Consolidation & Year-End Process


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Consolidation & Year-End Process

Consolidated Financial Statements – Background: On July 12, 2006, the Territorial Finance Council (TFC) approved the plan to produce a consolidated financial statement for the territory, to incorporate the financial results of all Salvation Army operations in Canada and Bermuda. The consolidated audited financial statements clearly and accurately reflect the full extent of the Army’s work throughout the Territory.

The background to the rationale for this decision and the importance of consolidated financial statements can be found in two discussion papers published by the Finance Department.

Click here to read the first Discussion Paper and Invitation to Comment issued in September 2005. It provides background on the project and sets out tentative conclusions on how such a project might proceed. Feedback from stakeholders as well as further work by the Finance Department formed the basis for recommendations that were approved in principle by the TFC on April 5, 2006.

Click here to see the second discussion paper, which provided an update to stakeholders on the project and solicit input on the implementation phase. This second discussion paper produced responses from across the Territory, which helped in the development of the implementation plan. To clarify the meaning of consolidation and its impact on accounting staff at ministry units, the Finance Department provided a summary of responses and its replies to these.

Click here to see the Finance Department’s reply to the feedback received from the second discussion paper.

Audited consolidated statements have been published since the fiscal year ending March 31, 2011.

Year End Process

The consolidation process is extensive and requires coordinated effort by numerous personnel within our organization. Annually, year-end guidelines are issued by the financial reporting team at Territorial Headquarters to ensure an efficient process.

The Finance department’s regional offices will complete year end tasks and closing procedures for those ministry units contracting their services. These units will receive direction from the regional office regarding their specific responsibilities (if any). Finance department clients that are externally audited must ensure that key staff is available during the audit period to answer questions. This means they must not schedule vacation time in the month of May.

Ministry units performing their own accounting must follow the guidelines and templates provided below to ensure a successful year end audit.

Ministry units requiring an external audit:

  1. Year end process and requirements. Click here
  2. Consolidation year end timeline – ministry unit responsibilities. Click here
  3. Standard chart of accounts. Click here
  4. Vacation Accrual Template. Click here
  5. Intercompany account explanations. Click here
  6. Year end checklist. Click here
  7. Specified audit procedures. Click here
  8. Financial Statement and notes template. Click here

Ministry units – not externally audited:

  1. Year end process and requirements. Click here
  2. Consolidation year end timeline – ministry unit responsibilities. Click here
  3. Standard chart of accounts. Click here
  4. Intercompany account explanations. Click here
  5. Year end checklist. Click here
  6. Specified audit procedures. Click here

Financial Reporting Team (THQ) and Contact Information:

Territorial Headquarters has a team which is dedicated to the successful completion of consolidated financial statements.

The team is responsible for:

  • establishing accounting policy and treatment to meet generally accepted accounting principles for not-for-profit organizations;
  • standardizing report format and presentation to achieve consolidation;
  • providing support to ministry units on reporting requirements, chart of account maintenance and structure, accounting related issues and policy and disclosure requirements;
  • compiling financial statements of all ministry units across the territory;
  • assessing the quality and consistency of presented financial statements;
  • assessing the accuracy and completeness of financial statements;
  • developing systems to facilitate the consolidation process;
  • managing the consolidation process, ensuring all information is summarized and presented for examination by external auditors.

The consolidation team can be consulted at any time on accounting treatment, disclosure issues or any other matter relating to the consolidation process. The team can be contacted by email at THQ_Consolidation@can.salvationarmy.org and will be pleased to work with ministry units to resolve any questions or issues they have.

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