HomeMy WebLinkAboutTR-6-92 THE CORPORATION OF THE TOWN OF NEWCASTLE
REPORT
Meeting: File#
GENERAL PURPOSE & ADMINISTRATION COMMITTEE
Date: Res.
February 3, 1992 B y-L aw
Report#:__TR_6_-_q2_ File #:
Subject:
APPOINTMENT OF AUDITORS
Recommendations:
It is respectfully recommended that the General Purpose and Administration
Committee recommend to Council the following:
1. That report TR-6-92 be received;
2. That the firm of Deloitte & Touche be appointed the Corporation's
Municipal Auditors for a term of five years covering the year end
audit for the years 1992 to 1996 inclusive;
3. That By-law 74-15 be repealed;
4. That the attached by-law confirming the appointment be recommended to
Council for approval;
5. That Deloitte & Touche be advised of actions taken.
BACKGROUND & COMMENT:
1. Legislation
1. Bill 122, the Municipal Statute Law Amendment Act received Royal Assent on
June 27, 1991. The bill amends several acts dealing with the licensing
and appointment of municipal auditors. The act has made it necessary to
re-appoint the Municipal Auditors through by-law for a term not to exceed
five years.
1.1 All appointments of municipal auditors that were in force on June 27,
1991 are revoked effective January 1, 1992. The year end audit for the
1991 fiscal year is covered by the existing by-law appointment of
auditors.
2. History
2. Previous to the introduction of this legislation, the Municipal Act,
Sec.88, stated that the auditor ". .shall hold office during good behaviour
and be removable by the Council for cause. ." .
2.1 The problem that many municipalities faced was that the wording in the
Municipal Act made it virtually impossible to change auditors if they felt
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TR-6-92 Page Two
that the service they were receiving was not adequate in terms
of professionalism, experience, or advice. In fact many smaller
municipalities have effectively had to retain auditors who were not
licensed Chartered Accountants. This new legislation will allow those
municipalities to change auditors.
3. Present Status
3.1 The auditors currently retained by the Municipality, Deloitte & Touche,
have audited the area municipalities within the Region of Durham for many
years, and as a result they have significant and considerable municipal
audit and accounting expertise.
3.2 The increase in the annual audit fees over the past three years have
maintained only an inflationary impact, and are as follows:
1988 - 4% $40,640
1989 - 6% $43,190
1990 - 5% $45,325
The above fees cover the external audit for the municipality and the
external recreation affiliate boards.
3.4 Deloitte & Touche have confirmed that they will hold their 1992 year end
audit fee to 0% over the 1991 fee and further have, in recognition of
Council's commitment to the ratepayers, proposed holding the increase,
in each year thereafter (1993-1996) , to a rate which reflects the annual
municipal mill rate increase.
There are certain advantages to be gained by tendering the audit,
primarily cost savings, however much of this advantage is negated by
additional time requirements of the audit team to become familiar with
the records of the municipality and with municipal accounting in general
which is significantly different than regular accounting practices. There
is also a significant trade off in efficiency with respect to Town Staff
time involved in explaining and documenting internal procedures. The
current auditors through years of continuity are familiar with our staff,
procedures and file documentation. They require little staff time to
conduct their audit.
3.5 The tendering route in this instance may not be the optimal choice to
select an auditor since this is a service oriented contract and in
that the service is specialized, tendering may jeopardize the level of
service received as it is basically open to anyone to submit a bid. In
many instances where specialized or consulting type services are
required Council has selected the most suitable candidate based on
knowledge of who is able to provide the level of specialized service
required.
4. Recommendations
4.1 That the Auditors Deloitte & Touch be appointed for a five year term
commencing with the 1992 year end.
Respectfully submitted, Recommended for presentation
to the C,omM-ittee�
M A. Marano, H.BSc.,A.M.C.T. , Lawrence otseff,
Treasurer. Chief Ad in strative officer.
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The Corporation of the Town of Newcastle
By-law 92 -
being a by-law to establish an Auditor for the
Corporation of the Town of Newcastle
WHEREAS it is necessary to appoint an auditor for the Corporation
of the Town of Newcastle pursuant to Bill 122, of the Municipal
Statute Law Amendment Act, 1991
THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF NEWCASTLE
ENACTS AS FOLLOWS:
1. THAT Deloitte & Touch is hereby appointed auditor for the Town
of Newcastle for a term of five years for the fiscal years
ending December 31, 1992 to December 31, 1996 inclusive.
2. By-law Number 74-15 is hereby repealed.
By-law read a first time this day of February, 1992.
By-law read a second time this day of February, 1992.
By-law read a third time and finally passed this day of
February, 1992.
Mayor
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Clerk
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