audited financial statements - alberta...we have audited the accompanying financial statements of...

6015HAB1

School Jurisdiction Code: 6015

AUDITEDFINANCIAL STATEMENTS

FOR THE YEAR ENDED AUGUST 31, 2015[School Act, Sections 147(2)(a), 148, 151(1) and 276]

Legal Name of School Jurisdiction

Mailing Address

Telephone & Fax Numbers, and Email Address

SCHOOL JURISDICTION MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The financial statements of

Board of Trustees Responsibility

External Auditors

Declaration of Management and Board Chair

c.c. ALBERTA EDUCATION, Financial Reporting & Accountability Branch8th Floor Commerce Place, 10155-102 Street, Edmonton AB T5J 4L5EMAIL: [email protected]: (780) 422-0312 (Toll free 310-0000) FAX: (780) 422-6996

Jill Weiss

of qualified personnel, an organizational structure that provides an appropriate division of responsibility and a strong system of budgetary control.

The ultimate responsibility for the financial statements lies with the Board of Trustees. The Board reviewed the auditedfinancial statements with management in detail and approved the financial statements for release.

The Board appoints external auditors to audit the financial statements and meets with the auditors to review their findings.The external auditors were given full access to school jurisdiction records.

To the best of our knowledge and belief, these financial statements reflect, in all material respects, the financial position,results of operations and cash flows for the year in accordance with Canadian Public Sector Accounting Standards.

BOARD CHAIR

"Original Signed"

school jurisdiction's transactions. The effectiveness of the control systems is supported by the selection and training

New Horizons Charter School Society

53145 Range Rd 222 Ardrossan AB T8E 2M8

(780) 922-8087 (780) 922-8784 [email protected]

presented to Alberta Education have been prepared by school jurisdiction management which has responsibility fortheir preparation, integrity and objectivity. The financial statements, including notes, have been prepared in accordancewith Canadian Public Sector Accounting Standards and follow format prescribed by Alberta Education.

In fulfilling its reporting responsibilities, management has maintained internal control systems and procedures designedto provide reasonable assurance that the school jurisdiction's assets are safeguarded, that transactions are executedin accordance with appropriate authorization and that accounting records may be relied upon to properly reflect the

New Horizons Charter School Society

Board-approved Release Date

Signature

Signature

SignatureName

Name

Name

SUPERINTENDENT

Don B. Falk

SECRETARY-TREASURER OR TREASURER

G. (Fred) de Kleine

November 20, 2015

"Original Signed"

"Original Signed"

1


TABLE OF CONTENTS

Page

3

4

5

6

7

9

10

12

13

14

15

16

17

18

STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT)

INDEPENDENT AUDITOR'S REPORT

NOTES TO THE FINANCIAL STATEMENTS

SCHEDULE OF PROGRAM OPERATIONS

SCHEDULE OF CAPITAL REVENUE

SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS

STATEMENT OF REMEASUREMENT GAINS AND LOSSES

STATEMENT OF CASH FLOWS

STATEMENT OF OPERATIONS

STATEMENT OF FINANCIAL POSITION

SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES

UNAUDITED SCHEDULE OF FEE REVENUE

UNAUDITED SCHEDULE OF DIFFERENTIAL FUNDING

UNAUDITED SCHEDULE OF CENTRAL ADMINISTRATION EXPENSES

2

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of New Horizons Charter School Society

We have audited the accompanying financial statements of New Horizons Charter School Society, which comprise the statement of financial position as at August 31, 2015, and the statements of operations, cash flow, changes in net debt, and change in remeasurement gains and losses, for the year ended August 31, 2015, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian Public Sector Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,. but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, these financial statements present fairly, in all material respects, the financial position of New Horizons Charter School Society as at August 31, 2015, and the results of its operations and its cash flows for the year ended August 31, 2015, in accordance with Canadian Public Sector Accounting Standards.

Sherwood Park, Alberta November 20, 2015

~ )'~ tJ41;;,q 1-J.~ Vleemmg Vleeming O'Neill LLP

Vleeming Vleeming O'Neill LLP

Accountants 3


2015 2014

FINANCIAL ASSETS

Cash and cash equivalents 86,128$ 248,857$

Accounts receivable (net after allowances) (Note 3) 33,411$ 19,505$

Portfolio investments (Note 4) 611,220$ 757,759$

Other financial assets -$ -$

Total financial assets 730,759$ 1,026,121$

LIABILITIES

Bank indebtedness -$ -$

Accounts payable and accrued liabilities (Note 5) 81,278$ 32,644$

Deferred revenue (Note 6) 267,722$ 1,186,166$

Employee future benefit liabilities -$ -$

Liability for contaminated sites -$ -$

Other liabilities -$ -$

Debt

Supported: Debentures and other supported debt -$ -$

Unsupported: Debentures and capital loans -$ -$

Mortgages -$ -$

Capital leases -$ -$

Total liabilities 349,000$ 1,218,810$

381,759$ (192,689)$

NON-FINANCIAL ASSETS

Tangible capital assets (Note 7)

Land -$ -$

Construction in progress -$ -$

Buildings 554,616$

Less: Accumulated amortization -$ 554,616$ 1,182,929$

Equipment 19,705$

Less: Accumulated amortization (6,604)$ 13,101$ -$

Vehicles -$

Less: Accumulated amortization -$ -$ -$

Computer Equipment -$

Less: Accumulated amortization -$ -$ -$

Total tangible capital assets 567,717$ 1,182,929$

Prepaid expenses 9,006$ 7,175$

Other non-financial assets -$ -$

Total non-financial assets 576,723$ 1,190,104$

Accumulated surplus (Note 8) 958,482$ 997,415$

Accumulating surplus / (deficit) is comprised of:

Accumulated operating surplus (deficit) 958,482$ 997,415$

Accumulated remeasurement gains (losses) -$ -$

958,482$ 997,415$

Contractual obligations (Note 9)

Contingent liabilities

The accompanying notes and schedules are part of these financial statements.

As at August 31, 2015 (in dollars)STATEMENT OF FINANCIAL POSITION

Net financial assets (debt)

4


Budget Actual Actual2015 2015 2014

(Note 14)

Alberta Education 2,232,236$ 2,215,811$ 2,124,165$

Other - Government of Alberta -$ -$ -$

Federal Government and First Nations -$ -$ -$

Other Alberta school authorities -$ -$ -$

Out of province authorities -$ -$ -$

Alberta municipalities-special tax levies -$ -$ -$

Property taxes -$ -$ -$

Fees 50,900$ 68,629$ 76,862$

Other sales and services 20,773$ 20,065$ 18,380$

Investment income 7,001$ 7,636$ 9,081$

Gifts and donations 12,000$ 23,100$ 8,500$

Rental of facilities -$ -$ -$

Fundraising 4,000$ 5,567$ 8,096$

Gains on disposal of capital assets -$ -$ -$

Other revenue -$ -$ -$

Total revenues 2,326,910$ 2,340,808$ 2,245,084$

Instruction - ECS 117,276$ 115,418$ 104,190$

Instruction - Grades 1 - 12 1,834,402$ 1,760,998$ 1,697,269$

Plant operations and maintenance 285,663$ 275,995$ 187,970$

Transportation 33,784$ 43,879$ 20,450$

Board & system administration 177,432$ 172,579$ 183,401$

External services 4,700$ 10,872$ 10,995$

Total expenses 2,453,257$ 2,379,741$ 2,204,275$

(126,347)$ (38,933)$ 40,809$

STATEMENT OF OPERATIONSFor the Year Ended August 31, 2015 (in dollars)

EXPENSES

Operating surplus (deficit)


REVENUES

5

6015

2015 2014

CASH FLOWS FROM:

A. OPERATING TRANSACTIONS

Operating surplus (deficit) (38,933)$ 40,809$

Add (Deduct) items not affecting cash:

Total amortization expense 60,664$ 63,188$

Gains on disposal of tangible capital assets -$ -$

Losses on disposal of tangible capital assets -$ -$

Expended deferred capital revenue recognition (60,664)$ (60,663)$

Deferred capital revenue write-off -$ -$

Donations in kind -$ -$

Changes in:

Accounts receivable (13,906)$ (104)$

Prepaids (1,831)$ (192)$

Other financial assets -$ -$

Non-financial assets -$ -$

Accounts payable, accrued and other liabilities 48,634$ (55,075)$

Deferred revenue (excluding EDCR) (1,141)$ 1,142$

Employee future benefit liabilities -$ -$

-$ -$

Total cash flows from operating transactions (7,177)$ (10,895)$

B. CAPITAL TRANSACTIONS

Purchases of tangible capital assets

Land -$ -$

Buildings (288,990)$ -$

Equipment (13,101)$ -$

Vehicles -$ -$

Computer equipment -$ -$

Net proceeds from disposal of unsupported capital assets -$ -$

-$ -$

Total cash flows from capital transactions (302,091)$ -$

C. INVESTING TRANSACTIONS

Purchases of portfolio investments (13,284)$ (7,164)$

Dispositions of portfolio investments 159,823$ -$

Remeasurement gains (losses) reclassified to the statement of operations -$ -$

Change in endowments -$ -$

-$ -$

Total cash flows from investing transactions 146,539$ (7,164)$

D. FINANCING TRANSACTIONS

Issue of debt -$ -$

Repayment of debt -$ -$

-$ -$

Issuance of capital leases -$ -$

Repayment of capital leases -$ -$

-$ -$

-$ -$

Total cash flows from financing transactions -$ -$

Increase (decrease) in cash and cash equivalents (162,729)$ (18,059)$

Cash and cash equivalents, at beginning of year 248,857$ 266,916$

Cash and cash equivalents, at end of year 86,128$ 248,857$


For the Year Ended August 31, 2015 (in dollars)

School Jurisdiction Code:

STATEMENT OF CASH FLOWS

Other factors affecting debt (describe)

Other factors affecting capital leases (describe)

Other (describe)

Other (describe)

Other (describe)

Other (describe)

6

6015

Budget 2015 2014

2015

Operating surplus (deficit) (126,347)$ (38,933)$ 40,809$

Effect of changes in tangible capital assets

Acquisition of tangible capital assets -$ 554,548$ -$

Amortization of tangible capital assets 60,663$ 60,664$ 63,188$

Net carrying value of tangible capital assets disposed of -$ -$ -$

Write-down carrying value of tangible capital assets -$ -$ -$

Other changes -$ -$ -$

Total effect of changes in tangible capital assets 60,663$ 615,212$ 63,188$

Changes in:

Prepaid expenses -$ (1,831)$ (192)$

Other non-financial assets -$ -$ -$

Net remeasurement gains and (losses) -$ -$ -$

Endowments -$ -$ -$

Increase (decrease) in net financial assets (net debt) (65,684)$ 574,448$ 103,805$

Net financial assets (net debt) at beginning of year -$ (192,689)$ (296,494)$

Net financial assets (net debt) at end of year (65,684)$ 381,759$ (192,689)$

School Jurisdiction Code:

STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT)



7


2015 2014

Accumulated remeasurement gains (losses) at beginning of year -$ -$

Unrealized gains (losses) attributable to:

Portfolio investments -$ -$

Other -$ -$

Amounts reclassified to the statement of operations:

Portfolio investments -$ -$

Other -$ -$

Net remeasurement gains (losses) for the year -$ -$

Accumulated remeasurement gains (losses) at end of year -$ -$

STATEMENT OF REMEASUREMENT GAINS AND LOSSES



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LU

S

10

6015

SCHEDULE OF CAPITAL REVENUE(EXTERNALLY RESTRICTED CAPITAL REVENUE ONLY)

for the Year Ended August 31, 2015 (in dollars)

Proceeds on UnexpendedDisposal of Deferred

Provincially Surplus from Provincially Capital Expended

Approved Provincially Funded Revenue from Deferred

& Funded Approved Tangible Capital Other Capital

Projects (A) Projects (B) Assets (C) Sources (D)Revenue

Balance at August 31, 2014 -$ -$ -$ -$ 1,182,928$

Prior period adjustments -$ -$ -$ -$ -$

Adjusted balance, August 31, 2014 -$ -$ -$ -$ 1,182,928$

Add:

Unexpended capital revenue received from:

Alberta Education school building & modular projects (excl. IMR) 265,626$

Infrastructure Maintenance & Renewal capital related to school facilities -$

Other sources: (Describe) -$ -$

Other sources (Describe) : -$ -$

Unexpended capital revenue receivable from:

Alberta Education school building & modular (excl. IMR) -$

Other sources: (Describe) -$ -$

Other souces: (Describe) -$ -$

Interest earned on unexpended capital revenue -$ -$ -$ -$

Other unexpended capital revenue: (Describe) -$

Net proceeds on disposal of supported tangible capital assets -$ -$

Insurance proceeds (and related interest) -$ -$

Donated tangible capital assets (Explain): -$

Alberta Schools Alternative Program (ASAP), Building Alberta School Construction Program, (BASCP) and other Alberta Infrastructure managed projects 265,626$

Transferred in (out) tangible capital assets (amortizable, @ net book value) (1,122,265)$

Expended capital revenue - current year -$ -$ -$ -$ -$

Surplus funds approved for future project(s) -$ -$

Other adjustments (Explain): -$ -$ -$ -$ -$

Deduct:

Net book value of supported tangible capital dispositions or write-offs

Other adjustments (Explain): -$ -$ -$ -$

Capital revenue recognized - Alberta Education 60,664$

Capital revenue recognized - Other Government of Alberta -$

Capital revenue recognized - Other revenue -$

Balance at August 31, 2015 265,626$ -$ -$ -$ 265,625$ (A) (B) (C) (D)

Balance of Unexpended Deferred Capital Revenue at August 31, 2015 (A) + (B) + (C) + (D) 265,626$

Unexpended Deferred Capital Revenue

(A) - Represents funding received from the Government of Alberta to be used toward the acquisition of new approved tangible capital assets with restricted uses only.

(B) - Represents any surplus of funding over costs from column (A) approved by Minister for future capital expenditures with restricted uses only.

(C) - Represents proceeds on disposal of provincially funded restricted-use capital assets to be expended on approved capital assets per 10(2)(a) of Disposition of Property Reg. 181/2010.

(D) - Represents capital revenue received from entities OTHER THAN the Government of Alberta for the acquisition of restricted-use tangible capital assets.

Unexpended Deferred Capital Revenue

11

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de:

6015

2014

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13


Actual Actual2014/2015 2013/2014

FEES

Transportation fees $0 $0

Basic instruction supplies (text books, including lost or replacement fees, course materials) $25,373 $25,238

Technology user fees $0 $0

Alternative program fees $0 $0

Fees for optional courses (band, art, etc.) $2,212 $2,120

Fees for students from other boards $0 $0

Tuition fees (international & out of province) $0 $0

Kindergarten & preschool $0 $0

Extracurricular fees (sports teams and clubs) $2,698 $2,828

Field trips (related to curriculum) $38,346 $46,676

Lunch supervision fees $0 $0

Locker rental; locks; student ID; uniforms; library, student union, and fitness fees $0 $0

Other (describe)* $0 $0



TOTAL FEES $68,629 $76,862

Actual Actual

2014/2015 2013/2014

Cafeteria sales, hot lunch, milk programs $16,284 $15,594

Special events, graduation, tickets $0 $0

Student travel (international, recognition trips, non-curricular) $0 $0

$3,781 $2,786

$0 $0

$0 $0

Other (describe) $0 $0



TOTAL $20,065 $18,380

Please disclose amounts paid by parents of students that are recorded as "Other sales and services" or "Other revenue" (rather than fee revenue):

Sales or rentals of other supplies/services (clothing, agendas, yearbooks)

*PLEASE DO NOT USE "SCHOOL GENERATED FUNDS" AS A CATEGORY

UNAUDITED SCHEDULE OF FEE REVENUEfor the Year Ending August 31, 2015 (in dollars)

Adult education revenue

Child care & before and after school care

14

6015

Funded Students in ProgramREVENUES

Alberta Education allocated funding -$ -$ -$ 11,673$ -$ Other funding allocated by the board to the program -$ -$ -$ -$ -$ TOTAL REVENUES -$ -$ -$ 11,673$ -$

EXPENSES (Not allocated from BASE, Transportation, or other funding)Instructional certificated salaries & benefits -$ -$ -$ 51,728$ Instructional non-certificated salaries & benefits -$ -$ -$ -$ SUB TOTAL -$ -$ -$ 51,728$ Supplies, contracts and services -$ -$ -$ -$ Program planning, monitoring & evaluation -$ -$ -$ -$ Facilities (required specifically for program area) -$ -$ -$ -$ Administration (administrative salaries & services) -$ -$ -$ -$ Other (please describe) -$ -$ -$ -$ Other (please describe) -$ -$ -$ -$ TOTAL EXPENSES -$ -$ -$ 51,728$ NET FUNDING SURPLUS (SHORTFALL) -$ -$ -$ (40,055)$

UNAUDITED SCHEDULE OF DIFFERENTIAL FUNDINGfor the Year Ended August 31, 2015 (in dollars)

PROGRAM AREA

First Nations, Metis & Inuit

(FNMI)ECS Program Unit

Funding (PUF)

English as a Second Language

(ESL)Inclusive

Education

Small Schools by Necessity

(Revenue only)

15

Sch

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risd

icti

on

Co

de:

6015

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I '

NEW HORIZONS CHARTER SCHOOL SOCIETY NOTES TO FINANCIAL STATEMENTS

August 31, 2015

1. Authority and Purpose The Society delivers education programs under the authority of the School Act, Revised Statutes of Alberta 2000, Chapter S-3.

The Society receives instruction and support allocations under Education Grants Regulation (AR 12012008) The regulation allows for the setting of conditions and use of grant monies. The

Society is limited on certain funding allocations and administration expenses.

2. Summary of Significant Accounting Policies These financial statements have been prepared in accordance with the CICA Canadian public sector accounting standards (PSAS). The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below:

A. Basis of Consolidation The Fundraising Association of New Horizons School is not a controlled entity and has not been consolidated with the Society's financial statements.

B. Cash and Cash Equivalents Cash and cash equivalents include cash and investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value. These short-term investments have a maturity of three months or less at acquisition and are held for the purpose of meeting short-term cash commitments rather than for investing.

C. Portfolio Investments The Society has investments in GIC's that have a maturity of greater than 3 months. GIC's are reported at cost or amortized cost.

Detailed information regarding portfolio investments is disclosed in Note 4.

D. Tangible Capital Assets Tangible capital assets acquired or constructed are recorded at cost which includes amounts that are directly related to the acquisition, design, construction, development, improvement or betterment of the asset. Cost also includes overhead directly attributable to construction as well as interest costs that are directly attributable to the acquisition or construction of the asset.

Donated tangible capital assets are recorded at their fair market value at the date of donation, except in circumstances where fair value cannot be reasonably determined. when they are then recognized at nominal value. Transfers of tangible capital assets from related parties are recorded at original cost less accumulated amortization.


Accountants


August 31, 2015

2. Significant Accounting Policies (continued)

D. Tangible Capital Assets (continued) Sites and buildings are written down to residual value when conditions indicate they no longer contribute to the ability of the Society to provide services or when the value of future economic benefits associated with the sites and buildings are less than their net book value. For Supported assets, the write-downs are accounted for as reductions to Expended Deferred Capital Revenue.

Tangible capital assets with costs in excess of $5,000 are capitalized.

Leases that, from the point of view of the lessee, transfer substantially all the benefits and risks incident to ownership of the property to the Board are considered capital leases. These are accounted for as an asset and an obligation. Capital lease obligations are recorded at the present value of the minimum lease payments excluding executor costs. The discount rate used to determine the present value of the lease payments is the lower of the Society's rate for incremental borrowing or the interest rate implicit in the lease.

Buildings includes building, land and site improvements

Tangible capital assets are amortized over their estimated useful lives on a straight-line basis, at the following rates:

Buildings Equipment and Furnishings

4% 20%

Leasehold improvements are amortized on a straight-line basis over the remaining term of the lease.

E. Deferred Revenue Deferred revenue includes contributions received for operations which have stipulations that meet the definition of a liability per Public Sector Accounting Standard (PSAS) PS 3200. These

contributions are recognized by the Society once it has met all eligibility criteria to receive the contributions. When stipulations are met, deferred revenue is recognized as revenue in the fiscal year in a manner consistent with the circumstances and evidence used to support the initial recognition of the contributions received as a liability.

Deferred revenue also include contributions for expended capital expenditures. Expended Deferred Capital Revenue represent externally restricted supported capital funds that have been expended but have yet to be amortized over the useful life of the related capital asset. Amortization over the useful life of the related capital asset is due to certain stipulations related to the contributions that require that the school jurisdiction to use the asset in a prescribed manner over the life of the associated asset.


Accountants


August 31, 2015


F. Employee Future Benefits The Society provides certain post-employment benefits including vested and non-vested benefits for certain employees pursuant to certain contracts and union agreements.

The Society accrues its obligations and related costs including both vested and non-vested benefits under employee future benefit plans. Benefits include defined-benefit retirement plans, plans. The future benefits cost is actuarially determined using the projected unit credit method pro-rata on service and using management's best estimate of expected salary escalation, benefit usage, termination and retirement rates and mortality. The discount rate used to measure obligations is based on the cost of borrowing.

G. Operating and Capital Reserves Certain amounts are internally or externally restricted for future operating or capital purposes. Transfers to and from reserves are recorded when approved by the Board of Directors. Capital reserves are restricted to capital purposes and may only be used for operating purposes with approval by the Minister of Education. Reserves are disclosed in the Schedule of Changes in Accumulated Surplus.

H. Revenue Recognition Revenues are recorded on an accrual basis. Instruction and support allocations are recognized in the year to which they relate. Fees for services related to courses and programs are recognized as revenue when such courses and programs are delivered.

Volunteers contribute a considerable number of hours per year to schools to ensure that certain programs are delivered, such as kindergarten, lunch services and the raising of school generated funds. Contributed services are not recognized in the financial statements.

Eligibility criteria are criteria that the Society has to meet in order to receive certain contributions. Stipulations describe what the Society must perform in order to keep the contributions. Contributions without eligibility criteria or stipulations are recognized as revenue when the contributions are authorized by the transferring government or entity. Contributions with eligibility criteria but without stipulations are recognized as revenue when the contributions are authorized by the transferring government or entity and all eligibility criteria have been met.

Contributions with stipulations are recognized as revenue in the period the stipulations are met, except when and to the extent that the contributions give rise to an obligation that meets the definition of a liability in accordance with Section PS 3200. Such liabilities are recorded as deferred revenue.

I. Expenses Expenses are reported on an accrual basis. The cost of all goods consumed and services received during the year is expensed.


Accountants


August 31, 2015


I. Expenses (continued) Actual salaries of personnel assigned to two or more programs are allocated based on the time spent in each program. Employee benefits and allowances are allocated to the same programs, and in the same proportions, as the individual's salary. Supplies and services are allocated based on actual program identification.

J. Pensions Pension costs included in these statements comprise the cost of employer contributions for current service of employees during the year.

The current and past service costs of the Alberta Teachers Retirement Fund are met by contributions by active members and the Government of Alberta. Under the terms of the Teachers Pension Plan Act, the Society does not make pension contributions for certificated staff. The Government portion of the current service contribution to the Alberta Teachers Retirement Fund on behalf of the jurisdiction is included in both revenues and expenses. For the School year ended August 31, 2014, the amount contributed by the Government was $133,544 (2013 - $134,276).

K. Program Reporting The Society's operations have been segmented as follows:

ECS Instruction: The provision of Early Childhood Services educational instructional services that fall under the basic public education mandate.

Grade 1-12 Instruction: The provision of instructional services for grades 1-12 that fall under the basic public education mandate.

Plant Operations and Maintenance: The operation and maintenance of all school building and maintenance shop facilities.

Transportation: The provision of regular and special education bus services (to and from school), whether contracted or board operated, including transportation facilities.

Board & System Administration: The provision of board governance and system-based I central office administration.

External Services: All projects, activities, and services offered outside the public education mandate for ECS children and students in grades 1-12. Services offered beyond the mandate for the mandate for public education are to be self-supporting, and Alberta Education funding may not be utilized to support these programs.

The allocation of revenues and expenses are reported by program, source, and object on the Schedule of Program Operations. Respective instruction expenses include the cost of certificated teachers, non-certificated teaching assistants as well as proportionate share of supplies & services, school administration & instruction support, and system instructional support.


Accountants

i (


August 31, 2015


L. Financial Instruments A contract establishing a financial instrument creates, at its inception, rights and obligations to receive or deliver economic benefits. The financial assets and financial liabilities portray these rights and obligations in the financial statements. The Society recognizes a financial instrument when it becomes a party to a financial instrument contract.

All financial assets and liabilities are recorded at cost or amortized cost and the associated transaction costs are added to the carrying value of items in the cost or amortized cost upon initial recognition. The gain or loss arising from derecognition of a financial instrument is recognized in the Statement of Operations. Impairment losses such as write-downs or write-offs are reported in the Statement of Operations.

Financial instruments consist of cash and cash equivalents, accounts receivable, portfolio investments, accounts payable and accrued liabilities. Unless otherwise noted, it is management's opinion that the Society is not exposed to significant credit and liquidity risks, or market risk, which includes currency, interest rate and other price risks.

Liquidity risk is the risk that the Society will encounter difficulty in meeting obligations associated with financial liabilities. The Society enters into transactions to purchase goods and services on credit, and leases office equipment from various creditors for which repayment is required at various maturity dates. Liquidity risk is measured by reviewing the Society's future net cash flows for the possibility of a negative net cash flow. The Society manages the liquidity risk resulting from accounts payable through the preparation and monitoring of budgets, and maintaining Guaranteed Investment Certificates

M. Measurement Uncertainty The precise determination of many assets and liabilities is dependent on future events. As a result the preparation of financial statements for a period involves the use of estimates and approximations, which have been made using careful judgment. Actual results could differ from those estimates. Significant areas requiring the use of management estimates relate to the potential impairment of assets, rates for amortization and estimated employee future benefits.

3. Accounts and Grants Receivable

Federal Government - Goods and Services Tax Recoverable Government of Alberta - Alberta Education Interest Receivable Other

2015

$18,947 7,000 3,114 4,350

$33,411

2014

$13,406 1,000 4,595

504

$19,505


Accountants

' ( \ . NEW HORIZONS CHARTER SCHOOL SOCIETY

NOTES TO FINANCIAL STATEMENTS August 31, 2015

4. Portfolio Investments Portfolio Investments consists of Guaranteed Investment Certificates with an amortized cost of $611,220 (2014 - $757,759) maturing within 7 months. The GIC's have an average effective yield of 0.83% (2014 - 1.2%).

It is management's opinion that there has been no impairment during the year.

5. Accounts Payable and Accrued Liabilities

Trade Payables Elk Island Public School Regional Division No 14. Elk Island Catholic Separate Regional Division No. 41 Salaries & Benefit Costs

6. Deferred Revenue

Opening Funds Balance Received

School Generated Funds (Note 11) $2,095 $0

Prepaid School Fees 1, 142 0

3,237 0 Expended Deferred

Capital Revenue 1,182,929 265,627

$1, 186, 166 $265,627

Opening Funds Balance Received

School Generated Funds (Note 11) $2,095 $0

Prepaid School Fees 0 1, 142

2,095 1,142 Expended Deferred

Capital Revenue 1,243,592 0

$1,245,687 $1,142

2015 2014

$65,753 $22,538 12,047 0 3,478 2,812

0 7,294

$81,278 $32,644

2015

Funds Funds Closing Expended Returned Balance

$0 $0 $2,095 1,142 0 0

1, 142 0 2,095

60,663 1,122,266 265,627

$61,805 $1, 122,266 $267,722

2014

Funds Funds Closing Expended Returned Balance

$0 $0 $2,095 0 0 1,142

0 0 3,237

60,663 0 1,182,929

$60,663 $0 $1,186,166


Accountants

• ( 1' i


August 31, 2015

7. Tangible Capital Assets

Leasehold Building Improvements Equipment 2015 2014

Historical Cost Opening Balance $1,516,575 $18,642 $6,604 $1,541,821 $1,541,821 Additions 288,989 0 13, 101 302,090 0 Transfers in 265,627 0 0 265,627 0 Transfers (out) (1,516,575) 0 0 (1,516,575) 0 Disposal including

Write-offs 0 (18,642) 0 (18,642) 0

Ending Balance $554,616 $0 $19,705 $574,321 $1,541,821

Accumulated Amortization Opening Balance 333,646 18,642 6,604 $358,892 $295,704 Amortization Expense 60,664 0 0 60,664 63, 188 Transfers (out) (394,310) 0 0 (394,310) 0 Disposal including

Write-offs 0 (18,642) 0 (18,642) 0

0 0 6,604 6,604 358,892

Net Book Value $554,616 $0 $13, 101 $567,717 $1, 182,929

8. Accumulated Surplus Detailed information related to accumulated surplus is available on the Schedule of Changes in Accumulated Surplus. Accumulated surplus is summarized as follows:

2015 2014

Operating Reserves Plant, Operations and Maintenance $144,244 $196,124

Board System and Administration 134,995 113,737

Maternity Leave 40,000 40,000

319,239 349,861

Unrestricted Surplus 227,335 541,864

Invested in Tangible Capital Assets 302,091 0

Capital Reserve 109,817 105,690

Accumulated Surplus $958,482 $997,415


Accountants

" t " A


August 31, 2015

8. Accumulated Surplus (continued) Accumulated suplus from operations inlcudes school generated funds of $9,989 (2014 - $9,791). These funds are raised at the school level and are not available to spend at the board level. The School jurisdiction's adjusted surplus from operations is as follows:

Accumulated Surplus from Operations School Generated Funds included in Accumulated Surplus (Note 10)

Adjusted Accumulated Surplus from Operations

9. Contractual Obligations

Contracted Services Office Equipment Building Projects

2015

$958,482 (9,989)

$948,493

2015

$164,314 24,058

0

$188,372

2014

$997,415 (9,791)

$987,624

2014

$208,992

9,568 7,350

$225,910

The Society has leased office equipment with a cost of $1,257 per quarter, expiring June, 2020.

The Society has entered into a 5 year agreement for the provision of contracted superintendent services, expiring June 30, 2017. The Society has also entered into a 2 year agreement for the provision of building operations services expiring June 30, 2017.

The Society has entered into one-year contracts for the provision of building maintenance and HVAC maintenance. These contracts expire June 30, 2016.

The Society has entered into a rental agreement with Elk Island Catholic Separate Regional Division No 41. regarding the rental of a school, commencing June 13, 2014. This agreement will continue until such time as the official transfer of the school to the Society is in place.

Estimated payment requirements for each of the next five years and thereafter are as follows:

Office Contracted Equipment Services Total

2016 $4,784 $94,174 $98,958 2017 5,028 70, 140 75,168 2018 5,028 0 5,028 2019 5,028 0 5,028 2020 4,190 0 4,190

$24,058 $164,314 $188,372


Accountants

.. f I .. NEW HORIZONS CHARTER SCHOOL SOCIETY

NOTES TO FINANCIAL STATEMENTS August 31, 2015

10. School Generated Funds Deferred Accumulated Revenue Surplus 2015 2014

Balance, Beginning of Year $2,095 $9,791 $11,886 $11,307 Gross Receipts:

Fees 0 17,909 17,909 23,932 Other Sales and Services 0 3,173 3,173 2,480 Fundraising 0 5,567 5,567 8,096

Total Gross Receipts 0 26,649 26,649 34,508

Expenditures: Total Direct Costs Including Cost

of Goods Sold to Raise Funds 0 2,243 2,243 2,254 Uses of Funds 0 24,208 24,208 31,675

Total Expenditures 0 26,451 26,451 33,929

Balance, End of Year $2,095 $9,989 $12,084 $11,886

11. Related Party Transactions All entities that are consolidated in the accounts of the Government of Alberta are related parties of school jurisdictions. These include government departments, health authorities, post-secondary institutions and other school jurisdictions in Alberta.

Balances Transactions t-manc1a1 Assets Liabilities Revenue Expenses

Government of Alberta Alberta Education

Grant revenue and expenses $7,000 $0 $2,155,147 $0 Unexpended Deferred Capital

Revenue 0 0 60,663 0 Other Alberta School Divisions

Edmonton School Division No. 7 0 0 0 8,395 Elk Island Catholic Separate

Regional Division No. 41 0 3,478 0 5,606 Elk Island Public Schools Regional

Division No. 14 0 12,047 0 114,151

Total 2013/2014 $7,000 $15,525 $2,215,810 $128,152

Total 2012/2013 $0 $0 I $2, 124, 165 $139,883

During the year, the Society transferred Buildings with a net book value of $1, 122,265 to Elk Island Public Schools Regional Division No. 14. This transfer has been recorded net of Expended Deferred Capital Allocations of $1, 122,265.


Accountants

12.


August 31, 2015

Economic Dependence on Related Third Party The Society's primary source of income is from the Alberta Government. The Society's ability to continue viable operations is dependant on this funding.

13. Remuneration and Monetary Incentives The Society has paid or accrued expenses for the year ended August 31, 2015 to or on behalf of the following positions and persons, in groups as follows:

Negotiated Perfonnance ERIP's/ FTE Remuneration Benefits Allowances Bonuses Other Expenses

Board Members: Chair: Clarke, Jason 1.00 $0 $0 $0 $0 $0 Director: Thomson, Kim 1.00

Director: Bosch, Ryan 1.00 Director: Karbonik, Carole 0.80 Director: Loh, Jay-Lynn 0.20

Director: Mclean, Dave 1.00

Director: Vogel, Christine 0.20

Director: Weiss, Jill 1.00 Director: Qualie, Vicky 0.80

Subtotal 7.00 0 0 0 0 0

Superintendent: Falk, Don 0.40 73,152 0 0 0 0 Secretary IT reasurer: de Kleine, G. 0.60 74,580 0 0 0 0

Certificated Teachers 12.10 1,126,448 226,912 0 0 0

Non-certificated - Other 6.10 197,539 28,747 0 0 0

Total 26.20 $1,471,719 $255,659 $0 $0 $0

Superintendent and Secretaryrfreasurer remuneration is classifies as services, contracts and supplies as these services are provided on a contract basis.

14. Budgeted Amounts The budget was prepared by the Society and approved by the Board of Directors on

May 26, 2014.

15. Comparative Figures The comparative figures have been reclassified where necessary to conform to the 2015

presentation.

$0

575

575

1,199

0 0 0

$1,774


26 Accountants

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