A year-end financial audit for the Barrie Police Service has determined the department is on the right track in keeping its coffers in check.
Members of the Barrie Police Services Board received a brief overview of the audit and financial statements during Thursday’s meeting.
The audit, explained Lilian Cheung, who works as a partner with Deloitte LLP, was conducted in line with Canadian audit standards, which is a set of standards that all auditors follow as part of the conduct of a financial statement audit.
The audit, she noted, was “sample driven” where they conducted and achieved objectives through a series of testing sample transactions as well as internal controls that have been adopted by management of the police services board.
“We are very pleased to report that, as a result of our audit procedures that were done, which is risk-based, we have concluded that there are no material misstatements to the financial statements nor are there any internal control deficiencies," Cheung said.
"Both of these are the best outcome that you could see from the purpose of an audit," she added.
Lynn Strachan, one of the police board’s provincial appointees, noted a detailed overview of the audited statements was presented at the budget subcommittee level and members were able to ask questions at that time.
“I’d say the subcommittee was also impressed with the … audit and the work that our finance team put into preparing and working with our auditors. We felt it was a good result,” she said.
Board chair Greg Ferguson agreed.
“As a 40-year professional auditor, having what I refer to as a clean audit report, where not only were there no material adjustments that were presented to the auditor from management but the auditors report … identified no weaknesses through internal control issues, etc. … (is a) job well done,” Ferguson said.
Provincial appointee Arif Khan pointed to what he called “new math and new formulas” that are being brought forward regarding Workplace Safety and Insurance Board (WSIB) and inquired as to the department’s strategy moving forward.
“WSIB is something that’s been on our radar for a while. What you’re seeing on the financial statements this year is probably a better reflection of what WSIB liability carries,” explained finance manager Tyrell Turner.
“We are working with a new actuary and we have a much more robust calculator and methodology that recognizes the true likelihood of some of our members returning to work and the cost associated with that loss of earning," Turner added. "Capturing that this year is resulting in a fairly significant increase in the WSIB liability."
Turner said there have been conversations to review that methodology with the actuary, "but we believe that it is a more accurate reflection of what that liability carries. We will keep that in mind as we go forward to make sure we can plan for that liability in the future.”
The budget presented — and approved — to city council was the anticipated costs of WSIB for fiscal 2024, added Ferguson, while the accrual is the anticipated costs to perpetuity.
“The accrual wasn’t a $17-million hit in fiscal 2023, it was the anticipated costs at the end of the WSIB program," he said. "In our budget, we budget for actual or expected disbursements for WSIB in the fiscal year whereas the accrual is the anticipated accrual costs on their estimates of what it would cost to the end."
The board also approved six motions related to the allocation of surplus funds in the amount of $2.1 million during Thursday’s meeting, including $473,250 to the department’s capital reserve, which Turner noted will help address some specific identified capital needs.
There will be $52,000 allocated to the 2024 operating budget for a few items specifically related to the new Community Safety and Policing Act (CSPA), while $300,000 will be placed in the WSIB reserve — which Turner noted is currently in a deficit and as a result there is increased pressure on that reserve.
The community safety and well-being reserve will see $100,000 of the surplus allocated to it while the remaining surplus will be split between the department’s operating reserve and the City of Barrie.
“We recommend splitting that allocation on a 75 per cent and 25 per cent basis where we would maintain 75 per cent ($887,196) in our operating reserve. (We) know we have a lot of pressure coming from the new CSPA and as a provision for unanticipated events (with) the remaining 25 per cent of that ($295,732) be allocated back to the City of Barrie,” said Turner.
The main driving force that contributed to that $2.1-million surplus is related to grant funding, he noted.
“Typically, grant funding is money received and spent on a program or initiative but specifically for 2023 we had a couple of grants that did contribute to our surplus, the first being the court security and transportation grant,” said Turner, adding the department's funding ended up being $550,00 above what they were expecting.
Through the so-called NG911 grant, the department says it was also able to recover $200,000 of prior-year costs and $400,000 of the current-year costs related to salaries, licensing, maintenance and other expenses that were already expected.
“Beyond that, we do have a surplus in our general revenues. we have been able to take advantage of increased interest rates and have increased revenues from paid duties and other user fees that resulted in an about $500,000 surplus in 2023,” he said. “We have offsetting impacts in 2023. Our salaries were in a deficit, but our operating expenses were in a surplus related to things like fuel, insurance and other operating supplies.”
