After receiving a failing grade from the C.D. Howe Institute’s annual report card on financial transparency for the past couple of years, the City of Regina and Saskatoon saw improvements in 2022.
The annual report assesses the transparency and quality of the budgets and financial statements of 32 major Canadian municipalities.
The report said that residents “should be able to understand the government’s plans, see how results differed from plans, discern the implications for the government’s future capacity to deliver services, and hold the government accountable for its performance.”
At the bottom of the list, once again, was Regina, who received a D-grade.
“Regina’s grade of D is largely due to its practice of splitting its budget into four presentations: operating versus capital activities divided by sources of funds,” the report said.
Regina wasn’t alone in receiving the D-grade, joined by cities like Kitchener, London, Hamilton, and Halifax.
Despite the low grade, it is an increase from there F-grade the City has received in the past two years and the highest in the last five reports.
The other Saskatchewan city included in the report, Saskatoon, saw a major increase from an F-grade to a B+.
“Saskatoon jumped to B+ from F by including PSAS-consistent expenses in its budget, improving the reconciliation between results and budget in its financial statements, and presenting its headline figures nearer the front of both documents.”
Saskatoon was one of seven cities included in the report to receive a B+ or higher.
C.D. Howe has docked marks to both Saskatchewan cities in the past for reporting budgets using cash accounting while using accrual-based accounting for year-end financial statements.
Accrual-based accounting records the value of an asset, like a road or a bridge, on a depreciating basis over its estimated lifespan. Cash accounting records an asset’s entire cost upfront.
C.D. Howe favours accrual-based accounting and has held the opinion that the difference makes it difficult for even a professional accountant to reconcile the budgets delivered at the start of each financial year to the statements delivered at the end.
The institute noted that the grades are not a review of the city’s financial position as both cities’ passed audits, and each recorded a surplus. The C.D. Howe grades are based on how easily a regular person can make sense of key numbers in a city’s financial documents.
