Financial & Operational Reviews

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

We've launched a new and improved multi-step Operational Review process and PartnerHub, an online platform to conduct the new Operational Review.

Learn about the new Operational Review Process

Guide Sheet: OR-Administration-Register as a New User

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.

BC Housing’s Financial Review is the process of comparing the revenues and expenses submitted by Non-Profit Providers to the approved budget and applicable Operating Agreement requirements, to ensure that the appropriate level of subsidy is provided. The Financial Review process is also used to identify any indicators that may warrant a more in depth examination of the revenues and expenses submitted by Non-Profit Providers.

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:

No collection or payment is required, as no substantial surpluses or deficits occurred.
No collection or payment is required, as societies are responsible for managing their own operating deficits and surpluses.
BC Housing will arrange collection of subsidy overpayment or operating surplus.
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.

BC Housing Subsidy Equal to or Over > $100,000 Annual Filing Requirements

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 of Audited Financial Statements 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:
- Rent Support Subsidy Reconciliation Report

BC Housing Subsidy Under < $100,000 Annual Filing Requirements

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
For HomesBC Rent Support:
- Complete the Rent Support Subsidy Reconciliation Report

Still looking for answers? Consult our Financial Statement Framework Frequently Asked Questions .

Operational Review

The Operational Review helps identify areas of strength and improvement to support BC Housing funded non-profit partners.

What to expect

A site tour involving one-third of the providers housing portfolio
A review of rent calculation
A look at policies and procedures related to Organization & Governance, Asset and Facility Management, Client and Community, and overall understanding of programs and agreements

The Operational Review process has four Core Areas

Organization and Governance
Asset and Facility Management
Client and Community
Understanding of Agreements and Programs

Each Core Area includes a set of standards and elements. They apply to all BC Housing funded non-profit providers required to complete an operational review.

The Core Area standards and elements allow for flexibility for non-profits to demonstrate compliance. They account for factors impacting their organization such as:

the provider size and scope
and the PESTLE (Political, Economic, Sociological, Technological, Legal, Environmental)

Resources

These resources describe how a provider can demonstrate that they meet each of the standards, with PESTLE considerations where applicable.

Note: All information and resources are preliminary versions subject to change.

Core Area 1: Organization and Governance

There are four standards under this core area:

Core Area 1: Standard 1 establishes board accountability for adherence to laws, regulations, and BC housing agreements.
Core Area 1: Standard 2 emphasizes the importance and responsibility of operational management positions.
Core Area 1: Standard 3 focuses on effective strategies, policies, and frameworks to ensure long term success.
Core Area 1: Standard 4 ensures organizational viability through effective financial management.

Core Area 2: Asset and Facility Management

There are four standards under this core area:

Core Area 2: Standard 1 ensures that all facilities under the provider are safe, secure, and free of hazards.
Core Area 2: Standard 2 informs us of strategic and long-term capital planning to ensure that assets are effectively and efficiently resourced.
Core Area 2: Standard 3 centres on business continuity and resilience through risk assessment and mitigation policies.
Core Area 2: Standard 4 revolves around environmental stability.

Core Area 3: Client and Community

This core area highlights the value of communication strategies for staff, clients, and community. There are three standards:

Core Area 3: Standard 1 focuses on improving client and community interactions through staff engagement.
Core Area 3: Standard 2 informs effective feedback and complaints policy.
Core Area 3: Standard 2 supports rapport with community stakeholders.

Core Area 4: Understanding of Agreements and Programs

This core area is specific to each funding and program type. The six modules are:

Training Resources

Course: The Operational Review Process and System for Providers

Description: An introduction to Operational Review for housing and service providers. Topics include:

The Operational Review assessment framework
The PartnerHub online platform
The 6 key process steps of an Operational Review (initiate, demonstrate, preliminary, site visit, report, close)

Prerequisites: There are no prerequisites for this course.

Delivery Style: Online, self-paced

Cost: Free ($0)

Registration:

Sign up for the BC Housing Learning Portal at https://learn.bchousing.org/
Locate “The Operational Review Process and System for Providers” in the course catalogue and click “enrol now”

System Requirements: Microsoft Edge, Chrome, and Firefox are preferred browsers when using this portal. In addition, please ensure that JavaScript and Cookies are both enabled on your devices for the site to function correctly.

Operational Review: The Process and System | A Handbook for Providers

For more information about the operational review process, reach out to your non-profit portfolio manager.