WESTLOCK — The Town of Westlock received a ‘clean and qualified’ passing grade on its recent year-end financial audit.
Edward Cheung, of Doyle & Company, presented the town’s audited financial statements to councillors at their March 27 meeting, a document that included the town’s financial position and results of its operations for the year ending Dec. 31, 2022.
“For 2022 December year-end, the Town of Westlock’s financial statements was issued a clean and qualified audit opinion. We weren’t able to find anything of fraud, we had no disagreements with management. All the audit evidence was there for us to provide this opinion to the town,” said Cheung, noting they were given full and free access to all information and were not limited in their scope in any way. “We were able to do our audit without any issues.”
Every year, municipalities must prepare annual financial statements and a financial information return. The financial statements must include the debt limit and the amount of the municipality’s debt as defined in legislation and must also make its financial statements and the auditor’s report available to the public by May 1.
At the end of 2022, the town’s financial records reported a reduction to surplus of $712,417, which can be broken into three categories — general unrestricted surplus is $37,414 after a transfer to reserves of $425,000 (2022 ending total $2,694,797), restricted surplus (reserves) of $770,854 (2022 ending total $6,585,117) and equity in tangible capital assets $-1,520,685 (2022 ending total $51,889,389).
During his presentation Cheung pointed out the schedule of change in accumulated surplus details, noting it provides the overall assessment and is the “report card page for municipalities.”
“It goes through everything in terms of what was spent on capital assets, debt paid, debt obtained for the year. It gives you a number at the very end, your change in accumulated surpluses is your grade and we always look for a positive number there that means there’s a surplus for the year,” explained Cheung. “The change in accumulated surplus for unrestricted surplus was $37, 414 but if you look at the restricted surplus, which is through reserves, it increased about $770,000 so you end up at $6.5 million for your restricted surplus.”
He also noted the reserves are fully funded which means it has the ability and the money to do these projects with the deferred revenue and with their payables. “The Town of Westlock is in a really good financial position largely due to the management and the staff.”
Cheung said they also look at internal controls and determine if there are any deficiencies that need to be brought to council and management’s attention. In the town’s case, there were none found, he noted and as a result will not be issuing a management report.
“Everybody’s working well together, the numbers are there, our team has a really, really easy time finding anything,” said Cheung, noting the statements also have information that supports numbers in the financial position and all numbers in the income statement.
Coun. Murtaza Jamaly asked if there were any communities that have ‘unfunded’ restricted surpluses and what that meant. “It means you don’t have the cash or the investments available to pay for those restricted surpluses,” said Cheung, while mayor Ralph Leriger noted the town’s recent switch to electronic payments for invoices earlier this year and the concerns in cybercrime, asking “what kind of controls do we have.”
“From what I’ve seen, the Town of Westlock is a leader in terms of having the technology and the controls in place for that,” said Cheung. “The software that you guys have allows you to see who’s entered, changed and ultimately approved that and it’s really, really important for us as auditors to be able to see that audit trail.”
The financial information, which was accepted by councillors unanimously, will be posted on the town’s website and will be available at the town office upon request. An annual report is also being prepared and will have excerpts of the financial statements in it as well.
