200607 Financial Statement Update

1
2006-07 Financial Statement Update

• TPFR Information Sessions
• Fall 2007

2
Topics to be discussed

• 2006-07 Financial Statement Changes
• Common Errors noted during Financial Statement
  Review

3
Changes from 2006-07 Revised Estimates

• Section 9 Transportation Allocation
• Section 10 Administration Governance
  Allocation
• Section 11 Pupil Accommodation Allocation
• Section 12 Debt Charge Allocation
• Schedule 3 Capital Fund Expenditure
  Financing

4
Changes from 2006-07 Revised Estimates (cont)

• Schedule 10 and 10 ADJ Operating Expenditures
• Schedule 10.4 Supplementary Information on
  Salary Benefit Expenditures
• Schedule 10 F Employee Benefits
• Schedule 21E Deferred Revenues
• Schedule 21H Future Debt Payments

5
Section 9 Transportation Allocation

• The first phase of the Effectiveness Efficiency
  reviews are complete as per 2007SB14. The
  2006-07 transportation allocation for nine school
  boards includes an adjustment at line 9.7.1
• Refer to Table 9.1 in the 2006/07 Grant
  Regulations for board specific amounts.
  (http//www.e-laws.gov.on.ca)

6
Section 10 Administration Governance
Allocation

• Revisions to this section have been made pursuant
  to 2006 B10 and consistent with the format of
  the 07/08 Estimates
• Trustee honoraria is now calculated fully through
  the forms (rather than calculated amount
  pre-loaded in EFIS). Input is required at items
  10.1.1a to 10.1.1b and 10.2.1a to 10.2.1c
• Item 10.3.5a uses 2005/06 ADE and is preloaded
  from the 05/06 Financial Statements

7
Section 10 Administration Governance
Allocation

• Trustee honorarium allocation for the period of
  Sept to Nov 2006 is calculated by multiplying
  Table 1 of Regulation 357/06 by Item 10.1.1 and
  then dividing by 4
• Trustee honorarium allocation for Dec to Aug 2007
  is calculated at items 10.2 to 10.6.
• The total trustee honorarium allocation for
  2006-07 is reported at item 10.7

8
Administration Governance Allocation

• Section has been revised to incorporate funding
  for student trustees honoraria and expenses
• Board can elect up to 3 student trustees and
  enter the number of student trustees at item 10.9
• The calculation is based on the sum of days each
  student trustee has held office. The number of
  days is to be entered at item 10.9.1. (e.g. 2
  student trustees held office for the whole year
  enter 2 x 365 days)

9
Section 11 Pupil Accommodation Allocation

• New initiative to provide long-term financing
  through OFA for construction costs incurred by
  school board.
• Funding calculation has been changed for the
  following capital programs.
• Prohibitive to Repair
• Primary Class Size Capital
• Growth Schools
• Capital Transitional Adjustments

10
Section 11 NPP allocation

• Timing of entitlement data is preloaded from SFIS
• The data will be updated daily until November 1,
  2007
• If a board is satisfied with the timing of
  entitlement data before November 1, 2007, it
  should request a lock out of the data by
  informing Mark Bonham of the Ministry.
  (mark.bonham_at_ontario.ca or 416-325-8571)

11
Section 11 NPP allocation Page 3

• Debt servicing cost now includes costs related to
  debt on projects that were committed prior to
  August 31, 2006 but the debt was incurred after
  that date.
• POD reserves are reported at item 11.35.9 in two
  columns. ( lt100K and gt 100K)
• Proceeds of Disposition used for the committed
  debt adjustment are calculated at item 11.35.11.
  The adjustment takes into account 50 of amounts
  reported at item 11.35.9 that are each gt100K
• less
• amounts incurred or committed by the board to
  purchase leased facilities or to purchase
  facilities to replace leased facilities in
  2006/07

12
Section 11 NPP allocation Page 3

• At items 11.35.5 to 11.35.7 the calculation is
  adjusted for enrolment pressures entitlement
  that have not yet been constructed and reported
  under the timing of entitlement calculations
• Input required at item 11.35.17 to report the
  reserves that are required to meet future debt
  servicing costs of capital debt committed prior
  to June 12, 2006. Any enrolment pressure grants
  (or part thereof) provided in prior years and
  still unused is to be reported here.

13
Section 11 NPP allocation Page 3

• Item 11.35.15.1 - the protected amount in pupil
  accommodation reserve for prohibitive to repair
  projects not tendered by March 31, 2006 is
  preloaded from Col. 6, Table 16.3 of 2006/07
  Grant reg.
• Item 11.35.15.2 - the protected amount in pupil
  accommodation reserve for Capital Transitional
  projects not tendered by March 31, 2006 is
  preloaded from Col. 7, Table 16.1 of 2006-07
  Grant reg.

14
Section 11 Growth Schools

• Approved pupil places are pre-loaded under items
  11.36.1 and 11.36.2
• The pupil places approved for growth schools are
  converted into a construction cost entitlement at
  items 11.36.4 and 11.36.5
• This amount is adjusted by available capital
  reserves at item 11.36.6 to determine the maximum
  that will be long term financed through the OFA

15
Section 11 Growth Schools

• Actual construction costs to be input at item
  11.36.8
• Amount financed is the lower of actual
  construction costs and the maximum growth schools
  entitlement
• Long term financing arrangements will be made
  after 2006/07. Internal borrowing costs are
  calculated at items 11.36.10 to 11.36.12 using
  the 3-months BA rate at Sept 2006. Actual
  external short term borrowing costs are input at
  item 11.36.13

16
Section 11 Primary Class Size Reduction

• Form revised to determine the cost of PCS capital
  expenditures that are available for OFA long term
  financing
• PCS costs are net of any construction costs that
  the board has already long term financed
• Short term internal and external borrowing costs
  are calculated at items 11.41.1 through 11.41.4
  using an approach similar to Growth schools
• Construction costs already long term financed are
  funded at an annualized payment using 25 years
  amortization and 5.25

17
Section 11 Primary Class Size Reduction

• The 2005/06 PCS allocation net of leasing and
  relocation cost is preloaded at item 11.41.10
  based on 2005/06 Financial Statements
• 2005/06 principal and interest cost for the long
  term financed portion of the approved 2005/06
  cost for portable purchase and permanent PCS
  construction is to be input at item 11.41.11
• An adjustment is made to the PCS allocation for
  the difference between the amounts calculated at
  items 11.41.10 and 11.41.11.

18
Section 11 Best Start

• Introduced in this year
• Approved spaces preloaded at item 11.60.1
• Capital funding will be based on the lower of
  construction costs and the best start
  construction entitlement
• Annual grant for the program is calculated on the
  capital funding amortized over 25 years at 5.25

19
Section 11 -Capital Transitional Adjustment and
PTR

• Both to be financed through the OFA long term
  financing vehicle after 2006/07
• Approved pupil places for Capital Transitional
  Adj. are reflected in Table 16.1 columns 4 and 5
• Approved construction costs for PTR are reflected
  in Table 16.3 column 6
• Internal and external financing costs are
  calculated using a similar approach to Growth
  Schools

20
Section 12 Debt Charge Allocation

• NPP debt is now segregated
• Long term debt information related to NPP
  projects is reported at items 12.31.1 and 12.31.2
  
• and
• Eligible Not Permanently Financed Debt is
  reported at items 12.32.1 and 12.32.2. Both are
  segregated between debt committed before Sept 1,
  2006 and debt committed on or after Sept 1, 2006.
• Separate reporting of debt committed before, on
  or after September 1, 2006 is no longer required
  for PCS and Growth Schools.

21
Section 12 Debt Charge Allocation

• Boards are required to report their short term
  borrowing costs for GPL projects at line 12.17.1.
  Interest costs are picked up from schedule 3A.
• New line 12.21.1 for reporting Permanently
  financed GPL Loans

22
Schedule 3 Capital Fund, Expenditure Financing

• Two new columns have been added to report
  tangible and non-tangible capital assets
• Summary Table has been revised and expenditures
  are now classified as
• Buildings (40 years)
• Portables
• Buildings (20 years)
• Land
• Land improvements
• Construction in Progress (CIP)
• Pre-acquisition and Pre-construction

23
Schedule 10 10 ADJ Operating Expenditures

• NEW Line 76 has been added under Pupil
  Accommodation to report expenditures related to
  Growth Schools ,PCS and Capital Transitional
  Adjustments
• Best Start expenditures are to be reported on
  Line 72 with NPP

24
Schedule 10.4 Supplementary Information -
EXPANDED

• The schedule has been expanded to report
  information for both the elementary and secondary
  panels

25
Schedule 10F Employee BenefitsREINTRODUCED and
NEW FORMAT

• Boards are to estimate the breakdown of employee
  benefits, reported on Schedule 10, by type of
  benefit

26
Schedule 21E Deferred Revenue DELETED

• This schedule has now been removed

27
Schedule 21H Future Debt Payment NEW SCHEDULE

• Report principal and interest payments on
  debentures, capital lease payments and sinking
  fund contributions
• Reporting should be consistent with the
  disclosure in the notes to the Financial
  Statements

28
Common Errors in Submissions

• Incomplete submission package
• Published Financial Statements No Management
  Report
• Differences between information reported in EFIS
  and the audited Financial Statements
• Section 2 Technician Amount not Reported
• Data A.3 Opening Balance not Reported
• F/S submission have not been corrected to reflect
  prior errors noted in Finance Officer Reviews

29
Incomplete Submission Package

• A complete submission includes
• Two (2) signed copies of Schedules 1, 1.1, and
  1.2, and Section 1, printed from the active EFIS
  submission
• Two (2) hard copies of the audited financial
  statements with the auditors report, notes and
  Management Report
• An electronic copy of Capital Activities Report
  to the following mailbox reporting.entity_at_ontari
  o.ca
• One (1) hard copy of the Capital Activities
  Report and Specified Procedures Report
• Active EFIS file
• Electronic copy of Appendix C to the following
  mailbox financials.edu_at_ontario.ca

30
Published Financial Statements No Management
Report

• Boards are required to publish their audited
  financial statements and annual report
  Education Act s 252(2)
• Per 1700.38 -.39 in PSAB, a complete set of
  financial statements includes the signed report
  on Managements Responsibility for the Financial
  Statements.
• Boards are required to send an electronic copy of
  the published FS, notes, auditors report and
  Board Annual Report as published to their
  Ministry Finance Officer

31
Differences between Information reported in EFIS
and the Audited Financial Statements

• Boards must submit annual financial forms
  (Ministry Forms) to the Ministry in addition to
  publishing their audited financial statements.
• These forms are designed in accordance with PSAB
  recommendations and to provide reconciliations
  that comply with the funding requirements of the
  Education Act.
• Except for presentation, the figures in the
  Ministry Forms must correspond with the audited
  financial statements.

32
Section 2 Technician Amount not Reported

• The allocation for SEA Technicians is calculated
  on the Technician Worksheet of each boards Excel
  SEA claim (TAB 2)
• The SEA Technician reimbursement is to be
  combined with the Special Education Equipment
  approval at item 2.2 of Section 2
• The board enrolment reported in Column 1 of the
  Technician Worksheet should reflect the October
  31 FTE and agree with the confirmed enrolment
  (does not include pupils 21 and over or other
  pupils)

33
Data A.3 Opening Balance Accumulated Eligible
Expenditures not Reported

• Opening balance for Deferred Revenue/Accumulated
  Eligible Expenditures must be reported at item
  1.0
• Potential to create artificial Deferred Revenue
  on Schedule 5.1 if board has Accumulated Eligible
  Expenditure and amount is not reported at item
  1.0
• Example
• 10,000,000 opening balance Accumulated Eligible
  Expenditure not reported on line 1.0. Current
  Allocation is 2,000,000 and Expenditures
  1,000,000. 1,000,000 of deferred revenue created
  on Schedule 5.1 in error

34
F/S have not been corrected to reflect prior
errors noted in FO Reviews

• Self Explanatory
• Errors noted by Ministry Finance Officers during
  Estimate and Revised Estimate reviews should be
  corrected in the F/S submission

35
Questions

• ?????