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Financial & Operational Reviews

What to expect and how to prepare for standard financial and operational reviews.

Financial Review

Provider agreements with BC Housing include an annual review of your financial statements. The purpose of the review is to ensure your organization is in compliance with the financial terms of your agreement and to ensure any required adjustment to the subsidy is processed. We have put together information in this section to help you prepare for the review.

When to submit

You must submit your financial statements within four months of your fiscal year end.

What to submit

  • Providers whose subsidy is $100,000 or more annually must submit a copy of audited financial statements, including applicable separate schedules in the format prescribed by BC Housing (Financial Statement Framework) every year.
  • Providers whose subsidy is less than $100,000 annually must submit a copy of unaudited financial statements in the format prescribed by BC Housing (Financial Statement Framework) every year.

What we review

  • The revenues and expenses reported in your financial statements in comparison to your approved BC Housing budget
  • Your accumulated operating fund balances, if necessary
  • Your replacement reserve/capital expenditures to confirm that reserve/capital is managed in accordance with the terms of your agreement and with the capital plan
  • Your replacement reserve/capital fund balance(s), if necessary
  • Repayable assistance from BC Housing (if required). We’ll arrange for collection of the repayable portion, if the balance is due back to us

After the review

Based on the review findings, there are four possible outcomes:

  1. No collection or payment is required, as no substantial surpluses or deficits occurred.
  2. No collection or payment is required, as societies are responsible for managing their own operating deficits and surpluses.
  3. BC Housing will arrange collection of subsidy overpayment or operating surplus.
  4. BC Housing will pay the subsidy underpayment or operating deficit.

We’ll notify you of your review results by mail or email.

Important: Make sure you include all the requested information; otherwise the review process could be delayed.

1. Audited financial statements including the following documents must be submitted:

  • Auditor's Report
  • Statement of Financial Position signed by two directors
  • Statement of Operations and Changes in Fund Balances
  • Statement of Changes in Replacement Reserve Fund
  • Statement of Cash Flow
  • Schedule of Housing Surplus Accounts (if applicable)
  • Notes to the financial statements
  • Auditor's note/report indicating that:
    • The reserve is maintained according to the terms of the operating agreement
    • The accumulated surplus is being spent and accounted for according to the terms of the operating agreement, if applicable
  • Auditor’s management letter (or written confirmation from the auditor that no such letter was issued)
  • See a Sample Audited Financial Statement for reference.


2. BC Housing Financial Statement Framework to be prepared or verified by your auditor

  • For each project funded by BC Housing, please complete:
    • Schedule of Operations
    • Schedule of Changes in Replacement Reserve Fund (if applicable)
  • For Independent Living BC Phase 1:
    • Society must account for shelter and non-shelter operations separately and report only the shelter portion in the Schedule of Operations section
       
  • For Independent Living BC Phase 2:
    • Society must account for shelter and hospitality separately from care operations and report only the shelter and hospitality portions in the Schedule of Operations
       
  • For HomesBC rent Support, please complete:

 

1. Unaudited financial statements (optional) that include the following documents:

  • Statement of Financial Position, signed by two directors
  • Statement of Operations and Changes in Fund Balances
  • Notes to the financial statements

2. BC Housing Financial Statement Framework prepared by your accountant

  • You must complete the Statement of Financial Position and have it signed by two directors (if you haven't already submitted it as part of the unaudited financial statements).
  • For each project funded by BC Housing:
    • Schedule of Operations
    • Schedule of Changes in Replacement Reserve Fund (if applicable)
  • For Independent Living BC Phase 1:
    • Society must account for shelter and non-shelter operations separately and report only the shelter portion in the Schedule of Operations
  • For Independent Living BC Phase 2:
    • Society must account for shelter and hospitality separately from care operations and report only the shelter and hospitality portions in the Schedule of Operations

 

Operational Review

The Operational Review helps identify areas of strength and improvement to achieve excellence in the delivery of subsidized housing and supportive programs.

Why and when we do a review

Partnership agreements between BC Housing and housing providers include an operational review conducted every three years to ensure both public accountability and that housing, shelters and programs are:

  • Delivering an appropriate level of service to residents/clients
  • Meeting health and safety standards
  • Fiscally responsible
  • Maintaining the physical structure and grounds of the development
  • Meeting the terms of the operating agreement

Who does the review?

Your non-profit portfolio manager leads the operational review.

What to expect

  • A site tour involving a minimum of one-third of the provider’s housing portfolio, including viewing two units per building
  • A review of rent calculation that typically involves examining rents for five households with portfolios of less than 100 units and up to 10 households for portfolios with more than 100 units
  • A look at maintenance, finances, resident/client management, program supports, administration and human resources

Checklist

Use this checklist to prepare for an operational review. It outlines typical events and milestones that are part of the operational review process:

1. Your non-profit portfolio manager calls you two months prior to the review to arrange a date for the review:

  • Your  non-profit portfolio manager sends a letter confirming dates, requesting copies of the rent documentation and identifies units that will require notice of entry.

  • If identified units are not appropriate, you advise your non-profit portfolio manager and he or she will select different units.

2. You send rent documentation to us.

  • We review the information.

3. You tour the buildings and units with your non-profit portfolio manager.

4. You meet with your non-profit portfolio manager for an operational review.

5. Your non-profit portfolio manager sends you a letter and a follow-up report, usually within 30 days of the review, that:

  • Identifies who the follow up has been assigned to, either BC Housing or you

  • Identifies all timelines for the completion of the item(s) noted for follow up
  • Your non-profit portfolio manager will provide assistance or resources to appropriately respond to the items identified for follow up.
     

6. You address action items with a work plan, within the following timeframes:

  • Items that are a safety concern require remedial action within three months.

  • Financial risk items require follow up within six to 12 months.

  • All other good practice items are given up to one year for follow up.

7. Once you have completed the work plan with the appropriate documentation, the operational review is complete.