Chapter 1- Intro to Municipal Finance Management

Question 1

What is financial Management?

Answer 1

• planning, directing, monitoring, organizing and controlling monetary resources to meet the organizations objectives
• ensures that financial resources are properly managed and funds spent accordingly
• Crucial for financial sustainability

Question 2

What is involved with Financial Management?

Answer 2

1-strategy and planning
2. supporting decision making
3. Reporting
4. Compliance
5. Ensuring Value for money
6.Enabling Change
Establishing controls and accountability
8. Risk Management7.

Question 3

Municipality Financial Sustainability

Answer 3

• ability to continue to deliver services and develop the required infrastructure without sudden unplanned increases in rates and tariffs or reduction of services
• Capacity to absorb financial shocks without external financial assistance
• Financial Capacity of municipalities to deliver services and meet contractual commitments while planning for future
• Proper bookkeeping, accounting and finance reports

Question 4

What is finance?

Answer 4

• “the thread running through management, separate in certain specific aspects but mostly intertwined with other factors”
• expressed through bookkeeping and accounting records, and financial reports which are transactional, historical representation of funds expended.

Question 5

Steps in Financial Management Cycle

Answer 5

• Planning and budgeting
• Transactions and Accounting
• Management reporting and analysis
• Financial Statements
• Audit and risk management

Question 6

What is the Municipal Legislative Framework?

Answer 6

-is set out in the Municipal Act, 2001 outlining requirements throughout the financial management cycle.
- Other pieces of legislation also have specific accounting, planning and reporting requirements
- Municipal Act, 2001, gives Ministry of Municipal Affairs and Housing the authority to prescribe forms, returns, statements and information that municipalities are required to submit to the ministry.
Ministry has authority related to municipal audits, compiling statistics, publishing reports, investigations and more.

Question 7

Reporting entities.

Answer 7

• defines the responsibility centre and boundaries for collection information.
• Organization that is obliged to prepare general-purpose financial reports.
• Entity concept is IMPORTANT because it focuses on responsibility and accountability

Question 8

What are the 4 types of entities?

Answer 8

1. Government
2. Organizations controlled by government
3. Program
4. Fund (esp. important in municipal sector)

Question 9

What is the treasurer responsible for?

Answer 9

• handling all of the financial affairs including
  a) collecting money payable to the municipality (issue receipts)
  b) depositing all money received on behalf of municipality into a financial institution designated by the municipality
  c) paying all debts of the municipality and other expenditures authorized by the municipality
  d) maintaining accurate records and accounts of the financial affairs of the municipality
  e) providing council with such information with respect to the financial affairs of the municipality as it requires or requests
  f) ensuring investments of the municipality are made in compliance with the regulations made under section 418 if applicable

Question 10

What are the 3 categories of boards?

Answer 10

`-general activity

• municipal enterprise
• school board

Question 11

What are 2 types of local boards?

Answer 11

1. Municipal service boards (public utilities, waste management, highways, parking, recreation and heritage)
2. Municipal business corporations

Question 12

What factors must be considered for an entity to be considered local board

Answer 12

• direct link between the board and municipality
• entity must have distinctly local or municipal character
• entity must have the authority to make decisions.
• Board members must be chosen by appointment
• entity must be carrying on the affairs of the municipality
• entity must be connected to or controlled by the municipality
• process for establishing and dissolving the entity must reflect criteria set out in legislation
• must be an element of autonomy

Question 13

What are some general activity boards? Relationship with council

Answer 13

• Library boards -council can questions submitted by the library board and negotiate.
• Police Services- council has very little discretion with respect to the estimates. Council established an overall budget after reviewing the board’s estimate. If police services unsatisfied the board can refer to Ontario Civilian Police Commissioner
• Conservation Authorities- jurisdiction in or more watersheds and municipality has very limited representation and influence. Municipal council dissatisfied with apportion of the cost can appeal to the Ontario land Tribunal
• Health Units- municipalities have limited influence. Expenses incurred shared between Ministry of Health and municipalities Municipal cost is usually 50%.