Audit Sub-Committee Workshop Members of the Region’s Audit Sub Committee & Halton Community Housing Corporation’s (HCHC) Audit Committee April 10, 2019 Presented by: Cyndy Winslow, Director, Financial Services & Payroll Karen Cinq-Mars, Chief Internal Auditor
Workshop Agenda Governance Terms of Reference Committee Membership Role of the Committee • Appointment of External Auditors 20 minutes • Terms of Engagement • External Audit Work Plan • External Audit Report • Overview of Financial Statements • Internal Audit Charter and Work Plan 10 minutes • Internal Audit Report Questions 15 minutes 2
Governance 3
Governance Regional Council / HCHC Board Region Audit Sub-Committee / HCHC Audit Committee External Audit Internal Audit Management Chief Administrative Officer Chief Internal Auditor Deloitte Partner Jane MacCaskill Karen Cinq-Mars Steve Stewart Regional Treasurer Deloitte Senior Manager Mark Scinocca Scott Finkel HCHC Treasurer Cyndy Winslow 4
Terms of Reference 5
Terms of Reference Regional Council Report HCHC Board Report LPS-03-19 (CS-93-07) HC-01-19 • Role of the Committee • Authority • Composition and Term • Meetings • Scope and Responsibilities • Reporting 6
Committee Membership 7
Committee Membership Region Audit Sub-Committee HCHC Audit Committee (of Region Administration and (of HCHC Board) Finance Committee) • Chair Carr • Chair Carr • Mayor Burton • Councillor Adams • Councillor Fogal • Councillor Malboeuf • Councillor Stolte 4 • Councillor Sharman • Councillor Somerville Year Term 2018-2021 Fiscal Periods 8
Role of the Committee 9
Role of the Committee Appointment of External Auditors Receive External Audit Reports Recommend Approval of Review Terms of Engagement Financial Statements Communication with Management Review Internal Audit Charter and External Auditor and Work Plan Review Work Plan for External Receive Internal Audit Reports Auditor (Audit Service Plan) 10
Appointment of External Auditors Request for Staff Evaluation Recommendation Committee Proposal Evaluation to Council • 2017 Bids • Review technical proposals • Recommend to Council – • Score submissions using highest ranked overall Council/Board approved evaluation criteria • Evaluate presentations by all proposal proponents • Summarize technical proposals 11
Role of External Auditors Develop work plan (audit service plan) Conduct audit in accordance with Canadian Generally Accepted Auditing Standards (GAAS) Review internal controls over financial reporting Deliver audit results report Provide an opinion on Financial Statements Maintain independence and report to audit sub-committee 12
Role of the Committee Appointment of External Auditors Receive External Audit Reports Recommend Approval of Review Terms of Engagement Financial Statements Communication with Management Review Internal Audit Charter and External Auditor and Work Plan Review Work Plan for External Receive Internal Audit Reports Auditor (Audit Service Plan) 13
Terms of Engagement & Communication Deloitte: External Auditors for Fiscal Periods 2017-2021 Performance of External Audit External Audits External Audits Results Report • Regional Municipality of Halton • In accordance with Canadian • Due on completion of audit – Consolidated GAAS and/or Ministry requirements • Summarize findings from the • Halton Community Housing audit Corporation (HCHC) • Obtain audit evidence • Regional Municipality of Halton • Evaluate application of Trust Funds accounting policies • Special Purpose Audits Communication • Committee is responsible for the oversight of the financial reporting process • External auditor will communicate with the Committee should any matters arise 14
2018 Fiscal Year External Audit Deliverables Audit Results Report May 2019 Financial Work Plan Statements January 2019 May 2019 15
2019-2021 Fiscal Periods External Audit Deliverables Audit Results Report May Financial Work Plan Statements October/ November May 16
Role of the Committee Appointment of External Auditors Receive External Audit Reports Recommend Approval of Review Terms of Engagement Financial Statements Communication with Management Review Internal Audit Charter and External Auditor and Work Plan Review Work Plan for External Receive Internal Audit Reports Auditor (Audit Service Plan) 17
Audit Service Plan at a Glance 18
Role of the Committee Appointment of External Auditors Receive External Audit Reports Recommend Approval of Review Terms of Engagement Financial Statements Communication with Management Review Internal Audit Charter and External Auditor and Work Plan Review Work Plan for External Receive Internal Audit Reports Auditor (Audit Service Plan) 19
External Audit Report 20
External Audit Report 21
External Audit Report 22
External Audit Report 23
Role of the Committee Appointment of External Auditors Receive External Audit Reports Recommend Approval of Review Terms of Engagement Financial Statements Communication with Management Review Internal Audit Charter and External Auditor and Work Plan Review Work Plan for External Receive Internal Audit Reports Auditor (Audit Service Plan) 24
Includes the activities of all committees of Council, Halton Regional Police Service and the Halton Community Housing Corporation (HCHC). 25
Management Report The management of The Regional Municipality of Halton has prepared the accompanying consolidated financial statements and is responsible for their accuracy and integrity . These financial statements consolidate all operations for which Halton Region has legislative and financial responsibility, as well as the operations of the Halton Regional Police Service and Halton Community Housing Corporation. The consolidated financial statements have been prepared by management in accordance with Canadian public sector accounting standards. The adoption of these standards provides the reader of the consolidated financial statements a more complete view of Halton Region’s assets and financial obligations. The reader is encouraged to review the summary of the significant accounting policies that are disclosed in Note 1 to the consolidated financial statements. To meet its responsibility, management has developed and maintained a comprehensive system of financial and internal controls which includes an organizational structure that appropriately segregates authorization and recording functions, employs highly qualified professional staff and is built on sound budget policies, all of which are subject to a continuing program of internal audit. These controls ensure that the assets of Halton Region are properly safeguarded and that the business transactions of Halton Region are carried out within the legislative authority of the Province of Ontario and within the policies authorized by Regional Council, and that these transactions are completely and accurately reflected in Halton Region’s consolidated financial statements and reports. The Audit Sub‐Committee of Regional Council reviews and approves the consolidated financial statements before such statements are submitted to the Administration and Finance Committee, Regional Council and published for the residents of Halton Region. As mandated by resolution of Council, the internal and external auditors have access to and regularly meet with the Audit Sub‐Committee to discuss their audits and the results of their examination. The 2017 consolidated financial statements have been examined by Halton Region’s external auditors, Deloitte LLP, Chartered Professional Accountants, Licensed Public Accountants and their report precedes the financial statements. 26
Independent Auditor’s Report Identifies the audited financial statements Management’s role in preparing financial statements Defines the scope of the audit Expression of the audit opinion Other reporting 27
Changes To Auditor’s Report In 2018 28
Key Components of the Consolidated Financial Statements Consolidated Consolidated Statement of Statement of Financial Position Operations Consolidated Notes to Statement of Consolidated Cash Flows Financial Statements 29
Assets that can be used to discharge existing liabilities or finance future operations Obligations of the Region Difference between Financial Assets and Liabilities Assets that are used or expected to generate future cash flow Region’s net worth 30
Approved budget converted to PSAS accrual basis Region revenues by significant type Region expenses categorized by program C Transfer to reserves TCA $4,879,934 80% Reserves $1,073,253 17% Other $ 163,092 3% Tangible Capital ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Assets (TCA) and C Total $6,116,279 Reserves set aside by Council 31
Cash-generating activities Spend/receipts on tangible capital assets Cash used/generated by the Region’s investing policies Funds received/paid for long-term debt financing Activities during the period involving cash 32
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