Matt Stie, Senior Manager of Assurance with MNP in Brandon, presented the 2020 Financial Audit to Town of Virden Council at its regular meeting on Tuesday, Dec. 7 at Tundra Oil & Gas Place.
He commented on the methodology behind the work, which has recently wrapped up.
“We determine what the great risks are, such as how cash looks, the completeness of revenue, ensuring payables and receivables are cut off appropriately at year end, and determining that payroll is being administered correctly,” he said. “We look at that pretty thoroughly and we do that by testing random samples throughout the year. We take a good close look at valuation of capital assets as well. We assign a materiality number, which amounts to 2 to 4 per cent of total consolidated revenue, and this year it stands at $244,000. Materiality, as he describes it, is “the maximum amount of errors we can find in a dollar value before we would deem those statements misleading to a user.”
In terms of the Town’s day-to-day operations, Stie had plenty of positive news to share.
“You are well below the threshold of $244,000,” he said. “The audit went really well. We looked at all the controls in place for the Town in making sure the accounting policies and procedures established are working appropriately and we did not find any issues there. We don’t actually test the controls themselves an extensive amount but we do walk-throughs and those controls seem to be working, and for the size of the operation, appropriate. We were able to issue a clean audit report, which is the best kind of report you can have.”
Stie praised the work of the Town’s administrative staff in maintaining the books and their cooperation in making data available to him in a timely manner.
In performing the audit, Stie did not delve into a significant number of year-over-year comparisons due to the impact of COVID-19 on the community. Last year’s revenue figures included provincial grant money intended to assist communities in defraying expenses related to the pandemic.
The auditor took note of the “healthy” cash flow position the Town is in in relation to its $10.6 million in financial assets. The $7.3 million worth of liabilities were not added to during the year.
No new debentures were issued, and capital spending was dominated by work to obtain a new water source and put the required infrastructure in place. Other significant expenditures included lighting replacement in Tundra Oil & Gas Place and the development of a new landfill cell.
Total revenue amounted to $9.2 million, and subtracting $9 million worth of expenses resulted in an operating surplus of approximately $236,000. The $1.6 million in utility revenue included one-time capital funding from the Manitoba Water Services Board and lump sum payments by ratepayers of the waste water treatment plant phase two levy. The Town will not realize a significant amount of revenue from the hike in water and sewer rates until 2021, as they did not come into effect until the last quarter of 2020.
“Your revenues are increasing and your costs are holding steady, so that’s always a good sign. Things are looking favourable for water and sewer,” Stie said. At present, the Town needs to recoup a utility deficit of close to $800,000; with these funds to be raised through billing and a pending debenture issue.
Council passed a motion to accept the audit report as presented.
PAYING FOR NEWSPRINT RECYCLING
A new advertising program for municipalities will be launched in early 2022.
In a letter to Mayor Murray Wright, Multi-Material Stewardship Manitoba (MMSM) explained that after four years of negotiations, an agreement has been reached between itself, the City of Winnipeg, News Media Canada (NMC), the Manitoba Community Newspapers Association (MCNA) and the Association of Manitoba Municipalities (AMM) which will pave the way for the new initiative.
“We’ve worked quite extensively with different municipalities, and namely the Association of Manitoba Municipalities and the City of Winnipeg for the last couple of years, as well as NMC and the Government of Manitoba to try and come to a resolution to the funding of newspaper recycling and this is what we came up with,” said MMSM Executive Director Karen Melnychuk.
Newspapers that are members of NMC and MCNA will contribute print or digital advertising space on an in-kind basis in lieu of the dollars they would have paid to towns and cities towards the newsprint portion of residential recycling programs.
Up until 2017, the provincial government paid the fees directly to MMSM on behalf of the newspapers. With this funding terminated, the recycling organization lacked the resources to compensate communities accordingly.
“The in-kind advertising may be used for issues, events and projects related to a broad array of environmental concerns, including recycling, waste, litter, give-away programs, or tree planning initiatives,” states the letter. “It may also be used for initiatives related to climate change, green buildings, water conservation, waste management, sustainable transportation, food systems and stainable security.”
Municipalities are encouraged to use the space to promote their residential recycling programs. They also have the option of allocating it to arts or other non-profit community groups for promotional use.
NMC and MMSM staff will administer the program, which encompasses all Manitoba newspapers including the Virden Empire-Advance. Each community will get a minimum allocation per annum based on the value of the cash funding during the program year. The Town of Virden currently has $9,619.24 in credit available - the dollar amount which has been withheld since 2017.
OTHER BUSINESS
Council authorized a $500 sponsorship to the Southwest Business and Entrepreneurship Expo and the provision of a $1,000 prize for its Business Pitch Competition. The 2022 Expo will be held on Feb. 9 in Souris.
The date for the 2022 tax sale will be December 6, 2022 at 6:30 P.M.
The Town will renew its membership in the Federation of Canadian Municipalities for 2022 at a cost of $932.
