Financial & Operational Reviews

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

A new online tool for the Operational Review process is in the beta stage of development. Stakeholders are participating in testing and sharing feedback. We'll share updates on the launch of the new tool after the beta phase is complete.

Learn about the new Operational Review Process

Financial Review

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:

  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.

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:
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:

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

Operational Review

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 2: Asset and Facility Management

There are four standards under this core area:

 

Core Area 3: Client and Community

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

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