Don't Risk Losing the Alberta Affordability Grant! Act Fast to Ensure Licensed Daycare and Dayhome Compliance

Givens LLP | May 23, 2023


Did you know the Government of Alberta has implemented financial reporting requirements to licensed Daycare and Dayhomes in order to remain eligible for the Alberta Affordability Grant? This is being done to ensure that the grant funds are being utilized appropriately.

Secure your funding! Audits are due June 30, 2023 but the Government of Alberta is providing extensions but these requests need to be made as soon as possible.

Why are they making you do this? The Government of Alberta is looking to safeguard the integrity of the Alberta Affordability Grant and ensure compliance that funds are being used properly. This can be a rather daunting undertaking, so we’d like to help make it that much easier!

To assist child care providers, like yourself, in navigating through this process, we have prepared a summary for you regarding the directed or suggested financial reporting requirements.

Good to Know

Pro Tip: Consider reaching out to the government and requesting an extension if you anticipate needing more time to complete the directed or suggested financial reporting. While this is not guaranteed, it is worth exploring, as it may alleviate some pressure in meeting the tight deadline.

Requirements for Child Care Operators

These new financial reporting requirements enacted by the Government of Alberta for all grant recipients are based on the level of funding received. Essentially, the amount of funding you receive will determine which type of financial engagement the Government of Alberta requires of you.

To provide clarity, we have outlined the requirements for each of the three income thresholds as outlined in the Affordability Grant Agreement:

    1. Funding up to $250,000 = Compilation Engagement (optional)
      For grants totalling $250,000 or less, grant recipients are required to provide a certificate signed by appropriate officers (as determined by the recipient). This certificate attests that the funding was used solely in accordance with the purpose stated in the grant agreement. Additionally, a financial report should be submitted detailing the actual funding spent and any funds that need to be returned.

    2. Funding from $250,001 to $500,000 = Review Engagement
      If the grant amount falls between $250,001 and $500,000, grant recipients are required to provide a review engagement report along with accompanying financial statements. These financial statements can be presented as a separate statement or as a schedule attached to the recipient's overall unaudited financial statement.

      The report and statements should demonstrate the income and expenditures related to the grant. Additionally, any unused funding should be returned in accordance with the agreement. This statement confirms that the funding was used appropriately as per the grant agreement.

    3. Funding $500,000 and above = Audited Financial Statement Engagement
      For grants exceeding $500,000, grant recipients must provide an audited financial statement. Similar to the previous threshold, the financial statement can be presented as a separate statement or as a schedule attached to the recipient's overall audited financial statement. This statement should outline the income and expenditures related to the grant, along with the return of any unused funding in accordance with the agreement. The purpose of this statement is to ensure that the funding was utilized properly as per the grant agreement.

      Compliance with these reporting obligations is vital to maintain transparency and accountability in grant utilization. If you are a Licensed Daycare or Dayhome that receives any subsidy grants, you will need to identify which income threshold you fall under in order to decide which financial engagement is required of you.

Different Types of Financial Engagements

There are a few types of financial assessments – or engagements – that are required, and it all depends on your income threshold. Let’s take a look at a brief analysis of the three types of engagements available, so that you can navigate which one will work for your business.

    1. Compilation Engagement
      A compilation engagement involves unaudited financial statements and provides no assurance of their accuracy or freedom from material misstatements. The information is based on the representations made by management without any independent verification.

    2. Review Engagement
      A review engagement offers limited assurance. It involves analytical procedures and inquiries to assess the reasonableness of the information presented in the financial statements. Unlike the Compilation Engagement, the Review Engagement provides some level of assurance of the accuracy of financial statements.

    3. Audit Engagement
      An audit engagement offers the highest level of assurance. It includes in-depth procedures such as examining source documents, third-party confirmations, physical inspections, tests of control, and more. The goal is to provide an objective evaluation of the company's internal controls, along with recommendations and any significant findings. A financial reporting ensures that the financial statements are free from material misstatements.

Compliance with the Alberta Government's directed or suggested financial reporting mandate for Licensed Daycares and Dayhomes is of the utmost importance. Failure to comply may result in the loss of the Alberta Affordability Grants, potentially impacting the sustainability of your childcare facility.

Givens is here to offer our professional directed or suggested financial reporting services, ensuring that your income statement meets the government's requirements. Time is of the essence with the deadline looming as the end of June approaches - act now, book your compilation, review, or audit engagement appointment today, and secure the future of your facility -  Contact us today!