Item - 2020.AU7.3

The Audit Committee recommends that:

1.  City Council approve the 2019 Audited Consolidated Financial Statements for the City of Toronto Trust Funds in Appendix A to the report (November 2, 2020) from the Controller.

The City of Toronto (City) and its agencies and corporations are the beneficiaries of assets from third parties intended to be used for specific purposes. These assets, mainly held in cash and investments, are administered by the City and two of its related parties, the Toronto Police Services Board and the St. Lawrence Centre for the Arts (TO Live). Although these trust funds are assets to the City and its consolidated entities, they represent liabilities to third parties and therefore, are not included in the City's consolidated financial statements.

This report presents the City's Audited Consolidated Trust Funds Financial Statements (Statements) for the year ended December 31, 2019 and provides highlights of the Trust Funds' 2019 financial performance and financial condition as at December 31, 2019.

The Trust Funds Financial 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 financial statements in accordance with Public Sector Accounting Standards (PSAS). The Audit Committee is responsible for approving the statements prior to City Council approval.

In 2019, the Audited Consolidated Trust Funds Financial Statements received an unqualified audit opinion. In addition, no internal control recommendations were made by PwC.

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.