In a 2025 ChildFriendly Pro Lunch & Learn, Irfanali Moledina of RMI LLP said that Alberta centers receiving under $250,000 in annual Affordability Grant funding need only an owner-signed attestation, $250,000 to $500,000 requires a review engagement (which he estimated at $6,000 to $8,000), and above $500,000 requires an audit (about $8,000 to $10,000).
What the session covered
According to Moledina, Alberta's Affordability Grant requires licensed child care operators to submit monthly claims and keep records such as attendance hours and parent fees for each child, including transparent reporting of supplemental fees. Because the system relies on operators self-reporting enrolment and hours, he said, the government requires independent assurance once funding reaches certain levels. Moledina described three tiers based on annual Affordability Grant funding: an attestation signed by the owner, a review engagement that relies on inquiry and analytical procedures, and an audit that uses sample testing of attendance records against claims. He said a grant-specific special review or audit, which he referred to as a CAS 805 engagement, covers only grant revenue and allocated expenses such as wages and rent, and costs less than a full-scope audit of the whole business. He also covered general financial obligations for Alberta child care businesses: corporate tax deadlines and installments, the annual return with the Alberta corporate registry, GST rules for child care, budgeting and forecasting for lenders, and detailed bookkeeping that separates each revenue type.
What is the difference between an Affordability Grant review engagement and an audit?
In a review engagement, which Moledina said is required for $250,000 to $500,000 in annual grant funding, the accountant tests whether the numbers are plausible. His example: if a center had fewer children in February than in January but received more funding, the operator must explain why. He said operators should expect one to five hours of questions. In an audit, which he said is required above $500,000, the auditor asks fewer questions but needs full documentation, because the work is sample testing. For a center with 100 children, the auditor might review 20 children over four months, comparing attendance, the funding each child should have generated, what was reported and what was received. He said reporting periods are flexible: some clients used a 15-month first period from January to March before moving to the government's April-to-March year, and early on some used a three-month attestation plus a 12-month audit instead of two review engagements. He estimated review engagements at $6,000 to $8,000 and audits at $8,000 to $10,000, and said a $20,000 to $30,000 quote suggests over-scoping.
What Affordability Grant reporting mistakes lead to clawbacks?
Moledina said the most common problem is incorrect monthly submissions, usually overclaiming. Operators often prepare September claims carefully and then spend less time each month, while enrolment keeps changing. His example was a child who left in February but stayed on the attendance sheet and was claimed every month, leading to a large clawback. Carrying two or three such children forward can create $40,000 to $50,000 owed back, and the government recovers it by cutting funding, in his experience for about two months, so centers need cash available. Krystal Churcher added that she had spoken with an operator facing a clawback of over $50,000 for misreported children. Moledina also said the government has started pushing back on operators who signed an attestation when they needed a review engagement; he had heard of one center whose funding was stopped until reporting was corrected. Because accounting firms are busy, starting late can extend the period without funding. He recommended choosing an accountant with other child care clients who can perform audits and explains the grant-specific scope, typically wages, rent and grant revenue.
What tax, GST and bookkeeping rules apply to Alberta child care businesses?
Moledina said corporate taxes are typically due within three months of year end, or two months for companies with profit above $500,000, and tax filings are due within six months. He said late filing triggers an automatic penalty starting at 10% of tax owed, rising to 50% for repeat late filers. According to Moledina, companies owing the CRA more than $3,000 a year must pay installments; missed installments attract interest he estimated at five to six percent a year. He said the annual return, separate from the tax return, is filed yearly with the Alberta registry; a business that misses it for two and a half years is dissolved. He said child care is not a taxable service, so centers cannot charge GST, and that the CRA has refused build-out rebates and cancelled some centers' GST numbers. By his account, sales of toys, uniforms or prepared meals are taxable, with registration required above $30,000 in yearly taxable sales. For bookkeeping, he recommended monthly reconciliation and recording subsidy, Affordability Grant and parent fees in separate accounts, though not separate bank accounts.
Affordability Grant reporting levels and financial deadlines from the session
| Time | Key point | What centers should do |
|---|---|---|
| 06:40 | Moledina: corporate taxes are due within three months of year end; two months if profit exceeds $500,000. | Calendar tax payment dates and installments with your accountant. |
| 07:01 | Moledina: tax filings are due within six months; late filing starts at a 10% penalty. | File by the six-month deadline every year. |
| 08:51 | Moledina: missing the Alberta annual return for two and a half years dissolves the business. | File the annual return with the Alberta registry yearly, separate from taxes. |
| 09:41 | Moledina: child care centers cannot charge GST; taxable supplies need registration above $30,000. | Confirm GST status before registering to claim build-out costs. |
| 13:03 | Moledina: under $250,000 in grant funding: attestation; $250,000 to $500,000: review engagement. | Identify your reporting level from annual Affordability Grant funding. |
| 15:01 | Moledina: review engagements need one to five hours of the operator's time. | Prepare explanations for month-to-month changes in enrolment and funding. |
| 17:11 | Moledina: audits sample-test attendance, for example 20 children across four months. | Keep attendance sheets and claims matched child by child. |
| 18:13 | Moledina: overclaimed children can create $40,000 to $50,000 clawbacks taken from future funding. | Remove departed children from claims immediately and hold a cash reserve. |
| 21:20 | Moledina estimated costs: audit $8,000 to $10,000; review $6,000 to $8,000. | Ask for a grant-specific CAS 805 engagement instead of a full-scope audit. |
| 27:45 | Moledina: record subsidy, Affordability Grant and parent fees in separate accounts. | Set up separate revenue accounts in your bookkeeping and reconcile monthly. |
How ChildFriendly Pro automates this
The session described operators reconciling claims to attendance by hand and handing year-end records to accountants. At 40:47, Churcher noted that Affordability Grant claims can be tracked and reconciled in ChildFriendly Pro, and at 41:15 Wayne Chen of ChildFriendly Pro added that it exports records to Excel or CSV, tracks staff by task for wage top-up funding and syncs line items to specific products and services in QuickBooks.
Next steps
- Register for the next Director Lunch & Learn
- Subsidy split-billing and online payments for child care
- Alberta child care software for Affordability Grant reporting
- Book a ChildFriendly Pro demo
