Mississauga’s Financial Reporting Praised
Published November 30, 2016 at 5:09 am
It seems when it comes to their accounting practices, Brampton and Mississauga are actually doing pretty well…but are they?
A new report released by the C.D. Howe Institute, entitled “Two Sets of Books at City Hall? Grading the Financial Reports of Canada’s Cities,” grades the method of presentation by major Canadian cities of their most recent budgets and financial reports.
You can read the report in its entirety here. I recommend perusing the charts, which outline each municipality and how they were graded based on various criteria.
While Toronto and Winnipeg received a failing F grade for budget numbers that do not match their financial reporting, Mississauga received a B grade and Brampton got an A-. How do Brampton and Mississauga stack up in terms of budgeting and financial reporting based on this report’s criteria? Let’s take a closer examination:
Same Basis of Accounting in Both Budgets and Financial Reports
A budget is an outline of what you plan to spend in a fiscal period, while a financial statement is what you actually spent. As the CD Howe report implies, if an organization uses inconsistent accounting in preparing its budgets and its financial reports, people will not be able to tell whether its revenue and spending were close to budget, or far from it – or in which direction. Brampton receives a ‘partial’ designation for this criteria because it presents the budget on a full accrual basis only as supplemental information, not as the headline budget figure. By contrast, Mississauga doesn’t engage in this practice at all, so I wonder if the budget numbers are accurate in Brampton and Mississauga in comparison to their actual spending.
Although if you look at the chart from the report, only Surrey in British Columbia use the same accounting basis for both budget and financial statements, so either Surrey is an outlier, or it is standard practice to not do the budget the same way as you would your financial statements.
Dates When Budgets Get Approved
There’s not much difference between Brampton and Mississauga in this area. Both have the approval deadline (as of the CD Howe report’s publication) by early to mid December of last year (for the 2016 City Budget). For the 2017 Budget, Mississauga’s schedule for meetings and consultations have them approving the budget by December 14, 2016. In Brampton, the 2016 budget was approved last year on December 9, 2015. This year, according to Brampton’s budget website, they are also scheduled to approve it on December 14, 2016.
By contrast, Toronto and Winnipeg approve their budgets several weeks late, well into the first few months of the year. That could be because there are more debates in Toronto between council members and city staff. Toronto city council meetings are legendary for running all day and well into the evening. So their councillors could be debating each minute issue one at a time, and every councillor wants their 10 minutes of fame on the TV cameras. Brampton and Mississauga move their agendas and budgets through in a more businesslike fashion, which explains the early approval periods.
You might say that things seem to be rushed too fast in Brampton and Mississauga on their budget process, but that could also be a by-product of a lack of interest from people to openly engage in discussing the budget. Although Mississauga did conduct several public town hall style discussions, they were sparsely attended and the only reason most people would come to city hall, according to City Manager Janice Baker, was if there was a development application that riled up the local residents in the area. That’s probably why the budget process seems rushed; the only thing people care about is whether their taxes are going up.
Municipalities Crying Wolf on Lack of Money?
Are municipalities as cash strapped as they claim? The CD Howe report (from Stats Canada’s own government financial statistics) points out that while the federal and provincial governments are running annual deficits, Canadian municipalities have been running surpluses, accumulating positive net worth of $260 billion. It seems municipalities are doing much better fiscally than their other governmental counterparts.
It should be noted that, at least in Ontario, municipalities are by law forbidden from running a deficit. That’s why you hear stories year after year of city councils trying to make sure that the budget is balanced. But overall, municipalities seem to be doing much better on the fiscal front than their federal and provincial counterparts. Why the constant request for transfers from upper levels of government and the infrastructure deficit that never seems to go away?
It could be that because of new infrastructure projects that cities like Brampton and Mississauga are bringing in that is putting a strain on their existing revenues. You could only manage or even slow down the amount of spending only so much in order to properly fund new capital projects.insauga's Editorial Standards and Policies advertising