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Meeting Document Type: 
Resolution
2021 Annual Audited Financial Statements Recommendation Report

JULY 14, 2022

ISSUE/PURPOSE

Approval of the annual audited financial statements.  This includes:

  • The annual audited financial statements for the Windsor-Essex County Health Unit for the year-ended December 31, 2021 (Appendix A)
  • The annual audited financial statements for the Windsor-Essex County Health Unit Ministry of Children, Community and Social Services Program Initiatives for the year-ended March 31, 2022 (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 are audited by KPMG LLP, independent external auditors appointed by the Corporation of the City of Windsor.  On June 16, 2022, the Audit Committee of the Windsor-Essex County Board of Health (Audit Committee) 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 of Health (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 (WECHU)

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

Statement of Financial Position

  • Cash and short-term investments increased $3,162,047.  Refer to the Statement of Cash Flows for details.
  • Accounts receivable increased $148,637 primarily due to the following:  a) Decrease in grants receivable from the Province of Ontario of $207,303 over 2020.  This balance varies on an annual basis 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 $314,542.  The most notable grants outstanding for the year-ended December 31, 2021, include $67,161 relating to the Infectious Disease and Climate Change Program and $266,547, relating to the IPAC Hub Funding. 
  • Due to Province of Ontario increased $3,356,486.  This balance is comprised of:
    2021 Settlement $2,880,732
    Prior Settlements (2020, 2019) 1,921,315
    Total $4,802,047

Of noteworthy mention is the following:

  • In the period January to March of 2022, $915,766 was clawed back by the Ministry of Health (MOH) on account of the 2021 settlement.  The remaining, will be clawed back upon completion of the settlement review.
  • The 2019 settlement review is nearing completion with a final reconciliation notice to be issued by the MOH shortly.  The total amount remaining to be clawed back on account of the 2019 settlement is $518,577.
  • The 2018 settlement of $213,422 was clawed back in 2021;
  • Due to Municipalities decreased $949,475.  This balance is comprised of:
    2021 Settlement $1,260,800
    Prior Settlements (2020, 2019) 1,621,433
    Total $2,882,233

Of noteworthy mention is the following:

  • The 2021 Settlement relates to the 2021 Cost-Sharing Mitigation Funding of $1,260,800;
  • As noted in Due to Province of Ontario, the 2019 settlement review is nearing completion and will result in $1,285,794 being repaid to the Obligated Municipalities, based upon their pro-rata share of the population of Windsor and Essex County (2016 Census).
  •  Due to Community Programs increased $518,817.  This financial statement caption includes amounts owing to the other WECHU administered programs not included in the WECHU financial statements.  More specifically, this include balances relating to the WECHU Healthy Babies Healthy Children Program and the WECHU Nurse Practitioner Program.  These Programs do not have separate bank accounts.  Funds received from the Ministry of Children, Community and Social Services (MCCSS) are included in the primary WECHU bank account and are reconciled regularly.
  • Accrued payroll and deductions decreased $119,861.  The decrease in this financial caption primarily relates to the discharging of obligations on account of management overtime (2020 - $176,584).
  • Deferred revenue increased $409,999.  Fluctuations in deferred revenue year-over-year typically relate to the nature and timing of grant funding.  At December 31, 2021, significant sources of deferred revenue include:  a) School-Focused Nurses funding of $439,134; b) Ontario Active Transportation grant of $24,000; c) Grant received from the Greater Essex County District School Board of $26,000 to support the Windsor-Essex Community Opioid and Substance Strategy.
  • Tangible capital assets decreased $11,760.  The net decrease is attributed to:  i) Tangible capital asset additions of $294,788; ii) Amortization expense of $306,548.  Of the tangible capital assets acquired in the year, $231,024 were funded by the Ministry of Health using Mandatory Program funding (70%), and $63,764 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 $6,758,354.  The increase is attributed to the following:
    • Increase in Ontario Seniors Dental Care Program (OSDCP) Funding in the amount of $557,562.  This increase is attributed to the OSDCP Program being in operation for a full fiscal year, impacted on a limited basis by COVID-19 restrictions.
    • Increase in Other of $6,203,821. This is attributed to:  a) COVID-19 Vaccination Program funding in the amount of $5,739,845; b) School-Focused Nurses Initiative funding in the amount of $1,425,807.
  • 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, 2021 $ 28,791,415
Less: AMOH/MOH Compensation Initiative expenses 3,493
  $ 28,787,922
Less: Non-admissible expenses  
Amortization (306,548)
Plus: Change in Employee Future Benefits Liability 28,390
Tangible capital asset additions – Mandatory Program 231,024
  $ 28,740,788
Less: Offset revenue (170,086)
Total admissible expenditures $ 28,570,702 A
Ministry portion (70%) $ 15,981,600 B
100% of admissible expenditures $ 22,830,857 C (B/70%)
Municipal portion (30%) $ 6,849,257 D (C-B)
Mitigation funding $ 1,260,800 E
Final contributions – Obligated Municipalities $ 5,588,457 (D-E)
  • Increase in Expenses of $6,728,629.  Notable increases include:
    • Increase in Salaries and Benefits in the amount of $4,775,348.  Notable increases from 2021 include:
      • Increase in FTEs year-over-year.  At January 1, 2021, total FTEs amounted to 267.  At December 31, 2021, total FTEs amounted to 295.
      • One (1) percent cost of living increase for employees represented by the Canadian Union of Public Sector Employees (CUPE) and non-union staff and two (2) percent increase for employees represented by the Ontario Nurses Association (ONA).
      • Total payments on account of overtime, premium pay, and retroactive payments for the 2021 fiscal year amounted to $1,576,876.
    • Increase in Purchased Services in the amount of $1,559,727.  Notable increases from the prior year include:
      • Professional supports (immunizers) for mass vaccination clinics of $256,638;
      • Third party support for case and contact management of $698,476;
      • Third party support for call centre and other support services for case and contact management and vaccinations of $344,852.
    • Increase in Supplies and other in the amount of $420,131.  Notable increases from prior year include:
      • $134,974 increase in Mileage in 2021 incurred on account of staff working at mass vaccination clinics;
      • $285,157 increase in Supplies and other relate to program costs incurred on account of COVID-19 vaccination efforts.  Examples include:  a) Licensing for scheduling application and website support of $63,979; b) Personal Protective Equipment of $52,271; c) Sharps disposal costs of $41,438; d) Transportation of vaccines to health care providers of $10,452.

Windsor-Essex County Health Unit Ministry of Children, Community and Social Services 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, 2021 to March 31, 2022.

The enclosed summary analytical review addresses 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 $694,762 from March 31, 2022.
  • Due to Ministry of Children, Community and Social Services:  The amount outstanding is as follows:
    • Settlement for the year-ended March 31, 2022, in the amount of $734,310;
    • Settlement for the year-ended March 31, 2021, in the amount of $581,637.  This settlement was clawed back in April of 2022.

Statement of Operations and Accumulated Deficit:

Year-over-year variations in the financial results are primarily due to the impact the COVID-19 pandemic had on service delivery for the period April 1, 2021 to March 31, 2022.  A substantial portion of the nursing staff that would historically support theses Programs were deployed to support the WECHU’s pandemic response including case and contact management and vaccinations.

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

Total Program expenses at March 31, 2022 $ 2,186,591
Non-admissible expenses  
Amortization (29,295)
Change in Employee Future Benefits Liability 20,045
Tangible capital asset additions 9,944
Other (26,754)
Total admissible expenditures $ 2,160,531
Ministry approval $ 2,894,841
Due to Ministry of Children, Community and Social Services $ 734,310

PROPOSED MOTION

Whereas, at the June 16, 2022, meeting, the Audit Committee of the Windsor-Essex County Board of Health reviewed the annual audited 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 of the Windsor-Essex County Health Unit for the year-ended December 31, 2021; and

The annual audited financial statements for the Windsor-Essex County Health Unit Ministry of Children, Community and Social Services Program Initiatives for the year-ended March 31, 2022.