Written By David Gomez
STRATHROY-CARADOC - Questions about municipal reserves, past accounting estimates and the meaning of a “clean” audit dominated discussion as council reviewed its 2025 audited financial statements on August 4.
Representatives from MNP told council the municipality would receive an unmodified audit opinion, meaning the financial statements fairly represent Strathroy-Caradoc’s finances under Canadian public-sector accounting standards.
The municipality finished 2025 with about $50 million in operating revenue and $42.8 million in expenses. After capital-related revenues and other items were included, the annual surplus was approximately $12.28 million. Cash and cash equivalents stood at $68.08 million at year-end.
Auditors did, however, flag the sufficiency of some municipal reserves and a $2.38-million operating deficit within accumulated surplus. MNP representative Ashley Didone explained that the deficit largely reflected the timing of capital spending that is expected to be financed through borrowing after year-end.
“It is something that we wanted to flag just from the perspective of ensuring the sufficiency of reserves is reviewed,” Didone said.
Treasurer Bill Dakin told council that loan applications were already moving forward and that the financing would replenish reserve and operating balances. “Those funds will flow back into those reserves,” he said. “So, it gets us back on course.”
Councillor Greg Willsie questioned how an issue raised during the previous year’s audit involving depreciation of municipal assets had been resolved. Didone explained that auditors initially estimated a possible error because some assets were being depreciated at rates different from those listed in the municipality’s accounting policy.
Further review determined the rates being used were appropriate, she said, and it was the written accounting policy that needed updating rather than the asset values themselves.
Willsie also asked about a previous staff report that he recalled showing cash holdings in the high $70-million range, compared with the $68.08 million reported at the end of 2025. Dakin said staff would review the earlier report and provide an explanation of the difference.
Councillor Brian Derbyshire asked whether the reserve issue was the only significant concern identified by auditors.
“That was the significant item that we wanted to bring to your attention,” Didone responded.
Derbyshire also asked MNP to explain an unmodified audit opinion for residents unfamiliar with accounting terminology.
“That would mean a clean opinion that the financials are fairly presented,” Didone said.
Following the discussion, council approved the municipality’s 2025 draft audited financial statements.
