a cost estimate or a maximum cost statement has been published and filed,

(i) the sum of the financial consequences for the operating budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years, and

(ii) the sum of the financial consequences for the capital budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years.

6(2)A maximum cost statement published with an election commitment may include only the information set out in paragraphs (1)(a) and(d) and in subsections 24(1), (3) and (5) of the Act if

(a) all other information required to be included in the maximum cost statement is included in the version of the maximum cost statement filed with the Supervisor and in the version published on the website of the registered political party, and

(b) the version of the maximum cost statement published with the election commitment includes information that is sufficient for a reader to locate the version referred to in paragraph (a) on the website of the registered political party.

Minimal disclosure statement

7(1)In addition to the information set out in the Act, a minimal disclosure statement shall include the following information:

(a) the name of the election commitment;

(b) a description of the election commitment; and

(c) with respect to all election commitments for which a cost estimate or a maximum cost statement has been published and filed,

(i) the sum of the financial consequences for the operating budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years, and

(ii) the sum of the financial consequences for the capital budget of all these election commitments in the fiscal year in which the scheduled general election is held and in each of the four following fiscal years.

7(2)If the minimal disclosure statement includes a statement described in paragraph 23(3)(a) of the Act, the minimal disclosure statement shall also include the following information:

(a) the measures taken by the registered political party to obtain sufficient information to enable it to prepare a cost estimate; and

(b) a statement regarding whether the registered political party requested research assistance from the Legislative Library in accordance with section 31 of the Act to prepare a cost estimate with respect to the election commitment.

7(3)If the minimal disclosure statement includes a statement described in paragraph 23(3)(b) of the Act, the minimal disclosure statement shall also include the following information:

(a) the measures taken by the registered political party to determine if the election commitment would have financial consequences for the Province; and

(b) a statement regarding whether the registered political party requested research assistance from the Legislative Library in accordance with section 31 of the Act to determine if the election commitment would have financial consequences for the Province.

7(4)A minimal disclosure statement published with an election commitment may include only the information set out in paragraphs (1)(a) and (c), the applicable statement required under subsection 23(3) of the Act and the information set out in subsection 24(1) of the Act if

(a) all other information required to be included in the minimal disclosure statement is included in the version of the minimal disclosure statement filed with the Supervisor and in the version published on the website of the registered political party, and

(b) the version of the minimal disclosure statement published with the election commitment includes information that is sufficient for a reader to locate the version referred to in paragraph (a) on the website of the registered political party.

Retaining accountant

8Subject to the restrictions set out in section 4 of Schedule A, a registered political party may retain the accountant of its choice to prepare the statement required under section 5.

Reimbursement of accounting expenses

9(1)The Supervisor shall authorize the reimbursement of a registered political party for its accounting expenses of up to $25,000 actually incurred by it for the purposes of complying with its obligations under Part 2 of the Act and this Regulation.

9(2)The reimbursement provided for in subsection (1) shall be paid out of the Consolidated Fund by the Minister to the official representative of the registered political party on receipt of a certificate signed by the Supervisor authorizing the payment.

9(3)The reimbursement provided for in subsection (1) shall be paid no earlier than the day on which the writs of election are returnable for the applicable scheduled general election.

Commencement

10This Regulation comes into force on June 24, 2014.

SCHEDULE A

GUIDELINES FOR STATEMENT OF ACCOUNTANT

Scope and Definitions

1This guideline deals with services provided by an accountant who prepares a statement on an election commitment during the course of a campaign for a scheduled general election. In such an engagement, the accountant receives information from a registered political party and provides a statement on the methodology used in preparing a cost estimate. This guideline provides the minimum standards that should be met and the minimum procedures that should be followed when an accountant issues a statement.

2This guideline is modelled on the Chartered Professional Accountants of Canada Handbook - Assurance, Guideline AuG-6, entitled “Examination of a Financial Forecast or Projection Included in a Prospectus or Other Public Offering Document” and is modified to meet the particular circumstances of preparing a statement on a cost estimate.

3In this Schedule, “future-oriented financial information” means information about prospective financial consequences based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as a cost estimate.

4The following persons are not eligible to be an accountant for the purpose of preparing a statement on a cost estimate:

(a) an election officer or a member of the staff of Elections New Brunswick;

(b) the chief agent, the official representative or any other agent of a registered political party or a person who serves or intends to serve in such a capacity for a political party;

(c) a candidate or the spouse of a candidate;

(d) an official agent or a person who intends to serve as an official agent;

(e) the official representative of a registered district association or an officer or a member of the executive or board of directors of a registered district association;

(f) a person who canvasses for or campaigns on behalf of a political party or a candidate; and

(g) an officer or a member of the executive or board of directors of a political party.

Objectives and Standards

5The accountant’s objective is to prepare a statement on the cost estimate provided by a registered political party in relation to the criteria set out in this Schedule. The statement shall indicate specifically whether:

(a) the methodology used by the registered political party in preparing the cost estimate is consistent with the Act and the regulations under the Act;

(b) the assumptions made by the registered political party are suitably supported and consistent with the election commitment made by the registered political party and provide a plausible basis for the cost estimate;

(c) the cost estimate reflects the assumptions made by the registered political party; and

(d) the cost estimate complies with the presentation and disclosure requirements set out in the Act and the regulations under the Act.

6A cost estimate is based on assumptions regarding future events. Actual results for the period covered by the cost estimate will vary from those figures in the disclosure statement. Accordingly, the statement of the accountant cannot be directed to providing assurance that the cost estimate is achievable.

7The accountant shall

(a) have adequate technical training and proficiency in accounting,

(b) adequately plan the engagement and supervise the work of any assistants,

(c) obtain sufficient appropriate evidence to provide a reasonable basis for the statement,

(d) document matters that in his or her professional judgment are important in indicating that sufficient appropriate evidence has been obtained to afford a reasonable basis to support the content of the statement, and

(e) follow the procedures outlined in this guideline and prepare the statement with due care and an objective state of mind.

8Evidence will be considered sufficient when, in the accountant’s professional judgment, the risk of not detecting that the assertions being reviewed are materially at variance with reasonably available information is reduced to an acceptably low level. The assertions to be reviewed are the following:

(a) the methodology used by the registered political party is consistent with the Act and the regulations under the Act;

(b) the assumptions made by the registered political party are suitably supported and consistent with the election commitment made by the registered political party and provide a reasonable basis for the cost estimate;

(c) the cost estimate reflects the assumptions made by the registered political party; and

(d) the cost estimate complies with the presentation and disclosure requirements set out in the Act and the regulations under the Act.

Independence and Objectivity

9The accountant shall comply with the independence rules of those professional organizations of which the accountant is a member, so as to ensure that his or her objectivity has not been impaired. The independence rules released by the provincial institutes of chartered professional accountants contain a requirement that threats to independence must be considered before an engagement is accepted and that, if there are threats, action must be taken to reduce the risk to an acceptable level. There are five categories of independence threats:

(a) a self-interest threat, in which the accountant stands to benefit in some way from the arrangement with the client;

(b) a self-review threat, in which the accountant reviews his or her own work;

(c) an advocacy threat, in which the accountant promotes the client’s position to too great an extent;

(d) a familiarity threat, in which the accountant is too close to the client; and

(e) an intimidation threat.

The accountant preparing a statement on a cost estimate shall ensure that the above threats do not in any way compromise the objectivity of the engagement.

10The accountant may be asked by a registered political party to become involved in the preparation of a cost estimate, for example, in the development of assumptions or the development and gathering of information to support the assumptions. Before agreeing to provide such assistance, the accountant shall consider whether the nature and extent of the assistance to be provided would impair his or her objectivity and thus preclude preparing a statement on the cost estimate.

Acceptance of Engagement

11It is important that the nature and terms of the engagement be understood and agreed on by the accountant and the registered political party, and that the registered political party acknowledges its responsibilities for the cost estimate, the methodology used to prepare it and the assumptions on which it is based.

12The requirements for the preparation and presentation of a cost estimate are outlined in the Act and the regulations under the Act. It is important that the accountant and the registered political party know the specific requirements of the Act and the regulations under the Act.

13When an accountant is considering whether to accept an engagement to prepare a statement on a cost estimate, the matters outlined in sections 14 to 16 of this Schedule warrant particular attention because they may affect the evidence that will be available and dictate whether a statement can be prepared on the cost estimate.

14The cost estimate will be based on assumptions regarding future events that are inherently matters of opinion rather than fact. Therefore, it is important that the accountant consider carefully a request to accept an engagement that will result in the accountant becoming associated with the cost estimate. In particular, when requested to prepare a statement on a cost estimate, the accountant needs to recognize that the ability to provide a statement is dependent on the following:

(a) the availability of suitable support for the assumptions underlying the cost estimate; and

(b) the extent to which the quality of the information is affected by the nature and significance of hypotheses; for example, while the accountant may be able to prepare a statement on a cost estimate based on one hypothesis and several assumptions, it may be much more difficult to do so for a cost estimate based on many complex hypotheses and assumptions.

15The registered political party is responsible for developing the assumptions and preparing the cost estimate. If, in the accountant’s professional judgment, it is uncertain that the methodology used to prepare the cost estimate will result in the accountant being able to obtain sufficient evidence to support his or her statement on the cost estimate, the accountant and the registered political party shall consider whether an engagement should be undertaken. If, in accordance with the engagement, the accountant is unable to obtain sufficient information to support his or her statement or a condition set out in section 23 of this Schedule exists, the accountant shall indicate this in the statement.

16Before accepting an engagement to prepare a statement on a cost estimate, an accountant shall discuss the costing assumptions or hypotheses with the registered political party in order to be satisfied that the assumptions or hypotheses represent plausible circumstances. If, in the accountant’s professional judgment, the assumptions or hypotheses do not represent plausible circumstances or the information may be false or misleading, the accountant is prohibited by the rules of professional conduct from being associated with the cost estimate.

17It is recommended that the accountant reach an agreement with the registered political party as to the nature and extent of the services to be provided and the extent of the responsibility assumed by the registered political party and the accountant. The agreement may include, but is not limited to, the following matters:

(a) the format of the cost estimate as provided for in the Act and the regulations under the Act;

(b) the period of time to be covered by the cost estimate;

(c) that the registered political party will prepare and present the cost estimate in accordance with the Act and the regulations under the Act;

(d) that the registered political party is responsible for the cost estimate, including its presentation and the methodology used and the assumptions made in preparing it;

(e) that the registered political party is responsible for obtaining or developing appropriate support for the assumptions that is sufficient to enable the accountant to prepare a statement on the cost estimate;

(f) the need for the accountant to have access to outside specialists used by and third party reports obtained by the registered political party;

(g) the anticipated format and content of the statement of the accountant; and

(h) that the accountant is not responsible for updating the statement for events and circumstances that occur after the date of the statement.

When an agreement is reached, it is highly desirable that it be put in writing to avoid misunderstandings. An example of an engagement letter is provided in Schedule B.

Assumptions

18The accountant shall seek evidence to establish that the registered political party has identified and supported all assumptions necessary for the preparation of the cost estimate and whether these assumptions, individually and taken as a whole, provide a plausible basis for the cost estimate.

19There are distinct differences in the nature of assumptions and the information from which they are developed. The types of assumptions are the following:

(a) assumptions based on information that falls within the control of government and can be documented, such as government records or the analyses of labour costs;

(b) assumptions based on general economic factors that are beyond the control of government that must be interpreted and analysed for application, such as the interest rate or the inflation rate;

(c) assumptions based on information supplied by or agreed to by third parties, such as a budget or a cost estimate;

(d) assumptions based primarily on the registered political party’s representations regarding its intentions, such as a new or expanded program or service, an expenditure reduction program or a plan that will change revenue; and

(e) assumptions based on information that may be subject to frequent, large and unpredictable changes, such as commodity prices.

20In evaluating whether the assumptions made by a registered political party provide a plausible basis for a cost estimate, the accountant shall consider the following:

(a) whether sufficient pertinent sources of information about the assumptions have been considered by the registered political party; external sources include government publications, industry publications, economic forecasts, royalty agreements, sales contracts, feasibility studies and labour contracts; internal sources include provincial budgets and historical data such as costs and royalty records; it is expressly understood that information contained in the updated version of the multi-year fiscal plan published under subsection 18(2) of the Act and information provided to a registered political party by the Legislative Library in accordance with Division B of Part 2 of the Act are considered reliable information for the purpose of a cost estimate;

(b) whether the assumptions are consistent with the sources from which they are derived;

(c) whether the assumptions are consistent with the election commitment made by the registered political party; and

(d) whether there is any bias in the selection of assumptions by the registered political party that causes the assumptions, on an overall basis, to be unduly optimistic or pessimistic.

Procedures

21The procedures required to be followed in an engagement to prepare a statement on a cost estimate do not include providing an opinion as to the reasonableness or likelihood of the cost estimate being realized. The purpose of the procedures is to enable the accountant to prepare a statement on the methodology used by a registered political party in preparing a cost estimate, based on the information provided by the registered political party.

22When preparing a statement on the methodology used by the registered political party in preparing a cost estimate, an accountant is required to use professional judgment in determining the nature, timing and extent of the procedures to follow. The following procedures are suggested, but the accountant may follow other procedures:

(a) through written documentation and inquiry, compare the methodology used by the registered political party to prepare the cost estimate against the Act and the regulations under the Act for consistency;

(b) inquire as to how the registered political party developed its assumptions;

(c) obtain the supporting documentation and references used by the registered political party in preparing the cost estimate;

(d) compare the assumptions, supporting documentation and references against the considerations set out in section 19 of this Schedule to determine whether they form a plausible basis for the cost estimate;

(e) ensure the assumptions are reflected in the cost estimate and consider the following:

(i) whether there appears to be any obvious omissions or inconsistencies in the assumptions and whether the assumptions obviously appear to be inappropriate in the circumstances; and

(ii) whether the time period addressed in the cost estimate is the fiscal year in which the election commitment is made and each of the four following fiscal years;

(f) perform the computations that translate the assumptions into the cost estimate; and

(g) compare the cost estimate against disclosure requirements set out in the Act and the regulations under the Act.

23The accountant shall state which of the following variations apply and include the variants in the statement on a cost estimate if, as a result of applying the procedures, the accountant concludes that

(a) the methodology used by the registered political party in preparing the cost estimate is not consistent with the Act and the regulations under the Act,

(b) the assumptions made by the registered political party are not suitably supported by or are inconsistent with the election commitment or do not provide a plausible basis for the cost estimate,

(c) the cost estimate does not reflect the stated assumptions, or

(d) the cost estimate does not comply with the presentation and disclosure requirements set out in the Act and the regulations under the Act.

Party Representations

24On the completion of the procedures and before issuing the statement of the accountant on a cost estimate, the accountant may obtain a letter from the registered political party, dated as of the date of the statement, setting out important representations made by the registered political party to the accountant during the course of the engagement. An example of a letter of representations is provided in Schedule C.

Statement

25In accordance with the engagement, the accountant shall issue a statement to the registered political party. The statement shall be entitled “Accountant Procedures on the (name of registered political party) Cost Estimate” and shall

(a) identify the cost estimate presented,

(b) identify the registered political party,

(c) state that the cost estimate has been prepared in accordance with the Act and the regulations under the Act,

(d) state the effective date of the assumptions,

(e) state that the accountant has reviewed the cost estimate from information provided by the registered political party,

(f) state that the engagement was performed in accordance with the Act and the regulations under the Act,

(g) state that the statement is limited to presenting the cost estimate based on the information provided by the identified registered political party and does not include evaluating the likelihood or plausibility of the assumptions or other information underlying the cost estimate,

(h) state that the accountant does not express an opinion or any other form of assurance on the cost estimate,

(i) state whether there have been any variations from the Act and the regulations under the Act,

(j) state that, as the cost estimate is based on assumptions regarding future events, actual results will vary from the information presented and the variations may be material,

(k) state that the accountant has no responsibility to update the statement for events and circumstances occurring after the date of the statement, and

(l) disclose the recipient, the name of the accountant, the date of the statement and its place of issue.

26The statement of the accountant shall be dated no earlier than the date on which the accountant completes the engagement, which shall not be earlier than the effective date of the assumptions disclosed in the cost estimate. Normally, the date of the statement will be the same as the effective date of the assumptions.

27It is suggested that the statement be worded as follows:

Accountant Procedures on the Cost Estimate

To: ..............

I have reviewed the COST ESTIMATE of the (name of registered political party) for the (period covered) using assumptions with an effective date of ________and other information provided by (name of registered political party). My engagement was performed in accordance with the applicable guidance as set out in the Fiscal Transparency and Accountability Act (New Brunswick) and the regulations under that Act.

My engagement is limited to presenting the cost estimate based on information provided by (name of registered political party) and does not include an evaluation of the support for the assumptions or other information underlying the cost estimate. Accordingly, I do not express an opinion or any other form of assurance on the cost estimate. Further, since this cost estimate is based on assumptions regarding future events, actual results will vary from the information presented and the variations may be material. I have no responsibility to update this statement for events and circumstances occurring after the date of this statement.

(If applicable) There was a variation (or “were variations”) from the Fiscal Transparency and Accountability Act (New Brunswick) and the regulations under that Act as follows:

[List variant(s)]

This statement is intended to be used solely for (indicate specific use) and is only to be referred to or distributed to (name of recipient).

City ________

Date ________

SCHEDULE B

ENGAGEMENT LETTER

The following sample letter is provided to assist an accountant who wishes to use an engagement letter as a record of the agreement reached with a registered political party to issue a statement in connection with a cost estimate.

(Recipient)

[Note: The recipient should be a person having the necessary authority to sign on behalf of the registered political party.]

(Name of registered political party)

(Name of officer)

(Position of officer)

Dear ..............

I am summarizing my understanding of the terms of my engagement to issue a statement in connection with the (date) cost estimate of (name of registered political party) (“the Party”) for the (period covered). I understand that the cost estimate, together with my statement, will be used to demonstrate compliance with the Fiscal Transparency and Accountability Act (New Brunswick) and the regulations under that Act.

The Party’s Responsibility

The cost estimate will be based on assumptions that the Party believes are appropriate (i.e., plausible and supportable assumptions that reflect the most probable set of economic conditions and planned courses of action). The Party agrees that the objective is to issue a statement in accordance with the standards set out in the Fiscal Transparency and Accountability Act (New Brunswick) and the regulations under that Act. The Party and its officers bear sole responsibility for the assumptions, including the hypotheses, and the cost estimate.

It is understood that in conducting my engagement, I will have access, as I consider necessary, to Party documents and records and to outside sources of information used by the Party in developing the assumptions (for example, outside specialists consulted by the Party). Before issuing my statement on the cost estimate, you will provide me with an appropriate letter of representations.

My Statement

Because of my limited involvement, I will not express an opinion, or any other form of assurance, on the cost estimate, including on the assumptions and hypotheses. Further, since the cost estimate is based on assumptions regarding future events, actual results will vary from the information presented and the variations may be material. I have no responsibility to update my statement for events and circumstances occurring after the date of my statement.

If I become aware that the Party has not complied with the requirements to develop a cost estimate as set out in the Fiscal Transparency and Accountability Act (New Brunswick) and the regulations under that Act, I will disclose the nature of the variation in my statement.

I expect that my statement will be worded as follows:

[See suggested wording of statement in section 27 of Schedule A.]

Fees will be determined on the basis of time spent on this engagement. Any disbursements will be added to the billing.

If the services outlined are in accordance with your requirements and the above terms are acceptable to you, please sign the copy of this letter in the space provided and return it to me.

Yours truly,

(Name of accountant)

The terms of the engagement set out above are as agreed.

(Name of registered political party)

Per: (Name and title of the recipient)

Date ________

SCHEDULE C

LETTER OF REPRESENTATIONS

The following sample letter is provided to assist the accountant who wishes to use a letter of representations as a record of important representations made to the accountant by a registered political party during the course of the engagement.

(Name of accountant)

Dear ..............

We are writing at your request to confirm our understanding regarding your engagement to issue the legislated statement in connection with our (date) cost estimate.

We confirm, to the best of our knowledge and belief, the following representations made to you during this engagement:

(a)all financial information and data used to prepare the cost estimate have been made available to you, and you have been made aware of and given access to outside sources of information as applicable;

(b)the assumptions underlying the cost estimate reflect the judgment of the (name of registered political party) (“the Party”) as to the most probable set of economic conditions and the Party's planned course of action for (time period); these assumptions are supportable and consistent with the plans of the Party, and are reflected in the cost estimate; all such assumptions have been disclosed to you;

(c)the time period does not extend beyond the fiscal year in which the election commitment is made and each of the four following fiscal years;

(d)all information necessary to compile the cost estimate has been disclosed to you and, except as disclosed to you, no events are expected to occur or are pending and no facts have been discovered to date that would have a material effect on this cost estimate, including items of such significance as would require changes in the assumptions or disclosure in the cost estimate.

The cost estimate, together with supporting documentation for the principal assumptions, has been reviewed by the Party’s management. We acknowledge sole responsibility for the cost estimate and for the determination and appropriateness of the assumptions.

Yours truly,

(Name of officer)

(Position of officer)

N.B. This Regulation is consolidated to March 27, 2015.

2014-68 - Disclosure Statement

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