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FMI
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IGF JOURNAL
VOLUME 25, NO. 1
become an unnecessarily labour intensive
project if the focus is placed on the right
areas. For government entities with no
inactive sites (and no active sites with
inactive components, such as wings or
floors of a building not being used), or
those with inactive sites but no suspected
contamination, PS3260 will not have much
impact. For all others, work should be
underway now to ensure March 31, 2015
year end reporting timelines can be met.
First and most importantly, senior
management and audit committees
should be educated to the potential
impact of PS3260 on reported financial
results. Depending upon the number
of contaminated sites, the extent of
contamination present, and the location of
the site, the financial impact could be very
significant. Even though some government
entities financial statements previously
included certain environmental liabilities,
they may not have included all sites, or
measured the liabilities consistently as
required by PS3260.
Secondly, all relevant functions should be
engaged in overseeing the implementation
of PS3260 - not only Finance, but also
Property Management, Operations, Pro
curement, and Legal. Many of the inputs
required to identify and measure potential
liabilities for contaminated sites will come
from the teams overseeing remediation
efforts. The ability to validate key
assumptions is essential to supporting the
integrity of financial information reported
for contaminated sites.
Government entities should be working
now to prepare an inventory of all their
active and inactive sites - not just those
which are potentially contaminated.
Not only does the sites inventory help
to guide the assessment of the financial
reporting impact of PS3260, but it
also helps demonstrate to the financial
statement auditor the sites considered in
the determination of the contaminated
sites liability ultimately recorded. In
addition to assessing the measurement of
significant liabilities, financial statement
auditors will need comfort that all potential
contaminated sites have been considered.
The best way to demonstrate this
completeness is through a full inventory
of sites, along with an assessment of which
sites are potentially contaminated.
As sites are inventoried for government
entities, consideration should be given
to developing a framework to classify
and account for risk which may drive
the estimates for remediation. Where
entities are dealing with a large number
of sites, a framework will better support
efficient groupings of sites with similar risk
profiles, and the benchmarking of sites.
The framework also provides additional
documentation the financial statement
auditor can consider when assessing
appropriate implementation of PS3260.
A gap analysis of existing accounting
policies against the requirements of PS3260
should be performed. This will further
identify the extent of changes required to
meet the requirements of the section.
Once any probable contaminated
sites have been identified, professional
engineers should be engaged to perform
an environmental site assessment to
confirm whether contamination exists
which exceeds an established standard. An
environmental site assessment by a qualified
professional engineer is essential to support
the measurement of the liability for a
contaminated site. Where site assessments
have been performed in previous fiscal
periods, consideration should be given to
whether technology or the understanding
of extent of contamination for the site
has changed which would warrant a re-
assessment. Detailed work plans developed
for a site by the project team should also
be evaluated, considering the degree of
consistency with the environmental site
assessment, and the nature of identified
expenditures which should be captured
within the liability. Where an entity has
multiple sites, it is essential that the nature
of expenditures included within the liability
be consistent site to site.
Edmonton Capital Region
Chapter News
(Formerly Alberta Chapter)
The 2013-2014 fiscal year started with the Chapter’s annual
membership campaign to new and existing members. An exciting
year is being planned, along with a change in the Chapter name
from Alberta to
Edmonton Capital Region
that will bring focus
to the audience being served.
On September 19th, the Chapter held its inaugural Annual
General Meeting. The Board welcomed a number of new
directors, while existing directors have taken on new positions
and challenges. After the AGM, guest speaker Brenda Robinson
captivated the crowd with “Managing Change with Humour and
a Positive Attitude.” Her presentation on listening, laughing and
learning about yourself, other people, and other stuff you may
need and want to know was well-received by all attendees.
In October, Juliet Woodfield from the Treasury Board of
Canada Secretariat visited the Chapter to discuss current topics in
the Federal Government.
The Chapter is planning many future events that appeal
to its municipal, provincial and federal audience. It hopes to
continue its collaboration partnership with the Institute of Public
Administration of Canada (IPAC) Edmonton Chapter, along with
other potential organizations.
Read full details of Edmonton Chapter’s events and activities online
@
, click on the “Chapters” tab.
ACCOUNTING FOR CONTAMINATED SITES
