Provincial auditor finds issues with oil well cleanup grants

By Steven Wilson

The Saskatchewan auditor has found the provincial Ministry of Energy and Resources didn’t follow proper procedures in obtaining approval before providing grants totalling $125 million to the Saskatchewan Research Council for inactive oil well cleanup.

The report stated the ministry didn’t get the approval required under the Executive Government Administration Act for the grant payments under the Accelerated Site Closure Program. The program, funded by the federal government, is intended to clean up around 8,000 inactive oil and gas wells in the province.

The report from the auditor also found the Ministry of Energy and Resources had not identified the risks in achieving the program’s objectives. The audit showed no formal risk management plan had been put in place, and while there had been discussions about risks with the Saskatchewan Research Council and the Ministry of SaskBuilds and Procurement, no minutes of the meetings were kept.

The auditor recommended the Ministry of Energy and Resources formally identify and evaluate the risks associated with the Accelerated Site Closure Program, while also improving the program’s steering committee, including having an approved charter for the committee as well as keeping minutes of decisions made during the meeting.

The report also noted the grants were provided without obtaining the required approval via an Order in Council. The auditor noted no approvals were obtained prior to payments being made for the 2020-21 fiscal year for the program costs. It was recommended that approval as required by the legislation be received before making any payments under the program.

It was also noted the Ministry of Energy and Resources had not received enough information for proper recording of revenue for the program for the fiscal year that ended in March of 2021.

The auditor stated in the report there was no written evidence seen of the ministry providing instructions to the Saskatchewan Resource Council on how to prepare the financial year-end report. The audit revealed the ministry understated its revenues for the program by $3.5 million.

While the report did note the issues with approval, it has been reported the proper Orders in Council have now been provided for the grants.