The 2022 audit for Penetanguishene revealed no concerning issues for council to worry about.
The town audit featured a draft consolidated financial report over the past year, presented at the recent regular meeting of council by Jay Anstey, partner at Baker Tilly Canada, through a powerpoint summary of highlights.
“Tonight is the final step in the audit, in having council approve the financial statements,” Anstey said.
“The audit, I have to say, was an exceptionally smooth process this year in 2022. 2020 and 2021 were obviously difficult years, and audits weren’t an exception throughout COVID, but I have to say that Penetanguishene was one of the best audit processes I had gone through for a municipality this year.”
Within the submitted documents was a management letter and audit reporting letter, both of which noted there were no significant issues to report, nor were there adjustments to the financial statements found.
The 2022 operating revenue was approximately $20 million, in line with the $18.7 million budget for most revenue sources except for a $1.3 million increase coming from government grants at $960,000 and investment income of $300,000 due to increased bank rates.
Operating expenses were $20.5 million but were on par with the $17 million budget due to $3 million of amortization expenses. In the actuals: net revenues were listed as $500,000 of net expenses; capital and other reserves sat around $2.5 million; and annual surplus was at $2 million.
Anstey explained that for financial assets, the auditors looked at how much cash would be available compared to current liabilities.
“To be considered low risk,” said Anstey, “you would want to have at least enough cash to cover 50 per cent of your current liabilities – where the town of Penetanguishene does have five times the amount of cash to cover its current liabilities. So, no liquidity risk within the municipality.”
He pointed out, however, that of that $15.2 million cash balance, $6 million had been restricted and set aside for development charges, government grants, or other future sources.
Regarding long-term debt, while no new loans were drawn through the 2022 fiscal year, the sewage treatment plant and Main Street construction projects were two notable long-term loans as well as the town’s share of the Huronia Airport Commission long-term debt. As the $12.2 million debt is being repaid slowly until 2048, Penetanguishene “is still considered in the low-risk range” for debt repayment.
Anstey also addressed non-financial assets, which are physical things the town owns like buildings, roads, machinery, sewers, and more; the town saw a net $2.5 million increase in those assets last year.
“The financial indicator that we look at when we look at tangible capital assets is how much of the useful life is remaining on average, or is specific on a tangible capital asset,” said Anstey, “and Penetanguishene has only used up 31 per cent of the life of its assets on average.
“Very low here, which is great in the risk range," he said.
“Some recent construction, including the sewage treatment plant and Main Street reconstruction along with other road redevelopments that are going on are really bringing this average down, just indicating that the town is reinvesting in its own assets,” Anstey added.
The audited financial statements, letters and year-end report were approved by council without further question, and can be found in the council agenda page of the Town of Penetanguishene website.
Meetings of Penetanguishene council are held on the second Wednesday of each month, and can be watched live on Rogers TV cable 53, or on the Rogers TV website.
Archives of council meetings are located on the Town of Penetanguishene YouTube channel.
