City of Powell River has received a clean audit for the year ending December 31, 2021.
At the May 3 committee of the whole meeting, councillors heard from Brian Szabo, a representative of BDO Canada LLP, the firm that conducted the municipal audit.
Szabo said BDO’s audit was substantially complete, subject to council’s approval of the financial statements and also obtaining the signed representation letter from city management.
“We are required each year to confirm to you our independence from the city and we have done so in a written letter to you,” said Szabo. “With respect to the auditor’s role, regarding fraud in the organization, we have undertaken the procedures required to address the fraud risks within the organization, and we’re not aware of any such matters that need to be brought to your attention.
“We do ask that at any time during the year, if there are any concerns with respect to potential or suspected fraudulent activities, that we are advised immediately and we have those discussions with management throughout the year. They have confirmed to us that they are not aware of anything.”
Szabo said BDO approaches its audits for local governments from a consistent basis but it does customize for specific features of particular clients. He outlined a representation letter that management is required to sign, which tells BDO that the city has provided complete cooperation and is taking responsibility for financial reporting.
Szabo said there was nothing in particular in this year’s letter, other than that management has considered and disclosed to the auditors all factors and impacts COVID-19 may have had on financial reporting.
“It’s not had as big an impact on the local government industry as some other industries, but there is still the potential that there may be some impacts falling out, so we do request all of our clients provide that representation as well,” added Szabo.
The audit also had a management letter attached which had some prior year recommendations attached, pertaining to developer contribution calculations, a cyber security incident response plan and a review of citywide tangible capital asset listing.
“All three have been resolved to our satisfaction, and as I indicated previously, there are no new points arising in the current year that require your attention, or for management to address,” said Szabo.
Mayor Dave Formosa said he appreciated the presentation. He said there was a big difference in the interest and income revenue for the year as compared to the previous year, then asked if that was just a factor of having more cash.
Chief financial officer Mallory Denniston said on the balance sheet there was a shift between portfolio investments and cash. She said in 2021 the city was able to keep a lot of the grant money for the consolidated wastewater treatment plant in the portfolio investments and in 2022, the city was more actively drawing on them as activity with the plant increased.
“You’ll see a higher balance in cash and a lower value in portfolio investments in 2022, resulting in lower interest income,” added Denniston.
Committee of the whole gave consent to send the matter to the May 5 city council meeting for approval to meet a May 15 deadline.
