Arctic Yearbook 2014 - Page 219

  219   Figure 8: The Potential of the Alberta Heritage Fund (Adapted from Murphy & Clemens 2013) Strong governance rules will directly affect the wealth that a fund has the potential to generate. Alberta’s Heritage and Savings Fund demonstrated the risks when fund rules are ignored, particularly if the rules are unclear. Alaska, on the other hand, has been evaluated as a strong example of good governance. For instance, the public is very engaged with the fund and see direct benefits from it21 (Murphy & Clemens 2013). In summary, a framework regulating what goes in and out of the fund will help assure the preservation of wealth over the long-term. Auditing and Reporting Under the current structure of auditing and reporting, the Heritage Fund will be summarized in a separate notes section but will not be audited separately from the rest of the GNWT budget. To comply with global standards, an internal audit would need to be reported back to the Ministry of Finance and the Legislative Assembly, while an external audit would be reported to the Supervisory Council, who could use the report to generate asset allocation recommendations to the Minister of Finance and Legislative Assembly. Both audits would be publicly available on a government website. Quarterly internal and annual external audits from the investment manager are critical for assessing compliance with governance and investment rules, and making recommendations to improve the fund’s effectiveness. Publicly accessible documentation would give assurances to the people of NWT that resource revenues are being used effectively and responsibly. Transparency further ensures “fiscal policy consistency, more efficient public financial management, and can help prevent fiscal crises. It can also improve the private investment climate and help build trust between the government and the public” (Toledano & Bauer 2014). To engrain transparency within the management of the NWT Heritage Fund, regular public reporting (through online access and other forums such as public meetings, in easily digestible formats) should include the following: fund size, fund managers, significant fund activities and transactions, deposit and withdrawal amounts, returns on investments, types of assets permitted for Daitch, Schwann, Bauer, Dias & Fan Li