Loading...
HomeMy WebLinkAbout2009-11-02 AUDIT COMMITTEE MINUTES NOVEMBER 2, 2009 CITY OF KITCHENER The Audit Committee met this date commencing at 3:35 p.m. Present: Mayor C. Zehr - Chair Councillors J. Smola, J. Gazzola, K. Galloway, B. Vrbanovic and C. Weylie Staff : C. Ladd, Chief Administrative Officer D. Chapman, General Manager, Financial Services & City Treasurer T. Speck, General Manager, Corporate Services J. Will mer, Interim General Manager, Development & Technical Services R. Gosse, Director, Legislated Services & City Clerk R. Upfold, Director of Accounting M. May, Director of Communications R. LeBrun, Manager, Financial Planning S. Brisbane, Supervisor of Financial Reporting C. Goodeve, Committee Administrator 1. 2009 EXTERNAL AUDITOR'S PLAN - PRESENTATION BY KPMG The Committee considered Financial Services Department report FIN-09-151, dated October 22, 2009 regarding KPMG's Audit Planning Report for the year ending December 31, 2009. Messrs. Tom Mennill and Matthew Betik, KPMG presented the plan for the 2009 audit. Mr. Mennill advised that the last few entries of the timetable on page five of KPMG's 2009 audit plan, attached to report FIN-09-151 , should read 2010 as opposed to 2009. Councillor J. Gazzola questioned why the specific findings from the review of the SAP system conversion were going to be presented to the City Treasurer as opposed to the Audit Committee. Mr. D. Chapman advised that this is being done in accordance with the City's request for proposal and suggested that staff could present these findings to this Committee as part of the year-end report. Clarification was requested regarding the proposed changes in accounting standards with respect to environmental liabilities, and Mr. Mennill advised that this relates to the application of the principles set out in Public Sector Accounting Board (PSAB) PS 3200 Liabilities, which have not yet come into effect. He stated that under the current standards, the City has to record an accrual if it's undertaking an Ontario Ministry of the Environment (MOE) order to clean a site, or if the environmental situation is impacting a City asset. He outlined that the proposed changes would require the accrual of obligations not currently accrued in the City's financial statements. Under the revised standard the City would have to record an accrual for all sites where it's aware of an environmental issue, regardless of an MOE order, and even if it has no intention of doing anything with that property. In response to further questions, Ms. R. Upfold advised that KPMG was appointed as the City's External Auditor for the fiscal periods 2009 through 2013 and the RFP for these services set out a fee for the five year term with a built-in escalation. She confirmed that the $18,000. fee attributed to the Tangible Capital Asset Review is only for 2009. Mr. Chapman noted that if the Auditors need to be engaged for additional work this would be pursued through the guidelines contained in the City's Purchasing By-law. Mayor C. Zehr requested clarification regarding the potential recognition of government transfer revenues. Mr. Betik advised that if the PSAB decides to move forward with this many government transfers received by the City would be considered to be cost shared arrangements. He stated that cost shared arrangements for the acquisition of tangible capital assets would be recorded as revenue in the period in which the asset is acquired. Since the asset is no longer expensed as is presently the case, this would result in surpluses. Mr. Betik noted that this could produce a mismatch of when revenue is recognized to when expenses are recognized. On motion by Councillor B. Vrbanovic - it was resolved: "That KPMG's 2009 audit plan for the year ending December 31, 2009, be approved." AUDIT COMMITTEE MINUTES NOVEMBER 2, 2009 2. ADJOURNMENT - 10- On motion, this meeting adjourned at 4:01 p.m. CITY OF KITCHENER C. Goodeve Committee Administrator