Manitoba NDP MLA James Allum accused the Progressive Conservative government Tuesday of changing accounting practices in order to intentionally overstate the province's deficit.

Allum (Fort Garry-Riverview), the NDP's finance critic, made the comments at a meeting of the province's standing committee on public accounts Tuesday evening.

The meeting included discussion of the September report by Manitoba's auditor general, which flagged a government transfer of $265 million from the Manitoba Agricultural Services Corporation insurance reserve fund to trusts. At the time, Auditor General Norm Ricard wrote the transfer had been authorized in September 2018 but the province indicated they were effective months earlier, in February.

On Tuesday, Allum accused the government of making the transfers so the province's deficit would look higher. He directed his comments to deputy minister of finance Jim Hrichishen.

"I would suggest that, in fact, you're very bravely taking a bullet here for the government, and in fact this was a political decision that was made in order, one could say, to cook the books, in order to show a higher deficit than otherwise existed," Allum said at the meeting.

"Cook the books to show a higher deficit than otherwise existed because you can hardly justify an ongoing and relentless austerity program when the deficit is $325 million less than the government purports it to be."

Finance Minister Scott Fielding dismissed the accusation.

The province has a "professional, respectful disagreement" with the auditor general about the transfers, he said, saying the auditor general's concerns about them was over the timing of their authorization — not the matter of whether transfers to trusts are legitimate.

"A trust is not a bad thing," Fielding said.

Government had been taking credit for income: Fielding

Deputy minister Hrichishen told the committee the transfers had government approval in February 2018, but agreements were executed in September so the trustee could do its due diligence to iron out additional details.

The conversation at the committee also centred on the government's decision not to include the Workers Compensation Board in its summary budget, which added a further $347 million to the deficit.

Ricard also flagged that decision in his September report, and reiterated concerns about it on Tuesday. Ricard said it's his office's opinion the board should be included in the summary budget, based on its assessment the board is controlled by the government.

Fielding said the province disagrees, and the decision not to include it provides a more accurate representation of how the government is faring financially.

"The government was taking credit for a lot of income [produced by MASC and the WCB]" he said.

"We wanted to clean that up to have a truer sense of where the books are, and we believe this is an important step to cleaning up the books and moving to summary financial."