2017-18 Audited Financial Statements Final Year End Report - - PowerPoint PPT Presentation

2017-18 Audited Financial Statements

Final Year End Report

Presented to the Board

September 18, 2018

Agenda

• Transparency and Accountability Reporting
• Key Financial Influences
• Financial Highlights
• Financial Position
• Looking Forward – Significant Matters
• Action Required

• Enhanced transparency and accountability

reporting provided through two additional documents

• Financial Statement Discussion

and Analysis (FSD&A)

• Guide to Financial

Statements

Transparency & Accountability Reporting

Key Financial Influences

• Strategic Vision – Directions 2020
• Achieve Student Success
• Enhance Learning through Technology
• Foster a Sustainable Education Organization
• Full year Implementation of MOA #17 - SCC

decision on restoration of collective agreement language with respect to class size and composition.

• Agreement to close the Non-Teaching Pension

Plan and transition employees to the Municipal Pension Plan.

• Our actual financial outcome for the 2017-18 year is consistent

with our previous reporting at the end of the 3rd quarter

Financial Highlights – Operating Accounts

Surplus

Increased revenues from 2nd semester IE enrolment Lower Salary increments cost Lower substitute costs Lower Casual Education Assistants costs Higher slippage in Salary budgets due to turnover Elimination of MSP Premium – PRGB curtailment gain Non-usage of Contingency fund

• The influences that contributed to our realized surplus

include:

• Increased revenues from Strong 2nd semester International Education

enrolment;

• Salary increments for administration that were below budgeted levels;
• Lower substitute costs resulting from shortage of available TTOCs as

many had been hired under the Classroom Enhancement Fund to address restored teachers collective agreement language;

• General shortage in availability of casual Education Assistants while

maintaining a full staffing;

• Higher level of slippage in all salary budgets due to staff turnover;
• Elimination of the Medical Services premium resulted in a one-time

PRGB curtailment gain;

• Full retention of budgeted contingency fund.

Financial Highlights – Operating Accounts

Financial Highlights – Special Purpose Fund Accounts

• All Special Purpose Funds tracked within the Amended

Budget with the following exceptions:

• CommunityLINK - funding received to support vulnerable

students.

• Funding level is insufficient to meet increasing demands and

as a result, some of the costs incurred in providing needed services were funded thru the operating account.

• Classroom Enhancement Fund –funding provided for restored

collective agreement language.

• Funding was used to staff 181 teachers and related TTOC and

remedy costs, 23 EA’s, administration teaching relief time and

• ther overhead costs.
• In June, the ministry withdrew funding creating an underfunded

expenditure of $793k. The district has requested full funding from the Ministry of Education to meet best efforts and incurred contractual obligations and is working with Ministry staff to resolve this matter.

Financial Highlights – Capital Fund Accounts

• Funding for capital expenditures is sourced primarily through

the Ministry of Education with incremental funding provided through locally generated capital funds

• There were five schools under various stages of construction

during the year

Centennial Secondary Banting Middle Moody Middle Smiling Creek Minnekhada Middle

Financial Highlights – Capital Fund Accounts

• Funding for the seismic replacement of Irvine

Elementary was announced during the year and architectural drawing are well advanced.

• The School District announced it is moving forward to

advancing funds to support the design documents for Sheffield Elementary and the joint Burke Mountain Middle/Secondary School

• Board has agreed to replace the 58 year old Board office

with an Educational Learning Center at the Winslow campus site, to be funded from local capital.

Financial Highlights – Other items

• Medical Services Premiums and Employer Health Tax
• MSP premiums were reduced by 50% effective January 1, 2018

creating a savings of $350k.

• MSP premiums will be completely eliminated effective Jan 1, 2020

and will be replaced with the Employer Health Tax effective Jan 1,

• 2019. This change created a release of associated liabilities in the

Post Retirement Group Health Benefit Plan which was used toward

• ne-time MPP transition costs.
• Non-Teaching Pension Plan
• Agreement was reached between the union representing support

staff and SD43 to close the NTPP to new enrollees and transition active member to the Municipal Pension Plan.

• Municipal Pension Plan(MPP) Application and Transition
• On June 21, 2018, the MPP Board of Trustees approved the

application to transfer active members of the NTPP. Estimated transactional costs of $11m have been recorded in the financial records as at June 30, 2018.

• In broad terms, the current year surplus arises

from two key sources:

• 1. Non-Grant Revenues = $5.52 M (1.76%)
• International Education Program = $4.2 M
• Investment Income = $1.0 M
• Rental Revenue = $0.3 M
• A key aspect of the District’s stability and sustainability approach is

to ensure the recognition of all earned income prior to spending commitments

• This is an aspect of best practices that the Board of Education has

adopted

• As an outcome, it is not unexpected to recognize these additional

revenues and utilize them in subsequent years as per the noted policy

Financial Position

2. Ministry Grant Funding Underspending = $2.42 M (0.77%)

• The elements that make up this amount are the aggregate of

the individual financial lines as detailed in the Operations discussion in the FSD&A

• The underspend is mostly related to replacement staffing

shortages of teachers and educational assistants as well as non- usage of the contingency budget.

Financial Position

Non-Grant Revenues (IE, Investment and Rental Revenue) Ministry Grant Funding Under- spending

Surplus

Financial Position –

Pension Stabilization Account

• Pension Stabilization Account = $7.532 M
• The closing of the NTPP plan effective December 31, 2017 to new

enrollees and transferring active members to the MPP will result in a reduction of required solvency payments.

• Solvency payments continue to be required until a new actuarial

valuation is filed. Current year payments of $4.3 M has been set aside separately in a Pension Stabilization account.

• In addition, last year, the Board had set aside $3.2 M related to the

closing of the PRGB. The intent was to use this either toward MPP transactional costs or required solvency payments.

• It was determined that this amount was not required for MPP

transactional costs and has instead been contributed to the NTPP and deposited into the Pension Stabilization Account.

Financial Position

• The Board of Education has established an Accumulated

Operating Surplus Policy as part of its multi-year financial approach for stable and sustainable organizational health.

• This policy is reviewed annually by the Board and outlines

how the current year operating surplus is to be allocated for future years use.

• This policy has been applied to the current year operating

surplus and further details have been provided in Note 22 of the

audited financial statements as to how restricted surplus funds are planned to be utilized in subsequent years.

• Additionally, a Surplus Continuity Summary has been

included in the Financial Statement Discussion and Analysis document as reference.

Looking Forward – Significant Matters

• Organizational Capacity
• Classroom Enhancement Funding Adequacy
• Staffing costs
• New classroom space
• Grant Funding Model Review
• International Education
• Funding adequacy: Inflation and the Employer Health Tax
• Bargaining 2019
• Facilities – Capital Funds
• Technology Requirements

Action Required

• At the September 18, 2018 Board of Education

meeting, it is recommended that:

• The Board motion to approve the Audited

Financial Statements for the year ended June 30, 2018 for filing with the Ministry of Education by September 30, 2018.

• The Board motion to appoint KPMG as our

external auditors for the 2018/19 school year.

Thank You

Questions?