PART 2.5 DEPARTMENT OF FINANCE GASOLINE TAX

Transcription

1 PART 2.5 DEPARTMENT OF FINANCE GASOLINE TAX

2 Executive Summary The Tax Administration Division of the Department of Finance (the Department) is responsible for administering and collecting Gasoline Tax in accordance with the Revenue Administration Act and the Gasoline Tax Regulations. Revenues from the Provincial Gasoline Tax for the year ended 31 March 2010 totalled $156 million and represented 5.9% of the Province s taxation revenue and 2.3% of the Province s total revenue from all sources. Provincial gasoline tax is charged on all fuels at rates ranging from 0.7 to 16.5 cents per litre, depending on the type of fuel used. The Act requires every wholesaler and retailer to be registered and licensed to sell gasoline in the Province. Wholesalers bring fuel into the Province and can provide retailers with fuel or consume it themselves. Retailers operate, for the most part, as service stations providing fuel directly to the consumers. As part of the licensing requirement, wholesalers must remit a monthly return and any taxes payable by the 20 th of the subsequent month. As at 31 March 2010, there were 489 retailers and 25 wholesalers registered in the Province. Of the 25 wholesalers, 20 sell to retailers, while 5 use gasoline for their own purposes. When a wholesaler consumes their own fuel, they are referred to as self assessors and are required to remit the appropriate gasoline tax. Consumers may apply for a permit to purchase tax-exempt diesel fuel when a valid reason exists e.g. commercial fishing, farming or logging. As at 31 March 2010 there were 2,299 consumers with such a permit. Retailers are required to remit a monthly return if they sell tax-exempt diesel fuel. Our review indicated that the Department was not proactive in identifying unregistered wholesalers or retailers. The Department did not adequately review wholesaler or retailer returns to determine compliance with the Act and performed a very limited number of audits. Furthermore, the extent of audit work performed by staff at the Division was not sufficient. Staff were not provided with any standard audit programs. Exception reports produced by the Department s database were not adequately followed-up. Although there were instances where tax-exempt diesel fuel was used for an inappropriate purpose, the Department did not conduct sufficient audit work or follow-up on exceptions identified in monthly reports or results of fuel testing. Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

3 Wholesalers Wholesalers are required by the Act to be licensed by the Department and can either provide retailers with fuel or consume it themselves. Wholesalers are also responsible for collecting and remitting all Gasoline Tax due to the Province. We found the following: Departmental officials indicated that they do not make any effort to identify unlicensed wholesalers as they were confident that all wholesalers had been identified. However, one wholesaler operated in the Province since at least May 2008 even though they were not licensed until 6 May In this case, the Department was aware that this company was operating without a licence because they were identified on the monthly returns provided by another wholesaler. However, it took at least one year for the wholesaler to be licensed. No monthly returns or remittances were made by this wholesaler prior to being licensed. We reviewed the 135 monthly returns which were required to be submitted by 6 wholesalers for the 2009 and 2010 fiscal years. We identified 173 deficiencies as follows: 38 returns had no evidence of review. In fact, no reviews of monthly returns had been completed for 5 of the 6 wholesalers since October 2009 and for the other since December 2009; 48 returns were not reviewed until 3 to 10 months after the month for which the return was filed; 59 returns had inadequate or missing documentation and no evidence of follow-up by the reviewer; for 21 returns, the review checklist procedures were not complete; and 7 consecutive returns by one wholesaler from July 2009 contained calculation errors which resulted in insufficient remittance of gasoline tax. Because the July 2009 return was not reviewed until January 2010, the obvious error was not identified until then. The wholesaler was assessed $4,515 including interest of $ Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

4 The Department did not perform any planned audit work on wholesalers for the five fiscal years 2006 through to The only audit of the 25 wholesalers performed was the result of a wholesaler informing the Department that its tax-exempt status had changed and that taxes were owed. As a result of the audit, the company was assessed $474,679, including interest of $12,626, relating to the period December 2005 to March Furthermore, the Department did not have a standard audit program for wholesaler audits. Retailers Retailers are required by the Act to be licensed by the Department in order to sell fuel to consumers. Retailers selling tax-exempt diesel fuel must apply for a licence every three years and must remit a monthly return (Schedule F) showing the purchasers, the quantity of fuel purchased, and the purchasers permit number. We found the following: Officials indicated that the Department was not proactive in identifying unregistered retailers. The Department did not actively seek to ensure that all retailers were licensed and had not conducted any significant search for unregistered retailers since they implemented a new database in The Department could not demonstrate that the extent of audit work on retailers was sufficient for the five fiscal years 2006 through to We found that, of the 153 tax-exempt retailers, only 42 were audited during the five year period. We reviewed 8 retailers where 28 audits were performed and found the following: 26 of the 28 audits consisted only of reviews of monthly Schedule F returns and the files did not contain any evidence of an audit checklist or program being completed; and While 2 of the 28 audits were more thorough and covered a three year period, including onsite visits and client interviews, one file did not include the audit checklist while the audit checklist in the other file was not fully complete. These two audits resulted in assessments totalling $52,977, including interest of $15,939 and penalties of $3,367. The Department did not perform any planned audit work on retailers for the 2009 and 2010 fiscal years. Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

5 Although, the Department used an audit checklist for retailer audits, it did not have a standard audit program. Consumers Consumers purchase fuel from retailers. They may apply for a permit to purchase tax-exempt diesel fuel under the Act if a valid reason for usage exists e.g. commercial fishing, farming or logging. Consumers can only purchase tax-exempt diesel fuel with a permit and may not use the fuel for other purposes. We found the following: The Department was not performing sufficient monitoring of tax-exempt diesel fuel purchases. As at 31 March 2010, there were 2,299 registered consumers with permits. During the five fiscal years 2006 to 2010, the Department inspected 3,169 fuel samples of which 173 were identified as tax-exempt diesel fuel. The Department performed only 25 audits. Thirteen of the 25 audits resulted in assessments totalling $265,812, including interest of $90,122 and penalties of $13,850. Furthermore, the Department could not conclude that it did sufficient work because they had not developed any standards as to the extent of testing required. There was no follow-up on exception reports highlighting instances where a permit number or name reported for a sale of tax-exempt diesel fuel on a retailer s return did not match the registered permit holder in the Department s database. Although the Department used an audit checklist for consumer audit, it did not have a standard audit program. Background The Tax Administration Division of the Department of Finance (the Department) is responsible for administering and collecting Gasoline Tax in accordance with the Revenue Administration Act (the Act) and the Gasoline Tax Regulations (Regulations). Provincial gasoline tax is charged on all fuels at rates ranging from 0.7 to 16.5 cents per litre, depending on the type of fuel used. In the Act, gasoline is defined as any and all liquids capable of being used for the purpose of generating power in an internal combustion engine. Figure 1 shows the various types of gasoline and the related Provincial gasoline tax per litre. 172 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

6 Figure 1 Department of Finance Gasoline Tax Rates As at 31 March 2010 Type Consumer Tax (Cents/Litre) Gasoline 16.5 Diesel 16.5 Auto Propane 7.5 Marine Fuel 3.5 Aviation Fuel 0.7 Source: Department of Finance, Tax Administration The price consumers pay for gasoline is comprised of the fuel cost, a marketing margin (wholesaler and retailer), Provincial gasoline tax, Federal excise tax and HST. The maximum price of a litre of regular unleaded self serve gasoline in the Avalon Peninsula zone at 31 March 2010 was cents per litre. Figure 2 shows the cost components of the litre of gasoline. Figure 2 Department of Finance Regular Unleaded Self Serve Gasoline Cost Components for the Avalon Peninsula Zone As at 31 March 2010 Cost Component Cents Per Litre Average New York Harbour Benchmark Price for Period Total Allowed Markup, as approved by Public Utilities Board Pump Price (Excluding Taxes) Federal Excise Tax Provincial Gasoline Tax Pump Price (Excluding HST) % Pump Price (rounded to one decimal place) Source: Public Utilities Board Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

7 Of the total cost per litre, the Province s share is cents (Provincial Gasoline Tax plus 8% Provincial portion of HST). Revenues from the Provincial Gasoline Tax for the year ended 31 March 2010 totalled $156 million and represented 5.9% of the Province s taxation revenue and 2.3% of the Province's total revenue from all sources. Only two types of fuel may be used without paying tax, gasoline grade fuel or diesel. All other gasoline sales are taxed at the specified rate. While diesel fuel may be purchased tax free at the pump if a purchaser has an exemption permit from the Department of Finance, the tax on gasoline grade fuel is paid at the pump and the purchaser has to request a rebate from the Department. As at 31 March 2010, there were 2,299 registered permit holders eligible to purchase tax-exempt diesel fuel. In both instances, the fuel must be consumed for specified purposes (commercial fishing, farming, logging, manufacturing and processing, transportation by boat, locomotives, generation of electricity, household fuels and natives on reserves) in order to qualify as tax-exempt. Because tax-exempt diesel fuel is available only at a separate pump, it can be dyed, which acts as a deterrent for consumers to use it for other than specified purposes. There are three levels of application for the Act and Regulations; wholesalers, retailers, and consumers. The Act requires every wholesaler and retailer to be registered and licensed to sell gasoline in the Province. Wholesalers bring fuel into the Province and can provide retailers with fuel or consume it themselves. Retailers operate, for the most part, as service stations providing fuel directly to the consumers. All Provincial Gasoline Tax is collected and remitted by the wholesalers. As part of the licensing requirement, wholesalers must remit a monthly return and any taxes payable by the 20 th of the subsequent month. Wholesalers file a generic monthly return which contains details of imports, exports, transfers to/from other wholesalers and opening and closing inventories of all grades of fuel. Retailers must file a return (Schedule F) for all sales of tax-exempt diesel fuel to consumers with a valid permit. As at 31 March 2010, there were 489 retailers and 25 wholesalers registered in the Province. Of the 25 wholesalers, 20 sell to retailers, while 5 use gasoline for their own purposes. When a wholesaler consumes their own fuel, they are referred to as self assessors and are required to remit the appropriate gasoline tax. Information on the wholesalers and retailers is recorded in the Tax Audit Management System (TAMS) at the Department of Finance. 174 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

8 Audit Objective and Scope Audit objective The objective of this audit was to review the Provincial Gasoline Tax program within the Tax Administration Division of the Department of Finance and determine whether adequate systems and practices were in place to ensure that all licencees and consumers are in compliance with the Revenue Administration Act and Gasoline Tax Regulations, specifically to determine that: all potential licencees are identified and registered; all licencees have remitted required returns and tax amounts on a timely basis; monthly returns were adequately monitored; and audits were conducted and issues arising from audits or monthly reviews were investigated and/or followed up on a timely basis. Audit scope Our review covered the fiscal years 2006 to 2010 and included interviews with Departmental officials, review of Departmental documentation, and review of registration and audit files. Our review was completed in December Detailed Observations This report provides detailed audit findings and recommendations in the following sections: 1. Wholesalers 2. Retailers 3. Consumers Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

9 1. Wholesalers Overview A Gasoline wholesaler is defined by the Act as a person who holds a licence to sell or keep gasoline for sale other than to retail purchasers (consumers). As at 31 March 2010 there were 25 wholesalers in the Province, including 5 self-assessors, such as pre-commercial mining operations, who use gasoline for their own purposes. In reviewing the information from the Department we indentified issues in the following areas: A. Registration B. Monitoring Details are as follows: 1A. Registration Introduction The 25 registered wholesalers in the Province account for all of the gasoline tax revenue collected and remitted to the Province. The Act requires wholesalers to be licensed to sell fuel to retailers. Licensing is also necessary so the Department can monitor the volume of fuel sold and ensure that the appropriate amount of tax is remitted. Licences are required before a wholesaler begins selling fuel, and subsequent applications for renewal are required to be submitted by January 31 st of the licence year. For the 20 wholesalers who sell fuel to retailers, there is an annual registration fee based on their sales volume. Wholesalers not licensed Departmental officials indicated that they do not make any effort to identify unlicensed wholesalers as they were confident that all wholesalers had been identified. However, one wholesaler operated in the Province since at least May 2008 even though they were not licensed until 6 May In this case, the Department was aware that this company was operating without a licence because they were identified on the monthly returns provided by another wholesaler. However, it took at least one year for one wholesaler to be licensed. No monthly returns or remittances were made by this wholesalers prior to being licensed. 176 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

10 1B. Monitoring Introduction The wholesalers are required by the Act to remit monthly returns. The generic monthly return is a document that was developed at a national level by the Canadian Fuel Tax Council and is standard across the country for all wholesalers. It is used to record sales, imports, exports, and consumption of all fuel types within the Province. It is received by the Department, entered into TAMS, and checked for mathematical accuracy. The Department has a checklist to determine whether all required documents are included with the return. By reviewing the monthly returns, the Department can assess whether the appropriate level of tax is submitted. The audit of a wholesaler includes a review of the purchases, sales, and changes in inventory levels of all grades of gasoline, usually over a three-year period. The purpose of the audit is to assess compliance with the Act by the wholesaler and to obtain information on retailers for later use. The audit provides an assessment of whether the amount of tax remitted by the wholesaler is correct. Monthly returns not adequately reviewed We reviewed the 135 monthly returns which were required to be submitted by 6 wholesalers for the 2009 and 2010 fiscal years. We identified 173 deficiencies as follows: 38 returns had no evidence of review. In fact, no reviews of monthly returns had been completed for 5 of the 6 wholesalers since October 2009 and for the other since December 2009; 48 returns were not reviewed until at least 3 months after the month for which the return was filed: 19 were reviewed 3 months after the return month; 13 were reviewed 4 months after the return month; 6 were reviewed 5 months after the return month; 5 were reviewed 6 months after the return month; and 5 were reviewed 7 to 10 months after the return month; Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

11 59 returns had inadequate or missing documentation and no evidence of follow-up by the reviewer; for 21 returns, the review checklist procedures were not complete; and 7 consecutive returns by one wholesaler from July 2009 contained calculation errors which resulted in insufficient remittance of gasoline tax. Because the July 2009 return was not reviewed until January 2010, the obvious error was not identified until then. The wholesaler was assessed $4,515 including interest of $885. Departmental officials indicated that the Tax Administration Division is currently behind in performing reviews of monthly returns. At the time of our review, of the 6 wholesalers sampled, we found that the Department had not reviewed monthly returns for 5 of the 6 wholesalers since October 2009 and for 1 of the 6 wholesalers since December Insufficient audit work Our review indicated that the Department did not perform any planned audit work on wholesalers for the five fiscal years 2006 through to The only audit of the 25 wholesalers performed was the result of a wholesaler informing the Department that its tax-exempt status had changed and that taxes were owed. As a result of the audit, the company was assessed $474,679, including interest of $12,626, relating to the period December 2005 to March The audit was a desk audit whereby all the records were requested from the client and sent to the Department for review. Onsite field work was not performed. The audit work consisted of a review of monthly return documentation for that period. We found that this documentation did not include the support required by the return review checklist. No standard audit program The Department did not have a standard audit program for wholesaler audits. A standard audit program would ensure that a consistent level of work is completed across all audits. 178 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

12 Recommendations The Department should: ensure that all wholesalers have been identified and are licensed; ensure that monthly returns submitted by wholesalers are reviewed in an adequate and timely matter and all issues are followed up; perform more frequent audits on wholesalers; and develop a standard audit program for auditing wholesalers. 2. Retailers Overview A gasoline retailer is defined by the Act as a person who holds a licence authorizing that person to sell gasoline or keep gasoline for sale directly to consumers. As at 31 March 2010 there were 497 licensed retailers in the Province, 153 of which are licensed to sell tax-exempt diesel fuel to consumers licensed to purchase this fuel. In reviewing the information from the Department we identified issues in the following areas: A. Identification and Registration B. Monitoring Details are as follows: 2A. Identification and Registration Introduction Retailers are required by the Act to be licensed by the Department in order to sell fuel to consumers. Since 1992, retailers have not been required to renew their licence on an annual basis; instead, the licence remains in effect until the retailer ceases operations or the licence is revoked by the Department. Retailers selling tax-exempt diesel fuels are required every three years to apply for a licence to sell this fuel. Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

13 Identification efforts insufficient Officials indicated that the Department was not proactive in identifying unregistered retailers. The Department did not actively seek to ensure that all retailers were licensed and had not conducted any significant search for unregistered retailers since they implemented a new database in Retailers with permits to sell tax-exempt diesel fuel are required to submit a monthly return (Schedule F) showing all sales of this fuel. The Schedule F return is the only type of monthly submission required to be submitted by a retailer. Retailers who do not sell tax-exempt diesel fuel are not required to make any monthly submission to Government relating to Gasoline Tax. The Department is only concerned with those retailers who are required to submit a Schedule F. However, the Act requires that all retailers be licensed. 2B. Monitoring Introduction Retailers with a permit to sell tax-exempt diesel fuel remit a Schedule F return each month showing the purchasers of this fuel, the quantity of fuel sold, and the consumer permit number. Schedule F is received by the Department, entered into TAMS, and checked for mathematical accuracy. Reports are produced from TAMS each month to identify delinquent Schedule F submissions and instances where consumers are sold tax-exempt diesel fuel without a valid permit. The audit of a retailer includes a review of the retailers' fuel sales, usually over a three-year period. The purpose of the audit is to assess compliance with the Act by the retailer and to obtain information on consumers for later use. The Department has a basic checklist for auditors to use when performing audits. Insufficient audit work The Department could not demonstrate that the extent of audit work on retailers was sufficient for the five fiscal years 2006 through to We found that, of the 153 tax-exempt retailers, only 42 were audited during the five year period. We reviewed 8 retailers where 28 audits were performed and found the following: 26 of the 28 audits consisted only of reviews of monthly Schedule F returns and the files did not contain any evidence of an audit checklist or program being completed; and 180 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

14 While 2 of the 28 audits were more thorough and covered a three year period, including onsite visits and client interviews, one file did not include the audit checklist while the audit checklist in the other file was not fully complete. These two audits resulted in assessments totalling $52,977, including interest of $15,939 and penalties of $3,367. Furthermore, the Department did not perform any planned audit work on retailers for the 2009 and 2010 fiscal years. No standard audit program Although the Department used an audit checklist for retailer audits, it did not have a standard audit program for retailer audits. A standard audit program would ensure that a consistent level of work is completed across all audits. Recommendations The Department should: conduct regular reviews to identify unregistered retailers; perform more frequent field audits on retailers: and develop a standard audit program for retailer audits. 3. Consumers Overview Consumers or retail purchasers are defined by the Act as a person who acquires gasoline not for resale but for usage. Consumers may apply for a permit to purchase tax-exempt diesel fuel when a valid reason exists. As at 31 March 2010 there were 2,299 consumers with a permit. The main risks facing the Department are consumers with permits purchasing tax-exempt diesel fuel and using them for non-tax exempt reasons, and consumers who obtain this fuel through retailers when they do not have a permit. The Department has authority under the Act to perform random vehicle checks of consumers. The result of these checks is used as a lead to begin a consumer audit. During our review of consumer audits conducted by the Department for the 2006 to 2010 fiscal years, we found the following: Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

15 Insufficient audit work The Department did not perform sufficient monitoring of tax-exempt diesel fuel purchases. During the five fiscal years 2006 to 2010, the Department inspected 3,169 fuel samples of which 173 were identified as tax-exempt. The Department performed only 25 audits. Thirteen of the 25 audits resulted in assessments totalling $265,812, including interest of $90,122 and penalties of $13,850. Furthermore, the Department could not conclude that it did sufficient work because they have not developed any standards as to the extent of testing required. Lack of followup on exception reports Report A0120 is an exception report produced from Schedule F returns filed by retailers. It highlights instances where a permit number or name reported for a sale of tax-exempt diesel fuel on a retailer s return does not match a registered permit holder in TAMS. There was no follow-up on exception reports highlighting instances where a permit number or name reported for a sale of tax-exempt diesel fuel on a retailer s return did not match the registered permit holder in the Department s database. We reviewed a report which showed that during March 2010, 16 retailers submitted incorrect information on 32 different consumers who purchased tax-exempt diesel fuel. No standard audit program Although the Department used an audit checklist for consumer audits, it does not have a standard audit program. A standard audit program would ensure that a consistent level of work is completed across all audits. Recommendations The Department should: perform more frequent audits on consumers; follow-up on issues identified in monthly exemptions reports; and develop a standard audit program for consumer audits. 182 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

16 Department s Response Wholesalers The Department should ensure that all wholesalers have been identified and are licensed. Response: The Department identifies unregistered wholesalers through the review of existing wholesaler returns and new gasoline retailer applications, as well as leads generated through audits and inspections. The Department is not aware any additional sources of information to identify potential unlicensed wholesalers, if any. However, the Department will undertake a review to determine if there are other options available to obtain names of unregistered wholesaler. The report makes reference to an unregistered wholesaler making sales in the province, and who was not registered on a timely basis. This unlicensed wholesaler was providing untaxed fuel to a registered wholesaler who remitted the tax. At no time was the tax at risk. The Department should ensure that monthly returns submitted by wholesalers are reviewed in an adequate and timely matter and all issues are followed up. Response A risk analysis approach is utilized in selecting monthly wholesaler returns for review. Staff turnover and unexpected gasoline refund reviews have temporarily interrupted the timeliness of these reviews. It is anticipated that the review of selected wholesaler returns will be completed and current as of March The Department should perform more frequent audits on wholesalers. Response: The Department has been challenged in reaching audit goals as a result of recruitment and retention issues. Human resource allocation is continually reviewed with staff assigned to areas of greatest audit risk and priority. In the last fiscal year, the focus has been on providing newly assigned gasoline tax auditors with training necessary to carry out wholesaler audits. Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

17 The Department should develop a standard audit program for auditing wholesalers. Response Standard audit programs are normally developed for routine audits. Where there is a significant degree of complexity and a relatively small pool of taxpayers, a customized risk based approach is taken in the development of audit programs in order to utilize resources effectively. Retailers The Department should conduct regular reviews to identify unregistered retailers. Response: The Department believes that it is proactive in identifying unregistered retailers through the review of wholesaler and retailer Schedule F returns on an ongoing basis. Also, Gasoline and Tobacco Inspectors check for valid gas retailer licenses when conducting inspections. The Department is of the view that the risk of tax loss in this area is relatively low and further work in this area would not be an effective use of limited resources. The Department should perform more frequent field audits on retailers. Response: The Department has been challenged in reaching audit goals as a result of recruitment and retention issues. Human resources allocation is continually reviewed with staff assigned to areas of greatest audit risk and priority. However, if an internal review of information leads the Department to believe a retailer was not in compliance with the legislation, or an audit lead was provided from an external source, an audit would be assigned on a priority basis. The Department should develop a standard audit program for retailer audits. Response: A standard audit program/checklist is utilized in conducting retailer audits. This program/checklist is quite extensive and covers all areas of audit. Further examination may be conducted based on findings included in the initial audit program/checklist. 184 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador

18 Consumers The Department should perform more frequent audits on consumers. Response: Tobacco and Gasoline Inspectors were introduced throughout the province in 2004 to assist in the minimization of the occurrence of tax evasion, in particular for gasoline susceptible for misuse by consumers. Inspectors conduct on an average of 400 to 600 gasoline inspections on consumer equipment, annually. In the first few years of operation the Inspectors found exempt product being misused which lead to a large number of consumer audits. As the inspectors continued with inspections, instances of misuse decreased, therefore decreasing the number of consumer audits. Inspection of consumer equipment has provided assurance that consumers are using marked diesel in compliance with the Revenue Administration Act. The Department should follow-up on issues identified in monthly exemptions reports. Response: Based on outcomes achieved from the overall review of the Schedule F Reports, a low priority has been assigned to this activity. The reports are reviewed when resources become available. It is anticipated that this activity will be current by March The Department should develop a standard audit program for consumer audits. Response: A standard audit program/checklist is utilized in conducting consumer audits. This program/checklist is quite extensive and covers all areas of audit. Further examination may be conducted based on findings included in the initial audit program/checklist. Auditor General of Newfoundland and Labrador Annual Report, Part 2.5, January

19 186 Annual Report, Part 2.5, January 2011 Auditor General of Newfoundland and Labrador