INDEPENDENT AUDITOR'S REPORT
To the Council Members of District of Sparwood
Report on the Financial Statements
Opinion
We have audited the financial statements of District of Sparwood (the District), which comprise thestatement of financial position as at December 31, 2019, and the statements of operations andaccumulated surplus, changes in net financial assets and cash flows for the year then ended, and notesto the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financialposition of the District as at December 31, 2019, and the results of its operations and cash flows for theyear then ended in accordance with Canadian public sector accounting standards (PSAS).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Ourresponsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the District in accordance withethical requirements that are relevant to our audit of the financial statements in Canada, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with PSAS, and for such internal control as management determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud orerror.
In preparing the financial statements, management is responsible for assessing the District's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the District or to ceaseoperations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the District's financial reporting process.
(continues)
824 - 1st Street South, Cranbrook, BC V1C 7H5Phone 250-426-8277 Fax 250-426-4109Email [email protected] Web www.cgafirm.com
David M.W. Adams, BSc, CPA, CGA, CFP*James R. Wooley, BPE, CPA, CGA*
Brian F. Adams, FCPA, FCGA* (Associate)
*Denotes Professional Corporation
Independent Auditor's Report to the Council Members of District of Sparwood (continued)
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with Canadian generally accepted auditing standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the District’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the District’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the District to cease to continue asa going concern.
Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
Cranbrook, BC Adams WooleyFebruary 27, 2020 Chartered Professional Accountants
3
Budget Total Total
2019 2019 2018
Revenues
Net taxation and grants-in-lieu (Note 13) 7,689,658$ 7,695,125$ 7,379,438$
Sale of services, user rates, rentals (Note 14) 2,896,120 3,042,872 2,948,925
Interest 454,395 507,199 436,115
Government transfers (Note 15) 754,973 1,101,343 5,831,239
Donations and other revenue 28,000 4,281,756 1,303,005
11,823,146 16,628,295 17,898,722
- 0 (0)
Expenses
General government 1,815,596 1,490,393 1,379,249
Protective services 1,137,081 909,893 921,174
Transportation 2,070,086 1,926,772 1,829,102
Solid waste management 308,930 317,365 659,500
Public health 124,802 68,503 99,057
Environmental development 1,327,389 844,172 872,143
Recreation and cultural services 2,709,026 2,667,656 2,406,356
Water services 779,854 615,515 578,501
Sewer services 664,219 753,956 620,770
Loss (gain) on sale of resale land - (55,461) (11,201)
Loss (gain) on disposal of tangible capital assets (Note 12) - 22,972 (24,830)
Amortization 2,500,000 2,382,080 2,433,294
13,436,983 11,943,816 11,763,115
Annual Surplus (deficit) (1,613,837) 4,684,479 6,135,607
Accumulated Surplus, beginning of year 93,651,184 93,651,184 87,515,577
Accumulated Surplus, end of year (Note 10) 92,037,347$ 98,335,663$ 93,651,184$
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District of Sparwood
Statement of Operations and Accumulated Surplus
Year Ended December 31, 2019
The accompanying notes are an integral part of these financial statements 5
$6.7 M $7.3 M $7.4 M $7.7 M
$145.0 K $426.0 K $1.3 M
$4.3 M
$3.2 M $3.0 M
$2.9 M
$3.0 M
$1.1 M
$1.7 M
$5.8 M
$1.1 M
$237.3 K
$230.6 K
$436.1 K
$507.2 K Return on investments
Transfers from othergovernments
Sale of services
Other revenue
Net taxation and grants-in-lieu
$(2,000,000)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2016 2017 2018 2019
$2.4 M $2.4 M $2.4 M $2.7 M
$2.5 M $2.5 M $2.4 M $2.4 M
$1.5 M $1.6 M $1.8 M $1.9 M $1.3 M $1.2 M $1.4 M $1.5 M $791.1 K $847.6 K $921.2 K
$909.9 K $1.1 M $857.3 K $872.1 K
$844.2 K $622.2 K $578.8 K $620.8 K
$754.0 K $619.9 K $686.1 K $578.5 K
$615.5 K $391.3 K $402.8 K $659.5 K
$317.4 K $101.2 K
$98.1 K
$99.1 K $68.5 K
OPERATING EXPENSESLoss on write down of mortgage
Gain / (loss) on sale of resale land
Gain / (loss) on disposal of capital assets
Public health
Solid waste management
Water services
Sewer services
Environmental development
Protective services
General government
Transportation
Amortization
Recreation and cultural
2019 2018
Financial Assets
Cash and cash equivalents (Note 2) 19,187,924$ 18,492,751$
Accounts receivable (Note 3) 951,783 2,331,502
Loans receivable (Note 4) 157,036 242,289
Land held for resale 1,233,398 1,292,198
Municipal Finance Authority debt reserve deposits (Note 5) 60,210 57,587
21,590,351 22,416,327
Liabilities
Accounts payable and accrued liabilities (Note 6) 1,469,685 2,271,652
Municipal Finance Authority debt reserve deposits (Note 5) 60,210 57,587
Deferred revenue (Note 7) 1,631,409 1,969,366
Callable debt (Note 8) 138,965 234,463
Long term debt (Note 9) 4,203,646 4,349,717
7,503,915 8,882,785
Net Financial Assets 14,086,436 13,533,542
Non-Financial Assets
Prepaid expenses 144,796 162,145
Tangible capital assets (Schedule 1) 84,104,431 79,955,497
84,249,227 80,117,642
Accumulated Surplus (Note 10) 98,335,663$ 93,651,184$
0.45 -
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Councillor
Councillor
District of Sparwood
Statement of Financial Position
Year Ended December 31, 2019
The accompanying notes are an integral part of these financial statements 4
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2016 2017 2018 2019
$19.5 M $23.1 M
$18.5 M $19.2 M
$1.3 M
$1.3 M
$1.3 M $1.2 M $744.2 K
$1.3 M
$2.3 M $951.8 K $426.8 K
$337.5 K
$242.3 K $157.0 K
ASSETS
Other financial assets
Loans receivable
Accounts receivable
Land for resale
Cash and short-terminvestments
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2016 2017 2018 2019
$13.0 M $14.8 M
$12.0 M $12.4 M
$6.5 M
$8.3 M
$6.5 M $6.8 M
CASH
Unrestricted
Restricted
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2016 2017 2018 2019
$4.2 M $4.9 M $5.0 M $4.2 M
$1.2 M $1.7 M $2.0 M
$2.5 M $1.0 M
$1.2 M $1.4 M $1.7 M $1.5 M
$1.7 M $1.5 M $1.5 M
$3.9 M
$4.3 M
$1.1 M $1.1 M
$367.1 K
$415.0 K
$469.3 K $531.1 K $160.3 K $352.4 K
RESERVE FUNDS
Parks acquisition
Recreation and Cultural
Michel Creek Road
Land sales
Sewer system
Waterworks
Repaving
Capital works, Machinery andEquip.
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2016 2017 2018 2019
$127.6 K
$724.3 K
$1.9 M
$536.6 K $334.6 K
$308.3 K
$171.6 K
$172.7 K $249.5 K
$256.7 K
$164.0 K
$154.2 K $32.5 K
$38.5 K
$107.9 K
$88.2 K
ACCOUNTS RECEIVABLE
Other governments
Utilities
Taxes
Trade receivables andother
$60,000,000
$65,000,000
$70,000,000
$75,000,000
$80,000,000
$85,000,000
2016 2017 2018 2019
$73.3 M $70.9 M
$80.0 M
$84.1 M $332.9 K
$338.2 K
$162.1 K
$144.8 K
NON-FINANCIAL ASSETS
Prepaid expenses
Tangible capital assets
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
2016 2017 2018 2019
$48.8 M $49.1 M $46.7 M
$60.6 M
$12.3 M $12.0 M $12.1 M
$11.8 M $5.9 M $3.8 M
$15.1 M
$4.4 M
$3.2 M $3.0 M
$2.9 M $4.2 M
$3.2 M $3.1 M
$3.1 M $3.1 M
PHYSICAL ASSETS
Land
Equipment
Capital work-in-progress
Buildings
Engineeringstructures
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
2016 2017 2018 2019
$5.0 M $4.8 M $4.6 M $4.3 M
$1.7 M
$3.6 M
$2.0 M $1.6 M
$1.6 M
$1.4 M
$2.3 M
$1.5 M
LIABILITIES
Accounts payable andaccrued liabilities
Deferred revenue
Borrowing
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
2016 2017 2018 2019
$68.2 M $66.1 M $75.4 M $79.8 M
$13.1 M $14.8 M
$12.1 M $12.4 M $4.5 M $5.1 M
$4.8 M $4.8 M
$1.6 M $1.5 M
$1.4 M $1.3 M
FUND BALANCES AND EQUITY IN TANGIBLE CAPITAL ASSETS
Equity in financialassets
Operating fundsurplus
Statutory reservefund
Equity in tangiblecapital assets
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