Staff Report #1
May 29, 2019
To All Commissioners
Re: 2018 Financial Statements
Recommendation
That the Commission APPROVE the Draft Financial Statements, as set out in Enclosure I, noting the statements have not changed from those presented at the March 27, 2019 meeting.
Background
The 2018 Draft Financial Statements and Auditors’ Report were presented to the Commission at its March 27, 2019 meeting. The statements were presented in draft and could not be approved given the outstanding finalization of an Actuarial Report pertaining to Non-Pension Post-Retirement and Post-Employment Benefit plans held by the City and its Boards and Commissions. The final report did not differ from the draft, thus KPMG are now able to issue the statements for Commission approval.
As set out in their initial report, KPMG expressed an unqualified opinion that the financial statements present fairly, in all material respects, the financial position of the Commission as at December 31, 2018 and the results of its operations for the year then ended. The unqualified opinion of the Commission’s Auditors is a reflection of the quality of the Commission’s systems for financial reporting and control.
There are four required financial statements to be presented: a statement of financial position; a statement of operations; a statement of changes in net financial assets; and a statement of cash flows.
The statement of financial position highlights four key areas that together describe the financial position of a government:
- The cash resources of the entity.
- The net debt position as calculated as the difference between financial assets and liabilities. Net debt representing future revenues required to pay for past transactions.
- The non-financial assets that are normally held for service provision such as tangible capital assets, noting the presentation of tangible capital assets is predicated upon the adopted administrative policy.
- The accumulated surplus/deficit (or in private sector terms, retained earnings) as there are no shareholder contributions or distributions.
Each of the three remaining financial statements illustrate changes in each of the key areas presented on the statement of financial position.
The statement of operations reports the net favourable or unfavourable performance from operations during the accounting period. The statement displays the cost of services provided, the revenues recognized in the period and the difference between them.
The statement of change in net financial assets reports the extent of change in investment/make-up of the Commission’s assets.
The statement of cash flow reports changes in cash and cash equivalents resulting from operations and shows how a government financed its activities during the period and met its cash requirements. It is noteworthy that the statement of operation requires budget information to be presented on the same basis as the actual figures are presented.
Enclosure
I – 2018 Draft Financial Statements
Recommended by:
E.P. (Ted) Graham, Manager of Accounting
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager