HomeMy WebLinkAbout05bi Memo re Financial Statements 2010-2011 Public
M E M O R A N D U M
To: Trustees
From: Jennifer Adams, Director of Education
Michael E. Clarke, Chief Financial Officer
Re: Questions at 05 December Special Board Meeting on 2010-2011 Financial
Statements
Date: 06 December 2011
1) In response to a trustee request for a break out of the make up of the net change from the
2010-2011 budget to the actuals, in particular how was it possible to have not used the
budgeted amount of reserves ($7.3M) and have a $2.3M surplus?
Staff provides the following:
As shown in Report 11-210 to the 28 November, 2011 Audit Committee meeting in
paragraphs 7 & 8:
In summary, the changes from the original budget are:
Increase Increase in Net
in Revenue Expenditure Surplus
Increase in GSNs $ 6.8 M $ 5.4M $ 1.4M
Accounting Changes 4.8 5.4 <.6>
Non-GSN 5.9 5.8 .1
Cafeteria 1.4 -- 1.4
$18.9 $16.6 $ 2.3
Expense Improvements
Planned -- <7.6> 7.6
Other _ -- <6.7> __6.7 _
$18.9M $2.3M $16.6M
The $16.6M was used to:
Not have to use Reserves as budgeted $7.3M
Planned Surplus:
Board approved multi-year plans 3.9
Accounting change (Cafeteria) 1.2
In-year funding of W.F. Program 2.5__
$14.9M
Year-End Net Income Surplus: ($16.6M-$14.9M) $ 1.7M
Transfer from Reserves to fund
Board financed amortization: .6_
Year-End Surplus for Ministry Compliance $ 2.3M
The details of the revenue and expense summaries are:
Revenue:
Increase in GSN due to enrolment changes
and maximizing grant claims: $ 6.8M (1.0% of GSN budget)
Accounting changes offset by increased
equal expense - GSN: 4.8 (0.7% of GSN & amortization
grant)
- non-GSN 1.4 (4.2% of non-GSN)
Increase in non-GSN revenues: 5.9_ (17.4% of non-GSN)
Total Increase in Revenue: $18.9M (2.6% of total revenue)
Expenses:
Increase in expenses due to increased
enrolment and related factors: $ 5.4M
Increase in expenses due to accounting
changes, offset by equal revenue: 5.4
Increased expenses from non-GSN
revenue change: 5.8
Decreased expenses in compensation budget: <3.8> (0.6% of comp.)
Decreased expenses in non-compensation
budget: <10.5> (6.8% of non-comp.)
$ 2.3M
The $14.3M expense improvements ($3.8M plus $10.5M) is made up of $7.6M of planned
surplus and $6.7M of other causes.
Please note that Report 11-210, Appendix A, is in the Ministry compliance format, and so
excludes the numbers of the consolidated entities (OCENET, schools, and school councils)
and the PSAB items that the Ministry does not expect school boards to be responsible for.
This changes the $5.9M PSAB surplus in the Financial Statements to a school board non-
PSAB Ministry compliance surplus of $9.3M. The $9.3M includes the $7.6M of planned
surplus.
The PSAB changes that the Ministry did mandate that we had to include in the compliance
calculation added $4.8M of revenue and $5.4M of expense. The ($0.6M) hit was the result
of amortization of OCDSB financed capital projects, and was covered by a transfer within
There
was no overall negative impact on working fund reserves from this accounting treatment.
The external auditors asked for a change in accounting to record the central cafeteria
royalties as revenue, which added $1.4M of revenue as a one time conversion item.
The Board then planned to under spend its expenditure budget in order to create a series of
specific items the $7.6M of planned surplus. Please see Appendix A of Report 11-210 for
a description of the planned surplus. The Board had agreed all four items in previous years
(retirement gratuities, energy project repayment and cafeteria) or the current year (WiFi).
That leaves $6.7M of other expenditure under spending, most of it from non salary &
benefit budgets. This is 4.4% of the non compensation budget of $152.2M. Staff has
already indicated its focus on this area to find budget reallocations to help with the 2012-
2013 budget.
In summary, the $6.7M expense savings, plus the $2.3M net gain from the new additional
revenues plus the $06.M of internal funding for the amortization on new Board financed
capital projects, created a pot of $9.6M, which covered not having to use $7.3M of reserves
and left $2.3M of unplanned surplus.
2)Why is there the large increase in Grants for Student Needs from 2010 to 2011, as shown on
the Consolidated Statement of Operations and Accumulated Deficit?
The growth in GSNs before the PSAB adjustments is caused mainly by the increase in
grants to fund the economic increases given under the provincially sponsored collective
bargaining agreements, plus the impact of growing enrolment. See Report #11-210 to the
28 November, 2011 Audit Committee for a discussion of the changes in grants.
The major cause for the large year to year increase is due to the deemed transfers to and
impact of the capital related funding that has to be included or excluded from the Grants for
Students Needs line in the Statement of Operations. This causes a change of $16.4M,
between the two years, moving from a minus $8.3M in 2010 to a positive $8.2Min 2011.
Staff provides the following analysis: (Please see chart below)
This new PSAB requirement started in 2010-2011 and so we are obliged to restate 2009-
2010 in order to have comparative numbers. As such, there is not the same level of detail
available for 2009-2010.
MAKEUP OF GRANTS FOR STUDENT NEEDS REPORTED ON FINANCIAL STATEMENTS
2009-102010-11% CHG
Pupil Foundation$321,557,885$334,383,6263.99%
School Foundation44,310,21745,770,8973.30%
Special Education73,903,00276,931,9594.10%
Language21,012,43022,601,7737.56%
Learning Opportunity16,840,92217,570,8514.33%
Adult & Cont Ed5,848,8846,456,46510.39%
Teacher Qualification & Experience36,958,39042,474,90214.93%
New Teacher Induction411,001463,80312.85%
Transportation32,444,17633,483,3693.20%
Admin & Gov16,517,87616,582,1810.39%
School Operations (Facilities)68,694,95869,978,2111.87%
Community Use of Schools992,7941,018,7902.62%
Declining Enrolment81,112
Program Enhancement1,418,5501,399,250-1.36%
First Nation & Metis460,715842,63882.90%
Safe Schools1,732,9591,748,8720.92%
Permanent Financing of NPF2,523,1152,523,1150.00%
GSNs BEFORE DEFERRED REVENUES & CAPITAL$645,708,986$674,230,7024.42%
Ministry assumes part of GSN will be used for
Minor Tangible Capital Assets (MTCA)-16,855,768
Add back amount not used for MTCA13,562,156
Portion of Facilities Renewal not used for capital
projects (from 11,764,253)4,160,500
Interest on capital debt7,238,866
Unused portion of Spec Ed
Special Equipment Allocation-685,597
OMERs Contribution Supplement740,562
IMPACT OF DEFERRED REVENUES AND CAPITAL-8,283,2038,160,719198.52%
PSAB Adjusted Grants for Student Needs$637,425,783$682,391,4217.05%