Baker Tilly audit presentation to Faraday

·6 min read

Joanna Park, a partner with Baker Tilly KDN LLP, provided an audit presentation for Faraday council at their meeting on June 1. After going over the audit numbers and getting council’s approval of the financial statements, receipt of the signed representation letter and the receipt of legal letters, the audit was deemed complete. Both Park and Dawn Switzer, the clerk and treasurer, said they were happy with the audit and with the presentation to council.

Park began her audit presentation by thanking council for having her and said it was great to be back to an in-person presentation after two years of COVID-19 restrictions. She said the most important paragraph of the auditors’ report is the second paragraph in the letter to the township, which states that in their opinion “the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Township of Faraday as of December 31, 2021, and the results of its operations and cash flows for the year then ended, in accordance with the Canadian Public Sector Accounting Standards.”

Park told council what Baker Tilly does as part of their audit as required.

“We look at council’s minutes, open and closed, to make sure that any financial decisions in the minutes are reflected in the financial records. We do substantive testing, sampling, analytic review, we look at management estimates and we really dig deep into your normal systems; your revenues, disbursements, your payroll, your journal entries, we look at the controls that are in place and if we have any recommendations we bring them to you,” she says.

Park said the audit was complete, and that they’d gotten all the documents they needed. All that was needed was council’s approval of the financial statements, receipt of the signed representation letter and the receipt of legal letters, the latter Park confirmed had been taken in. She said there had been no significant difficulties encountered during the audit and no changes to the initial audit plan. The audit had been done virtually and they had excellent cooperation from the township, which they’ve come to expect. There were no uncorrected audit differences noted. Park said there was a note in the file about COVID-19 and the unknowns and uncertainty surrounding that, and she hoped that it was the last year that they’d have to do the audits virtually due to the pandemic restrictions.

Municipalities like Faraday are required under the Municipal Act, 2001, to prepare audited financial statements yearly and submit them to the Ministry of Municipal Affairs and Housing, when the municipality submits its annual financial information return to the ministry. That’s where Baker Tilly comes in to perform said audit under generally accepted accounting principles for local governments as laid out by CPA Canada-Public Sector Accounting Board, or PSAB.

Baker Tilly is one of Canada’s largest associations of chartered professional accounting firms, providing audit, tax and advisory solutions to their clients. They are also an independent member of Baker Tilly International, a network that stretches across the globe, employing nearly 40,000 people working out of over 700 offices across almost 150 territories.

Park has been a partner with Baker Tilly KDN LLP since 2010 and with over 20 years professional experience, specializes in performing audits for public sector clients, including municipalities like Faraday, not for profit organizations, Indigenous communities and school boards. She is also an active member of the Baker Tilly Canada Public Sector Accounting Board working group and chair of the Baker Tilly Canada Non-Profit Committee.

Park proceeded to get into the numbers with Faraday council, starting with the first slide showing financial assets. These were; cash in the amount of $7,615,132, taxes receivable in the amount of $159,684, accounts receivable in the amount of $551,172 and investments in the amount of $1,172,100, for a grand total of $9,498,088.

With regard to taxes received in the amount of $159,684, she said it was remarkable how much tax revenue that township had collected, especially with the pandemic to contend with still.

“Staff really need to be commended. I don’t know what they’re doing on that, tactics they’re doing to get people to pay their taxes, but it’s working,” she says.

The next slide showed financial liabilities with a grand total of $4,278,716. These were; accounts payable and accrued liabilities in the amount of $416,916, landfill closure and post-closure liability in the amount of $3,452,000, deferred revenue-other in the amount of $82,613, deferred revenue-obligatory reserve funds in the amount of $327,187

The next slide showed non-financial assets that came in at a grand total of $14,284,562. This came under the category of net financial assets at $5,219,372 and non-financial assets-tangible capital assets at $8,960,474, prepaid expenses at $93,870 and inventory at $10,846.

The next slide showed consolidated statement of operations, with total revenues at $4,335,805 (2021 actual) versus $4,911,389 (2021 budget), while the total expenses were $3,515,448 (2021 actual) versus $3,437,784 (2021 budget). The PSAB annual surplus was $820,357 (2021 actual) versus $1,473,605 (2021 budget). The accumulated surplus at the beginning was $13,464,205 while the accumulated surplus at the end was $14,284,562.

The next slide showed financial activities-revenues, with property taxation at $2,711,890, user charges at $160,700, Government of Canada at $218,458, Province of Ontario at $902,587, other municipalities at $189,163, penalties and interest on taxes at $35,912, investment income at $56,915, other grants at $58,180, other at $2,000 and federal gas tax earned at $250,000, for a grant total of $4,335,805 in 2021 actual revenues.

The next slide showed financial activities-expenses, with general government at $538,564, protection services at $794,823, transportation services at $1,197,046, environmental services at $639,373, health services at $20,500, recreation and cultural services at $63,086, planning and development at $56, change in landfill closure and post-closure liability at $262,000 for total 2021 actual expenses at $3.515,448.

The segmented information on these expenses was as follows; salaries and benefits at $912,793, materials at $649,950, contracted services at $779,436, rents and financial at $3,761, external transfers at $104,761, amortization at $743,500, loss (gain) on disposal of tangible capital assets at $59,247 and change in landfill liability at $262,000 for as indicated above, 2021 actual expenses of $3,515,448.

The final slide Park presented to council showed the net financial assets over the past five years, which she said showed the township’s financial assets and liabilities. She said it demonstrated a steady increase over the past three years, from $3,752,943 in 2019 to $5,219,372 in 2021.

Park thought her presentation to Faraday council went well and she told The Bancroft Times on June 1 that she was very satisfied with the audit process overall. Switzer said that she too was happy with Park’s presentation to council.

“It is always a benefit to get recommendations and input from a third party on how and what we need to focus on to help the township become more effective and efficient.”

Michael Riley, Local Journalism Initiative Reporter, The Bancroft Times

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