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FREDERICTON - The office of the auditor general may spend more investigating the Caisse Populaire de Shippagan than it does each year reviewing the entire government's finances.

New Brunswick's Auditor General Michael Ferguson's office exceeded its budget by $362,000 in 2007-08, which Ferguson said yesterday represents the cost of a major probe into the caisse's questionable lending practices.

Shippagan accumulated a $33.7-million deficit, was placed under supervision by its regulator in 2004 and eventually cost taxpayers $60 million when the Liberal government stepped in with a bailout last year.

Justice Minister T.J. Burke requested the investigation in April, and KPMG Forensic Inc. has been working with Ferguson's office since August.

The price tag so far is already more than $362,000, said Ferguson, because some of his $1.9-million budget was used and one of his employees is dedicating much of her time to the file.

Ferguson expects to exceed his budget again this year, making it likely the cost could shoot past $500,000 and even towards $1 million. That could exceed what is normally the office's greatest task, the annual audit of the province, which costs between $500,000 and $600,000.

The costs are mostly for the time of the KPMG employees, whose hourly rates run from $95 to $375, as well as some travel expenses, said Ferguson.

He said he met with KPMG at the end of February to discuss their work plan and what they should focus on. He estimated they have completed two-thirds of their field work, which should be finished "over the next couple of months."

He expects a report later this year. "It's mostly still around what were the practices and procedures that were used at the caisse and what were the roles of the various people as well as the various organizations," said Ferguson.