AGENDA - Audit Committee - 20210622Town of Aurora
Audit Committee
Meeting Agenda
Date:June 22, 2021
Time:6:15 p.m.
Location:Video Conference
Pages
1.Procedural Notes
This meeting will be held electronically as per Section 19. i) of the Town's
Procedure By-law No. 6228-19, as amended, due to the COVID-19 situation.
2.Approval of the Agenda
3.Delegations
Note: At this time, the municipal offices are closed. This meeting will be live
streamed at www.youtube.com/c/Townofaurora/videos. Anyone wishing to
provide comment on an agenda item is encouraged to visit
www.aurora.ca/participation for guidelines on electronic delegation.
4.Consideration of Items Requiring Discussion
4.1.FIN21-032 - 2020 Audited Financial Statements and Audit Report 1
(Presentation to be provided by Giselle Bodkin, Partner, and Emma Roy,
Senior Manager, Assurance and Accounting, BDO Canada LLP)
That Report No. FIN21-032 be received; and1.
That the 2020 Audit Reports and Financial Statements for the
year ended December 31, 2020, be approved and published on
the Town’s website; and
2.
That the 2021 year-end audit plan as proposed by BDO Canada
LLP be endorsed.
3.
5.Adjournment
100 John West Way
Aurora, Ontario
L4G 6J1
(905) 727-3123
aurora.ca
Town of Aurora
Audit Committee Report
No. FIN21 -0 32
Subject: 2020 Audited Financial Statements and Audit Report
Prepared by: Rachel Wainwright-van Kessel, CPA, CMA, Director, Finance
Department: Finance
Date: June 22, 2021
Recommendation
1. That Report No. FIN21-032 be received; and
2. That the 2020 Audit Reports and Financial Statements for the year ended December
31, 2020 be approved and published on the Town’s website, and
3. That the 2021 yearend audit plan as proposed by BDO Canada LLP be endorsed.
Executive Summary
The Town of Aurora’s audited financial statements and auditor’s report for the year
ended December 31, 2020 are presented for approval along with the 2021 audit plan
and audit fee schedule.
The audited statements combine all of the town’s financial results into one set of
statements
The full accrual version of the financial statement presents a much larger surplus
than budget variance reporting
The summary of unadjusted misstatements is below the materiality threshold
BDO has also provided a plan for the 2021 yearend audit as part of their review
Background
The entire audit package as presented by our auditors BDO Canada LLP is attached, this
package includes the 2020 Yearend Audit Report, Letter to the Audit Committee and the
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June 22, 2021 2 of 6 Report No. FIN21-032
audited financial statements which can all be found under Attachment 1. The financial
statements were prepared by staff and audited by BDO Canada LLP. These statements
have been marked DRAFT by the auditors as the audit cannot technically be completed
until after the approval of the statements by Council. Council is required to approve
these statements as part of the finalization of the audit. After the approval the auditors
will sign their final report in the coming days. Then financial statements will be made
publicly available by being placed on the Town website, a requirement under Section
295 of the Municipal Act, 2001, S.O. 2001, c. 25 as amended (the Act).
Also attached (Attachment 2) is the Audit Plan for the 2021 yearend audit as prepared
by BDO Canada LLP (BDO).
Analysis
The audited statements combine all of the town’s financial results into one set of
statements
The audited financial statements present a consolidation of the Aurora’s finances
including the combined results of tax and rate funded operating and capital activities
and financial results for the Aurora Public Library. The results shown in these
consolidated statements differ from the yearend financial performance report to budget
because of the inclusion of tangible capital assets and other Public Sector Accounting
Standards (PSAS) reporting differences.
As part of the annual audit, BDO performed a review of all Council minutes, including
closed session minutes, prior year’s internal control letters and consider any concerns
raised therein during their current audit. Their audit looks for continuing circumstances,
weaknesses or concerns as raised in the prior year and how they may affect the
outcome of their current audit.
The full accrual version of the financial statement presents a much larger surplus than
budget variance reporting
The audited Public Sector Accounting Board (PSAB) basis financial statements for
2020, as currently drafted, reflect an operating surplus of $16,638,000. This amount
reconciles to the internal report cumulative total general operating and water &
wastewater program budget deficit of $938,000 as shown in Table 1.
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June 22, 2021 3 of 6 Report No. FIN21-032
Table 1
Public Sector Accounting Board 2020 Surplus Reconciliation
Description Amount
Tax levy supported budget surplus 852,400
Rate supported budget deficit 85,600
Traditional Balanced Consolidated Budget Surplus 938,000
Add Back: Debt principal repaid included 1,072,300
Add: Transfers to/from reserves 11,236,000
Add: Capital assets assumed through development 9,730,000
Add: Net deferred revenue adjustment – DC, CIL, FGT 10,971,000
Add: Investment income allocated directly to reserves 1,134,500
Deduct: Net capitalization of assets adjustment (1,792,800)
Deduct: Amortization of capital assets (16,044,000)
Deduct: Loss on disposal of capital assets (607,000)
PSAB 2020 “Annual Surplus”: Audited (Draft) $16,638,000
Of note, the operating budgeted transfers to/from reserves amount of $11,236,000
represent budgeted contributions that are considered expenses or revenues under the
town’s traditional balanced budget. However, under the Public Sector Accounting
Standards (PSAS) in consideration that these transfers simply represent the movement
of town surpluses, they are not considered to be true expenses or revenues and
therefore any net contributions to reserves should be removed as expenses from the
calculated operating surplus resulting in a larger surplus.
In addition, in some instances PSAB requires that the town recognize expenses and
revenues that do not result in a cash inflow or outflow such as in the cases of the
town’s assumption of assets from developers and the annual amortization of its assets.
In these instances, the PSAS require that the Town record a revenue equivalent to the
value of the assets that it has assumed from a developer and an expense equivalent to
how much value of its existing asset book value that is estimated to have been
consumed for the year. Because these two items do not result in a cash impact to the
town, they are not included under its traditional balanced budget surplus calculation and
therefore its resultant surplus needs to be increased or decreased by any PSAS
generated revenues or expenses, respectively in order to arrive at the Town’s PSAB
2020 annual surplus.
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June 22, 2021 4 of 6 Report No. FIN21-032
The summary of unadjusted misstatements is below the materiality threshold
During the annual audit, the auditor will generate a list of misstatements for which the
presented financial statements have not been adjusted for. They are considered to be
material if individually, or in aggregate, could reasonably be expected to influence the
economic decisions of financial statement users. For 2020, the auditor has defined the
Aurora’s materiality thresholds as $9,860,000 for areas surrounding tangible capital
assets and $2,200,000 for all other financial statement areas.
For tangible capital assets, the aggregate misstatement impact was $658,600, or 7
percent of the defined materiality threshold of $9,860,000. This amount relates to the
identification of additional asset value that was not report in previous financial
statements and has now been included in 2020. Adjustments like these are very
common for municipalities and should reduce over time through improved asset
management.
The aggregate misstatement impact for all other financial statement areas was
$517,900, or 24 percent of the defined materiality threshold of $2,200,000. The
misstatement items mostly relate to the transition from pre-funding capital projects to
funding them as they are completed. This change impacted how deferred revenue was
calculated representing a significant process change from previous years. This
impacted the revenue recognition for development charges and federal gas tax. The risk
of these issues repeating themselves in future years will be significantly reduced under
the new method of funding projects as their actual spend take place commencing.
BDO has also provided a plan for the 2021 yearend audit as part of their review
The 2021 yearend audit plan as prepared by BDO is included in Attachment 2. This plan
includes the scope and approach to their planned audit. Staff are not in a position to
comment or challenge the approach that the auditors have chosen in order to fulfil their
professional obligations required when rendering an audit opinion report. From the
perspective of the Finance, we continue to be committed to provide the auditors with
the documentation requested in an effort to facilitate the audit in a timely manner.
Audit fees are always quoted on the presumption that staff will have completed all
requested schedules and support materials in advance of the audit, and that the
financial statements and associated notes have been properly and fully prepared by
staff. The fee also anticipates not finding any item of substance requiring extensive
additional audit effort to resolve or report.
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June 22, 2021 5 of 6 Report No. FIN21-032
Advisory Committee Review
Not applicable
Legal Considerations
The annual audit of the Aurora’s financial statements fulfils the statutory requirements
set out in Section 296 of the Municipal Act.
Financial Implications
There are no financial implications relating to the 2020 yearend audit report. The
statements included are presented for receipt by the Audit Committee, as well as to
obtain approval of the Consolidated 2020 Financial Statements so that the statements
may be published as required by legislation.
The cost for the 2021 audit has been provided for within the 2021 budget. An amount of
$40,900 has been budgeted for the 2021 audit with anticipated fees of $31,500 for the
audit of the consolidated financial statements, excluding administration charges and
taxes. Additional audit expenses from this budget include independent actuarial
valuations separately commissioned by staff.
Communications Considerations
In accordance with the Municipal Act, 2001, S.O.2001, c25, Section 295, the 2020
audited financial statements will be published on the Town’s website. The Town of
Aurora will use ‘Inform’ as the level of engagement for the Town’s 2020 audited
financial statements. There are five different levels of community engagement to
consider, with each level providing the community more involvement in the decision
making process. These levels are: Inform, Consult, Involve, Collaborate and Empower.
Examples of each can be found in the Community Engagement Policy. These options
are based on the International Association of Public Participation (IAP2) Spectrum and
assist in establishing guidelines for clearly communicating with our public and
managing community engagement. In order to inform the public, this report will be
posted to the Town’s website.
Link to Strategic Plan
The annual audit is a statutory requirement that is guided by professional standards
applicable to all Canadian licensed audit practitioners. Preparation and publication of
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June 22, 2021 6 of 6 Report No. FIN21-032
the annual audited financial statements support the Strategic Plan principles of
integrity, progressive corporate excellence and continuous improvement.
Alternative(s) to the Recommendation
Not applicable
Conclusions
The auditors are ready to issue an unqualified opinion on the fairness and
completeness of the corporation’s financial statements for the year ended December
31, 2020. Staff recommend the approval of the statements. Once approved and final
versions are prepared, the Mayor and CAO will sign the statements.
In addition, it is recommended that Council endorse the proposed 2021 audit plan as
presented by BDO.
Attachments
Attachment #1 – 2020 Year-End Auditor’s reporting package
Attachment #2 – 2021 Audit Plan
Previous Reports
FIN20-016 – 2019 Audited Financial Statements with Audit Report, June 23, 2020
Pre-submission Review
Agenda Management Team review on May 27, 2021
Approvals
Approved by Rachel Wainwright-van Kessel, CPA, CMA, Director, Finance
Approved by Doug Nadorozny, Chief Administrative Officer
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BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. AUDIT FINAL REPORT TO THE AUDIT COMMITTEE MEMBERS June 22, 2021 THE CORPORATION OF THE TOWN OF AURORA Attachment #1Page 7 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 20201TABLE OF CONTENTSSUMMARY ............................................................................................................................................................................................................... 2 AUDIT FINDINGS .................................................................................................................................................................................................... 5 INTERNAL CONTROL MATTERS.............................................................................................................................................................................. 7 OTHER REQUIRED COMMUNICATIONS ................................................................................................................................................................... 8 Page 8 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 2 SUMMARY Status of the Audit As of the date of this report, we have substantially completed our audit of the 2020 consolidated financial statements, pending completion of the following items: X Receipt of signed management representation letter X Receipt of outstanding legal confirmations X Subsequent events review through to financial statement approval date X Approval of consolidated financial statements by the Council We conducted our audit in accordance with Canadian generally accepted auditing standards. The objective of our audit was to obtain reasonable, not absolute, assurance about whether the consolidated financial statements are free from material misstatement. See Appendix A for our draft independent auditor’s report. The scope of the work performed was substantially the same as that described in our Planning Report to the Audit Committee Members dated June 23, 2020. MaterialityAs communicated to you in our Planning Report to the AuditCommittee Members, preliminary materiality was $9,400,000 for financialstatement areas surrounding tangible capital assets and specific materialitywas $2,080,000 for the remaining financial statement areas. Finalmateriality was $9,860,000 and $2,200,000 respectively. Audit Findings Our audit focused on the risks specific to your business and key accounts. Our discussion points below focus on areas of significant risks of material misstatement, or the following items: X Management override of controls X Revenue recognition – assumed lands, developer charges and gas tax revenue Our audit and therefore this report will not necessarily identify all matters that may be of interest to the Audit Committee Members in fulfilling its responsibilities. This report has been prepared solely for the use of the Audit Committee Members and should not be distributed without our prior consent. Consequently, we accept no responsibility to a third party that uses this communication. Page 9 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 3 Internal Control Matters We are required to report to you in writing, any significant deficiencies in internal control that we have identified. The specifics of this communication are included in our report below. Independence Our annual letter confirming our independence was previously provided to you. Except as noted Appendix B, we know of no circumstances that would cause use to amend the previously provided letter. Adjusted and Unadjusted Differences We have disclosed all significant adjusted and unadjusted differences and disclosure omissions identified through the course of our audit engagement. Each of these items has been discussed with management. Management has determined that the unadjusted differences are immaterial both individually and in aggregate to the consolidated financial statements taken as a whole. Should the Audit Committee Members agree with this assessment, we do not propose further adjustments. For purposes of our discussion, a summary of adjusted and unadjusted differences has been presented in Appendix C. Page 10 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 20204Management Representations During the course of our audit, management made certain representations to us. These representations were verbal or written and therefore explicit, or they were implied through the consolidated financial statements. Management provided representations in response to specific queries from us, as well as unsolicited representations. Such representations were part of the evidence gathered by us to be able to draw reasonable conclusions on which to base our audit opinion. These representations were documented by including in the audit working papers memoranda of discussions with management and written representations received from management. A summary of the representation we have requested from management is set out in the representation letter included in Appendix D to the report. Fraud Discussion Through our planning process, and current and prior years’ audits, we have developed an understanding of your oversight processes. We are not currently aware of any fraud affecting the company. If you are aware of changes to processes or are aware of any instances of actual, suspected or alleged fraud affecting the Town since our discussions held at planning, we request that you provide us with this information. Please refer to the Auditor’s Responsibilities for Detecting Fraud in the Planning Report to the Audit Committee Members. Page 11 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 5 AUDIT FINDINGS SIGNIFICANT RISKS OF MATERIAL MISSTATEMENT RISKS NOTED AUDIT FINDINGS Management override of internal controls Management is in a unique position to perpetrate fraud because of management’s ability to directly or indirectly manipulate accounting records or prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. In accordance with auditing standards, BDO has performed specific procedures that include testing journal entries, reviewing accounting estimates for biases and obtaining and evaluating the business rationale for transactions that are outside the normal course of operations for the organization, if any. As part of our ongoing communications with you, we are required to have a discussion on our views about significant qualitative aspects of the Town's accounting practices, including accounting policies, accounting estimates and financial statement disclosures. In order to have a frank and open discussion, these matters will be discussed verbally with you. A summary of the key discussion points are as follows: Page 12 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 6 Revenue recognition – assumed lands, developer charges and gas tax revenues There is a significant risk regarding the fair value estimates of the land assumed by the town as the transactions are not officially made at arm’s length on the open market. Judgement is required with respect to the timing of revenue recognition of developer charges and gas tax revenues. This creates an opportunity to manipulate financial results. Errors have been noted in the past with respect to the timing of recognition of these revenues and control weakness have been noted in this area. In accordance with auditing standards, BDO has performed specific procedures that include reviewing fair value estimates for bias, sampling developer charges and obtaining and evaluating the business rationale of transactions that are outside the normal course of operations for the organization, if any. BDO also reviewed deferred revenue recognition policies for the Town and noted that their treatment is consistent with Public Service Accounting Standards. Some differences were noted from revenue recognition policies not being consistently applied. These differences were extrapolated and were noted to be below materiality. Page 13 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 7 INTERNAL CONTROL MATTERS During the course of our audit, we performed the following procedures with respect to the Town’s internal control environment: X Documented operating systems to assess the design and implementation of control activities that were relevant to the audit. X Discussed and considered potential audit risks with management. The results of these procedures were considered in determining the extent and nature of substantive audit testing required. We are required to report to you in writing, significant deficiencies in internal control that we have identified during the audit. A significant deficiency is defined as a deficiency or combination of deficiencies in internal control that, in the auditor's professional judgment, is of sufficient importance to merit the attention of those charged with governance. As the purpose of the audit is for us to express an opinion on the Town’s consolidated financial statements, our audit cannot be expected to disclose all matters that may be of interest to you. As part of our work, we considered internal control relevant to the preparation of the consolidated financial statements such that we were able to design appropriate audit procedures. This work was not for the purpose of expressing an opinion on the effectiveness of internal control. Page 14 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 8 OTHER REQUIRED COMMUNICATIONS Potential effect on the financial statements of any material risks and exposures, such as pending litigation, that are required to be disclosed in the financial statements.•BDO Response: N/A Material uncertainties related to events and conditions that may cast significant doubt on the entity's ability to continue as a going concern.•BDO Response: N/A Disagreements with management about matters that, individually or in the aggregate, could be significant to the entity's financial statements or our audit report.•BDO Response: N/AMatters involving non-compliance with laws and regulations.•BDO Response: N/A Significant related party transactions that are not in the normal course of operations and which involve significant judgments made by management concerning measurement or disclosure.•BDO Response: N/A Management consultation with other accountants about significant auditing and accounting matters.•BDO Response: N/AOther Matters•BDO Response: N/AProfessional standards require independent auditors to communicate with those charged with governance certain matters in relation to an audit. In addition to the points communicated within this letter, the attached table summarizes these additional required communications. Page 15 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 9 APPENDICES Appendix A: Independent auditor’s report Appendix B: Independence update Appendix C: Summary of adjusted and unadjusted differences Appendix D: Representation letter Appendix E: BDO resources Page 16 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020
10
APPENDIX A: INDEPENDENT AUDITOR’S REPORT
Page 17 of 91
Independent Auditor's Report
To the Mayor and Councillors of The Corporation of the Town of Aurora
Opinion
We have audited the consolidated financial statements of The Corporation of the Town of Aurora, (the
Town) which comprise the consolidated statement of financial position as at December 31, 2020, and the
consolidated statement of operations and accumulated surplus, consolidated statement change in net
financial assets and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Town as at December 31, 2020, and the consolidated results of its
operations, changes in net financial assets, and cash flows for the year then ended in accordance with
Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Town in
accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with Canadian public sector accounting standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Town’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Town or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Town’s financial reporting process.
1
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Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Town’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Town’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Town to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Barrie, Ontario
June 22, 2021
2
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Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020
11
APPENDIX B: INDEPENDENCE UPDATE
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June 22, 2021
Members of the Audit Committee Members
The Corporation of the Town of Aurora
Dear Audit Committee Members:
We have been engaged to audit the consolidated financial statements of The Corporation of the
Town of Aurora (the “Town”) for the year ended December 31, 2020.
Canadian generally accepted auditing standards (GAAS) require that we communicate at least
annually with you regarding all relationships between the Town and our Firm that, in our
professional judgment, may reasonably be thought to bear on our independence.
In determining which relationships to report, these standards require us to consider relevant rules
and related interpretations prescribed by the appropriate provincial institute/order and
applicable legislation, covering such matters as:
x Holding a financial interest, either directly or indirectly in a client;
x Holding a position, either directly or indirectly, that gives the right or responsibility to exert
significant influence over the financial or accounting policies of a client;
x Personal or business relationships of immediate family, close relatives, partners or retired
partners, either directly or indirectly, with a client;
x Economic dependence on a client; and
x Provision of services in addition to the audit engagement.
We have prepared the following comments to facilitate our discussion with you regarding
independence matters arising since June 23, 2020, the date of our last letter.
We are aware of the following relationships between the Town and us that, in our professional
judgment, may reasonably be thought to have influenced our independence. The following
relationships represent matters that have occurred from June 23, 2020 to June 22, 2021.
x We have provided assistance in the preparation of the consolidated financial statements,
including adjusting journal entries. These services created a self-review threat to our
independence since we subsequently expressed an opinion on whether the consolidated
financial statements presented fairly, in all material respects, the financial position, results
of operations and cash flows of the organization in accordance with (relevant GAAP).
x We, therefore, required that the following safeguards be put in place related to the above:
x Management provided us with a trial balance and draft consolidated financial
statements, including notes, prior to completion of our audit.
x Management created the source data for all the accounting entries.
x Management developed any underlying assumptions required with respect to the
accounting treatment and measurement of the entries.
x Management reviewed advice and comments provided and undertook their own
analysis considering the Town’s circumstances and generally accepted accounting
principles.
x Management reviewed and approved all journal entries prepared by us, as well as
changes to financial statement presentation and disclosure.
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BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO
network of independent member firms.
x Someone other than the preparer reviewed the proposed journal entries and
consolidated financial statements.
We hereby confirm that we are independent with respect to the Town within the meaning of the
Code of Professional Conduct of the Chartered Professional Accountants of Ontario as of June 22,
2021.
This letter is intended solely for the use of the Audit Committee, the Council, management and
others within the Town and should not be used for any other purposes.
Yours truly,
Chartered Professional Accountants, Licensed Public Accountants
Page 22 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020
14
APPENDIX C: SUMMARY OF ADJUSTED AND UNADJUSTED
DIFFERENCES
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The Corporation of the Town of Aurora 0.10
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
1 2020-12-31 N EQUIPMENT - OTHER 24770284021.000 TB.10 54,539.77
1 2020-12-31 N COLLECTIONS-PHYSICAL 54077424068.000 TB.10 176,322.25
1 2020-12-31 N PROCESSING SUPPLIES 54077524039.000 TB.10 12,497.40
1 2020-12-31 N ILLO 54077525060.000 TB.10 33.16
1 2020-12-31 N CATALOGUING SERVICES 54077525072.000 TB.10 34,859.17
1 2020-12-31 N AMORT EXPENSES-Library Furniture 64900000159.800 TB.10 65,432.94
1 2020-12-31 N AMORT EXPENSES-Library Leasehold Improv 64900000166.800 TB.10 57,708.92
1 2020-12-31 N AMORT EXPENSES-Library Collections 64900000167.800 TB.10 346,210.16
1 2020-12-31 N AMORT EXPENSES- Library IT 64900000168.800 TB.10 36,201.06
1 2020-12-31 N Aurora Public Library Leasehold Improvements 65500000166.000 TB.10 2,028,197.42
1 2020-12-31 N LIBRARY COLLECTION 65500000167.000 TB.10 223,711.98
1 2020-12-31 N LIBRARY COLLECTION 65500000167.000 TB.10 357,180.92
1 2020-12-31 N IT & COMMUNICATION EQUIP-LIBRARY 65500000168.000 TB.10 54,539.77
1 2020-12-31 N IT & COMMUNICATION EQUIP-LIBRARY 65500000168.000 TB.10 8,342.10
1 2020-12-31 N IT & COMMUNICATION EUQIP-LIB-LEASE 65500000169.000 TB.10 8,342.10
1 2020-12-31 N TCA WIP - BUILDING 65500010150.000 TB.10 2,028,197.42
1 2020-12-31 N BUILDIGN-FURNITURE (LIBRARY)65600000159.000 TB.10 65,432.94
1 2020-12-31 N Aurora Public Librarary Leasehold Improvemen 65600000166.000 TB.10 57,708.92
1 2020-12-31 N LIBRARY COLLECTION 65600000167.000 TB.10 357,180.92
1 2020-12-31 N LIBRARY COLLECTION 65600000167.000 TB.10 346,210.16
1 2020-12-31 N IT & COMMUNICATION EQUIP-LIBRARY 65600000168.000 TB.10 36,201.06
PBC Entry to book the aurora
public
library's TCA additions and disposals, including 2020 amortization expense
2 2020-12-31 N SALARIES - F/T 14033002000.000 TB.10 604,339.00
2 2020-12-31 N Industrial/Vandorf Road Resurfacing 24310542000.000 TB.10 77,330.00
2 2020-12-31 N Murray Dr & Pinehurst Court Reconstruction 24311132000.000 TB.10 3,876.00
2 2020-12-31 N M&O Dunning, Edward and Golf Links 24311162000.000 TB.10 4,432.00
2 2020-12-31 N Browning, Johnson, Holman, Baldwin Road Re 24311182000.000 TB.10 266,967.00
2 2020-12-31 N ADAIR, BAILEY, DAVIDSON ROAD RECONST24311192000.000 TB.10 239,987.00
2 2020-12-31 N Vandorf-Monkmon Reconstruction 24311772000.000 TB.10 3,083.00
2 2020-12-31 N Kitimat Sidewalk 24346262000.000 TB.10 8,664.00
PBC Entry to capitalize capital
project delivery salary expense.
3 2020-12-31 N ACCOUNTS RECEIVABLE - ACTIVENET HOL 11000400049.000 TB.10 1,229,116.61
3 2020-12-31 N ACCOUNTS RECEIVABLE - ACTIVENET HOL 11000400049.000 TB.10 911,495.89
3 2020-12-31 N Contribution FROM CYFS Reserves to Operati 13021011901.001 TB.10 911,495.89
3 2020-12-31 N TRANSFER TO NEWMARKET FIRE 14021018000.000 TB.10 911,495.89
3 2020-12-31 N CYFS - ASSET REPLACEMENT RESERVE - C32950170790.001 TB.10 154,921.77
3 2020-12-31 N CYFS - GENERAL RESERVE FUND - C/O 32950170790.002 TB.10 1,074,194.84
3 2020-12-31 N CONT'N FROM OPS - CYFS ASSET REPLAC 33950171903.001 TB.10 351,212.86
3 2020-12-31 N CON'T FROM OPS - CYFS GENERAL RESER 33950171903.002 TB.10 560,283.03
PBC Entry to establish and adjust
the
TOA's share of the CYFS reserves that are held by the Town of Newmarket.
4 2020-12-31 N PAYABLES - TRADE 12004000405.000 TB.10 742,882.05
4 2020-12-31 N SURPLUS DEFICIT 12009990999.000 TB.10 1,133,683.82
4 2020-12-31 N TRADE 52004000405.000 TB.10 742,882.05
4 2020-12-31 N SURPLUS DEFICIT 52009990999.000 TB.10 1,133,683.82
4 2020-12-31 N SURPLUS DEFICIT 62009990999.000 TB.10 3,750,035.00
4 2020-12-31 N Accu. Surplus - Library TCA 62009990999.003 TB.10 3,750,035.00
PBC Entry to differentiate Aurora
Public Library balance's from Town's.
5 2020-12-31 N STAT. ACCT.-DC UNSPENT I 72100000790.000 TB.10 13,589,108.36
5 2020-12-31 N STAT. ACCT.-DC UNSPENT I 72100000790.000 TB.10 904,939.43
5 2020-12-31 N STAT. ACCT.-DC UNSPENT I 72100000790.000 TB.10 63,492.79
5 2020-12-31 N STAT.ACCT.-CIL UNSPENT I 72100010790.000 TB.10 606,181.18
5 2020-12-31 N STAT.ACCT.-CIL UNSPENT I 72950050790.000 TB.10 606,181.18
5 2020-12-31 N STAT.ACCT.-CIL UNSPENT I 72950050790.000 TB.10 606,181.18
5 2020-12-31 N STAT. ACCT.-UNSPENT DC A 72950070790.000 TB.10 13,589,108.36
5 2020-12-31 N STAT. ACCT.-UNSPENT DC A 72950070790.000 TB.10 13,589,108.36
5 2020-12-31 N STAT. ACCT. - UNSPENT FEDERAL GAS TAX72950120790.000 TB.10 904,939.43
5 2020-12-31 N STAT. ACCT. - UNSPENT FEDERAL GAS TAX72950120790.000 TB.10 904,939.43
2021-06-14
2:55 PM Page 1
Page 24 of 91
The Corporation of the Town of Aurora 0.10-1
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
5 2020-12-31 N Stat. Acct. - Unspent Library DC 72950230790.000 TB.10 63,492.79
5 2020-12-31 N Stat. Acct. - Unspent Library DC 72950230790.000 TB.10 63,492.79
5 2020-12-31 N STAT. ACCT.-UNSPENT DC A 73014901000.000 TB.10 13,589,108.36
5 2020-12-31 N STAT. ACCT.-UNSPENT DC A 73014901000.000 TB.10 63,492.79
5 2020-12-31 N STAT.ACCT.-UNSPENT CIL A 73014901001.000 TB.10 606,181.18
5 2020-12-31 N STAT. ACCT. - UNSPENT FEDERAL TAX AS 73014901002.000 TB.10 904,939.43
PBC Entry to establish opening
2020
unspent capital, CIL, DC and gas tax Funding Balances and subsequent 2020 adjustments to
those balances.
6 2020-12-31 N SURPLUS DEFICIT 12009990999.000 TB.10 7,255,412.92
6 2020-12-31 N CONT'N FROM GEN GOV'T DC 13014901961.000 TB.10 348,676.09
6 2020-12-31 N CONT'N FROM PKS DEV DC RESERVE 13014901963.000 TB.10 2,569,365.70
6 2020-12-31 N CONT'N FROM FIRE DC 13014901969.000 TB.10 1,961,348.26
6 2020-12-31 N PARK DEV DC C/O BAL 32950210790.000 TB.10 6,906,736.83
6 2020-12-31 N GEN GOVT DC C/O BAL 32950250790.000 TB.10 348,676.09
6 2020-12-31 N CONT'N FROM DEVELOPERS 33950201333.000 TB.10 1,961,348.26
6 2020-12-31 N CONT'N FROM GENERAL 33950211903.000 TB.10 2,569,365.70
6 2020-12-31 N CONT'N TO GENERAL 34950258005.000 TB.10 348,676.09
PBC Entry to re-establish adjusted
ending DC Account balances and book current year liability adjustments (DC contra Account
Management)
7 2020-12-31 N CONTRIBUTION FROM GENERAL 33900211903.000 TB.10 6,471,512.00
7 2020-12-31 N CONT'N FROM DEVELOPERS 33950211333.000 TB.10 6,471,512.00
7 2020-12-31 N CONT'N FROM DEVELOPERS 33950251333.000 TB.10 247,584.72
7 2020-12-31 N CONTRIBUTIONS TO CAPITAL 34950078002.000 TB.10 247,584.72
PBC JE to move DC revenues to
correct
DC Service Line and correct coding error
8 2020-12-31 N CONT'N FROM DEVELOPERS 23120351333.000 TB.10 555,411.48
8 2020-12-31 N CONT'N FROM DEVELOPERS 23120351333.001 TB.10 555,411.48
8 2020-12-31 N SALE OF LANDS 23130241205.000 TB.10 247,099.84
8 2020-12-31 N SALE OF LANDS 23130241205.001 TB.10 247,099.84
PBC To adjust transfer accounts.
9 2020-12-31 N CONTRACTS 24770325059.000 TB.10
9 2020-12-31 N CONTRACTS 24770345059.000 TB.10
9 2020-12-31 N SURPLUS DEFICIT 62009990999.000 TB.10 131.25
9 2020-12-31 N SURPLUS DEFICIT 62009990999.000 TB.10 1,999.89
9 2020-12-31 N TCA COST - LAND FOR PARKS & REC 65500000135.000 TB.10 224.97
9 2020-12-31 N LAND IMPROVEMENT-PARK FAC 65500000140.000 TB.10 1,048.41
9 2020-12-31 N VEHICLES 65500000160.000 TB.10 11,148.50
9 2020-12-31 N IT & COMMUNICATION EQUIPMENT 65500000162.000 TB.10 10,747.61
9 2020-12-31 N ROAD (INCLUDES CURB & GUTTER)65500000170.000 TB.10 749.73
9 2020-12-31 N POND 65500000184.000 TB.10 871.87
9 2020-12-31 N TCA WIP - ROAD & RELATED 65500010170.000 TB.10 421.91
9 2020-12-31 N LAND IMPROVEMENT-PARK FAC 65600000140.000 TB.10 980.21
9 2020-12-31 N BUILDING 65600000150.000 TB.10 321.41
9 2020-12-31 N VEHICLES 65600000160.000 TB.10 727.47
9 2020-12-31 N TCA ACCUM AMORT'N - VEHI 65600000160.100 TB.10 500.00
9 2020-12-31 N IT & COMMUNICATION EQUIPMENT 65600000162.000 TB.10 431.76
9 2020-12-31 N TCA ACCUM AMORT'N - IT &65600000162.100 TB.10 500.01
9 2020-12-31 N ROAD (INCLUDES CURB & GUTTER)65600000170.000 TB.10 1,196.87
9 2020-12-31 N TCA ACCUM AMORT'N - ROAD 65600000170.400 TB.10 499.88
9 2020-12-31 N STORM 65600000182.000 TB.10 234.13
9 2020-12-31 N POND 65600000184.000 TB.10 600.00
9 2020-12-31 N TCA ACCUM AMORT'N - POND 65600000184.500 TB.10 500.00
PBC TCA Journal Entry to adjust
opening account balances and to book non-library 2020 asset increases.
10 2020-12-31 N CONTRACT 24722015059.001 TB.10 909,921.06
10 2020-12-31 N 1 SUBDIVISION ASSUMPTION 63014900001.001 TB.10 9,730,365.43
2021-06-14
2:55 PM Page 2
Page 25 of 91
The Corporation of the Town of Aurora 0.10-2
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
10 2020-12-31 N 4900002.001 GAINS/LOSSES 63014900002.001 TB.10 1,200,722.83
10 2020-12-31 N 4900002.001 GAINS/LOSSES 63014900002.001 TB.10 636,331.27
10 2020-12-31 N LAND IMPROVEMENT-PARK FAC 65500000140.000 TB.10 15,264.01
10 2020-12-31 N .100 TCA COST - BUILDING 65500000150.100 TB.10 112,608.50
10 2020-12-31 N .100 TCA COST - BUILDING 65500000150.100 TB.10 85,931.00
10 2020-12-31 N TCA COST - ROAD (INCLUDE 65500000170.400 TB.10 2,446,975.75
10 2020-12-31 N .400 TCA COST - SIDEWALK 65500000171.400 TB.10 504,849.11
10 2020-12-31 N .400 TCA COST - SIDEWALK 65500000171.400 TB.10 17,398.41
10 2020-12-31 N .400 TCA COST - SIDEWALK 65500000171.400 TB.10 319,554.09
10 2020-12-31 N TCA COST - STREET LIGHTI 65500000172.400 TB.10 21,549.06
10 2020-12-31 N TCA COST - STREET LIGHTI 65500000172.400 TB.10 312,721.83
10 2020-12-31 N 400 TCA COST - ROAD SIGN 65500000173.400 TB.10 22,464.80
10 2020-12-31 N 400 TCA COST - ROAD SIGN 65500000173.400 TB.10 547.87
10 2020-12-31 N 400 TCA COST - ROAD SIGN 65500000173.400 TB.10 37,644.71
10 2020-12-31 N TCA COST - BRIDGE & CULV 65500000176.400 TB.10 18,183.32
10 2020-12-31 N TCA COST - BRIDGE & CULV 65500000176.400 TB.10 826,737.55
10 2020-12-31 N TCA RETAINING WALLS 65500000177.000 TB.10 4,884.92
10 2020-12-31 N TCA RETAINING WALLS 65500000177.000 TB.10 13,663.07
10 2020-12-31 N Fences Along Roads 65500000178.400 TB.10 33,128.65
10 2020-12-31 N Fences Along Roads 65500000178.400 TB.10 45,370.92
10 2020-12-31 N TCA Cost - Road Surfaces 65500000179.400 TB.10 1,002,651.77
10 2020-12-31 N 180.500 TCA COST - WATER 65500000180.500 TB.10 186,564.18
10 2020-12-31 N 180.500 TCA COST - WATER 65500000180.500 TB.10 1,663,231.72
10 2020-12-31 N .500 TCA COST - SANITARY 65500000181.500 TB.10 93,078.50
10 2020-12-31 N .500 TCA COST - SANITARY 65500000181.500 TB.10 1,655,965.52
10 2020-12-31 N 182.500 TCA COST - STORM 65500000182.500 TB.10 96,372.33
10 2020-12-31 N 182.500 TCA COST - STORM 65500000182.500 TB.10 63,729.06
10 2020-12-31 N 182.500 TCA COST - STORM 65500000182.500 TB.10 2,224,980.19
10 2020-12-31 N 0184.500 TCA COST - POND 65500000184.500 TB.10 99,330.43
10 2020-12-31 N 0184.500 TCA COST - POND 65500000184.500 TB.10 197,183.15
10 2020-12-31 N TCA COST-PUMPING STATION 65500000186.500 TB.10 24,973.42
10 2020-12-31 N TCA WIP-LAND IMPROVEMENT 65500010140.700 TB.10 7,768,648.52
10 2020-12-31 N TCA WIP - BUILDING 65500010150.000 TB.10 703,387.44
10 2020-12-31 N 0 TCA WIP-ROAD & RELATED 65500010170.400 TB.10 2,365,041.30
10 2020-12-31 N TCA WIP-BRIDGE & CULVERT 65500010176.400 TB.10 1,584,471.53
10 2020-12-31 N TCA WIP - STORM 65500010182.000 TB.10 10,372,151.58
10 2020-12-31 N TCA ACCUM AMORT'N - BRID 65600000176.400 TB.10 65.19
10 2020-12-31 N TCA ACCUM AMORT'N - WATE 65600000180.500 TB.10 1,393.11
10 2020-12-31 N TCA ACCUM AMORT'N - SANI 65600000181.500 TB.10 1,704.69
10 2020-12-31 N TCA ACCUM AMORT'N - STOR 65600000182.500 TB.10 39,428.94
10 2020-12-31 N TCA ACCUM AMORT'N - POND 65600000184.500 TB.10 61,428.25
PBC Entry to book WIP Additions
and
Transfers, Subdivision Donated Assets and New Found Asset Additions.
11 2020-12-31 N Other Equipment Disposal Proceeds 13013051201.001 TB.10 4,717.65
11 2020-12-31 N FITNESS PROGRAMS - OTHER REVENUES 13074041201.000 TB.10 4,717.65
11 2020-12-31 N CENTRAL YORK FIRE SERVICES - CAPITAL 14021015060.001 TB.10 161,149.03
11 2020-12-31 N CONSULTING 24130235043.000 TB.10 26,767.78
11 2020-12-31 N CONTRACTS 24130285059.000 TB.10 7,227,239.74
11 2020-12-31 N CONTRACTS 24130285059.000 TB.10 460,629.67
11 2020-12-31 N CONTRACTS 24240125059.000 TB.10 43,600.29
11 2020-12-31 N CONTRACTS 24311165059.000 TB.10 121,607.36
11 2020-12-31 N CONTRACTS 24430385059.000 TB.10 433,705.48
11 2020-12-31 N CONTRACTS 24722015059.000 TB.10 93,355.22
11 2020-12-31 N CONTRACTS 24722015059.000 TB.10 104,408.38
11 2020-12-31 N 4900002.001 GAINS/LOSSES 63014900002.001 TB.10 75,035.09
11 2020-12-31 N TCA COSTS - LAND FOR GEN GOV'T 65500000132.000 TB.10 460,629.67
11 2020-12-31 N LAND IMPROVEMENT-PARK FAC 65500000140.000 TB.10 93,355.22
11 2020-12-31 N LAND IMPROVEMENT-PARK FAC 65500000140.000 TB.10 57,329.49
11 2020-12-31 N .100 TCA COST - BUILDING 65500000150.100 TB.10 7,254,007.52
11 2020-12-31 N .100 TCA COST - BUILDING 65500000150.100 TB.10 73,605.35
11 2020-12-31 N .100 TCA COST - VEHICLES 65500000160.100 TB.10 104,408.38
11 2020-12-31 N .100 TCA COST - VEHICLES 65500000160.100 TB.10 182,935.80
11 2020-12-31 N TCA COST - FIRE VEHICLES 65500000161.200 TB.10 45,360.00
11 2020-12-31 N TCA COST - IT & COMMUNIC 65500000162.100 TB.10 43,600.29
11 2020-12-31 N TCA COST - FIRE EQUIPMEN 65500000162.200 TB.10 115,789.03
11 2020-12-31 N TCA COST - ROAD (INCLUDE 65500000170.400 TB.10 166,312.20
11 2020-12-31 N .400 TCA COST - SIDEWALK 65500000171.400 TB.10 7,616.42
11 2020-12-31 N TCA COST - STREET LIGHTI 65500000172.400 TB.10 42,494.87
2021-06-14
2:55 PM Page 3
Page 26 of 91
The Corporation of the Town of Aurora 0.10-3
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
11 2020-12-31 N 400 TCA COST - ROAD SIGN 65500000173.400 TB.10 2,209.97
11 2020-12-31 N 400 TCA COST - ROAD SIGN 65500000173.400 TB.10 4,053.08
11 2020-12-31 N 180.500 TCA COST - WATER 65500000180.500 TB.10 15,001.37
11 2020-12-31 N .500 TCA COST - SANITARY 65500000181.500 TB.10 7,822.77
11 2020-12-31 N 182.500 TCA COST - STORM 65500000182.500 TB.10 4,344.93
11 2020-12-31 N 500 TCA COST-WATER METER 65500000185.500 TB.10 433,705.48
11 2020-12-31 N 500 TCA COST-WATER METER 65500000185.500 TB.10 155,130.46
11 2020-12-31 N TCA COST-PUMPING STATION 65500000186.500 TB.10 33,419.55
11 2020-12-31 N TCA ACCUM AMORT'N - LAND 65600000140.700 TB.10 41,848.19
11 2020-12-31 N TCA ACCUM AMORT'N - BUIL 65600000150.100 TB.10 67,642.75
11 2020-12-31 N TCA ACCUM AMORT'N - VEHI 65600000160.100 TB.10 182,935.80
11 2020-12-31 N TCA ACCUM AMORT'N - SIDE 65600000171.400 TB.10 2,403.09
11 2020-12-31 N TCA ACCUM AMORT'N - ROAD SIGN 65600000173.400 TB.10 1,611.32
11 2020-12-31 N TCA ACCUM AMORT'N - WATE 65600000180.500 TB.10 7,532.09
11 2020-12-31 N TCA ACCUM AMORT'N - SANI 65600000181.500 TB.10 3,514.52
11 2020-12-31 N TCA ACCUM AMORT'N - STOR 65600000182.500 TB.10 2,269.13
11 2020-12-31 N TCA ACCUM AMORT'N-WATER 65600000185.500 TB.10 155,130.46
11 2020-12-31 N TCA ACCUM AMORT'N-PUMPIN 65600000186.500 TB.10 1,336.78
PBC Entry to book final TCA
expenditure additions, including fire services, excluding library services and to reflect all
2020 disposals.
not used
13 2020-12-31 N AMORT EXPENSES-Parks 64900000140.700 TB.10 1,063,973.72
13 2020-12-31 N AMORT EXPENSES - Building 64900000150.100 TB.10 4,358,847.64
13 2020-12-31 N AMORT EXEPNSES - Vehicles & Equip 64900000160.100 TB.10 665,914.28
13 2020-12-31 N AMORT EXEPENSE - FIRE 64900000161.200 TB.10 246,541.12
13 2020-12-31 N AMORT EXPENSES - IT Equip 64900000162.100 TB.10 365,191.76
13 2020-12-31 N AMORT EXPENSES - Fire Equip 64900000162.200 TB.10 72,639.52
13 2020-12-31 N AMORT EXPENSES - Roads 64900000170.400 TB.10 2,558,557.03
13 2020-12-31 N AMORT EXPENSES - Sidewalks 64900000171.400 TB.10 442,345.10
13 2020-12-31 N AMORT EXPENSES - Streetlights 64900000172.000 TB.10 402,068.38
13 2020-12-31 N AMORT EXPENSES - Road Signs 64900000173.000 TB.10 27,339.85
13 2020-12-31 N AMORT EXPENSES - Traffic Lights 64900000175.000 TB.10 21,035.27
13 2020-12-31 N AMORT EXPENSES -Bridge & Culvert 64900000176.400 TB.10 191,587.97
13 2020-12-31 N AMORT EXPENSES - RETAINING WALL 64900000177.400 TB.10 40,820.80
13 2020-12-31 N AMORT EXPENSES-Water 64900000180.500 TB.10 1,429,138.80
13 2020-12-31 N AMORT EXPENSES-Sanitary 64900000181.500 TB.10 1,250,849.04
13 2020-12-31 N AMORT EXPENSES-Storm 64900000182.500 TB.10 1,649,595.60
13 2020-12-31 N AMORT EXPENSES - Pond 64900000184.500 TB.10 448,875.88
13 2020-12-31 N AMORT EXPENSES-Water Meters 64900000185.500 TB.10 278,898.18
13 2020-12-31 N AMORT EXPENSES-Pumping Stations 64900000186.500 TB.10 23,896.59
13 2020-12-31 N TCA ACCUM AMORT'N - LAND 65600000140.700 TB.10 1,063,973.72
13 2020-12-31 N TCA ACCUM AMORT'N - BUIL 65600000150.100 TB.10 4,358,847.64
13 2020-12-31 N TCA ACCUM AMORT'N - VEHI 65600000160.100 TB.10 665,914.28
13 2020-12-31 N TCA ACCUM AMORT'N - FIRE Vehicles 65600000161.200 TB.10 246,541.12
13 2020-12-31 N TCA ACCUM AMORT'N - IT &65600000162.100 TB.10 365,191.76
13 2020-12-31 N TCA ACCUM AMORT'N - FIRE 65600000162.200 TB.10 72,639.52
13 2020-12-31 N TCA ACCUM AMORT'N - ROAD 65600000170.400 TB.10 2,558,557.03
13 2020-12-31 N TCA ACCUM AMORT'N - SIDE 65600000171.400 TB.10 442,345.10
13 2020-12-31 N STREET LIGHTING 65600000172.000 TB.10 402,068.38
13 2020-12-31 N ROAD SIGN 65600000173.000 TB.10 27,339.85
13 2020-12-31 N TRAFFIC LIGHT 65600000175.000 TB.10 21,035.27
13 2020-12-31 N TCA ACCUM AMORT'N - BRID 65600000176.400 TB.10 191,587.97
13 2020-12-31 N TCA ACCUM AMORT'N - RETAIN WALLS 65600000177.400 TB.10 40,820.80
13 2020-12-31 N TCA ACCUM AMORT'N - WATE 65600000180.500 TB.10 1,429,138.80
13 2020-12-31 N TCA ACCUM AMORT'N - SANI 65600000181.500 TB.10 1,250,849.04
13 2020-12-31 N TCA ACCUM AMORT'N - STOR 65600000182.500 TB.10 1,649,595.60
13 2020-12-31 N TCA ACCUM AMORT'N - POND 65600000184.500 TB.10 448,875.88
13 2020-12-31 N TCA ACCUM AMORT'N-WATER 65600000185.500 TB.10 278,898.18
13 2020-12-31 N TCA ACCUM AMORT'N-PUMPIN 65600000186.500 TB.10 23,896.59
PBC Entry to book 2020
amortization
expenses.
14 2020-12-31 N CONTRACTS 24120195059.000 TB.11 9,750.79
2021-06-14
2:55 PM Page 4
Page 27 of 91
The Corporation of the Town of Aurora 0.10-4
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
14 2020-12-31 N CONTRACTS 24120195059.001 TB.11 9,750.79
PBC Entry to clear out Land Listed
for Sale to Income Statement.
15 2020-12-31 N DEB. DEBT - FUTURE DC'S - TAX RATE 11000500081.000 TB.12 249,997.42
15 2020-12-31 N LED INFRAS ONT DEBT 11000500083.000 TB.12 318,731.45
15 2020-12-31 N JOC OILC DEBENTURE 11000500084.000 TB.12 503,568.91
15 2020-12-31 N REGIONAL DEBENTURE - REC CTR 12008000800.000 TB.12 249,997.42
15 2020-12-31 N JOC OILC DEBENTURE 12008000820.000 TB.12 503,568.91
15 2020-12-31 N INFRASTURE ONTARIO DEBT 12008000830.000 TB.12 318,731.45
PBC - Entry to reduce LT debt
liabilities
16 2020-12-31 N ALLOWANCE FOR DOUBTFUL ACCOUNTS 11001000060.000 FM.07 942,528.64
16 2020-12-31 N ALLOWANCE FOR BAD DEBT 11001100060.000 FM.07 942,528.64
To adjust allowance for doubtful
accounts to actual.
17 2020-12-31 N ACCOUNTS RECEIVABLE - LEISURE SERVIC11000400047.000 TB.13 144,640.01
17 2020-12-31 N ACCOUNTS RECEIVABLE - LEISURE HOLDI 11000400048.000 TB.13 728,900.59
17 2020-12-31 N PAYABLES - ACCRUED LIABILITIES 12004000409.000 TB.13 873,540.60
PBC - Relcass ActiveNet Credit
Balances.
18 2020-12-31 N ACCOUNTS RECEIVABLE - ACTIVENET HOL 11000400049.000 TB.14 33,635.31
18 2020-12-31 N Contribution FROM CYFS Reserves to Operati 13021011901.001 TB.14 33,635.31
18 2020-12-31 N TRANSFER TO NEWMARKET FIRE 14021018000.000 TB.14 33,635.31
18 2020-12-31 N CON'T FROM OPS - CYFS GENERAL RESER 33950171903.002 TB.14 33,635.31
PBC - Entry to revise CYFS Ending
reserve fund balance as per Town of Newmarket update.
19 2020-12-31 N LED INFRAS ONT DEBT 11000500083.000 TB.15 2,207,595.65
19 2020-12-31 N LED INFRAS ONT DEBT 11000500083.000 TB.15 318,731.45
19 2020-12-31 N LED Infrastructure Debt 11000500083.001 TB.15 2,207,595.65
19 2020-12-31 N LED Infrastructure Debt 11000500083.001 TB.15 318,731.45
19 2020-12-31 N CAPITAL LOAN REPAYMENT 14014906000.000 TB.15 15,986.82
19 2020-12-31 N DEBENT INT & CHGS 14014906001.000 TB.15 15,986.82
19 2020-12-31 N LED DEBTENTURE REPYMT 14034706000.000 TB.15 321,109.66
19 2020-12-31 N LED Debenture Principal Payment 14034706000.001 TB.15 318,731.45
19 2020-12-31 N BANK CHARGES 14034706001.000 TB.15 2,378.21
19 2020-12-31 N CONTRIBUTION FROM RESERVE FUNDS 43043201902.000 TB.15 253,016.85
19 2020-12-31 N CONTRACTS 44041205059.000 TB.15 253,016.85
PBC - Transfer Account
Reconciliation Entries
20 2020-12-31 N CONT'N TO GENERAL 34950158005.000 TB.16 826,466.39
20 2020-12-31 N BUILDING SERVICES CONT'N TO GENERAL 34950158005.001 TB.16 826,466.39
PBC - Entry to clean up Reserve LS
21 2020-12-31 N BANK ACCOUNT - GENERAL 11000200020.000 TB.17 59,635.66
21 2020-12-31 N BANK ACCOUNT - GENERAL 11000200020.000 TB.17 1,747.65
21 2020-12-31 N BANK ACCOUNT - GENERAL 11000200020.000 TB.17 1,042,687.36
21 2020-12-31 N INVESTMENTS - SHORT TERM 11000300030.000 TB.17 97,524.28
21 2020-12-31 N INVESTMENTS - LONG TERM 11000300031.000 TB.17 297,227.47
21 2020-12-31 N INVESTMENT ACCRL/RECVBLE 11000300034.000 TB.17 97,524.28
21 2020-12-31 N ACCOUNTS RECEIVABLE - OTHER 11000400044.000 TB.17 21,739.83
21 2020-12-31 N ACCOUNTS RECEIVABLE - OTHER 11000400044.000 TB.17 37,895.83
21 2020-12-31 N ACCOUNTS RECEIVABLE - GENERAL 11000400045.000 TB.17 1,747.65
21 2020-12-31 N TAXES RECEIVABLE - TAXES 11001000100.000 TB.17 1,042,687.36
21 2020-12-31 N INVESTMENT INCOME 13014901401.000 TB.17 297,227.47
PBC - Reallocate Cash Receipts and
update investment portfolio value and recognize additional investment income
2021-06-14
2:55 PM Page 5
Page 28 of 91
The Corporation of the Town of Aurora 0.10-5
Year End: December 31, 2020 Prepared by Detail Rev Gen Rev Quality Rev
Journal Entries NT-S 2021-06-09
Date: 2020-01-01 To 2020-12-31 4th Level Rev Tax Rev IS Audit Rev Other Rev
Number Date Type Name Account No Reference Debit Credit Recurrence Misstatement
22 2020-12-31 N SURPLUS DEFICIT 12009990999.000 TB.18 6,611.81
22 2020-12-31 N MUNICIPAL PURPOSES - OTHER REVENUE 13014901201.000 TB.18 2,064.39
22 2020-12-31 N ACC SURPLUS - LAND LISTED FOR SALE 62009990998.000 TB.18 2,951,811.73
22 2020-12-31 N SURPLUS DEFICIT 62009990999.000 TB.18 2,951,811.73
22 2020-12-31 N SURPLUS DEFICIT 62009990999.000 TB.18 4,547.42
PBC - Shareholder's Equity LS
Reconciliation
23 2020-12-31 N PAYABLES - TRADE 12004000405.000 TB.18 714,139.11
23 2020-12-31 N SURPLUS DEFICIT 12009990999.000 TB.18 714,139.11
23 2020-12-31 N TRADE 52004000405.000 TB.18 714,139.11
23 2020-12-31 N SURPLUS DEFICIT 52009990999.000 TB.18 714,139.11
PBC - Entry to adjust library
accounts payable balance
24 2020-12-31 N PAYABLES - TRADE 12004000405.000 TB.18 413.94
24 2020-12-31 N SURPLUS DEFICIT 12009990999.000 TB.18 413.94
24 2020-12-31 N TRADE 52004000405.000 TB.18 413.94
24 2020-12-31 N SURPLUS DEFICIT 52009990999.000 TB.18 413.94
PBC - Entry to further adjust
library accounts payable balance.
25 2020-12-31 N DEFERRED REVENUE - REVENUE FUND 12006300630.000 TB.19 1,816,746.00
25 2020-12-31 N PROVINCIAL GRANTS 13014901801.000 TB.19 1,816,746.00
PBC - Entry to accrued unspent
Safe Restart grant funding at end of 2020
R1 2020-12-31 R BANK ACCOUNT - GENERAL 11000200020.000 A.06, CC. 06 361,448.94
R1 2020-12-31 R PAYROLL - OMERS 12006000603.000 A.06, CC. 06 361,448.94
To reclassify OMERS amount as a
payable at December 31, 2020.
125,996,748.93 125,996,748.93
Net Income (Loss) 16,696,341.02
2021-06-14
2:55 PM Page 6
Page 29 of 91
Description of MisstatementIdentified MisstatementsProjections of Identified MisstatementsEstimates Assets Dr(Cr)Liabilities Dr(Cr)Opening R/E Dr(Cr)Income Dr(Cr)TCA opening balance adjustments658,577 (658,577) 658,577 2019 and reversed in 2020. In the prior year WIP and accrued liabilities were overstated. Accrued liabilities were written-off to expenses in 2020 and loss recorded on the write-off of WIP. No net impact on P&L.862,176 Likely Aggregate Misstatements Before Effect of Previous Year's Errors and Estimates1,520,753 - - - - (658,577) 658,577 - - - - - - (658,577) 658,577 Effect of Previous Year's ErrorsLikely Aggregate MisstatementsProposed AdjustmentsTown of AuroraSummary of Unadjusted MisstatementsDecember 31, 2020Page 30 of 91
Description of MisstatementIdentified MisstatementsProjections of Identified MisstatementsEstimates Assets Dr(Cr)Liabilities Dr(Cr)Opening R/E Dr(Cr)Income Dr(Cr)Holdbacks older than 6 years which have not been followed-up on in accordance with policy. Likely that some of this balance has already been paid and should not be included in accounts payable.146,241 146,241 (146,241) Cut-off error re. Central York Fire Station progress billing (isolated error).501,780 501,780 (501,780) Difference in revenue recognized related to DCs as a result of funding projects from other sources before utilizing DCs and other discrepancies.64,368 149,802 (214,170) 214,170 Difference in revenue recognized related to DCs as a result of missing unspent adjustment in the prior year.1,103,962 1,103,962 (1,103,962) Federal gas tax revenue recognized without corresponding project expenditures.351,590 (315,590) 351,590 Extrapolated error related to outstanding payments on bank reconciliation issued subsequent to year end.255,231 255,231 (255,231) Cumulative trivial tax variances between supporting schedules and GL.166,520 (166,520) 166,520 Likely Aggregate Misstatements Before Effect of Previous Year's Errors and Estimates2,188,220 405,033 146,241 590,491 (1,140,530) 1,103,962 (517,923) - - - - 590,491 (1,140,530) 1,103,962 (517,923) Proposed AdjustmentsTown of AuroraSummary of Unadjusted MisstatementsDecember 31, 2020Effect of Previous Year's ErrorsLikely Aggregate MisstatementsPage 31 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020
15
APPENDIX D: REPRESENTATION LETTER
Page 32 of 91
The Corporation of the Town of Aurora
100 John West Way, Box 1000
Aurora, Ontario
L4G 6J1
June 22, 2021
BDO Canada LLP
Chartered Professional Accountants
300 Lakeshore Drive, Suite 300
Barrie, Ontario
L4N 0B4
This representation letter is provided in connection with your audit of the financial statements of The
Corporation of the Town of Aurora for the year ended December 31, 2020, for the purpose of
expressing an opinion as to whether the financial statements are presented fairly, in all material
respects, in accordance with Canadian public sector accounting standards.
We confirm that to the best of our knowledge and belief, having made such inquiries as we considered
necessary for the purpose of appropriately informing ourselves:
Financial Statements
We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated November
2, 2020, for the preparation of the financial statements in accordance with Canadian public sector
accounting standards; in particular, the financial statements are fairly presented in accordance
therewith.
x The methods, significant assumptions, and data used in making accounting estimates and their
related disclosures are appropriate to achieve recognition, measurement and/or disclosure that
are reasonable in accordance with Canadian public sector accounting standards.
x Related party relationships and transactions have been appropriately accounted for and
disclosed in accordance with the requirements of Canadian public sector accounting standards.
x All events subsequent to the date of the financial statements and for which Canadian public
sector accounting standards require adjustment or disclosure have been adjusted or disclosed.
x The financial statements of the entity use appropriate accounting policies that have been
properly disclosed and consistently applied.
x The effects of uncorrected misstatements are immaterial, both individually and in the
aggregate, to the financial statements as a whole. A list of the uncorrected misstatements is
attached to the representation letter.
x We have reviewed and approved all journal entries recommended by the practitioners during
the audit. A list of the journal entries is attached to the representation letter.
Information Provided
x We have provided you with:
x access to all information of which we are aware that is relevant to the preparation of the
financial statements, such as records, documentation and other matters;
x additional information that you have requested from us for the purpose of the audit; and
x unrestricted access to persons within the entity from whom you determined it necessary to
obtain audit evidence.
Page 33 of 91
x We are responsible for the design, implementation and maintenance of internal controls to
prevent, detect and correct fraud and error, and have communicated to you all deficiencies in
internal control of which we are aware.
x All transactions have been recorded in the accounting records and are reflected in the financial
statements.
x We have disclosed to you all known instances of non-compliance or suspected non-compliance
with laws and regulations whose effects should be considered when preparing the financial
statements.
x We have disclosed to you the identity of the entity’s related parties and all the related party
relationships and transactions of which we are aware.
Fraud and Error
x We have disclosed to you the results of our assessment of the risk that the financial statements
may be materially misstated as a result of fraud.
x We have disclosed to you all information in relation to fraud or suspected fraud that we are
aware of and that affects the entity and involves:
x management;
x employees who have significant roles in internal control; or
x others where the fraud could have a material effect on the financial statements.
x We have disclosed to you all information in relation to allegations of fraud, or suspected fraud,
affecting the entity’s financial statements communicated by employees, former employees,
analysts, regulators, or others.
General Representations
x Where the value of any asset has been impaired, an appropriate provision has been made in the
financial statements or has otherwise been disclosed to you.
x We have provided you with significant assumptions that in our opinion are reasonable and
appropriately reflect our intent and ability to carry out specific courses of action on behalf of
the entity when relevant to the use of fair value measurements or disclosures in the financial
statements.
x We confirm that there are no derivatives or off-balance sheet financial instruments held at
year end that have not been properly recorded or disclosed in the financial statements.
x Except as disclosed in the financial statements, there have been no changes to title, control
over assets, liens or assets pledged as security for liabilities or collateral.
x The entity has complied with all provisions in its agreements related to debt and there were no
defaults in principal or interest, or in the covenants and conditions contained in such
agreements.
x There have been no plans or intentions that may materially affect the recognition,
measurement, presentation or disclosure of assets and liabilities (actual and contingent).
x The nature of all material uncertainties have been appropriately measured and disclosed in the
financial statements, including all estimates where it is reasonably possible that the estimate
Page 34 of 91
will change in the near term and the effect of the change could be material to the financial
statements.
x There were no direct contingencies or provisions (including those associated with guarantees or
indemnification provisions), unusual contractual obligations nor any substantial commitments,
whether oral or written, other than in the ordinary course of business, which would materially
affect the financial statements or financial position of the entity, except as disclosed in the
financial statements.
Other Representations Where the Situation Exists
x We have informed you of all known actual or possible litigation and claims, whether or not they
have been discussed with legal counsel. Since there are no actual, outstanding or possible
litigation and claims, no disclosure is required in the financial statements.
x To the extent that our normal procedures and controls related to our financial statement close
process or other reporting processes at any of our locations were adversely impacted by the
COVID-19 outbreak, we took appropriate actions and safeguards to reasonably ensure the fair
presentation of the financial statements in accordance with Canadian public sector accounting
standards.
x Other than as disclosed in the notes to the financial statements, no other impacts from the
COVID-19 outbreak need to be reflected in the financial statements.
Yours truly,
_____________________________________ _______________________________________
Signature Position
_______________________________________ _______________________________________
Signature Position
Page 35 of 91
Audit Final Report for The Corporation of the Town of Aurora For the year ended December 31, 2020 16 APPENDIX E: BDO RESOURCES BDO is a leading provider of professional services to clients of all sizes in virtually all business sectors. Our team delivers a comprehensive range of assurance, accounting, tax, and advisory services, complemented by a deep industry knowledge gained from nearly 100 years of working within local communities. As part of the global BDO network, we are able to provide seamless and consistent cross-border services to clients with global needs. Commitment to knowledge and best practice sharing ensures that expertise is easily shared across our global network and common methodologies and information technology ensures efficient and effective service delivery to our clients. Outlined below is a summary of certain BDO resources, which may be of interest to the Audit Committee Members. PSAS PUBLICATIONS Public Sector Accounting Standards (PSAS) Update 20 https://www.bdo.ca/BDO/media/FRS/PSAS/NTL_AA_21Oct20_PSAS-Update_Final.pdf INDIRECT TAX BDO’s Indirect Tax Team advises clients on the measures needed to navigate complexities, identify tax efficiencies and drive value. We review returns to find errors and recover overpaid taxes, manage the government audit process, advise on cash flow improvement, identify tax or duty recovery opportunities, and more. For additional information on Indirect Tax and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/tax/commodity-tax-services/overview/ CYBERSECURITY BDO’s Cybersecurity consultants help organizations protect their valuable digital assets against theft and misuse. Our strategic approach begins with a cybersecurity risk assessment that surveys and tests the applications, data and infrastructure of the enterprise against the business risks of the organization. After identifying any vulnerabilities, we develop a cybersecurity plan tailored to the organization’s needs. For additional information on Cybersecurity and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/advisory/cybersecurity/overview/ DIGITAL STRATEGY BDO Technology Advisory works with client to deliver sustainable business results scaled and tailored to the unique dynamics of client’s industries and the individual needs of their businesses. Although different for each organization, optimal IT solutions align risk protection investments with digital asset value to improve performance and efficiency. For additional information on Digital Strategy and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/advisory/technology/overview/ Page 36 of 91
The Corporation of the Town of Aurora
Consolidated Financial Statements
For the year ended December 31, 2020
Page 37 of 91
The Corporation of the Town of Aurora
Consolidated Financial Statements
For the year ended December 31, 2020
Contents
Independent Auditor's Report 1-2
Consolidated Financial Statements
Consolidated Statement of Financial Position 3
Consolidated Statement of Operations and Accumulated Surplus 4
Consolidated Statement of Change in Net Financial Assets 5
Consolidated Statement of Cash Flows 6
Notes to the Consolidated Financial Statements 7 - 21
Schedule 1 - Consolidated Schedule of Segmented Disclosure 22 - 23
Page 38 of 91
Independent Auditor's Report
To the Mayor and Councillors of The Corporation of the Town of Aurora
Opinion
We have audited the consolidated financial statements of The Corporation of the Town of Aurora, (the
Town) which comprise the consolidated statement of financial position as at December 31, 2020, and the
consolidated statement of operations and accumulated surplus, consolidated statement change in net
financial assets and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Town as at December 31, 2020, and the consolidated results of its
operations, changes in net financial assets, and cash flows for the year then ended in accordance with
Canadian public sector accounting standards.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Town in
accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with Canadian public sector accounting standards, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Town’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Town or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Town’s financial reporting process.
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Page 39 of 91
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Town’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Town’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Town to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Chartered Professional Accountants, Licensed Public Accountants
Barrie, Ontario
June 22, 2021
2Draft - Subject to Changeements as as a
uditor’s reportr’s report
uarantee tee that t anan
ill always way detect det aa
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g from fraud is higher thafrom fraud is h
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the circumstances, circumstances but
he Town’s internal contro’s interna
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isclosures made by managres made by m
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Page 40 of 91
The Corporation of the Town of Aurora
Consolidated Statement of Financial Position
December 31 2020 2019
(Dollar amounts presented in '000's)
Financial assets
Cash (note 3) $ 10,046 $ 9,348
Taxes receivable 15,228 9,651
User fees receivable (note 5)6,659 5,524
Accounts receivable 8,677 7,380
Portfolio investments (note 6) 130,181 134,223
170,791 166,126
Liabilities
Notes payable and bank indebtedness (note 8) 2,700 -
Accounts payable and accrued liabilities 25,270 18,223
Deposits (note 9) 3,592 4,033
Deferred revenue (note 10) 49,910 44,544
Employee benefits liabilities (note 11) 1,690 1,563
Net long-term liabilities (note 12) 7,582 8,654
90,744 77,017
Net financial assets 80,047 89,109
Non-financial assets
Tangible capital assets (note 23) 497,632 471,697
Prepaid expenses 79 314
497,711 472,011
Accumulated surplus (note 13) $ 577,758 $ 561,120
Contingencies and contractual obligations (notes 19 and 20)
Approved by Council
Mayor
Chief Administrative Officer
The accompanying notes are an integral part of these consolidated financial statements
3
Page 41 of 91
The Corporation of the Town of Aurora
Consolidated Statement of Operations and Accumulated Surplus
Budget
For the year ended December 31 2020 2020 2019
(Dollar amounts presented in '000's)
(note 4)
Revenue
Taxation (note 14) $ 51,168 $ 52,715 $ 48,939
User fees 41,242 36,432 35,245
Grants (note 15) 3,858 3,205 2,114
Loss on disposal of land available for sale -(607)(1,677)
Gain on tangible capital asset adjustment --6,949
Assumed infrastructure assets -9,730 1,921
Other (note 16) 11,963 8,686 14,937
108,231 110,161 108,428
Expenses
General government 17,684 15,679 17,790
Protection to person and property 15,419 14,565 13,434
Transportation services 10,624 10,014 10,513
Environmental services 33,042 31,897 32,001
Leisure and cultural services 23,833 19,619 23,191
Planning and development 2,187 1,749 2,121
102,789 93,523 99,050
Annual surplus 5,442 16,638 9,378
Accumulated surplus,beginning of year561,120 561,120 551,742
Accumulated surplus,end of year $ 566,562 $ 577,758 $ 561,120
The accompanying notes are an integral part of these consolidated financial statements
4
Page 42 of 91
The Corporation of the Town of Aurora
Consolidated Statement of Change in Net Financial Assets
Budget
For the year ended December 31 2020 2020 2019
(Dollar amounts presented in '000's)
(note 4)
Annual surplus $ 5,442 $ 16,638 $ 9,378
Amortization of tangible capital assets 16,044 16,044 15,090
Net proceeds on disposal of tangible capital
assets -32 87
Loss on disposal of tangible capital assets -607 1,677
Acquisition of tangible capital assets (32,888)(32,888)(20,265)
Assumed infrastructure assets -(9,730)(1,921)
Tangible capital asset adjustment gain --(6,949)
Change in prepaid expenses -235 481
Change in net financial assets (11,402)(9,062)(2,422)
Net financial assets, beginning of year 89,109 89,109 91,531
Net financial assets, end of year $ 77,707 $ 80,047 $ 89,109
The accompanying notes are an integral part of these consolidated financial statements
5
Page 43 of 91
The Corporation of the Town of Aurora
Consolidated Statement of Cash Flows
For the year ended December 31 2020 2019
(dollar amounts presented in '000's)
Operating transactions
Annual surplus $ 16,638 $ 9,378
Non-cash charges to operations:
Amortization of tangible capital assets 16,044 15,090
Loss on disposal of tangible capital assets 607 1,677
Assumed infrastructure assets (9,730)(1,921)
Changes in non-cash operating working capital:
Taxes receivable (5,577)1,002
User fees receivable (1,135)1,130
Accounts receivable (1,297)(644)
Accounts payable and accrued liabilities 7,047 (1,402)
Deposits (441)(1,074)
Deferred revenue 5,366 9,151
Employee benefits liabilities 127 239
Prepaid expenses 235 481
Total Operating Transactions 27,884 33,107
Capital transactions
Acquisition of tangible capital assets (32,888)(20,265)
Capital asset adjustments -(6,949)
Net proceeds on disposal of tangible capital assets 32 87
Total Capital Transactions (32,856)(27,127)
Investing transactions
Increase in portfolio investments 4,042 (6,119)
Financing transactions
Advances / (principal repayments) on long-term liabilities (1,072)(1,040)
Advances / (principal repayments) of notes payable
and bank indebtedness 2,700 -
Total Financing Transactions 1,628 (1,040)
Increase in cash 698 (1,179)
Cash, beginning of year 9,348 10,527
Cash, end of year $ 10,046 $ 9,348
The accompanying notes are an integral part of these consolidated financial statements
6
Page 44 of 91
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
1. Summary of Significant Accounting Policies
The Corporation of the Town of Aurora (the "Town") is a municipality in the Province of
Ontario. The Town conducts its operations guided by the provisions of provincial statutes
such as the Municipal Act, Municipal Affairs Act and related legislation.
Management's Responsibility
The consolidated financial statements of the Town are the responsibility of management.
They have been prepared in accordance with Canadian public sector accounting standards
established by the Public Sector Accounting Board ("PSAB") of The Chartered Professional
Accountants of Canada.
Basis of Consolidation
The consolidated financial statements reflect the assets, liabilities, revenue, expenditures
and fund balances of the Town and comprise all of the organizations that are accountable
for the administration of their financial affairs and resources to the Town and are owned or
controlled by the Town. These boards include:
The Aurora Public Library Board
All inter-organizational and inter-fund transactions and balances are eliminated.
Basis of Accounting
Revenue and expenses are reported on the accrual basis of accounting whereby revenue is
recognized as it is earned and measurable; and expenses are recognized in the period that
goods and services are acquired, a liability is incurred, or transfers are due.
Cash
Cash and cash equivalents are comprised of cash on hand, cash held in financial institutions
and temporary investments with maturities of 90 days or less.
Government Transfers
Government transfers, which include legislative grants, are recognized in the consolidated
financial statements in the period in which the events giving rise to the transfers occur,
providing the transfers are authorized, any eligibility criteria have been met, and
reasonable estimates of the amounts can be made, except to the extent possible that the
transfer stipulations give rise to an obligation that meets the definition of a liability.
Transfers are recognized as deferred revenue when transfer stipulations give rise to a
liability. Transfer revenue is recognized in the consolidated statement of operations as the
stipulated liabilities are settled.
Tangible Capital Assets
Tangible capital assets are recorded at cost, less accumulated amortization. Cost includes
all costs directly attributable to acquisition or construction of the tangible capital asset
including transportation costs, installation costs, design and engineering fees, legal fees and
site preparation costs. Contributed tangible capital assets are recorded at fair value at the
time of the donation, with a corresponding amount recorded as revenue. Amortization is
recorded on a straight-line basis over the estimated life of the tangible capital asset using
the following rates.
7
Page 45 of 91
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
1. Summary of Significant Accounting Policies (continued)
Tangible Capital Assets (continued)
Buildings 10 - 50 years
Landscaping & Other 5 - 20 years
Vehicles 7 - 15 years
Other
Machinery and Equipment 7 - 20 years
Library Collection 7 years
Computer Equipment 4 - 10 years
Facilities (excluding Buildings) 5 - 50 years
Transportation Infrastructure
Roads 20 - 36 years
Signage 1 - 36 years
Bridges and Other Structures 15 - 40 years
Environmental Infrastructure
Underground and Other Networks 15 - 100 years
One half of the annual amortization is charged in the year of acquisition and in the year of
disposal.
Non-pension Post-employment Benefits, Compensated Absences & Termination Benefits
The Town accrues its obligations under employee benefit plans as the employees render the
services necessary to earn employee future benefits. The Town has adopted the following
valuation methods and assumptions:
a) Actuarial cost method:
Accrued benefit obligations are computed using the projected benefit method
prorated on service, as defined in PSAB 3250 and PSAB 3255. The objective under
this method is to expense each member's benefit under the plan taking into
consideration projections of benefit costs to and during retirement. Under this
method an equal portion of total estimated future benefit is attributed to each year
of service.
b) Accounting policies:
Actuarial gains and losses are amortized on a linear basis over the expected average
remaining service life ("EARSL") (expected remaining payment period in respect of
the retiring allowance) of members expected to receive benefits under the plan,
with amortization commencing in the period following the determination of the gain
or loss. Obligations are attributed to the period beginning on the member's date of
hire and ending on the expected date of termination, death or retirement,
depending on the benefit value.
c) Workplace Safety and Insurance Board (WSIB):
The costs of WSIB obligations are actuarially determined and are expensed in the
period they occur. Any actuarial gains and losses that are related to WSIB benefits
are recognized immediately in the period they arise.
8
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
1. Summary of Significant Accounting Policies (continued)
Pension agreements
The Town makes contributions to the Ontario Municipal Employees' Retirement System
("OMERS"), a multi-employer public sector pension fund, based on the principles of a
defined benefit plan, which specifies the amount of the retirement benefit to be received
by the employees on the basis of predefined retirement age, length of eligible service and
rates of remuneration over a fixed period of time.
Because OMERS is a multi-employer pension plan, any pension plan surpluses or deficits are
a joint responsibility of all participating Ontario municipalities and their employees. As a
result, the Town does not recognize any share of the OMERS pension surplus or deficit.
Accordingly, contributions made during the year are expensed.
Deposits
The Town receives deposits on building permits and site plan applications that ensure
restitution of any potential damage caused by the developer. These deposits are held in
trust until the work has been completed, at which point in time, the deposit is returned.
Deferred Revenue
Deferred revenue represents user charges and fees which have been collected, but for
which the related services have yet to be performed. These amounts will be recognized as
revenue in the fiscal year the services are performed.
The Town receives development charges under the authority of provincial legislation and
Town by-laws. These funds, by their nature, are restricted in their use and, until applied to
specific capital works, are recorded as deferred revenue (formerly obligatory reserve
funds).
Use of Estimates
The preparation of financial statements in accordance with Canadian public sector
accounting standards requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period. The principal
estimates used in the preparation of these financial statements are the allowance for
doubtful accounts, taxes receivable, post-employment benefits liabilities, accrued
liabilities, the net amount of development charges, the estimated useful lives of tangible
capital assets, fair value of assumed infrastructure assets and valuation of tangible capital
assets. Actual results could differ from management's best estimates as additional
information becomes available in the future.
Assumed Infrastructure Assets
Subdivision streets, lighting, sidewalks, drainage, and other infrastructure and in some
instances park fixtures and trail networks are required to be provided by subdivision
developers. Upon completion they are assumed by the Town and recorded at fair value at
the date of assumption. The Town is generally not involved in the construction of these
assets. In some instances, the Town may construct these assets on the developer's behalf on
a fully cost recoverable basis. Under either scenario the Town does not budget for the
contributions from the developer or the capital expenditure.
9
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
1. Summary of Significant Accounting Policies (continued)
Revenue Recognition
Revenues are recognized as follows:
a) Taxation revenue is recognized as revenue when it is authorized and the taxable
event occurs. Related penalties and interest are recognized as revenue in the year
that they are earned. As the Town's total taxes receivable are based on
management's best estimates at the time, it is possible for the fianl amount
collected to differ as a result of property value reassessments arising from audits,
appeals or court decisions.
b) User fees and other revenues are reported when a performance obligation has been
satisfied through the delivery of a good or service or when authority to claim or
retain an economic inflow exists and a past transaction or event that gives rise to
an asset has been identified.
c) Grants
- Conditional grant revenue is recognized to the extent the conditions imposed
on it have been fulfilled.
- Unconditional grant revenue is recognized when monies are receivable.
d) Investment income earned on surplus funds is reported as revenue in the period
earned.
Investment income earned on deferred revenue amounts such as development
charges and parkland allowances, is added to the associated funds and forms part of
the respective deferred revenue balance.
Investment income earned on the Town's reserve fund balances is added to the
associated funds and forms part of the respective period ending reserve fund
balance. Reserve fund balances in a debit (over-allocated) position are similarly
charged interest.
e) Development related fees and charges are recognized over the period of services or
when required expenses occur if applicable, net of development credits.
2. Uncertainty due to COVID-19
The global pandemic, as a result of COVID-19 has disrupted economic activities and supply
chains. As the impacts of COVD-19 continue, there could be further impact on the Town, its
citizens, employees, suppliers and other third party associates that could impact the timing
and amounts realized on the Town's assets and future ability to deliver services and
projects. At this time, the full potential impact of COVID-19 on the Town is not known.
Although the disruption from the virus is expected to be temporary, given the dynamic
nature of these circumstances, the duration of disruption and the related financial impact
cannot be reasonably estimated at this time. The Town's ability to continue delivering non-
essential services and employ related staff, will depend on the legislative mandates from
the various levels of government. The Town will continue to focus on collecting receivables,
managing expenditures and leveraging existing reserves and available credit facilities to
ensure it is able to continue providing essential services to its citizens.
10
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
3. Cash
The Town's bank accounts are held at one chartered bank. The bank accounts earn interest
at composite prime rate minus 1.75%. As at December 31, 2020, the rate is 0.70% (2019 -
2.20%).
The Town has an overdraft credit facility agreement with TD Bank, to be used for day to
day operations. The maximum credit limit is $1,000 with interest calculated using the
composite prime rate minus 0.25%. As at December 31, 2020, the rate is 2.20% (2019 -
3.70%) and the outstanding balance is $Nil (2019 - $Nil).
The Town has letters of credit outstanding with the bank as at December 31, 2020 of
$486,208 (2019 - $486,208), which were required by its utilities provider for security on a
development project.
4. Budget Reconciliation
The Budget for 2020 adopted by Council on December 10, 2019 was prepared on a basis not
consistent with that used to report actual results (Canadian public sector accounting
standards). The budget was prepared on a modified accrual basis, while Canadian public
sector accounting standards now require financial statements to be prepared on a full
accrual basis. Accordingly, the budget expensed all tangible capital expenditures rather
than including amortization expense. As a result, the budget figures presented in the
statements of operations and change in net financial assets represent the 2020 budget
adopted by Council with adjustments as follows:
11
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
4. Budget Reconciliation (continued)
Revenue Expense Net
Council approved budget:
Operating - Town & Library $ 71,774 $ 71,774 $ -
Operating - water/sewer 28,805 28,805 -
Capital (for multiple years) 24,357 24,357 -
Total Council approved budget 124,936 124,936 -
Less: Multiple years capital (24,357) (24,357) -
debt principal payments1 - (1,072) 1,072
Plus: 2020 Non-TCA capital - 1,793 (1,793)
transfers to/from other funds2 (3,319) (14,555) 11,236
transfers from deferred revenue 10,971 - 10,971
amortization expense3 - 16,044 (16,044)
Adjusted budget per the
consolidated statement of operations $ 108,231 $ 102,789 $ 5,442
1 "Debt principal payments" are considered a repayment of a long-term liability and are not
considered an expense under accrual accounting - only the related interest portion
remains a valid expense under accrual accounting.
2 "Transfers to/from other funds" represents transfer to/from reserves for expenditures and
is not considered a revenue source under accrual accounting.
3 Under accrual accounting, costs related to the acquisition of "Tangible Capital Assets" are
recorded on the balance sheet - only the amortization of existing Tangible Capital Assets
is included as an expense.
5. User Fees Receivable
As of the end of 2020 the Town's water receivables that are in dispute and provided for
remained at $1,880. Subsequent to year end a settlement was reached regarding the
disputed balance and $1,850 of receivables were written-off.
6. Portfolio Investments
Portfolio investments are comprised of fixed income securities that are primarily federal,
provincial and municipal government bonds, debentures and promissory notes and bearer
deposits that mature after more than 90 days. Portfolio investments are valued at the lower
of cost or market value.
Portfolio investments of $130,181 (2019 - $134,223) have a market value of $140,627
(2019 - $139,697).
12
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
7. Land Listed for Sale
As of December 31, 2020 the Town has no land listed for sale.
8. Notes Payable and Bank Indebtedness
For the purposes of constructing Town Square consisting of a new multi-purpose building,
new outdoor square, bridge between the existing library and new multi-purpose building
and enhancements to existing nearby buildings, the Town has arranged for a construction
line of credit through Infrastructure Ontario. The line of credit is fully open, bears a
monthly variable interest rate which was 0.60 percent as of December 31, 2020, interest is
paid monthly, and the line of credit is to be refinanced within 120 days of completion of the
project. It is the Town's intent to refinance any balance remaining on its line of credit upon
substantial completion of this project.
As of December 31, 2020 the Town has received a total of $2,700 in advances from
Infrastructure Ontario resulting in an outstanding balance of $2,700 related to this line of
credit.
9. Deposits
Beginning Ending
Balance 2020 2020 Balance
2020 Inflows Outflows 2020
Refundable Damage Deposits $ 4,033 562 (1,003)$ 3,592
10. Deferred Revenue
Beginning
Balance
2020
2020
Inflows
2020
Outflows
Ending
Balance
2020
Development charges $ 21,888 3,872 (2,358)$ 23,402
Parkland purposes 11,973 3,753 (939)14,787
Federal Gas Tax 6,282 1,826 (579)7,529
Revenue Deferral - General 4,401 6,886 (7,095)4,192
$ 44,544 16,337 (10,971)$ 49,910
11. Employee Benefits Liabilities
2020 2019
Post-employment benefits $ 1,074 $ 1,042
Accrued sick leave 552 469
1,626 1,511
WSIB benefits 64 52
$ 1,690 $ 1,563
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
11. Employee Benefits Liabilities (Continued)
Post-employment benefits
Post-employment benefits are health and dental benefits that are provided to early retirees
and employees currently on a long term disability. The Town recognizes these post-
employment costs as they are earned during the employee's tenure of service. The accrued
benefit obligations for the Town's post-employment benefits and accrued sick leave
liabilities as at December 31, 2020 are as follows:
2020 2019
Accrued benefit obligation, beginning of year $ 1,999 $ 1,997
Add: Benefit expense 167 222
Interest cost 69 72
Actuarial losses / (gain)-(141)
Less: Benefits paid for the period (197)(151)
Accrued benefit obligation, end of year 2,038 1,999
Unamortized actuarial losses (412)(488)
Accrued benefit liability $ 1,626 $ 1,511
The accrued benefit obligations for the Town's post-employment benefits liability and
accrued sick leave as at December 31, 2020 are based on actuarial valuations for
accounting purposes as at December 31, 2019 with projections to December 31, 2022.
These actuarial valuations were based on assumptions about future events. The economic
assumptions used in these valuations are management's best estimates of expected rates of:
2020 2019
Expected future inflation rates 1.75%1.75%
Discount on accrued benefit obligations 3.50%3.50%
Drug costs escalation 6.75%6.75%
Other health care costs escalation 6.75%6.75%
Dental costs escalation 3.75%3.75%
The amount of benefits paid by the Town during the year was $83 (2019 - $98).
Workplace Safety and Insurance Board (WSIB) benefits
The Town is a Schedule 2 employer under the Workplace Safety and Insurance Act and, as
such, assumes responsibility for financing its workplace safety and insurance costs. The
accrued WSIB benefit obligations for the Town's WSIB benefits liability as at December 31,
2020 are based on actuarial valuations for accounting purposes as at December 31, 2019
with projections to December 31, 2022. These actuarial valuations were based on
assumptions about future events.
14
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
12. Net Long-term Liabilities
2020 2019
Debenture, bearing interest at 2.29%, maturing in
March 2026. Principal and interest is repayable in
semi-annual installments of $184.$ 1,889 $ 2,208
Debenture, bearing interest at 4.37%, maturing in
September 2025. Principal and interest is repayable in
semi-annual installments of $160.1,426 1,676
Debenture, bearing interest at 2.85%, maturing in
May 2023. Principal and interest is repayable in
semi-annual installments of $318.4,267 4,770
$ 7,582 $ 8,654
Principal repayments for each of the next five years and thereafter are as follows:
2021 $ 1,105
2022 1,139
2023 3,842
2024 646
2025 667
Thereafter 183
$ 7,582
The interest expense related to the above long-term debt was $243 (2019 - $276).
One debenture was issued by The Regional Municipality of York in the name of the Town to
fund the construction of a recreation complex. A second debenture was issued by
Infrastructure Ontario in the name of the Town of Aurora to fund the Town's conversion of
all streetlights to LED. The third debenture also issued by Infrastructure Ontario in the
name of the Town of Aurora was utilized by the Town to fund its Joint Operations Centre.
These long-term liabilities have been approved by municipal and regional by-law. The
annual principal and interest payments required to service these liabilities are within the
annual debt repayment limit prescribed by the Ministry of Municipal Affairs and Housing.
15
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
13. Accumulated Surplus
Accumulated surplus is comprised of the following:
2020 2019
Non Financial Surpluses
General revenue $(22,714)$ 13,894
Invested in tangible capital assets 497,632 471,697
Less: financed by long-term liabilities (7,582)(8,654)
Total non-financial surpluses 467,336 476,937
Reserves set aside by Council for Infrastructure
Infrastructure Sustainability - Water Rate Funded 18,408 11,877
Infrastructure Sustainability - Tax Rate Funded 21,286 5,513
39,694 17,390
Reserve funds, set aside for specific purposes by Council 37,752 34,322
Proceeds of sale of Aurora Hydro 32,976 32,471
Total reserves and reserve funds 110,422 84,183
Accumulated surplus $ 577,758 $ 561,120
14. Net Taxation
2020 2019
Total taxes levied by the Town $ 151,527 $ 144,779
Less:
Taxes levied on behalf of the Boards of Education 39,618 39,102
Taxes levied on behalf of the Region of York 59,194 56,738
$ 52,715 $ 48,939
15. Grants Revenue
2020 2019
Federal $ 599 $ 387
Provincial 1,442 1,304
Other 1,164 423
$ 3,205 $ 2,114
16
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
16. Other Revenue
2020 2019
Penalties and interest on taxes $ 1,148 $ 1,444
Fines 172 321
Licenses, permits and fees 3,054 2,727
Interest income 3,256 4,468
Other 1,056 5,977
$ 8,686 $ 14,937
17. Pension Agreements
OMERS provides pension services to almost 500,000 active and retired members and their
approximately 1,000 employers. Each year an independent actuary determines the funding
status of OMERS Primary Pension Plan (the Plan) by comparing the actuarial value of
invested assets to the estimated present value of all pension benefits that members have
earned to date. The most recent actuarial valuation of the Plan was conducted at
December 31, 2020. The results of this valuation disclosed total actuarial liabilities of
$113,055 million in respect of benefits accrued for service with actuarial assets at that date
of $109,844 million indicating an actuarial deficit of $3,211 million. Because OMERS is a
multi-employer plan, any pension plan surpluses or deficits are a joint responsibility of
Ontario municipal organizations and their employees. As a result, the town does not
recognize any share of the OMERS pension surplus or deficit.
Contributions in 2020 ranged from 9.0% to 14.6% depending on the level of earnings. As a
result, $2,264 (2019 - $2,173) was contributed to OMERS for current year services.
18. Insurance Coverage
The Town is self-insured for insurance claims up to $10 for any individual claim and for any
number of claims arising out of a single occurrence.
Claim costs during the year amounted to $47 (2019 - $35).
The Town has made provisions for reserves for self-insurance claims under $10 to be used
for those claims that exceed the sum provided for in the annual budget. These reserves are
reported on the Financial Statement Operations and Accumulated Surplus under reserves set
aside by Council. In 2013, the Insurance stand alone reserve was collapsed into the Town's
general Tax Rate Stabilization Reserve; this reserve will be similarly accessible for this
purpose. The balance of the Tax Rate Stabilization Reserve as of December 31, 2020 was
$8,256 (2019 - $7,101).
17
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The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
19. Contingencies
The Town is subject to various legal claims arising in the normal course of its operations.
The ultimate outcome of these claims cannot be determined at this time; therefore, no
amounts have been recorded in these financial statements. The Town's management believe
that the ultimate disposition of these matters will not have a material adverse effect on its
financial position.
20. Contractual Obligations
The Town committed contractual obligations on major capital projects of approximately
$84,885 during 2020, which have various contract completion dates.
Effective January 1, 2002, the Town entered into an agreement with the Town of
Newmarket with respect to the provision of Fire and Emergency services. Under the
Agreement, the Town of Newmarket assumed responsibility for the combined Central York
Fire Services. The cost of these services is shared between the two municipalities on the
basis of a pre-defined cost sharing formula. The Town's share of costs for the year was
$11,044 (2019 - $10,260).
21. Segment Information
The Town is a diversified municipal government institution that provides a wide range of
services to its citizens. Distinguishable functional segments have been separately disclosed
in the Consolidated Schedule of Segment Disclosure. The nature of the segments and the
activities they encompass are as follows:
Taxation Revenue
The Town's primary source of funding for its operations is achieved through property taxes
levied against property owners.
Governance & Corporate Support
This functional segment includes The Mayor's office and Council, CAO Office, Legislative
Services, Legal, Communication, Information Technology and Financial Services, and all
other support services.
Fire & Emergency Services
Central York Fire Services provides fire and emergency services to the residents of Aurora
and Newmarket. The cost the Town paid for these services is described in Note 20.
Building, Bylaw & Licensing Services
The Town issues a variety of licenses and permits. This segment ensures an acceptable
quality of building construction and maintenance of properties through enforcement of
construction codes, building standards and by-laws for the protection of occupants. It
enforces all zoning by-laws and the processing of building permit applications.
Roads & Related Services
This segment represents the reconstruction, repair, maintenance works and winter control
services provided to the Town's roads, sidewalks, street lighting, walkways and bridges.
18
Page 56 of 91
The Corporation of the Town of Aurora
Notes to the Consolidated Financial Statements
December 31, 2020
(Dollar amounts presented in '000's)
21. Segment Information (continued)
Environmental Services
This segment represents the water/sewer services and waste management services provided
by the Public Works Department.
Community Programs & Events
This segment represents the services that the Parks & Recreation Services Department
provided through community programs and special events.
Parks & Facilities
This segment maintains numerous recreation facilities, as well as indoor community space
for booking and community use. It also maintains parks and playgrounds, open spaces and a
vast trail system.
Public Library Services
This segment of library services covers the Library Board and The Town's library expenses.
The funding from the Town to the Library Board is eliminated before the segment amount is
determined.
Planning & Development
This functional segment manages the Town's urban development through the development
application process. It also oversees community economic development, environmental
concerns, heritage matters, local neighbourhoods, and the Town's Official Plan.
22. Tangible Capital Assets Under Construction
Tangible capital assets under construction and other capital work in progress by the Town
having a value of $61,923 (2019 - $44,547) have not been amortized. Amortization of these
assets will commence when these noted assets are put into service. This value excludes any
developer constructed assets which have yet to be assumed.
19
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The Corporation of the Town of AuroraNotes to the Consolidated Financial StatementsDecember 31, 2020(Dollar amounts presented in '000's)23. Tangible Capital Assets 2020GeneralInfrastructureTotalLandBuildingsVehiclesComputerand otherFacilitiesRoadsUndergroundand OtherNetworksBridges andOtherStructuresAssets UnderConstructionCostBalance, beginning of year $ 111,495$ 106,415$ 11,515$ 8,845$ 30,320$ 103,565$ 244,832$ 22,074$ 44,547$ 683,608Add: Additions during the year463 7,708 488 608 730 45 434 - 22,412 32,888Add: Donations and transfers- 2,190 - - 15 4,697 5,640 1,024(3,836)9,730Add: Net TCA adjustment- 86 - - - 86 343 143 - 658Less: Disposals during the year-(74)(183)(357)(58)(12)(182)(34)(1,200)(2,100)Balance, end of year111,958116,32511,8209,09631,007108,381251,06723,20761,923724,784Accumulated amortizationBalance, beginning of year-46,3186,0415,54312,49444,78180,26816,466-211,911Add: Amortization during the year- 4,417 912 886 1,064 3,492 4,608 665 - 16,044Add: Net TCA adjustment------(39)61 - 22Less: Amortization on disposals-(68)(183)(358)(42)(4)(168)(2)-(825)Balance, end of year-50,6676,7706,07113,51648,26984,66917,190-227,152Net book value of tangible capital assets$ 111,95865,6585,0503,02517,49160,112166,3986,01761,923497,63220Page 58 of 91
The Corporation of the Town of AuroraNotes to the Consolidated Financial StatementsDecember 31, 2020(Dollar amounts presented in '000's)23. Tangible Capital Assets (continued)2019GeneralInfrastructureTotalLandBuildingsVehiclesComputerand otherFacilitiesRoadsUndergroundand OtherNetworksBridges andOtherStructuresAssets UnderConstructionCostBalance, beginning of year$ 111,495$ 104,316$ 10,862$ 8,281$ 25,663$ 102,985$ 239,013$ 21,444$ 30,431$ 654,490Add: Additions during the year392 1,305 949 115 25 346 - 17,133 20,265Add: Donations and transfers- - - - 3,839 - 745 41 (2,704) 1,921Add: Net TCA adjustment- 1,725 - - 787 1,025 6,590 793 - 10,920Less: Disposals during the year- (18) (652) (385) (84) (470) (1,862) (204) (313) (3,988)Balance, end of year111,495106,41511,5158,84530,320103,565244,83222,07444,547683,608Accumulated amortizationBalance, beginning of year-42,2895,7725,04011,24741,19074,05115,485-195,074Add: Amortization during the year- 3,601 882 887 978 3,469 4,594 679 - 15,090Add: Net TCA adjustment- 439 - - 355 426 2,244 507 - 3,971Less: Amortization on disposals- (11) (613) (384) (86) (304) (621) (205) - (2,224)Balance, end of year-46,3186,0415,54312,49444,78180,26816,466-211,911Net book value of tangible capital assets$ 111,495$ 60,097$ 5,474$ 3,302$ 17,826$ 58,784$ 164,564$ 5,608$ 44,547$ 471,69721Page 59 of 91
The Corporation of the Town of AuroraConsolidated Schedule of Segmented DisclosureSchedule 1December 31, 2020(Dollar amounts presented in '000's)2020TaxationRevenueGovernance &CorporateSupportFire &EmergencyServicesBylaw &LicensingServicesRoads &RelatedServicesEnvironmentalServicesCommunityPrograms &EventsParks &FacilitiesPublic LibraryServicesPlanning &DevelopmentConsolidatedRevenueTaxation$52,715$-$-$-$-$ -$-$-$-$-$52,715User fees- 355 459 462 770 28,006 246 4,004 355 1,775 36,432Grants- 171 945 19 1,692 202 131 - 45 - 3,205Loss on disposal of tangible capital assets-(607)--- -----(607)Assumed infrastructure assets- - - - 3,162 6,568 - - - - 9,730Other- 4,104 - 2,029 383 754 223 318 15 860 8,686Total Revenue52,7154,0231,4042,5106,00735,5306004,3224152,635110,161ExpensesSalaries, wages and benefits- 7,056 - 3,292 3,168 874 2,943 6,211 2,461 1,440 27,445Amortization- 5,390 319 - 3,684 5,081 - 1,064 506 - 16,044Materials and supplies- 475 - 62 1,072 2,305 182 343 206 6 4,651Contracted services- 2,607 10,725 161 2,091 23,482 925 4,187 316 172 44,666Interest on long-term liabilities- - - - - - - 183 - - 183Others- 149 - 5 - 155 92 2 - 131 534Total Expenses-15,67711,0443,52010,01531,8974,14211,9903,4891,74993,523Annual Surplus (Deficit)$ 52,715$(11,654)$(9,640)$(1,010)$(4,008)$ 3,633$(3,542)$(7,668)$(3,074)$ 886$ 16,63822Page 60 of 91
The Corporation of the Town of AuroraConsolidated Schedule of Segmented DisclosureSchedule 1December 31, 2020(Dollar amounts presented in '000's)2019TaxationRevenueGovernance &CorporateSupportFire &EmergencyServicesBylaw &LicensingServicesRoads &RelatedServicesEnvironmentalServicesCommunityPrograms &EventsParks &FacilitiesPublic LibraryServicesPlanning &DevelopmentConsolidatedRevenueTaxation $48,939$-$-$-$-$-$-$-$-$-$48,939User fees - 86 844 444 855 25,289 4,690 489 943 1,605 35,245Grants - 20 47 112 1,097 258 485 50 45 - 2,114Gain on tangible capital asset adjustment-6,949--------6,949Loss on disposal of tangible capital assets- (1,677) - - - - - - - - (1,677)Assumed infrastructure assets- - - - - - - 1,921 - - 1,921Other - 6,065 - 2,233 964 3,171 1,169 796 38 501 14,937Total Revenue48,93911,4438912,7892,91628,7186,3443,2561,0262,106108,428ExpensesSalaries, wages and benefits- 6,874 - 2,966 2,993 866 3,817 6,777 2,866 1,719 28,878Amortization - 4,628 291 - 3,336 5,406 - 978 450 - 15,089Materials and supplies - 468 1 81 1,265 2,358 276 486 467 7 5,409Contracted services - 5,739 9,969 122 2,816 23,291 1,350 5,082 316 281 48,966Interest on long-term liabilities - - - - - - - 223 - - 223Other - 80 - 4 103 80 90 13 - 115 485Total Expenses-17,78910,2613,17310,51332,0015,53313,5594,0992,12299,050Annual Surplus (Deficit)$ 48,939$ (6,346)$ (9,370)$ (384)$ (7,597)$ (3,283)$ 811$ (10,303)$ (3,073)$ (16)$ 9,37823Page 61 of 91
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. AUDIT PLANNING REPORT TO THE AUDIT COMMITTEE June 22, 2021 THE CORPORATION OF THE TOWN OF AURORA Attachment #2Page 62 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 1 TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................................................................ 2 YOUR DEDICATED BDO AUDIT TEAM ............................................................................................................................... 3 AUDIT TIMELINE ....................................................................................................................................................... 4 SIGNIFICANT AUDIT RISKS AND PLANNED RESPONSES .......................................................................................................... 5 MATERIALITY .......................................................................................................................................................... 6 FEES ..................................................................................................................................................................... 7 USING THE WORK OF OTHERS ...................................................................................................................................... 8 APPENDIX A: BDO AUDIT STRATEGY ............................................................................................................................. 10 APPENDIX B: ENGAGEMENT LETTER ............................................................................................................................. 11 APPENDIX C: INDEPENDENCE LETTER ........................................................................................................................... 12 APPENDIX D: RESPONSIBILITIES .................................................................................................................................. 15 APPENDIX E: BDO RESOURCES .................................................................................................................................... 18 Page 63 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 2 EXECUTIVE SUMMARY Your BDO Audit Team Giselle Bodkin, CPA, CA will be the lead on the engagement team, supported by experts as deemed necessary. Please refer to page 4 for contact information should you have any questions or concerns regarding the financial statement audit. Timeline The audit is scheduled to start in April with final completion scheduled for the June. See the Audit Timeline section of the report for the detailed milestones. Significant Audit Risks Our audit is focused on risks specific to your business and key accounts. Specifically, we have identified the following areas on which to focus: X Management override of controls X Revenue recognition – assumed lands and developer charges Materiality We have determined that materiality for the current year audit will be $9,866,000 based on 2% of tangible capital assets for financial statement areas surrounding tangible capital assets. We have determined a specific materiality for the remaining financial statement areas will be $2,222,000 based on 2% of revenues. Fees We estimate our fees for 2021 will be $31,500 for the audit of the consolidated financial statements, based on the assumptions outlined in the Fees section of this report. Engagement Objectives Our overall responsibility is to form and express an opinion on the financial statements. The performance of this audit does not relieve management or those charged with governance of their responsibilities. Please see the attached engagement letter in Appendix B for specific details regarding the scope of our work. Fraud Discussion Through our planning process, and prior years’ audits, we have developed an understanding of your oversight processes. We are not currently aware of any fraud affecting the Town. Please see Appendix D for clarification of the auditor’s responsibilities for detecting fraud. If you are aware of changes to processes or are aware of any instances of actual, suspected or alleged fraud affecting the Town, we request that you provide us with this information. Page 64 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 3 YOUR DEDICATED BDO AUDIT TEAM In order to ensure effective communication between the Audit Committee and BDO Canada LLP, the contact details of the engagement team are outlined below. We attempt to provide continuity of service to our clients to the greatest extent possible in accordance with mandated partner rotation rules. When rotation is required for key members of the engagement team, we will discuss this matter with the Audit Committee and determine the appropriate new individual(s) to be assigned to the engagement based on particular experience, expertise and engagement needs. NAME ROLE PHONE NUMBER EMAIL Giselle Bodkin, CPA, CA Engagement Partner 705-797-3960 gbodkin@bdo.ca Emma Roy, CPA, CA Assurance Senior Manager 905-898-1221 eroy@bdo.ca fname@bdo.ca Direct: 403 213 2592 Page 65 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 4 AUDIT TIMELINE • June 2021Present audit planning report and agreed upon fees• November 2021Planning and interim fieldwork• April 2022Final audit fieldwork• June 2022Present final report to the Audit Committee• June 2022Release of Audit ReportThe following schedule outlines the anticipated timing of the audit of the consolidated financial statements of the Town. As part of the year end Audit Committee meeting, we will provide the Audit Committee with a copy of our draft audit opinion, discuss our findings, including significant estimates utilized by management, accounting policies, financial statement disclosures, and significant transactions completed during the year. We will also report any significant internal control deficiencies identified during our audit and reconfirm our independence. Page 66 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 5 SIGNIFICANT AUDIT RISKS AND PLANNED RESPONSES AREAS OF FOCUS RISKS NOTED AUDIT APPROACH Management override of controls A common significant risk in all audit engagements is the risk of management override of controls. Management is in a unique position to perpetrate fraud because of management’s ability to directly manipulate accounting records or prepare fraudulent financial statements by overriding controls that otherwise appear to be operating efficiently. In accordance with auditing standards, BDO will perform specific procedures that include testing journal entries, reviewing accounting estimates for biases and obtaining and evaluating the business rationale for transactions that are outside the normal course of operations for the organization, if any. Revenue recognition – assumed lands and developer charges There is a significant risk regarding the fair value estimates of the land assumed by the town, as the transactions are not officially made at arm’s length on the open market. There is a significant risk related to revenue recognized with respect to developer charges and gas tax revenue, as judgement is required in determining the timing of revenue recognition. In accordance with auditing standards, BDO will performed specific procedures that include reviewing fair value estimates and sampling developer charges recognized as revenue during the year and ensuring the revenue recognition criteria has been met. BDO will also review deferred revenue recognition policies for the organization and assess whether they are consistent with Public Sector Accounting Standards and whether management is applying the policies appropriately. Based on our knowledge of the Town’s business, our past experience, and knowledge gained from management and the Audit Committee, we have identified the following significant risks; those risks of material misstatement that, in our judgment, require special audit consideration. Significant risks arise mainly because of the complexity of the accounting rules, the extent of estimation and judgment involved in the valuation of these financial statement areas, and the existence of new accounting pronouncements that affect them. We request your input on the following significant risks and whether there are any other areas of concern that the Audit Committee has identified. Page 67 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 6 MATERIALITY Misstatements, including omitted financial statement disclosures, are considered to be material if they, individually or in aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Judgments about materiality are made in light of surrounding circumstances and include an assessment of both quantitative and qualitative factors and can be affected by the size or nature of a misstatement, or a combination of both. Preliminary materiality was determined to be $9,866,000 based on 2% of tangible capital assets for financial statement areas surrounding tangible capital assets. A specific materiality for the remaining financial statement areas was determined to be $2,222,000 based on 2% of revenues. Our materiality calculation is based on the Town’s preliminary results. In the event that actual results vary significantly from those used to calculate preliminary materiality, we will communicate these changes to the Audit Committee as part of our year end communication. We will communicate all corrected and uncorrected misstatements identified during our audit to the Audit Committee, other than those which we determine to be “clearly trivial”. Misstatements are considered to be clearly trivial for purposes of the audit when they are inconsequential both individually and in aggregate. We encourage management to correct any misstatements identified throughout the audit process. Page 68 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 7 FEES We estimate our fees for 2021 will be $31,500 for the audit of the consolidated financial statements, representing a fee of $35,000 less a 10% discount. Our estimated fees are based on the time expected to complete the audit and excludes taxes, out of pocket expenses, internal administration fees, and are based upon the following assumptions: X We will be provided with the requested audit schedules, working papers and descriptions of accounting systems and processes as detailed in our annual requirements letter upon the commencement of fieldwork; X The consolidation and draft financial statements, including notes, are prepared to a standard suitable for audit with all balances reconciled to the underlying accounting records; X There will be minimal adjusting entries; and X The nature of the Town’s operations remain consistent with the prior year and there have been no changes in accounting personnel. In the event that we incur additional charges or we experience delays in completing the audit, we will advise management. AUDIT SERVICES THAT DIFFERENTIATE BDO FROM OUR COMPETITORS Although BDO and our larger competitors share many similarities, including our national and international structures, services and use of techniques and tools to manage engagements, it is how we deliver our services that truly differentiate us from our competition. We offer clients the full service expertise of a national firm, while maintaining a local community focus. This local presence combined with our partner to staff ratio creates the following key differentials that make us an excellent fit for our clients: f Our philosophy of “Big Enough to Know, Small Enough to Care” is paramount to our service model. f BDO is deliberately structured to allow one partner to every 6 staff (1:6). This means easy access to senior staff and the “Partner in Charge” of the audit as well as a quick turnaround on any questions. f Our partner-driven approach allows us to have our partners involved throughout each stage of the audit. This ensures that we identify and resolve issues on a timely basis and provides you with a senior-level contact to address your concerns. f One of our strengths that goes beyond the typical audit process is our use of in-field reviews. The benefit of these in-field reviews is that final decision makers are on site ensuring issue resolution prior to leaving the field. This guarantees that queries are cleared quickly so files are closed in a timely manner. f BDO’s accounting and management professionals are sensitive to meeting deadlines. We commit to meeting the deadlines as mutually agreed upon by BDO and our clients. Page 69 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 8 USING THE WORK OF OTHERS Experts In order for us to perform adequate audit procedures on certain financial statement areas, we will be relying on the work of, and the report prepared by, Nexus Actuarial Consultants Ltd. Canadian generally accepted auditing standards require us to communicate with the expert. We propose to discuss the following with Nexus Actuarial Consultants Ltd.: X The objective and nature of our audit engagement and how we intend to use the expert’s findings and report. X Our assessment of the significant and risk aspects of the engagement that will affect the expert’s work. X The requirement to advise us if they have any relationship with the organization which could impair their judgment or objectivity in the conduct of their engagement. X The nature, timing and extent of the expert’s work and our planned review of it, possibly including review of their working papers. X Confirmation that the assumptions used in their calculations are consistent with those used in the prior periods and with industry standards. X Their obligation to advise BDO Canada LLP of any matters up to the estimated audit report date that may affect their calculations and their report. We ask that the appropriate level of management review the data provided to Nexus Actuarial Consultants Ltd. and that they also review the assumptions used and results reported by the expert for reasonableness. Page 70 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 9 APPENDICES Appendix A: BDO audit strategy Appendix B: Engagement letter Appendix C: Independence letter Appendix D: Responsibilities Appendix E: BDO resources Page 71 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 10 APPENDIX A: BDO AUDIT STRATEGY Our overall audit strategy involves extensive partner and manager involvement in all aspects of the planning and execution of the audit and is based on our overall understanding of the Town. We will perform a risk-based audit which allows us to focus our audit effort on higher risk areas and other areas of concern for management and the Audit Committee. Identify and Assess Risk: To assess risk accurately, we need to gain a detailed understanding of the Town’s business and the environment it operates in. As well, we obtain an understanding of the system of internal control in place in order to consider the adequacy of these controls as a basis for the preparation of the consolidated financial statements, to determine whether adequate accounting records have been maintained and to assess the adequacy of these controls and records as a basis upon which to design and undertake our audit testing. Design Audit Response: Based on our risk assessment, we design an appropriate audit strategy to obtain sufficient assurance to enable us to report on the consolidated financial statements. We choose audit procedures that we believe are the most effective and efficient to reduce audit risk to an acceptable low level. The procedures are a combination of testing the operating effectiveness of internal controls, substantive analytical procedures and other tests of detailed transactions. Obtain Audit Evidence / Form Opinion / Report: Having planned our audit, we will perform audit procedures, maintaining anappropriate degree of professional skepticism, in order to collect evidence to concludewhether or not the consolidated financial statements are presented fairly, in allmaterial respects, in accordance with Canadian public sector accounting standards. Scoping Identify and assess risk Design audit response Obtain audit evidence Form opinion Report Page 72 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021
11
APPENDIX B: ENGAGEMENT LETTER
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Tel: 705 726 6331 BDO Canada LLP
Fax: 705 722 6588 300 Lakeshore Drive, Suite 300
www.bdo.ca Barrie, ON, Canada, L4N 0B4
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BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms.
November 2, 2020
The Corporation of the Town of Aurora
100 John West Way, Box 1000
Aurora, Ontario
L4G 6J1
Dear Sir/Madam:
We understand that you wish for us to continue as the auditors of The Corporation of the Town of
Aurora for its fiscal year ended December 31, 2020 and subsequent years.
We are pleased to continue as your auditors subject to the terms and conditions of this
Agreement, to which the attached Standard Terms and Conditions form an integral part. The
definitions set out in the Standard Terms and Conditions are applicable throughout this
Agreement. This Agreement will remain in place and fully effective for future years until varied
or replaced by another relevant written agreement.
Giselle Bodkin, CPA, CA will be the Engagement Partner for the audit work we perform for you.
The Engagement Partner will call upon other individuals with specialized knowledge to assist in
the performance of services.
Our Role as Auditors
We will conduct our audit(s) in accordance with Canadian generally accepted auditing standards.
Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements
("financial statements") prepared in accordance with Canadian public sector accounting standards
are free from material misstatement. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. Our audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by you, as well as evaluating the overall financial statement presentation.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, there is an unavoidable risk that some material misstatements, whether by fraud or
error, may not be detected, even though the audit is properly planned and performed in
accordance with Canadian generally accepted auditing standards.
In making our risk assessments, we consider internal control relevant to your preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
your internal controls. However, we will communicate to you concerning any significant
deficiencies in internal controls relevant to the audit of the financial statements that we have
identified during the audit.
We will also communicate matters required by professional standards, to the extent that such
matters come to our attention, to you, those charged with governance and/or the board of
directors.
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Since this is a group audit where we may be relying on component auditors or they may be relying
on us as component audito rs, please note the following:
(a)there will be unrestricted communication between the group engagement team and the
component auditors to the extent allowable under law or regulation;
(b) important communications with the component auditors, those charged with governance of
the group and the component and management of the component, including
communication of significant deficiencies in internal controls, shall be communicated to
the group engagement team;
(c)important communications with regulatory authorities and components related to financial
reporting matters, shall be communicated to the group engagement team;
(d)to the extent it is determined to be necessary, the group engagement team will be
permitted access to the component information, those charged with governance of the
component, and the component auditors (including relevant audit documentation); and
(e)the group engagement team will be permitted to perform work or request a component
auditor to perform work on the financial information of the component.
Reporting
Our audit will be conducted on the basis that the financial statements have been prepared in
accordance with Canadian public sector accounting standards.
Our independent auditor’s report will be substantially in the form set out in Canadian Auditing
Standard (CAS) 700. The form and content of our report may need to be amended in the light of
our audit findings. If we are unable to issue or decline to issue an audit report, we will discuss
the reasons with you and seek to resolve any differences of view that may exist.
Role of Management and Those Charged with Governance
You acknowledge and understand that you have responsibility for:
(a) the preparation and fair presentation of the financial statements in accordance with
Canadian public sector accounting standards. The audit of the financial statements does
not relieve you of your responsibilities;
(b) such internal controls as you determine are necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or
error; and
(c) providing us with:
x access, in a timely manner, to all information of which you are aware that is relevant to
the preparation of the financial statements such as records, documentation and other
matters;
x additional information that we may request for the purpose of the audit;
x unrestricted access to persons within the entity from whom we determine it is
necessary to obtain audit evidence;
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x financial and non-financial information (other information) that will be included in
document(s) containing financial statements and our audit report thereon prior to the
date of our auditor’s report. If it is not possible to provide all the other information
prior to the date of our auditor's report, you are responsible for provision of such other
information as soon as practicable; and
x written confirmation concerning representations made to us in connection with the
audit. If appropriate and adequate written representations are not provided to us,
professional standards require that we disclaim an audit opinion.
Financial Statement Services
We will obtain your approval, if during the course of our engagement we:
(a) prepare or change a journal entry; or
(b) prepare or change an account code or a classification for a transaction.
As agreed, we will provide assistance in the preparation of the financial statements.
These services create a threat to our independence. We, therefore, require that the following
safeguards be put into place:
(a)that you create the source data for all accounting entries;
(b)that you develop any underlying assumptions for the accounting treatment and
measurement of entries; and
(c)that you review and approve the draft financial statements, including the notes to the
financial statements.
Tax Services
Our audit is conducted primarily to enable us to express an opinion on the financial statements.
The audit process is not designed to provide us with a full understanding of your tax situation and
in particular, to allow us to determine whether the entity has specific tax compliance issues. We
understand that you are not looking to BDO to provide you with any guidance or advice in regard
to tax planning or compliance.
Additional Services
We are available to provide a wide range of services beyond those outlined in this Agreement. To
the extent that any additional services that we provide to you that are not provided under a
separate written engagement agreement, the provisions of this Agreement will apply to the
services.
Fee Estimation
The estimated fee for this engagement is as follows:
Audit services: $31,500
For each future year we will issue a Summary of Services providing details of our Services and
fees.
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We will notify you on a timely basis if there are any circumstances we encounter which could
significantly affect our initial estimate of professional fees. Our fees will be invoiced and payable
as follows:
x $10,500 interim payment;
x $10,500 prior to issuance of assurance report; and
x $10,500 within 10 days after issuance of our final invoice along with any additional
required final payments.
We reserve the right to suspend our Services if any of our invoices become delinquent. Fees that
are not paid within 30 days of an invoice or by a specified payment deadline will be considered
delinquent.
Additional information relating to our fees is provided in the Standard Terms and Conditions.
Standard Terms and Conditions
A copy of our Standard Terms and Conditions is attached as Appendix 1. You should ensure that
you read and understand them. The Standard Terms and Conditions include clauses that limit
our professional liability.
Please sign and return the attached copy of this Agreement to indicate your agreement with it. If
you have any questions concerning this Agreement, please contact us before signing it.
It is a pleasure for us to be of service and we look forward to many future years of association
with you.
Yours truly,
Chartered Professional Accountants, Licensed Public Accountants
Agreement of all the terms and conditions in this Agreement is hereby acknowledged by:
________________________________________________________________________
Signature Date
________________________________________________________________________
Name (please print) Position
Please carefully review this Agreement, which includes the attached Standard Terms and Conditions, prior to signing it. A
complete copy of the signed engagement letter should be returned to us.
5DFKHO:DLQZULJKWYDQ.HVVHO 'LUHFWRU)LQDQFH7UHDVXUHU
1RYHPEHU_________________________________________________________________________________________________________________
Signature
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Appendix 1 - Standard Terms and Conditions
1. Overview and Interpretation
1.1 This Agreement sets forth the entire agreement between the parties in relation to Services
and it supersedes all prior agreements, negotiations or understandings, whether oral or
written, with respect to Services. To the extent that any of the provisions of the
accompanying letter conflict with these Standard Terms and Conditions, these Standard
Terms and Conditions shall prevail. This Agreement may not be changed, modified or
waived in whole or part except by an instrument in writing signed by both parties.
1.2 In this Agreement, the following words and expressions have the meanings set out below:
This Agreement – these Standard Terms and Conditions, the letter to which they are
attached, and any supporting schedules or other appendices to the letter, and any
Summary of Services letters issued in future years.
Services – the services provided or to be provided under this Agreement
We, us, our, BDO – refer to BDO Canada LLP, a Canadian limited liability partnership
organized under the laws of the Province of Ontario
You, your – the party or parties contracting with BDO under this Agreement, including the
party’s or parties’ management and those charged with corporate governance. You and
your does not include BDO, its affiliates or BDO Member Firms
BDO Member Firm or Firms – any firm or firms that form part of the international network
of independent firms that are members of BDO International Limited
Confidential Information - information that contains identifying features that can be
attributed to you or individual personnel
2. BDO Network and Sole Recourse
2.1 BDO is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international network of independent member firms (i.e. BDO Member
Firms), each of which is a separate legal entity.
2.2 We may use other BDO Member Firms or subcontractors to provide Services; however, we
remain solely responsible for Services. You agree not to bring any claim or action against
another BDO Member Firm (or their partners, members, directors, employees or
subcontractors) or our subcontractors in respect of any liability relating to the provision of
Services.
2.3 You agree that any of our affiliates, subcontractors, and other BDO Member Firms and any
subcontractors thereof whom we directly or indirectly involve in providing Services have
the right to rely on and enforce Section 2.2 above as if they were a party to this
Agreement.
3. Respective Responsibilities
3.1 We will use reasonable efforts to complete, within any agreed-upon time frame, the
performance of Services.
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3.2 You shall be responsible for your personnel’s compliance with your obligations under this
Agreement. We will not be responsible for any delays or other consequences arising from
you not fulfilling your obligations.
4. Working Papers and Deliverables
4.1 Ownership – Any documents prepared by us, or for us, in connection with Services belong
solely to us.
4.2 Oral advice and draft deliverables – You should not rely upon any draft deliverables or
oral advice provided by us. Should you wish to rely upon something we have said to you,
please let us know and, if possible, we will provide the information that you require in
writing.
4.3 Translated documents - If you engage us to translate any documents, advice, opinions,
reports or other work product of BDO from one language to another, you are responsible
for the accuracy of the translation work.
4.4 Reliance by Third Parties – Our Services will not be planned or conducted in
contemplation of or for the purpose of reliance by any party other than you. Items of
possible interest to a third party will not be addressed and matters may exist that would be
assessed differently by a third party, possibly in connection with a specific transaction.
4.5 Consent to use the Report - Nothing in this Agreement shall be construed as consent to
the use of our report in connection with a continuous disclosure document, a public or
private offering document, an annual report or any other document and we expressly do
not provide such consent. If you request consent for the use of our report, we will
consider, at the relevant time, providing consent and any conditions that we may attach to
such consent. Our consent must be in writing.
4.6 Consent requests - In order to provide consent, professional standards require that we
read the other information in the related document and consider whether such information
is materially inconsistent with the related financial statements. Any consent request must
be made on a sufficiently timely basis to allow us to consider your identification and
resolution of events occurring in the period since the date of our report, and to obtain
updated written representation letters. Such procedures will be performed at your cost
and will be documented in a separate engagement letter.
5. Confidentiality
5.1 We agree to use Confidential Information provided by you only in relation to the Services in
connection with which the information is provided and we will not disclose the
information, except where required by law, regulation or professional obligation. We may
however, give Confidential Information to other BDO Member Firms or other subcontractors
assisting us in providing Services. Any party to whom we subcontract work will be required
to keep Confidential Information confidential either by professional obligation or contract
with us. Any BDO Member Firms or other subcontractors we use will be bound by the same
confidentiality obligations.
5.2 BDO shall be entitled to include a description of the work we render to or for you in
marketing and research materials and disclose such information to third parties, provided
that all such information will be made anonymous and not associated with you.
Additionally, we may analyze information on an industry or sector basis for internal
purposes or to provide industry/sector wide information to our clients or potential clients.
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You consent to our using information obtained from you in this way provided that the
outputs therefrom will not contain any identifying features that can be attributed to you.
6. Independence
6.1 Professional and certain regulatory standards require us to be independent, in both fact
and appearance, with respect to our clients in the performance of our Services. We will
communicate to you any relationships between BDO (including its related entities) and you
that, in our professional judgment, may reasonably be thought to bear on our
independence.
7. Offers of Employment
7.1 Any discussions that you, or any party acting on your behalf, have with professional
personnel of our Firm regarding employment could pose a threat to our independence.
Your recruitment of an engagement team member from the current or prior year's
engagement may compromise our independence and our ability to render agreed Services
to you. Engagement team members may include current and former partners and staff of
BDO, other BDO Member Firms and other firms who work under our direction. Therefore,
you agree to inform us prior to any such discussions so that you and we can implement
appropriate safeguards to maintain our independence.
8. Professional and Regulatory Oversight
8.1 As required by legal, regulatory, or professional authorities (both in Canada and abroad)
and by BDO policy, our client files must periodically be reviewed by practice inspectors to
ensure that we are adhering to professional and BDO standards. It is understood that by
entering into this Agreement, you provide your consent to us providing our files relating to
your engagement to the practice inspectors for the sole purpose of their inspection.
8.2 Certain regulatory bodies may also have the right to conduct investigations of you,
including the Services provided by us. To the extent practicable and permitted by law, we
will advise you of any such investigation request or order prior to providing our working
papers.
8.3 You agree to reimburse us for our time and expenses, including reasonable legal fees,
incurred in responding to any investigation that is requested or authorized by you or
investigations of you undertaken under government regulation or authority, court order or
other legal process.
9. Privacy and Consents
9.1 You agree we will have access to all personal information in your custody that we require
to complete our engagement. We may collect, use, transfer, store, or process such
information disclosed by you of a personal nature (personal information). Our Services are
provided on the understanding that:
(a) you have obtained any consents for collection, use and disclosure to us of personal
information required under all applicable privacy legislation; and
(b) we will hold all personal information in compliance with our Privacy Statement.
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10. Electronic Communications
10.1 Both parties recognize and accept the security risks associated with email communications,
including but not limited to the lack of security, unreliability of delivery and possible loss
of confidentiality and privilege. Unless you request in writing that we do not communicate
by internet email, you assume all responsibility and liability in respect of risk associated
with its use.
10.2 By signing this Agreement, you provide BDO with express consent to communicate with you
and your employees, as applicable, electronically, including sending BDO newsletters,
publications, announcements, invitations and other news and alerts that may be of interest
to you. You and your employees may withdraw such consent at any time by contacting BDO
at www.bdo.ca/unsubscribe.
11. Limitation of Liability
11.1 In any dispute, action, claim, demand for losses or damages arising out of the Services
performed by BDO pursuant to this Agreement, BDO shall only be liable for its
proportionate share of the total liability based on degree of fault as determined by a court
of competent jurisdiction or by an independent arbitrator as a result of the dispute
resolution procedures, notwithstanding the provisions of any statute or rule of common law
which create, or purport to create, joint and several liability.
11.2 Our liability shall be restricted to damages of a direct and compensatory nature and shall
not include indirect, consequential, aggravated or punitive damages, or damages for loss of
profits or expected tax savings, whether or not the likelihood of such loss or damage was
contemplated.
11.3 You agree that BDO shall in no event be liable to you for any actions, damages, claims,
liabilities, costs, expenses, or losses in any way arising out of or relating to the Services
performed hereunder for an aggregate amount of more than the higher of:
(a) three times the fees paid to BDO by you, in a twelve consecutive month period, for
the Services provided pursuant to this Agreement giving rise to the claim; and
(b) $25,000.
11.4 No exclusion or limitation on the liability of other responsible persons imposed or agreed at
any time shall affect any assessment of our proportionate liability hereunder, nor shall
settlement of or difficulty enforcing any claim, or the death, dissolution or insolvency of
any such other responsible persons or their ceasing to be liable for the loss or damage or
any portion thereof, affect any such assessment.
11.5 You agree claims or actions relating to the delivery of Services shall be brought against us
alone, and not against any individual. Where our individuals are described as partners, they
are acting as one of our members.
12. Indemnity
12.1 To the fullest extent permitted by applicable law and professional regulations, you agree
to indemnify and hold harmless BDO from and against all losses, costs (including solicitors'
fees), damages, expenses, claims, demands or liabilities arising out of or in consequence
of:
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13. Alternative Dispute Resolution
13.1 Both parties agree that they will first attempt to settle any dispute arising out of or
relating to this Agreement or the Services provided hereunder through good faith
negotiations.
13.2 In the event that the parties are unable to settle or resolve their dispute through
negotiation, such dispute shall be subject to mediation pursuant to the National Mediation
rules of the ADR Institute of Canada Inc. All disputes remaining unsettled for more than 60
days following the parties first meeting with a mediator or such longer period as the
parties mutually agree upon shall be subject to arbitration pursuant to the National
Arbitration Rules of the ADR Institute of Canada Inc. Such arbitration shall be final,
conclusive and binding upon the parties, and the parties shall have no right of appeal or
judicial review of the decision. The parties hereby waive any such right of appeal which
may otherwise be provided for in any provincial arbitration statute made applicable under
the National Arbitration Rules.
14. Limitation Period
14.1 You shall make any claim relating to Services or otherwise under this Agreement no later
than one year after you became aware or ought reasonably to have b ecome aware of the
facts giving rise to any such claim.
14.2 You shall in no event make any claim relating to the Services or otherwise under this
Agreement later than four years after the completion of the Services under this
Agreement.
14.3 To the extent permitted by law, the parties to this Agreement agree that the limitation
periods established in this Agreement replace any limitation periods under any limitations
act and/or any other applicable legislation and any limitation periods und er any limitations
act and/or any other applicable legislation shall not alter the limitation periods specified
in this Agreement.
15. Québec Personnel
15.1 We may sometimes have individual partners and employees performing Services within the
Province of Québec who are members of the Ordre des comptables professionnels agréés du
Québec. Any such members performing professional services hereunder assumes full
personal civil liability arising from the practice of their profession, regardless of their status
within our partnership. They may not invoke the liability of our partnership as grounds for
excluding or limiting their own liability. The provisions in Sections 11 (Limitation of
Liability) and 14 (Limitation Period) shall therefore not apply to limit the personal civil
(a) a misrepresentation by a member of your management or board of directors,
regardless of whether such person was acting in your interest;
(b) the Services performed by BDO pursuant to this Agreement, unless, and to the extent
that, such losses, costs, damages and expenses are found by a court of competent
jurisdiction to have been due to the gross negligence of BDO. In the event that the
matter is settled out of court, we will mutually agree on the extent of the
indemnification to be provided by you, failing which, the matter may be referred to
dispute resolution in accordance with the terms of this Agreement.
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liability of partners and employees who are members of the Ordre des comptables
professionnels agréés du Québec.
16. Termination
16.1 This Agreement applies to Services whenever performed (including before the date of this
Agreement).
16.2 You or we may terminate this Agreement at any time upon written notice of such
termination to the other party. We will not be liable for any loss, cost or expense arising
from such termination. You agree to pay us for all Services performed up to the date of
termination, including Services performed, work-in-progress and expenses incurred by us
up to and including the effective date of the termination of this Agreement.
17. Fees and Billings
17.1 Our estimated fee is based on an assumed level of quality of your accounting records, the
agreed upon level of preparation and assistance from your personnel and adherence to the
agreed-upon timetable. Our estimated fee also assumes that your financial statements are
in accordance with the applicable financial reporting framework and that there are no
significant new or changed accounting policies or issues or internal control or other
reporting issues. We will inform you on a timely basis if these factors are not in place.
17.2 Should our assumptions with respect to the quality of your accounting records be incorrect
or should the conditions of the records, degree of cooperation, results of audit procedures,
or other matters beyond our reasonable control require additional commitments by us
beyond those upon which our estimated fees are based, we may adjust our fees and
planned completion dates.
Delays in providing the complete list of agreed upon working papers/schedules to BDO will
result in additional fees as follows:
x 1 week delay – additional 10% of estimated fees
x 1 month delay – additional 20% of estimated fees
Should a delay occur, we cannot guarantee completion of our work by your deadline.
17.3 Our professional fees will be based on our billing rates which depend on the means by
which and by whom our Services are provided. We also will bill you for our out-of-pocket
expenses, our administrative charge (described below), and applicable Goods and Services
Sales Tax, Harmonized Sales Tax, Quebec Sales Tax and Provincial Sales Tax.
17.4 Our administrative charge is calculated as a percentage of our professional fee and
represents an allocation of estimated costs associated with our technology infrastructure,
telephone charges, photocopying and some support staff time costs.
17.5 Our accounts are due when rendered and invoiced amounts are deemed to be earned when
paid. BDO may suspend the performance of Services in the event that you fail to pay an
invoice when it is due. Interest may be charged at the rate of 12% per annum on all
accounts outstanding for more than 30 days.
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18. Governing Laws
18.1 The terms of our engagement shall remain operative until amended, terminated, or
superseded in writing. They shall be interpreted according to the laws of the province or
territory in which BDO’s principal Canadian office performing the engagement is located,
without regard to such province/territory’s rules on conflicts of law.
19. Survival
19.1 The provisions of this Agreement that give either of us rights or obligations beyond its
termination shall continue indefinitely following the termination of this Agreement. Any
clause that is meant to continue to apply after termination of this Agreement will do so.
20. Force Majeure
20.1 We will not be liable for any delays or failures in performance or breach of contract due to
events or circumstances beyond our reasonable control, including acts of God, war, acts by
governments and regulators, acts of terrorism, accident, fire, flood or storm or civil
disturbance.
21. Assignment
21.1 No party may assign, transfer or delegate any of the rights or obligations hereunder
without the written consent of the other party or parties. BDO may engage independent
contractors and BDO Member Firms to assist us in performing the Services in this
Agreement without your consent.
22. Severability
22.1 If a court or regulator with proper jurisdiction determines that a provision of this
Agreement is invalid, then the provision will be interpreted in a way that is valid under
applicable law or regulation. If any provision is invalid, the rest of this Agreement will
remain effective.
Version: 202006
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Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021
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APPENDIX C: INDEPENDENCE LETTER
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Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021
13
June 22, 2021
Members of the Audit Committee
The Corporation of the Town of Aurora
Dear Audit Committee Members:
We have been engaged to audit the consolidated financial statements of The Corporation of the Town of Aurora (the
“Town”) for the year ended December 31, 2021.
Canadian generally accepted auditing standards (GAAS) require that we communicate at least annually with you
regarding all relationships between the Town and our Firm that, in our professional judgment, may reasonably be
thought to bear on our independence.
In determining which relationships to report, we have considered the applicable legislation and relevant rules and
related interpretations prescribed by the appropriate provincial institute/order, covering such matters as:
x Holding a financial interest, either directly or indirectly in a client;
x Holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence
over the financial or accounting policies of a client;
x Personal or business relationships of immediate family, close relatives, partners or retired partners, either
directly or indirectly, with a client;
x Economic dependence on a client; and
x Provision of services in addition to the audit engagement.
We have prepared the following comments to facilitate our discussion with you regarding independence matters
arising since June 23, 2020, the date of our last letter.
We are aware of the following relationships between the Company and us that, in our professional judgment, may
reasonably be thought to have influenced our independence. The following relationships represent matters that
have occurred from June 23, 2020 to June 22, 2021.
x We have provided assistance in the preparation of the consolidated financial statements, including adjusting
journal entries. These services created a self-review threat to our independence since we subsequently
expressed an opinion on whether the consolidated financial statements presented fairly, in all material
respects, the financial position, results of operations and cash flows of the organization in accordance with
(relevant GAAP).
x We, therefore, required that the following safeguards be put in place related to the above:
x Management provided us with a trial balance and draft consolidated financial statements, including
notes, prior to completion of our audit.
x Management created the source data for all the accounting entries.
x Management developed any underlying assumptions required with respect to the accounting treatment
and measurement of the entries.
x Management reviewed advice and comments provided and undertook their own analysis considering the
Company’s circumstances and generally accepted accounting principles.
x Management reviewed and approved all journal entries prepared by us, as well as changes to financial
statement presentation and disclosure.
x Someone other than the preparer reviewed the proposed journal entries and consolidated financial
statements.
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Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021
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We hereby confirm that we are independent with respect to the Town within the meaning of the Code of
Professional Conduct of the Chartered Professional Accountants of Ontario as of June 22, 2021.
This letter is intended solely for the use of the Audit Committee, the Board of Directors, management and others
within the Town and should not be used for any other purposes.
Yours truly,
Chartered Professional Accountants, Licensed Public Accountants
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Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 15 APPENDIX D: RESPONSIBILITIES It is important for the Audit Committee to understand the responsibilities that rest with the Town and its management, those that rest with the external auditor, and the responsibilities of those charged with governance. BDO’s responsibilities are outlined below and within the annual engagement letter attached as Appendix B to this letter. The oversight and financial reporting responsibilities of management and the Audit Committee are also summarized below. AUDITOR’S ENGAGEMENT OBJECTIVES Year-End Audit Work Year-Round Work X Work with management towards the timely issuance of consolidated financial statements, tax returns and consents for offering documents. X Provide timely and constructive management letters. This will include deficiencies in internal control identified during our audit. X Present significant findings to the Audit Committee including key audit and accounting issues, any significant deficiencies in internal control and any other significant matters arising from our work. X Consult regarding accounting, income tax and reporting matters as requested throughout the year. Our overall objective is to express an opinion as to whether the consolidated financial statements present fairly, in all material respects, the financial position, financial performance and cash flows of the Town in accordance with Canadian public sector accounting standards. Page 88 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 16 AUDITOR’S RESPONSIBILITIES FOR DETECTING FRAUD We are responsible for planning and performing the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatements, whether caused by error or fraud, by: X Identifying and assessing the risks of material misstatement due to fraud; X Obtaining sufficient and appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and X Responding appropriately to fraud or suspected fraud identified during the audit. The likelihood of not detecting a material misstatement resulting from fraud is higher than the likelihood of not detecting a material misstatement resulting from error because fraud may involve collusion as well as sophisticated and carefully organized schemes designed to conceal it. Response to Assessed Fraud Risks X Inquire of management, the Audit Committee, and others related to any knowledge of fraud, suspected fraud or alleged fraud; X Perform disaggregated analytical procedures and consider unusual or unexpected relationships identified in the planning of our audit; X Incorporate an element of unpredictability in the selection of the nature, timing and extent of our audit procedures; and X Perform additional required procedures to address the risk of management’s override of controls including: o Testing internal controls designed to prevent and detect fraud; o Testing the appropriateness of a sample of adjusting journal entries and other adjustments for evidence of the possibility of material misstatement due to fraud; o Reviewing accounting estimates for biases that could result in material misstatements due to fraud, including a retrospective review of significant prior years’ estimates; and o Evaluating the business rationale for significant unusual transactions. Fraud Risk Assessment Procedures X Management’s assessment of the risk that the consolidated financial statements may be materially misstated due to fraud, including the nature, extent and frequency of such assessments; X Management’s process for identifying and responding to the risks of fraud in the Town, including any specific risks of fraud that management has identified or that have been brought to its attention, or classes of transactions, account balances, or disclosures for which a risk of fraud is likely to exist; X Management’s communication, if any, to those charged with governance regarding its processes for identifying and responding to the risks of fraud in the Town; and X Management’s communication, if any, to employees regarding its view on business practices and ethical behaviour. Page 89 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 17 AUDIT COMMITTEE RESPONSIBILITIES MANAGEMENT RESPONSIBILITIES ENTITYAudit CommitteeBDOManagementX Oversee the work of the external auditor engaged for the purpose of issuing an independent auditor’s report. X Facilitate the resolution of disagreements between management and the external auditor regarding financial reporting matters. X Pre-approve all non-audit services to be provided to the Town or its subsidiaries by the external auditor. X Review the consolidated financial statements, MD&A and annual and interim earnings press releases before the Town publicly discloses this information. X Maintain adequate accounting records and maintain an appropriate system of internal control for the Town. X Select and consistently apply appropriate accounting policies. X Prepare the annual consolidated financial statements in accordance with Canadian public sector accounting standards. X Safeguard the Town’s assets and take reasonable steps for the prevention and detection of fraud and other irregularities. X Make available to us, as and when required, all of the Town’s accounting records and related financial information. Page 90 of 91
Audit Planning Report for The Corporation of the Town of Aurora For the year ended December 31, 2021 18 APPENDIX E: BDO RESOURCES BDO is a leading provider of professional services to clients of all sizes in virtually all business sectors. Our team delivers a comprehensive range of assurance, accounting, tax, and advisory services, complemented by a deep industry knowledge gained from nearly 100 years of working within local communities. As part of the global BDO network, we are able to provide seamless and consistent cross-border services to clients with global needs. Commitment to knowledge and best practice sharing ensures that expertise is easily shared across our global network and common methodologies and information technology ensures efficient and effective service delivery to our clients. Outlined below is a summary of certain BDO resources which may be of interest to the Audit Committee. CYBERSECURITY DIGITAL STRATEGY Public Sector Accounting Standards (PSAS) Update 20 https://www.bdo.ca/BDO/media/FRS/PSAS/NTL_AA_21Oct20_PSAS-Update_Final.pdf INDIRECT TAX BDO’s Indirect Tax Team advises clients on the measures needed to navigate complexities, identify tax efficiencies and drive value. We review returns to find errors and recover overpaid taxes, manage the government audit process, advise on cash flow improvement, identify tax or duty recovery opportunities, and more. For additional information on Indirect Tax and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/tax/commodity-tax-services/overview/ PSAS PUBLICATIONS BDO’s Cybersecurity consultants help organizations protect their valuable digital assets against theft and misuse. Our strategic approach begins with a cybersecurity risk assessment that surveys and tests the applications, data and infrastructure of the enterprise against the business risks of the organization. After identifying any vulnerabilities, we develop a cybersecurity plan tailored to the organization’s needs. For additional information on Cybersecurity and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/advisory/cybersecurity/overview/ BDO Technology Advisory works with client to deliver sustainable business results scaled and tailored to the unique dynamics of client’s industries and the individual needs of their businesses. Although different for each organization, optimal IT solutions align risk protection investments with digital asset value to improve performance and efficiency. For additional information on Digital Strategy and links to archived publications, please refer to the following link: https://www.bdo.ca/en-ca/services/advisory/technology/overview/ Page 91 of 91