M I N U T E S ASC-2005-2
The Audit Subcommittee met on April 28, 2005, at 8:44 a.m. in the Council Chamber, Regional Administrative Headquarters, 10 Peel Centre Dr., Brampton.
|Members Present:||N. Iannicca, E. Kolb, G. Miles, R. Paterak, N. Stewart|
|Other Councillors Present||E. Moore, M. Morrison*|
R. Maloney, Chief Administrative Officer, D. Labrecque, Treasurer and Commissioner of Finance; K. Ward, Commissioner of Housing and General Manager of Peel Living; S. Hewitt, Director, Business and Information Services, Public Works; B. Wilson, Director, Internal Audit; I. Murray, Partner, KPMG; K. Travers, Senior Manager, KPMG; J. Payne, Legislative Co-ordinator
* See text for arrivals
Chaired by Councillor G. Miles
1. DECLARATIONS OF CONFLICTS OF INTEREST
2. APPROVAL OF AGENDA
That the agenda for April 28, 2005, Audit Subcommittee meeting be approved.
a) Peel Audited and Consolidated 2004 Financial Statements
Kevin Travers, Senior Manager, KPMG noted that the External Audit Findings Report and Management Letter would be brought to a future meeting of the Audit Subcommittee after management has reviewed and commented on the findings. He added that the comments contained in the 2004 Management Letter should not prevent the Committee from receiving the 2004 Financial Statements. He stated that there are certain standard reporting requirements that must be presented to an oversight committee, such as the Audit Subcommittee, as part of the audit process and to facilitate the review of the Financial Statements. The required disclosures include the following: KPMG, the External Auditor for the Region of Peel, had full access to all the necessary information and staff; there were no unresolved disagreements with management; no significant internal control weaknesses were encountered; and there were no uncorrected or unrecorded audit differences identified. The above-noted comments applied to both the 2004 Financial Statements for the Region of Peel and Peel Housing Corporation.
Speaking specifically to the 2004 Audit Report for the Region of Peel, Kevin Travers indicated that the report was signed off by KPMG on March 4, 2005, having substantially completed the work of the audit process. He also noted that the 2004 Audit Report was unqualified. Kevin Travers informed the Committee that the 2004 Financial Statements were based upon certain significant estimates that included: the valuation of receivables (uncollected accounts); accrued liabilities (value of services and goods received prior to year end but for which an invoice had not been received); employee future benefits (assumptions and estimates which factor into these liabilities); and the closure and post-closure costs for landfills within the Region of Peel (based upon future estimates) as of the December 31, 2004 year end. In addition, no incidents of fraud or alleged fraud were identified during the audit process. Finally, Kevin Travers confirmed to the Committee and the Citizens of Peel that KPMG is independent from the Region of Peel.
* Councillor Morrison arrived at 8:50 a.m.
b) Peel Housing Corporation Audited 2004 Financial Statements
Kevin Travers addressed the 2004 Peel Housing Corporation Audit Report, dated March 4, 2005, noting that it is prepared to comply with the reporting requirements set out under the Social Housing Reform Act and thus structurally it appears different from the Region of Peel Audit Report. He confirmed that the 2004 Peel Housing Corporation Financial Statements were unqualified so far as they complied with the accounting practices stipulated within the Act. There were no incidents of known or alleged fraud encountered during the audit process. He then made the Committee aware of the significant estimates contained within the Peel Housing Corporation 2004 Financial Statements including: the valuation of receivables (uncollected rents and tenant arrears); allocation of certain costs among projects; and accrued liabilities (value of services and goods received prior to year end but for which an invoice had not been received).
Councillor Stewart inquired about the status of the implementation of additional controls within Public Works based upon recommendations in the 2003 Management Letter. Kevin Travers responded that an update to the Committee was provided at the October 7, 2004 Audit Subcommittee meeting and that the 2004 Management Letter will contain some comment in this regard. Speaking in generalities, he noted that improvements have occurred in Public Works as a result of issues raised in the 2003 Management Letter.
Councillor Iannicca asked for clarification regarding the reference to several debts issued by the Region of Peel on behalf of the Peel District School Board and the Dufferin-Peel Catholic District School Board to finance capital expenditures. He further inquired if the Region would be responsible for these debts should the School Boards default. Dan Labrecque, Treasurer and Commissioner of Finance responded that these are historical debts that were issued under the authority of the Municipal Act, which permits the issuing of such debentures by upper tier municipalities (County or Region). He then confirmed that the Region would be responsible if the School Boards defaulted on these debts but noted that no such debt has been issued by the Region of Peel since 1997. In 1997 the Province assumed much of the financial control currently in place over the School Boards in Ontario, and that this report simply refers to the residual of outstanding debt issued prior to 1997.
Councillor Iannicca requested an explanation of how the total value of Region of Peel assets, valued at $415 million, was determined. Dan Labrecque advised the Committee that the figure is based upon historical costs of constructing all Regional facilities, the residual value of the mortgages and portions of the land value. He further noted that the total market value of the assets would be more than $415 million.
6. SCHEDULE OF FUTURE MEETINGS
7. OTHER BUSINESS
Dan Labrecque introduced Beate Wilson as the new Director of Internal Audit for the Region of Peel. He expressed his confidence in her abilities and wished her every success as she assumes her new responsibilities. Beate Wilson, Director, Internal Audit, stated that she is looking forward to working with the Committee in her new role and that she will strive to continue to provide the value added audit reports that the Members have come to expect.
The meeting adjourned at 9:02 a.m.