Town council passed a recommendation at its regular meeting Monday night to transfer $1.81 million from reserve funds to finance the year-end 2002 deficit.
The deficit was caused by a number of factors, including over-projected revenues and transfers from reserve funds that were not completed, Fort Frances CAO Bill Naturkach said.
“I don’t know that we’ve ever had a deficit of any nature before. This is most unusual,” he noted. “We’ve always practised, historically, good prudence in terms of our treasury systems and unfortunately, it’s not the case at the moment.”
Over-projected revenues make up $1.2 million of the deficit, and includes a projected $550,000 surplus from 2001 that did not exist.
Money that was not transferred from reserves totalled roughly $450,000.
“When you take out those other explanations, the true deficit of actual over-expenditure was $160,000,” Naturkach said, adding that $160,000 accounts for just 0.0083 percent of the town’s $19.2-million operating budget.
The deficit was revealed during the committee of the whole meeting earlier Monday following a verbal report from the town’s auditor.
The written auditor’s report is expected Oct. 14, along with what is called a “management letter.”
“A management letter is the auditor’s recommendations of prevention of reoccurrence; the changes that we need to institute to prevent reoccurrence,” noted Naturkach.
“Between the management directives and the journal entries, there’s going to be dozens of them,” he added. “It’s quite a variety of extra work that is in front of us.”
Management currently is comparing “to date” expenditures with budgeted ones to ensure the situation does not repeat itself in 2003.
“If we need to do an adjustment to our ’03 budget, we’ll know within a week or so,” Naturkach said.
In the meantime, the $1.81 million will be transferred from reserve funds and the auditor’s report will not show a deficit, although it will record the transfer of funds.
“We’re pretty well on track in terms of understanding the magnitude of the problem,” Naturkach said.
“We’re having several meetings a week with the management group to get things in order for ’03, and they will,” he stressed. “There’s no question in my mind it will be remedied.”
(Fort Frances Times)
Fort Frances Times
Local News from Across the Rainy River District
