By Joel Wittnebel/The Oshawa Express
Thanks to recent efforts from city council and staff, the city’s savings accounts are starting to bounce back, but more work is needed, according to a recently completed audit.
The audit, completed by KPMG, looked at the policies and practices in place around how the city contributes money to its reserve accounts.
In general, the auditors noted a “positive trajectory” for the city to increase its savings in the years ahead. On top of that, the audit also found evidence of all the recommendations in the city’s 2016-2019 Financial Strategy being implemented.
“There’s good work being done in the area,” says Tony Malfara with KPMG.
In particular, over the last four years, the city has managed to pour almost $20 million into its reserve accounts. It is a much-needed influx of funds after an earlier report from the city’s treasurer pointed to serious potential issues with the city’s reserves in the coming years if more discipline was not applied to putting money away for future projects.
On that end, the city is slowly making gains, but KPMG pointed out that Oshawa is still lagging behind comparative municipalities in that respect. According to the audit, in 2009, as a percentage of tax dollars received, the city was putting 31 per cent into reserves, a number that increased to 38 per cent in 2013.
However, when it comes to the city’s source revenues (taxes, land sales etc.), Oshawa was putting 29 per cent of those revenues into reserves in 2013, compared to other municipalities who were contributing approximately 50 per cent.
Moving forward, KPMG has suggested clearer guidance within the city’s reserve policies to ensure proper dollar amounts are being put away for future years, as currently some of those documents are vague on details.
“We identified a need for additional documentation to be incorporated into the Corporation’s reserve fund process to ensure clarity and guidance is present in the use and management of the reserve funds,” the document reads. “While we acknowledge that the purpose for individual reserves has been defined within the policy, we noted that it does not cover the current process around identifying the basis for determining funding contributions and target reserve balances.”
For Mayor John Henry, the audit indicates the city is on the right path in terms of its finances.
“As each year goes forward, our ability to put more and more money into our reserve funds comes from the money that is pretty much within our base budget,” he says. “That’s done through lean, continuous improvement, great fiscal management and a plan that is in place that works well for the corporation.”