HomeMy WebLinkAboutTR-39-97 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Meeting: File#
Date: .Tune 2, 1997 Res. #
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Report#:--TRs39-27 File #: By-Law#
Subject:
1996 AUDIT REPORT AND MANAGEMENT LETTER
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report TR-39-97 be received;
2. THAT the presentation by Deloitte and Touche on the 1996 Financial Statements
be acknowledged with thanks;
3. THAT the Financial Statements for the year ended December 31, 1996 (under
separate cover) be adopted;
4. THAT recommendations contained in the management letter (under separate
cover) be reviewed by staff and addressed appropriately and report back on any
necessary changes;
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5. THAT the firm of Deloitte and Touche be appointed as the Municipality's Auditors
for the 1997 year end audit; and
6. THAT a copy of this report be forwarded to Clarington Hydro-Electric Commission
for their information.
Background and Comment:
1.0 The 1996 year end has now been completed and a representative of Deloitte & Touche is
in attendance to present this Report. Any queries with respect to the Audit and the
Management Letter should be directed to his attention at this time.
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2.0 Staff are continuing in their efforts to increase and improve internal controls and the
auditor's comments reflect this. The areas identified as requiring fine tuning are areas
that previously were not able to be focused on from an audit perspective because other
areas lacked the level of expertise that now has been achieved.
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°PAPEE� 801
THISl PRI-D OH RECYCLED PAPER
TR-39-97 Page - 2 -
3.0 In 1996, Report TR-44-96 recommended that the firm of Deloitte & Touche be retained
for a five (5) year period. Council passed the applicable By-Law which also directed that
the appointment be reviewed on an annual basis. Staff are recommending that Deloitte
and Touche be appointed as the Municipality's Auditors for the 1997 year end audit.
3.1 The Municipality has requested the opinion of the Ministry of Municipal Affairs and
Housing, who has indicated that the cost of the audit services should not be the
determining factor in a decision to change auditors. The Ministry indicated that other
criteria, such as level of service available, reputation, timing of audit services, etc. should
be considered.
3.2 The knowledge and expertise of Deloitte & Touche with respect to the records and
operations of the Corporation adds to the efficiency of the audit. Maximization of any
available efficiencies will therefore be of benefit to the Municipality. Their extensive
knowledge of the Municipality's operations also allows a greater opportunity for Deloitte
and Touche to provide valuable advice and assistance in other areas.
3.3 In addition, Deloitte & Touche have agreed to keep their fees at the same rate as the
municipal mill rate in each of the years identified. This contribution is in recognition of
the Municipality's focus on the budgetary restrictions during the current economic
climate. They have not increased their fee since 1991.
3.4 On June 14, 1993, Council passed Resolution #C-431-93:
THAT the correspondence dated May 21, 1993 from David Clark, Manager, Clarington
Hydro-Electric Commission requesting that the municipal audit services be tendered for
the period 1997 through 2001 be received;
THAT the correspondence be referred to the Treasurer for appropriate action at the
termination of the current contract; and
THAT David Clark be advised of Councils's decision."
A copy of the correspondence is attached.
3.5 Staff have discussed the issue with Mr. Clark, who feels that the tendering of audit
services may result in a more value added service due to the new perspective being
applied. He also believes that there is potential that should the incumbent be successful
in being awarded the new tender the price may be reduced. Mr. Clark feels that over the
number of years that Deloitte and Touche have held the contract, his staff have gradually
taken over the preparation of a great deal of the audit working papers with no reduction
in the audit fee. However, he does acknowledge that Deloitte and Touche have effectively
reduced their normal fee by holding the rate stable since 1994, and that increased staff
time would be required to acquaint any new auditors to the records and files.
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TR-39-97 Page - 3 -
3.6 Effective September 1, 1997, the Oshawa Office of Deloitte and Touche will be
consolidated with the North York Office in order to create specialty based central offices.
Staff have been assured that this change will have no adverse impact upon the
Municipality.
3.7 As indicated in Report TR-32-97, the auditors concur that the Municipality reflects a
secure financial position as indicated in the financial statements.
Respectfull submitted, Reviewed by,
4MaA. Marano, H.BSc.,A.M.C.T., W.H. Stoc well,
Treasurer. Chief Administrative Officer.
MAM/NT/hjl
Attachment
8 01 3
EWCASTLE Newcastle Hydro-Electric Commission
C. Y®FIO
Box 130,2849 Hwy.#2 at Lambs Rd.
Bowmanville,Ontario .
K.-George Moore,Chairman L1 C 3fC9
Harvey Partner,Vice-Chairman
Pauline J.Storks,Commissioner David Clark,CMA-Manager
George VanDyk,Commissioner Telephone(416)623-4451-2
Diane Hamre,Mayor or 623-4625,Fax#623-5915
May 21, 1993 OISTRIBIJ
ORIGINAL:file
File: Audit or—
CC:jly 9 1993 l I Deputy
Town of Newcastle fAs 16. 2)Accountant
31 Pur.Agent
40 Temperance Street ` ' ` ` 41 Payrull`Clk
Bowmanville, Ontario ri1� sl Tax Coll.
L1C 3A6 �►
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Attention: Ms. Pattie Barrie, Town Clerk
Dear Ms. Barrie:
Re: Municipal Audit Services
The Public Utilities Act prescribes that the accounts of Newcastle Hydro-Electric
Commission shall be audited by the auditors of the Town of Newcastle. As such,
Newcastle Hydro has been audited by the same auditing firm that audits the accounts of
the Town of Newcastle. We understand that the Town has entered a contract with
Deloitte and Touche for the provision of audit services for the period from 1992 through
1996.
_The Commission passed a resolution at their May-13, 1993_ ng to request that the
Town of Newcastle tender the municipal audit services for the period 1997 through 2001.
Please advise Council of this request so that it may be taken into consideration at the end
of the current audit services contract.
Yours truly,
DI
Davi Clark, CMA A Ir"!`%. ----
Man ger, Secretary/Treasurer
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