HomeMy WebLinkAboutTR-4-81 MEMORANDUM
TO : Chairman &, Members of the Finance & Administration Committee
FROM: Klaas Degroot , C . G. A. , Treasurer
DATE: January 5, 1981
ITEM : TR-4-81
SUBJECT: Auditor' s Management Letter
REPORT:
To start a report on this subject I believe it is necessary to
review the activities that have taken place to date :
Resolution F-217-80
Refer the audit Letter to the Treasurer to report to the
Finance & Administration Committee at the next meeting.
Resolution F-218-80
Request that a separate report on the feasi.b:lity of hiring
an Accounting Manager.
Resolution F-249-80
Approve the moving; of the payment dates for the interm
tax bills to the third Monday ' s of February and April .
Subsequently , a by-law was passed covering this .
Resolution F-256-80
Defer the report regarding the position of Manager of
Accounting to a report from the Town Manager and input from
-the Provincial authorities .
Resolution F-257-80
Refer the report on the audit letter to the Treasurer for
the report and recommendation.
Resolution F-258-80
Adopt a report from the Treasurer on budget working
papers .
January 5, 1981
Finance & Administration Committee 2
Resolution F-264-80
Refer the subject and report of Committment Accounting to the
Town Manager and staff for a report .
Resolution F-289-80
Refer the report requested in resolution F-257-80 to the Treasurer
for a report on all action taken .
Resolution F-290-80
Tabled the audit Management Letter.
Resolution F-305-80
Refer the rop'Ort on Accounting Manager to the December 19 , 1980
meeting of Council.
Resolution F-307-80
Refer the report on Committment Accounting to a future meeting
of Council when the Town Manager ' s report will be available.
Action Taken to Date
Budget preparation :
Work Sheet Formats have been prepared and adopted for some-
classifications of expenditures which provide Council with
detail of how the various budget amounts were arrived at by
the Departments .
]Wdg)-oL Performance Reports :
These were implemented during 1980. The report received at
the last Finance & Administration Committee meeting to
forma.lize these procedures as Council policy has not been
dealt with.
Interm Tax Payment Dates :
These have been moved from mid March and mid May to the third
Monday in Feburary and April . This change will reduce our
dependence on borrowed funds to finance operations through the
first part of the year and depending on interest rates will
mean a saving of approximately $30 , 000.
January 5 ; 1.981 _ 3
Finance & Adminstation Committee
Finance Department Internal Operating Procedures :
A number of finance department internal operating procedures were
also dealt with in the audit letter. Where practical , the improve-
ments have been implemented, however, the balance are dependent on
the increase in staffing which was dealt with earlier.
RECOMMENDATIONS :
1 . That the recommendations made in previous reports regarding
position of Accounting Manager, Committment Accounting and
Budget Performance Reporting be enacted. That any action taken
on revising budget preparation methods be reviewed after the
Ministry of Intergovernmental Affairs have completed their study
for possible implementation for 1982.
3 . That no action be taken on the auditors suggestion of implementing
an audit committee.
a
K. Degroot .
s'
'1r0: Cliainnan & Mcidxers of the Finance & Administration (Ixrmittee
FMI: Klaas Degroot, C.G.A. , Treasurer
DATE: October 8, 1980
SUBJECT: Cannittment Accounting
Recamle-ndat ion: "
That the procedure for Comm t tmen t. Accounting as descri hod
in memo dated Septenber 2, 1980 Ix-, instituted for the 19131. .fiscal year.
That all department heads be requested to suiuni t an estimate
of the costs involved to the Deccirdx)r emmi ttee meetings.
Rc:�rt
The report' on Comnitt wnt Accounting; was before c.(-MDi ttee at the
Septc+nber meeting and asked for c(mments fran department heads. Cents
were received fran Camaunity Services, Public Works and Planning;. The report
was also on the agenda of a department, head meting;.
'11ae departments that did not ccy►i►x:nt I prestmne would have no
difficulty iinplenxenting the proposals.
I will briefly ca►nx�nt on the ccYmx,nts made by the dopai-WK.nts.
Plannin., Department
'Heir conments are positive as related to the proposed syst(-2fn and
are wel")e. Itm 3 in Mr. Smith's merx) can be dealt with in a requested
report on the departinental costs for implementation.
C llmillity Services
Mr. Dunning; decrilws the prol>loii of adiiinistrat:.ive, work related to
a department with far-flung; activities especially , it relates to low-cost
itons. While I agree that there are difficulties I do not see the difference
between ten $50.00 itaa>,s mid one $500.00 i tcm.
Also, I strongly believe that: i;he i n t:cg.;ri i;y or the sys k-m quad its
rm
infoation would be subject. to ankh crit.ici"n if it is not all i►►elusive:;
regardless of the value.
con t,'d jag o 2 . . . . . . .
w
�. Oytober 8, 1 4),iO
Calmun i ty Setvi cos con t'd .
V
Part of the value I believe in the proposed system the ordering
department nn>st determine the price at the time, the order is placed, thus
giving heater opportunity for price <xvnparison and evaluation before the
purchase is made.
Public Works
Mr. Dunham describes a problem related to incorrect orders and
back orders, I do not thinit that this will cause any problm,s in systc-in
operation in that a purchase order can be cancelled in the system and a
new one set up, in the case of a cancellation the backorder can be accan-
plished by writing down the purchase order accordingly.
The addition of additional purchwses while in-transit can be easily
accanplished by adjusting the purchase order when the cmiployee returns.
General Cannent
All deparbnents have raised the concern of increased workload; i.ti.s a
concern that I expressed in the original report and for this reason, I have
asked in the recannendation that cost estimates for this imp1mmtation be
prepared by the departments.
K. Ikgroot.
n
r
MEMORANDUM
TO: Chairman & Members of the Finance &
Administration Committee
FROM: K. DeGroot, C.G.A. , Treasurer
DATE,,: September 2, 1-980
SUBJECT: Camittment Accounting
REOMIENDATION:
That all Department Heads be invited to comment on -the proposal for
encumbrance accounting contained herein with particular emphasis on
administrative problems that may occur and additional costs that may
be involved.
That after the comments from the Department Heads have been reviewed,
a further report be made to this Committee.
REPORT:
During previous discussions on the accounting system, some mention
was made of the benefits of an encumbrance accounting system. An
encumbrance accounting system reacts to a transaction with a third
party at the time the transaction is instituted rather than at the
time payment is made. I will herein describe- the administrative
procedure necessary for implementation and some advantages and
disadvantages of the system.
Enctuiibraiice accounting requires that a control document be prepared
at the point of ineurrance of any transaction with an outsider. The
most common control document and one I advocate, is the purchase order.
PURCHASE ORDER
Should consist of four copies as follows:
Part 1: To be presented to supplier.
2: To accounting for set-tip of ccamittment.
3: To accounting with invoice for release of com-nittment.
4: Retained by issuing department.
�
- l
Page 2.
C8ZGRJ0rIBG OR ISSUING
The following is a chronicle of the actions .the issuing department
must foIIcxv:
A. When Z :
1. Enter supplier uoma & uddz000.
3. Enter account number distribution of the porcb000,
3. Enter purchase complete with prices.
4, IooUo Part 1 to supplier.
5. Deliver Part 2 to accounting deoortmeot.
G, 8otmiu Part 3 in notima file until goods are received.
?. File Part 4 in numerical sequence.
`
B. When Goods 0r Service Are Received
1, [bnpmre Part 3 of P.O. to packing slip.
2. Note any variances on Paxt 3 of P.O.
3. Retain in file ooCiI invoice received.
C. When Invoice 8noeivm4
I, Cmnparn invoice to annotated Part 3 of P.O.
O. Forward approved invoice and Part 3 of D.O. to accounting.
/K%%)D0TI0G IDZy&ID�OIM
The following is u chronicle of the actions of the ncomontioK
ceourboeoi.
A. When Pu,C O of Iurobmao Order is Received
l. Check for valid account distribution.
%. Enter supplier code.
3. Doter transaction and butch control codes.
4. ]`ape batch for control total.
S. Enter D.D. 's on terminal.
G. IriIo I/.O. `g numerically.
B. When Part 3 of Purchase Order is Received
1. Enter supplier code.
3. Enter transaction and batch control codes.
3. Tape batch for control total.
4. Enter P.O. 'a on terminal to release umnmittmeut.
5, File P.O. 's numerically with Part 3. '
&DVAM3BO
1. Will include trooenotinoa in financial reports at time of
inception ruChoc than at time of payment thereby providing more
timely information.
Page 3.
2. Will require person initiating transaction to be more aware of
cost.
3. Will set up administrative system to proceed to pre-audit process
if desired in the future.
4. Will provide better information for year-end procedures and
financial system preparation.
DISADVANTAGES
1. Will increase administrative work in all departments.
2. Requires the entry and control of 3 documents in the accounting
process, whereby only one is handled at present.
3. It will be difficult to put actual. cost, on for items billed on a
time basis such as legal and engineering fees.
4. Require more costly documents (i.e. ) 4 Part P.O.
5. Increases volume of paperwork.
' R80 BG 2
nf>�>nl�nrvlxma J
'IlJ: Chairman & McYnbers of the Pinan(x) & Administration Cerrrni.ttee
JIM Maas Dogroot, C.G.A. , Treasurer
DATE: October 3, 1980
SUBJECT: 1981 Budget Work Papers
13ecxdrtir�rlclat ion
That the Finance & Adulinistration Committee recommend to Council that
the attached worksheets for:
1. Capital Kxpendi tures
2. Salaries & Benefits
3. Conventions & Scminai.s
4. Mcxnberships & Subscriptions
be adopted and that departments be directed to (Xinplote these worksheets
to be submitted with their budgets.
Report:
'Die attached worksheets are the first effort in providing substantive
backgrowrd material to the annual bu(4,, rt in a (x(plrKm forTnat. 13y using
these formats Council in r•evicnving the Inult;eL will be in a Ixx-d tion in this
area to llla- ee decisions relative to the service involved rather than ,just the
do71a-r al"'unt. It is our intention to revi(.w the axpir•ionce with thc,se after
the cxxnpletion of the 1981 butlylL au►d 101YNden the use at LhaL Lime.
K. I egroo t.
CORPORATION OF fHE TOWN OF NEWCASTLE
=� De 3981 Budget.Korksheet
1
Account r: 4�(
Zr-AIMS' A�0 DESCRIPTIaN
N, FOP pp-c=-
i
i QkPITAL C CS'IS FINLN-CIING
Land, Building, Major improvEments ! Tax Levy
Furniture and Ecplipnent Revenue i= users
Construct Services tidy and Contributions
Temporary Financing Debentures
Minor Improvement Temporary -Financing
{
Total Total
ILT ITURE & EQUIR # PF JDPOSED START DATE i
Its tio. Cost/Unit Cost PROS ==IQN DATE
TOTAL STACK
t RELATED PROJEM s .M.D. ETA
Total i
CORPORATION OF THE TOWN OF NEWCASTLE
Departne
1981 Budget 1 orksheet Accamt le er:
-- �r BIB P.. 1'T &UARI£S Bate S` fitted:
w egrs axis t Lid e 1vork-am s r
Salar-- IP a,52's cpr.0 s UIC Ins. ccrrz.
itim a--r l i0l 0 , 012 013 015 t
PCs
0 1- 0�e ,�sC. C?the3' :btal
+
A Total
k q
Y , k .met Total S c
m
J
CORPORATION OF THE TOWN. OF NEWCASTLE
`� 1981 Budget Worksheet Account N
` ;N=e- of Employee:
�15£/TIi AIRY FATE I' FCR EU,
k
Sp�
i
E
C
a
Tot a1 Llenbessbsps Tot-: cost of Budget Year 19S1 S
-
,Total Subscriptions
Fin
4 r.
tcw.t
CORPORATION OF THE TOWN OF NEWCASTLE -
t.
1981 Radget Worksheet
�'�S '� iws & MARS t�CLX)ii�"4t iaLEI 2'
attendant Name/Location —-- - Date Registration Per Dien Trxiel Other Total
of Convention- or
I
e
a
9
M'DCEI' TOTAL
1030 ►X; 2
MEMORANDUM
TO: ChairMan & Members of the 1"Inanee & Administration Committee
FROM: Klaas Degroot , C.G. A. , Treasurer
DATE: November 26, 1080 W .,
SUBJECT: Resolution F-257-80
" That the 'Treasurer ' s report regarding the Audit Management
Letter be referred to the 'Treasurer for a report and
recommendation . ''
Recommendation :
That the Finance & Administration Committee recommend to
Council that a by-law be -'prepared to adopt the following
as policy.
1 . That the Treasurer present to the Finance & Administration
Committee each month a summary budget performance report .
The reports to begin the month after the month in which
the annual budget is adopted by By- 'Law.
2 . That all Department Heads present to the Committees to
which they report , each month a summary budget performance
report on the activities for which they are responsible.
The reports would begin with the period ending June 30th
each year.
3. That all Department Heads report to their respective
committees on any major variances or anticipated variances
when they occur or are anticipated.
•4g -01 Ag0
` November 26 , 1080 �
Finance & Administration Committee
Report :
The previous report and Auditor 's letter are attached hereto
and form part of this report . There are two specific areas addressed
in the Auditor ' s letter which are not addressed here ; as they have
been addressed in separate reports , which have not as yet been
finally dealt with by Committee or Council . These areas are as
follows , the Treasury Department staffing and the relationship with
Cotiununity Centre Boards .
This report, contains only one recommendation ; although a .number
of areas were commented on by the auditors and in my report dated
September 24th , 1980. Many of the comments made relating to 'opera-
tional practices which were possible and feasable, have been implement+
and others require decisions regarding staffing before any progress
can be made.
The present recommendation is made to create policy in the area
of management reporting of operating results. It expands on the
present practice of summary reports to Finance Committee , by re-
quiring departments to report regularly to the appropriate
conunittee ' s on performance of the budget; for their area of
responsibility . It also imposes on them the responsibility to
report to Committee any significant variances in their operations
and those that are imposed by outside conditions.
The report presented to the Finance Committee by myself will
be general in nature , and will be an analysis of financial informatiol
Therefore , it will not deal with the underlying activities but
rather , this will be dealt with , within the departmental reports to
Committees .
Ii. e 'root .
CORPORATION OF THE' TOWN OV Nrw('A.)`N,E
By-Law 80 -- 1 ,1 S
Being a By-Law to amend By-Law 74-23, which is a by-law to authorize
a levy on the whole of the assessment for real property and business
prior to adoption of the annual estimates.
Whereas the Council deems it necessary to change the due date for
interm tax bills.
It is hereby resolved that section 2 of by-law 74-23 is hereby rescinded
and new section 2 is enacted as follows:
2. The taxes so levied shall be deemed to have been imposed and become
due and payable the 1st day of January in each year, but may he paid in
two instalments, the first instalment being due on or about the 3rd
Monday of February and the second instalment due on or about the 3rd
Monday of April .
Read a first, second and third time and finally Massed
this _ 27th _ day of October 1980.
Mayor Garnet B. Rickard
Joseph M. McZlroy,C1 k
I
11