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Capital Wrap-Up Audit Procedures: Grants for Student Needs

This template provides specified audit procedures for conducting a capital wrap-up audit for the Grants for Student Needs program. It includes guidelines for reviewing debt schedules, project eligibility amounts, not permanently financed projects, and pupil accommodation debt reserves.

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Capital Wrap-Up Audit Procedures: Grants for Student Needs

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  1. Specified Audit ProceduresforCapital Wrap-Up Template Financial Analysis & Accountability Branch September 2010

  2. Purpose & Background • Capital Wrap-Up: Province is assuming $8.6B of Boards’ debts as of August 31, 2010 • Each Board’s supported debt as determined through the Capital Wrap-Up Template (CWT) will represent the Accounts Receivable balance from the Government of Ontario on the 2009-10 F/S • Ministry must meet audit requirements for Public Accounts 2007-08 Grants for Student Needs

  3. Submission Timelines • Ministry to review Boards’ submitted CWT from 2010-11 Estimates(These were submitted July 31, 2010 with estimates to August 31, 2010) • A Ministry reviewed template will be sent to Boards in early October • Boards will update their reviewed CWT based upon actual information as of August 31, 2010 • Boards to submit updated CWT and specified audit procedures report with 2009-10 audited F/S – Deadline November 15, 2010 unless an extension has been granted by the Ministry 2007-08 Grants for Student Needs

  4. Debt Schedule • Agreed total principal outstanding of all debentures as at August 31, 2010 to 2009-10 audited F/S • Agreed each outstanding principal debenture balance as at August 31, 2010 to the notes in the 2009-10 audited F/S • For all new debentures issued in 2009-10, agreed the original amount of the debenture (face value), interest rate and terms to debenture agreements/by-laws • For debentures issued prior to 2009-10, agreed the original amount of the debenture (face value), interest rate and terms to either the debenture by-law, audited notes to the F/S or auditors’ prior year working papers • For each debenture, agreed the future debt payments (principal and interest) to supporting documentation (i.e. the amortization schedule in debenture agreement) 2007-08 Grants for Student Needs

  5. Debt Schedule continued • Agreed sinking fund (SF) contributions (up to August 31, 2010) for each SF debenture to supporting documentation (i.e. SF debenture by-law and/or amortization schedule) • Agreed future SF contributions for each SF debenture to supporting documentation (i.e. SF debenture by-law and/or amortization schedule) • Agreed the amount to be refinanced for each sinking fund debenture to supporting documentation (i.e. SF debenture by-law, Board motion/minutes) • Agreed assumed rate of return for each sinking fund debenture to supporting documentation (i.e. SF debenture by-law, Board motion/minutes) 2007-08 Grants for Student Needs

  6. Project Eligibility Amounts Schedule • Column 14 Represents: • Actual project costs incurred up to August 31, 2010; and • Estimated remaining project costs to be completed based upon approvals at August 31, 2010 • Select 5 most recently completed permanent space projects • For actual project costs incurred up to August 31, 2010, obtain detailed listing from G/L and vouch the 5 largest invoices • Amounts to be Constructed should be nil as the sample is selected from completed projects 2007-08 Grants for Student Needs

  7. Not Permanently Financed (NPF) • Agreed opening NPF balance in 2009-10 FS Section 12 of EFIS to closing Capital Fund balance from audited 2008-09 F/S • Agreed closing NPF balance in 2009-10 FS Section 12 of EFIS to opening NPF balance in Section 12 worksheet of CWT • Select 5 projects based on 5 largest NPF balances from Column 21 of Project Eligibility Amounts Schedule of CWT • NPF = Total Project Costs – Long-Term (LT) Financing – Cash Contributions • For Project Costs in Column 14: For actual project costs incurred up to August 31, 2010, obtain detailed listing from G/L and vouch 5 largest transactions to invoices. • For LT Financing in Columns 19 and 20: Review Board’s allocation of debenture balances to each project and agree to supporting documentation (i.e. Board motion) 2007-08 Grants for Student Needs

  8. Not Permanently Financed (NPF) continued • For Cash contributions in Column 18: • For amounts recorded in Column 18, agree to Board motion/Ministry approval letter. • If no Cash reported in Column 18, enquire of Board if there was a Board motion or Ministry approval for the project and agree amount to Column 18. • For Amounts to be Constructed in Column 17.7 & 22: • Agreed to a summary of estimated project costs. 2007-08 Grants for Student Needs

  9. Project Debenture Matrix • Select 3 largest OFA and 3 largest Non-OFA debentures • Agree Board’s allocation of debt to different projects to supporting documentation. Examples include: • Board minutes/motions • Debenture by-laws • Debenture agreement • If the total allocation of the debt is less than 80% of the value of the debenture based upon supporting documentation, obtain explanation from Board. 2007-08 Grants for Student Needs

  10. Pupil Accommodation Debt Reserve (PADR) Balance • Consists of New Pupil Places (NPP), School Renewal and Other Reserves • The NPP portion of the reserve will reduce the Accounts Receivable balance from the Government of Ontario on the 2009-10 FS • Boards will be able to keep School Renewal and Other reserves • Table in the CWT will be completed by the Board • Balance of School Renewal reserve as of August 31, 2009 will be pre-loaded by the Ministry • Review the 2009-10 transactions and agree to 2009-10 active EFIS FS or supporting documentation • Provide a description and amount of other capital reserves reported in the 2008-09 FS 2007-08 Grants for Student Needs

  11. Leasing Report • Sample size: Select 50% of items reported up to a max of 4 • Review each selected lease and ensure meets PSG 2 of CICA HB • Agree original capitalized value based upon lease agreement • Agree remaining capitalized value based upon lease agreement/amortization schedule • Agree implicit rate to lease agreement • Agree 2009-10 capital lease amount and lease escalator to lease agreement • Agree lease start and end date to lease agreement • Agree future annual lease amounts to lease agreement 2007-08 Grants for Student Needs

  12. Contacts Anthony Yeung Manager Transfer Payment Accountability Unit (416) 314-0790 Anthony.Yeung@ontario.ca Cheryl Dalrymple Finance Officer Transfer Payment Accountability Unit (416) 325-2038 Cheryl.Dalrymple@ontario.ca 2007-08 Grants for Student Needs

  13. QUESTIONS ?? 2007-08 Grants for Student Needs

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