PSAB Implementation in Newfoundland and Labrador Municipalities

1. PSAB Implementation in Newfoundland and Labrador Municipalities Lori Anne Companion, ADM Department of Municipal Affairs May 10, 2008

2. Focus of presentation • PSAB Overview • Role of Municipalities • Impact on Municipalities • Department’s plan to assist municipalities

3. PSABOverview • 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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).

9. 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.

10. 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

11. 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 Department’s Plan to assist Municipalities

12. Closing • PSAB – New standards that are here to stay!! • Requires effort by municipalities • Municipalities need to become engaged now • Municipal Affairs will assist municipalities