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HomeMy WebLinkAboutFIN 25/99 - ~~ OF PIC .....0 1-<<- !#_~ t- ~1ii. Gl ~ REPORT TO COUNCIL FROM: Gillis A. Paterson Director of Finance & Treasurer DATE: September 23, 1999 REPORT NUMBER: FIN25-99 SUBJECT: 1998 Audited Financial Statements for the Town of Pickering RECOMMENDATION: That the Audit Committee recommend to Council that: '" 1. This report of the Director of Finance and Treasurer be received and referred to Council for information; The 1998 Audited Financial Statements for the Town of Pickering be received and forwarded to Council for information; The Management letter from the Auditor be referred to the Director of Finance for any further action deemed necessary, and forwarded to Council for information. 2. 3. - . ORIGIN: Director of Finance & Treasurer AUTHORITY: The Municipal Act, R.S.O. 1990, as amended, Sections 86, 87, 88, 89 and 90 FINANCIAL IMPLlCA TIONS: Not Applicable EXECUTIVE SUMMARY: - Each year the Auditor of the Town of Pickering, Hurren, Flett, Sinclair, Chartered Accountants, audits the books, accounts and annual financial statements, as prepared by the Finance Department, of the Corporation. This information is then forwarded to Council and made available to the public. Accompanying these statements is the Auditor's Letter of Opinion and Management Letter. - - .- 013 Report to Council Date: September 23, 1999 Subject: 1999 Audited rinancial Statement for the Town of Pickering Page 2 BACKGROUND: As mentioned above, each year the audited rinancial Statements are presented to Council. This year is exceptionally late, not due to any problems incurred during the audit, but rather due to uncertainties regarding the financial implications of the provincial "capping legislation" (Bill 79). This information was received from the Province during the summer, allowing the Auditor's Report to be completed. I am pleased to advise the Committee that there were no problems or items of a questionable nature that either I or the Auditor have to report to you at this time. I would like however to take this opportunity to comment upon the items mentioned in the Auditor's Management Letter. I. Department of Finance Agenda Your attention is drawn to this section of the report as it is somewhat indicative of some of the problems that have been present in the department for many years and which the current management staff inherited. . Our ability to address these issues have been severely hampered due to limited resources. Current management staff has the expertise but unfortunately the demands of the day to day operations of the department prevent us from dealing with many of these issues. Therefore, after consultation with the CAG, I have received his approval to engage the services of the Auuitor to unuertake an Operational Systems Review of all financial systems and processes in the Corporation. As you know, in the past there has been some issues with respect to the linancial affairs of the Corporation. While the new management staff in the department, with the support of the CAG, have done everything within their power to ensure that the Town receives the best linancial information and advice, basic problems and concerns continue. These are mainly in the areas of processing financial information, Internal Audit and Control, and other matters basic to the good management of a Finance Department and proper linancial processes and procedures for the Town of Pickering. We expect the Auditor to report back in the near future with his findings and recommendations. 2. Coordination of I-Iuman Resources Department and Payroll We expect the Auditor to expand upon thcse commen(s during his Opcrational Review. In the mcantime, ncw systems have been explored by the l'~lyroll Supervisor and the Manager of Accounting and we have had discussions with the Iluman Resources Department. It is anticipated that, at the least, new payroll processing software will be required. The current system is very old, very outdated, requires too much manual labour and does not interact with the other financial systems of the Town. Furthermore, the current attendance management system does not interact with the Payroll System. (t is anticipated that this item will be included in the 2000 Capital13udget. J. Departmental Signing Authorities The Accounting and Supply and Services Divisions of the [<,inance Department have undertaken a review of signing authorities in the Town. Revised authorities and control mechanisms are being put in place. It is anticipated that a further report on this and the aforementioned items will be made to the Audit Committee once the Auditor has completed the above mentioned review. 4. Year 2000 Status of the Accounting Program This comment, or one similar, has been included in many financial statements of municipalities and corporations. It appears to be fairly universal in expression of some concern that the changeover may result in uncertainties. The concern is worldwide that there are no guarantees that everything will change over on December J I, 1999 with no problem. This comment appears to be a general statement of conditions that an Auditor cannot ignore in 1999. 014 - ~ - Report to Council Date: September 23. 1999 Subject: 1999 Audited rinancial Statement [or the Town of Pickering Page J Treasurer's Comments There are two significant aspects that [. as Treasurer. must comment upon. One is the changeover in August of 1998 of the financial systems. Usually when a conversion of this magnitude takes place, additional time, planning and staffing arc required to ensure the new systems are performing correctly. [n this case the parallel run with the old software was only for approximately six weeks due to limited resources. The new software continues to be problematic resulting in excessive demands on staff, especially management, and lacks many features necessary to produce information needed by the management of the Town. These features are readily available on many different software packages. The second matter is the continuing adverse effects on staff and management workloads due to Bill 79 and other related assessment and taxation legislation. Most municipalities were completely unprepared for the continuing demands that would be placed upon them thereby adversely affecting our abilities to deal with many other significant accounting and financial significant malters. Ilowcver, in Pickering it is even more of a problem due to all of the foregoing matters and concerns. It is anticipated that both of these items will be addressed further in the 2000 I3udgets. ATTACHMENTS: Not Applicable Prepared/Approved / Endorsed I3y: ~~h~~~ a.A. Paterson. Director of Finance and Treasurer - GAP:vw Copy: Councillor M. I3renner. Chair. Audit Committee Mayor Wayne Arthurs, Member, Audit Committee Councillor M. I [olland. Member, Audit COlllmittee Chief Administrative Officer Recommended for the consideration of . Pickering Town Council ~-.~ Thomas J. Qui~n. eh e Administrative Officer ,.......