and / et au
613-580-2424
ext./poste
41723, Mona.Monkman@ottawa.ca
SUBJECT:
|
OBJET :
|
ÉTATS FINANCIERS CONSOLIDÉS DE 2011 DE LA
VILLE D’OTTAWA |
That the Audit Sub-Committee recommend that
the Finance and Economic Development Committee recommend Council approve the 2011
City of Ottawa Consolidated Financial Statements.
Que le
Sous-comité de la vérification recommande au Comité des finances et du
développement économique de recommander à son tour au Conseil d’approuver les
États financiers consolidés de 2011 de la Ville d’Ottawa.
The Municipal Act, 2001
requires that the City prepare annual audited financial statements in
accordance with accounting policies prescribed by the Public Sector Accounting
Board of the Canadian Institute of Chartered Accountants. These audited financial statements must be
made available to the public.
On November 24, 2011 Ernst &Young LLP provided a planning memo outlining the scope and key issues affecting the 2011 audit for the information of Committee and Council. The 2011 audit is now complete and Ernst & Young LLP is providing the attached report on their audit of City’s consolidated financial statements.
The
Financial Statements have been prepared by management in accordance with the
accounting policies prescribed by the Public Sector Accounting Board (“PSAB”)
of the Canadian Institute of Chartered Accountants. These accounting policies require the
reporting of revenues and expenses on the accrual basis of accounting. The accrual basis of accounting recognizes
revenues as they are earned and measurable. Expenses are recognized as they
are incurred and measurable, as a result of the receipt of goods and services
and the creation of a legal obligation to pay.
These consolidated financial statements include the operations of all local boards and agencies, such as the Police Services Board, Ottawa Public Library Board, the Ottawa Community Housing Corporation and the Business Improvement Areas. The City’s investment in Hydro Ottawa is recorded in the financial statements on a modified equity basis.
The City’s Operating and Capital Budgets are based upon a modified cash basis of accounting. This results in significant differences between the City’s external financial statements and its Operating and Capital Budgets. PSAB accounting policies require that the financial statements show a comparison of the actual financial results for the period to those originally planned (budgeted). These policies also state that those “planned” (budgeted) results should be presented for the same scope of activities and on a basis consistent with that used for actual results. Since the City prepares it’s Operating and Capital budgets on a different basis from that used to account for transactions in the consolidated financial statements, it is necessary to provide a reconciliation of Council’s approved budgets to the budget figures reported in the financial statements. This reconciliation is provided in note 19 to the financial statements.
The City uses cash accounting for budgeting because it is the most accurate way of determining how much taxation needs to be levied in any one year. It is the cash requirement that determines what the tax rate is and also what tax rate increase may be required. The accrual basis of accounting which is used in the financial statements, includes expenses that do not need to be financed or tax levied for in the immediate or near term. An example is the future cost of closing landfill sites.
The City’s external auditors have performed an audit of the Draft Consolidated Financial Statements. Under new accounting standards, the City’s external auditors are required to extend their subsequent events review procedures up until Council approves the Draft Consolidated Statements. These audit procedures include the review of bank statements, payments and receipts in the subsequent period as well as additional standard inquiries. In order to reduce the amount of post-audit review, this report should rise to Council at the earliest opportunity. Once Council approves the Draft Consolidated Statements, the City will receive the signed audit report at which time the statements will be considered final and be posted on the City’s web site. The City also prepares a financial information return for submission to the Province, based on the financial results contained in the consolidated financial statements. That information is also available publicly through the Province of Ontario’s Financial Information web site.
There
are no rural implications associated with this report.
No
public consultation was required.
There are no legal impediments to
receiving this report. Section 294.1 of the Municipal Act, 2001
requires the City to prepare an annual audited financial statement in
accordance with generally accepted accounting principles for local governments
as recommended from time to time by the Public Sector Accounting Board of the
Canadian Institute of Chartered Accountants.
There are no risk management implications.
Not
applicable.
Not applicable.
There are no technology
implications associated with this report.
Document 1 – 2011
City of Ottawa Consolidated Financial Statements
Document 2 – Ernst & Young Audit Results, Consolidated Financial Statements
Following consideration by the
Audit Sub-Committee, this report will be forwarded to the Finance and Economic
Development Committee and Council.