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HomeMy WebLinkAbout2021-04-07Claiftymn Audit Committee Agenda If this information is required in an alternate format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Date: April 7, 2021 Time: 2:00 pm Place: Held Virtually via Microsoft Teams Join on your computer or mobile app Click here to join the meeting Or call in (audio only) +1 289-274-8255„980787562# Canada, Oshawa Phone Conference ID: 980 787 562# 1. Call to Order 2. Land Acknowledgement Statement 3. Declarations of Pecuniary Interest 4. Adoption of Minutes of Previous Meeting(s) 4.1. Minutes of meeting held November 16, 2020 5. Presentations 5.1. None 6. Delegations 6.1. None 7. Communications — Receive for Information 7.1. None 8. Items for Direction 8.1. Report IAS-001-21, Cash Handling — Petty Cash and Cash Float Recommendation: That Report IAS-001-21, Cash Handling — Petty Cash and Cash Float be approved. 8.2. Report IAS-002-21, Financial Update 4' Quarter 2020 Recommendation: That Report IAS-002-21, Financial Update 4th Quarter 2020 be approved. Wage 12 8.3. That the following 3 dates be confirmed for the remainder of the 2021 Audit and Accountability meetings: • June 29, 2021 • September 10, 2021 • November 30, 2021 9. Other Business 10. Adjournment Clarftwn Audit Committee Minutes If this information is required in an alternate format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Date: November 16, 2020 Time: 3:00 PM Place: Held Virtually via Microsoft Teams Present: Mayor Foster, Councillor Neal, Councillor Hooper Staff Present: Andy Allison, Trevor Pinn, Catherine Carr, Heather Lynch 1. Call to Order Councillor Neal called the meeting to order at 3:04 PM. 2. Declarations of Pecuniary Interest 2.1 None 3. Adoption of Minutes of Previous Meeting(s) Resolution #AAC-001-20 Moved by Councillor Hooper Seconded by Mayor Foster That the minutes from the Audit and Accountability Committee meeting held September 10, 2020 be approved. Carried 4. Presentations 4.1 None 5. Delegations 5.1. None 6. Communications — Receive for Information 6.1 None Audit Committee Minutes — November 16, 2020 Page 12 7. Items for Direction 7.1 Report IAS-001-20, Internal Audit Policy Resolution #AAC-002-20 Moved by Mayor Foster Seconded by Councillor Hooper That Report IAS-001-20, Internal Audit Policy, be approved with the following amendment added to section 6.3 of the Policy: Carried "in accordance with the exceptions provided under 239(2) of the Municipal Act, 2001, as appropriate." Recommendation to Council #1 That Report IAS-001-20, Internal Audit Policy, be approved with the following amendment added to section 6.3 of the Policy: "in accordance with the exceptions provided under 239(2) of the Municipal Act, 2001, as appropriate." 7.2 Report IAS-002-20, Audit Services Resolution #AAC-003-20 Moved by Councillor Hooper Seconded by Mayor Foster That Report IAS-002-20, Audit Services, be received. That the proposal received from BDO Canada LLP., with a total bid price of $343,948.80 (Net HST Rebate) being the most responsive bidder meeting all terms, conditions and specifications of Request for Proposal RFP2020-13 be awarded the contract for the provision of Audit Services for a five year term as required by the Municipality. That the total funds required in the amount of $343,948.80 (Net HST Rebate), be drawn on an annual basis over the five-year term from the account: Description Account Number Amount Unclassified Admin —Audit and 100-21-211-00000-7154 $343,949 Accounting Fees Audit Committee Minutes — November 16, 2020 Page 13 That all interested parties listed in Report IAS-002-20 and any delegations be advised of Council's decision. Carried Recommendation to Council #2 That the proposal received from BDO Canada LLP., with a total bid price of $343,948.80 (Net HST Rebate) be awarded the contract for the provision of Audit Services for a five year term as required by the Municipality. 7.3 Report IAS-003-20, 2020 — 2021 Internal Audit Plan Resolution #AAC-004-20 Moved by Mayor Foster Seconded by Councillor Hooper That Report IAS-003-20, 2021 Internal Audit Plan, be received. That the 2020-2021 Internal Audit Plan, attached to Report IAS-003-20, as Attachment 1, be approved. Carried Recommendation to Council #3 That the 2020-2021 Internal Audit Plan, attached to Report IAS-003-20, as Attachment 1, be approved. 8. Other Business 8.1 None 9. Adjournment Resolution #AAC-005-20 Moved by Councillor Hooper Seconded by Mayor Foster That the meeting adjourn at 3:41 PM. Carried Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 POLICY TYPE: SUBSECTION: POLICY TITLE: POLICY #: G14 POLICY APPROVED BY: EFFECTIVE DATE: REVISED: Financial Internal Audit Policy Audit and Accountability Committee November 16, 2020 APPLICABLE TO: All Municipal Operations 1. Purpose The Internal Audit Policy provides a framework of accountability, including responsibilities to govern the operation of the internal audit function throughout the Municipality of Clarington. 2. Application and Scope 2.1 This policy applies to all municipal operations including all municipal boards, without exception. Definition 2.2 Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve the operations of the Municipality_ 2.3 Internal auditing includes, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the organization's governance, corporate risk management, and internal controls as well as the quality of performance in carrying out assigned responsibilities to achieve the Municipality's goals and objectives. Internal Audit Functions 2.4 Internal Audit staff supports the Audit and Accountability Committee and management by providing independent and objective internal auditing services. Internal audit assists the organization in accomplishing its objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of corporate risk management. Policy Number/Name Page 1 of 8 Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 2.5 The Internal Audit Manager is responsible for the management and fulfillment of internal audit services. Other staff may be called upon to assist with an audit project as needed and with approval of the Director of Financial Services/Treasurer.. Types of Services 2.6 Internal Audit provides the following services: • Evaluating risk exposure relating to the achievement of the Municipality's strategic objectives; • Evaluating the reliability and integrity of information systems and environment; • Evaluating the systems established to ensure compliance with those policies, plans, procedures, laws and regulations, which could have a significant impact on the organization; • Evaluating the effectiveness and efficiency with which resources are employed; • Evaluating operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned; • Evaluating governance processes; • Performing consulting and advisory services related to governance, corporate risk management and control as appropriate for the organization; • Reporting significant risk exposures and control issues, including fraud risks, governance issues and other matters; • Evaluating the effectiveness of the Municipality's corporate risk management processes; and • Evaluating specific operations at the request of the Audit Committee or management, as appropriate. Policy Number/Name Page 2 of 8 Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 3. Professionalism and Principles 3.1 In all its activities, Internal Audit will adhere to the Code of Ethics adopted by the Institute of Internal Auditors (Attachment A) as well as the Municipality's Code of Ethics policy (as amended from time to time). Engagements are performed with the care and skill expected of a reasonably prudent and competent internal auditor with consideration given to a. The extent of work required to meet objectives; b. The complexity, materiality, and significance of areas under review; c. The adequacy and effectiveness of internal controls; d. The cost of assurance relative to potential benefits; and e. The probability of significant errors, irregularities, or non-compliance. Independence and Objectivity 3.2 Internal auditors must be independent of the activities that they audit and the managers who are directly responsible for those activities. Internal auditors may provide advice and recommendations but not implement procedures or systems, prepare records, or engage in any activity that would compromise independence and objectivity. Integrity 3.3 The integrity of internal auditors creates trust and provides a basis for relying on their judgment. Confidentiality 3.4 Internal auditors will respect the value and ownership of information they receive and will not disclose information without appropriate authority unless there is a legal or professional obligation to do so. Competence 3.5 Internal auditors will apply the knowledge, skills and experience needed in the performance of internal auditing services. Policy Number/Name Page 3 of 8 Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 Risk Based 3.6 Internal auditors will independently assess all significant business processes, functions and organizational units within the Municipality's departments to support the identification and assessment of business risks and mitigation strategies. Continuous Improvement 3.7 Internal Audit activities will be designed to contribute to the continuous improvement of processes within the organization. Supported by the Audit Committee and Management 3.8 The Municipal Audit Committee, Director of Financial Services/Treasurer and the Chief Administrative Officer (CAO), must work to ensure that internal audit is sufficiently resourced to enable it to fulfill its mandate. 4. Reporting Relationship Audit Committee 4.1 The Internal Audit Manager is accountable to the Audit Committee. 4.2 Administratively, Internal Audit Manager reports to the Director of Financial Services/Treasurer. 4.3 Internal Audit will communicate significant matters to the CAO and the Department Head group as a means of informing management of important issues and obtaining feedback on findings. 4.4 Internal Audit will obtain guidance and direction on audit matters from the Audit Committee. Relationship with External Auditor 4.5 The Internal Audit Manager will maintain a working relationship with the external auditor in order to better co-ordinate audit activity and improve communications. Policy Number/Name Page 4 of 8 Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 5. Mandatory Requirements Audit Committee 5.1 An effective audit committee promotes a strong control and governance environment. An audit committee also helps an internal audit function to establish the level of independence and objectivity required to effectively discharge its responsibilities. 5.2 The Municipality's Audit and Accountability Committee is composed of three members of Council. Council shall appoint the members to the Committee, one of which shall be the Council liaison to Financial Services. Where the Mayor is not appointed to the Committee, he/she shall be an ex-officio member. The CAO, Director of Financial Services/Treasurer and the Internal Audit Manager are also ex-officio members of the Committee. The Chair will be the Council liaison to Financial Services. Audit Plan 5.3 Internal Audit must prepare an annual audit plan. The audit plan is created using a risk -based approach that will focus audit resources on providing assurance and consulting in the areas of highest risk to the Municipality_ 5.4 The Internal Audit Manager will provide a draft audit plan to the Director of Financial Services/Treasurer and the CAO for review. Once reviewed, the Internal Audit Manager will submit the plan to the Audit Committee for approval. 5.5 If the risks or conditions of the Municipality change significantly during the year, the plan may be amended to address the needs of the organization. In -year changes to the audit plan will be made by the Internal Audit Manager and approved by the Audit Committee. Policy Number/Name Page 5 of 8 Corporate Policy Ciffftmn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 Access 5.6 Internal Audit must be given direct and ready access to all personnel, books of accounts, records, reports, files, physical properties, or other documentation that Internal Audit deems necessary to carry out its audit functions. 5.7 This includes information in any media and considers any future form of storage. Access to all information will be in compliance with the provisions of the Municipal Freedom of Information and Protection of Privacy Act. (MFIPPA)_ 6. Responsibilities Audit Committee 6.1 Approving the Internal Audit Policy; 6.2 Approving the annual audit plan and any major changes to the plan; 6.3 Regularly meeting in camera with the Internal Audit Manager to discuss any matters that the Committee or internal audit believes should be discussed privately in accordance with the exceptions provided under 5.239(2) of the Municipal Act, 2001 as appropriate; 6.4 Reporting Committee activities, issues and related recommendations to the council; 6.5 Directing the Internal Audit Manager to perform special reviews, as necessary; 6.6 Providing open communication between internal audit, the external auditors, and the council; 6.7 Monitoring implementation of management activities in response to internal audit recommendations; and 6.8 Review the Internal Audit Policy with every term of Council_ Policy Number/Name Page 6 of 8 Corporate Policy clffftwn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 Chief Administrative Officer, Director of Financial Services and Management 6.9 Supporting an effective internal audit function, which includes providing the Internal Audit Manager with the ability to report directly to the Audit Committee. 6.10 Working to ensure that Internal Audit is sufficiently resourced to enable it to fulfill its mandate. Internal Audit Manager 6.11 Establishing plans and procedures to guide internal audit activities; 6.12 Ensuring the principles of integrity, objectivity, confidentiality, and competency are applied and upheld; 6.13 Developing and, if required, adjusting the internal audit plan, reflective of the business, risks, operations, programs, systems, and controls; 6.14 Ensuring the execution of the audit plan, including establishing objectives and scope, assigning appropriate and adequately supervised resources, documenting work programs and testing results, and communicating engagement results with applicable conclusions and recommendations to appropriate parties; 6.15 Communicating to CAO and the Audit and Accountability Committee any significant interim changes to the internal audit plan; 6.16 Reporting to the Committee at least annually on the results of the execution of the audit plan; 6.17 Reporting to the Committee, including in camera, and informing the Committee of any significant matters as they arise; 6.18 Following up on engagement findings and corrective actions, and reporting periodically to the Committee any corrective actions not effectively implemented; Policy Number/Name Page 7 of 8 Corporate Policy Ciffftmn If this information is required in an alternate format, please contact the Accessibility Co- ordinator at 905-623-3379 ext. 2131 6.19 Maintaining the integrity and quality of the internal audit function including quality of service, adherence to professional standards, quality assurance and performance measures, human resource and professional development strategies, communication strategies and financial management. 6.20 Preparing an annual report on the delivery of the annual risk -based audit plan; and 6.21 Ensuring that significant audit findings are reported to and addressed by the level of management where direct accountability resides. Policy Number/Name Page 8 of 8 Clarington Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: Audit and Accountability Committee Date of Meeting: April 7, 2021 Report Number: IAS-001-21 Submitted By: Catherine Carr, Manager of Internal Audit Reviewed By: By-law Number: File Number: [If applicable, enter File Number] Resolution#: Report Subject: Cash Handling Recommendations: 1. That Report IAS-001-21 be received; and 2. That staff be difrected to implement the recommendations set out in section 8 of this report . Municipality of Clarington Page 2 Report IAS-001-21 Report Overview The findings from the internal audit of petty cash and cash float accounts are summarized in the report. The internal audit was conducted in December 2020. There were several deficiencies noted and recommendations are included in the report. It is important to note that typical internal audits do not include the level of detail contained in this report. Normally, a sample is taken from the data and rigorous testing is applied and the results are reported at a higher level. Due to the small number of petty cash and cash float accounts, each fund was reviewed. 1. Background 1.1 An audit workplan was presented to the Audit and Accountability Committee (AAC) on November 16, 2020. The first audit is a cash handling audit that focused on Cash Floats and Petty Cash. While these do not include large dollars, cash handling audits are important to ensure the proper internal controls are in place. Most internal audits select a sampling of the data and test the controls and processes on the sample. Due to the small number of petty cash and cash float accounts, all funds were counted and reviewed. For future internal audits, an appropriate method to select the sample data will be used. 1.2 It is important to note that petty cash and cash float are not the same, as they serve different purposes. For this reason, there should be clear separation between the two funds. They must not be stored together in the same cash drawer. 1.3 The cash float is the constant amount kept in the cash drawer to facilitate making change. There should be no activity in the cash float general ledger unless there is a requested increase or decrease to the cash float. Periodic checks after the daily balancing should confirm the cash float amount. It there is an overage or shortage, it should be included in the cash receipts with the daily balancing and keep the cash float at the constant amount. Any shortages or overages would be associated and recorded with the daily transactions. 1.4 Petty cash is used for minor expenses and replenished on a regular basis. This ensures that any expenses are recorded in the accounting system in a timely manner. The policy G12 — Petty Cash, outlines the physical security and the safeguarding of the petty cash funds. This policy was put in place effective February 27, 2018. A copy of the policy is attachment 1 in the report. With the expansion of the purchasing card program and the improvements to the employee expense - reimbursement process, petty cash should be used for only minor expenses. 1.5 An internal audit was conducted during the first two weeks of December 2020 with the assistance of Financial Services staff. The Accounting Services Manager has given the Municipality of Clarington Page 3 Report IAS-001-21 responsibility of overseeing the petty cash and cash float accounts to the Accounting Clerk I (Accounts Receivable) within the Financial Services Department. 1.6 These accounts were reviewed under the previous department structure. In 2020, there were several changes to the organizational structure; however, the general ledger account structure was only changed in 2021. There were some changes made in these accounts in anticipation of the organizational changes. Included in this report are some further recommended changes to these accounts. 1.7 A spreadsheet was prepared and included the general ledger account number, account balance, calculation of the cash count and some general questions. The results are discussed below as well as summarized in the attached tables, attachments #2 and #3. 2. Petty Cash 2.1 In December 2020, there were 14 petty cash accounts that totaled $2,470. The physical count of the petty cash which factored in any receipts that had been paid out totaled $2,524.24. This is an overall variance of $54.24 or 2.20 per cent. The majority of the petty cash funds were stored in a locked cash box and kept in a secure location. As well, most petty cash funds were managed by one staff member. Petty cash funds are summarized in attachment #2. 2.2 Through the audit, the following observations were made: • Petty cash and cash floats held in the same cash drawer or cash box. • Petty cash being used as a cash float. • Ongoing shortages and/or overages not being accounted at time of balancing or replenishment. • Petty cash not being replenished in a timely manner. One petty cash had two receipts from 2019 that had not yet been submitted at time of the audit. • Petty cash boxes were not locked or secured. • Petty cash contained extra items that were not identifiable such as gift cards. 3. Cash Float 3.1 In December 2020, there were 20 cash float accounts that totaled $6,411.85. The physical count of the cash float $6,495.12. This is an overall variance of $86.27 or 1.3 per cent. Eleven of the cash floats matched the general ledger balance. The majority of the cash floats were stored in a secure location. Cash float funds are summarized in attachment 3. Municipality of Clarington Report IAS-001-21 3.2 Through the internal audit the following observations were made: • Petty cash and cash floats held in the same cash drawer or cash box. • Petty cash was used as concurrently used as a cash float at one location. • Cash floats not verified on a regular basis. • Cash floats not kept in a secure location. • Cash float not found. Current staff were not aware of the cash float existing. Discussed in detail below. • Error in general ledger account for cash float 4. Subsequent Changes 4.1 Due to the reorganization of departments there have been some changes to the accounts. Some departments have made some changes already. 4.2 These changes are summarized below. Page 4 a) With the Building Services division moving to the Planning and Development Services Department, the Building Services petty cash account was returned to Financial Services on December 17, 2020. Any need for petty cash will be managed through the Planning & Development petty cash account. As well the Building Serfvices transitioned over to the Planning cash float as their transactions recorded in the Planning & Development Services Department. b) Public Works includes the former Operations and Engineering Departments. Before the reorganization, the Engineering Department shared a cash float with Building Services. With the two locations (Municipal Administration Centre and the Hampton Operations Centre), it was decided by the department to set up a $75 cash float for transactions at the Public Works — Infrastructure counter and a $75 petty cash for the same location. This was completed January 14, 2021. 5. Corrections 5.1 From this review of the petty cash and cash float accounts, the following changes and corrections have been made. a) The Financial Services Department cash float held for the purpose of making change had an incorrect general ledger balance. This was due to an entry error made when the cash float was increased in February 2020. This was corrected on December 9, 2020. b) The 55+ Active Adult cash float was over by $93.75 as it included revenues from a pre- COVID event. The revenue remained in the cash drawer for at least nine months. The revenue should have been deposited in a timely manner. It was subsequently deposited in December 2020 and recorded as revenue. Municipality of Clarington Page 5 Report IAS-001-21 5.2 Further corrections that should be made as soon as possible are as follows. a) During the audit, Animal Services staff spoke of a cash float of $125 held for trap rentals. There is no general ledger account set up for the fund. To rent a trap there is a $40.00 deposit which is returned when the trap is returned. There is a $5/day trap rental fee. The cash float for trap rentals amount should be added to the animal services cash float general ledger account. b) Community Services has a petty cash account of $300. Through the audit it was discovered that it is being used as a cash float and petty cash combined. This is not appropriate. There should be two separate accounts with a physical separation between the money. It is recommended that the funds be divided so that there is a $100 cash float used for daily transactions and a $200 petty cash for minor expenses. 6. Missing Cash Float 6.1 The Tourism cash float was not located. As per the general ledger account there should be a $100 cash float. The general ledger account has been reassigned with department moves and account number changes. 6.2 In 2005, the cash float was initially $50 and increased in June 2005 to $100. Tourism and Communications account numbers were combined (100-16-161-) up to mid-2016 when the new sub department numbers were created to separate Communications (sub dept 170) and Tourism Services (sub dept 171). The petty cash float account for Communications and Tourism was transferred to the Tourism sub -department. As well in 2016, both Communications and Tourism moved from Corporate Services to the CAO office. The Corporate Communications Manager (started July 2014) and the Tourism Coordinator (started February 2016) were not aware of any cash float. As well, a Financial Services staff member who had worked at the Tourism offices had never seen a cash float. 6.3 Over the years, Tourism Services have run several events. It is quite possible that the cash float was returned in the past but not recorded properly. After an event the revenues would have been deposited in a cash receipt and the cash float may have been inadvertently included in the revenue figures. At this point, there is no way to tell what has happened to the cash float. This clearly demonstrates the requirement for mandatory periodic checks of cash floats by supervisors and management throughout the year. It is recommended that the cash float of $100 should be written off effective December 31, 2020. 7. Observations a) The Customer Service desk had an envelope with $200 in cash with some hand-written reference. The envelope was left on the front doorstep of townhall in the spring of 2020. The Customer Service desk made some initial enquiries without success; however, the envelope was left in the cash box. This should have been forwarded to Financial Municipality of Clarington Report IAS-001-21 Page 6 Services in a timely manner. This cash was recorded as miscellaneous revenue as it was untraceable. b) The CAO cash float contained an envelope with an employee's name that was assumed to be a High Five Reward redemption, as well as an unidentified gift card was in the cash box. Any gift card left in a cash box should be clearly identified. This audit does not review the use of gift cards. c) Some of the petty cash and cash float accounts had some minor variances. Those that are out one or two cents can be attributed to penny rounding on cash transactions; however, some of the accounts had a larger variance. It is important the staff understand that any overages and shortages should be accounted for each time the petty cash is replenished or when the daily balancing of the cash receipts is done. When the daily balancing of the day's transactions is completed one of the steps is to ensure that the fixed cash float remains in the cash drawer. While there is a policy for petty cash, there is not policy on cash handling. d) The Legal Services petty cash that included receipts from 2019 that had not been submitted in 2019. While not significant or material it is important to replenish the petty cash in a timely manner. As per the Petty Cash policy, the fund should be checked and replenished at least quarterly. Due to the lack of transactions in 2020, it is recommended that this petty cash account be eliminated and returned to Financial Services. e) It was observed that a common petty cash transaction was the reimbursement of employee sick notes. These transactions are processed through a Human Resources general ledger account. With the 2020 change of processing employee expenses through the payroll system, it was recommended that the sick note reimbursement be processed by and through payroll. This is now in place. Once the sick note is provided to the appropriate department, the reimbursement is processed by the payroll department. f) In the Fire Services petty cash, an employee was reimbursed for the purchase of cables for video equipment. The receipt shows the cables delivered to a home address. All shipment of goods must be delivered to a corporate address. While there may be some savings from an employee using a personal Amazon Prime account, it is important to follow best practices for procuring goods. g) There was a wide range of storing and securing cash drawers and cash boxes. The large recreation facilities all have a larger safe to secure valuables overnight and locked drawers during operational hours. There are walk-in vaults in Financial Services and the former Clerks department. Consideration should be given to the security of cash drawers and cash boxes. The drawer/box itself should be locked and then this should be locked up overnight. Future renovations of customer service areas must factor in the physical security of cash during both open and closed hours. Municipality of Clarington Report IAS-001-21 8. Recommendations and Best Practices a) The Tourism cash float be written off effective December 31, 2021. Page 7 b) The Community Services petty cash fund be divided into a $200 petty cash fund and a new general ledger account set up for a $100 cash float. A separate cash box be set up for the petty cash. Both cash box and cash drawer should always be kept locked and secure. c) The general ledger for the Animal Services cash float be corrected to include the trap rental float. A note should be added to the general ledger account card on what is included in the balance. The trap rental cash float should be kept clearly separated from the regular cash float in a secure location. d) All custodians and their supervisors must read the Petty Cash policy G12. Each custodian should sign a Petty Cash Custodian agreement. A proposed agreement is included as attachment 4. The appropriate supervisor should sign the form as well. The supervisor and custodian should retain a copy of the signed agreement. A copy should also be kept on file in the Financial Services department. e) As per the Petty Cash policy, supervisors are required to do a spot check on the petty cash at least twice per year. It was difficult to ascertain if this is being done as there was no documentation of the spot check. There should be a log kept with the Department Head that documents all the verification of the petty cash fund. f) Financial Services staff conduct an annual check of the petty cash funds. The counts should be random and does not need to be conducted all at the same time. Employees must give access to the fund and will observe while the Financial Services staff count the fund. These counts can be recorded on the same log kept by the department. g) The Financial Services Accounting Clerk I who is responsible for reconciling petty cash and cash float accounts sends out quarterly reminders to balance and replenish petty cash accounts. All cheque requisitions are now filed electronically through SharePoint. The system does allow for zero -dollar cheque requisitions so an end of year petty cash replenishment should be completed even if there are no receipts. The Financial Services Accounting Clerk I should verify the end of year form has been submitted. h) Similarly, there should be semi-annual checks of the cash floats by the supervisors and an annual check of the cash floats by Financial Services staff. The counts should be random and do not need to be conducted all at the same time. Employees must give access to the fund and will observe while the Financial Services staff count the fund. There should be a log kept with the Department Head that documents all the verification of the funds. Municipality of Clarington Page 8 Report IAS-001-21 i) Department Heads should review the requirement and limits of their petty cash fund annually. With the increased use of purchasing cards, the petty cash funds may be used less frequently. j) A cash handling policy be developed that is applicable to all cash drawers and daily balancing. A cash handling report would provide procedures to be followed regarding the following: handling cash receipts, preparing daily balancing cash deposits and daily reconciliations. This policy would inform staff on the importance for implementing segregation of duties and of the completeness of cash receipts in all municipal systems as well as the effective and timely preparation of deposits for bank reconciliation. Some departments already have some policy or procedures for cash receipts and cash handling specific to their business and software. They should be reviewed and can complement a new cash handling policy. 9. Conclusion 9.1 While the petty cash and cash floats do not represent large dollar amounts, it is imperative to maintain controls to ensure proper use of the funds and security of the Municipality's assets. Cash funds are particularly vulnerable to errors, misuse and theft. Overall, staff understand the importance of securing the cash funds. Following through on the periodic counts of the funds will ensure that issues are accounted for in a timelier manner. As well, the knowledge that there will be periodic checks provides the assurance that staff are adhering to the policies and procedures. Staff Contact: Catherine Carr, Internal Audit Manager 905-623-3379 ext. 2606 or ccarr@clarington.net. Attachments: Attachment 1 — Corporate Policy G12 — Petty Cash Attachment 2 — Petty cash audit results Attachment 3 — Cash float audit results Attachment 4 — Proposed custodian agreement form Corporate Policy Attachment 1 to IAS-001-21 ciff;W4017 If this information is required in an alternate format, please contact the Accessibility Co-ordinator at 905-623-3379 ext. 2131 POLICY TYPE: POLICY TITLE: POLICY #: POLICY APPROVED BY: EFFECTIVE DATE: REVISED: APPLICABLE TO: 1. Purpose: Financial Petty Cash G12 Chief Administrative Officer February 27, 2018 February 27, 2018 All Employees To formalize the petty cash policies and procedures relating to the administration of petty cash funds. 2. Policies: Departments may establish a petty cash fund to pay for minor expenses. Wherever possible staff should use their Purchasing Card (PCard) instead of petty cash. One employee in the department (such as the Administrative Assistant) will be the custodian of the fund. The custodian is responsible for the petty cash. The petty cash fund should be kept in a secured location such as a locked drawer, cabinet or safe where access is restricted to the custodian and not easily accessible. The supervisor should verify the petty cash funds at least twice a year to ensure that the cash on hand plus the receipts equal the approved petty cash amount. This process should be documented by signing a simple form noting the date of verification and any problems The Department Head and the Manager of Internal Auditor must be notified immediately in the case of missing and stolen funds. 3. Establishing, Changing or Cancelling a Petty Cash Fund Establishing The request for a new petty cash fund requires the authorization of the Department Head. A cheque requisition form (available on the intranet) must be completed. The Department Head must authorized the cheque requisition. The form must include an explanation for the need of the petty cash account. Finance staff will assign an account number for a new petty cash account G12 — Petty Cash Page 1 of 3 Corporate Policy ciff;W4011 If this information is required in an alternate format, please contact the Accessibility Co-ordinator at 905-623-3379 ext. 2131 (object code 1003). The form should include who will be the custodian of the petty cash. The custodian must acknowledge that they have read and are familiar with this policy. A cheque will be issued as "Petty Cash -Custodian's name." The custodian will then go to the bank to cash the cheque. Changing To increase a petty cash fund, the department should complete a cheque requisition form (available on the intranet) with the amount of the requested increase. The form should be authorized by the Department Head with an explanation for the reason for the increase. The account number would be the same as the existing petty cash account. The custodian of the petty cash should be confirmed on the form. A cheque will be issued as "Petty Cash - Custodian's name." The custodian will then go to the bank to cash the cheque. To decrease a petty cash the custodian should complete a cash receipt/deposit slip with a description of the decrease of the petty cash. This is NOT posted to a revenue account. It is posted to the same petty cash account to record the decrease to the petty cash. Cancelling When a petty cash fund is being closed, the petty cash must be balanced and any expenses will be charged to the appropriate departmental expense accounts. The remainder of the petty cash funds would be recorded on a cash receipt and posted to the petty cash account. If the petty cash that is no longer required and there have been no disbursements, the custodian would complete a cash receipt for the return of the petty cash noting that it is no longer required. This is NOT posted to a revenue account. It is posted to the same petty cash account to record the return to the petty cash fund. 3. Procedures: Petty cash should be used for minor departmental expenses. A receipt must be given to the custodian in order to be reimbursed. The receipt should have the receipt date, vendor's HST number (if applicable) and a description of what was purchased. If this is not clear the custodian should record details on the receipt. The petty cash and cheque requisition forms can be found on the Municipality's intranet website. Petty cash cannot be used for the following. x Alcoholic beverages or tobacco x Parking fines, road tolls, mileage x Fuel such as gasoline, propane G12 — Petty Cash Page 2 of 3 Corporate Policy ciff;W4011 If this information is required in an alternate format, please contact the Accessibility Co-ordinator at 905-623-3379 ext. 2131 x Donations x Hazardous materials / Chemicals x Advertising x Telephone/Cell phones x Professional services x Seminars, workshops, memberships x IOUs The custodian of the fund will replenish the petty cash when the funds become low. The petty cash must be reconciled at least quarterly. The petty cash must be reconciled as of December 31 st to account for the end of the fiscal year. The custodian is responsible for ensuring the cash on hand and receipts equal the authorized amount of the fund at all times. The custodian will use the petty cash form and follow the instructions shown on the top of the form. All receipts must be attached to the petty cash form and approved with the supervisor signature. Any penny rounding differences are posted to the Cash Over/Short account. The custodian will complete a cheque requisition form for the amount needed to replenish the petty cash fund. The supervisor signature is required as authorization. The cheque requisition form, petty cash form and the supporting receipts are to be sent all together to the Purchasing Department. The Purchasing Department will then forward the documents to Accounts Payable for processing. A cheque payable to "Petty Cash -Custodian's name" will be issued in the weekly cheque run. The custodian will then go to the bank to cash the cheque to replenish petty cash fund. G12 — Petty Cash Page 3 of 3 Attachment 2 to IAS-001-21 Cash Account Number AccountPetty Times Replenished in . Comments Location Balance Count 2020 of Replenishment Mayor 100-10-100-00000-1003 $ 125.00 $ 155.02 3 $ 122.21 Council 100-10-105-00000-1003 $ 200.00 $ 198.76 2 $ 66.25 An unknown gift card in the cash box and another Administration 100-13-130-00000-1003 $ 250.00 $ 236.56 1 $ 68.95 envelope assumed to be a High Five Redemption gift card. Legal 100-14-130-00000-1003 $ 300.00 $ 307.15 1 $ 65.00 Contained receipts for 2019 not submitted for 2019 year end. Submitted in December 2020. Corporate Services 100-16-130-00000-1003 $ 200.00 $ 200.70 1 $ 77.95 Clerks 100-19-130-00000-1003 $ 125.00 $ 130.08 1 $ 127.40 Animal Services 100-19-190-00000-1003 $ 50.00 $ 64.40 2 $ 65.59 MLE 100-19-191-00000-1003 $ 100.00 $ 99.98 3 $ 80.45 Difference due to penny rounding. Finance 100-21-130-00000-1003 $ 200.00 $ 199.99 1 $ 99.09 Difference due to penny rounding. Fire Station #1 100-28-130-00000-1003 $ 200.00 $ 199.51 2 $ 102.18 Engineering 100-32-130-00000-1003 $ 120.00 $ 120.25 3 $ 72.87 Building Inspection 100-32-321-00000-1003 $ 100.00 $ 100.00 1 $ 77.95 Petty cash and Building Inspection/Engineering cash float were combined in the same cash box. Community Services 100-42-130-00000-1003 $ 300.00 $ 306.64 2 $ 68.36 Petty cash is also used as a cash float. Planning 100-50-130-00000-1003 $ 200.00 $ 205.20 1 $ 85.39 Attachment 3 to IAS-001-21 FloatCash .-Changes Account Audit Balance Count Envelope with $200 cash left at front doors in the spring and Customer Service Desk 100-13-170-00000-1002 $ 100.00 $ 100.00 N/A left in Customer Service cash box for over 6 months. Enquiries made initially but envelope left in cash box for 6+ Tourism 100-13-171-10155-1002 $ 100.00 cash float found N/A Float not found. Through inquiries it appears this cash float not - does not exist has not existed for several years. Clerks 100-19-130-00000-1002 $ 300.00 $ 300.00 N/A This amount is divided between two cash drawers. Animal Services 100-19-190-00000-1002 $ 170.00 $ 254.65 N/A Includeds a Trap Rental float of $125 that was not recorded in the general ledger account. Municipal Law Enforcement 100-19-191-00000-1002 $ 200.00 $ 200.00 N/A Finance- Tax Counter 100-21-130-00000-1002 $ 600.00 $ 600.00 N/A This amount is divided between four cash drawers. Increased from $750 to Error in previous journal entry. GL account should be Finance- Accounting Services Float 100-21-210-00000-1002 $ 966.85 $ 1,000.30 $1,000 in February 2020. $1,000. The purpose of this fund is to make change for other departments. Fire Station #1 100-28-130-00000-1002 $ 100.00 $ 101.75 N/A Emergency Bunker 100-28-286-00000-1002 $ 500.00 $ 500.00 N/A This Cash Float was shared by Engineering and Building Engineering- Building Inspection 100-32-321-00000-1002 $ 100.00 $ 89.42 Returned 17-DEC-20 Inspection. Cash Float and Building Inspection Petty Cash were combined. Operations 100-36-130-00000-1002 $ 150.00 $ 154.85 N/A Diane Hamre Recreation Complex 100-42-421-10128-1002 $ 700.00 $ 700.00 N/A All drawers balance to what they say there should be in Courtice Community Complex 100-42-421-10129-1002 $ 675.00 $ 650.00 N/A there. They verify the total cash in the drawer to the cards in the drawers outlining the amount that should be there. South Courtice Arena- Admin 100-42-421-10130-1002 $ 400.00 $ 400.00 N/A Darlington Sports Centre - Skating 100-42-421-10131-1002 $ 100.00 $ 100.00 Returned 14-DEC-20 Not verified by audit but verified by Finance Clerk when returned. Rickard Recreation Complex 100-42-421-10132-1002 $ 500.00 $ 500.00 N/A Alan Strike Centre 100-42-421-10133-1002 $ 500.00 $ 500.00 Returned 13-JAN-20. Outdoor Pool & Skate Park 100-42-424-00000-1002 $ 150.00 $ 150.40 Reissued 22-JUL-20 and returned 14-DEC-20. Revenue from an event pre-COVID was left in the cash 55+ Active Adult (CCC) 100-42-428-00000-1002 $ 50.00 $ 143.75 N/A float. This was corrected in December and included in a deposit to 100-42-428-10624-6524 55+ ACTIVE Adults - coffee Kiosk Sales. Planning 100-50-130-00000-1002 $ 50.00 $ 50.00 N/A Attachment 4 to IAS-001-21 Uadiwmn Petty Cash Custodian Agreement Department Custodian Amount GL Account As Custodian, I understand that I am responsible for the security and maintenance of this petty cash fund according to the Petty Cash Policy G12. This includes the following. 1. The petty cash fund will be locked in a secure place at all times. 2. All disbursements from the fund must have proper back-up and supporting vouchers/receipts. 3. All disbursements will be appropriate and comply with Clarington policies. 4. At all times the total of the receipts plus cash must equal the fund balance. 5. To replenish the fund, a cheque requisition form will be completed and include all supporting receipts, account coding and proper signatures. 6. Any overages or shortages must be reported promptly at each time fund is replenished. 7. The reimbursement will be in the form of a cheque payable to the Custodian's name — Petty Cash. Petty Cash replenishment cheques are issued during the normal cheque run. 8. The Custodian may not delegate responsibility for the fund. 9. If the Petty Cash is no longer required it will be returned to Finance promptly. 10.1 have read the Petty Cash Policy G12. I agree to accept responsibility for the petty cash fund according to the above conditions. Custodian Signature Date Supervisor Signature Page 2 Clarington Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: Audit and Accountability Committee Date of Meeting: April 7, 2021 Report Number: IAS-002-21 Submitted By: Trevor Pinn, Director of Financial Services/Treasurer Reviewed By: Andrew C. Allison, CAO By-law Number: File Number: [If applicable, enter File Number] Resolution#: Report Subject: Financial Update as at December 31, 2020 Recommendation: 1. That Report IAS-002 -21 be received for information. Municipality of Clarington Page 2 Report IAS-002-21 Report Overview The COVID-19 pandemic has had a lasting impact on the Municipality of Clarington. It has changed the way in which we provide services (a strong movement towards online services), work, and live. The Municipality's most significant financial impact has been the reduction of services in Community Services. This continued to affect revenues in the fourth quarter even as programs and facilities began to open back up prior to the second wave closures late in December 2020. The attached report provides information on the variances by service area with anecdotal commentary where appropriate. 1. Background Quarterly Reporting 1.1 The Budget Policy outlines a requirement for the Treasurer to report to Council on a quarterly basis each year starting with the second quarter. This report fulfills that reporting requirement. 1.2 To improve the usefulness of the information, and consistency of format with the annual budget, the quarterly report is attached to this report as Attachment 1. Each department is broken down by sub -department with the expenses grouped together like the requirements for financial reporting and the annual budget. 1.3 Where there are key variances, these have been identified and are expanded upon for Committee's, and the public's, information. 1.4 This report is solely for operating expenses. Finance will be reporting separately on the capital budget. The capital budget will be reported on semi-annually, once in the fall which captures the "construction season" to September 30, and once in the spring which summarizes the prior year's activities. It is expected that the 2020 Report will be available at the June committee meeting. 2. Impact of COVID-19 2.1 Where appropriate, the impact of COVID-19 has been identified and discussed in Attachment 1. 3. Concurrence Not Applicable. Municipality of Clarington Page 3 Report IAS-002-21 4. Conclusion It is respectfully recommended that the report be received for information. Staff Contact: Trevor Pinn, Director of Financial Services/Treasurer, 905-623-3379 ext. 2602, tpinn@clarington.net Attachments: Attachment 1 — Financial Update for the Period Ending December 31, 2020 Interested Parties: There are no interested parties to be notified of Council's decision. Financial Update as of December /Y Financial Update for the period ending December 31, 2020 (unaudited) This report is to provide Council with an update on the Municipality of Clarington's financial activity through the fourth quarter of 2020 and to compare it with the same period in 2019. This report will provide a financial overview of budget variances as of December 31, 2020 and essential non -financial functions of the Municipality such as service level achievements or deficits that have been realized within the reported quarter, a review of COVID-19 impacts and department initiatives. COVID-19 Implications The Municipality continues to experience the financial impacts of COVID-19. Affects on our revenues and expenses are highlighted below for each department. Taxes Receivable/Collected Taxes Receivable as of December 31, 2020, provides the status of the taxes billed and collected by the Municipality during the fourth quarter. A total of $9,288,141 remains unpaid which is on trend for this same quarter in previous years. This unpaid value is 4.77 per cent of the taxes levied in 2020. In December 2019 there were taxes receivable of $9,383,327 which resulted in 5.01 per cent of taxes levied in 2019. The net balance is $95,186, or 1.02 per cent less than the previous year and the ratio is only 0.24 per cent lower. The following table outlines the taxes receivable ratio for 2020 and the three previous years: Page 12 Taxes Receivable 2017 20181• $ 8,427,275 $ 8,665,231 2020 $ 9,383,327 $ 9,288,141 Taxes Levied 172,913,203 179,993,948 187,277,840 194,744,258 Taxes Receivable Ratio 4.87% 4.81 % 5.01 % 4.77% Grants A grant was received for virtual fitness classes from Durham Community Foundations through the Federal Government. The $3,500 grant is intended to enhance virtual fitness classes currently offered to our older adult residences. This second grant, applied for through Community Foundations Grant, has been used to purchase fitness equipment to loan out during our virtual classes. TheraBand's, small pilates/bender balls and 2, 3 and 5 lb hand weights were purchased in December of 2020. Over 100 people have registered for our virtual classes, thanks to the Community Foundations Grant initially received in September 2020. Unfortunately, no revenue has been generated by these classes at this time but as the pandemic continues this grant has provided the opportunity to plan for continued virtual fitness classes. In August 2020, the Province of Ontario announced funding for the Safe Restart Program. The Municipality was allocated approximately $2.1 million through phase 1 of this program. The funds were received in the fourth quarter of 2020. Funding under this program provides support for expenses and revenue pressures associated with the COVID-19 pandemic. Development Charges Collected Residential and non-residential development charges collected as of December 31, 2020, were $14,526,733. Page 13 Residential municipal development charges collected were $13,526,322 compared to $2,840,164 in 2019 for the same time period. In the 2015 Development Charges Background Study, it was forecasted that the Municipality would be collecting approximately 823 units in total for 2020. Development charges have been collected for 902 units as at December 31, 2020. The development charges are significantly higher compared to 2019 due to the increased volume of permits issued in 2020. There have been a few large permits issued for townhouses, stacked townhouses and single detached dwellings. Staff have noted that this increase in permits issued has remained on the up turn in 2021. MUNICIPAL DEVELOPMENT CHARGES January to December 2020 Residential 2020 Municipal Development Charges Paid Number of Units • Municipal Development Charges Paid Number of Units Single/Semi- Detached New construction $ 840,946.00 378 $ 1,160,745.00 66 Additions - - - - Townhouse 5,686,946.00 409 1,128,284.00 84 Apartment 998,430.00 115 551,135.00 65 Total Residential: 13,526,322.00 902 2,840,164.00 215 Change in DC paid from prior year: Change in DC units from prior year: 376.3% 319.5% Page 14 Non -Residential 2020 Municipal Development Charges Paid 2019 Municipal Development Charges Paid Commercial New construction $ 423,085.23 $ 503,830.84 Additions - - Industrial - - New construction 577,326.23 30,133.35 Additions - - Agricultural - - Government - - Institutional - - Total non-residential: 1,000,411.46 533,964.19 Change in DC paid from prior year: 87.4% Municipal Development Charge Incentives In the 2015 Development Charges By-law 2015-035, there are several incentives to encourage development in Clarington. These incentives mainly relate to multi -residential, commercial and industrial development. Since July 2015, there has been a total of $1,555,277 in development charge incentives given to 15 properties. The split is approximately 37% and 63% respectively between residential and non-residential properties. Note that discretionary incentives are required to be covered by the Municipality's tax base. There are no new incentives in 2020, as of December 31, 2020. Page 15 Incentive • - of Total Mid -Rise $0 $413,822 $0 $0 $0 $0 $413,822 Residential Revitalization, 0 0 157,840 0 0 0 157,840 Mixed Use Residential 0 413,822 157,840 0 0 0 571,662 37% Medical 110,671 0 0 0 0 0 110,671 Exemption Revitalization, 3,636 938 974 0 0 0 5,548 Small Business Existing Industrial 0 22,983 0 0 0 0 22,983 Development Conversion Residential to 0 15,985 0 0 0 0 15,985 Commercial New Industrial 0 0 102,718 652,823 0 0 755,541 Development Revitalization, 0 0 72,886 0 0 0 72,886 Mixed Use Non -Residential 114,307 39,906 176,578 652,823 - - 983,614 63% $114,307 $453,728 $334,418 $652,823 $ 0 $0 $1,555,277 100% Investments The Manager of Internal Audit provides a quarterly compliance memo to the CAO and the Treasurer. Below are the highlights of this memo for the period ending December 31, 2020. Page 16 Investments by Institution The compliance calculations include the reserve fund bank account as it's not used for ongoing operations and is considered available for investing. The general fund TD bank account is used for the ongoing operations and are consider as "required immediately" and therefore are not eligible for investing, it is not included in the compliance calculations. The Municipality's policy has the following restrictions, among others, to ensure that credit risk is mitigated through avoiding a concentration of investments with any given institution: ONE portfolios are restricted to 15% per type (ONE HISA account is excluded as it is a cash account) Financial institution (including bonds, GICs) is restricted to 20% per institution Total Funds % of Total • - • - TD Bank - Savings $26,490,185 22.00% 0% 100% ONE - HISA 23,436,972 19.50% 0% 100% ONE - Equity 2,588,679 2.20% 0% 15% ONE - Bond 4,316,986 3.60% 0% 15% RBC 11,389,813 9.50% 0% 20% National Bank 8,805,845 7.30% 0% 20% BNS 16,236,823 13.50% 0% 20% BMO 12,959,520 10.80% 0% 20% Page 17 HSBC 4,360,864 3.60% 0% 20% TD Bank 4,841,449 4.00% 0% 20% City of Toronto 4,778,046 4.00% 0% 20% $120,205,182 100.00% The Municipality was compliant with all restrictions on investment with individual institutions. Investments by Term Total Funds % of Total • - • - 90 Days 58,044,595 48.30% 20% 100% 90 Days to 1 Year 9,812,283 8.20% 56.50% 30% 100% 1 to 5 Years 27,814,182 23.10% 0% 85% 5 to 10 Years 19,692,673 16.40% 0% 50% 10 to 20 Years 4,841,449 4.00% 0% 30% $120,205,182 100.00% The Municipality was compliant with the stated term length restrictions. There is a significantly high component that is less than 90 days, this is due to the One Fund HISA and TD Reserve Bank investments which are immediately accessible and thereby highly liquid. The investments in the 10 to 20 year terms are all bank bonds which are considered to have good liquidity. There are uses for these long-term investments, but the specifics have not been clearly identified. Investments by Type Total Funds % of Total • - • HISA $50,943,531 42.40% 0% 100% Federal Debt - 0.00% 0% 100% Provincial Debt - 0.00% 0% 80% Municipal Debt 4,778,046 4.00% 0% 35% Financial Institutions 57,577,940 47.90% 0% 60% Corporate Debt (non -financial) - 0.00% 0% 10% ONE Investment Pools 6,905,665 5.70% 0% 25% $120,205,182 100.00% As of December 31, 2020, the Municipality is compliant with the restrictions for the investment types as defined in the Municipal Investment Policy. It should be noted that investments with financial institutions does not include cash accounts; however, it does include GICs, bank bonds, TD Reserve bank and ONE Fund HISA. Page 19 Staffing Updates For the period ending December 31, 2020 there were 706 staff (including those on a leave — not COVID related). Prior to COVID-19, there were 809 employees which includes Mayor and Council (7), temporary staff, volunteer firefighters and employees on leave (this does not include Library or Museum). There were three retirements during the fourth quarter. Page 110 Municipal Operating Revenues and Expenses Overview - Financial Results This financial update report to Council has been redesigned to focus on (unaudited) overall budget variances for the period ending December 31, 2020. The reporting has expanded to show budget to actual variances by sub -department. The department summaries indicate the status of the Municipality's operating accounts compared to the approved budget as of December 31, 2020. Each department is responsible for its budget. To assist with the management of the budget, monthly trial balances are sent by Financial Services to each department for regular review. It is important to note that the figures presented in this report do not represent final year-end figures. Necessary year-end accruals and adjustments will continue to be processed to finalize the 2020 year. The Accounting Services division is preparing the Municipal Financial Statements in accordance with the Canadian generally accepted accounting principles (GAAP) for the external audit of the 2020 fiscal year. The audit will be completed at the end of June 2021. The figures in this report do not include all consolidated municipal service board activities nor noncash activities such as capital asset amortization and unfunded post - employment. Due to timing differences, variations from quarter -to -quarter as well as year-to-year exist and therefore, this statement cannot be used in isolation, nor can it be easily extrapolated to predict the whole year's activities. The figures in this report cannot be used to estimate or assume the Municipal surplus/deficit for the year ending December 31, 2020. The Summary of Operating Revenues and Expenditures compares the Municipality's budget to actual transactions as of December 31, 2020, reflecting financial activity through the fourth quarter of 2020 and comparing it with the same period in 2019. The tables below reflect the Municipality's operating budget only and exclude the year to date financial activities of the library, museum and BIA's. Page 111 19 2020 2020 2020•. YTD YTD Final Unexpended BudgetDescription Unassigned ($100,645) ($40,550) $0 Non -Departmental Accounts (74,302,451) (73,941,124) (75,881,769) 2.6% Mayor & Council 1,019,593 737,951 817,063 9.7% Administrator's Office 2,094,914 2,222,412 2,296,338 3.2% Legal Admin 364,650 342,510 503,791 32.0% Corp Services 4,140,596 5,192,148 5,179,396 (0.2%) Legislative Services 2,581,700 2,180,023 2,926,353 25.5% Finance & Unclassified Admin 8,522,761 4,582,701 3,987,193 (14.9%) Emergency Services - Fire 13,976,212 12,840,399 13,210,861 2.8% Engineering Services 18,637,451 3,579,108 6,910,720 48.2% Public Works 24,391,426 20,184,675 21,153,493 4.6% Community Services 11,984,883 8,439,995 10,153,263 16.9% Planning Services 3,513,512 3,276,994 4,033,995 18.8% Levies 0 0 0 BIA Taxation 0 0 0 Libraries/Museums 3,876,841 3,883,364 3,755,775 (3.4%) Culture 214,976 216,965 219,366 1.1 % External Agencies 673,531 734,162 734,162 Total Municipality of Clarington $22,166,387 ($5,568,267) $0 Page 112 Revenue and FxpensP Categories Revenues and expenses are categorized based on their purpose and similarities. Revenues Estimated taxation, supplementary taxation, and payments -in -lieu of taxation received. These funds may be collected on behalf of the Region of Durham, the Province of Ontario or a school board and are remitted to the specific agency. 'rovincial Grants and Subsidies Grants received from the Province of Ontario for specific functions such as the Ontario Community Infrastructure Fund or specific grant projects. -ederal Grants and Subsidies Grants received from the Government of Canada for specific functions such as the Federal Gas Tax Fund or specific grant projects. User Fees Fees for services including, but not limited to, facility rentals, cemetery fees, application for planning and building permits, recreational programming. Licensing and Lease Revenue Licensing fees such as taxi licensing and lease revenues for the long-term lease of municipal facilities and property. Investment Income All investment income earned by the Municipality through its investment holdings, bank account balances and investment in Elexicon. Contributions from Reserves Contributions from reserves and reserve funds for specific purposes, as identified within the budget. This is an internal source of funding and may be originally sourced from taxation, grants or user fees. Other Revenues Any revenue that is not otherwise categorized. Page 113 Expenses Salaries and Benefits Compensation for all employees such as salaries, wages, benefits, overtime, allowances and statutory benefits. Materiai: Includes items such as office supplies, salt and sand, gravel, insurance costs, phone costs and other general expenses. Rent and Financial Costs Bank charges, debit and credit card charges, cost of rental equipment and facility rentals for the Municipality. Purchase/Contracted Services Items that are outsourced, such as professional services, winter clearing and IT software as a service. Debt Repayment Interest on debt repayments to external parties Grants and Transfer Payments Grants provided to community groups, external boards and agencies and levies from other organizations. Contributions to Reserves and Reserve Funds Contributions from the general fund for the Municipality's reserves and reserve fund Page 114 Mayor and Council 100 Mayor Expenditures Salaries, Wages & Benefits 318,931 249,454 250,702 0.5% Materials & Supplies 43,647 25,510 61,867 58.8% 105 Council Expenditures Salaries, Wages & Benefits 604,398 416,401 433,124 3.9% Materials & Supplies 3,864 1,951 9,070 78.5% 106 Ward Council Expenditures Materials & Supplies 25,819 24,756 38,300 35.4% 107 Regional Council Expenditures Materials & Supplies 22,934 19,879 24,000 17.2% Total Mayor & Council $1,019,593 $737,951 $817,063 9.7% Highlights There were no items of interest to highlight for the period ending December 31, 2020 for the Mayor and Council departments. Page 115 Administration 000 Unassigned Expenditures Materials & Supplies 366,869 360,600 366,600 1.6% 130 Admin Expenditures Salaries, Wages & Benefits 583,019 603,660 594,903 (1.5%) Materials & Supplies 43,707 32,546 59,700 45.5% Contracted Services 119,889 114,677 90,000 (27.4%) Transfers from RES / RF / CAP Fund 16,400 170 Communication Revenue User Charges (46,715) (15,816) (45,000) 64.9% Expenditures Salaries, Wages & Benefits 601,875 601,074 645,631 6.9% Materials & Supplies 103,673 118,261 124,400 4.9% Contracted Services 88,600 64,799 102,725 36.9% 171 Tourism Revenue User Charges (22,080) Expenditures Salaries, Wages & Benefits 232,843 250,876 244,544 (2.6%) Materials & Supplies 65,072 90,034 80,750 (11.5%) Contracted Services 21,887 9,421 32,085 70.6% 250 Contributions Page 116 Highlights Administration There was an overall reduction in expenses as office work adapted to COVID-19 restriction. Many of the office expense accounts are lower than is typical for this quarter (i.e. Printing,Office Supplies, Postage & Courier, etc.) with employees working from home. Page 117 Tourism Advertising and Branding expenses will be offset by the grant from Tourism Industry Association of Ontario (TIAO) through FedDev Ontario we received in 2020. The Tourism Office was closed to the public due to COVID-19 at the end of the first quarter. The tourism staff moved out of the building in October to let the Durham Region vaccination clinic operate out of there for the remainder of the year. Tourism cleaning costs are due to COVID-19. Page 118 Legal Services Highlights There were no items of interest to highlight for the period ending December 31, 2020 for Legal Services. Page 119 Corporate Services 130 Admin Revenue User Charges (385,522) (10,488) (12,000) 12.6% Expenditures Materials & Supplies 216,758 187,417 224,850 16.6% Transfers from RES / RF / CAP Fund 570 160 HR/Payroll Expenditures Salaries, Wages & Benefits 1,529,437 1,504,920 1,542,249 2.4% Materials & Supplies 6,828 4,546 6,600 31.1 % Contracted Services 102,348 56,331 81,500 30.9% Rents/Financial Expenses 113,061 93,788 130,000 27.9% Transfers from RES / RF / CAP Fund 15,000 162 IT Expenditures Salaries, Wages & Benefits 1,375,049 1,414,967 1,417,707 0.2% Materials & Supplies 6,481 3,779 5,000 24.4% Contracted Services 13,521 3,397 15,000 77.4% Transfers from RES / RF / CAP Fund 116,206 670,500 670,500 Reclass: CF (NON-TCA) to GF 464,133 616,250 437,500 (40.9%) 163 Purchasing Expenditures Salaries, Wages & Benefits 627,852 629,871 632,025 0.3% Materials & Supplies 4,525 2,094 4,890 57.2% Page 120 Highlights Administration At the end of the 4t" quarter, the Corporate Services Department was disbanded with the retirement of its Director. The sub -departments were distributed per the prescribed method in the Organizational Structure Review. The accounts will reflect these changes in the 1st quarter of 2021. Information Technology (IT) Deferred expense entries have not yet been processed, which explains the overage of 40.9 per cent in the table above. Page 121 Legislative Services (Clerk's Department) 000 Unassigned Revenue User Charges (200) 100.0% 090 PSAB Expenditures Amortization Expense 28,461 130 Admin Revenue User Charges (110,267) (90,463) (118,800) 23.9% Expenditures Salaries, Wages & Benefits 1,094,665 982,950 1,163,744 15.5% Materials & Supplies 93,585 51,875 93,910 44.8% Contracted Services 12,510 21,210 10,800 (96.4%) Transfers from RES / RF / CAP Fund 33,415 19,114 19,500 2.0% 160 HR/Payroll Expenditures Salaries, Wages & Benefits (7,651) Materials & Supplies 5 190 Animal Services Revenue User Charges (105,192) (106,242) (87,800) (21.0%) Expenditures Salaries, Wages & Benefits 410,844 393,176 433,420 9.3% Materials & Supplies 60,023 55,428 65,825 15.8% Page 122 Contracted Services Transfers from RES / RF / CAP Fund 191 Municipal Law Enforcement Revenue User Charges Fines/Penalties on Interest Expenditures Salaries, Wages & Benefits Materials & Supplies Contracted Services Transfers from RES / RF / CAP Fund 192 Parking Enforcement Revenue User Charges Fines/Penalties on Interest Expenditures Salaries, Wages & Benefits Materials & Supplies Contracted Services Rents/Financial Expenses Transfers from RES / RF / CAP Fund 193 Election Revenue User Charges Expenditures Salaries, Wages & Benefits 60,118 16,640 (40,870) (32,481) 644,792 17,961 53,554 476 (148,085) (448,535) 387,721 36,695 8,544 11,912 601,152 529 271 78,526 12,840 (13,020) (17,853) 745,921 13,927 20,666 (87,891) (294,004) 416,084 12,980 8,518 10,390 381,895 (1,970) 55,000 7,000 (28,000) (25,000) 845,402 33,700 54,100 (80,000) (250,000) 409,462 24,840 10,000 10,000 330,000 (42.8%) (83.4%) 53.5% 28.6% 11.8% 58.7% 61.8% (9.9%) (17.6%) (1.6%) 47.7% 14.8% (3.9%) (15.7%) Page 123 Description YTD YTD Final Unexpended •.- ' Materials & Supplies 1,735 Contracted Services 3,943 63,410 69,000 8.1 % Rents/Financial Expenses 1,755 Transfers from RES / RF / CAP Fund 125,000 125,000 125,000 194 Legislative Services Expenditures Salaries, Wages & Benefits 14,848 Materials & Supplies 1,003 230 Grants Revenue Grants (27,605) (22,665) (22,000) (3.0%) 250 Contributions Revenue Transfer between Funds (47,525) (453,627) 326 Cemetery Revenue User Charges (192,660) (185,455) (258,100) 28.1 % Expenditures Materials & Supplies 128 825 1,800 54.2% 388 Fleet Expenditures Materials & Supplies 28,491 30,273 33,750 10.3% Total Legislative Services $2,581,700 $2,180,023 $2,926,353 25.5% Page 124 Highlights Council Services (Administration) The Records Management Summer Student position was extended to work part time until mid October, which will increase the actuals in the Wages Temporary Part -Time account. There will be budget capacity for this addition. The Professional Fees account is over budget due to the high (and unanticipated) costs of investigations (i.e. Integrity Commissioner). Animal Services The commission fee is an expense paid for online pet licensing. The expense is based on how many licenses are being renewed or pets being purchased which cannot be predict. There has been an increase yearly in this expense and the budget has been increased for 2021. Parking Enforcement Parking Fines and Meter revenue is slightly above budget at the end of the 4th quarter. The transfer of these funds to the Parking Lot RF can be seen in the Transfers from RES / RF / CAP Fund. Cemetery Cemetery revenue for Bondhead Cemetery has exceeded the budget expectations by 150% at the end of the year. Page 125 Financial Services and Unclassified Administration 000 Unassigned Revenue Fines/Penalties on Interest (20,735) (35,556) (13,000) (173.5%) 090 PSAB Expenditures Amortization Expense 819,261 130 Admin Revenue User Charges (214,087) (204,015) (178,000) (14.6%) Fines/Penalties on Interest (1,417,469) (1,269,120) (1,250,000) (1.5%) 140 Internal Audit Expenditures Salaries, Wages & Benefits 34 155,093 151,831 (2.1 %) Materials & Supplies 300 100.0% 162 IT Expenditures Salaries, Wages & Benefits (13,904) Reclass: CF (NON-TCA) to GF 36,477 210 Finance Admin Expenditures Salaries, Wages & Benefits 2,319,656 2,348,484 2,411,937 2.6% Materials & Supplies 92,592 78,929 106,400 25.8% Contracted Services 101,573 106,032 49,000 (116.4%) Transfers from RES / RF / CAP Fund 2,296 Page 126 Highlights Unassigned Accounts receivable fines and penalties on interest are higher than budgeted and higher than the same period in 2019. Finance Admin The legal fees account continues to be over budget due to the increased involvement of external solicitor regarding non- residential assessment appeals such as Loblaws, Walmart, Shoppers Home Depot and Canadian Tire. These appeals have been ongoing for several years and are being completed in 2020. The Municipality has been able to recognize Page 127 savings in lost revenue higher than the legal costs, this benefits the Municipality in the past as well as going forward with protecting its commercial assessment base. Unclassified Admin The Transfers from Reserve and Reserve Fund account looks to be over budget by a significant value but that includes the 2019 Operating Surplus entry which is not assumed at the time of the budget creation. The 2019 surplus transfer is about 54% less than the 2018 transfer, this decrease was primarily driven by a decrease in the equity share of net income — from Veridian Corporation of $1.2 million stemming from one-time costs related to the merger of Veridian and Whitby Hydro, lower building permit revenue in 2019 of $1 million due to decreased developer activities, and higher sand and salt costs of $0.7 million. These were partly offset by lower transfers to reserve funds of $0.9 million related to Building Inspection, lower operating costs of $0.2 million associated with the closing of concessions stands at community facilities and various other operating savings in 2019 totaling $0.3 million. IT Services At the end of the 4t" quarter, the Corporate Services Department was disbanded with the retirement of its Director. The sub -department IT Services was realigned under Financial Services as per the Organizational Structure Review. The budget for these accounts will reflect these changes in 2021. Page 128 Emergency Services 090 PSAB Expenditures Amortization Expense 984,765 130 Admin Revenue User Charges (240,751) (406,449) (105,000) (287.1 %) Expenditures Salaries, Wages & Benefits 927,665 1,000,870 940,149 (6.5%) Materials & Supplies 188,937 170,882 239,650 28.7% External Transfers to Others 10,000 6,250 10,000 37.5% Transfers from RES / RF / CAP Fund 841,189 674,257 553,925 (21.7%) 280 Fire Prevention Revenue User Charges (47,793) (12,159) (45,000) 73.0% Expenditures Salaries, Wages & Benefits 677,210 725,858 735,643 1.3% Materials & Supplies 37,240 15,738 46,500 66.2% Contracted Services 92,700 100.0% 281 Fire Suppression Expenditures Salaries, Wages & Benefits 8,183,352 8,293,207 8,443,560 1.8% Materials & Supplies 56,116 61,557 92,500 33.5% Contracted Services 69,073 71,565 70,000 (2.2%) 282 Fire Training/Technical Support Page 129 19 2020 2020 2020•. YTD YTD Final Unexpended BudgetDescription Expenditures Salaries, Wages & Benefits 379,914 397,479 350,680 (13.3%) Materials & Supplies 5,816 3,628 6,500 44.2% 283 Fire Communication Expenditures Contracted Services 610,416 650,140 587,000 (10.8%) 284 Fire Mechanical Expenditures Materials & Supplies 116,459 75,678 120,000 36.9% 285 All Stations - P/T Admin Expenditures Salaries, Wages & Benefits 984,013 895,613 867,380 (3.3%) Materials & Supplies 33,566 49,011 45,700 (7.2%) Contracted Services 4,918 9,070 6,500 (39.5%) 286 Municipal Emergency Measures Revenue User Charges (10,000) (10,000) 100.0% Expenditures Materials & Supplies 27,251 21,339 26,950 20.8% Contracted Services 287 Mechanical Technical Support Expenditures Salaries, Wages & Benefits 136,856 136,865 135,524 (1.0%) Total Emergency Services - Fire $13,976,212 $12,840,399 $13,210,861 2.8% Page 130 Highlights Administration User charges include an invoice to OPG for the 2020 annual payment as per the Memorandum of Understanding with the Municipality of Clarington and OPG. Transfers to the Reserve and Reserve Fund category look to be over budget however this is where the transfers of the Emergency Call revenue are transferred to the Reserve Fund. In previous years, this revenue was an unbudgeted item. Fire Suppression Equipment Maintenance is slightly over budget at the end of the 4t" quarter due a few factors. Mainly the cost of re - calibration gas. There was an increase in both cost and the usage in calibrating instruments. Other equipment was identified as needing immediate replacement. In discussions with the Treasurer it was agreed that the funds received from OPG are eligible to cover some of the costs for this equipment. Fire Communications There were some unanticipated increases in expenses through the Radio Equipment Rental account. There will be a partial refund for these expenses which will reduces the impact on the overage. All Stations - P/T Admin Cleaning Supplies and Janitorial Controls are over budget at the end of 2020 due to the increased cleaning measures required to mitigate the risks associated with COVID-19. Page 131 Engineering Services 000 Unassigned Revenue User Charges (211) (300) (500) 40.0% 090 PSAB Expenditures Amortization Expense 12,733,145 130 Admin Revenue User Charges (342,150) (227,922) (50,500) (351.3%) Expenditures Salaries, Wages & Benefits 2,280,240 2,257,713 2,513,421 10.2% Materials & Supplies 47,037 35,632 53,950 34.0% Contracted Services 105,151 184,992 150,250 (23.1%) Debt Services (Principle and Interest paid) 541,802 474,045 544,417 12.9% Transfers from RES / RF / CAP Fund 3,705,897 3,519,550 3,415,536 (3.0%) 250 Contributions Revenue Transfer between Funds (130,950) (1,637,845) 321 Building Inspections Revenue User Charges (2,194,711) (2,496,222) (1,554,032) (60.6%) Fines/Penalties on Interest (500) 100.0% Expenditures Salaries, Wages & Benefits 1,285,583 1,253,042 1,329,648 5.8% Page 132 Materials & Supplies Contracted Services 324 Street Lighting Expenditures Transfers from RES / RF / CAP Fund 325 Parks Expenditures Materials & Supplies Contracted Services Transfers from RES / RF / CAP Fund 327 Parking Lots Expenditures Debt Services (Principle and Interest paid) 330 Roads & Structures Expenditures Contracted Services 334 Safe Roads Expenditures Materials & Supplies Contracted Services 380 Road Maintenance Expenditures Contracted Services 388 Fleet Expenditures Materials & Supplies 88,800 134,059 100,000 4,682 8,650 443 150,793 24,226 12,054 32,375 48,116 2,420 66,888 11,924 100,000 151 636 1,100 (14,990) 9,040 3,683 33,960 4,031 102,930 199,000 100,000 500 10,000 21,000 13,500 50,000 6,500 5,600 35.0% 94.0% 69.8% 93.6% 57.0% 72.7% 32.1 % 100.0% 28.0% Page 133 Highlights Administration Funds were received from the Region of Durham for a "Durham Farm 911 Funding" project as well as revenue from Port Granby for Project Management and Roads & Infrastructure salaries causing the Miscellaneous Revenue account to be over budget. In addition to their annual maintenance and new development fees, Bell and Rogers were issued a one-time fee for Municipal Consent. The 2020 work is more extensive than would normally be undertaken, creating an overage in the Engineering Permits Revenue account. Contracted Services have Studies rolled up into this category but there is no budget in 2020. This makes it look like the category is over budget, when it is not. Consulting expenses are low for the year. Subdivision lighting review is being done in-house this year with fewer complicated subdivision, reducing the need for external consultants. This account will likely be under budget this year. Page 134 Building Inspections As a result of COVID-19, there was an increase in building and pool permits revenue as people were spending more on improving their homes/yards. The Building Division also saw a reduction in expenses with the restriction from COVID-19. Many of the office expense accounts are lower than is typical for this quarter (i.e. Printing, Professional Fees, etc.) Page 135 Public Works 000 Unassigned Revenue User Charges (208,461) (32,322) (208,800) 84.5% Expenditures Salaries, Wages & Benefits 1,984 690 3,000 77.0% Materials & Supplies 188,568 104,338 107,400 2.9% Contracted Services 3,752 9,394 3,000 (213.1 %) 090 PSAB Expenditures Amortization Expense 3,414,071 130 Admin Revenue User Charges (350,611) (81,116) (125,000) 35.1 % Expenditures Salaries, Wages & Benefits 2,388,737 2,166,163 2,361,020 8.3% Materials & Supplies 70,552 77,683 74,700 (4.0%) Contracted Services 19,388 52,561 11,000 (377.8%) Transfers from RES / RF / CAP Fund 3,151,651 2,753,100 2,746,100 (0.3%) 250 Contributions Revenue Transfer between Funds (324,427) (13,017) 324 Street Lighting Revenue User Charges (4,533) (1,802) (15,000) 88.0% Page 136 Expenditures Materials & Supplies 749,920 673,244 1,050,000 35.9% Contracted Services 275,180 187,264 330,000 43.3% Debt Services (Principle and Interest paid) 224,128 (22,281) 325 Parks Expenditures Salaries, Wages & Benefits 932,762 1,263,541 1,151,057 (9.8%) Materials & Supplies 549,617 551,287 515,750 (6.9%) Contracted Services 704,042 1,289,392 1,205,760 (6.9%) Rents/Financial Expenses 28,984 82,269 30,000 (174.2%) Transfers from RES / RF / CAP Fund 100,000 225,000 225,000 326 Cemetery Revenue User Charges (155,386) (143,558) (143,000) (0.4%) Expenditures Salaries, Wages & Benefits 178,352 190,226 225,854 15.8% Materials & Supplies 140,331 160,917 95,700 (68.1 %) Transfers from RES / RF / CAP Fund 50,000 5,000 5,000 350 Waste Collection Revenue User Charges (29,855) (6,183) (22,500) 72.5% Expenditures Materials & Supplies 27,888 12,370 22,500 45.0% 351 Recycling Collection Revenue User Charges (2,782) (443) (1,500) 70.5% Page 137 Expenditures Materials & Supplies 2,348 845 1,500 43.7% 370 Building & Property Service Expenditures Salaries, Wages & Benefits 945,560 878,285 992,159 11.5% Materials & Supplies 593,999 486,843 549,265 11.4% Contracted Services 224,009 112,063 139,825 19.9% Debt Services (Principle and Interest paid) 107,968 101,019 107,799 6.3% Transfers from RES / RF / CAP Fund 954,250 1,325,000 1,250,000 (6.0%) 380 Road Maintenance Revenue User Charges (22,882) (26,678) (19,500) (36.8%) Expenditures Salaries, Wages & Benefits 749,999 592,189 597,700 0.9% Materials & Supplies 1,085,655 994,983 846,275 (17.6%) Contracted Services 899,968 429,770 785,700 45.3% 381 Hardtop Maintenance Expenditures Salaries, Wages & Benefits 326,833 409,559 429,000 4.5% Materials & Supplies 402,199 633,204 456,100 (38.8%) Contracted Services 95,279 132,034 160,000 17.5% 382 Isetop Maintenance Expenditures Salaries, Wages & Benefits 54,507 44,625 72,500 38.4% Materials & Supplies 271,566 285,639 342,000 16.5% 383 Winter Control Page 138 Revenue User Charges (81,592) (9,506) (90,000) 89.4% Expenditures Salaries, Wages & Benefits 1,153,462 892,407 963,250 7.4% Materials & Supplies 2,912,295 1,990,662 2,010,000 1.0% 384 Safety Devices Expenditures Salaries, Wages & Benefits 203,275 210,037 188,000 (11.7%) Materials & Supplies 342,848 298,895 349,400 14.5% Contracted Services 242 74,937 50,000 (49.9%) 386 Storm Water Management Expenditures Salaries, Wages & Benefits 7,244 11,925 20,000 40.4% Materials & Supplies 2,856 3,147 8,000 60.7% Contracted Services 94,957 92,000 (3.2%) 387 Regional Roads Expenditures Salaries, Wages & Benefits 10,353 8,537 9,000 5.1 % Materials & Supplies 50,861 40,053 33,500 (19.6%) 388 Fleet Revenue User Charges (1,501,809) Expenditures Salaries, Wages & Benefits 618,587 655,425 766,037 14.4% Materials & Supplies 100,494 1,220,788 92,000 (1,226.9%) Transfers from RES / RF / CAP Fund 134,500 185,000 185,000 Page 139 Highlights Unassigned Unfortunately, the revenues are still low for sports field rentals due to COVID-19 restrictions. Contracted Services include "Work for Others" which are recoverable expenses. Administration There are some miscellaneous expenses that have gone over budget at the end of the year. The overage is attributed to COVID-19 related expenses and one-time expenses. Contracted Services include "Work for Others" which are recoverable expenses. Page 140 Safety Devices The special event budget has not been used due to the cancellation of events to reduce the risks of COVID-19. The railway work under Contracted Services, still requires some year end entries and then this perceived overage will be corrected. Parks Fleet allocation for Parks increased as staff had to be assigned to individual vehicles due to COVID-19, where normally there would be crews assigned to ride together. The Parks Rental account is for the rental and cleaning of portable toilets in Parks and due to COVID-19 there was increase in cleaning costs. Contracted service expense overages relate to emergency tree and stump removal. With limited use of the sports fields due to COVID-19, aggregate material was not ordered to repair fields and turf. Cemetery Fleet allocation for Cemeteries increased as staff had to be assigned to individual vehicles due to COVID-19, where normally there would be crews assigned to ride together. Road Maintenance New entrance curb cuts are a service provided in conjunction with our access permit process for cutting curbs for access and is mostly development driven and changes year to year. Fees are recovered from applicants for this service. There were catchbasin and stormsewers that required immediate and unscheduled emergency repairs resulting in higher than budgeted expenses. Page 141 Hardtop Maintenance In 2020, there have been substantial spring break up (potholing) and additional work was required throughout the balance of the year to repair damaged areas. This work was required to meet Provincial legislation outlined in the Municipal Act - Provincial Standards. Stormwater Managements (SWM) Multiple unscheduled beaver relocations caused budget overages in 2020. Beaver dams can have a larger negative affect on the flow of water through our SWM systems. Dams are removed by staff after the vendor has completed the relocation of the beaver. Waste and Recycling Collection No sales were made at the Hampton Operations/Public Works Centre during the COVID-19 shut down resulting in lower sales than would generally be seen in the year. The expense for the waste and recycling supplies are lower as well resulting from no additional inventory being purchased. Regional Roads These are the expenses for winter maintenance on Regional Roads. These expenses are recoverable from the Region. Fleet The Fleet Miscellaneous Operating Supply account is rolled up into the materials and supplies category making it look like it is over budget however this account's expenses are offset by fleet revenues. Page 142 Community Services 090 PSAB Expenditures Amortization Expense 2,085,447 130 Admin Revenue User Charges (78,426) (14,358) (63,500) 77.4% Expenditures Salaries, Wages & Benefits 871,860 757,276 958,743 21.0% Materials & Supplies 60,756 29,343 69,070 57.5% Contracted Services 38,706 1,399 Transfers from RES / RF / CAP Fund 686,028 809,943 816,700 0.8% 250 Contributions Revenue Transfer between Funds (1,616,352) 420 Recreation Services Admin Revenue User Charges (2,893) (210) (1,230) 82.9% Expenditures Salaries, Wages & Benefits 887,736 815,946 1,020,506 20.0% Materials & Supplies 22,852 13,505 26,942 49.9% 421 Facilities Revenue User Charges (2,259,033) (1,267,112) (2,357,646) 46.3% Expenditures Page 143 Salaries, Wages & Benefits 3,511,596 3,131,891 3,604,093 13.1 % Materials & Supplies 2,703,452 2,259,194 2,641,186 14.5% Contracted Services 159,294 129,402 157,434 17.8% Debt Services (Principle and Interest paid) 2,111,799 1,906,828 1,957,836 2.6% 423 Concessions Revenue User Charges (43,206) (7,704) (66,140) 88.4% 424 Aquatic Programs Revenue User Charges (1,171,739) (354,374) (1,172,741) 69.8% Expenditures Salaries, Wages & Benefits 850,225 435,623 912,481 52.3% Materials & Supplies 58,323 13,783 61,830 77.7% 425 Fitness Programs Revenue User Charges (515,987) (197,416) (532,295) 62.9% Expenditures Salaries, Wages & Benefits 350,309 184,350 364,173 49.4% Materials & Supplies 17,716 7,731 28,850 73.2% Rents/Financial Expenses 1,700 500 2,000 75.0% 426 Recreation Programs Revenue User Charges (550,463) (99,986) (566,015) 82.3% Expenditures Salaries, Wages & Benefits 456,664 177,842 501,408 64.5% Materials & Supplies 70,855 7,302 68,830 89.4% Page 144 Contracted Services 50,121 13,838 47,300 70.7% Rents/Financial Expenses 1,046 173 2,800 93.8% 427 Community Development Revenue User Charges (153,316) (133,820) (191,903) 30.3% Expenditures Salaries, Wages & Benefits 4,752 502 8,448 94.1 % Materials & Supplies 172,825 137,508 197,675 30.4% Contracted Services 27,627 20,868 34,700 39.9% 428 55+ Active Adults Revenue User Charges (127,296) (52,189) (162,231) 67.8% Expenditures Salaries, Wages & Benefits 113,979 59,889 142,812 58.1 % Materials & Supplies 26,630 10,484 25,400 58.7% Contracted Services 16,073 3,665 16,550 77.9% Rents/Financial Expenses 560 3,000 100.0% 429 Customer Service Revenue User Charges (16,268) (22,439) (15,675) (43.2%) Expenditures Salaries, Wages & Benefits 944,276 721,084 926,556 22.2% Materials & Supplies 138,745 70,542 132,736 46.9% 440 Libraries Expenditures Materials & Supplies 178 Page 145 450 Client Services Expenditures Salaries, Wages & Benefits 359,012 408,681 444,740 8.1 % Materials & Supplies 9,246 2,364 12,840 81.6% 451 Tourism Expenditures Salaries, Wages & Benefits (2,429) 473 Community Grant Program Expenditures External Transfers to Others 60,000 56,350 60,000 6.1 % 480 Municipal Sponsorships Expenditures External Transfers to Others 33,300 20,400 35,000 41.7% Total Community Services $11,984,883 $8,439,995 $10,153,263 16.9% Highlights Several wage accounts are lower than the projected 2020 budget due to vacant positions (Full Time: Manager of Facilities, Aquatic Programmer, Facility Supervisor for 6 months), cancelled programs and services (Part Time Recreation wages) and the closure of facility front desks as the result of COVID-19 shutdowns (Part Time Customer Service wages). The corresponding expenses for utilities and operating costs have also seen a decrease reflective of the facility closures. Significant savings are recognized in repair and maintenance for buildings vehicles and equipment, office supplies, travel and program supplies. Mechanical systems adjustments were made to reduce energy consumption. There are still year end entries to be made at this time, some of which relate to COVID relief funding provided to the Municipality by the Province. Page 146 Facilities This year has been hard on facility rental revenue and as a result there has been a $1.1 million decrease to the 2020 budgeted amount. These revenues are primarily from ice and indoor field rentals. Aquatic Programs Aquatic Program revenues have also seen a downturn this year due to COVID-19. The impact on the revenues is a $810,000 decrease in swimming lessons and public swimming revenue. Recreation and Fitness Fitness memberships, March Break and Summer Camp revenues were all affected by the reduction in services with COVID-19 mitigations. These revenues are ending the year with a $801,000 decrease in budgeted revenues. Page 147 Planning Services 000 Unassigned Expenditures Salaries, Wages & Benefits 420,215 287,264 Materials & Supplies 142,026 64,853 Transfers from RES / RF / CAP Fund 696,728 635,684 090 PSAB Expenditures Amortization Expense 130 Admin Revenue User Charges Expenditures Salaries, Wages & Benefits Materials & Supplies Contracted Services Transfers from RES / RF / CAP Fund 250 Contributions Revenue Transfer between Funds 321 Building Inspection Expenditures Salaries, Wages & Benefits i:: M. (652,118) 1 (498,816) 2,972,072 2,988,156 99,000 50,055 161,570 (12) 426,592 12,500 (465,089) 1 (123,695) (17,347) 438,591 34.5% 238,750 72.8% 634,717 (0.2%) (862,300) I 42.2% 3,145,792 5.0% 114,750 56.4% 186,000 100.0% 12,500 1• 2020 2020 2020•, Description YTD YTD Final Unexpended Actuals Actuals Budget Contracted Services 10,465 385 Environmental Revenue User Charges (1,170) (585) Expenditures Contracted Services 123,695 100.0% 430 Smallboards Expenditures Materials & Supplies 1,465 1,500 100.0% 502 Development Review Revenue User Charges (1,671,983) (1,078,005) Expenditures Materials & Supplies 34,091 43,639 Contracted Services 1,347,250 902,838 Total Planning Services $3,513,512 $3,276,994 $4,033,995 18.8% Highlights There were no items of interest to highlight for the period ending December 31,2020 for Planning Services. Page 149 Looking forward to the 11t Quarter of 2021 2021 COVID-19 Mitigation 2021 has brought with it more COVID-19 mitigation efforts from the Province. These measures have corresponding affects on our revenues and services. The 1st quarter reporting will identify the COVID-19 risk mitigation efforts and the corresponding implications to the corporation's financial statements. New DC's and Incentives The 2020/2021 DC Background Study and bylaw went to Council January 18th, 2021. The report outlines the changes to the DC's and approves the new bylaw. Continuous Improvement/Key Performance Indicators As this report is constantly evolving and improving, we hope the subsequent quarterly reports will include upcoming continuous improvements within the Municipality and focus on key performance financial indicators that will be used to benchmark existing service levels. Page 150