Whereas the Inspector of Municipalities requires that new business corporations mandate the preparation of audited financial statements in their corporate articles; And whereas municipally-owned corporations may consider business ventures or partnerships with other business corporations for which the articles of incorporation may not include the requirement for audited financial statements: Therefore be it resolved that the UBCM request the Province of British Columbia to legislate changes to mandate the preparation of audited financial statements in the articles of incorporation for municipally-owned corporations and the entities for which the municipally-owned corporations hold significant influence or control.
Ministry of Municipal Affairs Section 185 of the Community Charter and 265 of the Local Government Act state that local governments may only incorporate, or acquire shares in, a corporation with the approval of the Inspector of Municipalities Inspector. The role of the Inspector is to ensure that the incorporation, or acquiring shares, of a corporation protects the public interest and does not expose the local government to undue risk. As part of the approval requirements, the articles of incorporation must state that the corporation will appoint an auditor and have audited financial statements prepared each year. This requirement is specifically included in formal provincial policy, found in the provincial guide titled Launching and Maintaining a Local Government Corporation Guide. Annually audited financial statements are essential to the Inspectors approval and, as noted above, are already covered through formalized policy.