Professional Documents
Culture Documents
January 25, 2011
Dear Members:
Pride Toronto faced many challenges over the past year. During a year planned for growth of our organization
and expansion of the festival, a confluence of issues compelled us to scale back plans for 2010 and make some
difficult organizational changes.
At the end of the fiscal year, Pride Toronto had a budget deficit of $431,808. This is noted in the financial
statements as excess of expenditures over revenue, including capital fund adjustments [see Financial
Statements, pg. 3].
Since Pride Toronto began the 2009/10 fiscal year with a fund balance of $322,407, the fund balance at the end
of 2009/10 was ‐$109,401 (with the inclusion of the aforementioned deficit). Stated another way, Pride
Toronto began 2009/10 with retained earnings of $322,407, and ended 2009/10 with an accumulated deficit of
$109,401.
For the 2010/11 fiscal year, the board has approved a balanced budget. This balanced budget includes a
provision to replace $40,000 of the $109,401 deficit, representing the first year of a three year plan to
eliminate the shortfall.
There is no question that Pride Toronto had financial difficulties in 2009/10. However, we must commend the
staff and volunteers of Pride Toronto for exercising prudence to ensure the financial situation did not end up
worse than the current result. New accounting systems and procedures have been implemented over the past
year with positive effect, and we continue to work with our funders and credit providers to maintain financial
stability and positive cash flow.
In the attached pages I offer some answers to questions you may have about the Audited Financial Statements.
This report will be delivered at the General Meeting on January 27, 2011, and there will be an opportunity for
additional questions.
Should you have any specific, urgent concerns please contact me at treasurer@pridetoronto.com.
Respectfully,
Daniel Knox
Treasurer
‐ Prepared for Members of Pride Toronto ‐
Treasurer Report
APPENDIX – Q&A
Why weren’t the Audited Financial Statements available for the Annual General Meeting in September?
Pride Toronto’s current bylaws require an AGM to be held no later than four months after the organization’s
annual event – i.e. by the end of October
Unfortunately, it was not possible to prepare and approve audited financials in the time between our fiscal
year end and the time the AGM must be held (as proscribed in the bylaws). Further, our fiscal year end is July
31st, and the month of August is usually spent preparing for the audit which then takes place in September /
October. This means the earliest audited financials could possibly be available would be November, which is
too late for the ‘four months requirement’ noted above. For the last several years, audited financial statements
have been completed and ready for board approval in December or early January.
The bylaws also require that a financial report is presented at the AGM, but not that it needs to be an audited
statement. This is why we presented a financial report based on the trial balance that had been submitted to
the auditors. Please note that as per the Corporations Act, the audited financials are required to be made
available to the members within six months of the end of the fiscal year, i.e. end January.
Why is there a difference between the numbers in the Interim Financial Report (released at the AGM) and
those in the Audited Financial Statements?
The difference between the trial balance deficit of $393,218 listed in the annual report, and the final deficit of
$431,808 is about $38,000. This is accounted for by the following:
Our lease agreement for Pride Toronto’s new offices included two months free rent, which had been
included as a $20,000 savings in the financial report. However, the auditors advised that this amount
should be amortized over the full period of the lease instead of applying the entire amount to the
2009/10 fiscal year. This adjustment resulted in a difference of about $16,000 for the 2009/10 fiscal
year, contributing to almost half of the discrepancy.
The interim financial report included the deferral of approximately $14,000 to the 2010/11 fiscal year,
representing legal expenses incurred in preparing the charitable status application. However, the
auditors advised that the amount should remain in the 2009/10 fiscal year. This adjustment resulted in
a difference of about $14,000 for the 2009/10 fiscal year, contributing to a large portion of the
discrepancy.
A number of year‐end adjustments were not included in the interim financial report, such as prepaid
adjustments, miscellaneous expense reclassifications, and minor adjustments by the auditors. These
adjustments also impacted the discrepancy between the reported deficit amounts.
‐ Prepared for Members of Pride Toronto ‐
Treasurer Report
Why are some of the revenue and expenditure numbers so high? Did you really spend $1,159,040 on media
and promotion?
Under our accounting system, we report cash received and spent. However, we also report on products or
services given in‐kind. This would include both donations and sponsorship agreements (where in exchange for
a particular service, PT provides recognition to the sponsor).
For example, if a media sponsor agreed to provide Pride Toronto with $500,000 worth of free media coverage
in exchange for sponsorship recognition and benefits, this amount would be recorded under both revenue (for
in‐kind value received) and expenditures (for media used in carrying out our work).
I have questions about specific lines or notes in the Audited Financial Statements. What can I do?
There will be time allotted at the General Meeting on January 27, 2011 for questions following the Treasurer’s
Report and presentation of the Audited Financial Statements.
You can also contact the Treasurer at treasurer@pridetoronto.com should you have urgent concerns or are
unable to attend the January General Meeting.
‐ Prepared for Members of Pride Toronto ‐