There are over 200 improvement districts in BC of varying sizes. Many of the smaller improvement districts are located in rural areas of the province where services such as water, fire protection, and irrigation are financed by direct taxation or user fees.
Financial Reporting Framework for Improvement Districts
In accordance with Part 17, Section 691 of the Local Government Act, improvement districts’ annual financial statements are required to “be prepared in accordance with generally accepted accounting principles for local governments.” These principles are defined as those issued by the Public Sector Accounting Board in Canada (i.e. PSAS). The Local Government Act also requires the annual financial statements to be audited and submitted to the Inspector of Municipalities.
If you are assisting an improvement district in preparing their financial statements, you should be aware that the Accounting Standards for Not-for-Profit Organizations (ASNFPO), CPA Canada Handbook Part III, are not the appropriate starting point for these entities. Significant differences between PSAS and ASNFPO include, but are not limited to, the name of the individual statements, the presentation of the statement of financial position, and the inclusion of budgeted amounts. We encourage practitioners to review carefully the requirements in PSAS.