While the Local Authority Act does require Improvement Districts to submit audited financial statements, the Ministry of Municipal Affairs acknowledges that this is not cost effective for small improvement districts such as ours. (Other small Improvement Districts do not provide audited financial statements to the Ministry, but the board does not know how many IDs there are in that category.) The board has consulted with our Financial Analyst at the Ministry of Municipal Affairs, the accounting firm Grant and Thornton and a lawyer who specialized in municipal law. We have been advised that we are not in compliance with the Act but unless there is a challenge by a property owner there is not an area of concern within the Ministry.
We currently get a compilation done and it costs approximately $2000 per year. This was on the recommendation of both our past and current accountants. They check and confirm the bank statements and compare everything from last year to make sure it looks reasonable. Large expenditures such as the data logger are questioned. The next level is a review, and it would cost between $5000 and $7,500 per year. An audit is the highest level, and it would cost us between $10,000 and $15,000 per year. Our tax revenue is @ $24,000 per year.
To pay for audited financial statements, we would need to raise taxes an additional $146 to $190 (in addition to the already announced $50). When residents were asked to weigh in on whether they wished to have the statements reviewed or audited, the unanimous opinion was to continue with the compiled statements.