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Home My WebLink AboutFND-016-06 C&rilJglOn REPORT FINANCE DEPARTMENT Meeting: COUNCIL Date: September 25, 2006 Resolution #:C.i.j07-C<C~ Report #: FND-016-06 File#: By-law #: Subject: 2005 AUDITED FINANCIAL STATEMENTS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report FND-016-06 be received; 2. THAT Deloitte & Touche be thanked for their presentation; and 3. THAT the 2005 Audited Financial Statements be approved. Reviewed bYO ^--..-U~1.Ark Franklin Wu, Chief Administrative Officer. NT/hjl REPORT NO.: FND-016-06 PAGE 2 BACKGROUND: 1.0 Section 296(1) of the Municipal Act, S.O. 2001, c.25 provides that "A municipality shall appoint an auditor licensed under the Public Accounting Act who is responsible for, (a) annually auditing the accounts and transactions of the municipality and its local boards and expressing an opinion on the financial statements of these bodies based on the audit; 1.1 Deloitte & Touche, Toronto, Ontario, were appointed as the Municipality of Clarington's auditors through report COD-001-05 for a five (5) year term to expire January 31, 2010. 1.2 Section 5751 of the Canadian Institute of Chartered Accountant's (CICA) Handbook deals with "Communications with those having oversight responsibility for the financial reporting process". At the General Purpose and Administration Committee meeting of December 5,2005, Council approved report FND-019-05 formally appointing the Audit Review Group to include the Mayor, as Chair of Finance, the Chief Administrative Officer and the Director of FinancefTreasurer. This group has the oversight responsibility for the financial reporting process. 1.3 The Municipality of Clarington's 2005 audited financial statements were presented to the Audit Review Group on July 24, 2006. A copy was then circulated to Members of Council, made available for public viewing, and a condensed version posted on the Municipality's website. 1.4 A copy of the condensed financial statements for 2005 are included as Attachment A to this report. 1.5 The Ministry of Municipal Affairs and Housing also requires an audit letter as well as specialize financial reports entitled Financial Information Returns. The ministry reviews these and provides Financial Indicator Reviews based on the information submitted and comparable municipalities. The Municipality generally receives this late in the year and to date have always reflected results of low risk in all categories. 1.6 It is important to note that the financial statements are the responsibility of the Municipality's management. The financial statements have been prepared in accordance with generally accepted accounting principles applicable to local governments, and conform with accounting standards established by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants. Where the determination of assets and liabilities is dependent upon future events, amounts are based upon reasonably determined estimates and judgments (ie. Post employment benefit liability). REPORT NO.: FND-016-06 PAGE 3 1.7 The responsibility of the auditor's is to express an opinion on these statements based on their audit. A copy of the Auditor's Report for 2005 is included as Attachment "8" and reflects what is generally referred to as a clean audit opinion. CONCLUSION: 2.0 It is recommended that the 2005 audited financial statements (complete set distributed under separate cover) be approved and the auditor's be thanked for their presentation as well as their assistance and support provided throughout the year as various issues arise. Attachments: Attachment "A" - Condensed Financial Statements for 2005 Attachment "8" - Auditors Report for 2005 CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOW MANVILLE, ONTARIO L 1 C 3A6 T (905)623-3379 F (905)623-4169 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON Attachment "A" 2005 FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES AND FUND BALANCE Forthe year ended December 31, 2005 2005 2005 2005 CAPITAL FUND RESERVES AND 2005 2004 CURRENT FUND ACTIVITIES ACTIVITIES RESERVE FUNDS CONSOLIDATED CONSOLIDATED BUDGET ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL $ $ $ $ $ $ REVENUES Taxation and user charges Property taxation 27,143,934 27,517,511 27,517,511 25,533,920 Taxation from other govemments 2,920,304 5,192,877 5,192,877 5,437,872 User charges 7,342,715 8,488,848 8,488,848 7,871,510 Grants Government of Canada 25,000 36,874 6,934 43,808 92,983 ProvinceofOnlario 232,000 389,285 45,971 3,872 439,128 783,671 Other Deferredrevenueeamed 2,132,381 2,285,684 4,221,462 6,507,146 7,005,891 Investment income 1,055,692 687,926 364,100 2,472.283 3,524,309 3,594,079 Sale of land and equipment 86,506 85,506 347,480 Penalty and interest 011 taxes 1,025,000 1,111,791 1,111,791 1,188,002 Fines 219,000 196,661 196,661 231.451 Donations and contribution from others 21,000 69,596 1,182,240 2,045,404 3,297,240 2,354.254 Total revenues 42,117.026 45,977,053 5,907,213 4,521,559 56.405,825 54.441,123 EXPENDITURES General government 7.010,866 9,146.522 756,361 9,904,883 17,100,205 Protection, to persons and property 7,278,724 7,737,502 1,553,553 9,291,055 9,541,348 TransportaliOl1services 9,136,005 9,894,074 6,940,808 16,834,882 17,701,602 Environmental services 122,000 155,513 155,513 1,250,372 Heallhservices 243,188 215,696 25.718 241,414 206,464 Recreational and cultural services 11,436,069 11,866,171 6,318,015 18,164,186 17,658,882 Planning and development 3,181,007 3,655,505 32,593 3,688,098 4,099,468 Total 38,407,859 42,672,983 15627,048 58,300,031 67,558,341 Share of net Income of Verid~n Corporation 1,070,425 1,070,425 617,637 (Decrease) Increase in EquityofVelidian Corpora:ion 1,070,425 1,070,425 617.637 Net (expenditures) revenue 3,709,167 3,304,070 (9,719,835) 5.591.984 (823,781) (12,499,581) Net financing and tral1Sfer-s (2,309,467) (1,934,156) 6,562,262 (4628106) 3,385,000 Increase (decrease) in amounts to be recovered Debt principal repayments (1,399,700) (1,399,700) (1,399,700) (1,187200) Unfundedemployeefuturebenefitsobligatil 147,494 147.494 (6,710) Proceeds of Debenture Issue Increase (Decrease) in Amounts to be Recl (1,399,700) (1,252,206) (1.252,206) (1,193,9101 Increase (decrease) in NOIl"finoocial Assets (73,242) (73,242) 58,718 Change in Fund Balance 44,466 (3,157,573) 963,878 (2,149,229) (10,249,773) FUI1dBalance, Beginning of year (418,951J 9,582,206 52,503,033 61,666,288 71.916,061 Fund Balance, End of year (374,485) 6,424,633 53,466,911 59,517,059 61,666,288 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31,2005 ASSETS Financial assets Cash and cash equivalents Investments Accounts receivable Taxes receivable Inventories for resale Promissory notes receivable Investment in Veridian Corporation Total financial assets LIABILITIES Accounts payable and accrued liabilities Employee future benefit liabilities Net long-term liabilities Deferred revenue - general Deferred revenue - obligatory reserve fund Total liabilities Net financial assets Non-financial assets Prepaid expenses Inventory supplies Total non-financial assets Net assets MUNICIPAL POSITION Fund balances Current fund Capital fund Reserves Reserve funds-general Reserve fund-Veridian Corporation net equity Total fund balances Amounts to be recovered from future revenues Municipal position 2005 2004 $ $ 17,903,038 27,567,598 32,716,676 34,841,907 9,896,862 9,336,035 7,715,636 8,346,655 48,191 47,310 8,321,000 8,321,000 11,131,576 10,713,951 87,732,979 99,174,456 5,880,876 16,857,427 1,947,987 1,832,311 19,781,600 21,181,300 4,720,263 3,771,297 17,045,770 16,351,857 49,376,496 59,994,192 38,356,483 39,180,264 329,977 422,577 205,697 186,339 535,674 608,916 38,892,157 39,789,180 (374,485) (418,951) 6,424,633 9,582,206 4,828,934 5,783,499 28,050,054 27,105,755 20,587,923 19,613,779 59,517,059 61,666,288 (20,624,902) (21,877,108) 38,892,157 39,789,180 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON CONSOLIDATED SCHEDULE OF RESERVES AND RESERVE FUND BALANCES AS AT DECEMBER 31, 2005 2005 2004 $ $ 3,473,726 4,334,357 95,751 85,751 1,259,457 1,363,391 4,828,934 5,783,499 Reserves set aside for specific purpose by Council: Acquisition of capital assets Capital improvements Working Funds, Contingencies and Other Reserve Funds set aside for specific purposes by Council: Industrial Development and Bowmanville BIA Debt management and General municipal purposes Acquisition of capital assets Capital improvements Recreation and Culture 191,525 250,263 9,588,487 9,700,471 7,095,347 6,820,864 10,776,038 9,835,911 398,657 498,246 28,050,054 27,105,755 20,587,923 19,613,779 53,466,911 52,503,033 Municipal government business partnership CONSOLIDATED SCHEDULE OF TRUST FUND BALANCES AS AT DECEMBER 31,2005 2005 2004 $ $ Cemeteries 840,685 615,921 Vanderveer Legacy 1,000 1,000 Montague Trust 17,885 17,012 Host Community Fund 10,000,000 10,000,000 Total Trust Funds 10,859,570 10,633,933 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON GENERAL NOTES DECEMBER 31, 2005 1. These consolidated financial statements reflect the assets, liabilities, revenue, and expenditures of the current fund, capital fund, reserve funds and reserves and include the activities of all committees of Council and the following local boards, which are under the control of Council: Clarington Public Library Board Clarington Museum and Archives Board of Management for the Bowmanville Central Business District Improvement Area Board of Management for the Newcastle Central Business District Improvement Area Board of Management for the Orono Central Business District Improvement Area Orono Arena and Community Centre Board Newcastle Arena Board Newcastle Community Hall Board Salina Hall Board Tyrone Community Hall Board Clarington Older Adult Centre Board Local Architectural Conservation Advisory Committee Bowmanville Santa Clause Parade Committee Orono Cemetery Board 2. The data presented here has been extracted from financial statements audited by Deloitte and Touche, LLP. Detailed financial statements and the Auditor's Reports thereon, for the Municipality are available from the Finance Department. . . Deloitte Attachment "8" . . . Deloitte & Touche LLP 5140 Yonge Stneet Suite 1700 Toronto ON M2N 6L7 Canada Tel: (416) 601-6150 Fax: (416) 601-6151 www.deloltte.ca Auditors' Report . . . . . To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Municipality of Clarington We have audited the consolidated statement offmancial position of the Corporation of the Municipality of Clarington as at December 31, 2005 and the consolidated statements of financial activities and fund balance and or changes in financial position for the year then ended. These fmancial statements are the responsibility of the Municipality's management. Our responsibility is to express an opinion on these fmancial statements based on our audit. .. .. .. .. .. .. .. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. In our opinion, these consolidated fmancial statements present fairly, in all material respects, the fmancial position of the Municipality as at December 31, 2005 and the results ofits operations and the changes in its financial position for the year then ended in accordance with Canadian generally accepted accounting principles. ~~,~ttl 0/ t.uek ill Chartered Accountants Toronto, Ontario June 16, 2006 .. .. Member of Oeloitte Touche Tohmatsu