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Changes to Financial Statements and Training Sessions Agenda

This agenda outlines the changes to financial statement sections and provides information on training sessions. It covers topics such as allocations, transportation, primary class size reduction, full-day kindergarten, declining enrolment, and other grants.

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Changes to Financial Statements and Training Sessions Agenda

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  1. 2009-10 Financial StatementEFIS Forms September 2010 Ministry of Education Training Sessions

  2. Agenda – Part A • Changes to Sections • Section 1: Summary of Allocations • Section 9: Transportation Allocation • Section 11 – Primary Class Size Reduction • Section 11 – Full Day Kindergarten • Section 16 – Declining Enrolment • Section 17 – Other Grants Presented by Finance Officers

  3. Agenda – Part B • Overview of accounting changes • Schedule 1: Consolidated Statement of Financial Position • Schedule 1.1: Consolidated Statement of Operations • Schedule 1.2: Consolidated Statement of Cash Flow • Schedule 1.3: Consolidated Statement of Change in Net Debt • Schedule 5: Detail of Accumulated Surplus/(Deficit) • Schedule 5.5: List of Committed Capital Projects Funded by Accumulated Surplus Presented by Patrick Pelletier

  4. Agenda – Part C • Schedule 5.4: Proceeds of Disposition Calculations • Schedule 5.1: Deferred Revenue Continuity Presented by Karyn Morra

  5. Agenda – Part D • Schedule 5.2: Accounts Receivable Continuity – Government of Ontario – Approved Capital • Schedule 9: Revenues • Schedule 10: Expenses • Schedule 10ADJ: Adjustments for Compliance Purposes • Data Form D: Net Expenditure • Schedule 3: Capital Expenditures • Data Form A.3: Revenue Recognition Criteria/Enveloping Criteria Presented by Soundari Vigneshwaran

  6. Agenda - Part E • Schedule 3C: Tangible Capital Asset Continuity • Schedule 10F: Employee Benefits • Schedule 10G: Supplementary Information on Retirement Benefits, Post-employment Benefits, Compensated Absences and Termination Benefits Presented by Andrew Yang

  7. Agenda - Part F • Note 1: Significant accounting policies • Note 2: Change in accounting policy • Note 4: Accounts receivable – Government of Ontario • Note 12: Tangible Capital Assets • Note 17: Budget data • Note 18: Partnership in Transportation Consortium • Note 19: Accounting for Contributions Used for Capital Presented by Andrew Yang

  8. Part A – Changes to Sections • Section 1: Summary of Allocations • Section 9: Transportation Allocation • Section 11 – Primary Class Size Reduction • Section 11 – Full Day Kindergarten • Section 16 – Declining Enrolment • Section 17 – Other Grants

  9. Section 1 – Summary of Allocations New Lines Added: • Capital Debt Support (1.29 & 1.51) • Full Day Kindergarten (1.30 & 1.52) • Green Schools Pilot(1.31)

  10. Section 9 – Transportation Allocation Changes: • Monthly average diesel benchmarks (9.14) • Effectiveness and Efficiency amount (9.19)

  11. Section 11–Primary Class Size Reduction Change: • After the Ministry reviewed the historical costs and conducted discussions with the board on future requirements, the maximum entitlement may have been revised from the original entitlement provided to the boards in 2005-06. (11.40.1.1)

  12. Section 11 – Capital Transitional Adj. Change: • EFIS now allows for leasing costs that occurred in the current year as eligible for funding (11.70.1.3)

  13. Section 11 – Full Day Kindergarten New Section: • Allocation to provide funding for eligible capital expenditures which were incurred in the 2009-10 school year. • Funding also provided for interest of short term interest costs

  14. Section 16 – Declining Enrolment Change: • School operations related to S23 programs provided in board facilities is now included in the calculation of the School Operations before top up (16.13.14)

  15. Section 17 – Other Grants Change: • Green Schools Pilot initiative allocation (17.2.1)

  16. Common Errors in Submissions • Incomplete submission package • Published Financial Statements – No Management Report • Differences between information reported in EFIS and the audited Financial Statements • F/S have not been corrected to reflect prior errors noted in FO Reviews • Appendix G not completed or completed for incorrect year.

  17. Financial Statement Submission Package A complete submission includes: • Two (2) signed copies of Schedules 1, 1.1,1.2,1.3 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 • Active EFIS file • Submit to the mail box: financials.edu@ontario.ca • Electronic copy of Appendix C • Electronic copy of Warning Report in Excel along with explanations • Electronic copy of Capital Wrap-Up • Due date is November 15, 2010

  18. Questions?

  19. Part B – Changes to Schedules • Overview of accounting changes • Schedule 1: Consolidated Statement of Financial Position • Schedule 1.1: Consolidated Statement of Operations • Schedule 1.2: Consolidated Statement of Cash Flow • Schedule 1.3: Consolidated Statement of Change in Net Debt • Schedule 5: Detail of Accumulated Surplus/(Deficit) • Schedule 5.5: List of Committed Capital Projects Funded by Accumulated Surplus

  20. Overview of reporting changes • Moved funds and reserves to accumulated surplus as at September 1, 2009 as per PS-1200. • Implemented tangible capital assets (TCA) as at September 1, 2009 as per PS-3150. • Restated deferred revenue (proceeds of disposition) as a result of implementing PS3150. • Forms DO NOT include deferred capital contributions (DCC). • Forms DO NOT include the new compliance model, as this will be effective September 1, 2010. • Updated terminology to be on an accrual basis (ex. expenses), rather than on a cash basis (ex. expenditures). • Included the impact of the capital wrap-up as at August 31, 2010.

  21. PSAB Standard being implemented • PS1200 – Financial Statement Presentation • .31 - Financial statements should include a statement of financial position, a statement of operations, a statement of change in net debt, and a statement of cash flow. • PS3150 – Tangible Capital Assets • .07 - Tangible capital assets should be accounted for and reported as assets on the statement of financial position

  22. Consolidated Statement Schedules Schedules 1 through 1.3 have been updated to conform to PSAB section PS-1200 and guideline PSG-4 Schedule names changed to Schedule 1 – Consolidated Statement of Financial Position Schedule 1.1 – Consolidated Statement of Operations Schedule 1.2 – Consolidated Statement of Cash Flow Schedule 1.3 – Consolidated Statement of Change in Net Debt

  23. Schedule 1 – Consolidated Statement of Financial Position • Presentation changes • Temporary investments (item 1.2): Temporary investments are transitional or current in nature, such as short-term investments made to obtain a return on a temporary basis (> 90 days and < 1 year) • Long-term investments (item 1.5): Long-Term Investments are investments greater than one year from date of acquisition in organizations that do not form part of the government reporting entity (> 1 year) • A/R – Approved Capital (item 1.4): Line has been added to segregate the portion of accounts receivable related to the Capital Wrap-Up.

  24. Schedule 1 – Consolidated Statement of Financial Position Presentation changes Net Debt (item 3): The name of the difference between liabilities (item 2.7) and financial assets (item 1.7) has changed to Net Debt Tangible Capital Assets (item 4.3): Schedule now includes a line for Tangible Capital Assets under Non-Financial Assets due to the implementation of TCA as of September 1, 2009 (PS-3150) Accumulated Surplus (Deficit) (item 5): The name of the sum of Net Debt (item 3) and Non-Financial Assets (item 4.4) has been changed to Accumulated Surplus (Deficit) Fund balances and Amounts to be recovered have been removed

  25. Schedule 1.1 – Consolidated Statement of Operations • Presentation changes • Expenses (item 2): The name of item 2 has changed from Expenditures to Expensesas boards are now reporting on a full accrual basis • Annual Surplus/(Deficit) (item 3): Revenues (item 1.9) less expenses (item 2.8) is now Annual Surplus/(Deficit) – previously Net revenue(expenditure) • The following items have been added • Accumulated Surplus / (Deficit) at beginning of year (item 3.1) • Accumulated Surplus / (Deficit) at end of year (item 3.2) • The following items have been removed • The Increase in Non-Financial Assets • Change in Net Assets/Liabilities • Change in Amounts to be Recovered • Change in Fund Balances

  26. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Amounts under the 2009-10 Budget column need to be restated and reconciled for the Financial Statements • Capitalization of Tangible Capital Assets (TCA), amortization, and amounts to be recovered were not budgeted for Estimates • Actual and Budget amounts will both need to be used for the restated amounts • Actual amounts only to be used when boards did not budget at Estimates • Items to be restated/reconciled • Item 3.1: Accumulated Surplus/(Deficit) at beginning of year • Items 2.1 – 2.6: Expenses

  27. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Item 3.1 Restatement/Reconciliation of opening accumulated surplus/(deficit): • Accumulated Surplus includes • Fund Balances (generally positive/surplus) • Amounts to be Recovered (ATBR) balances (generally negative/deficit) • Net book value of TCA • Portion of Proceeds of Disposition relating to the NBV of disposed assets to be included in A/S

  28. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Item 3.1 Restatement/Reconciliation of opening accumulated surplus/(deficit): • Budget amounts will be used for • Fund Balances (generally positive/surplus) as at Sept 1, 2009 • Actual amounts will be used for • Amounts to be Recovered (ATBR) balance (generally negative/deficit) as at Aug 31, 2009 • Net book value of TCA as at Sept 1, 2009 • Portion of Proceeds of Disposition relating to the NBV of disposed assets as at Sept 1, 2009

  29. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Item 3.1 Restatement/Reconciliation: • The restated amount is calculated as: Budget at Sept. 1st, 2009 - From 2009-10 Estimates Operating Fund (from Sch. 2.1, item 8.1) XX Capital Fund (from Sch. 2.2, item 7.1) XX Reserve Fund (from Sch. 2.3, item 4.1) XX School Activity Fund (from Sch. 2.4, item 5.1) XX Actual at Aug. 31, 2009 - From 2008-09 Financial Statements ATBR – Total amount (from Sch. 1, item 7) (XX) Actual at Sept. 1st, 2009 - From 2009-10 Financial Statements Net Book Value of TCA (Sch 3C, total NBV) XX Accum. Surplus: Portion of POD (Sch. 5, item 4.9) XX Accum. Surplus/(Deficit) at the beginning of year (restated) XX

  30. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Item2.4 Restatement/Reconciliation for Pupil Accommodation expense: • Budget amounts will be used for • Pupil accommodation expenditure • Estimated Capital Expenditures on Land and Buildings • Actual amounts will be used for • Minor TCA Additions (First time equipping) • Amortization • Write downs

  31. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Item 2.4 Restatement/Reconciliation: • The restated amount is calculated as: Budget - From 2009-10 Estimates Pupil Accommodation Expenditure (Sch. 1, item 2.5) XX Less: Estimated Capital Expenditures (Sch. 3, Col. 0.1.1) (XX) Actual - From 2009-10 Financial Statements Less: Minor TCA Additions (from Sch. 3C – first time equipping) (XX) Plus: Amortization (from Sch. 3C) XX Plus: Write downs (from Sch. 3C) XX Restated – Pupil Accommodation ExpenseXX

  32. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Items 2.1, 2.2, 2.3, and 2.6 Restatements: • Amortization and write downs distributed to the five expense categories for 2009-10 Financial Statements • Restatements to include Actual Amortization Expense and Write downs from 2009-10 Financial Statements • Boards required to reallocate the Actual amortization and write downs from the Pupil Accommodation expense to the other 4 specific expense categories • Instruction (item 2.1) • Administration (item 2.2) • Transportation (item 2.3) • Other (item 2.6)

  33. Schedule 1.1 – Consolidated Statement of Operations • 2009-10 Budget (Restated & Unaudited) • Items 2.1, 2.2, 2.3, and 2.6 Restatements: • Full amortization/write downs included in pupil accommodation expense after restatement above • Deduct amortization/write down portion related to other expense categories from pupil accommodation expense • Reallocate portion of amortization/ write down from Pupil Accommodation to the specific expense category • Note that mTCA additions that are not first time equipping would need to be deducted from items 2.1, 2.2, 2.3, and 2.6 as part of the restatement

  34. Schedule 1.1 – Consolidated Statement of Operations • 2008-09 Actual (Restated) • Item 2.4 Restatement/Reconciliation: • Only Actual amounts from the 2008-09 Financial Statements required • Actual amounts that are required • Pupil Accommodation Expenditure • TCA Additions (Land, buildings and first time equipping) • Amortization (buildings and first time equipping) • Write downs

  35. Schedule 1.1 – Consolidated Statement of Operations • 2008-09 Actual (Restated) • Item 2.4 Restatement/Reconciliation: • The restated amount is calculated as: Actual - From 2008-09 Financial Statements Pupil Accommodation Expenditure (Sch. 1, item 2.5) XX Less: Actual additions (Sch. 3C – land, buildings, first time equipping) (XX) Plus: Amortization (from Sch. 3C, buildings, first time equipping) XX Plus: Write downs (from Sch. 3C, total write downs) XX Restated – Pupil Accommodation ExpenseXX

  36. Schedule 1.1 – Consolidated Statement of Operations • 2008-09 Actual (Restated) • Items 2.1, 2.2, 2.3,and 2.6 Restatements: • 2008-09 column to be restated to include Actual Amortization Expense and Write downs from 2008-09 Financial Statements • Boards required to reallocate the Actual amortization and write downs from the Pupil Accommodation expense to the other 4 specific expense categories • Instruction (item 2.1) • Administration (item 2.2) • Transportation (item 2.3) • Other (item 2.6)

  37. Schedule 1.1 – Consolidated Statement of Operations • 2008-09 Actual (Restated) • Items 2.1, 2.2, 2.3,and 2.6 Restatements: • Full amortization/write downs included in pupil accommodation expense after restatement above • Boards that did not split amortization by categories in prior you could allocate amortization proportionately based on 2009-10 amortization (proposed approach) • Deduct amortization/write down portion related to other expense categories from pupil accommodation expense • Reallocate portion of amortization/ write down from Pupil Accommodation to the specific expense category • Note that mTCA additions that are not first time equipping would need to be deducted from items 2.1, 2.2, 2.3 and 2.6 as part of the restatement

  38. Schedule 1.2 – Consolidated Statement of Cash Flows • Statement Details: • This statement replaces the previous Statement of Changes in Financial Position • The Statement of Cash Flows shows how a board generated and used cash and cash equivalents in the accounting period and the change in cash and cash equivalents in the period • It also shows the cash and cash equivalents at the beginning and end of the accounting period • Presentation Changes: • Statement includes 4 sections • Operating Transactions • Capital Transactions - New • Investing Transactions • Financing Transactions

  39. Schedule 1.2 – Consolidated Statement of Cash Flows • Presentation Changes: • Item 2.1 has been created to add back the non-cash items (including amortization, write downs and gain/loss on disposal) • Items 2.9 and 2.10 have been added to include the (increase) decreases in prepaid expenses and inventories of supplies. • Items 3.1 (Proceeds on sale of TCA) and 3.2 (Cash used to acquire TCA) have been created to include the capital cash flows. • Item 5.2 (Temporary borrowings) has been added; in prior years amount was netted and included with Cash and Cash Equivalents (item 6)

  40. Schedule 1.3 Statement of Change in Net Debt Statement Details: The statement of Change in Net Debt reports the extent of the change in the board’s net debt resulting from tangible capital asset activity and other non-financial asset activity (prepaid expenses and inventories of supplies) in the accounting period The statement also reports the net debt at the beginning and end of the year Presentation Changes: Tangible Capital Asset Activity include Acquisition, Amortization, Write-downs of tangible capital assets Proceeds on sale of tangible capital assets and the gain/loss on the sale of tangible capital assets Other Non-Financial Asset Activity Acquisition and consumption of supplies inventories Acquisition and use of prepaid expenses

  41. Schedule 1.3 Statement of Change in Net Debt Instructions for EFIS: Tangible Capital Asset Activity: 2009-10 Actual: Tangible Capital Asset Activity balances are automatically forwarded from amounts recorded on Schedule 3C (Tangible Capital Assets Continuity) and Schedule 5.4 (Proceeds of Disposition Calculation) 2008-09 Actual (Restated): Due to the addition of Schedule 1.3, boards will need to complete the 2008-09 Actual (Restated) column using prior year’s Schedule 3C 2009-10 Budget: Given that this is the first year of implementation and that budget numbers are not readily available for proper disclosure, boards would not be required to report numbers under the budget column

  42. Schedule 1.3 Statement of Change in Net Debt Instructions for EFIS (continued): Other Non-Financial Asset Activity: 2009-10 Actual and 2008-09 Actual (Restated): Boards are required for PSAB purposes to record the inflows and outflows of prepaid expenses and inventories of supplies In prior year only the net impact was required Boards would obtain this information from their general ledger 2009-10 Budget: Given that this is the first year of implementation and that budget numbers are not readily available for proper disclosure, boards would not be required to report numbers under the budget column

  43. New Schedule 5 – Detail of Accumulated Surplus / (Deficit) Purpose: To be in compliance with PS1200 Standard was effective for fiscal years starting on or after January 1, 2009, therefore Boards are required to implement for 2009-10 school year Boards were required to reallocate fund balances and amounts to be recovered to new accumulated surplus accounts at the beginning of the school year 42

  44. New Schedule 5 – Detail of Accumulated Surplus / (Deficit) Replacing Schedules 2.1 to 2.4, Old Schedule 5 and Appendix I Previously 4 fund accounts Operating (Schedule 2.1) Capital (Schedule 2.2) Reserve (Schedule 2.3 and old Schedule 5) School Activity (Schedule 2.4) 4 amount to be recovered (ATBR) accounts (Appendix I) Employee Future Benefits Interest to be accrued Vacation accrued Capital Financing 43

  45. New Schedule 5 – Detail of Accumulated Surplus / (Deficit) Starting in 2009-10: 3 Accumulated Surplus (Deficit) accounts Available for Compliance - Unappropriated Available for Compliance – Internally Appropriated Unavailable for Compliance These 3 classifications will start to be used for compliance purposes in the 2010-11 School Year per Education Act, 231.(1) 44

  46. New Schedule 5 – Detail of Accumulated Surplus / (Deficit) Breakdown of Accumulated Surplus (Deficit) allocation Available for Compliance – Unappropriated includes Total Operating (previously operating fund and working funds) (formerly Sch. 2.1 and reserve for working funds, item 1.2 on old Sch. 5) Available for Compliance – Internally Appropriated includes Retirement Gratuities (formerly on old Sch. 5) WSIB (formerly on old Sch. 5) Pupil Accommodation Debt Reserve (NPP portion) (formerly on item 1.7 on old Sch 5) Pupil Accommodation Debt Reserve (School Renewal portion) (formerly on item 1.7 on old Sch 5) Pupil Accommodation Debt Reserve (Other) (formerly on item 1.7 on old Sch 5) Pupil Accommodation (NPP) – Deferred Revenue (new - discussed later in presentation) Other Purposes Operating (formerly on old Sch. 5) Other Purposes Capital (formerly on old Sch. 5) 45

  47. New Schedule 5 – Detail of Accumulated Surplus / (Deficit) Unavailable for Compliance Employee Future Benefits (formerly on Appendix I – ATBR) Interest to be Accrued (formerly on Appendix I – ATBR) Vacation Accrued (formerly on Appendix I – ATBR) Debt (formerly capital financing on Appendix I – ATBR) Not Permanently Financed Amounts (formerly item 7.2 on Sch. 2.2) School Generated Funds (formerly on Sch. 2.4 and item 1.3 on Sch. 5) Net TCA (new – discussed later in presentation) Receivable from Province re: Capital Wrap-Up (new – discussed later in presentation) Net Book Value of Proceeds of Disposition (new – discussed later in presentation) Committed Capital Projects (new – from Schedule 5.5)

  48. Reallocation of fund/ ATBR accounts to accumulated surplus

  49. Schedule 5 – Detail of Accumulated Surplus / (Deficit) Pupil Accommodation Debt Reserve: Boards must separately enter the portion of the pupil accommodation debt reserve that is related to NPP (item 2.3.2), School Renewal (item 2.4), and Other (item 2.5) The sum of the 3 cells must equal the 2008-09 closing balance of the Pupil Accommodation Debt Reserve (Item 1.7 on prior year’s Schedule 5) The split is required for the calculation of the net receivable from the Province as a result of the Capital Wrap-up

  50. Schedule 5.5 – Committed Capital Projects • Purpose: • Schedule includes a listing of all capital projects expenditures on which the board committed accumulated surplus. • Board must set accumulated surplus aside to support the future amortization related to these projects • Boards will record the continuity of the committed capital projects on this schedule

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