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November 13, 2018 November 13, 2018

M.D. gets look at audit process

Posted on November 8, 2018 by Vauxhall Advance

By Cole Parkinson
Vauxhall Advance
cparkinson@tabertimes.com

While the Municipal District of Taber’s audit won’t be in front of council until next spring, they were given a quick update on what will be looked at for 2018’s analysis.

Like in previous years, KPMG will be doing the M.D. of Taber’s audit and council was presented with what the audit team will be looking for during the coming review at their regular meeting on October 23.

“KPMG is independent of the M.D. and we also make sure to take steps that everyone on the audit team is independent as well so it’s not related to anybody in the decision-making capacity which can be surprisingly challenging in southern Alberta from time to time,” said Derek Taylor, KPMG auditor. “Other things that will impact your audit is your daily operations. Your management team is usually very proactive in calling us throughout the year when they have questions or concerns.”

Taylor also touched on the effect the decline in the oil and gas sector will have on their audit.

While that wasn’t new news for council, the effect is still being felt year after year with the financial burdens being placed on municipalities due to the shortfall.

“Other items that will impact your audit potentially is, of course, senior levels of government and funding constraints and things that are occurring there as well as macroeconomic things such as the price of oil and gas which is impacting municipalities across Alberta in a variety of ways for several years now. Couple other items to touch on is the regulatory environment which we keep cognizant that we do have reporting requirements with the province that need to be done by April. While we try to work with management to ensure we are way, way ahead of and it is one of the items we keep cognizant of. As well as any other potential grant fillings you may have,” explained Taylor.

Another thing highlighted for council was changes that would have slight impacts in regard to some of their financial statements.

“Your financial statements are prepared in accordance with Canadian Public Sector Accounting Standards. Within those standards, there have been a couple new changes, none will have a dramatic effect on your financial statements but there are some items that were brought in to clarify some of the items in the assets section. Those aren’t expected to impact your financial statements dramatically,” stated Taylor, who also touched on a few other changes that will have an effect on the 2018 audit. “In the past, we have talked about some of the new financial instruments sections, those have actually differed from municipalities again. The reason for that is there are some challenges in adopting those standards.”

Other things that will be viewed by the audit staff will be revenues, receivables and tangible assets.

“With regards to revenues and receivables, our planned audit approach on those types of things is to evaluate some of the design and implementation of some of your processes and internal controls. We don’t look at all of your internal controls, we just focus on certain ones for those cycles,” said Taylor. “The key estimate that management makes on that is estimating the useful life of your tangible capital assets. What often happens is they will purchase an asset, they estimate it, let’s say a grader that will last 20 years or 10 years. We make sure those estimates are appropriate based on what they’ve done.”

They will also be accessing management evaluations on different items.

“One of the other things management often has to do is look is if there is any other receivable evaluation issues or anything like that. What we do is look at management’s assessments and go from there,” added Taylor.

While council was being informed of what to expect for the audit, the actual complete document is still a few months away. Work has begun but it is still in the early stages but the Taylor says the audit team will continue to work with administration as they continue to work towards the deadlines.

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