After 2 year hiatus, Baddeck gets closer to financial statement
The commission for the village of Baddeck, Nova Scotia, is hiring an accounting firm to provide residents with an accurate picture of the situation in the municipality after going two years without producing an audited financial statement.
Acting Administrative Director Maris Freimanis said the commission would ask the Sydney NPM to prepare a financial statement which can be presented at a public meeting in January or February.
Victoria County staff will also be involved, as they have the authority to issue checks and transfer money between the village’s six bank accounts, he said.
The move comes a week after residents demanded better financial information and rejected the village commission’s decision to dissolve and merge with Victoria County.
Mark Peck, assistant deputy minister of municipal affairs, said the province has been working with the village to get its finances back in order for more than a year.
Its last audited financial statement was filed in 2019.
“A serious situation,” says Associate Deputy Minister
“This is a serious situation and what we expect as a province, we expect the commission to really rectify the current situation it finds itself in,” said Peck.
To be eligible for grants and other funds, the province requires municipalities to file audited financial statements annually.
Peck said provincial staff have worked closely with Baddeck Commissioners over the past two years to try to get the village to put their finances back on track and that might not be easy now.
“The village has a lot of work to do to rectify the situation,” he said.
The Associate Deputy Minister said there is no deadline at this time for filing a financial statement.
Peck did not say whether the province would take unilateral action to force the village’s hand, but said it was a good sign the commission was getting professional help.
Balance the books
“They’re going to see what they can do in terms of balancing the accounts and looking at the different funds, looking at the cash flow and we’ll just see where they go,” he said.
“They need to put their house in order. They need to have a set of financial statements filed. They need to work out what is owed from account to account and get the village back on track.”
In its latest financial statement, the village had an accumulated surplus of approximately $ 9 million and net assets of nearly $ 2 million.
Peck said it sounds good on paper, but it doesn’t help the municipality pay its bills.
“It’s not cash on hand,” he said.
“There is money included with that, but what mainly constitutes the majority of this accumulated surplus is the value of the assets of the village of Baddeck. It’s not like it’s in an account you can withdraw from. this funding. “
“It’s really a question of income”
For example, Peck said, the village has a water service, but it would be difficult to sell it and convert it to cash.
Even having a positive balance sheet doesn’t necessarily mean the municipality can borrow money, Peck said.
Someone who takes out a mortgage on their home to finance renovations must have a stable income to pay off their debt, he said.
“It’s really all about the income,” Peck said. “It’s not about the amount of assets or the liquidation capacity. It’s about own-source revenue.”