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HomeMy WebLinkAboutAFC 2014-05-12 AgendaCorporation of the District of Maple RidgeCorporation of the District of Maple RidgeCorporation of the District of Maple RidgeCorporation of the District of Maple Ridge Audit & Finance CommitteeAudit & Finance CommitteeAudit & Finance CommitteeAudit & Finance Committee May 12May 12May 12May 12, 2014, 2014, 2014, 2014 8:00 A8:00 A8:00 A8:00 AMMMM Blaney RoomBlaney RoomBlaney RoomBlaney Room Chairperson:Chairperson:Chairperson:Chairperson: Councillor M. Morden Committee Members:Committee Members:Committee Members:Committee Members: Councillors: C. Bell; R. Masse; Mayor Daykin Staff:Staff:Staff:Staff: Chief Administrative Officer: J. Rule GM – Corporate & Financial Svc: P. Gill GM – Public Works & Development F. Quinn GM – Community Dev. Park & Rec K. Swift Manager of Accounting: C. Nolan Guest:Guest:Guest:Guest: External Auditor (BDO Canada LLP) B. Cox Recording Secretary:Recording Secretary:Recording Secretary:Recording Secretary: Amanda Gaunt AGENDAAGENDAAGENDAAGENDA 1.1.1.1. Approval ofApproval ofApproval ofApproval of aaaagendagendagendagenda 2.2.2.2. Approval of Approval of Approval of Approval of mmmminutes of inutes of inutes of inutes of February 3, 2014February 3, 2014February 3, 2014February 3, 2014 3.3.3.3. 2013 Audit Update2013 Audit Update2013 Audit Update2013 Audit Update • Overview of 2013 audit by external auditor 4.4.4.4. Audit Contract for 2014Audit Contract for 2014Audit Contract for 2014Audit Contract for 2014----2016201620162016 • Report regarding extension of audit services with BDO for 2014-2016 i.i.i.i. Appendix 1 – Proposal from BDO ii.ii.ii.ii. Appendix 2 – Contaminated Sites report from November 12, 2013 Audit Committee meeting 5.5.5.5. Investment UpdateInvestment UpdateInvestment UpdateInvestment Update _”original signed by Catherine Nolan” Agenda submitted by: C. Nolan, CGA Manager of Accounting District of Maple RidgeDistrict of Maple RidgeDistrict of Maple RidgeDistrict of Maple Ridge Audit & Finance CommitteeAudit & Finance CommitteeAudit & Finance CommitteeAudit & Finance Committee Meeting MinutesMeeting MinutesMeeting MinutesMeeting Minutes February 3, 2014 The Minutes of the Audit and Finance Committee Meeting held in the Blaney Room of the Municipal Hall, 11995 Haney Place, Maple Ridge, BC on Monday, February 3, 2014 at 8:00 a.m. PRESENTPRESENTPRESENTPRESENT Committee MembersCommittee MembersCommittee MembersCommittee Members Municipal StaffMunicipal StaffMunicipal StaffMunicipal Staff Councillor Morden, Chair J. Rule, Chief Administrative Officer Mayor Daykin P. Gill, General Manager, Corporate & Financial Services Councillor Bell K. Swift, General Manager of Community Development, Parks Councillor Masse and Recreation Services F. Quinn, General Manager of Public Works and Development GUESTGUESTGUESTGUEST C. Nolan, Manager of Accounting B. Cox, External Auditor, T. Thompson, Manager of Financial Planning BDO Canada LLP K. Gormley, Manager of Business Systems A. Gaunt, Confidential Secretary F. Armstrong, Manager of Corporate Communications The meeting was called to order at 8:00 a.m. 1.1.1.1. Approval ofApproval ofApproval ofApproval of aaaagendagendagendagenda MOVEDMOVEDMOVEDMOVED by Councillor Bell and SECONDEDSECONDEDSECONDEDSECONDED by Mayor Daykin that the agenda be approved as circulated. CARRIEDCARRIEDCARRIEDCARRIED 2.2.2.2. Approval of Approval of Approval of Approval of mmmminutes of inutes of inutes of inutes of November 12November 12November 12November 12, 2013, 2013, 2013, 2013 MOVEDMOVEDMOVEDMOVED by Mayor Daykin and SECONDEDSECONDEDSECONDEDSECONDED by Councillor Bell that the minutes of November 12, 2013 be approved. CARRIEDCARRIEDCARRIEDCARRIED 3.3.3.3. 2013 Audit Update2013 Audit Update2013 Audit Update2013 Audit Update • Overview of 2013 audit by external auditor The auditor reviewed the letter dated January 22, 2014 titled “Audit of the Financial Statements of the Corporation of Maple Ridge (the “District”) for the year ended December 31, 2013. Audit & Finance Committee Meeting Minutes February 3, 2014 Page 2 He explained the “Anticipated Issues” section. He advised on the audit scope and the documents and opinions BDO will provide and highlighted reports to the Province as well as the Auditor’s Management Letter The auditor reviewed the details of the higher risk financial statement areas and explained the methods used to audit various areas. The General Manager of Corporate and Financial Planning explained how differences between the District’s financial statements and the invoices from suppliers occur. Note: Councillor Hogarth joined the meeting at 8:18 a.m. The Auditor advised on the external auditor’s reliance on outside experts, the timing of the audit, auditor independence and Council fraud awareness. He addressed a question pertaining to Council expenses and on the work done by the committee. 4.4.4.4. Next Meeting Next Meeting Next Meeting Next Meeting –––– to be determinedto be determinedto be determinedto be determined AdjournmentAdjournmentAdjournmentAdjournment––––8:56 a.m.8:56 a.m.8:56 a.m.8:56 a.m..... ____________________________________________ Councillor Morden, Chair Corporation of the District of Maple Ridge Audit Results and Communications Report to: The Audit Committee and Council For fiscal year ended: December 31, 2013 I BDO 600 Cathedral Place 925 West Georgia Street Vancouver, BC, Canada V6C 3L2 Telephone: (604) 688-5421 Telefax: (604) 688-5132 E-mail: vancouver@bdo.ca Web: www.bdo.ca March 24, 2014 Members of the Audit Committee The Corporation of the District of Maple Ridge 11995 Haney Place Maple Ridge, BC V2X 6A9 Dear Members of the Audit Committee: We have completed our audit of the financial statements of the Corporation of the District of Maple Ridge [the “District”] for its fiscal year ended December 31, 2013. We take this opportunity to present our findings to you. The responsibility for producing financial statements and ensuring adequate internal controls and sound business practices is the responsibility of Council through management and is a part of management's overall responsibility for the ongoing activities of the District. Policies and procedures developed by the District to safeguard its assets and to provide reasonable assurance that errors and irregularities or illegal acts are promptly identified, must be properly monitored to ensure that all staff are complying with the guidelines provided. The objective of an audit is to obtain reasonable assurance whether the financial statements are free of any material misstatement. Auditors must be completely independent and objective in the application of their testing. We received full support from management and staff throughout our work and the scope of our audit was not restricted in any way. Our audit opinion is without reservation indicating that our audit tests and procedures yielded reliable results. Should you have any questions or concerns in regard to any of the items mentioned in this report, please do not hesitate to contact us at any time. Yours truly, Bill Cox, CA Partner through a corporation of BDO Canada LLP Chartered Accountants BC/ I BDO Contents   Audit Findings ....................................................................................... 1  Audit Reporting ..................................................................................... 2  Auditor Independence ............................................................................. 3  Possible Misstatements ............................................................................ 4  Management Representations .................................................................... 5  Appendix A – Management Letter ................................................................ 6  Appendix B – Letter of Representation ........................................................ 10  District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 1 Audit Findings There were a number of matters that arose during the audit that we would like to bring to your attention, although nothing that was detrimental to the audit. Each of these matters is summarized briefly below. We would be pleased to discuss any of these items in more detail at our upcoming meeting. Auditor’s considerations of possible fraud and illegal activities Our audit procedures were performed for the purpose of forming an opinion on the consolidated financial statements and although they might bring possible fraudulent or illegal activities to our attention, our audit procedures were not designed to detect fraudulent or illegal activities. In any event, we did not detect any fraudulent or illegal activities, or material misstatements resulting from fraudulent or illegal activities during our audit. Disagreements with Management There were no significant disagreements with management. Litigation Proceedings We have communicated directly with the District’s legal counsel. We have received all of the legal letter replies. There are a number of outstanding claims and we are required to obtain an update from legal counsel up to the date the financial statements are approved by Council. Significant Accounting Policies, Estimates and Judgments Management is responsible for determining the significant accounting policies. The choice of different accounting policy alternatives can have a significant effect on the financial position and results of operations of the District. The application of those policies often involves significant estimates and judgments by management. The most significant estimates are used in regard to useful life of tangible capital assets, which determines amortization expense, legal claims, which determine legal expense and liability and various estimates in determining the employee future benefits liability and expense. We are of the opinion that the significant accounting policies, estimates and judgments made by management are reasonable in the context of the financial statements taken as a whole. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 2 Audit Reporting Materiality In our Audit Planning Letter dated January 22, 2014, we discussed that materiality for planning purposes was $1,900,000 based on 1.5% of projected revenues and that performance materiality was set at $1,425,000 based on 75% of materiality. Furthermore, trivial errors were set at 1% of materiality, $19,000. The materiality used based on normalized actual results ended up being higher than the preliminary materiality stated in the Audit Committee Planning Letter. Materiality was $2,200,000 based on 1.5% of revenues. Performance materiality was set at $1,650,000 and the trivial error level was $22,000 based on 1% of materiality. Our Audit Opinion We did not detect any evidence of misstatements that would have a material effect on the consolidated financial statements and, accordingly, we plan to issue an unqualified audit report. Management Letter Our audit provides insight into many of the District’s financial operations and control systems. Points that come to our attention along with recommendations for improvement are reported to you in this format. This letter is included as Appendix A of this report. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 3 Auditor Independence At the core of the provision of external audit services is the concept of independence. We are communicating matters that, in our professional judgment, may reasonably be thought to bear on our independence for the audit of the District. In determining which relationships to report, we have considered the applicable legislation and relevant rules of professional conduct and related interpretations prescribed by the Institute of Chartered Accountants of BC covering such matters as the following:  holding of a financial interest, either directly or indirectly in a client;  holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client;  personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client;  economic dependence on a client; and  provision of services in addition to the external audit engagement. We have prepared the following comments to facilitate our discussion with you regarding independence matters. We are not aware of any relationships between the District and us that, in our professional judgment, may reasonably be thought to bear on our independence. We hereby confirm that we are independent with respect to the District within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of BC as of the date of this letter. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 4 Possible Misstatements During the audit we keep a list of differences between the financial statements and our audit findings from third parties or other sources. This list, known as “Possible Misstatements”, is totaled to ensure that the differences are not material. Should the list total become close to materiality, it is necessary to do further audit work on the differences to determine if there really is an error in the financial statements. The existence of items on our Possible Misstatements listing is normal and does not necessarily mean that the financial statements contain errors. We identified no possible misstatements at year end resulting in an under/over statement of income or expenses, or an under/over statement of asset or liabilities. After considering both quantitative and qualitative factors with respect to the likely aggregate misstatements attached, we agree with management that the financial statements are not materially misstated. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 5 Management Representations During the course of an audit, management made many representations to us. These representations were verbal or written and therefore explicit, or they were implied through the financial statements. Management provided representations in response to specific queries from us, as well as unsolicited representations. Such representations were part of the evidence gathered by us to be able to draw reasonable conclusions on which to base the audit opinion. These representations were documented by including in the audit working papers memoranda of discussions with management and written representations received from management. Management's representations included, but were not limited to: a) matters communicated in discussions with us, whether solicited or unsolicited; b) matters communicated electronically to us; c) schedules, analyses and reports prepared by the entity, and management's notations and comments thereon, whether or not in response to a request by us; d) internal and external memoranda or correspondence; e) minutes of meetings of the mayor and councillors; f) a signed copy of the financial statements; and g) a representation letter from management. We obtained management's written confirmation of significant representations provided to us during the engagement (Sample in Appendix B). Such a confirmation included matters that are: a) directly related to items that are material, either individually or in the aggregate, to the financial statements; b) not directly related to items that are material to the financial statements but are significant, either individually or in the aggregate, to the engagement; or c) relevant to management's judgments or estimates that are material, either individually or in the aggregate, to the financial statements. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 6 Appendix A – Management Letter March 24, 2014 Mr. Paul Gill, General Manager Corporate and Financial Services The Corporation of the District of Maple Ridge 11995 Haney Place Maple Ridge, BC V2X 6A9 RE: Auditor’s Management Letter As your external auditors we are engaged to provide an audit opinion on your year end financial statements. An external audit requires testing of transactions and balances and review of those internal control systems upon which we may place reliance. A positive opinion on the financial statements does not necessarily mean that your internal control systems are all operating effectively. This is because we review only those internal control systems where we feel that failure in those systems could result in a material error on the financial statements. With those systems that we do review, our focus is on the assertions necessary to meet our financial statement audit objectives. Our review of systems, transactions and balances as well as discussions with staff at various levels throughout the District gives us a unique insight into your operations. While conducting this work we make note of items that come to our attention where we feel that improvement could be made or alternatives could be considered. We are fortunate in that we work with a great number of clients and observe a wide variety of processes. We see firsthand any procedures that are emerging as best practices. As matters come to our attention we make note of these for subsequent follow- up. For minor matters we discuss directly with the staff involved. More important matters are brought forward in this letter (known as a “management letter”). It is always worth noting that we almost always come up with points for all clients. The existence of points does not mean that there are significant problems with your systems or staff. They are just recommendations to make good systems better. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 7 Status of Prior Year Recommendations There were a few carry-forward points from the prior year’s management letter. We track these points to ensure that recommendations are followed up and implemented. Recommendation Status Presentation of Investment Reports We recommend that the Investment Report summarizing the investment holdings, returns and deviations from policy be presented to the Audit and Finance Committee on a regular basis. Management has considered our recommendation and the Investment Report is presented to the Audit and Finance Committee on a regular basis. Deferred Revenue Tracking We recommend that the Public Works and the Finance departments coordinate to ensure the Finance department has the updated project status and that the completion reports are forwarded to the Finance department upon project completion. Management has considered our recommendation and the process has already been in place along with regular cross-checking of records to minimize the risk of Finance not receiving completion reports in the future. Current Year’s Observations and Recommendations 1. Contaminated Sites Observation We have previously mentioned to you the new public sector accounting standard that comes into force in 2015 known as “Liabilities for Contaminated Sites”. This standard requires that a government entity record a liability in regard to any properties that are not in use where there is environmental contamination above the legal standard. Importantly, the standard requires the government to methodologically review its properties to determine those properties at risk, and potentially to conduct environmental testing on high-risk properties. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 8 The approach that this standard takes makes it quite onerous because of the requirement to actively go beyond just what you are already aware of. It is expected that many local governments will have no resulting ending liability under this standard, yet they will still have to expend significant effort to be able to show this. Because of the requirement to determine inventory of properties, review the history of those properties, and potentially engage external experts in the process; this is not something that can be left to the last minute. Recommendation Your staff are aware of these new standards and have developed preliminary plans for completing its requirements. We encourage them to continue to move the project forward early in the 2014 fiscal year. Management Comments: Preliminary plans are underway for the implementation of PS3260 “Liability for Contaminated Sites” and the need to work on this has been incorporated into the business plans of departments that will play a role in its implementation. 2. Early Adoption of Financial Instruments Observation Another set of new standards, known as the Financial Instruments Standards, are coming in 2016. These standards include: PS 3450 – “Financial Instruments” and related sections PS 1201 – “Financial Statement Presentation”, PS 2601 – “Foreign Currency Translation”, and PS 3041 – “Portfolio Investments”. Although not mandated until 2016, you are able to elect to early adopt these standards. We are encouraging some local governments to consider early adoption along with a related election to record their investments at fair value. There are two main reasons why we believe this may be of value: first, the market value of investments is likely more relevant to most users then the historical cost method in use currently; and secondly, the standards require disclosure and analysis of risks related to financial instruments which we feel is good information for the readers of the financial statements. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 9 In your case, most of your investments are deposit notes, which are linked to performance of a set of equities or a financial index. As a result, market value will usually differ from the historical cost amount. In other words, if you were to adopt this new policy, the amounts reported in the financial statements would likely change. Recommendation We recommend that management consider whether there is value in early adopting these standards in 2014 rather than waiting until the 2016 year. Management Comments: Staff will review the requirements for these standards and consider implementing them in advance of the 2016 required implementation date. 3. Policy on Council Training, Conferences and Association Building Observation We understand that the policy for Council members to attend conferences, external committee work and self-directed training is $5,000 per year for councillors and $6,500 per year for the Mayor. Unspent monies from one year may be carried forward to the following year within the current term of Council. During our review on Council’s expenses, we noted expenses for some Council members exceeded the annual amount set under the policy in 2013 and 2012 and may exceed the combined three year amount at the end of the current term of Council. Recommendation We recommend that the Council expense policy should be re-evaluated. Management Comments: Council has committed to reviewing this policy in 2014. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 10 4. Canada’s Anti-Spam Law – a FYI Canada has a new anti-spam law which comes into effect July 1, 2014. The law sets out a number or requirements for communicating electronically. The requirement that is creating the greatest amount of concern amongst senders of electronic information is the requirement to obtain prior consent from those who you would plan to send information to. As municipalities look to expand use non-traditional methods to reach out to engage citizens, electronic communication can be expected to increase. We wanted to take this opportunity to point out that Canada's anti- spam legislation does not apply to non-commercial activity. This means that governments that engage their citizens through email are not subject to this legislation (assuming, of course, that their communications do not involve selling or promoting a product). We received excellent cooperation from everyone at the District of Maple Ridge during the audit. We thank Catherine Nolan and all of the Finance Department staff for their assistance in making the audit process as efficient as possible. Please do not hesitate to contact us should you wish to further discuss any of the matters discussed in this letter. Yours truly, Per: Bill Cox, CA Partner through a corporation of BDO Canada LLP Chartered Accountants BC/ c.c. Audit Committee/Council District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 11 Appendix B – Letter of Representation (date of Council approval of financial statements) BDO Canada LLP Chartered Accountants and Advisors 600 Cathedral Place 925 West Georgia Street Vancouver, BC V6C 3L2 Canada Dear Sir: This representation letter is provided in connection with your audit of the consolidated financial statements of The District of Maple Ridge for the year ended December 31, 2013, for the purpose of expressing an opinion as to whether the consolidated financial statements present fairly, in all material respects, the financial position as at December 31, 2013, and the results of its operations and cash flows for the year ended December 31, 2013 of The District of Maple Ridge in accordance with public sector accounting standards. Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter (last updated December 21, 2011), for the preparation of the financial statements in accordance with public sector accounting standards; in particular the financial statements are fairly presented in accordance therewith. 2. Significant assumptions used by us in making accounting estimates, including those measured at fair value are reasonable. 3. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of public sector accounting standards. 4. All events subsequent to the date of the financial statements and for which public sector accounting standards require adjustment or disclosure have been adjusted or disclosed. 5. The consolidated financial statements of the District use appropriate accounting policies that have been properly disclosed and consistently applied. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 12 Information Provided 6. We have provided you with: - access to all information of which we are aware that is relevant to the preparation of the financial statements, such as records, documentation and other matters; - additional information that you have requested from us for the purpose of the audit; and - unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. 7. We are responsible for the design, implementation and maintenance of internal controls to prevent, detect and correct fraud and error, and have communicated to you all deficiencies in internal control of which we are aware. 8. We have made available to you all: - minutes of the meetings of the Council, Audit Committee, closed meeting minutes and committee of the whole minutes. 9. The minute books of the District are a complete record of all meetings and resolutions of Council, Audit Committee, closed meeting minutes and committee of the whole minutes throughout the year and to the present date. 10. We have disclosed to you all significant matters contained in the minutes of all meetings and resolutions of Council, Audit Committee, closed meeting minutes and committee of the whole minutes throughout the year and to the present date. 11. All transactions have been recorded in the accounting records and are reflected in the financial statements. 12. We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements. 13. We have identified to you: - guarantees; - indemnifications against damages, liabilities, costs, charges or expenses suffered or incurred by officers or directors as a result of their service, and/or by any subsidiaries; and - non-monetary transactions and transactions for no consideration. 14. We have disclosed to you the identity of the entity's related parties and the related party relationships and transactions of which we are aware. 15. We are aware of the environmental laws and regulations that impact our District and we are in compliance. There are no known environmental District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 13 liabilities or contingencies that have not been accrued for or disclosed in the consolidated financial statements. Fraud and Error 16. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud, and have determined such risk to be low. 17. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the entity and involves: - management; - employees who have significant roles in internal control; or - others where the fraud could have a material effect on the financial statements. 18. We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators, or others. 19. We believe that the effects of unadjusted misstatements are immaterial, both individually and in the aggregate, to the consolidated financial statements taken as a whole. Existence, Completeness and Valuation of Specific Financial Statement Balances 20. All assets, wherever located, to which the District had satisfactory title at the year end, have been fairly stated and recorded in the financial statements. There are no liens or encumbrances on the District’s assets. 21. All financial instruments have been appropriately recognized and measured in accordance with public sector accounting standards. Significant assumptions used in arriving at fair value of financial instruments are reasonable and appropriate in the circumstances. 22. Where the value of any asset has been impaired, an appropriate provision has been made in the consolidated financial statements or has otherwise been disclosed to you. 23. The inventories as set out in the financial statements represent all of the inventories to which the District held title as at the balance sheet date. Inventories do not include any goods consigned to the District, merchandise billed to customers or any items for which the liability has not been provided in the books. Appropriate provisions have been made for obsolete, slow- moving and defective inventories. 24. The employee future benefit costs, assets and obligation have been determined, accounted for and disclosed in accordance with public sector accounting standards. The source data and plan provisions provided are complete and accurate. The plans included in the valuation are complete. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 14 The determination of the discount rate and the use of specific actuarial assumptions are our best estimate assumptions. We feel that the extrapolations are accurate and have properly reflected the effects of changes and events occurring subsequent to the most recent valuation that had a material effect on the extrapolation. General Representations 25. The nature of all material uncertainties have been appropriately measured and disclosed in the financial statements, including all estimates where it is reasonably possible that the estimate will change in the near term and the effect of the change could be material to the financial statements. 26. There were no direct or contingent liabilities (including those associated with guarantees or indemnification provisions), unusual contractual obligations nor any substantial commitments, whether oral or written, other than in the ordinary course of business, which would materially affect the consolidated financial statements or financial position of the District, except as disclosed in the consolidated financial statements. 27. We have informed you of all outstanding and possible claims, whether or not they have been discussed with legal counsel. When applicable, these claims have been appropriately disclosed in the consolidated financial statements. 28. We confirm that there are no derivatives or off-balance sheet financial instruments held at year end that have not been properly recorded or disclosed in the financial statements. 29. We have disclosed to you all significant customers and/or suppliers of the District who individually represent a significant volume of business with the District. We are of the opinion that the volume of business (sales, services, purchases, borrowing and lending) done by the District with any one party is not of sufficient magnitude that discontinuance would have a material negative effect on the ongoing operations of the District. 30. There have been no plans or intentions that may materially affect the carrying value or classification of assets and liabilities. 31. We confirm that operating segments are appropriately identified and disclosed in accordance with public sector accounting standards. 32. No significant matters, other than those disclosed in the consolidated financial statements, have arisen that would require a restatement of the comparative financial statements. District of Maple Ridge 2013 AUDIT RESULTS AND COMMUNICATION PAGE 15 33 We have made the following additional significant representations to you during the course of your audit which we understand that you have relied upon:  All tangible capital assets and inventory have been recorded and additions for the year are complete and accurate. Amortization based on the expected useful life of the tangible capital asset and residual value is our best estimate for the consumption of a portion of the tangible capital asset for the year. Where the value of any tangible capital asset has been impaired, an appropriate provision has been made in the financial statements or has otherwise been disclosed to you.  For the funding agreement signed with the Federal Government, Provincial Government or Translink, any misused or unspent funding must be returned to the funder. Yours truly, Signature Position Signature Position 1 of 2 District of Maple RidgeDistrict of Maple RidgeDistrict of Maple RidgeDistrict of Maple Ridge TO:TO:TO:TO: Councillor Michael Morden MEETINGMEETINGMEETINGMEETING DATE:DATE:DATE:DATE: 12-May-2014 and Members of the Audit & Finance Committee FILE NO:FILE NO:FILE NO:FILE NO: FROM:FROM:FROM:FROM: Manager of Accounting MEETING:MEETING:MEETING:MEETING: SUBJECTSUBJECTSUBJECTSUBJECT: Extension of Audit Services EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY: BDO Canada LLP has been our auditor since 2001. Prior to that, KPMG provides audit services for 8 years. As Council is aware, a number of new accounting standards have been implemented over the past period of time and the District of Maple Ridge has served as a testing ground for new audit procedures for BDO during this time. This practice has allowed us to achieve reduction in audit fees at a time when fee reductions for services are uncommon. BDO has a good understanding of our business and we are satisfied that we receive good value from their audit services. BDO has offered fee reductions of $2,000 in 2014 and $1,000 in each of 2015 and 2016 in order to facilitate audit continuity through the implementation of the Public Sector Accounting Board’s (PSAB) new standard PS3260 – Liability for Contaminated Sites. Staff are recommending acceptance of their offer in order to ensure that the implementation is undertaken as efficiently as possible. RECOMMENDATION(S):RECOMMENDATION(S):RECOMMENDATION(S):RECOMMENDATION(S): Extend the agreement with BDO CanadaExtend the agreement with BDO CanadaExtend the agreement with BDO CanadaExtend the agreement with BDO Canada LLP for the provision of audit services for three years through the LLP for the provision of audit services for three years through the LLP for the provision of audit services for three years through the LLP for the provision of audit services for three years through the end of the 2016 audit.end of the 2016 audit.end of the 2016 audit.end of the 2016 audit. DISCUSSION: DISCUSSION: DISCUSSION: DISCUSSION: a)a)a)a) Background Context:Background Context:Background Context:Background Context: BDO Canada LLP has been our auditors since 2001. Prior to that, KPMG provided audit services for 8 years. BDO has a good understanding of our business and we are satisfied we have received good value through their audit. By offering to be a testing ground for new audit procedures during times when significant changes in both public sector reporting standards and audit procedures were mandated we have been able to achieve reductions in audit costs while benefiting from early preparation for new reporting requirements. Many new Public Sector Accounting Board (PSAB) standards can be implemented with minimal input from the auditors. Some, however, require frequent touch points throughout the implementation process to ensure that the auditors sign off on our approach. The upcoming implementation of PS3260 – Liability for Contaminated Sites is one of the standards that will require frequent interaction with our auditors. The Audit & Finance Committee received a report on this new standard in November of 2013, attached to this report as Appendix 2. 8nt1sh Columbia 2 of 2 If we proceed with the implementation process for PS3260 without access to audit feedback we run the risk of having to redo parts of the project at a late date, imposing an additional burden on staff time and reducing efficiency. It may also mean that additional site evaluations will be required at a late date, further increasing implementation costs. The current audit agreement with BDO expires with the end of the 2013 audit and if the District chooses to issue a Request for Proposal (RFP) for audit services now we will be without access to audit advice at a critical time during the Liability for Contaminated Sites implementation process. BDO is proposing that we renew our audit agreement with them through 2016 in order to provide time for the implementation of PS3260 as well as new standards upcoming for Financial Instruments in order to maximize efficiencies for both parties. In order to facilitate that, they are offering a fee reduction at a time when we would normally expect a fee increase. Their proposal is attached as Appendix 1. Staff is recommending that we accept their proposal. b)b)b)b) Business Plan/Financial Implications:Business Plan/Financial Implications:Business Plan/Financial Implications:Business Plan/Financial Implications: Accepting BDO’s proposal provides us with some certain cost reductions for audit services for the next three years. 2013 audit fees to date are $56,950; accepting BDO’s extension offer will result in a $2,000 reduction for 2014 and $1,000 in each of 2015 and 2016. c)c)c)c) AlAlAlAlternatives:ternatives:ternatives:ternatives: We could choose not to accept BDO’s proposal and issue a Request for Proposal for audit services. Doing so may result in cost savings beyond what BDO has already offered; it may also result in a cost increase for audit services. It is not recommended that we pursue the RFP option at this time as it would leave staff without access to audit feedback during a critical point in the implementation of the PSAB standard PS3260 – Liability for Contaminated Sites and reduce operating efficiency. CONCLUSIONS:CONCLUSIONS:CONCLUSIONS:CONCLUSIONS: Taking advantage of the reduction in audit fees offered by BDO makes sense. Extending the contract would allow a continued focus on implementation of the Liability for Contaminated Sites standard. The fee reduction offered by BDO will help to offset the impact of other inflationary pressures within the existing budget envelope. “Original signed by Catherine Nolan”________ Prepared by: Catherine Nolan CPA, CGA Manager of Accounting “Original signed by Trevor Thompson for”_____ Approved by: Paul Gill, BBA, CGA GM: Corporate and Financial Services “Original signed by Jim Rule”_______________ Concurrence: J.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) Rule Chief Administrative OfficerChief Administrative OfficerChief Administrative OfficerChief Administrative Officer March 31, 2014 Corporation of the District of Maple Ridge 11995 Haney Place Maple Ridge, BC V2X 6A9 Attn: Ms. Catherine Nolan, CPA, CGA – Manager of Accounting Dear Sirs: RE: Continuing As Your Auditors We have now almost come to the end of the audit of the 2013 financial statements. Thank- you for your assistance, and that of your staff, which allowed the audit to go very smoothly. As we discussed a couple of times during the audit, there are some significant accounting changes on the horizon such as the “Financial Instruments” rules in 2016 and, most significantly, the “Contaminated Sites” rules for this upcoming 2014 year. These rules are not just something that require spending a little time at year end – instead they are very comprehensive and require planning and discussion with us during the year. As you know, we have already had several discussions on the planning and approach to implementing these rules. There will be requirement for further various “check-in points” during the year where the District and the auditors will need to compare notes such that each party agree that the issues are being properly identified, the work to date is reliable, and the future plans correctly set. This situation, quite frankly, makes it a bad time to change auditors. It would be very inefficient to head down a certain path with us only to have to put that on hold during an RFP process and then potentially have to recreate discussions and plans with new auditors. We are finding that other municipalities (both clients of our firm and of other firms) are extending arrangements because of this circumstance. In this regard, we would like to offer you the opportunity to extend your arrangements with us. Appendix 1 Tel : 004 088 5421 Fa x: 004 088 51 32 vancou ver@bdo.ca WWW .boo.ca. BDO Canada LLP 000 Cathedral Place 925 Wes.t Georgia.Street Va ncoLJVer BC voe Sl.2 Canada District of Maple Ridge March 31, 2014 Page 2 of 3 While we believe that continuing with us will save you much inefficiency during this time of significant change in standards, it is also beneficial to us as we do not have to make an investment in putting a formal proposal together. For this reason, we would be able to offer an extension for audits of the 2014-2016 years at a REDUCED fee level as that paid for the 2013 audit. We are planning on a $4,000 reduction - $2,000 for 2014 and $1,000 each for 2015 and 2016. Based on the constructive feedback that we have received from you and Paul Gill, we believe that you have found our service to be of high level. We can guarantee that this would continue through the extended term. You will remain a priority client for us. I think that it is also important that you should consider our qualifications prior to extending the arrangements. In this regard, I’ve attached a brief one-page document that summarizes our strength serving the public sector in general and local government in particular. Please let me know if you would like to discuss this further or whether it would be appropriate to discuss with the Audit & Finance Committee. If there is any further information that I could send that would help you with this decision, please do not hesitate to ask. Your very truly, Per Bill Cox, CPA, CA Partner through a corporation of BDO Canada LLP BC/ District of Maple Ridge March 31, 2014 Page 3 of 3 BDO Canada LLP and Engagement Partner Bill Cox Qualifications for Audit of Local Government Audit Clients: BDO Canada LLP – more than 400 local government audits across Canada Bill Cox – more than 20 local government clients in BC and Yukon including:  District of Maple Ridge  Resort Municipality of Whistler  City of Pitt Meadows  Corporation of Delta  District of Mission  City of Langley Bill Cox – many other clients in the government sector (PSAB accounting) including:  Simon Fraser University  BC Housing Management Commission  Industry Training Authority  Partnerships British Columbia  BC Securities Commission Consulting Services to Government: BDO Canada LLP  Interis Consulting Group – Ottawa and Montreal, one of largest government consulting groups in Canada  West Coast Government Consulting Group (based in Victoria) – led by partner Giles Newman  Services include: core reviews, strategic planning, asset management plans, citizen’s report card, IT systems review, IT consulting, forensic auditing, value-for-money auditing – and many others Bill Cox Relevant Experience:  Over 30 years serving local government  Member of Public Sector Accounting Board (newly appointed 2014)  Regular contributor and presenter to GFOA Conferences and Seminars  Regular contributor and presenter to Institute of Chartered Accountants Conferences and Seminars  Several presentations to LGMA and UBCM conferences  Western Canada public sector practice leader for BDO Canada LLP 1 of 2 District of Maple RidgeDistrict of Maple RidgeDistrict of Maple RidgeDistrict of Maple Ridge TO:TO:TO:TO: Councillor Michael Morden MEETINGMEETINGMEETINGMEETING DATE:DATE:DATE:DATE: 12-Nov-2013 and Members of the Audit & Finance Committee FILE NO:FILE NO:FILE NO:FILE NO: FROM:FROM:FROM:FROM: Manager of Accounting MEETING:MEETING:MEETING:MEETING: SUBJECTSUBJECTSUBJECTSUBJECT: PS3260 – Liability for Contaminated Sites Executive SummaryExecutive SummaryExecutive SummaryExecutive Summary As per the Community Charter, the District is required to prepare its financial statements in accordance with generally accepted accounting principals for local governments, which in Canada are prescribed by the Public Sector Accounting Board (PSAB). As new standards are introduced the District must implement those standards. By the end of fiscal year 2015 the District must implement PS3260 – Liability for Contaminated Sites, a new standard that requires the District to review its land holdings for possible contamination, and based on the District’s intended actions, determine whether or not a liability needs to be recorded to recognize a future economic cost. Implementing this standard will require some dedicated funding be set aside as part of our 2013 year-end processes. Recommendation: Recommendation: Recommendation: Recommendation: Receive for information. Discussion:Discussion:Discussion:Discussion: The Community Charter (section 167) requires us to prepare our financial statements in accordance with generally accepted accounting principles for local governments. The Public Sector Accounting Board (PSAB) is the accounting standard setting body for all government entities in Canada. In order for us to receive a clean audit opinion and meet our Community Charter obligations, we must follow PSAB accounting standards. It is not unusual for PSAB to issue new accounting standards, most of which can be implemented with little impact. From time to time, however, new standards are introduced that require work from multiple departments to implement. The most recent was the implementation of PS3150 – Tangible Capital Assets and the related reporting model. Implementing this standard required us to inventory and value all of our tangible capital assets; a significant undertaking that involved resources from most municipal departments as well as dedicated funding. Over 2014 and 2015, all governments are required to implement PS3260 – Liability for Contaminated Sites. The standard limits the scope of “contamination” to include only those substances for which an environmental standard has been defined. In BC, the Ministry of Environment has set those standards in their Contaminated Sites Regulation. PS3260 requires us to look first at our land holdings that are not in productive use. This is the land recorded as “undeveloped land bank properties” on our Financial Statements. We will need to determine if, based on historical use of the site, it is likely that contamination, as defined by the PSAB standard, exists. Once we have a list of possible contaminated sites we will need to determine if environmental testing is required to define the extent of the contamination and estimated remediation costs, and record the related liability. If there is no intent to undertake remediation, and there is no likelihood of future economic cost to the District, then there is no need to undertake testing and no liability to record. Implementing PS3260 does not require us to undertake remediation, but does require us to recognize the future economic cost to the District as a result of our intended future actions relating to contamination. An Appendix 2 MAPLE RIDGE British Columbia 2 of 2 example of property that will be considered under this standard is the town centre land acquired by the District a few years ago. As the committee will recall, there was contamination discovered on the site after we acquired it and some remediation work was undertaken. On the recommendation of a consultant, the District opted not to undertake further remediation work or pursue an Environmental Certificate of Compliance at the time as the standard of remediation could differ depending on the final use. Our intent is to market the property in the future and the final sale price will take into consideration any further costs needed to satisfy Ministry requirements. In order to satisfy PS3260 requirements we will need to consider whether or not we need to record a liability for this site. The procedures noted above do not apply to District land that is in productive use, for example our parks or other facilities. What PS3260 will require us to do for our productive land is to consider the impacts of “unexpected events” starting in the year of implementation. An example of an “unexpected event” would be something like a chemical spill at the Operations Centre. Starting in 2014, should something like this occur we would need to determine if an environmental standard had been exceeded, estimate the cost of remediation or other economic loss, and record a liability if appropriate. Implementing this standard will require work from several departments and this commitment is reflected in their business plans. In addition to staff time, it may be necessary to have environmental assessments conducted and there will be additional audit work required. It is difficult to estimate what the cost of this will be; some government entities are facing costs of up to $150,000 for environmental assessments on individual properties. As noted in the Financial Update report of August 26, it will be necessary to dedicate some funding to this project as part of our year-end processes. We’re recommending that $125,000 be set aside as part of our 2013 year end processes to start building the capacity to implement this standard. This may need to be augmented in future years. Any funding set aside that is not needed for the implementation will be returned to surplus. ConclusionsConclusionsConclusionsConclusions:::: As noted above, the District does not have any discretion about whether or not to follow PSAB accounting guidelines or implement new standards; to receive a clean audit opinion, as required by the Community Charter, we must follow PSAB guidelines. To implement this standard successfully, staff is recommending that $125,000 be set aside as part of our 2013 year-end processes, recognizing that this may need to be augmented in future years. Any funding set aside that is not needed for the implementation will be returned to surplus. _____”Original signed by Catherine Nolan”________ Prepared by: Catherine Nolan, CGA Manager of Accounting _____”Original signed by Dane Spence” for_______ Approved by: Paul Gill, CGA GM, Corporate and Financial Services _____”Original signed by Jim Rule”______________ Concurrence: J.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) Rule Chief Administrative OfficerChief Administrative OfficerChief Administrative OfficerChief Administrative Officer District of Maple RidgeDistrict of Maple RidgeDistrict of Maple RidgeDistrict of Maple Ridge TO:TO:TO:TO: His Worship Mayor Ernie Daykin MEETINGMEETINGMEETINGMEETING DATE:DATE:DATE:DATE: May 12, 2014 and Members of Council FROM:FROM:FROM:FROM: Chief Administrative Officer MEETING:MEETING:MEETING:MEETING: Audit and Finance Committee SUBJECTSUBJECTSUBJECTSUBJECT: Quarterly Investment Report – First Quarter, 2014 EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY: Money held by the District, that is not immediately required, is invested and prudently managed in order to achieve the objectives of safety, liquidity and return. The District’s Investment Policy outlines parameters to manage the investments. It also calls for regular updates to the Audit and Finance Committee summarizing the investments and any deviations from policy. The Investment Portfolio Summary as of March 31, 2014 is attached. It highlights that the investment portfolio has one exception to the Investment Policy. As explicitly noted in the Investment Policy, deviations are typical at this point in the year. This is due to the size of the holdings being lowest just prior to property tax collections, which may cause percentages on items impacted by longer term investments to be higher. The Investment Portfolio Return on Investments (ROI) includes year to date earnings of about $1,350,000 and an annualized ROI of 4.0% compared to the benchmark return of 1.2%. Caution should be used when interpreting the annualized return on investments. Changes in market prices of longer term holdings fluctuate with changes in market expectations. These changes are magnified by a factor of 4 during the first quarter. It is highly unlikely that the changes in market values will occur equally each quarter. The calculated returns for the first quarter should not be taken as an indication of annual returns. RECOMMENDATRECOMMENDATRECOMMENDATRECOMMENDATION(S):ION(S):ION(S):ION(S): NoneNoneNoneNone. . . . For information onlyFor information onlyFor information onlyFor information only.... DISCUSSION: DISCUSSION: DISCUSSION: DISCUSSION: a)a)a)a) Background Context:Background Context:Background Context:Background Context: Investment returns generate a significant amount of revenue for the District and more importantly they are invested in a way to protect the public funds ensuring that they are safe and available when needed. Council last revised the Investment Policy in June of 2011. There is currently no need to amend the policy. The calculated ROI includes unrealized gains or losses due to market price fluctuations. Including these price fluctuations is appropriate as it accurately reflects the value that one could receive if you sold the investments. It reflects the investment decisions around the timing of when to enter into different investment terms. The benchmarks also include market value changes so the comparison is relevant. As mentioned, the market value of the bonds held in our investment portfolio fluctuates. It is important to note that all our investments will mature at par and have no gains or losses. Market gains or losses are only realized if the bond is sold. The calculated returns for the first quarter should not be taken as an indication of annual returns. Caution should be used when interpreting the annualized return on investments. Changes in market prices of longer term holdings are magnified by a factor of 4 in the first quarter. It is highly unlikely that the changes in market values will occur each quarter. The calculated returns for the first quarter should not be taken as an indication of annual returns. b)b)b)b) Business Plan/Financial ImplicationsBusiness Plan/Financial ImplicationsBusiness Plan/Financial ImplicationsBusiness Plan/Financial Implications:::: A significant portion of the funds invested are from Reserve Funds, Reserve Accounts, Development Cost Charges (DCCs) and Water and Sewer Utility Funds. The interest earned helps address inflationary costs. The General Revenue Fund relies on returns from investments. These returns are conservatively budgeted. A more aggressive reliance on investment earnings in the Financial Plan is not advised. CONCLUSIONS:CONCLUSIONS:CONCLUSIONS:CONCLUSIONS: The return on investment for the first quarter of 2014 has exceeded the benchmark returns. It is important to understand what is driving the returns as not to draw any incorrect conclusions. Active management by staff, as well as insight and advice from our investment contacts ensure that funds are invested appropriately and continue to produce returns that beat the benchmark. The reports attached highlight the return on investments and how the holdings compare to the parameters set out in the investment policy. As noted in the Investment Policy, as we approach the property tax due date the percentages can deviate from the Investment Policy for several months. “Original signed by Trevor Thompson”____________ Prepared by: Trevor ThompsonTrevor ThompsonTrevor ThompsonTrevor Thompson, , , , BBA, CGABBA, CGABBA, CGABBA, CGA Manager of Financial PlanningManager of Financial PlanningManager of Financial PlanningManager of Financial Planning “Original signed by Trevor Thompson for”_________ Approved by: Paul Gill, BBA, CGAPaul Gill, BBA, CGAPaul Gill, BBA, CGAPaul Gill, BBA, CGA General Manager General Manager General Manager General Manager ---- Corporate and Financial ServicesCorporate and Financial ServicesCorporate and Financial ServicesCorporate and Financial Services “Original signed by Jim Rule”___________________ Concurrence: J.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) RuleJ.L. (Jim) Rule Chief Administrative OfficerChief Administrative OfficerChief Administrative OfficerChief Administrative Officer District of District of District of District of Maple RidgeMaple RidgeMaple RidgeMaple Ridge Investment Portfolio Return on Investment (ROI)Investment Portfolio Return on Investment (ROI)Investment Portfolio Return on Investment (ROI)Investment Portfolio Return on Investment (ROI) Year to date as of March 31, 2014 TermTermTermTerm is the term when purchased not the term to maturity. For example, a 7 year investment bought in 2007 would always be classified as Long Term even though it has less than a year to maturity. Short Term is a year or less, Mid. Term is over a year and fewer than 3 years and Long Term is anything over three years. IIIInvestment (avg.) nvestment (avg.) nvestment (avg.) nvestment (avg.) is the average daily balance, not the balance that is currently held. EarningsEarningsEarningsEarnings are calculated differently than accounting standards as unrealized capital gains (losses) are included. By taking the market price fluctuations into account, the management of the investments are better measured. Benchmarks are calculated on the same basis allowing for a more relevant comparison. ROIROIROIROI is the annualized return on investment. This assumes the same rate of earnings will continue for the balance of the year. There is risk in annualizing market price fluctuations as the change in market values is rarely constant and in the first quarter are magnified by a factor of four. The price appreciation that we saw in the first quarter will not continue for the balance of the year. For instance if we saw a market decrease in value of 3% in Long Term holdings in 2013 and then in the first quarter we saw a 1.5% appreciation, we’d report an annualized return due to this appreciation of 6%. This highlights the fact that assuming that we will have a return on our Long Term holdings of 8.3% by the end of 2014 would be unrealistic. Terms Investments (avg.) Dist'n EarningsEarningsEarningsEarnings ROIROIROIROI BenchmarkBenchmarkBenchmarkBenchmark Long Term 42,377,795 31.1%867,291 8.3% 1.9% Mid. Term 3,072,795 2.3%17,798 2.3% 1.2% Short Term 90,982,203 66.6%465,703 2.1% 1.0% Total 136,432,794 100.0%1,350,792 4.0%1.2% District of Maple RidgeDistrict of Maple RidgeDistrict of Maple RidgeDistrict of Maple Ridge Investment Portfolio Investment Portfolio Investment Portfolio Investment Portfolio SummarySummarySummarySummary March 31, 2014 Remaining TermRemaining TermRemaining TermRemaining Term HoldingsHoldingsHoldingsHoldings % Holdings% Holdings% Holdings% Holdings Policy Max.Policy Max.Policy Max.Policy Max. Within Policy Within Policy Within Policy Within Policy Long Term (>3 yrs.) $42,876,140 33% 35% Yes * Mid. Term (>1 to 3 yrs.) 3,962,363 3% 40% Yes Short Term (up to 1 yr.) 84,029,125 64% None n/a Total $130,867,628 Remaining TermRemaining TermRemaining TermRemaining Term HoldingsHoldingsHoldingsHoldings Avg. TermAvg. TermAvg. TermAvg. Term Policy Max.Policy Max.Policy Max.Policy Max. Within PolicyWithin PolicyWithin PolicyWithin Policy Long Term (>3 yrs.)$42,876,140 5.8 yrs. 6 yrs. Yes Mid. Term (>1 to 3 yrs.)3,962,363 1.7 yrs none Short Term (up to 1 yr.)84,029,125 96 days none Total $130,867,628 2.1 yrs.none IssuerIssuerIssuerIssuer HoldingsHoldingsHoldingsHoldings % Holdings% Holdings% Holdings% Holdings Policy Max.Policy Max.Policy Max.Policy Max. Within PolicyWithin PolicyWithin PolicyWithin Policy Credit Unions 81,851,639 63% ** None Prov. BC guarantee Envision 25,409,866 20%Yes Westminster Savings 56,441,772 43%Yes Banks - Schedule I 49,015,989 37% 25% per Sched. I Bank BMO 5,000,000 4%Yes CIBC 39,838,503 30%No *No *No *No * TD 4,177,486 3%Yes Banks - Schedule II 0 0% 25%, $10M, 3 Yrs Yes Gov't - Fed. 0 0% None Gov't -Prov. 0 0% BC - None, others 25% Yes Gov't - Muni. / Reg. District 0 0% 25% Yes Municipal Finance Authority 0 0% 25% Yes Total Investments $130,867,628 * At this time of the year, a few months before property tax collections, the holding have the lowest proportion of Short Term holdings. It is noted in the Investment Policy and highlighted in the quarterly investment reports, the holdings will likely be over weight during this time. The majority of the Long Term hold ings are in CIBC bonds given that their pricing has been very attractive and the desire for the structure of issues which they offer. ** The Province of BC has guaranteed deposits of BC Credit Unions. With this guarantee regular policy limits of $10 million per credit can be exceeded.