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Meeting Document Type: 
Resolution
2020 Annual Financial Statements

ISSUE

Approval of the annual audited financial statements including:

  • Windsor-Essex County Health Unit for the year-ended December 31, 2020 (Appendix A)
  • Windsor-Essex County Health Unit Ministry of Children, Community and Social Service Program Initiatives for the year-ended March 31, 2021 (Appendix B)

 (Hereinafter referred to collectively as “the annual financial statements”).

BACKGROUND

Paragraph 59(2) of the Health Protection and Promotion Act R.S.O. 1990 states that “A board of health shall cause to be prepared statements of its financial affairs in each year including but not limited to, (a) an annual statement of income and expenses; (b) an annual statement of assets and liabilities; (c) an annual estimate of expenses for the year.”

The annual financial statements audited by KPMG LLP, independent external auditors appointed by the Corporation of the City of Windsor.  On July 15, 2021, the Audit Committee of the Windsor-Essex County Health Unit convened to review the annual financial statements and audit findings report with Administration and KPMG LLP.  The Audit Committee has recommended the financial statements for approval to the Board. KPMG LLP is prepared to issue, pending approval by the Board, an unmodified audit opinion on the annual financial statements. 

Windsor-Essex County Health Unit

The enclosed is a summary analytical review addressing material changes in financial statement captions year-over-year.

Statement of Financial Position:

  • Cash and short-term investments increased $2,898,405.  Refer to the Statement of Cash Flows for details.
  • Accounts receivable increased $128,765 due to the following:  a) Increase in grants receivable from the Province of Ontario of $59,531 over 2019.  This balance varies annually based upon the extent and timing of funding approvals for one-time business cases typically funded at a rate of 100%.  b)  Increase in other receivables of $90,273.  For 2020, a grant of $81,725 was outstanding because of the Infections Disease and Climate Change Program for the period January 1, 2020 to December 31, 2020.  For additional details, refer to note 3 to the annual financial statements.
  • Due to Province of Ontario increased $627,963.  This net increase is attributed to: a) the claw back of amounts owing for the 2019 settlement year in the amount of $85,701.  The claw back occurred in the January to March 2020 timeframe;  b)  The 2020 settlement amount of $713,446 comprised of $557,562 on account of the Ontario Seniors Dental Care Program (OSDCP), $4,070 on account of capital improvements to support the OSDCP, and $152,032 on account of the Temporary Pandemic Pay grant.  In the period of January through to March of 2021, $709,664 was clawed back.  For additional details, refer to note 4 to the annual financial statements. 
  • Due to Municipalities increased $1,593,773.  This increase is attributed to:  a) 2020 settlement resulting in $332,973 of contributions owing back to the Obligated Municipalities. b) Allocation of 2020 Mitigation funding to the Obligated Municipalities of $1,260,800.  The allocation of this funding is based upon the Obligated Municipalities’ pro-rata share of the population of Windsor and Essex County (2016 Census).  For additional details, refer to note 5 to the annual financial statements.
  • Due to Community Programs increased $331,213.  This financial statement caption includes amounts owing to other WECHU administered programs not included in these financial statements.  More specifically, this includes balances relating the Windsor-Essex County Health Unit Healthy Babies Healthy Children Program and the Windsor-Essex County Health Unit Nurse Practitioner Program.  These programs do not have separate bank accounts.  Funds received from the Ministry of Children, Community and Social Services are included in the primary WECHU bank account and are reconciled annually.
  • Accounts payable decreased $199,635.  Fluctuation in this caption is a function of the extent and timing of procurements in the 30-days prior to year-end. 
  • Accrued payable and deductions increased $552,587.  The increase is due to the timing of payroll compared at year-end, as well as accruals for certain other payroll related matters. For the year-ended December 31, 2020, five days remained outstanding as compared to two days for the year-ended December 31, 2019.
  • Deferred revenue increased $78,379.  The increase in deferred revenue over 2019, is attributed to the amount and timing of one-time business case approvals for the period April 1, 2020 to March 31, 2021 as compared to one-time business case approvals for the period April 1, 2019 to March 31, 2020.  Of the $805,630 of funding advanced associated with these approvals, $67,068 remained unspent at December 31, 2020.  In addition, the WECHU received a grant from the Greater Essex County District School Board of $20,000 to support the Windsor-Essex Community Opioid and Substance Strategy.
  • Tangible capital assets decreased $12,803.  The net decrease is attributed to:  i) Tangible capital asset additions of $279,141; ii) Amortization expense of $291,944.  Of the tangible capital assets acquired in the year, $217,420 were funded by the Ministry of Health using Mandatory Program funding (70%), and $61,721 were funded using Ontario Seniors Dental Care Program funding (100%). Refer to note 9 for additional details.

Statement of Operations and Accumulated Deficit:

  • Increase in Revenue from the Province of Ontario of $2,111,005. The net increase is attributed to the following:
    • Decrease in Mandatory funding of $1,260,800 due to the changes in the funding model from 2019 to 2020.
    • Increase in OSDCP funding of $830,674.  In the latter part of 2019, the Province of Ontario launched the OSDCP Initiative.  Therefore, the 2020 revenues are more representative of 12-months of program administration.
    • Increase in Other.  This is attributed to:  i)  Mitigation funding – In recognition of the changes in the funding model from 2019 to 2020, the WECHU was approved for Mitigation funding in the amount of $1,260,800; ii)  COVID-19 Extraordinary Cost funding for 2020 in the amount of $241,920; iii)  School-Focused Nurses Initiative funding for 2020 in the amount of $728,572.

The Ministry of Health funds the WECHU to a maximum of 70% of admissible expenditures.  Admissible expenditures for the purposes of the Ministry of Health Settlement Process is defined below:

Total General Program expenses at December 31, 2020

$ 23,578,931

Less: AMOH/MOH Compensation Initiative expenses

5,000

 

$ 23,573,931

Less: Non-admissible expenses

 

Amortization

(291,944)

Change in Employee Future Benefits Liability

(288,138)

Plus: Tangible capital asset additions - Mandatory Program

279,141

 

$ 23,272,990

Less: Offset revenue

(200,212)

Total admissible expenditures

$ 23,072,778 A

Ministry portion (70%)

$ 15,981,600 B

100% of admissible expenditures

$ 22,830,857 C (B/70%)

COVID-19 Extraordinary Costs (100%)

$ 241,291

Municipal portion (30%)

$ 6,849,257 D (C-B)

Mitigation funding

$ 1,260,800 E

Final contributions - Obligated Municipalities

$ 5,588,457 (D-E)

For additional details regarding funding from the Province of Ontario, refer to Schedule 2 of the annual financial statements.

  • Increase in Expenses of $3,482,835, primarily attributed to Salaries and benefits.  Specific details are as follows:
    • In 2019, the WECHU experienced a labour disruption involving employees represented by the Ontario Nurses Association for the period March 8th, 2019 to May 8th, 2019, resulting in salaries and benefits savings of approximately $635,000.
    • In 2019, in response to anticipated changes in the funding model, the WECHU made a decision to not fill certain positions (predominantly non-union), resulting in salaries and benefits savings of $663,000.
    • March 2020, COVID-19 pandemic.  The WECHU’s response to the pandemic resulted in substantial overtime paid in 2020 ($975,012) and the hiring of additional staff to support the response to COVID-19 in Windsor and Essex County.
    • Increase in salaries in benefits of $654,147 relating to the WECHU’s administration of the Ontario Seniors Dental Care Program.
    • Annual increases (cost of living and grid increases) for all employee groups (1%).

Windsor-Essex County Health Unit Ministry of Children, Community and Social Service Program Initiatives

The annual audited financial statements for the Windsor-Essex County Health Unit Ministry of Children, Community and Social Services Program Initiatives include financial information for the Nurse Practitioner Program and the Healthy Babies Healthy Children Program for the period April 1, 2020 to March 31, 2021. 

The enclosed is a summary analytical review addressing material changes in financial statement captions year-over-year.

Statement of Financial Position:

  • Due from the Windsor-Essex County Health Unit:  Refer to the statement of cash flow for details on the increase of $633,533 from March 31, 2021.
  • Due to Ministry of Children, Community and Social Services:  The amount outstanding of $581,637 represents the settlement for the period April 1, 2020 to March 31, 2021.

Statement of Operations and Accumulated Deficit:

Year-over-year variations in the financial results are due to the following:

  • The variances noted between the March 31, 2021 figures and those of March 31, 2020 related primarily to the reporting timeframes.  The March 31, 2021, is a 12-month fiscal period while the March 31, 2020, is a 15-month fiscal period. 
  • Impact of the COVID-19 pandemic on service delivery for the period April 1, 2020 to March 31, 2021.

A summary of the settlement with the Ministry of Children, Community and Social Services is as follows:

Total Program expenses at March 31, 2021 

$ 2,221,930

Non-admissible expenses

 

Amortization

 (16,569)

Change in Employee Future Benefits Liability

7,019

Plus: Tangible capital asset additions - Mandatory Program

74,062

Other

 26,762

Total admissible expenditures

$ 2,313,205

Ministry approval

$ 2,849,841

Due to the Ministry of Children, Community and Social Services

$ 581,637

PROPOSED MOTION                         

Whereas, at its July 15, 2021, meeting, the Audit Committee reviewed the annual financial statements and recommended them to the Board for approval,

Now therefore be it resolved that the Windsor-Essex County Board of Health approve:

The annual audited financial statements for the Windsor-Essex County Health Unit for the year-ended December 31, 2020; and

The annual audited financial statements for the Windsor-Essex County Health Unit Ministry of Children, Community and Social Service Program Initiatives for the year-ended March 31, 2021.