2012 Municipal Orientation. Municipal Accounting and Financial Reporting

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1 2012 Municipal Orientation Municipal Accounting and Financial Reporting

2 Agenda Accounting Financial Reporting Annual Financial Statements Fund Accounting Budgeting

3 Accounting The art of recording, classifying, reporting and interpreting the financial data of an organization. Results in preparation of Financial Statements or Financial Reports.

4 Accounting & Reporting Objectives Compliance with Legal Provisions Internal Controls Full Disclosure Public Sector Accounting Board (PSAB)

5 Financial Reporting Municipal Financial Reporting Manual CCSP/MunicipalFinancialReportingManual.pdf Issued under the Control of Municipalities Act Created for use by NB Municipalities Interpretation of various Acts Reporting Requirements Consult your treasurer/administrator

6 Annual Financial Statements Fiscal Year is Calendar Year Must be PSAB compliant Must be Audited by a CGA or CA Notes are both integral and informative Public Document Formally approved by Council Not approved by the Minister of Environment and Local Government (ELG) Must be submitted to the Minister of ELG by legislated deadline of March 1.

7 Fund Accounting Typical Funds General Utility Operating Capital Reserves

8 Budgeting What is a budget? Financial Plan Forecast of Future Business Transactions Operating budget is one year period Capital budget can be for many years (usual 5 years) Authority to spend money Public documents

9 Municipal Budgets Annual plan for expenditures (programs and services) Forecast revenues for the coming year Council approves the final budget by resolution at a regular meeting and sets the tax rate and utility user fees Operating Budgets submitted on forms prescribed by Minister of ELG Used to communicate plans and activities to the general public, and the provincial government

10 General Operating Fund Budget Must be a balanced budget Reviewed and approved by Minister of ELG Required by Section 87 (2) of the Municipalities Act Prescribed form is supplied by ELG Form includes resolution by Council to set tax rate Tax rates forwarded to Department of Finance (DFIN) by end of January DFIN looks after billing and collection Municipalities receive warrant and unconditional grant in 12 monthly payments Legislated deadline for submission - November 30

11 Utility Operating Fund Budget Balanced budget required (over 1-4 years) Reviewed and approved by Minister of ELG Required by Section 189 (4.1) of the Municipalities Act Prescribed form is supplied by ELG Form includes resolution by Council to set water and sewer user fees Municipalities looks after billing and collection Legislated deadline for submission - November 30

12 Capital Fund Budgets Planning for Capital Expenditures should be done annually Capital Expenditures only as defined by the Municipal Capital Borrowing Act 5-year Plan for Capital Expenditures recommended Planning includes financing of expenditures Resulting debt charges will affect tax and utility rates

13 Budget Process Who is Involved? Staff Department Heads, Supervisors Treasurer / Accounting Staff Management Team Finance Committee Council

14 Seven Steps in Budget Process 1. Establish a Budget Calendar 2. Request Input from Others 3. Collect Necessary Information 4. Review Information and Prepare Draft Budget 5. Review Draft and Make Changes 6. Approval by Council and Minister of ELG 7. Submission to the Minister of ELG

15 Best Practices Year Round Planning Budget for revenues and expenditures, not tax rates Start with expenses Planning for each program and service Forecast revenues by source and type Zero-based budgeting Include long-term and short-term plans

16 Questions? 1) Your administrator/treasurer 2) Your auditor 3) Community Finances Branch at ELG