Item - 2023.AU2.1

The Audit Committee recommends that:  

1. City Council approve the 2022 Consolidated Financial Statements in Appendix B to the report (June 23, 2023) from the Chief Financial Officer and Treasurer and Controller.

2. City Council approve the 2022 Sinking Fund Financial Statements in Appendix C to the report (June 23, 2023) from the Chief Financial Officer and Treasurer and Controller.

3. City Council approve the 2022 Consolidated Trust Funds Financial Statements in Appendix D to the report (June 23, 2023) from the Chief Financial Officer and Treasurer and Controller.

Sandra Califaretti, Director, Accounting Services, Thaksa Sethukavalan, Manager Financial Reporting, Accounting Services, and Duri Lee, Project Director, Accounting Services, gave a presentation on 2022 Audited Financial Statements - Consolidated City, Sinking Funds, and Consolidated Trust Funds.

This report presents the City of Toronto's (City) Consolidated Financial Statements (Consolidated Statements), the Sinking Funds Financial Statements (SF Statements) and the Consolidated Trust Funds Financial Statements (TF Statements) for the year ended December 31, 2022.

All City financial statements are prepared in accordance with Public Sector Accounting Standards (PSAS) established by the Public Sector Accounting Board (PSAB) of the Chartered Professional Accountants (CPA) of Canada.

Management is highlighting the following items in relation to the City's financial statements:

·       The City's tangible capital asset balances detailed in the City's Consolidated Statements contain corrective adjustments recommended by the City's external auditors, KPMG LLP (KPMG), during the 2022 year-end audit;

·       The City experienced reductions in government transfers despite the sustainment of pandemic and economic recovery related costs;

·       The City's 2022 Consolidated Statements have incorporated only those entities significant to the City's overall financial position and performance; and

·       The SF Statements recognized a temporary unrealized loss of $180 million as a result of market performance in 2022.

The City's external auditors, KPMG, are responsible for providing an opinion on the fair presentation of the above financial statements in accordance with PSAS. KPMG has issued an unqualified audit opinion on the City's 2022 Consolidated Statements, SF Statements, and TF Statements.

The Audit Committee is responsible for adopting the financial statements prior to City Council's approval.