Item - 2020.AU7.1

The Audit Committee recommends that:

1.  City Council approve the 2019 Audited Consolidated Financial Statements for the City of Toronto in Appendix A to the report (November 3, 2020) from the Controller and the Chief Financial Officer and Treasurer.

The Director, Accounting Services, and the Manager, Analysis and Financial Reporting, Accounting Services, gave a presentation on Year-End 2019: Shared Vision. Shared Commitment.

This report presents the City of Toronto's (City) Audited Consolidated Financial Statements (Statements) for the year ended December 31, 2019, for approval, to the Audit Committee and Council and provides highlights of the City's financial performance during 2019 and financial condition as of December 31, 2019. The Statements include all entities with City Council's control; a full list is included in the Notes to the Statements.

The Statements are attached as Appendix A. In addition, Appendix B - 2019 Financial Statement Review, provides information about each statement and explains the City's revenue and expenditure activities and financial position for the audited fiscal year.

The City's Statements have been prepared by management who is responsible for ensuring that proper internal controls have been applied to the presentations in each statement. The City's 2019 auditors, PricewaterhouseCoopers LLP (PwC), are responsible for providing an opinion on the fair presentation of the City's Statements in accordance with Public Sector Accounting Standards (PSAS). The Audit Committee is responsible for approving the Statements prior to City Council approval.

The City of Toronto 2019 Year-End Report to the Audit Committee (Year-End Report), Appendix C, includes a draft of the external auditor's opinion on the Statements. The report contains two internal control recommendations, unadjusted items that total $220 million which have been included on the Summary of Unadjusted items and the draft Independent Auditor's Report, which includes PwC's unqualified opinion as to the fair presentation of the Statements. The PwC final audit opinion will be received and dated the day following City Council approval.

Financial statements and auditor's reports are typically reported to the Audit Committee and Council in June, when external audit work is substantially complete. During the external auditor's normal engagement period, management's focus was on the COVID-19 response and meeting operational requirements. Additionally, public health restrictions put in place because of the pandemic required that the audit process be conducted in an extended fashion over a longer period of time. As a result, the completion of the 2019 Statements and external audit was delayed.