Paradise pleased with financial audit
By Mark Squibb/August 19, 2022
Paradise council members say the Town is in good financial standing following the receipt of the 2021 audited financial statements at this week’s public meeting.
“I’m happy to report that the Town continues to maintain a strong financial position, with a debt service ratio of 4.4 percent,” said councillor Elizabeth Laurie, who moved that the Town adopt the statements.
That debt service ratio is a reflection of the Town’s ability to repay its loans. Like with golf, the lower the score the better.
The Municipalities Act requires that towns prepare and adopt audited financial statements annually, and the 2021 statements were conducted by BDO Canada. It was the first time the Town had contracted the accounting firm for the auditing.
“Representatives from BDO presented the draft audited financial statements at the Administration and Corporate Services Committee meeting, including a report on the audit approach,” explained Laurie.
Councillor Glen Carew asked whether rising interest rates will impact long term debt.
“Obviously, we will see an increase in our interest rates, as everyone else will,” said Director of Corporate Services Terrilynn Smith. “The Town has the opportunity, because of the financial position we’re in, to avail of great interest rates. I’ve been in conversations with our banking providers, RBC, and discussions about opportunities to potentially obtain loans or funding for future projects in advance to tie in some low interest rates before the rates increase significantly. So, as further discussions happen with the bank, it will be brought forward to committee.”
Carew then asked if the Town had received a management letter, essentially an assessment of any deficiencies the auditor uncovered.
Laurie said the Town has not yet received a management letter, but when it did, it would go first to committee and then council.
Mayor Dan Bobbett gave kudos to the CAO and the Corporate Services team for a job well done.
Councillor Patrick Martin echoed those comments, adding that when he was first elected to council nine years ago, the debt service ratio was almost 10 percent.
“Staff has done a tremendous job,” said Martin. “It’s astonishing that it’s that low. There are municipalities in the province that are up around 25 percent, so we’re doing extremely well.”
Councillor Larry Vaters pointed out the audited statement was submitted to council past the June 1 due date stipulated by the Municipalities Act.
“I was just wondering what led to the delay in completing this year’s audit, and do we have assurance from the auditor that subsequent annual audits will be completed in keeping with the time frames noted in the Municipalities Act?” said Vaters.
Laurie said the accounting work on the Town’s end was unfortunately delayed due to staff shortages. Furthermore, said Laurie, staff shortages on BDO’s end caused further delays.
“The Town did advise the provincial government of our delay, and they had no concerns at the time,” said Laurie. “They actually indicated to our staff that about 90 percent of municipalities in the province were experiencing delays.”
She said BDO has made a commitment to meet the deadline for next year.