Access Housing Connections Inc. Financial Statements December 31, 2011

Size: px

Start display at page:

Download "Access Housing Connections Inc. Financial Statements December 31, 2011"

Gabriel Richards
5 years ago
Views:

1 Financial Statements December 31, 2011

August 17, 2012 Independent Auditor s Report To the Directors of We have audited the accompanying financial statements of, which comprise the balance sheet as at December 31, 2011 and the statements

2 August 17, 2012 Independent Auditor s Report To the Directors of We have audited the accompanying financial statements of, which comprise the balance sheet as at December 31, 2011 and the statements of operations and deficit and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. PricewaterhouseCoopers LLP, Chartered Accountants PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2 T: , F: PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

3 Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of as at December 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Other matter The unaudited financial statements for December 31, 2010, which are presented for comparative purposes only, were compiled by management. Chartered Accountants, Licensed Public Accountants

4 Balance Sheet As at December 31, (Unaudited) Assets Current assets Cash Due from City of Toronto (note 3) 3,678,724 2,482,891 HST receivable 15,161 16,794 3,694,585 2,500,385 Capital and intangible assets (note 4) 96, ,495 Liabilities 3,791,570 2,664,880 Current liabilities Accounts payable and accrued liabilities 279, ,889 Due to Toronto Community Housing Corporation (note 3) 2,534,128 1,588,789 Deferred rental allowance (note 5) 568, ,558 3,382,231 2,621,236 Notes payable - Toronto Community Housing Corporation (note 3) 1,371,827 1,371,827 Net Liabilities 4,754,058 3,993,063 Share capital Authorized and issued 100 common shares Contributed capital 300, ,000 Deficit (1,262,588) (1,628,283) (962,488) (1,328,183) 3,791,570 2,664,880 Approved by the Board of Directors Director Director The accompanying notes are an integral part of these financial statements.

5 Statement of Operations and Deficit For the year ended December 31, (Unaudited) Revenue Operating subsidies (note 3) 5,349,951 5,278,000 Subsidies - Housing Allowance and Mental Health Commission 340, ,301 Market rental services (note 3) 468, ,938 Landlord grants (notes 3 and 6) 31,113,993 29,357,748 Interest and sundry 2,480 5,422 37,275,599 35,439,409 Operating expenses Salaries and benefits 4,369,190 4,498,737 Landlord payments (note 6) 31,039,814 29,357,748 Recoverable expense - Mental Health Commission 249, ,672 Staff 14,740 21,837 Office 563, ,586 Systems 275, ,380 Professional services 242, ,839 Administrative and other 11,651 14,710 Interest 75,450 75,450 Depreciation 67, ,251 36,909,904 35,546,210 Excess (deficiency) of revenue over expenses for the year 365,695 (106,801) Deficit - Beginning of year (1,628,283) (1,521,482) Deficit - End of year (1,262,588) (1,628,283) The accompanying notes are an integral part of these financial statements.

6 Statement of Cash Flows For the year ended December 31, (Unaudited) Cash provided by (used in) Operating activities Excess (deficiency) of revenue over expenses for the year 365,695 (106,801) Add: Item not involving cash Depreciation 67, , ,206 23,450 Changes in non-cash working capital balances related to operations Due from City of Toronto (1,195,833) 185,924 HST receivable1,632 (11,532) Accounts payable and accrued liabilities (95,984) 65,675 (856,979) 263,517 Investing activities Purchase of capital and intangible assets - (18,471) Financing activities Due to Toronto Community Housing Corporation 945, ,162 Deferred rental allowance (88,360) (431,208) 856,979 (245,046) Increase in cash and cash equivalents during the year - - Cash - Beginning of year Cash - End of year The accompanying notes are an integral part of these financial statements.

7 Notes to Financial Statements December 31, The organization The (AHCI) was incorporated on August 14, 2003 under the provisions of the Ontario Business Corporations Act and is wholly owned by Toronto Community Housing Corporation (TCHC). In establishing AHCI, the TCHC approved a shareholder direction that set guiding principles, high-level objectives and expected accountability to TCHC. The shareholder direction establishes AHCI as a not-for-profit organization under the direction of an independent board of directors. AHCI is a not-for-profit organization. Pursuant to section 149, paragraph (1)(d.6) of the Income Tax Act (Canada) (the ITA), AHCI is exempt from federal Part I tax, as it is a subsidiary of a municipal corporation. AHCI qualifies as a subsidiary of TCHC, having met the following conditions: TCHC, a municipal corporation, directly controls AHCI; no rights have been issued to acquire shares or capital in AHCI, either immediately or in the future, either absolutely or contingently; and no more than 10% of income for the taxation year is earned outside of the geographical boundaries of AHCI or those of TCHC. Per subsection 27(2) of the Taxation Act (Ontario), AHCI is exempt from Ontario income tax because it is exempt from federal Part I tax, pursuant to section 149 of the ITA. On January 1, 2004, AHCI commenced operations in the delivery of housing access services and in the administration of homelessness and commercial rent supplement programs. 2 Summary of significant accounting policies These financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) for not-for-profit organizations. The significant accounting policies are summarized below: Revenue recognition AHCI follows the deferral method of accounting for contributions. Unrestricted contributions, which include subsidies, are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Externally restricted contributions, which include rent supplements, are recognized as revenue in the year in which the related expenses are recognized. Other revenue is recorded when services are provided and collection is reasonably assured. Capital and intangible assets Capital and intangible assets are recorded at cost less, accumulated depreciation. Depreciation is calculated on a straight-line basis over the useful life of the asset as follows: (1)

8 Notes to Financial Statements December 31, 2011 Equipment Computer software Computer hardware Office renovation 4 to 10 years 4 years 4 years 15 years Use of estimates The preparation of financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Future accounting policy changes The Public Sector Accounting Board (PSAB) issued new accounting standards in December 2010, which set out financial reporting standards that apply to government not-for-profit organizations. The PSAB has incorporated into the Public Sector Accounting (PSA) Handbook the 4400 Series from The Canadian Institute of Chartered Accountants (CICA) Handbook without making substantive changes, amended the Introduction of Accounting Standards that apply only to not-for-profit organizations currently in the PSA Handbook to set out the applicability of standards in the PSA Handbook to government not-for-profit organizations, and amended the Introduction to Public Sector Accounting Standards to direct government not-for-profit organizations to apply the standards for not-for-profit organizations in the PSA Handbook for fiscal periods beginning on or after January 1, 2012, with retroactive application resulting in restatement of prior periods. Government notfor-profit organizations currently use the standards developed by the Accounting Standards Board that are used by private sector not-for-profit organizations, which are summarized in Part V of the CICA Handbook. 3 Related party transactions The amount due from the City of Toronto represents subsidies receivable and is non-interest bearing. The amount due to TCHC represents a reimbursement to TCHC for expenses paid on AHCI s behalf. Amounts due are non-interest bearing. Note payable to TCHC bears interest at 5.5% payable yearly and is due on demand. During the year, AHCI provided market rental services to TCHC for 90,276 ( ,793). Related party transactions are recorded at their exchange amount. The operating subsidies of 5,349,951 (2010-5,278,000) and landlord grants of 31,113,993 ( ,357,748) were received from the City of Toronto. (2)

9 Notes to Financial Statements December 31, Capital and intangible assets Cost Accumulated depreciation Net Net (Unaudited) Equipment 216, ,871 77,301 98,918 Office renovation 4, ,424 4,751 Computer hardware 3,560 3, Capital assets 224, ,922 81, ,114 Intangible assets - computer software 1,516,238 1,500,978 15,260 60,381 5 Deferred rental allowance 1,740,885 1,643,900 96, ,495 Deferred rental allowance represents grants received in advance for payments to landlords under the Housing Allowance pilot program, Short-term Rent Support Program and Mental Health Commission administered by AHCI. 6 Landlord payments and landlord grants Landlord payments consist of the following: (Unaudited) Commercial - rent supplement 12,250,599 12,030,669 Strong Communities - rent supplement 11,644,122 11,831,140 Housing allowance Pilot (4,494) 446,839 Rollout 3,676,775 4,239,163 Mental Health Commission 1,813, ,239 Short-term Rent Support Program 1,659,575 9,698 31,039,814 29,357,748 Landlord grants are equivalent to the landlord payments plus an agreed upon administrative fee per unit totalling 74,179 ( nil) received from the City of Toronto. (3)

10 Notes to Financial Statements December 31, Financial instruments AHCI has chosen to apply CICA Handbook Section 3861, Financial Instruments - Disclosure and Presentation, in place of Section 3862, Financial Instruments - Disclosures, and Section 3863, Financial Instruments - Presentation. The carrying values of cash, due from City of Toronto, due to TCHC, HST receivable, accounts payable and accrued liabilities approximate their fair values due to their short-term maturity. The fair value of the notes payable to TCHC cannot be determined due to the uncertain date at which the notes may come due. At initial recognition, AHCI classifies its financial instruments in the following categories depending on the purpose for which the instruments were acquired: Category Measurement Cash loans and receivables amortized cost Due from City of Toronto loans and receivables amortized cost HST receivable loans and receivables amortized cost Accounts payable and accrued liabilities financial liabilities amortized cost Due to TCHC financial liabilities amortized cost 8 Capital management AHCI defines capital as long-term debt and equity. AHCI s objective is to have sufficient capital to continue operating despite adverse financial events and to provide itself with the flexibility to take advantage of opportunities. AHCI is not subject to any externally imposed capital requirements. There has been no change in AHCI s approach to capital management during the year ended December 31, Economic dependence AHCI depends on the City of Toronto for a significant portion of its funding (note 3). If the funding ceases, AHCI may not be able to continue as a going concern. (4)

FPSC Foundation (incorporated under the laws of Canada as a corporation without share capital) Financial Statements March 31, 2013

FPSC Foundation (incorporated under the laws of Canada as a corporation without share capital) Financial Statements March 31, 2013 (incorporated under the laws of Canada as a corporation without share capital) Financial Statements March 31, July 31, Independent Auditor s Report To the Members of We have audited the accompanying financial