Loading...
HomeMy Public PortalAbout2021 Tweed Consolidated FSCORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 TABLE OF CONTENTS Page Number MANAGEMENT REPORT INDEPENDENT AUDITOR'S REPORT CONSOLIDATED FINANCIAL STATEMENTS Statement of Financial Position 1 Statement of Operations and Accumulated Surplus 2 Statement of Change in Net Financial Assets 3 Statement of Cash Flows 4 Notes to the Financial Statements 5 - 16 Schedule of Tangible Capital Assets 17 Schedules of Segment Disclosure 18 - 19 TRUST FUNDS Independent Auditor's Report 20 Statement of Financial Position 22 Statement of Continuity 22 Notes to the Financial Statements 23 LOCAL BOARD Tweed Public Library Board 24 - 34 The Corporation of the MUNICIPALITY OF TWEED 255 Metcalf St., Postal Bag 729 Tweed, ON K0K 3J0 Tel.: (613~478-2535 Fax: (613) 478-6457 Email: in fo!~t~'eed.ca Website: ~ ww.tweed.ca face book.con~tweedontario CORPORATION OF THE MUNICIPALITY OF T~NEED For The Year Ended December 31, 2021 MANAGEMENT REPORT The accompanying consolidated financial statements of the Corporation of the Municipality of Tweed are the responsibility of management and have been approved by Council. The consolidated financial statements have been prepared by management in accordance with Canadian Public Sector Accounting Standards. Financial statements are not precise since they include certain amounts based on estimates and judgements. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances, in order to ensure that the financial statements are presented faidy, in all material respects. The Municipality maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and the Municipality's assets are appropriately accounted for and adequately safeguarded. The Municipality's Council is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving financial statements. Council reviews and approves the Municipality's financial statements for issuance to the members of Council, inhabitants and ratepayers of the Corporation of the Municipality of Tweed. Council meets periodically with management, as well as the external auditor, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy themselves that each party is propedy discharging their responsibilities and to review the financial statements and the independent auditor's report. The consolidated financial statements have been audited by Baker Tilly KDN LLP in accordance with Canadian generally accepted auditing standards on behalf of the Municipality. Baker Tilly KDN LLP has full and free access to Council. Mayor May 11, 2022 INDEPENDENT AUDITOR'S REPORT To the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Opinion We have audited the consolidated financial statements of the Corporation of the Municipality of Tweed and its local board (the Municipality), which comprise the consolidated statement of financial position as at December 31, 2021, the consolidated statements of operations and accumulated surplus,change in net financial assets and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Municipality as at December 31, 2021, and the results of its consolidated operations and its consolidated cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Municipality in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Canadian Public Sector Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Municipality's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Municipality or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Municipality's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Municipality's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Municipality's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Municipality to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the consolidated financial information of the entities or business activities within the Municipality to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario May 11, 2022 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At December 31, 2021 2021 2020 $$ FINANCIAL ASSETS Cash 2,181,728 1,088,021 Investments (note 2)1,817,362 2,218,669 Accounts receivable 1,603,322 1,882,119 Taxes receivable 662,127 866,688 Long term loans (note 8)-5,000 TOTAL FINANCIAL ASSETS 6,264,539 6,060,497 LIABILITIES Accounts payable and accrued liabilities 1,497,796 866,130 Deferred revenue - obligatory reserve funds (note 4)420,265 89,634 Deferred revenue - other (note 6)19,588 7,291 OILC temporary loan (note 16)1,530,000 - Long term debt (note 8)-5,000 Landfill closure and post-closure liability (note 9)1,595,993 1,267,803 TOTAL LIABILITIES 5,063,642 2,235,858 NET FINANCIAL ASSETS 1,200,897 3,824,639 NON-FINANCIAL ASSETS Tangible capital assets (note 11)34,132,724 29,854,952 Inventories of supplies 118,958 80,900 Prepaid expenses 35,663 31,548 TOTAL NON-FINANCIAL ASSETS 34,287,345 29,967,400 ACCUMULATED SURPLUS (note 12)35,488,242 33,792,039 The accompanying notes are an integral part of these financial statements 1 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2021 Budget Actual Actual 2021 2021 2020 $$$ (Unaudited) REVENUES Property taxation 4,301,473 4,308,751 4,213,730 User charges 1,438,337 1,701,183 1,409,844 Government of Canada 1,127,472 1,267,930 804,824 Province of Ontario 3,779,697 3,424,415 2,996,279 Other municipalities -28,500 - Penalties and interest on taxes 110,000 98,747 103,571 Investment income 77,400 36,486 67,128 Donations 11,250 56,478 40,037 Other grants 66,900 48,227 101,410 Parkland fees earned --40,000 Canada Community-Building Fund amounts earned 419,000 419,000 884,197 Gain/(loss) on disposal of tangible capital assets 100,000 277,132 (10,593) TOTAL REVENUES 11,431,529 11,666,849 10,650,427 EXPENSES General government 1,315,169 1,274,548 1,150,949 Protection services 1,723,412 1,626,738 1,676,777 Transportation services 3,770,905 3,742,559 3,442,136 Environmental services 1,320,762 1,930,447 1,154,553 Recreation and cultural services 1,241,432 1,166,812 983,792 Planning and development 276,130 229,542 308,792 TOTAL EXPENSES 9,647,810 9,970,646 8,716,999 ANNUAL SURPLUS 1,783,719 1,696,203 1,933,428 ACCUMULATED SURPLUS - beginning of year 33,792,039 31,858,611 ACCUMULATED SURPLUS - end of year 35,488,242 33,792,039 The accompanying notes are an integral part of these financial statements 2 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL ASSETS For the Year Ended December 31, 2021 Budget Actual Actual 2021 2021 2020 $$$ (Unaudited) ANNUAL SURPLUS 1,783,719 1,696,203 1,933,428 Amortization of tangible capital assets 2,292,439 2,058,196 1,972,274 Purchase of tangible capital assets (5,579,133)(6,400,223)(4,397,264) Loss/(gain) on disposal of tangible capital assets (100,000)(277,132)10,593 Proceeds on sale of tangible capital assets 100,000 341,387 43,792 Change in inventories of supplies -(38,058)(23,114) Change in prepaid expenses -(4,115)(8,392) DECREASE IN NET FINANCIAL ASSETS (1,502,975)(2,623,742)(468,683) NET FINANCIAL ASSETS - beginning of year 3,824,639 3,824,639 4,293,322 NET FINANCIAL ASSETS - end of year 2,321,664 1,200,897 3,824,639 The accompanying notes are an integral part of these financial statements 3 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended December 31, 2021 2021 2020 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual surplus 1,696,203 1,933,428 Items not involving cash Amortization of tangible capital assets 2,058,196 1,972,274 Loss/(gain) on disposal of tangible capital assets (277,132)10,593 Change in landfill closure and post-closure liability 328,190 (61,769) Change in non-cash assets and liabilities Accounts receivable 278,797 (1,443,242) Taxes receivable 204,561 33,425 Inventories of supplies (38,058)(23,114) Prepaid expenses (4,115)(8,392) Accounts payable and accrued liabilities 631,666 20,374 Deferred revenue - obligatory reserve funds 330,631 (543,672) Deferred revenue - other 12,297 (30,241) Net change in cash from operating activities 5,221,236 1,859,664 CAPITAL ACTIVITIES Purchase of tangible capital assets (6,400,223)(4,397,264) Proceeds on disposal of tangible capital assets 341,387 43,792 Net change in cash from capital activities (6,058,836)(4,353,472) INVESTING ACTIVITIES Redemption of investments 1,602,506 303,224 Purchase of investments (1,201,199)(1,733,561) Net change in cash from investing activities 401,307 (1,430,337) FINANCING ACTIVITIES OLIC temporary loan 1,530,000 - Debt principal repayments (5,000)(5,000) Long term loan receipts 5,000 5,000 Net change in cash from financing activities 1,530,000 - NET CHANGE IN CASH 1,093,707 (3,924,145) CASH - beginning of year 1,088,021 5,012,166 CASH - end of year 2,181,728 1,088,021 The accompanying notes are an integral part of these financial statements 4 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 The Municipality of Tweed is a lower tier municipality in the Province of Ontario, Canada. It conducts its operations guided by the provisions of provincial statutes such as the Municipal Act, Municipal Affairs Act and related legislation. 1. SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies are as follows: (a) Reporting Entity These consolidated financial statements reflect the assets, liabilities, revenues and expenses and accumulated surplus of the reporting entity. The reporting entity is comprised of all organizations, committees and local boards accountable for the administration of their financial affairs and resources to the Municipality and which are owned and controlled by the Municipality. These consolidated financial statements include: Tweed Public Library Board All interfund assets and liabilities and revenues and expenses are eliminated. (b) Trust Funds Trust funds and their related operations administered by the Municipality are not included in these consolidated financial statements but are reported on separately on the Trust Funds Statement of Continuity and Statement of Financial Position. (c) Tangible Capital Assets Tangible capital assets are recorded at cost which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. Initial costs for tangible capital assets that were acquired or developed prior to 2009 were obtained using historical cost information or using current fair market values discounted by a relevant inflation factor to the point of acquisition. The cost, less residual value, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Land improvements 20 years Buildings 40-50 years Roads 7-50 years Bridges and other structures 20-75 years Underground and other networks 50-75 years Vehicles 5-10 years Machinery and equipment 4-20 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. Tangible capital assets categorized as assets under construction are not amortized until they are put into service. 5 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 1.SIGNIFICANT ACCOUNTING POLICIES, continued (d) Inventories of Supplies Inventories of supplies are recorded at the lower of cost, as determined by the first-in, first out method, and market. (e) Recognition of Revenues and Expenses Revenues and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues in the period in which the transactions or events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Taxation Property tax billings are prepared by the Municipality based on assessment rolls issued by the Municipal Property Assessment Corporation (MPAC) and in accordance with the provisions of the Municipal Act, 2001. The Municipality's Council establishes the tax rates annually, incorporating amounts to be raised for local services, and amounts the Municipality is required to collect on behalf of the County and School Boards. From time to time property assessments are adjusted by MPAC through the reconsideration process or by the Assessment Review Board through the appeal process. Additional assessments, referred to as supplementary and omitted assessment can also be issued by MPAC in accordance with the Assessment Act. These adjustments and additional assessments are reported in the financial statements when amounts can be reasonably determined. The Municipality is entitled to collect interest and penalties on overdue taxes. These revenues are recorded in the period the interest and penalties are levied. Government funding Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Other revenue User charges are recognized as revenue in the year the goods and services are provided. Investment income is recorded when earned. Federal gas tax and parkland fees are recognized in the period in which the related expenditures are recorded. Donations are recognized when received. (f) Non-Financial Assets Tangible capital and other non-financial assets are accounted for as assets by the Municipality because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Municipality unless they are sold. 6 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 1.SIGNIFICANT ACCOUNTING POLICIES, continued (g) Reserves and Reserve Funds Certain amounts, as approved by Council, are set aside in reserves and reserve funds for future operating and capital purposes. Transfers to and/or from reserves and reserve funds are an adjustment to the respective fund when approved. (h) Deferred Revenue Deferred revenue represents grants, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. (i) Use of Estimates Certain items recognized in the consolidated financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Municipality's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the consolidated financial statements or changes in such estimates in future periods could be significant. The Municipality's significant estimates include: The amounts recorded for landfill closure and post-closure care depend on estimates of usage, remaining life and capacity. The provision for future closure and post-closure costs also depends on estimates of such costs; The amounts recorded for amortization of tangible capital assets are based on estimates of useful life and residual values; and The amount recorded as allowance for doubtful accounts receivable is based on management's estimate of future payments on receivable account balances. 2.INVESTMENTS Investments are recorded at cost and consist of the following: Market Value Actual 2021 Actual 2020 $$$ One Fund Investments - Bond Fund 1,035,739 1,102,580 1,084,431 One Fund Investments - High Interest Savings 587,108 587,108 1,007,803 Guaranteed investment certificates, maturity dates from March 20, 2023 to October 5, 2026, interest rates ranging from 0.35% to .85% per annum 127,674 127,674 126,435 1,750,521 1,817,362 2,218,669 7 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 3.CREDIT FACILITY AGREEMENT The Municipality has a revolving credit facility agreement with its main financial institution. The amount available at any time is limited to $500,000 via an operating loan. Any balance borrowed will accrue interest at the bank’s prime lending rate plus 0.50% per annum. At December 31, 2021 there was no balance outstanding (2020 - $Nil). 4.DEFERRED REVENUE - OBLIGATORY RESERVE FUNDS A requirement of the Chartered Professional Accountants Canada Public Sector Accounting Handbook, is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as legislation and external agreements restrict how these funds may be used and under certain circumstances these funds may possibly be refunded. The balances in the obligatory reserve funds of the Municipality are summarized below: 2021 2020 $$ Canada Community-Building Fund 377,457 51,530 Parkland 42,808 38,104 420,265 89,634 The continuity of deferred revenue - obligatory reserve funds is as follows: 2021 2020 $$ Balance - beginning of year 89,634 633,306 Add amounts received: Canada Community-Building Fund 743,586 366,704 Parkland 4,500 9,000 Interest 1,545 4,821 749,631 380,525 Less transfer to operations: Canada Community-Building Fund 419,000 884,197 Parkland -40,000 419,000 924,197 Balance - end of year 420,265 89,634 8 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 5.PENSION AGREEMENTS Certain employees of the Municipality are eligible members of the Ontario Municipal Employees Retirement System (OMERS), a multi-employer pension plan. The Actuarial Opinion contained in the 2021 Annual Report disclosed total actuarial liabilities of $120,796 million in respect of benefits accrued for service with actuarial assets of $117,665 million indicating an actuarial deficit of $3,131 million. Because OMERS is a multi-employer plan, any pension plan surpluses or deficits are a joint responsibility of Ontario municipal organizations and their employees. As a result, the Municipality does not recognize any share of the OMERS pension surplus or deficit. The Municipality's required contributions to OMERS in 2021 were $123,374 (2020 -$122,538). Some of the employees of the Municipality, who are not members of OMERS, are eligible to be members of a contributory pension plan. Employer contributions to the plan by the Municipality during the year amounted to $28,102 (2020 - $58,941). These contributions which match the employees' contribution for current service, are expense during the year in which services are rendered and represent the total pension obligation of the Municipality. 6.DEFERRED REVENUE - OTHER Included in deferred revenue - other are the following amounts: 2021 2020 $$ Deposits and other 13,088 7,291 Library grants and donations 6,500 - 19,588 7,291 The continuity of deferred revenue - other is as follows: 2021 2020 $$ Balance - beginning of year 7,291 37,532 Deposits and other 13,088 7,291 Library grants and donations 6,500 - 19,588 7,291 Less transfer to operations: Association of Municipalities of Ontario -5,700 Deposits and other 7,291 31,832 7,291 37,532 Balance - end of year 19,588 7,291 9 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 7.TRUST FUNDS Trust funds administered by the Municipality amounting to $11,386 (2020 -$11,108) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statement of Operations and Accumulated Surplus. As such balances are held in trust by the Municipality for the benefit of others, they are not presented as part of the Municipality's financial position or operations. 8.LONG TERM DEBT 2021 2020 $$ Tile drainage loans due August 1, 2021 -5,000 (a)The Municipality acts as a collection agency for the Province of Ontario for tile drainage loans for individual ratepayers. The value of these loans outstanding at December 31, 2021 is $Nil (2020 -$5,000). (b)Interest paid during the year on long term debt amounted to $1,435 (2020 -$1,793). 9.LANDFILL CLOSURE AND POST-CLOSURE LIABILITY The estimated liability for landfill closure and post-closure costs for the two landfill sites the Municipality operates is $1,595,993 (2020 -$1,267,803). The closure costs include final cover, vegetation and additional monitoring wells. Post-closure costs include monitoring, maintenance of control systems and consulting fees for 25 years after the site is closed.The landfill closure and post-closure liability will be funded from taxation and a reserve fund.A reserve fund of $1,188,988 (2020 - $1,394,948) has been established to provide for this liability. The reported liability is based upon estimates and assumptions with respect to events extending over the remaining life of the landfill. The total discounted future cash flows for closure and post- closure cost is estimated at $1,986,193 as at December 31, 2021 (2020 -$1,941,797). The remaining capacity of the solid waste landfill sites is estimated at 74,931 m3 (2020 -175,764 m3) which is 13.3% (2020 -31.3%) of the sites' total capacity. The total discounted future cash flows for closure and post-closure cost is estimated at $1,986,193 (2020 -$1,941,797) as at December 31, 2021 using an inflation rate of 1.67% (2020 - 1.64%) and a discount rate of 3.14% (2020 - 2.46%).The Municipality has decided to close the Hunt Road site at December 31, 2021. The Marlbank Road site is expected to reach it's capacity in 2037. 10.CONTINGENT LIABILITIES The Municipality, in the course of its operations, is often named in lawsuits the outcomes of which are indeterminable at this time. No amounts in connection with these items have been reflected in these financial statements. 10 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 11.TANGIBLE CAPITAL ASSETS The net book value of the Municipality's tangible capital assets are: 2021 2020 $$ General Land and land improvements 1,699,434 1,837,377 Buildings 2,955,465 2,875,296 Vehicles 1,116,006 1,204,632 Machinery and equipment 1,678,585 1,258,529 Infrastructure Buildings 878,048 987,822 Roads 9,536,859 8,295,154 Underground and other networks 3,585,169 3,706,278 Bridges and other structures 7,381,903 7,523,229 28,831,469 27,688,317 Assets under construction 5,301,255 2,166,635 34,132,724 29,854,952 For additional information, see the Consolidated Schedule of Tangible Capital Assets. During the year there were no write-downs of assets (2020 -$Nil) and no interest capitalized (2020 -$Nil). Tangible capital assets allocated by segment are as follows: 2021 2020 $$ General government 1,439,661 1,490,966 Protection services 925,494 832,607 Transportation services 18,628,269 18,692,378 Environmental services 10,039,791 5,997,323 Recreation and cultural services 3,083,926 2,827,312 Planning and development 15,583 14,366 34,132,724 29,854,952 11 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 12.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2021 2020 $$ Surplus/(Deficit) Unfunded landfill closure and post-closure costs (1,595,993)(1,267,803) Library board 10,162 1,601 (1,585,831)(1,266,202) Invested In Capital Assets Tangible capital assets - net book value 34,132,724 29,854,952 Unfunded capital - Municipal building (9,528)- Unfunded capital - Fire hall (58,900)- Unfunded capital - Lagoon system upgrades (2,151,403)- Unfunded capital - Fitness shelter -(36,367) 31,912,893 29,818,585 Surplus 30,327,062 28,552,383 Reserves Working funds 531,167 950,174 General government 428,355 154,394 Protection services 285,841 279,593 Transportation services 773,171 447,185 Water and sewer 1,257,312 1,203,417 Recreation services 442,953 545,443 Community improvement plan 45,154 48,919 Total Reserves 3,763,953 3,629,125 Reserve Funds Transportation services 208,239 215,583 Landfill 1,188,988 1,394,948 Total Reserve Funds 1,397,227 1,610,531 35,488,242 33,792,039 13.BUILDING SERVICES CONTRACTUAL AGREEMENT The Municipality of Tweed, the Township of Stirling-Rawdon, the Town of Deseronto, the Township of Tyendinaga, the Township of Madoc and the Municipality of Marmora and Lake have entered into an agreement for joint building services to be provided by the Township of Stirling-Rawdon. The joint building services agreement came into effect April 1, 2005. No revenues or expenses have been included in the Consolidated Statement of Operations and Accumulated Surplus. 12 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 14.EXPENSES BY OBJECT The expenses for the year reported on the Consolidated Statement of Operations and Accumulated Surplus by object are as follows: Budget Actual Actual 2021 2021 2020 $$$ (Unaudited) Salaries and benefits 2,663,940 2,549,726 2,473,546 Interest charges 1,794 1,816 1,793 Materials 2,536,552 2,624,394 2,180,819 Contracted services 1,769,696 2,368,131 1,704,326 Rents and financial 84,060 93,284 89,315 External transfers 299,329 275,100 294,926 Amortization 2,292,439 2,058,196 1,972,274 9,647,810 9,970,647 8,716,999 15.OPERATIONS OF SCHOOL BOARDS AND THE COUNTY OF HASTINGS During 2021, requisitions were made by the County of Hastings and School Boards requiring the Municipality to collect property taxes and payments in lieu of property taxes on their behalf. The amounts collected and remitted are as follows: School Boards County $$ Property taxes 3,067,762 1,860,448 Taxation from other governments 1,812 11,026 Amounts requisitioned and remitted 3,069,574 1,871,474 These amounts have not been included in the Consolidated Statement of Operations and Accumulated Surplus. 16.OILC ADVANCE In 2021, the Municipality entered into a temporary loan agreement with the Ontario Infrastructure and Lands Corporation (OILC) for the financing of the capital work to be completed on the Tweed Wastewater Lagoon System upgrades. The maximum aggregate principal amount is $3,100,000. At December 31, 2021, the Municipality had drawn and received $1,530,000 of this balance by the year end. This debt will be converted to a 30 year amortizing debenture once the project is completed. 17.COMPARATIVE FIGURES Certain comparative figures were restated, where required, to conform with the current year presentation. 13 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 18.BUDGET FIGURES The budget, approved by the Municipality, for 2021 is reflected on the Consolidated Statement of Operations and Accumulated Surplus and the Consolidated Statement of Change in Net Financial Assets. The budget established for capital investment in tangible capital assets are on a project- oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year’s actual amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSA reporting requirements. Budget figures are not subject to audit. The following is a reconciliation of the Council approved budget amounts to the PSA amounts: (Unaudited)(Unaudited) Revenue Expenses $$ Council approved budget: Operating 8,912,201 8,601,870 Capital 5,275,634 5,585,965 Total Council approved budget 14,187,835 14,187,835 Less: Tangible capital assets capitalized -(5,579,133) Add: Amortization of tangible capital assets -2,292,439 Less: Long term receivable receipts (5,000)- Less: Principal repayment of long term debt -(5,000) Less: Transfers to/from reserves and reserve funds (1,752,435)(1,282,522) Proceeds of long term debt (1,033,062)- Library Board budget 49,191 49,191 Reallocate tax write offs (15,000)(15,000) Adjusted budget per Consolidated Statement of Operations 11,431,529 9,647,810 19.UNCERTAINTY CAUSED BY COVID-19 In March 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Municipality's environment and in the global markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Municipality's operations. The extent of the impact of this outbreak and related containment measures on the Municipality's operations cannot be reliably estimated at this time. 14 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 20.SEGMENTED INFORMATION The Municipality of Tweed is a municipal government organization that provides a range of services to its residents. Municipality services are reported by function and their activities are separately disclosed in the segmented information. For each reported segment, revenues and expenses represent both amounts that are directly attributable to the segment and amounts that are allocated on a reasonable basis. Certain allocation methodologies are employed in the preparation of segmented financial information. Taxation, payments-in-lieu of taxes and certain unconditional government transfers are apportioned based on each segment’s net requirements. The accounting policies used in these segments are consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 1. For additional information see the Consolidated Schedule of Segment Disclosure. General Government General government consists of the activities of Council and general financial and administrative management of the Municipality and its programs and services. Protection Services Protection services include police, fire, conservation authority and protective inspection and control. The Municipality of Tweed and the Township of Stirling-Rawdon have entered into an agreement for joint fire services. The joint fire services agreement came into effect January 1, 2016. Transportation Services The activities of the transportation function include construction and maintenance of the Municipality's roads and bridges, winter control and street lighting. Water and Sewer This function is responsible for providing water and sewer services to the Municipality. Other Environmental Services This function is responsible for providing waste collection, waste disposal and recycling services to ratepayers. Recreation and Cultural Services The recreation and cultural services function provides indoor and outdoor recreational facilities and programs and library services. Planning and Development The planning and development services function manages commercial, industrial and residential development within the Municipality. 15 CORPORATION OF THE MUNICIPALITY OF TWEED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended December 31, 2021 21.OIL KINGS HOCKEY TEAM INFORMATION In 2021, the Municipality began operations of the Tweed Oil Kings, a men's hockey team that is a part of the Eastern Ontario Super Hockey League (EOSHL). The amounts presented below are also included in the Consolidated Statement of Operations and Accumulated Surplus. Various revenues and expenses related to the team are as follows: 2021 $ Revenue Advertising 15,750 Ticket sales 12,211 Fundraising 8,858 Miscellaneous 202 37,021 Expenses Equipment and uniforms 22,674 Merchandise for sale 5,939 Travel 4,393 Logos 3,749 Alcohol inventory & licence 3,475 League fees 2,000 Supplies 1,895 Ice rental 666 Referees and time keepers 3,710 48,501 Annual surplus (deficit)(11,480) 16 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF TANGIBLE CAPITAL ASSETS For the Year Ended December 31, 2021 General Infrastructure Land and Land Improvement s Buildings Vehicles Machinery and Equipment Buildings Roads Underground and Other Networks Bridges and Other Structures Assets Under Construction Totals $$$$$$$$$$ COST Balance, beginning of year 2,483,110 4,684,841 3,481,716 2,414,874 2,947,125 21,122,212 5,811,623 10,368,356 2,166,635 55,480,492 Add: additions during the year 14,425 -97,588 554,100 -1,170,527 -23,909 4,539,674 6,400,223 Less: disposals during the year 46,595 -29,500 97,654 -1,282,850 ---1,456,599 Internal transfers -220,636 -57,100 -1,127,318 --(1,405,054)- Balance, end of year 2,450,940 4,905,477 3,549,804 2,928,420 2,947,125 22,137,207 5,811,623 10,392,265 5,301,255 60,424,116 ACCUMULATED AMORTIZATION Balance, beginning of year 645,733 1,809,545 2,277,084 1,156,345 1,959,303 12,827,058 2,105,345 2,845,127 -25,625,540 Add: additions during the year 105,773 140,467 183,264 191,074 109,774 1,041,500 121,109 165,235 -2,058,196 Less: disposals during the year --26,550 97,584 -1,268,210 ---1,392,344 Balance, end of year 751,506 1,950,012 2,433,798 1,249,835 2,069,077 12,600,348 2,226,454 3,010,362 -26,291,392 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 1,699,434 2,955,465 1,116,006 1,678,585 878,048 9,536,859 3,585,169 7,381,903 5,301,255 34,132,724 17 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2021 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation 254,922 1,089,998 1,990,118 -256,209 551,065 166,439 4,308,751 User charges 152,592 92,250 45,403 879,369 351,611 160,564 19,394 1,701,183 Government transfers - operating 152,180 546,696 998,742 -110,359 599,815 83,479 2,491,271 Government transfers - capital Other municipalities - - - - 134,136 - 2,066,938 - - - - 28,500 - - 2,201,074 28,500 Penalties and interest on taxes 98,747 ------98,747 Investment income 15,053 -1,639 -19,794 --36,486 Donations -18,211 ---38,267 -56,478 Other grants 15,181 6,000 ---27,046 -48,227 Canada Community-Building Fund amounts earned --419,000 ----419,000 Gain/(loss) on disposal of tangible capital assets 294,722 -(17,590)----277,132 Total revenues 983,397 1,753,155 3,571,448 2,946,307 737,973 1,405,257 269,312 11,666,849 Expenses Salaries and benefits 663,866 89,293 885,690 95,721 191,656 485,773 137,727 2,549,726 Interest charges ------1,816 1,816 Materials 450,266 195,151 1,265,705 103,142 125,906 403,037 81,187 2,624,394 Contracted services 47,381 1,066,628 194,937 635,288 422,097 1,800 -2,368,131 Rents and financial 77,450 -4,328 -3,102 4 8,400 93,284 External transfers -176,915 --88,614 9,571 -275,100 Amortization 35,585 98,751 1,391,899 264,922 -266,627 412 2,058,196 Total expenses 1,274,548 1,626,738 3,742,559 1,099,073 831,375 1,166,812 229,542 9,970,647 Net surplus/(deficit)(291,151)126,417 (171,111)1,847,234 (93,402)238,445 39,770 1,696,202 18 CORPORATION OF THE MUNICIPALITY OF TWEED CONSOLIDATED SCHEDULE OF SEGMENT DISCLOSURE For the Year Ended December 31, 2020 General Government Protection Services Transportation Services Water and Sewer Other Environmental Services Recreation and Cultural Services Planning and Development Consolidated $$$$$$$$ Revenues Property taxation 351,783 1,150,617 1,802,644 -197,618 593,485 117,583 4,213,730 User charges 159,992 26,620 21,955 881,637 212,912 94,124 12,604 1,409,844 Government transfers - operating 363,721 583,014 913,395 -100,133 393,375 59,579 2,413,217 Government transfers - capital --1,387,886 ----1,387,886 Penalties and interest on taxes 103,571 ------103,571 Investment income 30,219 -2,400 882 33,627 --67,128 Donations -2,780 2,552 --34,705 -40,037 Other grants -----90,610 10,800 101,410 Parkland fees earned -----40,000 -40,000 Canada Community-Building Fund amounts earned --884,197 ----884,197 Gain/(loss) on disposal of tangible capital assets (6,307)-36,829 -(1,720)(39,395)-(10,593) Total revenues 1,002,979 1,763,031 5,051,858 882,519 542,570 1,206,904 200,566 10,650,427 Expenses Salaries and benefits 636,353 103,517 855,763 102,151 192,466 455,222 128,074 2,473,546 Interest charges ------1,793 1,793 Materials 361,749 177,114 1,019,523 63,422 109,347 279,551 170,113 2,180,819 Contracted services 49,244 1,091,518 221,505 309,082 32,977 --1,704,326 Rents and financial 72,336 -5,949 -2,621 9 8,400 89,315 External transfers -205,307 --82,487 7,132 -294,926 Amortization 31,267 99,321 1,339,396 260,000 -241,878 412 1,972,274 Total expenses 1,150,949 1,676,777 3,442,136 734,655 419,898 983,792 308,792 8,716,999 Net surplus/(deficit)(147,970)86,254 1,609,722 147,864 122,672 223,112 (108,226)1,933,428 19 INDEPENDENT AUDITOR'S REPORT To the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Opinion We have audited the financial statements of the Trust Funds of the Corporation of the Municipality of Tweed (the Trust Funds), which comprise the statement of financial position as at December 31, 2021, the statement of continuity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Trust Funds as at December 31, 2021, and the continuity of the Trust Funds for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Trust Funds in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian Public Sector Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Trust Funds' ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Trust Funds or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Trust Funds' financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust Funds' internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust Funds' ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Trust Funds to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario May 11, 2022 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS STATEMENT OF FINANCIAL POSITION At December 31, 2021 Recreation Associations Santa Claus Parade Fund 2021 Total 2020 Total $$$$ FINANCIAL ASSETS Cash -1,008 1,008 1,008 Investments (note 2)10,373 -10,373 10,347 Accounts receivable 5 -5 3 10,378 1,008 11,386 11,358 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable ---250 FUND BALANCES 10,378 1,008 11,386 11,108 10,378 1,008 11,386 11,358 TRUST FUNDS STATEMENT OF CONTINUITY For the Year Ended December 31, 2021 Recreation Associations Santa Claus Parade Fund 2021 Total 2020 Total $$$$ BALANCES - beginning of year 10,350 758 11,108 10,989 RECEIPTS Donations -250 250 - Interest 28 -28 119 28 250 278 119 BALANCES - end of year 10,378 1,008 11,386 11,108 The accompanying notes are an integral part of these financial statements 22 CORPORATION OF THE MUNICIPALITY OF TWEED TRUST FUNDS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2021 1.SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. (a)Basis of Accounting Revenue and expenses are reported on the accrual basis of accounting which recognizes revenues as they become available and measurable; expenses are recognized as they are incurred and measurable as a result of receipt of goods or services and the creation of a legal obligation to pay. (b)Use of Estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period and are based on the Municipality's best information and judgment. Actual results could differ from these estimates. (c)Revenue Recognition Donations are recognized when they are received. Interest income is recognized when earned. 2.INVESTMENTS Investments consist of a GIC with interest rate of 0.40% and maturity of November 15, 2022. 23 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD FINANCIAL STATEMENTS DECEMBER 31, 2021 INDEPENDENT AUDITOR'S REPORT To the Members of the Tweed Public Library Board, the Members of Council, Inhabitants and Ratepayers of the Municipality of Tweed Baker Tilly KDN LLP 272 Charlotte St. Peterborough, ON Canada K9J 2V4 T: (705) 742-3418 F: (705) 742-9775 www.bakertilly.ca Qualified Opinion We have audited the financial statements of the Tweed Public Library Board of the Corporation of the Municipality of Tweed (the Board), which comprise the statement of financial position as at December 31, 2021, the statements of operations and accumulated surplus, change in net financial assets and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements present fairly, in all material respects, the financial position of the Board as at December 31, 2021, and the results of its operations and cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Basis for Qualified Opinion In common with many Public Library Boards, the Board derives revenue from fines, other fees and donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts recorded in the records of the Board. Therefore, we were not able to determine whether any adjustments might be necessary to fines, other fees and donations revenue, annual deficit, assets and accumulated surplus. We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Board in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian Public Sector Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Board's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Board or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Board's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Board's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Board to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Baker Tilly KDN LLP Chartered Professional Accountants Licensed Public Accountants Peterborough, Ontario May 11, 2022 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF FINANCIAL POSITION At December 31, 2021 2021 2020 $$ FINANCIAL ASSETS Cash 52,769 28,226 Accounts receivable 3,168 4,304 TOTAL FINANCIAL ASSETS 55,937 32,530 LIABILITIES Due to Municipality (note 6)40,123 31,752 Deferred revenue (note 5)6,500 - TOTAL LIABILITIES 46,623 31,752 NET FINANCIAL ASSETS 9,314 778 NON-FINANCIAL ASSETS Tangible capital assets (note 3)698,213 728,306 Prepaid expenses 848 823 TOTAL NON-FINANCIAL ASSETS 699,061 729,129 ACCUMULATED SURPLUS (note 4)708,375 729,907 The accompanying notes are an integral part of these financial statements 27 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUS For the Year Ended December 31, 2021 Budget Actual Actual 2021 2021 2020 $$$ (Unaudited) REVENUES Municipality of Tweed (note 6)154,000 163,591 165,936 Province of Ontario 14,976 15,859 19,334 Government of Canada 2,300 1,296 - Other grants 16,900 3,146 1,610 Donations 11,250 16,316 11,283 Fines and other fees 3,765 1,670 1,450 Other -17 1,297 TOTAL REVENUES 203,191 201,895 200,910 EXPENSES Salaries and benefits 146,600 151,476 150,478 Electronic and other resources 1,781 3,666 3,172 Internet sustainability 1,300 1,460 1,266 Professional development 1,700 132 1,379 Supplies and maintenance 18,350 7,301 11,373 Office and administration 4,960 3,907 5,329 Specific projects -673 883 Utilities 13,500 8,317 9,839 Amortization 46,111 46,495 46,110 TOTAL EXPENSES 234,302 223,427 229,829 ANNUAL DEFICIT (31,111)(21,532)(28,919) ACCUMULATED SURPLUS - beginning of year 729,907 758,826 ACCUMULATED SURPLUS - end of year 708,375 729,907 The accompanying notes are an integral part of these financial statements 28 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CHANGE IN NET FINANCIAL ASSETS For the Year Ended December 31, 2021 Budget Actual Actual 2021 2021 2020 $$$ (Unaudited) ANNUAL DEFICIT (31,111)(21,532)(28,919) Amortization of tangible capital assets 46,111 46,495 46,110 Acquisition of tangible capital assets (15,000)(16,402)(17,850) Change in prepaid expenses -(25)(132) INCREASE/(DECREASE) IN NET FINANCIAL ASSETS -8,536 (791) NET FINANCIAL ASSETS - beginning of year 778 778 1,569 NET FINANCIAL ASSETS - end of year 778 9,314 778 The accompanying notes are an integral part of these financial statements 29 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD STATEMENT OF CASH FLOWS For the Year Ended December 31, 2021 2021 2020 $$ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Annual deficit (21,532)(28,919) Items not involving cash Amortization of tangible capital assets 46,495 46,110 Change in non-cash assets and liabilities Accounts receivable 1,136 983 Prepaid expenses (25)(132) Accounts payable and accrued liabilities -(537) Due to Municipality 8,371 (13,229) Deferred revenue 6,500 (4,297) Net change in cash from operating activities 40,945 (21) CAPITAL ACTIVITIES Acquisition of tangible capital assets (16,402)(17,850) NET CHANGE IN CASH 24,543 (17,871) CASH - beginning of year 28,226 46,097 CASH - end of year 52,769 28,226 The accompanying notes are an integral part of these financial statements 30 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2021 1.SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with the standards in the Chartered Professional Accountants Canada Public Sector Accounting (PSA) Handbook. Significant aspects of the accounting policies adopted by the Board are as follows: (a)Recognition of Revenue and Expenses Revenue and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenue in the period in which the transactions of events occurred that give rise to the revenue; expenses are recognized in the period the goods or services are acquired and a legal liability is incurred or transfers are due. Government funding is recognized in the financial statements as revenues in the period in which events giving rise to the transfers occur, providing the transfers are authorized, any eligibility criteria have been met, and reasonable estimates of the amounts can be made. Fines and other fees are recognized as revenue in the year the goods and services are provided. Donations and other revenue is recognized when the amounts are received. Contributions from the Municipality of Tweed are recognized as approved by the Municipality. (b)Use of Estimates Certain items recognized in the financial statements are subject to measurement uncertainty. The recognized amounts of such items are based on the Board's best information and judgment. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. The Board's significant estimates include: The amounts recorded for amortization of tangible capital assets are based on estimates of useful life and residual values. (c)Tangible Capital Assets Tangible capital assets are recorded at cost which includes all amounts that are directly attributable to acquisition, construction, development or betterment of the asset. Initial costs for tangible capital assets that were acquired or developed prior to 2009 were obtained using historical cost information or using current fair market values discounted by a relevant inflation factor to the point of acquisition. The cost, less residual value, if any, of tangible capital assets is amortized on a straight-line basis, over the expected useful life of the asset, as follows: Buildings 40 years Equipment 15 years Computers 5 years Books 7 years Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are also recorded as revenue. 31 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2021 1.SIGNIFICANT ACCOUNTING POLICIES, continued (d)Deferred Revenue Deferred revenue represents grants, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. (e)Non-Financial Assets Tangible capital assets and other non-financial assets are accounted for as assets by the Board because they can be used to provide services in future periods. These assets do not normally provide resources to discharge the liabilities of the Board unless they are sold. (f)Inter-Entity Transactions The Tweed Public Library Board is a Board of the Municipality of Tweed and is consolidated with the Municipality's financial statements. Allocated costs and recovery of costs are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Unallocated costs are measured at the carrying amount, which is the amount recorded in the records of the Municipality. 2.BUDGET FIGURES The operating budget, approved by the Board, for 2021 is reflected on the Statement of Operations and Accumulated Surplus and the Statement of Change in Net Financial Assets. The budgets established for capital investment in tangible capital assets are on a project-oriented basis, the costs of which may be carried out over one or more years and, therefore, may not be comparable with current year’s actual expenditure amounts. Budget figures have been reclassified for the purposes of these financial statements to comply with PSA reporting requirements. Budget figures are not subject to audit. 32 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2021 3.TANGIBLE CAPITAL ASSETS The net book value of the Board's tangible capital assets are: Buildings Equipment Computers Books 2021 Totals 2020 Totals $$$$$$ COST Balance, beginning of year 876,450 148,386 13,691 80,052 1,118,579 1,113,345 Add: additions during the year -744 -15,658 16,402 17,850 Less: disposals during the year ---11,851 11,851 12,616 Balance, end of year 876,450 149,130 13,691 83,859 1,123,130 1,118,579 ACCUMULATED AMORTIZATION Balance, beginning of year 240,976 106,570 6,084 36,643 390,273 356,779 Add: additions during the year 21,911 9,865 2,739 11,980 46,495 46,110 Less: disposals during the year ---11,851 11,851 12,616 Balance, end of year 262,887 116,435 8,823 36,772 424,917 390,273 NET BOOK VALUE OF TANGIBLE CAPITAL ASSETS 613,563 32,695 4,868 47,087 698,213 728,306 4.ACCUMULATED SURPLUS Accumulated surplus consists of the following: 2021 2020 $$ Surplus Operations 10,162 1,601 Invested In Capital Assets Tangible capital assets - net book value 698,213 728,306 708,375 729,907 33 CORPORATION OF THE MUNICIPALITY OF TWEED TWEED PUBLIC LIBRARY BOARD NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2021 5.DEFERRED REVENUE Included in deferred revenue are the following amounts: 2021 2020 $$ Kimberley Foundation grant 4,000 - Specified donation for books 2,500 - 6,500 - 6.INTER-ENTITY TRANSACTIONS During the year, the Board entered into transactions with the Municipality of Tweed. As part of the budgeting process, the Municipality approves a contribution to the Board which is identified on the Statement of Operations and Accumulated Surplus. Details of the inter-entity expense transactions are as follows: 2021 2020 $$ Unallocated costs: Water and sewer 651 846 651 846 In addition, the following services are provided to the Board by the Municipality at no cost: Payroll services Rental of land Building insurance Cooling system upgrades All balances with the Municipality of Tweed have been identified on the Statement of Financial Position.Due from (to) balances are unsecured, without interest and have no terms of repayment. 7.UNCERTAINTY CAUSED BY COVID-19 In March 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Board's environment and in the global markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Board's operations. The extent of the impact of this outbreak and related containment measures on the Board's operations cannot be reliably estimated at this time. 34