HomeMy WebLinkAbout2005-06-13
AUDIT COMMITTEE MINUTES
JUNE 13, 2005 CITY OF KITCHENER
The Audit Committee met this date commencing at 1:15 p.m.
Present: Mayor C. Zehr and Councillors J. Smola, B. Vrbanovic, J. Gazzola, M. Galloway and G.
Lorentz.
Staff: C. Ladd, Chief Administrative Officer
P. Houston, General Manager, Financial Services & City Treasurer
G. Stewart, General Manager, Development & Technical Services
C. Tasker (nee Wilson), Internal Auditor & Performance Measurement, Office of the C.A.O.
R. LeBrun, Director of Budgets & Financial Services
John Herhalt, KPMG Chartered Accountants
Matthew Betik, KPMG Chartered Accountants
Tim Adams, KPMG Chartered Accountants
P. Houston advised that the purpose of this meeting was to receive the 2004 Annual Financial
Report and the Auditor's Report. R. Lebrun gave a presentation highlighting various aspects of
the Financial Report. He reviewed the consolidated revenue and the current and capital
expenditures noting that revenues had increased in 2004 over the previous year. Councillor J.
Gazzola requested details on the general government expenditures for current operations.
Mr. Lebrun then reviewed the key balance sheet items noting a large increase in the cash and
temporary investments and an increase in tax receivables. He advised that a large amount of
the tax receivables were collected in January of 2005. He further advised that with respect to
the cash and temporary investment item $14 M of additional cash was due to debentures and
partly to a reduction in inventory. Mayor C. Zehr noted that in the Auditor's Report a sale of
land was shown as a receivable. Mr. Lebrun confirmed that it had happened but in future, sale
of lands would be shown appropriately. Mr. Lebrun then reviewed the surplus balances for the
gasworks, golf courses, waterworks, sewer surcharges and others. Councillor J. Gazzola
raised a concern regarding the projected figures used on Budget Day when determining the
2005 budget and the actual surpluses at year's end. He noted that on Budget Day the
projected gaswork surplus was given as $8.6 M but the financial statement shows it at $15.6
M. He suggested that in order to set a more accurate budget the projected figures need to be
closer to the year end balances.
The Committee then reviewed the key performance indicators including the long term debt per
capita. Mayor Zehr requested information on comparitable municipalities with respect to the
debt per capita figures. R. Lebrun then reviewed the Reserves and Reserve Funds noting that
the Tax Stabilization Fund increased $5.7 M from 2003. Councillor Gazzola reiterated his
concern with respect to the figures given to Council on Budget Day and the large discrepancy
from actual figures at year end. Mayor Zehr raised a concern regarding the current rate for the
Sick Leave Fund and whether the current rate would cause the Fund to extend more than the
25% target. P. Houston advised that the City will be faced with a challenge over the next one
to two years with the fringe benefit rate and OMERS rate increasing which may impact the
Fund. She advised that the Sick Leave Reserve Fund will be reviewed in conjunction with the
fringe benefits, OMERS and liabilities with early retirement.
Messrs. John Herhalt, Matthew Betik and Tim Adams, KPMG Chartered Accountants attended
as the City's Auditors and provided a review of their report on the 2004 Financial Statement.
They advised on their approach to auditing and that there were no significant weaknesses to
report. Suggestions were made on minor issues and that the audit was conducted smoothly
with no unresolved issues.
Moved by Councillor B. Vrbanovic
Seconded by J. Gazzola
"That the 2004 Financial Statement and Auditor's Report be received."
Carried.
On motion, the meeting adjourned at 2:00 p.m.
Randy Gosse
Committee Administrator