An accounting glitch has prompted a revision of South Glengarry Township’s financial statements from two years ago.
According to Kaylyn MacDonald, Treasurer/GM of Finance for South Glengarry, KPMG Canada noted an error of about $2 million when the auditor was preparing the 2022 report.
“During the year, management became aware that the post-closure costs for the landfill sites and developer contributions had been incorrectly reported in the financial statements of the Municipality in prior years,” the report reads. The correction resulted in a $1,871,495 decrease in the accumulated surplus for 2021 and the annual surplus for that year decreased by $48,759 to $1,294,183.
The 2022 financial report was presented by Lori Huber from KPMG Canada at a recent meeting.
Delays in completing the 2022 auditor’s report in part were due to staff turnover — South Glengarry had three treasurers since 2021. The discovery of gaps and missing information further hampered the process, causing a later start for KPMG which completed and presented its report 11 months after the audit began.
2022 was the first year for KPMG to complete the auditor’s report for the Township.
KPMG used different methodology and information provided by an engineer’s report to recalculate the amount required to close and monitor landfills. Asset retirement obligation (ARO) is an accounting standard that will be applied in future audits. An ARO is the legal obligation associated with the retirement of a long-term asset such as the removal of equipment or cleaning up hazardous materials.
In the 2021 report, the previous auditors had used an estimate of the landfill liability with the information available at that time. South Glengarry has recently completed a study of the landfills, still to be presented to council, which will provide updated information on expected use and the cost for closure.
KPMG also made recommendations to the Township for the coming year’s audit. One of the first suggested by the KPMG team was to formalize the year-end financial reporting process. This will ensure compliance with the Public Sector Accounting Standards, provide a more complete review of all financial transactions and improve the year-end financial statements. The auditor pointed out difficulties reconciling accounts from the previous year due to a high volume of entries that needed to be corrected. The report also drew attention to significant deficiencies in internal controls over financial reporting occurring in 2022, whereby mistakes could not be detected within a timely manner to be corrected.
2022 saw a decrease in cash flow for South Glengarry Township due to capital expenditures such as the purchase of three fire vehicles and arena renovations, increased wages, contracted services, accrued liabilities and increased accounts payable. However, these increased expenses were balanced by increased revenues through development and property taxes with residential and business growth in South Glengarry, along with government grants received for the arena and roads improvements.
MacDonald says no significant delays are expected for the presentation of the 2023 auditor’s report.
Cargo container riles neighbours
Shipping containers make excellent storage units, but in South Glengarry debate continues whether such a unit is a suitable alternative for a storage shed or garage.
A cargo container has been placed on a residential property in the Glendale subdivision without approval from council. In South Glengarry shipping containers are permitted only for uses in industrial or agricultural zoned areas.
The homeowner in question, feeling the container is cheaper than a garage extension, is retroactively seeking a minor variance to approve the storage unit in his yard. Further the homeowner feels repurposing the container exemplifies a circular economy.
But neighbours are upset because the container is placed close to the property line and are worried that the outer appearance will not be maintained.
General Manager of Planning Joanne Haley recommended denying the amendment, but following a long discussion, council members deferred a decision. The hope is the homeowner will approach council with a temporary use request for the container, thus limiting the time it will remain in the residential neighbourhood.
