HomeMy WebLinkAboutCS 37-06
REPORT TO
AUDIT COMMITTEE
Report Number: CS 37-06
Date: June 19,2006
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
2005 Year-End Audit
Recommendation:
1. That Report CS 37-06 of the Director, Corporate Services & Treasurer be received
and referred to Council for information;
2. That the Auditor's Report to the Audit Committee as submitted by Deloitte &
Touche be received for information;
3. That the Management Letter from the Auditor be referred to the Director,
Corporate Services & Treasurer for any further action deemed necessary and
report back to the Committee; and,
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4. That the 2005 draft Audited Financial Statements for the City of Pickering be
received and forwarded to Council for information.
Executive Summary:
Not applicable
Background: The Audit for the year 2005 has been completed. Attached are the
Auditor's Report to the Audit Committee, which includes the Independence Letter and
the Management Letter from the Auditor and the draft Audited Financial Statements.
The Auditor's report prepared by Deloitte & Touche summarizes the results of the
December 31, 2005 audit. Nothing of significance was noted.
The draft Financial Statements are the responsibility of management and have been
prepared by City accounting staff under the direction of the Director, Corporate
Services & Treasurer. Deloitte & Touche is responsible to express an opinion on these
Financial Statements based on their audit. An unqualified opinion has been provided.
I am pleased to advise the Committee there were no problems or questionable items I
have to report to you at this time. However I would like to summarize some financial
-- highlights.
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Report CS 37-06
Date: June 19, 2006
2005 Year-End Audit
Page 2
Overall net assets increased by approximately $3.0 million over prior year as a result of
an increase in current assets of approximately $6.2 million offset by an increase in
current liabilities of approximately $3.2 million.
The increase in current assets is primarily due to an increase in the investment
balance. As in past years, the increase in the investment balance results from the
timing of supplementary taxes billed and collected, the overall increase in the Reserve
Fund balances, primarily Development Charges Reserve Fund, unused funds from the
agricultural easement received and lastly the City's share of taxes from OPG for
properties that are still under assessment appeal.
The prior year's cash balance was unusually high as a result of cash requirements
necessary in early 2005. The reduction in the cash balance to $2.7 million at the end
2005 brings the balance more in line with the average cash balance maintained
throughout the year for normal operations. Accounts receivable also had a large
increase over prior year. This arose due to the accruals necessary for the 2005
instalments of the Federal Gas Tax funds ($850K), Provincial Gas Tax funds ($220K)
and sale of land ($149K) of which the cash was not received until early 2006.
The increase in current liabilities is primarily due to the increase in deferred revenue
and more specifically the increase in the obligatory Reserve Funds which are made up
of the following: Development Charges, Parkland, Third Party/Developer's
Contribution, Ontario Transit Renewal, Provincial Gas Tax and Federal Gas Tax. In
compliance with financial statement reporting guidelines, these restricted funds are to
be reported as deferred revenue. The increase in the Development Charges Reserve
Fund resulted from a large amount of Development Charges collected versus those
required in the year to fund capital expenditures incurred. The Provincial Gas Tax and
Federal Gas Tax fund balances contributed to the increase because of timing of receipt
of funds and occurrence of related expenditures. Two other Provincial grants, the
Ontario Fire Services grant of $178,000 and the balance of the Geosmart grant for
approximately $154,000 also contributed to the increase in deferred revenue to allow
for the matching of revenue to the related 2006 expenditures. The WSIB benefit
liability is higher than prior year as a result of the settlement of an outstanding claim
during the course of 2005. This increase in the liability reflects an estimate of the future
WSIB liability that is required by PSAB to be recognized for reporting when earned
versus when paid.
Current revenues and expenditures are comparable with the budget. Taxation from
other governments which are more commonly referred to as payments-in-lieu (PIL) of
taxes are higher than budget. This arises due to the returned assessment roll providing
higher assessment amounts, which must be billed, for the OPG properties currently
under appeal. Again this year, a transfer of the City's share of these revenues ($1.6 M)
was made to the Contingencies Reserve until such time as the appeal is settled.
As you are aware capital expenditures for projects may be incurred over multiple years
and often are not comparable to budget. As you can see capital expenditures incurred
Report CS 37-06
Date: June 19, 2006
2005 Year-End Audit
Page 3
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were significantly lower than those budgeted. This is a direct result in timing of
approval in the budget and completion of the project. For example, approximately $3.5
million was budgeted in 2005 for external subdivision works of which approximately
20% of this amount was incurred in 2005.
In addition approximately $3.0 million of the capital budget pertained to the City's share
of APTA's 2005 budgeted capital expenditures. APTA's capital budget included the
purchase of six replacement buses and two expansion buses. In light of the transfer of
APT A to the Region of Durham, the Region was asked to participate in the funding
since the construction of buses is a two-year cycle. However the Region declined and
the buses were not ordered. This timing also impacts on the revenue reported for the
capital projects being much lower than compared to budget. Specifically government
grants are lower as a result of a large portion of APT A's 2005 capital budget not
proceeding.
In conclusion, positive financial results in 2005 are once again assisting in maintaining
the City's financial position.
Attachments:
1. Auditor's Report to the Audit Committee (Confidential)
2. 2005 Draft Audited Financial Statements
Prepared By:
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Manager, Accounting Services
Approved I Endorsed By:
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Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP/vw
Attachments
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City Council .
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ATTACHMENT#L TO REPORT#(l:S' 3'7~ eb
. Deloitte
The Corporation of the
City of Pickering
Report to the Audit Committee
Year ended December 31, 2005
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Table of Contents
Letter to Members of the Audit Committee
Status of the Audit, Audit Scope and Related Representations
Audit Results and Matters to Report to the Audit Committee
Audit Findings
Areas of Audit Focus
Internal Controls and Other Matters
Appendix A: Independence Letter
Appendix B: Management Letter
@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2005 Report to the Audit Committee
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2
3
4
6
7
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Deloitte
Deloitte & Touche LLP
5140 Yonge Street
Suite 1700
Toronto, ON M2N 6L7
Canada
Tel: (416) 601 6150
Fax: (416) 601 6151
www.deloitte.ca
June 13,2006
Members of the Audit Committee
The Corporation ofthe City of Pickering
Dear Committee Members:
We are pleased to submit this report on the results of our audit of the consolidated financial statements of
The Corporation of the City of Pickering (the "City") for the year ended December 31,2005.
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Our audit was completed in accordance with the audit plan presented to you on February 7, 2006. Our
professional standards require that we communicate with you celiain matters that may be of interest to you
in fulfilling your obligation to oversee the financial reporting and disclosure process for which management
of the City is responsible. This repOli is designed to summarize certain aspects of the 2005 audit of the
consolidated financial statements, comment on significant matters regarding the audit and other matters
which we believe will be of interest to the Committee.
This report has been provided to the Audit Committee of the City on a confidential basis. It is intended
solely for the use of the Audit Committee and we disclaim any responsibility or obligation to any third
party who may rely on this report. The matters addressed in this report are a by-product of the financial
statement audit and may not necessarily identify all matters that may be of interest to the Committee in
fulfilling its responsibilities.
We wish to express our appreciation for the excellent cooperation we received during 2005 from the senior
management and Finance staff and the many employees of the City with whom we work in the discharge of
our various responsibilities.
Yours sincerely,
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Chartered Accountants
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Member of
Deloitte Touche Tohmatsu 1
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Status of the Audit, Audit Scope and
Related Representations
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. The audit of the December 31, 2005 consolidated financial statements is
substantially complete.
. Our opinion on the 2005 financial statements will:
- be signed following approval by council
- be dated April 7, 2006
- state that the consolidated financial statements present fairly, in all material
respects, the financial position of the City as at December 31, 2005 and the
results of its operations and the changes in its financial position for the year then
ended in accordance with Canadian generally accepted accounting principles.
. The audit approach was consistent with the audit plan we provided to you on
February 7, 2006.
. Our audit was conducted in accordance with Canadian Generally Accepted Auditing
Standards (GAAS) and our firm standards.
. We examined, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, therefore, we would not necessarily detect all weaknesses,
errors or other irregularities that might have occurred.
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. We assessed the accounting principles used and significant estimates made by
management.
. We evaluated the overall financial statement presentation.
. Tests and procedures that we considered necessary were used to form an opinion
on the consolidated financial statements.
. We are independent of the City as is required to provide an independent audit
opinion. A copy of our annual independence letter to the Committee is included in
Appendix A of this report.
@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
2
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Audit Results and Matters to Report to
the Audit Committee
4.
5.
6.
7.
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8.
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1. Significant weaknesses in internal controls.
No significant weaknesses in internal
controls relating to the financial
reporting process were identified.
2. Illegal Acts
See Management Letter (Appendix B).
None noted.
3. Significant transactions inconsistent with
the ordinary course of business, including
fraud or possible fraud.
Unusual related party transactions. None noted.
None noted.
New significant accounting principles or None.
policies.
Disagreements with management. None.
Management consultation with other None noted.
accountants about any significant auditing or
accounting matters.
Unusual transactions that significantly None noted.
increase risk of loss.
Actions that, if they become public, might None noted.
cause embarrassment.
10. Non-compliance with regulatory None noted.
requirements.
11. Major issues discussed with management None.
that influence audit appointment.
12. Management's judgments and accounting Reasonable (see page 4).
estimates.
13. Misstatements, including unadjusted audit See Audit findings (page 5).
differences.
14. Difficulties encountered during the audit. None.
15. Limitations placed on the scope of our audit. None.
@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
3
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Audit Findings
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Management judgments and accounting estimates
The preparation of the financial statements requires management to exercise
judgment and utilize assumptions to make estimates. The key areas where
management estimates are required are as follows:
. Year-end accruals including post employment benefit liability and WSIB benefit
liabilities
. Environmental liabilities
. Property tax appeals
. Legal claims
. Allowance for doubtful accounts receivable
Management uses the assistance of an actuary in determining the post-employment
benefits liability. The WSIB liability at year end is calculated by WSIB using
management's best estimates. This is consistent with other municipalities and we
believe these estimates to be reasonable.
Management is also required to make estimates for any environment liabilities, legal
claims, property tax appeals and the provision for doubtful accounts receivable.
Management makes these estimates based on the information available, at a point in
time, when preparing the financial statements.
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The City is involved in ongoing property assessment appeals. In particular, there is
one large appeal outstanding. The outcome of this appeal is not determinable as at the
date of reporting as the parties are still in negotiation and accordingly, no provision
has been made in these financial statements for any liabilities which may result.
Management believes that the Contingency Reserve of $10,774,911 at December 31,
2005 will be sufficient to cover any potential liability that may arise from the
settlement of these property assessment appeals. Approximately, $5 Million of this
reserve represents amounts which have been transferred to the reserve through the
2003 to 2005 budget process to fund this contingency.
Related tax appeals from 1999 to 2002 have been settled. The City has filed a
Statement of Issues with the Assessment Review Board for taxation years 2003
through 2005.
Overall, we believe the accounting policies selected and the application thereof to be
appropriate for the City. Estimates and assumptions used have been assessed against
standard practice and appear to be reasonable.
@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
4
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Audit Findings (continued)
Unadjusted differences
The following adjustments were discussed with City management but not adjusted:
. Understatement of cash and accounts payable due to stale dated cheques of
$5,273.
. Reclassification from accounts receivable to cash in the amount of $82,721
relating to cash balances held in the Nesbitt Burns investment portfolio.
. Overstatement of transfer from the operating fund to capital fund in the
amount of $31,026 relating to capital expenditures to be incurred during fiscal
2006.
. Overstatement of other revenues in the amount of $32,500 relating to Climate
Protection Project as these revenues were invoiced, earned and collected during
fiscal 2006.
Adjusted differences
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The following adjustments were discussed with City management and were adjusted:
. Accrual for capital fund expenditures in the amount of $167,082 relating to
work performed to December 31, 2005.
. Reclassification of a provincial capital grant in the amount of $154,531 to
deferred revenue, as eligible capital expenditures were not complete at
December 31, 2005.
. Provision of $306,000 relating to the City's share of APTA inventory and
$121,000 relating to the City's share of post employment benefits as
negotiations with the Region are ongoing with respect to the ultimate
realization of assets and assumption of liabilities by the Durham Region Transit
Commission.
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@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
5
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Areas of Audit Focus
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On February 7th, 2006, we reported to you our planned key areas of audit focus. The following
summarizes our findings in respect of these areas:
Liabilities . Completeness of certain . Review of Actuarial Reports . Satisfactory
liabilities such as Post- including calculations and
employment benefit and assumptions used
WSIB . Review the City's calculations and
information
. Ensure appropriate accounting
treatment has been applied
. Review related note disclosure in
the financial statements
. Reliance on the City's actuary with
respect to actuarially determined
liabilities
Reserve and . Various activities were . Review of continuity and material . Satisfactory
Reserve Funds approved and incurred transactions (See audit
during the year . Review of revenue recognition findings)
. Initiatives to improve the criteria for those externally
overall recording of these restricted reserve funds classified
activities to promote as deferred revenue. '~-
accuracy and efficiency
Revenue - . Completeness of revenue . Review of systems and procedures · Satisfactory
Clerks . Develop expectation for revenue
Department accounts and compare to amounts
recorded
Investment in . Compliance with PS 3060 . Assess implication on financial . Satisfactory
Veridian Government Partnerships statements of the City
Corporation . Value of Investment . Communicate with Veridian's
auditor regarding reliance on audit
Management . Requires management . Focused review of calculations . Satisfactory
Estimates judgment . Discussion with management (See audit
(i.e. allowance for
assessment appeals, . Analytic Review of related account findings)
contingent liabilities, etc.)
Year-end cut- . Accounting for revenue . Focused substantive testing on . Satisfactory
off and expenditures in the accounts payable, accruals, (See audit
proper period deferred revenue and receivables findings)
Public Sector
Accounting
(PSAB)
Standards
. Impact of any new
accounting standards
especially:
- Contingent liabilities
- Contractual obligations
. Work with Finance staff to ensure
compliance
· Satisfactory
@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
6
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Internal Controls and Other Matters
Our audit was designed to provide a cost-effective basis for formulating our opinion on
the financial statements of the City. As part of our examination we reviewed and
evaluated certain aspects of the systems of internal control and the accounting
systems to the extent we considered necessary to make an evaluation of such systems
and procedures in accordance with Canadian generally accepted auditing standards.
The main purpose of our systems review was to assist in determining the nature,
extent and timing of our audit tests and to establish the degree of reliance, which we
could place on selected controls; it was not to determine whether internal controls
were adequate for management's purposes.
While the audit did not include an in-depth evaluation of all systems or all aspects of
any individual system and should not therefore be relied upon to identify all significant
internal control weaknesses, or all errors, irregularities or inefficiencies that might
occur, we undertake to report such matters to you when they come to our attention.
Our management letter is included as Appendix B. In addition to the comments in
Appendix B we also provided an interim management letter at the February 7, 2006
audit committee meeting.
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@ Deloitte & Touche LLP
and affiliated entities.
The Corporation of the City of Pickering
- 2006 Report to the Audit Committee
7
Appendix A
@ Deloitte & Touche LLP
and affiliated entities.
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Independence Letter
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The Corporation of the City of Pickering
- 2005 Report to the Audit Committee
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Deloitte
Deloitte & Touche LLP
5140 Yonge Street
Suite 1700
Toronto, ON M5J 2V1
Tel: (416) 601-6150
Fax: (416) 601-6151
www.deloitte.ca
June 9, 2006
The Audit Committee
The Corporation of the City of Pickering
One The Esplanade
Pickering Civic Complex
Pickering ON L 1 V 6K7
Dear Audit Committee Members:
We have been engaged to audit the consolidated financial statements of the Corporation of the City of
Pickering, including the Pickering Public Library Board and the City of Pickering Trust Funds
(collectively, the "City") for the year ended December 31,2005.
Canadian generally accepted auditing standards (GAAS) require that we communicate at least annually
with you regarding all relationships between the City and our Firm that, in our professional judgment, may
reasonably be thought to bear on our independence.
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In determining which relationships to report, these standards require us to consider relevant rules and
related interpretations prescribed by the appropriate provincial institute / ordre and applicable legislation,
covering such matters as:
(a) holding a financial interest, either directly or indirectly, in a client;
(b) holding a position, either directly or indirectly, that gives the right or responsibility to exert
significant influence over the financial or accounting policies of a client;
( c) personal or business relationships of immediate family, close relatives, partners or retired partners,
either directly or indirectly, with a client;
(d) economic dependence on a client; and
(e) provision of services in addition to the audit engagement.
We have prepared the following comments to facilitate our discussion with you regarding independence
matters arising since May 20, 2005, the date of our last letter.
We are not aware of any relationships between the City and our Firm that, in our professional judgment,
may reasonably be thought to bear on independence that have occurred from May 20, 2005 to June 9,
2006.
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The Corporation of the City of Pickering
June 9, 2006
Page 2
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The fees billed to the City from May 20,2005 (the date of our last independence letter) to June 9, 2006 are
as follows:
Citv of Pickering
. Additional audit and financial statement work
related to the year ended December 31, 2004 $7,500
. Balance of audit fee for the year ended December 31, 2004 $500
. Clerk's Department Miscellaneous Revenue Sources
Process and Controls Review - Status update $8,350
. Tax related issues $800
. Clerks Department and Cash Handling procedures review $6,400
. Audit for the year ended December 31, 2005 $50,000
(Audit fee for December 31,2005 per engagement letter $55,000)
Citv of Pickering Public Librarv Board
. Balance of audit fee relating to the audit for the
year ended December 3 1, 2004
. Audit for the year ended December 31,2005
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$750
$3,750
GAAS requires that we confirm our independence to the audit committee in the context of the Rules of
Professional Conduct of the Institute of Chartered Accountants of Ontario. Accordingly, we hereby
confirm that we are independent with respect to the City within the meaning of the Rules of Professional
Conduct of the Institute of Chartered Accountants of Ontario as of June 9,2006.
This report is intended solely for the use of the audit committee, the board of directors, management, and
others within the City and should not be used for any other purposes.
We look forward to discussing with you the matters addressed in this letter at our upcoming meeting.
Yours truly,
d)~ o/--/~e.- LLI
Chartered Accountant
Member of
Deloitte Touche Tohmatsu
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Appendix B
@ Deloitte & Touche LLP
and affiliated entities.
Management Letter
The Corporation of the City of Pickering
- 2005 Report to the Audit Committee
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Deloitte
Deloitte & Touche LLP
5140 Yonge Street
Suite 1700
Toronto ON M2N 6L7
Canada
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Tel: 416-601-6150
Fax: 416-601-6151
www.deloitte.ca
June 13,2006
Private and confidential
Audit Committee Members
The Corporation of the City of Pickering
One The Esplanade
Pickering ON Ll V 6K7
Dear Audit Committee Members:
Management Comments
In February 2006, we reported interim management comments to you based on the results of our interim
audit. We have recently completed our audit related to the examination of the consolidated financial
statements of the City of Pickering for the year ended December 31, 2005. Based on the results of our
audit, we have provided the attached additional management comments for your consideration.
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The primary focus of our audit is to enable us to form an opinion on the consolidated financial statements
of the City. We review and test the financial systems and related internal controls to the extent required
by generally accepted auditing standards. The main purpose of our systems and controls review was to
assist us in determining the nature, extent and timing of our audit tests and to establish the degree of
reliance, which we could place on selected controls; it was not to determine whether internal controls
were adequate for management's purposes.
We would like to acknowledge the assistance and co-operation of management and all the staff during the
course of our audit. We would be pleased to discuss our recommendations and provide any assistance
you may require with respect to implementation.
Yours truly,
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Chartered Accountants
Enclosure
c. C. T. Quinn, Chief Administrative Officer
G. Paterson, Director of Corporate Services
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THE CORPORATION OF THE CITY OF PICKERING
Management Comments
December 31, 2005
Page I of 7
1. Payroll
Observation:
Currently all non union and a select group of union hourly employees are paid up to date. All other
city employees are paid one week behind. For employees that are paid up to date, actual processing
of the related timesheets lags by one week. The actual amount paid to these employees for the
second week of the pay period is estimated based upon the assumption that the employee has
worked a standard workweek. If the employee worked other than the standard hours, the payroll
section will note this when the timesheets are received (in the following pay period), and
adjustments to pay are made accordingly. There is a risk of overpayment given sick time usage,
vacation time usage and unpaid leaves. Further, if the payment is made before a period end and the
adjustment is made after a period end, the risk of error increases.
Recommendation:
Consideration could be given to changing this process such that employees are not paid in advance.
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Management's Response:
Management concurs.
Currently non-union and some union employees are paid to date while the balance of employees are
paid one week behind. Now that timesheets, which are one week behind, are automatically
uploaded to the payroll system it makes sense to have all staff paid one week behind in order that
they are being paid for the hours submitted on the timesheets.
The Manager, Accounting Services and Payroll staff are currently preparing a proposal, for the
Chief Administrative Officer's consideration, to provide for the transition of the above-noted group
of employees to be paid one week behind as is the balance of the Corporation.
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THE CORPORATION OF THE CITY OF PICKERING
1\tlanagement Comments
December 31, 2005
Page 2 of 7
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2. Review of L02ical Access Ril!:hts
Observation:
We observed that there is no regular process to review logical access rights.
Without a regular review process, the risk that unauthorized users may access confidential data or
that authorized users may have access to data that they no longer are privy to, is increased. Periodic
reviews help ensure access rights remain current and are relevant to users' job functions and help to
serve as a check that access rights assigned to terminated employees have been revoked on a timely
basis.
We understand that the Information Technology ("IT") group acts as custodian of information
assets on behalf of business owners. Thus, an effective process would entail the IT group working
jointly with other groups and data owners to implement an effective review process.
Recommendation:
We recommend that management reviews, either annually or semi-annually, a user listing detailing
users with active access to application systems along with their access rights. During the review,
management should verify that proper segregation of duties is being maintained within the City.
Management's Response:
Agreed. While there is agreement regarding the need, the City currently does not have the software
capable of performing such a task, and to complete the task manually would involve far too many
of IT's resources. In 2006, IT is investigating the purchase of possible software to automate this
task, but has yet to identify a viable solution.
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THE CORPORATION OF THE CITY OF PICKERING
lVIanagement Comments
December 31, 2005
Page 3 of7
3. Business Continuity and Disaster Recovery PlanniDl.?:
Observation:
Currently there is no Business Continuity Plan ("BCP") or Disaster Recovery Plan ("DRP") in
place to detail the steps required to recover the City's critical business processes in the event of a
disaster or system failure.
A business continuity plan is wider than a disaster recovery plan, which tends to focus on the IT
environment. The objective of a BCP would be to enable recovery of all of the critical business
processes of the City, rather than just the computer systems.
There is a risk that in the event of an unexpected outage, the City would not be able to continue
normal operations and would be unable to recover their systems and key business activities without
significant cost or loss to the City. The recovery of services in the shortest period of time will
reduce the cost of the event to the City and minimize the negative public relations aspects of such
an event.
We are pleased to note that as a first step to a formal Business Continuity/Disaster Recovery Plan, a
Business Impact Analysis was conducted for the IT group during fiscal 2004. However, our
understanding is that no follow-up action was taken after the initial phase of this project.
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Recommendation:
We recommend that the City Council revisit the Business ContinuitylDisaster Recovery project that
was initiated during fiscal 2004 in order to ensure that proper arrangements are in place in the
unexpected event of a disaster.
Management's Response:
Agreed. IT is currently in the process of reviewing its own Business Continuity and Disaster
Recovery plans. It is anticipated that this exercise will lead towards more corporate wide reviews
of both topics.
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THE CORPORATION OF THE CITY OF PICKERING
lVlanagement Comments
December 31, 2005
Page 4 of 7
4. Windows 2003 Mi2ration
Observation:
During our review, we noted that the City is in the process of migrating from the Windows 2000 to
Windows 2003 operating system. As a result, this change at the IT infrastructure level may give rise
to new risks, security risks and vulnerabilities if the process is not properly managed.
Managing the Windows environment requires a disciplined approach to patch application and
security fixes so that known vulnerabilities are addressed on a timely basis.
Recommendation:
We recommend that security hardening standards be developed for the new Windows 2003
environment.
This process will ensure the implementation of consistent standards over locking down critical
Windows servers including:
. The creation of server building and hardening checklists;
. Application of vendor patches as required;
. Utilizing best practice security settings to mitigate the potential risk of known
vulnerabilities being exploited;
. System administrator accounts being tightened; and
. Password policies being implemented.
Hardening standards will also be required to be periodically updated to address newly found
vulnerabilities. All critical servers should then be hardened according to the established hardening
standard and any exceptions should be reported for those devices that do not meet the standard.
Management's Response:
Agreed. The 2006 budget contains funds for software that will automatically update the servers
with the latest patches and security updates. The City currently has a policy related to passwords,
and the system administrator accounts are already secured. The upgrades will occur in a secure and
methodological manner.
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THE CORPORA. TION OF THE CITY OF PICKERING
J\llanagement Comments
December 31. 2005
Page 5 of 7
5. IT Documentation
Observation:
During our audit we noted that the IT Department at the City performs a number of functions/tasks
that are not documented. Examples include:
. Audit of users access profiles;
. Network monitoring activities; and
· Review of audit logs.
From the audit perspective, documentation is important as it provides reliable evidence of the
performance of a task. More importantly, from an operational standpoint, documentation helps
ensure consistency, ensure adherence to corporate policies and regulatory requirements and helps
ensure knowledge transfer during absence or turnover of key staff.
Recommendation:
~
We recommend that City staff review the above list as well as other day-to-day tasks and
implement procedures to ensure sufficient and appropriate evidence is retained to verify that the
function/task was performed as well as for accountability purposes. Evidence can be retained via
email, electronic or hard copy checklists, using help desk tracking software or other appropriate
means.
Management's Response:
Management agrees with the Observation. Some monitoring activities are currently undertaken and
software will be reviewed in 2006 to assist in the audit activities. However, resource limitations
similar to many municipalities the same size as the City, are not uncommon.
,'~
THE CORPORATION OF THE CITY OF PICKERING
Management Comments
December 31, 2005
Page 6 of 7
~;
6. Chane:e Manae:ement Procedures and Documentation (carried forward from 2004 audit)
Observation:
During our audit, it was observed that the City appears to lack important change management
procedures and documentation. There is currently no documentation of changes or testing, and no
formalized sign-offs.
As part of our procedures, we tried to obtain supporting documentation, including documented
approvals prior to any changes being made within the IT environment and to support testing. For
the following areas, no documentation was available:
· Application changes
The Vailtech PO module was implemented at the beginning of 2006. For audit purposes,
change related documentation, including a copy of the test plan and results were requested,
however, were not available . Therefore, it was not possible to determine whether testing was
performed and if it was appropriate based on the risk level of the change.
· Database Change
In 2005, the Oracle database was upgraded from version 8 to 9i. A sample test plan and test
results were requested for audit testing purposes, however we were informed that test plans and
test results are not documented. Therefore, it was not possible to determine whether testing was
performed and if it was appropriate based on the risk level of the change. The risk of
inappropriate or insufficient testing is that the change may not perform as expected in the
production environment, hence disrupting the operations of the City. As a consequence, this
may financially impact the City.
. Network Change
We were informed that not all network changes are tested before they are implemented into
production.
. Operating System patching
We requested supporting documentation for a sample patch or system fix that was applied to
the Windows 2000 Server. We were informed that not all system software changes are tested or
that testing, if completed, is documented.
Without formalized procedures for change management, a risk exists that unauthorized or
inappropriate modifications could be made to the infoill1ation systems. These changes could result
in system conflicts and instability, leading to downtime and financial loss.
~,
~
THE CORPORATION OF THE CITY OF PICKERING
Management Comments
December 31,2005
Page 7 of7
6. Chan2e Mana2ement Response Procedures and Documentation (continued)
Recommendation:
The City should consider creating a formal change management policy and procedure for
documenting all changes, testing and signoffs from testers, management, and IT personnel.
Management's Response:
Agreed. A change management process is currently being tested for the servers and the network
infrastructure, and will be implemented into production during May. By the end of 2006, the
change management process will include application and database changes as well.
Not all changes to servers can be tested prior to implementation. To do so would require test
servers for almost every production server. The City is implementing a test system for the TSE
(Canaveral) servers into which about 150 PCs will connect prior to December, 2006.
To document simple database version upgrades when the steps are fully documented by Oracle
seems to be an unnecessary effort. The testing and implementation of completely new systems
should be documented. However, once again the number of available staff must be considered.
,,....
.~-
~ ~'
i."
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Deloitte
@ Deloitte & Touche LLP and affiliated entities.
Deloitte, one of Canada's leading professional services firms, provides
audit, tax, consulting, and financial advisory services through more than
6,100 people in 47 offices. Deloitte operates in Quebec as Samson
BelairjDeloitte & Touche s.e.n.c.r.1. The firm is dedicated to helping its
clients and its people excel. Deloitte is the Canadian member firm of
Deloitte Touche Tohmatsu.
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss
Verein, its member firms, and their respective subsidiaries and affiliates.
As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor
any of its member firms has any liability for each other's acts or
omissions. Each of the member firms is a separate and independent
legal entity operating under the names "Deloitte," "Deloitte & Touche,"
"Deloitte Touche Tohmatsu," or other related names. Services are
provided by the member firms or their subsidiaries or affiliates and not
by the Deloitte Touche Tohmatsll Verein.
Member of
Deloitte Touche Tohmatsu
'Wf"
ATTACHMENT #-4-. TO REPORT # (~S:,3(-r) ~
~
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December 31, 2005
~
M W Document in 2211 City of Pickering- December 31, 2005- Job; 6/14/06; 4:18 PM
FOR DISCUSSION PURPOSES ONLY
r"
1'''1
~ (" ~'
"-":j
Auditors' Report
To the Members of Council, Inhabitants and
Ratepayers of the Corporation of the City of Pickering
Deloitte & To he LLP
5140 Yonge treet
Suite 170
Toronto N M2N 6L7
Canad
We have audited the consolidated statement of fmancial p sit'on of the C oration of the City of
Pickering as at December 31,2005 and the consolidated st e ts of financ. 1 activities and of changes
in [mancial position for the year then ended. These financ. 1 s a ts are e responsibility of the City's
management. Our responsibility is to express an opinio on thes ci statements based on our audit.
cepted auditing standards. Those
standards require that we plan and perform an a it to obtain reas able assurance whether the financial
statements are free of material misstatement. An audit includ s examining, on a test basis, evidence
supporting the amounts and disclosures in th fi;~te nts. An audit also includes assessing the
accounting principles used and significan est' a e y management, as well as evaluating the
overall financial statement presentation.
~s::;
In our opinion, these consolidated fi cial statements resent fairly, in all material respects, the fmancial
position of the City as at Decem er 31, 2005 and e results of its operations and the changes in its
[mancial position for the year t ~ acc rdance with Canadian generally accepted accounting
priociples. ~ /
M Document in 2211 City of Pickering- December 31, 2005- Job: 6/14/06; 4:18 PM
<~"
FOR DISCUSSION PURPOSES ONLY
THE CORPORATION OF THE CITY-OF PICKERING
Table of Contents
December 31, 2005
/
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Consolidated Statement of Financial Position
Consolidated Statement of Financial Activities
2
Consolidated Statement of Changes in Financial Position
3
Notes to the Consolidated Financial Statements
4-18
Consolidated Schedule of Operating Fund Financial Activitie ff/lUlld Balanc
Consolidated Schedule of Capital Fund Financial Activi . es an~Bal
19
20
Consolidated Schedule of Reserves and Reserve F ds Financial A
21
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M Document in 2211 City of Pickering- December 31. 2005- Job; 6/14/06; 4:18 PM
FOR DISCUSSION PURPOSES ONLY
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F
THE-CORP01~ATTO-N-O-F-THE-CITY-O-F-PTCKERIN-G
Consolidated Statement of Financial Position
December 31, 2005
2005
FINANCIAL ASSETS
Cash
Short-term investments
Taxes receivable
Accounts receivable
Other current assets
Investment in Veridian Corporation (Note 4)
Promissory notes receivable (Note 5)
$
8,589,2
34,719.)24
9,4 ,807
3 55,502
280,449
32,299,411
25,069,000
113,703,735
LIABILITIES
Accounts payable and accrued liabilities
Other current liabilities
Deferred revenue (Note 6)
Long-term liabilities (Note 9)
Post-employment benefit liability (Note 8(a))
WSIB benefit liabilities (Note 8(b))
11,024,637
413,404
24,113,832
8,791,000
2,297,850
631,786
47,272,509
NET FINANCIAL ASSETS
NON-FINANCIAL ASSETS
69,416,643
66,431,226
Inventory
NET ASSETS
438,987
$ 69,855,630
448,207
$ 66,879,433
$ 1,271 $ 88,944
4,079,053 7,043,941
20,725,437 19,224,908
61,670,447 58,443,431
86,476,208 84,801,224
(16,620,578) (17,921,791)
$ 69,855,630 $ 66,879,433
~
Worksh et in 2210 City of Pickering- December 31, 2005 Job # 91686; 6/14/2006; 4:18 PM
Page 1 of21
FOR DISCUSSION PURPOSES ONLY
THE-CORPOKL\TrO~OF-THE-CITY-OF-PICKE-RING
Consolidated Statement of Financial Activities
-~ Year ended December 31,2005
2005 2004
Budget Actual Actual
(Note 18)
REVENUES
Residential and farm taxation $ 26,281,384 $ 24,4 ,302
Commercial and industrial taxation 6,366,104 6 42,643
Taxation from other governments 7,004,703 ,736,363
User charges 9,438,073 9,260,151
Government grants and fees 3,815,492 537,046
Developer contributions and donations 282,500 607,555
Development charges and
developer contributions earned 1,419,973
Investment income 568,060
Penalties and interests on taxes 1,455,787
Fines 379,320
Interest on promissory notes 1,905,294
Other 3,125,791
Total revenues 59,053,285
EXPENDITURES (Note 14)
Current
General government 9,377,042 10,250,908
Protection to persons and property 12,977,758 12,486,523
Transportation services 12,165,029 10,490,626
Environmental services 42,682 13,745
Social and family services 348,748 358,140
Recreational and cultural services 15,068,380 14,581,546
,~ Plannino- and develo ment 1,749,085 1,776,151
51,728,724 49,957,639
1,368,255 1,161,949 516,495
968,100 253,167 189,459
11,797,450 6,644,547 2,562,144
190,000 6,244
280,300 15,314 21,472
2,826,290 3,207,192 2,545,732
4,600 4,411
17,434,995 11,286,580 5,841,546
71,023,309 63,015,304 55,799,185
3,227,016 1,861,993
(5,745,737) 2,985,417 5,1l6,093
(1,679,245) (807,000) (266,000)
(1,110,725) (870,266)
4,244,800 5,031,000
8,400 (11,631)
287,000 267,000
321,112 (3,187)
2,565,555 (1,301,213) 4,146,916
(9,220) 44,397
$ (3,180,182) $ 1,674,984 $ 9,307,406
---- -_._~---_._..- __ ______.~_.._.___._ u_ .... ---- ---- .------.--------
Worksh et in 2210 City of Pickering- December 31, 2005 Job # 91686; 6/14/2006; 4:18 PM Page 2 of2l
FOR DISCUSSION PURPOSES ONLY
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THE-CDRPDRATrO~O~-THE-CITY-OF-PTCKERIN G
Consolidated Statement of Changes in Financial Position
Year ended December 31, 2005 -~,,-
2005 2004
NET (OUTFLOW) INFLOW IN CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net revenue $
Change in equity in Veridian Corporation
Uses
Increase in taxes receivable (116,730)
Increase in accounts receivable
Increase in other current assets
Decrease in other current liabilities
Decrease in WSIB benefit liabilities (3,187)
(119,917)
222,510
11,572
309,651 4,073,700
7,682 -~-
3,544,473 4,237,289
8,400 77,869
321,112
4,183,636 8,630,622
1,529,477 11,764,805
(8,568,563) (11,865,752)
5,031,000
(807,000) (266,000)
1,968,000 437,880
(7,407,563) (6,662,872)
(5,878,086) 5,101,933
8,589,242 3,487,309
$ 2,711,156 $ 8,589,242
Worksh et in 2210 City of Pickering- December 31, 2005 Job # 91686; 6/14/2006; 4;18 PM
FOR DISCUSSION PURPOSES ONLY
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Page 3 of21
The consolidated financial statements of The Corporation of the City of Picke ng (the "City")
the representations of management prepared in accordance with generall accepted acco
principles for local governments as established by the Public Sector Accou mg Board ("PS
the Canadian Institute of Chartered Accountants. Significant account' policies adopte
City are as follows:
(a) Reporting entity
(i) Consolidated statements
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2005
1. SIGNIFICANT ACCOUNTING POLICIES
The consolidated fmancial statements reflect he assets, liab' lties, revenues and
expendihrres of the operating fund, capital d, reserve s and reserves. The
reporting entity is comprised of the activitie of all committee of Council and the City
of Pickering Public Library Board which is ~~d by the ity.
All material inter-fund transactions and alan~e' . ated on consolidation.
(ii)
Proportionate consolidation
-I
The consolidated financial state ents reflect the ty's proportionate share ofthe assets,
liabilities, revenues and expe ihrres of the Aj Pickering Transit Authority (APTA).
(see Note 2). ~
All inter-entity transa ions an bala ces are eliminated when proportionately
consolidated.
~
(iii)
s f school boards and the Region of Durham
The ta tion, other revenues, expendihrres, assets and liabilities with respect to the
opera ons of the school boards and the Region of Durham are not reflected in these
co olidated financial statements.
Trust funds and their related operations administered by the municipality are not
consolidated, but are repOlied separately on the Tmst Funds Statement of Financial
Activities and Statement of FiJlancial Position.
M Document in 2211 City of Pickering, December 31, 2005- Job: 6/14/06: 4:18 PM
Page 4 of21
FOR DISCUSSION PURPOSES ONLY
(ii)
Short-term investments are comprised ofillghly liquid guar eed investment
and are recorded at the lower of cost plus accrued interest jil~arket value.
Tangible capital assets ~
Tangible capital asset expenditures incurred d . g the year are as capital
expenditures in the consolidated statement offill cial activities.
THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2005
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Basis of accounting
(i) Short-term investments
(iii)
Tax Capping
the Ontario Fair
(iv) Deferred revenue
~..
(v)
The
(vi)
Cost is determined on a
Gove ent transfers are recognized in the fmaneial statements in the period in willch
the ents giving rise to the transfer occur, eligibility criteria are met, and reasonable
es . nates of the amount can be made.
The preparation of financial statements in conformity with Canadian generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and accompanying notes. Actual
results could differ from these estimates.
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M Document in 2211 City of Pickering- December 31,2005- Job; 6/14/06; 4:18 PM
Page 5 of21
FOR DISCUSSION PURPOSES ONLY
THE CORPORATION OF-THELITY-OF-pn:::'KRRING
Notes to the Consolidated Financial Statements
December 31, 2005
~.
2. AJAX PICKERING TRANSIT AUTHORITY
Effective September 4,2001, a joint Board of Management was established by e City ofPicke
and the Town of Ajax by way of a Merger Agreement for operating transit system ross
Pickering and Ajax. Operations, under the control of the joint bo ,commenced fective
January 1, 2002.
In January 2005, the Councils of the City of Pickering and the To n - Ajax passe a resolution
agreeing to the transfer of the responsibilities for transit service to
Durham (the "Region"). On January 1, 2006 the Ajax Pic ring Trans! u ority ("APT A")
transferred its operations to the Region as part of the Du am Region Tr sit Commission in
accordance with Regional By-law #85-2004.
~..., 2005 2004 .
Financial position:
Financial assets $ 1,004,441 $ 1,071 ,969
Non-frnancial assets 536,894 490,117
Liabilities (1,985,097) (1,826,710)
Net liabilities $ (443,762) $ (264,624)
$ (233,062) $ (57,524)
(210,700) (207,100)
$ (443,762) $ (264,624)
$ 13,318,943 $ 11 ,574,369
(12,026,290) (10,300,066)
(1,518,568) (1,309,065)
$ (225,915) $ (34,762)
$ (57,524) $ (170,849)
(225,915) (34,762)
3,600 15,938
46,777 132,149
$ (233,062) $ (57,524)
Negotiations between the City of Pickering, Town of ~'ax d the Regi are still underway as to
the ultimate realization of assets and assumptions . il" es by e Durham Region Transit
Commission
During 2006, APTA will collect receivables an settle liabilities tstanding at December 31,2005.
Any remaining fund balance will be settled 0 e negotiations w' the Region are completed.
information for the Transit
M Document in 2211 City of Pickering- December 31. 2005- Job: 6/14/06: 4:18 PM
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FOR DISCUSSION PURPOSES ONLY
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THE-C-ORP-ORATrO~OVTHE-CITY-o~--PrCKERING
Notes to the Consolidated Financial Statements
December 31, 2005
3. OPERATIONS OF SCHOOL BOARDS AND THE REGION OF DURH.Ai'\1
Further to Note 1 (a) (iv) requisitions are made by the Region of Durh
requiring the City to collect property taxes and payments in lieu of prope
The amounts collected and remitted are summarizes as follows:
Taxation
Payments in lieu of taxes
$
39,694,486
526,959
40,221,445
4. INVESTMENT VERIDIAN CORPORATION
(a) Veridian Corporation is owned by the City o~' e' g, Tow of Ajax, Municipality of
Clarington and the City of Belleville. Ve'ili oratio , as a government business
partnership, is accounted for on the mod' led equ' asi in these [mancial statements.
Veridian Corporation serves as the electri al distribution ut" . ty for a number of communities
including the four noted above and con cts non-regulate utility service ventures through its
subsidiaries.
The following table provides con nS~lemen ry consolidated [mancial information for
the corporation and its subsidi . s for n d December 31 :
2005 2004
Financial Position:
Assets
Current
Capital and inta b'b
Other
Total assets
evenue
Other income
Expenses
Net income for the year
M Document in 2211 City of Pickering- December 31. 2005- Job; 6/14/06: 4:18 PM
$ 92,281,194
132,918,454
2,201,700
$ 227,401,348
$ 130,029,467
15,522,058
145,551,525
67,285,173
24,910
14,539,740
81,849,823
$ 227,401,348
$ 207,388,764
4,894,868
204,412,861
$ 7,870,771
FOR DISCUSSION PURPOSES ONLY
~.}'
$ 70,709,680
121,166,690
1,979,006
$ 193,855,376
$ 27,726,836
75,294,000
12,055,488
115,076,324
67,285,173
24,910
11,468,969
78,779,052
$ 193,855,376
$ 180,210,703
5,460,962
181,130,219
$ 4,541,446
~_.
Page 7 of21
(i)
Insurance clail ~
The Corpo tio Q e er of the Municipal Electric Association Reciprocal
Insurance xchang, " "), which was created on January 1,1987. A reciprocal
insuran exchange may e defmed as a group of persons formed for the purpose of
exch ging reciprocal contracts of indemnity or inter-insurance with each other.
M provides g eralliability insurance to member electric utilities.
$
"~
THE-C-ORPDRATION-OF-THE-CITYUF-PICKERL.~G
Notes to the Consolidated Financial Statements
December 31, 2005
4. INVESTlVlENT VERIDIAN CORPORATION (continued)
(b) City of Pickering's equity represented by:
Promissory notes receivable (Note 5)
Investments in Veridian Corporation
Initial investment in shares of the Corporation
Accumulated income
Accumulated dividends received
Increase in value of investments
Total investment
30,496,196
1,359,414
(665,020)
1,108,821
$ 32,299,411
(c) Equity in Veridian Corporation
2005
2004
Balance, beginning of year
Equity share of net income for the e
Balance, end of year
58,443,431
3,227,016
61,670,447
$ 56,581,438
1,861,993
$ 58,443,431
-~>
(d) Contingencies and guar
statements are as follows:
Corporation as disclosed in their fmancial
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FOR DISCUSSION PURPOSES ONLY
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THE-CORPURATIUN-OF-THE-CITY-OF-pn:KERING
Notes to the Consolidated Financial Statements
December 31,2005
.~.
4. INVESTl\-fENT VERIDlAN CORPORATION (continued)
(d) (continued)
(ii) Other claims
A class action claiming $500 million in restitutionary pa
on Toronto Hydro on November 18, 1998. The actio
Hydro-Electric Commission as the representative of
all municipal electric utilities in Ontario which hav
overdue utility bills at anytime after April 1 , 1981.
The action has not yet been certified
this time, it is not possible to quanti
Corporation.
'~
ossible to q tity the effect, if any, on the fInancial statements of
d ther ore on the fmancial statements of the City for this
n potential liability has been recorded in the fmancial
(iii)
eridian Corporation, under the terms of the shareholder agreement with Enersource
Corporation, requires security to meet credit security requirements of First Source
Energy Corporation ("First Source") to power suppliers for power purchase agreement
for market settlement purposes.
As at December 31, 2005, Vcridian Corporation's prop0J1ionate share of guarantees
posted on behalf of Fir:st Source~Y~I1ersource Co:rporation.totallcd $2,53~,000.
~,
M Document in 22JJ City of Pickering- December 31, 2005- Job: 6/14/06: 4:18 PM
Page 9 of 21
FOR DISCUSSION PURPOSES ONLY
( e) Lease commitments
, '-----THE-cURPUKt\TION-O~-THE-CITY-OF-PICKERING-
Notes to the Consolidated Financial Statements
,- December 31,2005
,~
4. INVESTMENT VERIDIAN CORPORATION (continued)
Future minimum lease payment obligations under operating leases ar
2006
2007
2008
2009
2010
Thereafter
$
5. PROMISSORY NOTES RECEIVABLE
6.
Promissory notes are payable by Veridian Corp, ration and Verid' Connections Inc. in the amount
of $7,095,000 and $17,974,000 respectively, with an interest ate of 7.6% and maturity dates of
November1,2006. These promissory note are convertible' to common shares at the option of the
holder at the rate of 1 common share for e~l'OOO ofp cipa1 then outstanding on or before the
maturity date. ~
DEFERRED REVENUE
2005 2004
$ 21,135,306 $ 19,496,777
2,103,060 2,166,696
19,166 14,035
722,039 161,515
850,684
1 819 264 1,601,076
26,649,519 23,440,099
1,008,786 673,733
$ 27,658,305 $ 24,113,832
M Document in 2211 City of Pickering- December 31, 2005- Job; 6/14/06: 4:18 PM
Page 10 of21
FOR DISCUSSION PURPOSES ONLY
',",' ,'"
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T. 'I
,- ":"-~"'"
6. DEFERRED REVENUE (continued)
THE-CDRPURATrONOF-THE-CITY-O~-PrCKERING
Notes to the Consolidated Financial Statements
December 31,2005
Continuity of deferred revenue is as follows:
Balance, beginning of year
$
Restricted funds received
General funds received
Interest earned
4,656,118
928,925
5,585,043
Revenue recognized in current operations
Revenue recognized in capital operations
General deferred revenues
Balance, end of year
$
7.
INTERFUND LOANS ~
As a means of funding various ca tal acq~sh&ns0 ds are borrowed by the Capital Fund from
Development Charges and Parkl nd deferred reve ue (obligatory reserve funds). These funds are
secured by ten year prornisso notes with inter st rates of 5.8% and 5.2% and 5 year promissory
notes with interest rates of 5. %. The financ' arrangements and ultimate repayment are approved
by Council through the c ~get proc ss. For the purpose of these financial statements, the
loans are included in am 0 v ed (Note 10). The following is a summary of the related
loans negotiated, by ction.
~i
2005
2004
$ 3,122,129
2,002,544
334,009
97,748
$ 5,556,430
$ 3,647,747
2,081,757
515,868
134,783
$ 6,380,155
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Page 11 of21
M Document in 2211 City of Pickering- December 31, 2005- Job; 6/14/06; 4:18 PM
FOR DISCUSSION PURPOSES ONLY
....._.--THE-CDRPDRATrONO~-THE-CITy-OF-prCKERlNG
Notes to the Consolidated Financial Statements
,- December 31, 2005
l-
I
(a) Post employment benefit liability
8. POST ElVIPLOYMENT BENEFIT LIABILITY
The City makes available to qualifying employees who retire b ore the age of 5, the
opportunity to continue their coverage for such benefits as e ended health a d drugs.
Coverage ceases at the age of 65. Dependent on eligibility, he h overage may e a shared
frnancial responsibility between the City and the retired emp y~. The City so provides
full time and permanent part-time employees a sick f e . ent d any unused
entitlement is accumulated year to year. This accumu ted entitle t' not vested and
therefore does not get paid out at the time of retirem t or terminatio. The most recent
actuarial valuation of the post-employment benefits w performed at J uary 1, 2004.
(i) Discount Rate
The present value as at Dece
discount rate of 6%.
~-'
(ii) Dental Costs
The current trend co
(iii)
M Document in 2211 City of Pickering' December 31. 2005- Job; 6/14/06; 4:18 PM
Page 12 of21
FOR DISCUSSION PURPOSES ONLY
-t; ---- -'r--":'" . ~-,.-"'--~
.,--,
-- -.----1'
tj
- lrf~ -- -I f
Accrued WSIB liability, beginning of year
Expense for the period
Benefits paid during the period
Accrued WSIB liability, end of year
THE-cDRP-ORA TfOX-OF-THE-CI TY-OF-prC.KERINli
Notes to the Consolidated Financial Statements
December 31, 2005
8. POST EMPLOYMENT BENEFITS LIABILITY (continued)
(b) Workplace safety and insurance liability (WSIB)
Effective January 1, 2001, the Corporation of the City of Picke ' g became a Sc
employer under the Workplace Safety & Insurance Act and follow a policy of self'
for all its employees.
Information about the City's WSIB liability is as follows:
2004
$ 634,973
76,903
(80,090)
$ 631,786
Management, using best estimates, iden ' led that the amo t provided in the liability account
at year-end of $952,898 (2004 - $631 86) is sufficien to cover the potentia1liability of all
existing claims granted by WSIB an outstanding as a ecember 31, 2005.
The outcome of any claims filed ith ~ terminable at this time.
A WSIB Reserve Fund was stab1ished ~o, The Reserve Fund balance at December 31,
2005 was $589,575 (2004 $378,731). In dition, the City purchased two insurance policies
that protect the City ag , st significant cl lIDS to the Corporation, The occupational accident
insurance pays loss ~' up~ to $350 00 per work related accident. The excess workers
compensation inde 't ance h a $350,000 deductible and will pay for claims up to
and including $25 0 r related accident,
9. LONG-TERM L ILITIES
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(a)
e oflong-term r bilities is made up of the following:
2005
2004
$ 7,984,000
$ 8,791,000
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M Document in 2211 City of Pickering- December 31.2005- Job; 6/14/06; 4:18 PM
Page 13 of21
FOR DISCUSSION PURPOSES ONLY
THE-CURP-ORATION-OF-THE-CITY-OF-PItKERIND
Notes to the Consolidated Financial Statements
December 31,2005
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9. LONG-TERM LIABILITIES (continued)
(b) The above long-term liabilities have maturity dates of November 1, 20 , July 15,2014 nd
December 23, 2014 with various interest rates ranging from 3.2500 to
repayments are summarized as follows:
2006
2007
2008
2009
2010
Thereafter
(c) Long-term liabilities include a principal sum 0 $1,
may be raised by the issuance of debentures ver a
(d)
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(e) Interest expense recorded in the
$277,609).
10. AMOUNTS TO BE REeO
M Document in 2211 City of Pickering- December 31, 2005- Job: 6/14/06: 4:18 PM
FOR DISCUSSION PURPOSES ONLY
o as' efundable Debentures' which
e . d not to exceed 10 years.
2005 2004
$ 2,127,250 $ 2,118,850
363,323 253,085
5,556,430 6,380,155
7,984,000 8,791,000
589,575 378,731
$ 16,620,578 $ 17,921,821
Page 14 of21
THE C(fRPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2005
II. MUNIClP AL F(jND BALANCES AT THE END OF THE YEAR
The City's fund balances are comprised of the following:
(a) Operating Fund Balance
2004
For general reduction oftaxation 88,944
(b) Capital Fund Balance
2004
Funds available for acquisition of
tangible capital assets $ 7,712,951
Acquisition of tangible capital assets
expected to be
Financed by long-term liabilities ,110,939) (31,170)
Financed by taxation or user char s (199,752) (221,047)
Financed by donations (298,375) (416,793)
4,079,053 $ 7,043,941
(c) Reserves and Reserve Funds ~~
2005 2004
$ 400,000 $ 400,000
915,514 940,514
722,843 758,175
10,774,911 9,053,320
3,388,965 2,619,565
484,204 1,921,332
237,106 1,025,740
342,533 233,160
75,000 25,000
1,095,129
20,000
18,456,205 16,976,806
set aside for special purposes
265,492 380,604
1,348,078 1,455,054
66,087 33,713
589,575 378,731
otal Reserve Funds 2,269,232 2,248,102
Total Reserves and Reserve Funds $ 20,725,437 $ 19,224,908
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M Document in 2211 City of Pickering- December 31. 2005- Job: 6/14/06: 4;18 PM Page 15 of21
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
Notes to the Consolidated Financial Statements
December 31, 2005
12. PENSION AGREEMENTS
The municipality makes contributions to the Ontario Municipal Employ s Retirement F d
(OMERS), which is a multi-employer plan, on behalf of the members of . s staff. The pi is a
defined benefit plan which specifies the amount of the retirement bene t to be receive y the
employees based on the length of service and rates of pay.
Contributions on account of current ".-vicefor 2005 were $1,461,25 f~ - $1,400, 7).
TRUST FUNDS u~
Trust funds administered by the municipality amounting t $260,785 (2004 $255,359) have not
been included in the Consolidated Statement of Financia Position nor ha their operations been
included in the Consolidated Statement of Financial Ai;l~
CLASSIFICATION OF EXPENDITURES BY ~
The Consolidated Statement of Financial Ac. ities presents t e expenditures by function; the
following classifies those same expenditures object:
13.
14.
2005 2004
Salaries, wages and employee benefit $ 34,725,091 $ 32,825,598
~ Operating materials and supplies 13,475,404 13,692,883
Contracted Services 2,284,134 2,150,762
Rents and fmancial expenses 1,032,190 1,035,764
External transfers to others 211,905 252,632
Tangible capital assets 11,286,580 5,841,546
Total expenditures by ob. ct $ 63,015,304 $ 55,799,185
15.
receive electricity and services from Veridian Corporation, a corporation in
rinc. al shareholder. Veridian also provides streetlight and power line
a ontract basis.
2005
nsactions
Revenues
Interest 0 promissory notes
Proper! taxes levied
Expens
Ele trical energy and services
Balan es
counts payable
rornissory notes receivable
$ 1,905,244
$ 40,616
$ 1,727,633
$ 156,947
$ 25,069,000
M Document in 2211 City of Pickedng- December 31. 2005- Job: 6/14/06: 4:18 PM
FOR DISCUSSION PURPOSES ONLY
2004
$ 1,905,294
$ 31,384
$ 1,690,604
$ 283,550
$ 25,069,000
Page 16 of2l
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THE-CD~-ORATrO~OF-THE-CITY-OF-PTCKKRING
Notes to the Consolidated Financial Statements
December 31,2005
16. GUARANTEES
In the normal course of business, the City enters into agreements which con
City's primary guarantees are as follows:
(i) The City has provided indemnities under lease agreements for the se of various fa ilities or
land. Under the terms of these agreements the City agrees to in mnify the count arties for
various items including, but not limited to, all liabilities, 10 s~ts, and d ages arising
during, on or after the term of the agreement. The maximu a of any otential future
payment cannot be reasonably estimated.
(ii)
(iii)
17.
The Continge y Reserve of $10,774,911 is sufficient to cover any potential liability that may arise
from the sett ment of these property assessment appeals.
The ity has been named as a defendant in certain legal actions in which damages have been
so bt. The outcome of these actions is Dot detenninable as at the date of reporting and
cordingly, no provision has been made in these financial statements for any liabilities which may
result:
M Document in 2211 City of Pickering- December 3/,2005- Job " 6/14/06; 4:/8 PM
Page 17 of21
FOR DISCUSSION PURPOSES ONLY
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THE-CURP-ORATltlN-OF-THE-CITY-OF-PIC-KERING
Notes to the Consolidated Financial Statements
December 31, 2005
18. BUDGET FIGURES
The approved operating and capital budgets for 2005 are reflected on the Co lidated Schedul of
Operating Fund Financial Activities and Fund Balance, Consolidated Sc dule of Capital und
Financial Activities and Fund Balance, and the Consolidated Statement of inancial Activiti s. The
budgets established for the capital fund operations are on a project-orien d basis, the cost of which
may be carried out over one or more years and, therefore, may not b co parable wit e current
year actual amounts. As well, the municipality does not have a bud et activity w- -n Reserves
and Reserve Funds, with the exception being those transactio w ow thr gh either the
operating or capital fund budgets. Budget figures have been re ass! ed e urposes of these
statements to comply with PSAB reporting principles.
19. COlVIPARATIVE FIGURES
Certain comparative figures have been
presentation adopted in the current year.
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M Document in 2211 City of Pickering- December 31. 2005- Job: 6/14/06: 4:18 PM
FOR DISCUSSION PURPOSES ONLY
the fmancial statement
Page 18 of21
THE-CD1U>-ORATIOKOF-THE-CITrOFPTCKERING
Consolidated Schedule of Operating Fund Financial
Activities and Fund Balance
Year ended December 31, 2005
2005 2004
Budget Actual
REVENUES
Residential and farm taxation $ 24,4 ,302
Commercial and industrial taxation 6 42,643
Taxation from other governments ,736,363
User charges 9,260,151
Government grants and fees 317,633
Developer contributions and donations 157,896
Investment income 477,979
Penalties and interest on taxes 1,455,787
Fines 379,320
Interest on promissory notes 1,905,294
Other 3,116,639
Total revenues 56,865,007
EXPENDITURES
General government 9,377,042 10,250,908
Protection to persons and property 12,977,758 12,486,523
TranspOltation services 12,165,029 10,490,626
Environmental services 42,682 13,745
Social and family services 348,748 358,140
Recreational and cultural services 15,068,380 14,581,546
~^
Planninc:r and develo ment 1,749,085 1,776,151
Total ex enditures 51,728,724 49,957,639
NET REVENUES 9,149,531 6,907,368
(3,714,378) (5,968,131) (4,604,156)
(248,208) (1,671,640) (1,163,779)
(1,679,245) (807,000) (266,000)
(1,110,725) (846,276)
321,112 (3,187)
8,400 (11,631)
(9,220 44,397
(5,641,831 ) (9,237,204) (6,850,632
(110,000) (87,673) 56,736
110,000 88,944 32,208
$ $ 1,271 $ 88,944
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Worksh et in 2210 City of Pickering- December 3{ 2005 Job # 91686 " 6/14/2006,' 4,'18 PM
Page 19 of21
FOR DISCUSSION PURPOSES ONLY
Worksh et in 2210 City of Pickering- December 31,2005 Job # 91686; 6/14/2006; 4:18 PM
FOR DISCUSSION PURPOSES ONLY
Page 20 of21
THE-CURJ>ORATIUN-OF-THE-CITY-OF-PlCKERING
Consolidated Schedule of Reserves and Reserve Funds
Financial Activities and Fund Balance
Year ended December 31, 2005
2005
Budget
REVENUES
Developer contributions and donations
Investment income
$
$
NET TRANSFERS FROM (TO) OTHER FUNDS
Operating Fund
Ca ita! Fund
Total net transfers
1,163,779
(351,371)
812,408
CHANGE IN RESERVES AND RESERVE
FUND BALANCE
957,720
RESERVES AND RESERVE FUNDS,
BEGINNING OF YEAR
RESERVES AND RESERVE FUNDS,
END OF YEAR
19,224,908 18,267,188
$ 20,725,437 $ 19,224,908
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Worksh et in 2210 City of Pickering- December 31,2005 Job # 91686: 6/14/2006: 4:18 PM
Page 21 of21
FOR DISCUSSION PURPOSES ONLY
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Financial Statements of i/ II,'
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CITY OF PICKERI G'/
PUBLIC LIBRA~ BOARD
Decemb" 31, 2005 ~.
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MW Document in 22I1,f City of Pickering Public Llbrory Board {.' 6/14/06; 4.37 PM
FOR DISCUSSION PURPOSES ONLY
err
Auditors' Report
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Deloitte & Tau,!' LLP
5140 YongeJtreet
Suite 1700/ /
Toronto ON M2N 6L7 II
Canad<V
, I
Tel/~6-601-6150 /
Ix: 416-601-615;
wW.deloitte.ca
II; /
/ !/~~) /
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<< /1
We have audited the statement of financial position of t City ~fJRkkeri g Public Library Board as at
December 31, 2005 and the statement of financial actijlties and funJ' b ance for the year then ended.
These financial statements are the responsibility of he Board's man ement. Our responsibility is to
express an opinion on these financial statements bas d on our audit.
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To the Members of
The City of Pickering Public Library Board,
Members of Council, Inhabitants and Ratepayers
of the City of Pickering
We conducted our audit in accordance with anadian genera accepted auditing standards. Those
standards require that we plan and perform a auditto obtain asonable assurance whether the financial
statements are free of material misstatem t. Ai~>;~;'in udes examining, on a test basis, evidence
supporting the amounts and disclosures tr< the finan2i~ stat~ments. An audit also includes assessing the
accounting principles used and signifi ant estimates v~e by management, as well as evaluating the
overall financial statement presentati . /
In our opinion, these financial st tements present airly, in all material respects, the financial position of
the City of Pickering Public LilSrary,Board as a ecember 31, 2005 and the results of its operations and
the changes in its financial pbsttton)(QLthe y ar then ended in accordance with the Canadian generally
accepted accounting princi es.'<:!:.-----J
<>.
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Chartered Acco
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Toronto, 0 ari,0/~<'\
March 31 006 '~;::.) )
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/Document in 2211-1 City of Pickering PuMc Llbrory Board (6/14/06; 4:37 PM
FOR DISCUSSION PURPOSES ONLY
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Table of Contents
December 31,2005
Statement of Financial Position
Statement of Financial Activities and Fund Balance
Notes to the Financial Statements
M Document in 2211-1 City of Pickering Public L,brary Board (6/14/06: 4.37 PM
FOR DISCUSSION PURPOSES ONLY
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Statement of Financial Position
December 31, 2005
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FINANCIAL ASSETS
Cash
Accounts receivable
Due from Government of Canada
LIABILITIES
CURRENT
Accounts payable and accrued libilities
Due to the Government of Canada
Due to City of Pickering
Post-employment benefits obligation (Note 3)
NET FINANCIAL LIABILITIES
NON-FINANCIAL ASSETS
Prepaid expense
Inventory
NET LIABILITIES
BOARD POSITION //()!-
AMOUNTS TO BE RE VE~P~ ~
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FOR DISCUSSION PURPOSES ONLY
$
2~1
2,01 $
23J?
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17, (
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4,918
128,800
221,629
(219,338)
90,538
$ (128,800)
$ (128,800)
2004
$
9,929
22,405
128,200
160,534
(151,036)
21,658
1,178
$ (128,200)
$ (128,200)
Page 1 of 5
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Actual Actual I
$ 3'788'~.76 $ 3'631~
2i4,~72 367,528
10;J99 ;: 6,734
130,425:>" 172,788
'v
196,852 186,326
4,401,024 4,367,029
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2, 10,323
520,522
3,030,845
CITY OF PICKERING
PUBLIC LIBRARY BOARD
Statement of Financial Activities and Fund Balance
Year ended December 31,2005
REVENUES
City of Pickering grants - operating
City of Pickering grants - capital
Federal grants
Province of Ontario grants
Fines and other receipts
EXPENDITURES
Operating
Salaries
Salaries and wages
Fringe benefits
Material, supplies and utilities
Books
Utilities
Other supplies
Services
Repairs and maintenance
Insurance
Travel
Audit and legal
Advertising
Conventions
Postage
Telephone
Freight
Seminars and ducation
Miscellaneo s
I CREASE IN A aUNTS TO BE RECOVERED
INCREASE IN ON-FINANCIAL ASSETS
CHANGE I FUND BALANCE
FUND B~ oANCE, BEGINNING OF YEAR
FUND J3ALANCE, END OF YEAR
Workshe tin 2211 City of PICkering Public Library Board (#95077); 6/14/2006,' 4:38 PM
Budget
$ 3,847,865
320,390
106,425
182,221
4,456,901 /
//
2, 7,381 /)
32,450,(
2,999,831 ,,)
245,379
34,917
10,872
5,600
6,575
7,490
4,706
60,895
420
7,500
12,168
396,522
4,136,511
320,390
4,456,901
$
FOR DISCUSSION PURPOSES ONLY
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2005
540,204
177,551
41,298
759,053
264,224
32,622
10,699
10,520
7,102
4,093
5,113
51,941
9,033
9,609
404,956
4,194,854
274,472
4,469,326
(68,302)
600
67,702
$
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2,390,081
530,860
2,920,941
507,621
179,315
46,761
733,697
237,455
53,546
10.1 21
8,196
4,811
7,380
5,591
58,216
227
8,976
8,436
402,955
4,057,593
367,528
4,425,121
(58,092)
37,100
20,992
$
Page 2 of 5
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SIGNIFICANT ACCOUNTING POLICIES / I
The financial .tatement. of the City of Pickecing Public Libmry Boa<d .')f~ cepce"otat.k of
management prepared in accordance with Canadian generally acce~d ;accounting ~n~~i~les
established by the Public Sector Accounting Board (PSAB) of the Capadt~~titute of Chartered
Accountants. / ~;)
Significant accounting policies adopted by the Library Board are 'follows:
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BasIs of accounting I
(a) Accrual basis of accounting I(? A
Revenue and expenditures are reported on the crual'B(sis of a ounting. The accrual basis
of accounting recognize revenues as they are amed; experiait es are recognized, as they are
incurred and measurable as a result of the ceipt of goods d services and the creation of a
legal obligation to pay.
CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
December 31,2005
(c)
The historical cost and accumu ted\~IU~r:t!~atio for capital assets are not recorded for
Library Board purposes. Capi~ assets 'aYc{tllred uring the year are reported on the statement
of financial activities and fum(balance as C~P7 expenditures in the year of acquisition.
Post employment benefit and Compensatf Absences
The present value 0 the cost of pr~ding employees with future benefits programs is
recognized as empl yees"eam these titlements through service. Actuarial gains or losses are
amortized on a tr'tithi:)fim~ basi over the estimated average remaining service lifetime
(EARSL) of e 10yees;(Tliilict ary estimated EARSL to be 17 years.
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(b) Capital assets
~-'
(d)
The pr paration of fin cial statements in conformity with Canadian generally accepted
acco ting principles r quires management to make estimates and assumptions that affect the
reg rted amount of sets, liabilities and the disclosure of contingent liabilities at the date of
tile fyian~iql state ents and the reported amounts of revenues and expenditures during the
terib(t"Act~al r suits could differ from those estimates.
'''~/
2. APIT AL EXP DITURES
/ Capital expe itures were incurred to acquire furniture and equipment in the amount of $274,472
(2004 - $3 ,528).
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FOR DISCUSSION PURPOSES ONLY
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POST EMPLOYMENT BENEFITS OBLIGATION I /
The Library makes available to qualifying employees who retire befot the age of ();5, the
opportunity to continue their coverage for such benefits as extended heJrth/and drugs. <;::tverage
ceases at the age of 65. Dependent on eligibility. health coverage/1na~be a sharecY financial
responsibility between the Library and the retired employees. The L(brary also provi/~s full time
and pennanent part-time employees a sick time entitlement ,rid any unu~ed /entitlement is
accumulated year to year. This accumulated entitlement is notl'ested and theref.0re does not get
paid out at the time of retirement or termination. The most recent actuarial va~tion of the post-
employment benefits was performed at January 1, 2004. II /
Information about the Library's benefits liabilities is as fo1I6'ws: /
I II
<~/(I .~2005
Post-employment benefits liability, beginning Ofyi'</<~' . /128,200
Expense for the period / 14,100
Prior Period Service Costs -
/
Amortization of actuarial loss 800
Interest expense 8,500
Benefit Payments (22,800)
Post-employment benefits liability, e $ 128,800
~ 2005
Accrued post-employment enefits obligatio $ 139,300
Unamortized actuarial 10 (10,500)
Post-employment ben ItsI:iabjl~ty $ 128,800
'~~:;,-~
The main actuaria assumption~'i;m oyed in the actuarial valuations are as follows:
(0) DL'COuf"
The ;Present value as t December 31, 2005 of the future benefits was determined using a
~i ou>>._.t. ra. .te of 6%.
;f.~-'<::
(b) enral~~9!D)
'v
The current tr nd cost at January 1,2004 was 4.5% per annum.
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
December 31, 2005
3.
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(c)
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2004
$
91,100
13,300
36,100
800
8,500
(21,600)
$ 128,200
2004
$ 139,500
(11,300)
$ 128,200
Healt costs were assumed to increase at 10% in 2005 and decrease by 1 % increments per year
to a ultimate rate of 5% per year in 2010 and thereafter.
M Document In 2211-1 City of Pickerlflg Pub/lc Library Board (' 6/14/06: 4..37 PM
FOR DISCUSSION PURPOSES ONLY
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Page 4 of5
December 31,2005
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PENSION AGREEMENTS /
The Library Board makes contributions to the Ontario Municipal Emp yees Retiremenj~und
(OMERS), which is a multi-employer plan, on behalf of eligible member ofj~s. s"taff. fThe Pfa~ lis a
defined benefit plan that specifies the amount of the retirement be ef(/(~,be recei ed by the
employees based on the length of service and rates of pay. / "~)
Contributions in the amount of $125,264 (2004 - $122,244) w7paid to OMERQ~ behalf of its
members during the year. / 7 Vl
STATEMENT OF CHANGES IN F1NANCIALPosf/f ^ /
A statement of changes in financial position has not ),eefr ~e~ented, , the related information is
readily determinable from the financial statemen'7s p esented. "~ /
GUARANTEES /
In the normal course of business, the LI'rbrar~ters into agre ments, which contain guarantees. The
Library Board's primary guarantees are a follows:
.~
(i) The Library indemnifies emplo/ees a~jtrd mbers for various items including, but not
, limited to, all costs to settl; tGits or actl~1;1s e to association with the Library, subject to
certain restrictions. The Li~!ary Board has p chased liability insurance to mitigate the cost of
any potential future suits? actions. Th~t m of the indemnification is not explicitly defined,
but is limited to the peyfod over which t indemnified party served as an employee or board
member of the Li~ra Y BO, ard. The m imum amount of any potential future payment cannot
be reasonably esti ted.~,
IF'))
(ii) The Library B rd ha:i:~~i~cfi 0 agreements that may include indemnities in favour of third
parties, such s purchase'ilbd Ie agreements, confidentiality agreements, engagement letters
with advi rs and consul nts, outsourcing agreements, leasing contracts, information
technolo agreements a Cl service agreements. These indemnification agreements may
requir the Library B}lard to compensate counterparties for losses incurred by the
cou erparties as a reSult of breaches in representation and regulations or as a result of
lif atiQ..Q~ claims oystatutory sanctions that may be suffered by the counterparty as a
! n~{qu, ~.,n,<(\ of tI;e' transaction. Th~ ter~s of these indemnities are not explic~tly defined and
the rrta~~I11Y~ a ount of any potential reimbursement cannot be reasonably estimated.
'''J
he nature of t se indemnification agreements prevents the Library Board from making a
~easonable esti ate of the maximum exposure due to the difficulties in assessing the amount of
liability, whi stems from the unpredictability of future events and the unlimited coverage offered
to counterp rties. Historically, the Library Board has not made any significant payments under such
or similar mdemnification agreements and therefore no amount has been accrued in the Statement of
Final I Position with respect to these agreements.
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CITY OF PICKERING
PUBLIC LIBRARY BOARD
Notes to the Financial Statements
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M Document In 2211-1 City of Piekenng PuMe L,brory Board (6/14/06: 4037 PM
Page 5 of5
FOR DISCUSSION PURPOSES ONLY
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Financial Statements of
THE CORPORATIO
THE CITY OF PIC
TRUST FUNDS
December 31,2005
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M W Document in 2212 Pickering Trust Funds (- 6/14/06, 4;51 PM
FOR DISCUSSION PURPOSES ONLY
Auditors' Report
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Deloitte & T. ~/che LLP II
5140 Yonge'Street
Suite 1700
Toront9,ON M2N 6L7 / -,
Canacj;j I
Te0416) 601-6750 /
E x: (416) 601-6151
www.deloitte.ca
/
/
To the Memb", of Coune;l, Inhab;tanls and Ratcpaym /
of The Corporation of the City of Pickering I
We have audited the statement of financial position of the T~F51n~s of the orporation of the City of
Pickering as at December 31, 2005 and the statement of finrcia~~cJtvities an fund balances of the Trust
Funds for the year then ended. These financial state~~,:!(:re the resp~1Jsib' Ity of the City's management.
Our responsibility is to express an opinion on these fij_ial statements 'b ed on our audit.
We conducted our audit in accordance with Can;ic1ian generally cepted auditing standards. Those
standards require that we plan and perform an arIit to obtain reas nable assurance whether the financial
statements are free of material misstatement. An audit inc~ud s examining, on a test basis, evidence
supporti.ng the. ar:lOunts and discl~sur.es in th ~n~~ciaJ~ate nts. An audit also includes assess.ing the
accountIng pnnclples used and slgmfican estlmat~;Z/fuaae y management, as well as evaluatIng the
overall financial statement presentation. \\\
In our opinion, these financial state ents present fair , In all matenal respects, the financial posItion of
the Trust Funds of the Corporatio of the City of B ckering as at December 31, 2005 and the results of
operations and changes in finan~l position of the rust Funds for the year then ended in accordance with
Canadian generally accepted ;t~~I1!ing principl s.
/~{y
'" ,ant; /
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FOR DISCUSSION PURPOSES ONLY
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Tot~(
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1$ 'vI '~, ) 24 571
'" '
250,414 250,41y4.J 220,363
5,077 / 5,077 4,310
- / 5,29; 6,115
$ 255,4?1 $ 260;,85 $ 255,359
jr/ L
$ 255411? $ 260,785
THE CORPORi\TION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Position
December 31,2005
FINANCIAL ASSETS
Cash
Investments
Interest receivable
Loans receivable
TRUST FUND POSITION
OHRP
$
$
$
5,294
5,294
5,294
2005
Dorothy Card
Estate
/
/
/
2004 /
7
Total/
Worksh et in 22// p,(:kenng Trust Funds (#95078); 6/14/2006: 4.54 PM
$
$ 255,359
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\~(
\.)
Page 1 of3
FOR DISCUSSION PURPOSES ONLY
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Statement of Financial Activities and Fund Balances
Year ended December 31, 2005
/
/
/
II _
/
Totl -;I
/.
~ /7;222 $ /6,694
U1;V
1 96
2005
Dorothy Card
Estate
OHRP
REVENUES
Interest
6,247
$
975
$
EXPENDITURES
Provincial payments
Administration charges
1,706
90
1,796
810
42
852
NET REVENUES (EXPENDITURES) (821)
6;247
// ;'.
('''JI
~,,>,
249,244';
/
5,842
FUND BALANCE, BEGINNING
OF YEAR
FUND BALANCE,
END OF YEAR $
/K-
/ \~(::;
\)
~L
/ <::<~~'.-'_/
'.)
255,359
249,517
$ 255,359
$ 260,785
;;~w
~.
Page 2 of3
Worksh et In 2211 Pickering Trust Funds (#95078)' 6/14/2006: 4:54 PM
FOR DISCUSSION PURPOSES ONLY
1.
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The financial statements of the Trust Funds of the The Corporation of the efty of Pickering zire the
representations of management prepared in accordance with Can51diaJb generally ;kcepted
accounting principles. / l/'~", /
~..~ /
Significant accounting policies adopted include: L '"~/
Basis of accounting /
Revenues are recorded in the period in which the transactio s or events occvted that gave rise to
the revenue. / /
Expenditures are reported on the accrual basis of acco nti~h1ch reco nizes expenditures as they
are incurred and measurable as a result of the receip of good5'6~servi es and the creation of a legal
obligation to pay. '~
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THE CORPORATION OF THE CITY OF PICKERING
TRUST FUNDS
Notes to the Financial Statements
December 31,2005
ACCOUNTING POLICY
Investments
~
Investments are recorded at cost. The cost investments ap oximates their fair market value.
2. ONTARIO HOME RENEWAL PRO ~~;. /
The Ontario Home Renewal pr~m ("O~~ ;was established by the Ontario Ministry of
Housing in 1973 to provide gra~s for municipaljries to make loans to assist owner occupants to
repair, rehabilitate and improv {heir homes to loeal property standards. Individual loans are limited
to $7,500 of which the maxi m forgivable p ion is $4,000.
Effective July 16, 1993, e Province of ntario discontinued this program. Unused funds were
~
remitted to the Provinc o11;;M~Ich I, 19 4. Outstanding balances of loans issued prior to July 16,
1993 will continue to e adqli9iStered nder the terms of the original program. The City continues
to administer the ollection"(j& an outstanding loans and remit the proceeds, net of a 5%
administration feifto the Ministry Municipal Affairs and Housing.
"OHRP" loa~ceivable at D ember 31, 2005 are comprised entirely of repayable loans of $5,294
(2004 - $6,/15). In the eve of the sale or lease of the home or in the event of the homeowner
ceasing tloccupy the horrie, the balances of the repayable loan immediately become due and
/
payable y......t.hcQo..meoz:n .
(/~'"
D OTHY'bA~D ST A TE
"j
3.
he City of Pic ering has established a trust fund for the Dorothy Card Estate for the care and
upkeep of th destitute elderly. The fund balance is comprised of cash, investments and
accumulated 'nterest amounting to $255,491 (2004 - $249,244).
4.
STATE ENT OF CHANGES IN FINANCIAL POSITION
II
^ st tement of changes in financial position has not been presented as the information is readily
de rminable from the information provided.
Page 3 of3
M Document in 2212 Pickering Trust Funds {.' 6/14106; 4:51 PM
FOR DISCUSSION PURPOSES ONLY