It was supposed to be a good news story, but somehow it went horribly wrong.

When the province increased funding for Legal Aid Ontario by $86 million over the last two years, Attorney General Yasir Naqvi expected 400,000 more low-income people to qualify for services.

Instead, the agency announced in December that it had accumulated a $26-million deficit and would have to cut services so that only those who face a “substantial likelihood of incarceration” will now be represented.

That means thousands of Ontarians who can’t afford a criminal lawyer but could be deported, fired or heavily fined if convicted will have to represent themselves at trial.

That is dangerous, as well as unconscionable.

Now Naqvi has rightly ordered an independent audit of how the arm’s-length government agency manages its budget. He has asked for answers by March 31.

That is good for potential legal aid clients and taxpayers alike. The faster the audit unearths the problem, the better.

Right now the agency and its critics are at polar opposites on where the problem lies.

According to its critics, Legal Aid Ontario is a bloated bureaucracy that mishandled its $440-million annual budget by undertaking a major program of hiring its own staff and lawyers rather than taking advantage of independent lawyers who could take on legal aid cases.

The agency’s president and CEO, David Field, insists its problems are not a result of mismanagement of funds, but simply reflect the huge demand for legal aid services. “It just speaks to the access-to-justice issue that we’re facing, not just Legal Aid Ontario, but the entire justice system in Ontario,” he says.

It will be up to the company conducting the external audit to make clear whether Legal Aid Ontario mishandled its budget or not. But to be fair, Field has a point when he points to problems with access to justice in Ontario.

At the moment, a single person with no dependents must have an income of about $13,000 a year or less to qualify for legal aid. That’s an absurdly low level, considering that Statistics Canada calculates the low-income cut-off for a single individual in a large city as closer to $25,000.

Now, sadly, with the cuts to service because of the agency’s deficit, access to legal aid has gotten even worse for the poorest of the poor. This is exactly the opposite of the direction we should be going if we care about making equal access to justice more than just a slogan.

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The outside auditor’s report should point to some answers. It cannot come soon enough.

Correction – January 17, 2017: This article was edited from a previous version to update an incorrect headline that said that the Ontario government should not cut Legal Aid. In fact, as noted in the editorial, the government has increased funding to the program but the agency is cutting back on services because of its deficit.