Stark and Marsh Chartered Accountants
Village of Denzil Pilot Project
Purpose of the Project
The purpose of the project was to determine if the asset values recorded by the Village, and
reported in the Financial Statements, were in accordance with the Tangible Capital Asset
Policy approved by the Village council.
Audit Steps

Determine an appropriate sample, using dollar cost interval sampling from the Net
Book Value of tangible assets, from the Asset Register provided by Vemax.

Review the Tangible Capital Asset Policy approved by the Council to determine
useful lives and asset value thresh holds.

Review the asset valuation procedures for the Village provided by Vemax to
incorporate into our testing procedures.

Cross reference streets, sidewalks, water mains and sewer lines to the original maps
for the Village and maps created with new facilities and subdivisions.

Recalculate the cost of the assets sampled, for accuracy and include calculations for
historical costs and associated amortization recorded in the year subsequent to
purchase or construction.
Auditor’s Findings
Streets, Sidewalks, Sanitary Systems and Water Mains

Reviewed Asset Register to ensure Village was following the TCA Policy approved
by council.

Completeness of the Asset Register was verified to Village maps and updated
drawings for additions to Water Treatment Plant, subdivisions and streets.

Verified historical costs by recalculation using NRBCPI indices.

Confirmed that the assets were not amortized in the records of the Village in the year
of acquisition or construction.
Stark and Marsh Chartered Accountants
Village of Denzil Pilot Project
Building and Facilities

Verified values using SAMA assessment values for those facilities not recently
constructed. Actual vendor and construction documentation was used for the newly
constructed facilities post 1985.

Confirmed that the assets were not amortized in the records of the Village in the year
of acquisition or construction.

Verified amortization of assets by recalculation.

Historical costs were used by the Village for buildings and facilities as they were
constructed as early as 1987.
The historical value for the Curling Rink appears to be the replacement value from the 2007
SAMA Assessment. The historical cost should have been calculated using the replacement
value at January 1, 2007 and discounted back to 1987 using the NRBCPI index.
The historical cost of the Curling Rink, added on to the existing skating rink from 1967,
could also be determined to be $80M, the estimated cost of the project per the Council
minutes from March 1989.
It should also be noted that it appears that the Skating Rink and Curling Arena are not
covered by insurance for facility replacement and haven’t been covered since 2003.
Equipment and Machinery

It was noted that the Village included numerous values for equipment that were lower
than the thresh hold value of $5,000. We recommend keeping a separate Excel
spreadsheet to manage this equipment for future purchasing decisions. Administrator
has advised that she will be removing these items for her audit.

Valuation of equipment verified to documentation at time of purchase or
construction.

Verified amortization of assets by recalculation.

The assets were not verified by physical observation.
Conclusion
Tangible Capital Assets, with the exception of the valuation of the Curling/Skating Rink,
were appropriately recorded in accordance with the Tangible Capital Asset policies approved
by the Council for the Village of Denzil