The City of Grand Forks released its 2011 financial statement on May 15.
The independent external auditors, Berg Naqvi Lehmann of Chartered Accountants and Business Advisors, were appointed by city council to look at last years financial statement.
The auditor looks at city records to determine whether the city is spending the money appropriately.
“In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation of the City of Grand Forks as of Dec. 31, 2011, and its financial performance and its cash flows for the year ended in accordance with the Canadian public sector accounting standards,” said Amed Naqvi, a representative from Berg Naqvi Lehmann, during a meeting with city council.
Cecile Arnott, chief financial officer for the city, explained that the city received a clean audit report.
“You get a qualified or unqualified report and we have an unqualified audit, which is a good thing,” she said. “Basically the auditors are saying that the city is managing the funds the way they say they’re managing them.”
City staff present a report to council on a quarterly basis on what is occurring and what is being done.
For the year-end Dec. 31, 2011, the city spent $10,109,564 in revenue and expensed $9,478,435, with an annual surplus of $628,656.
The audit gives someone a statement of the position that the city is at in a point of time, and what it costs.
“It also tells you what we did with the surplus,” explained Arnott. In 2011, the city had a $628,656 surplus and was used towards capital projects.
There was an acquisition of $998,475 towards capital assets and projects, and an amortization of capital assets of $1,258,734.
There was also a gain on sale of capital assets of $305,994. The city received $322,743 from the proceeds from sales of capital assets, and the net change in prepaid expenses and supplies inventory of $13,284. The total net financial assets at the end of the year were $3,109,620.
“If you look at the operating statement, it gives you a better understanding of how things work,” added Arnott. “So you have your revenue coming in every year, your expenses, like general government expenses, which shows you what it takes to run and operate the city.”
Arnott pointed out that when energy, fuel, electricity or wages increases, it also increases the costs of operations.
“Over time we have to increase the taxes and the sales of goods in order to meet the budget and to provide the services that council wants to provide to the city,” she said.
In terms of significant accounting policies, the city has operating, capital and reserve funds.
“The operating fund is what is used to operate and maintain those assets that belong to that utility,” said Arnott. “The capital funds are to purchase new capital or dispose of it.
When you capitalize something, it’s something that you can physically see and drive to, like the City Hall building. The operating funds are what’s used to operate the building and the assets.”
As of the year-end Dec. 31, 2011, some capital projects that the city has completed included the fibre optics network, the purchase of a greenhouse friendly vehicle, updating trails and the VOIP (Voice Over Internet Protocol) phone system.
City staff will be bringing forward a review of capital projects to a city council meeting in June.
Arnott encourages residents to look at the audit if they are interested in seeing what is happening in the city.
“It gives them an indication of what it costs to run the city for the year. The people of the city can see where the expenses are and what department they’re at,” explained Arnott. “If they’re interested they can look at it and see where the revenues are coming from and where the money is being spent.”
