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2007-08 Financial Statement Update Session: School Board Finance Staff and Auditors

This session provides information on financial statement changes for 2007-08, common errors to avoid, transfer payments, and financial reporting. Topics include capital fund expenditure, good places to learn project reporting, tangible capital assets continuity, operating fund revenues, transportation allocation, and debt charge allocation.

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2007-08 Financial Statement Update Session: School Board Finance Staff and Auditors

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  1. PUT TITLE HERE 2007-08 Financial Statement Update Information session for School Board Finance Staff and External Auditors Transfer Payments and Financial Reporting Branch Fall 2008

  2. Topics to be discussed • 2007-08 Financial Statement Changes • Common Errors noted during Financial Statement

  3. Changes from 2007-08 Revised Estimates • Warnings: Excel report under EFIS Report module • Interest Earned on Prefinanced Debenture Proceeds • Schedule 3: Capital Fund – Expenditure & Financing • Schedule 3A: Good Places to Learn (GPL) • Schedule 3B: Capital Asset Expenditures • Schedule 3C: Tangible Capital Assets Continuity Schedule • Schedule 9: Operating Fund Revenues • Section 9: Transportation Allocation • Section 11: Capital Programs • Section 12: Debt Charge Allocation • Data Form E: Expenditure and Revenue by Program • Appendix H: Staffing

  4. Warnings – Excel report • EFIS Report module creates a new Excel report that boards are now required to use to provide explanations for warning messages. • The completed Excel report is required as part of the board’s submission to the Ministry and an electronic copy of this report shall be sent to the following mailbox: financials.edu@ontario.ca

  5. Interest Earned on Pre-financed Capital • Some Debenture proceeds have been raised to finance future building projects. • Interest earned on investment of these debenture proceeds must be transferred to the internally restricted capital reserve. • Proceeds of the debenture and any interest earned on that prefinancing are both applied to future capital projects or the future debt servicing costs of the projects. • The amount of pre-financing is reported in the appropriate areas on Schedules 3 and 5

  6. Schedule 3 – Capital Fund, Expenditure & Financing • Same as form used in 2006-07 Financial Statements • Two columns added to report tangible and non-tangible capital assets • Summary Table

  7. Schedule 3A – Good Places to Learn • Provides for reporting GPL Stage 3 projects • Sep 4, 2007 3-month BA rate is 4.94286 (item 1.4) • External short term borrowing now recognizes interest up to 3 months BA +20 basis points (item 2.1) • OFA long term financing of GPL expenditures preloaded at items • 1.2.1 (Nov/06 issue) and • 1.2.1a (Mar/08 issue)

  8. Schedule 3B – Capital Asset Expenditures • Schedule removed as a result of revisions made in Schedule 3.

  9. Schedule 3C – TCA Continuity Schedule(new schedule) • PS 3150 is to be fully implemented in 2008-09 school year • School boards required to disclose information on Tangible Capital Assets (TCA) in Notes to Financial Statements to the extent of reliable information. • Schedule supports this note disclosure

  10. Schedule 9 – Operating Fund Revenues Other Revenue • Item 5.1 added in Other Revenue to record payments received from Gov’t of Ontario that is not grant related. • Example: salary recovery for employees on secondment to the government. Grants from Other Ministries • Item 8.2.5: is used for reporting funding under LMDA (Labour Market Development Agreement) • renamed EBSM (Ontario Employment Benefits and Support Measures) • Agreement is between Province and Gov’t of Canada and took effect Jan 1, 2007

  11. Section 9 – Transportation Allocation • The results of the Effectiveness & Efficiency reviews and study costs on transportation are included as part of the 2007-08 transportation funding at item 9.7. • Refer to Table 9.1 in the 2007-08 Grant Regulations for board specific amounts. (http://www.e-laws.gov.on.ca)

  12. Section 11 – NPP allocation • Timing of entitlement data for NPP is preloaded from SFIS • The data will be updated daily until the cut-off date of October 15, 2008 • If a board is satisfied with the timing of entitlement data before October 15, 2008, it should request a lock out of the data by informing Mark Bonham of the Ministry. (mark.bonham@ontario.ca or 416-325-8571)

  13. Section 11 – NPP allocation Pages 1 & 2 • Costs of relocating portables now recognized as part of Timing of Entitlement costs – see items 11.31.8.2 and 11.34.8.2

  14. Section 11 – NPP allocation Page 3 • The calculation of committed debt servicing cost includes • NPP capital debt for NPP project costs pre Aug 31/06 • Interest costs related to debt on projects that were committed prior to Aug 31/06 but the debt was incurred after that date. …cont’d

  15. Section 11 – NPP allocation Page 3 (cont’d) Revisions to Calculation of Committed Debt servicing cost include: • Enrolment pressure adjustment (11.35.5 to 7) – provides for pupil places relating to 2005 Capital Policy Adjustment entitlement not yet constructed and reported under timing of entitlement. • Debt servicing costs for committed debt (11.35.8 to 11.35.8.4) – for a school leased on or before Aug 31/06 and replaced by a school with long term debt, the debt servicing costs are recognized. (Note: sum of debt cost and current lease payments not to exceed 2006-07 lease payments. • Unused enrolment pressure grants are not included in reserves adjustment. Board to report unused EP grants that is part of Aug 31/06 capital reserves (line 11.35.22).

  16. Section 11 – NPP allocation Page 3 (cont’d) • POD reserves used in determining adjustment to capital debt commitment includes: • POD relating to schools that are prohibitive to repair • Other proceeds of disposition • Item 11.35.9 and 11.35.10 now used to report <100K and =>100K (formatting is different than last year) • Debt servicing costs used for calculation of capital debt commitment assistance (Item 11.35.8) must: • Agree with Capital Liquidity Template (note that ministry will adjust at 11.35.8A during review of F/S), and • Agree to information reported in Section 12

  17. Section 11 – Growth Schools • Growth schools funding calculation has been changed • Table amount from Grant Regulation now used at 11.36.1 • Previous calculation used pupil places multiplied by benchmarks

  18. Section 11 • PTR, PCS Capital, Growth Schools, Capital Transitional Adjustment Programs (French language boards) • Short term interest recognize for funding is limited to higher of actual interest and 3 month BA rate + 20bp • The OFA long term financed portion of the program expenditures and corresponding P+I are preloaded in the forms.

  19. Section 12 – Debt Charges Allocation • OFA loan issued in March 2008 pre-loaded at 12.12.2. • Debt servicing costs for replacing schools leased on or before Aug31/06 reported at 12.31.2 as “Post September 2006 debt” (Now recognized in committed debt provision in NPP allocation). • Amounts reported as “Not permanently financed” includes amounts funded by internal borrowing from other funds and short term external borrowing, but only report interest on external borrowing.

  20. Section 12 – Debt Charges Allocation (cont’d) • Where long term debt issued includes: • Permanent financing of NPF debt, and • Pre-financing of capital needs • Only report the amount of the debenture issue relating to NPF debt as retirement of the NPF debt in column 2. • In Permanently Financed section of Debt issue boards report the entire debenture issue including the pre-financed portion.

  21. Data Form E – Expenditure and revenue by program • Some cells are opened across programs for board input: • Directors/Supervisory Officers • Board Administration • Supporting schedule – Additional Support for Students includes: • Parent Involvement (col 30) • Community Use of Schools (col 31)

  22. Appendix H – Staffing • New line for Child and Youth Workers (CYW). • Excludes any CYWs hired as Teaching Assistants. • Includes CYWs hired under Safe Schools initiative. • New line for Library Technicians: • Implements accountability for new library staffing funding provided to school boards.

  23. 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 • Section 10 – Student Trustee Calculation • Data A.3 – Opening Balance not Reported • F/S have not been corrected to reflect prior errors noted in FO Reviews

  24. 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’ and management reports and notes, a hard copy of the warning message explanation report from EFIS-Reports module • Active EFIS file • Electronic copy of Appendix C to the following mailbox: financials.edu@ontario.ca • Electronic copy of Excel report on explanation of Warnings to the following mailbox: financials.edu@ontario.ca

  25. Published Financial Statements – No Management Report • Boards are required to publish their audited financial statements and annual report – Education Act s 252(2) • PSAB s.1700.38 -.39: a complete set of financial statements includes the signed report on “Management’s Responsibility for the Financial Statements”. • Boards required to send an electronic copy of published FS, notes, Auditors’ Report, Management Report and BoardAnnual Report, as published, to the Ministry.

  26. Information reported in EFIS differs from Audited Financial Statements • The Ministry 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.

  27. Section 10 – Student Trustee Calculation • 10.9.1 is for the cumulative number of days in office for ALL student trustees. • Check the outcome of the math at 10.9.2 to ensure board is properly compensated for student trustees.

  28. 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 • Use the closing balance from the final FO version of previous year’s Financials so that adjustments are accountedfor.

  29. F/S have not been corrected to reflect prior errors noted in FO Reviews • Errors noted by Ministry Finance Officers during Estimate and Revised Estimate reviews should be corrected in the F/S submission

  30. Contact Information • Finance Officer - Firstname.lastname@ontario.ca SANJAY CHITAPAIN JANE COLLINS DAVID CORKETT CHERYL DALRYMPLE GREG FIORIDO VINOD GUREWAN TIM KIELMAN BRENDA SHAW LISA TARINI2 DAVID WRIGHT2

  31. Questions ?????

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