PSAB Implementation in Newfoundland and Labrador

Municipalities

Lori Anne Companion, ADM Department of Municipal Affairs May 10, 2008

Focus of presentation

PSAB Overview Role of Municipalities Impact on Municipalities Department’s plan to assist municipalities

PSAB Overview

Public Sector Accounting Board of the Canadian Institute of Chartered Accountants (CICA) requires new rules for municipal government accounting

Requires identification and accounting for what you own (assets and inventory), assessing useful life and planning for the fiscal capacity to replace these assets.

PSAB Overview

The PSAB requirements are not new – what is new is the requirement for municipalities to start reporting under PSAB standards.

Several requirements of the PSAB Standards – Tangible Capital Asset reporting (Phase 1); Accruals, Environment Liabilities and others (Phase 2).

Both phases are required to be in progress before December 31, 2008.

Gas Tax Agreement

The Federal/Provincial Gas Tax Agreements in all provinces require municipalities to comply with PSAB standards.

Provincial/municipal GTA requires municipalities to report under PSAB standards by March 31, 2009.

Means that all inventory must be accounted for and valued as of December 31, 2008 to provide opening balances of municipal assets.

Gas Tax Agreement Municipalities may use their Gas Tax funds

for the following:

- Hire professional consultants for inventory compilation and calculation of current book value

- Development of policy for implementation of an asset management system.

Why is the new reporting important? Asset management is the goal. Will provide a link between fiscal

responsibility and strategic infrastructure planning for municipalities.

Indicator of sustainability and viability.

What Councils Need To Do Now

Ensure your Administrator begins preparing inventory of capital assets.

Engage your accountants/auditors. Support (both human and financial resources)

your Administrator in this process. Ensure your Administrator participates in

seminars and information sessions. Engage a representative of your Council attend

the information sessions (eg. Finance Committee Member).

What does PSAB mean to Councils Your financial statements will look different –

will reflect the value of assets and all expenditures will be reported in the period in which they occurred.

Bottom line may look different – surplus or deficit different than may have been expected.

Department’s Plan to assist Municipalities

Develop guidelines and reference manuals Deliver seminars and information sessions

(May 26 – July 29) Dedicated departmental staff resources PSAB direct e-mail (PSAB@gov.nl.ca) and toll

free number (1-877-729-4393) Information posted on Government web-site Regional office staff available to provide

assistance

Department’s Plan to assist Municipalities Provide matched funding for

seminar/information sessions through MTDC Communicate and coordinate with

stakeholders including municipalities, auditors and accountants, engineers, accounting associations and consultants

Reviewing and amending legislation

Closing PSAB – New standards that are here to stay!!

Requires effort by municipalities

Municipalities need to become engaged now

Municipal Affairs will assist municipalities