While last week it looked like town council would be facing more financial woes this year with a possible deficit of almost $1.3 million, on top of the surprise $1.8-million shortfall at the end of 2002, the situation was looking slightly better after a special committee of the whole meeting late Tuesday.
Town treasurer Peggy Dupuis told councillors that in the past week, an interfunctional transfer of $298,300 was identified and accounted for as a debit and credit, bringing that total down to $982,187.
Another $188,512 in further revenues was reconciled, bring the deficit to $793,000.
Dupuis explained an interfunctional transfer is a transaction whereby one division of the town charges itself or another for a service rendered. For instance, Public Works uses some heavy equipment at the water treatment plant and charges for it.
While the town essentially is charging and then paying itself, this action is done to reflect the actual cost of operating.
Interim CAO Mark McCaig said that, unfortunately, interfunctional transfers have not been kept track of correctly in the past couple of years.
Dupuis noted that with the 2004 budget, the town will adopt a system of coding that will help keep track of future interfunctional transfers.
Meanwhile, McCaig said he, Dupuis, and the management group has made much progress in the past week tracking down inconsistencies and identifying a realistic picture of the town’s financial situation
“It’s not near as bad as it was last week,” he remarked, though adding they need more time.
“We’re smashing it down, but we haven’t put it back together,” he remarked, stressing the process “goes hand-in-hand with the operating forecast” for the 2004 budget.
Another 2003 budget report meeting is slated for 4:30 p.m. next Wednesday at the Civic Centre.
In the meantime, McCaig stressed council should be thinking about what direction it should be taking as far as whether the town should incur a long-term debt or draw more from its reserves.
New light on the 2003 budget situation also is expected to be shed next Tuesday night when a written auditor’s report, along with what is called a “management letter” (which is the auditor’s recommendations to prevent a re-occurrence with the financial troubles), is presented to council during its regular meeting (postponed a day due to Thanksgiving).
As first reported in the Sept. 10 edition of the Times, the 2002 year-end deficit was caused by a number of factors, including over-projected revenues and transfers from reserve funds that were not completed.
Over-projected revenues made up $1.2 million of the deficit, and also included a projected $550,000 surplus from 2001 that did not exist.
Money that was not transferred from reserves totalled roughly $450,000.
That deficit was revealed during the committee of the whole meeting Sept. 8 following a verbal report from the town’s auditor.
Then at a meeting last Tuesday, town council looked to be on the road to more financial woes this year with a possible deficit of almost $1.3 million.
As requested by council, Dupuis and the management team compiled a budget report of the town’s finances up to Aug. 31 of this year and presented them.
Those findings, which showed more over-estimated revenues and other financial errors (just as those found in the 2002 year-end), then were discussed at a special committee of the whole meeting last Tuesday afternoon.
(Fort Frances Times)
Fort Frances Times
Local News from Across the Rainy River District
