ADMINISTRATIVE REPORT

Date: March 11, 1998

Author/Local: A. Kloppenborg/6031

CC File No. 1503

TO:	Standing Committee on City Services and Budgets
FROM:	Director of Community Services, Social Planning and Director of Finance
SUBJECT:	Downtown Eastside Residents’ Association (D.E.R.A.)

RECOMMENDATION

THAT Council amend a 1992 grant condition requiring D.E.R.A. to provide annual audited financial statements both for D.E.R.A. and for D.E.R.A. Housing Society, by deleting the requirement for audited statements from D.E.R.A. Housing Society.

GENERAL MANAGER’S COMMENTS

The General Manager of Community Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

There is no applicable Council policy.

PURPOSE

This report recommends approval of D.E.R.A.’s request that a grant condition established by Council on June 23, 1992 requiring D.E.R.A. to submit annual audited financial statements for both D.E.R.A. and D.E.R.A. Housing Society, be amended to delete the requirement for audited statements from the Housing Society.

BACKGROUND

Conditions were placed on D.E.R.A.’s civic grants on June 23, 1992 as a result of problems with the organization’s financial management practises at that time. Council approved a recommendation:

"THAT Council approve disbursement of D.E.R.A. grant funds currently held in abeyance, subject to written agreement from D.E.R.A. on the requirements outlined in items C2, C3 and C4 of the Administrative Report dated June 19, 1992."

These requirements were:

"C2 As conditions of City grants, D.E.R.A. will be required to:

a)provide annual audited financial statements for both D.E.R.A. and the D.E.R.A. Housing Society and will also be required to submit any management letter provided by the auditor;

b)provide a quarterly report on the implementation of internal financial controls.

C3 D.E.R.A. will also be required to immediately engage the services of an independent auditor to the satisfaction of the City to review the internal controls now in place and to make recommendations for improvement. The report should be made available to the City.

C4 D.E.R.A. will be requested to continue the position of accountant on a full-time, permanent basis."

DISCUSSION

The original requirement for audited statements included both D.E.R.A. and D.E.R.A. Housing Society because this was the only way to obtain a comprehensive picture of Society finances. The City grants have always gone only to D.E.R.A.

Since 1992, D.E.R.A. has met the various conditions imposed by the City, reorganizing its financial practises. The management structure has been reorganized to improve supervision, clear payroll policies are in place and the Society has an independent auditor.

D.E.R.A. is requesting relief from the condition requiring audited statements for D.E.R.A. Housing Society, which cost approximately $6,000 annually. Annual audited statements will continue to be provided for D.E.R.A.

Staff are recommending approval of D.E.R.A.’s request. There is no need in the grant review process to have the Housing Society information as City grants go only to D.E.R.A. The Society has also implemented the financial controls which were requested.

CONCLUSION

Annual audited statements from D.E.R.A. Housing Society are no longer needed. This report recommends that Council amend a condition placed on D.E.R.A.’s grant on June 23, 1992, to delete this requirement.

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(c) 1998 City of Vancouver