Tehkummah audit reveals budget woes

TEHKUMMAH—The Township of Tehkummah has released an audit of its finances for the fiscal year of 2017. MNP Chartered Professional Accountants prepared the audit and presented it to council at the meeting on November 6, 2018.

Within its pages are financial details from 2017 that are contrasted with the 2016 figures. Overall, the township exceeded expenses by $472,812 and missed the target for its surplus by $253,548. Net financial assets were below half of anticipated, down to $127,066 from $299,369 in 2016. However, its total financial assets were up $140,681, including its cash resources which increased by $104,564.

Acting clerk-treasurer Roy Hardy writes in an email to The Expositor that the circumstances surrounding the 2017 budget contributed to the reductions in certain areas.

“The net financial assets dropped because staff drafted a deficit budget and spent beyond its means. This requires the new council to have processes in place to ensure regular reporting of expenditures,” he says.

In 2017, Tehkummah council did not approve a budget, something Mr. Hardy says was the result of tensions and miscommunication within the township.

“The operations of the municipality in 2017 was marked by a significant division between the council and the senior staff person on direction, and items that were not communicated effectively. The fact that a budget was not passed by council, and that staff spent like it had an approved deficit budget, contributed to the auditor providing a qualified audit,” he states.

One area that differs significantly is taxation. In 2017, $161,573 was collected, down from $223,906 in 2016. Residential and farm taxes came in roughly $12,000 below the budgeted amount of $902,091. Commercial, industrial and business taxes, however, only came in at 14 percent of the budgeted figure—$5,742 out of the expected $41,938. The Expositor has requested context on this figure from Mr. Hardy had but not received clarification by press time.

Some expenses were notably higher as well. Environmental services totalled $438,551, $250,461 over budget. Health and social services came in $201,498 over budget, totalling $387,767. However, compared to the real figures from 2016, the actual costs in 2017 were only 9.5 percent higher and 8.1 percent higher respectively. The budgeted amount in 2017 was far below what was spent in 2016.

MNP also includes a note on the landfill in its report. It cites the estimated remaining life of the landfill as six years, with its total liability estimated at $142,000. Tehkummah has a balance of $40,491 saved for landfill closure and post-closure liability costs, but no new money or assets were allocated to the fund in 2017.

The closure and acquisition costs on the landfill site alone are estimated at $65,000, with an extra $7,000 per year in monitoring costs. The township would need to put roughly $17,000 per year into this fund, starting in 2018, if it were to have enough to cover the estimated liability.

However, Mr. Hardy says the biggest liability the landfill site faces is with its management.

“From my perspective, the landfill is an area that is going to be a long-term liability on the township if they can’t regulate people accessing the site anytime they want, and if they don’t charge tipping fees that will ensure a new cell can be developed,” says Mr. Hardy, adding the township will need to develop a new landfill cell sooner if it only focuses on paying “yesterday’s bills.”

“It has been seen as a ‘free’ service, with no consequences as a result of not compacting the garbage or managing the site. This was relayed by the roads superintendent (Adam Bowerman) at an earlier council meeting this fall.”

Moving to its assets, the township added $190,265 in furniture and equipment assets in 2017. The Expositor has requested clarification as to what would be included within that category. Salaries are also up by almost $100,000 in 2017 compared to 2016, to $491,584 from a value of $394,429 in 2016. Mr. Hardy has not elaborated on the jump in cost.

Ultimately, Mr. Hardy says these issues will need to be addressed by the new council, which has its first meeting on December 4. He stresses that patience and co-operation from all Tehkummah citizens will be crucial to moving forward in a positive way.

“Discussions will start with the new council regarding the auditor’s letter and other outstanding matters. These things are going to take time, resources and support from the residents over the next four years,” says Mr. Hardy.