Finance

Ministerial Order 54/96 delegates the financial function to the KID Council. Council has two functions in the KID finance system. First, it recommends where KID funds go by establishing an annual budget. The Chief Administrative Officer presents this recommendation to the Minister, who approves a final budget estimate and rate of taxation through a Ministerial Order.

Council’s second function is to monitor municipal program expenditures using the financial information prepared by KID Administration. Financial Statements and Year End Reporting are prepared by Administration through contracted services with a recognized Chartered Accountant. These financial reports are audited by the Auditor General of Alberta.

Budgeting

Council’s Budget and Audit Committee recommends the KID's priorities for the next year by setting aside money in the budget for each program and service. Council’s role in the budget process includes the following:

  • Setting overall goals and objectives (policy making)
  • Allocating the resources (staff and money) to meet goals and objectives (policy making)
  • Monitoring operations and programs to ensure they are cost effective and achieving results (program monitoring)

The budget itself has two parts, operating and capital.

Operating Budget

The Operating Budget is a detailed estimate of how much the KID needs to spend to meet its financial obligations and provide programs and services.

These combined obligations constitute the funds the KID needs to operate for the budget year. The next step in the budget process involves estimating all the revenues the KID will receive, except those from property taxes. These can include utility services, grants, sales of services and products. The difference between the KID's operating fund requirements and the estimated revenues is what the KID needs to raise through property taxes.

Capital Budget

The Capital Budget is comprised of funds that are set aside for buying, financing, leasing or building fixed assets such as land, buildings, utility facilities and major equipment. Large asset acquisitions that the KID will need and use for a number of years are planned for in advance and amortized over a number of years once obtained.

Capital Budget planning is carried out on a five-year cycle. The Capital Budget Plan sets out:

  • What capital expenditures are needed (new assets or replacement of assets)
  • When each is needed (setting priorities on when assets are needed)
  • How the assets will be purchased
  • Development of a Capital Reserve 5-Year Plan so funds are available when needed

The goal of the Capital Reserve 5-Year Plan is to achieve a balance of $200,000 and maintain a minimum of $125,000. Council has considerable flexibility in setting up the Capital Budget. Capital purchases may be paid for through a combination of sources:

  • Taxes
  • Funds generated from the sale of other assets
  • Money set aside in Capital Reserve Funds
  • Utility payments and other user fees
  • Development agreements
  • Donations and government grants

The Budget Cycle

The KID budgeting process has two parts: an Interim Budget and a Final Budget. The Interim Budget guides the KID’s financial decisions until all information from the previous year is finalized and the Minister can set a tax rate. Setting the tax rate is one of the most important parts of the KID budget process.

Interim Budget

Preparation of the Interim Budget begins each year in June and concludes with the approval of the Interim Budget by the end of November. This budget allows the KID to identify the funds needed for operating into the next year. Approval of the Interim Budget allows the KID to pay bills and other financial obligations (such as education requisitions) until tax revenues flow in later in the year.

Final Budget

The financial statements for the previous fiscal year are completed by May of each year. This information allows Council to fine-tune the Interim Budget, if required. Council then directs the Chief Administrative Officer to make a recommendation to the Minister to establish the rate of taxation by Ministerial Order. The final budget becomes official when it is approved by the Minister.