financial statements - keewatin-patricia district school board financial... · 2010 actual annual...

tfyIdeewatinPatricia

DISTRICT SCHOOL BOARD

Financial

Statements

2010 - 2011

Kenora - Head Office100 First Avenue WestKenora, Ontario PgN 327Phone: 807-468-5571Fax: 807-468-3857Toll Free: 877 -275-777 1

Dryden Office79 Casimir AvenueDryden, Ontario P8N 226Phone: 807-223-531 1Fax:8O7-223-4703Toll Free: 877 -287 -5430

KeewatinPatricia

DISTRICT SCHOOL BOARD

MAT{AGEMENT REPORT

Managemenfs Responsibility for the Consolldated Flnancial Statements

The accompanying consolidated financial statements of the Keeuratin-Patricia District SchoolBoard are the responsibility of the Board's management and have been prepared in compliancewith legislation, and based on the financial reporting provisions described in Note 1a to theconsol idated fi nancial statements.

The preparation of consolidated financial statements necessarily involves the use of estimatesbased on management's judgement, particularly when transactions affecting the currentaccounting period cannot be finalized with certainty until future periods.

Board management maintains a system of internal controls designed to provide reasonableassurance that assets are safeguarded, transactions are properly authorized and recorded incompliance with legislative and regulatory requirements, and reliable financial information isavailable on a timely basis for preparation of the consolidated financial statements. Thesesystems are monitored and evaluated by management (and by the Board's internal auditors).

The Board meets with management and the external auditors to review the consolidatedfinancial statements and discuss any significant financial reporting or internal control mattersprior to their approval of the consolidated financial statements.

The consolidated financial statements have been audited by BDO Canada LLP, independentexternal auditors appointed by the Board. The accompanying lndependent Auditor's Reportoutlines their responsibilities, the scope of their examination and their opinion on the Board'sconsol idated fi nancial statements.

Director of Education

January 24,2011

Superintendent of Business

c.'ack

McMaster Dean Garrie

WWW,KFDSB.ON,CA

lBpo Tet: 807 468 5531Fax: 807 468 9774www.bdo.ca

BDO Canada LLP300 - 101 First Avenue 5Kenora ON P9N 4E9 Canada

Independent Auditor's Report

To the Board of Trustees of Keewatin-Patricia District School Board

We have audited the accompanying consotidated financiat statements of Keewatin- Patricia DistrictSchool Board, which comprise the consotidated statement of financial position as at August 31,201 1, and the consolidated statement of operations, consolidated statement of change in net debtand consolidated statement of cash flows for the year then ended, and a summary of significantaccounting policies and other exptanatory information. The consolidated financial statementshave been prepared by management based on the financial reporting provisions described in Note1 to the consotidated financiaI statements.

Management's Responsibitity for the Consolidated Financial Statements

Management is responsibte for the preparation and fair presentation of these consolidatedfinancial statements in accordance with the basis of accounting described in Note 1 to theconsolidated financiaI statements, and for such internaI controI as management determines isnecessary to enable the preparation of consolidated financiat statements that are free frommaterial misstatement, whether due to fraud or error.

Auditor's Responsibility

our responsibility is to express an opinion on these consolidated financial statements based on ouraudit. We conducted our audit in accordance with Canadian generally accepted auditingstandards. Those standards require that we comply with ethical requirements and ptan andperform the audit to obtain reasonabte assurance about whether the consotidated financialstatements are free from materiaI misstatement,

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consotidated financial statements. The orocedures selected depend on theauditor's judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the consotidated financia[ statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal controt. An audit also includes evatuating theappropriateness of accounting policies used and the reasonabteness of accounting estimates madeby management, as we[[ as evaluating the overatt presentation of the consolidated financialstatements.

We betieve that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our oDinion.

2BDocanadaLLqacanad ian l jm i ted l jab i l j t ypar tneEh ip ' i5amembero 'BD0nterna t iona lL im] ted ,aL ] { .ompany l jm i tedbyguarantee ,network ot independent member firms.

IBDO

Opinion

In our opinion, the consotidated financial statements of Keewatin-Patricia District School Boardfor the year ended August 31,2011 present fairly, in aU material respects, the consotidatedfinancial position of Keewatin- Patricia School Board at as August 31,2011, and its consotidatedresults of operations and changes in its consotidated net debt and consolidated cash flows for the

, year then ended in accordance with the basis of accounting described in Note 1 to theconsotidated financiaI statements.

Basis of Accounting

Without modifying our opinion, we draw attention to Note I to the consolidated financialstatements which describes the basis of accounting. The consotidated financial statements areprepared to assist Keewatin-Patricia District School Board to meet the requirements of theOntario Ministry of Education. As a resutt, the consolidated financial statements may not besuitabte for another purpose.

fu ee^odcr L-Lf

Chartered Accountants, Licenced Pubtic Accountant

January 24, 2012Kenora. Ontario

August 31, 2011

FINANCIAL ASSETSCash and cash eouivalentsAccounts receivablelnvestmentsOtherTOTAL FINANCIAL ASSETS

LIABILITIESTemporary borrowingAccounts payable & Accrued liabilitiesOtherNet Debenture Debt, Capital Loans and LeasesDeferred revenueEmployee future benefits payableDeferred Capital ContributionsTOTAL LIABILITIES

NET DEBT

NON.FINANCIAL ASSETSPrepaid ExpensesTangible Capital AssetsTOTAL NON-FINANCIAL ASSETS

ACCUMULATED SURPLUS

Signed on Behatf of the Board on January 24,2012

Signature of Chief Executive Officer

It-)A**"fi"Paticia

6,66129,4324,003

48

Signature of Chair of the Boarc

Consolidated Financial Statements(in thousands of dollars)

Consolidated Statement of Financial PositionFor the year ended August 31

2011 2010(Restated -

note 2)

10,88120,6116,051

5840,14

1016,426

029,5041,295

13,93059,295

37,601

1105,158

7630,5163,497

13,14450,283

110,551

(7O,4O71

5580,779

102,7U

(65,183)

7872,294

80,8it4 72,372

10,427 7,189

/4'zK- @:r-- Pase4

t#accompanying srrmmary of significart accounting polici€s and not€s a.E an integral part of th€se financial stat€ments.

August 31, 2011 Consolidated Financial Statements (in thousands of dollars)

Page 5 The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.

Consolidated Statement of Operations

For the year ended August 31

2011 Budget

2011 Actual

2010 Actual

REVENUES (Restated & Unaudited)

(Restated - note 2)

Provincial grants - Grants for Student Needs 54,913 58,260 66,573

Provincial grants - Other 1,044 2,356 2,435

Local taxation 17,257 15,135 15,816

School generated funds 2,700 2,523 2,538

Federal grants & fees 5,131 5,137 5,971

Investment income 0 254 128

Other revenues - School boards 228 146 1,694

Other fees & revenues 785 1,573 1,966

Amortization of Deferred Capital Contributions 2,233 2,253 3,134

TOTAL REVENUE 84,291 87,637 100,255

EXPENSES Instruction 60,731 60,438 62,668

Administration 3,814 3,711 3,619

Transportation 4,430 3,773 5,610

Pupil Accommodation 13,486 12,871 10,568

School generated funds 2,700 2,513 2,510

Other 1,106 1,093 1,080

TOTAL EXPENSES 86,267 84,399 86,055

Annual Surplus/(Deficit) (1,976) 3,238 14,200

Accumulated Surplus/(Deficit) at beginning of year 247 7,189 (7,011)

Accumulated Surplus/(Deficit) at end of year (1,729) 10,427 7,189



Consolidated Statement of Cash Flows For the year ended August 31

2011 2010

OPERATING TRANSACTIONS

(Restated - note 2)

Annual Surplus

3,238 14,200

Items not involving cash Amortization of tangible capital assets

2,932 3,805

Amortization of deferred capital contribution

(2,253) (3,134)

Loss on disposal of tangible capital assets

15 54

Write downs of tangible capital assets

0 111

Change in non-cash assets and liabilities Accounts receivable

(8,821) (12,975)

Other financial assets

10 100

Accounts payable & Accrued liabilities

1,268 (244)

Other liabilities

(76) 446

Deferred revenue

(2,203) 403

Employee future benefits payable

786 227

Deferred Capital Contributions

11,265 4,965

Prepaid expenses

23 (20)

6,184 7,938

CAPITAL TRANSACTIONS Proceeds on sale of tangible capital assets

45 32

Cash used to acquire tangible capital assets

(11,476) (5,130)

Cash provided by (applied to) capital transactions

(11,431) (5,098)

INVESTING TRANSACTIONS Investments

2,047 (5,070)

Cash provided by (applied to) investing transactions

2,047 (5,070)

FINANCING TRANSACTIONS Temporary borrowing

(9) 40

Debt repaid and sinking fund contributions

(1,011) (1,048)

Cash provided by (applied to) financing transactions

(1,020) (1,008)

Decrease in Cash and Cash Equivalents

(4,220) (3,238)

Opening Cash and Cash Equivalents

10,881 14,119

Closing Cash and Cash Equivalents

6,661 10,881



Consolidated Statement of Change in Net Debt


2011 Actual

2010 Actual

Annual Surplus 3,238 14,200

Acquisition of tangible capital assets (11,476) (5,130)

Amortization of tangible capital assets 2,932 3,805

Loss on disposal and write downs of tangible capital assets 15 165

Proceeds on sale of tangible capital assets 45 32

Other (1) 0

Total tangible capital asset activity (5,247) 13,072

OTHER NON-FINANCIAL ASSET ACTIVITY Acquisition of prepaid expenses (62) (79)

Use of prepaid expenses 85 59

Total other non-financial asset activity 23 (20)

(Increase) decrease in net debt (5,224) 13,052

Net debt at beginning of year (65,183) (78,235)

Net debt at end of year (70,407) (65,183)

August 31, 2011 Notes to Consolidated Financial Statements

Page 8

1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements are prepared by management in accordance with the basis of accounting described below. All dollars referenced in these notes and financial statements are in thousands (000’s) of Canadian dollars.

a) Basis of Accounting

These consolidated financial statements have been prepared in accordance with Ontario Regulation 196/10 which requires school boards to comply with all regulations, policies, guidelines, directives and similar instruments. In 2004, directive was provided by the Ontario Ministry of Education within memorandum 2004:B2 requiring school boards to adopt Public Sector Accounting Standards established by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA).

In March 2011, PSAB released a new Public Sector Accounting Standard PS 3410 “Government Transfers”. The Ontario Ministry of Education provided direction on the adoption of this new standard in memorandum 2011:B08. The Ontario Ministry of Education required the implementation of this Government Transfers standard on a retroactive basis as described in Note 2 to the financial statements. The Ministry direction requires school boards to record a liability (deferred capital contribution) equal to the amount of the net book value of the depreciable assets at September 1, 2010 that have been Ministry approved. This direction, therefore, results in property tax revenue which was used to acquire or construct depreciable capital assets prior to 1998 when school boards ceased to have taxing authority, being afforded the same treatment as government capital grants, which is to recognize related revenue over the remaining useful life of the asset as disclosed in Note 2. Under the Public Sector Accounting Standards property tax revenue should be recorded as revenue when received or receivable in accordance with Public Sector Accounting Standard PS 3510 “Tax Revenue”. These consolidated financial statements have been prepared in accordance with the financial reporting framework described above.

b) Reporting Entity The consolidated financial statements reflect the assets, liabilities, revenues and expenses of the reporting entity. The reporting entity is comprised of all organizations accountable for the administration of their financial affairs and resources to the Board and which are controlled by the Board.


Page 9

School generated funds, which include the assets, liabilities, revenues and expenses of various organizations that exist at the school level and which are controlled by the Board are reflected in the consolidated financial statements. Consolidated entities – Northwestern Ontario Student Services Consortium School Generated Funds Interdepartmental and inter-organizational transactions and balances between these organizations are eliminated.

c) Trust Funds Trust funds and their related operations administered by the Board are not included in the consolidated financial statements as they are not controlled by the Board.

d) Cash and Cash Equivalents Cash and cash equivalents comprise of cash on hand, demand deposits and short-term investments. Short-term investments are highly liquid, subject to insignificant risk of changes in value and have a short maturity term of less than 90 days.

e) Investments Temporary investments consist of marketable securities which are liquid short-term investments with maturities of between three months and one year at the date of acquisition, and are carried on the Consolidated Statement of Financial Position at the lower of cost or market value. Long-term investments consist of investments that have maturities of more than one year. Long-term investments are recorded at cost, and assessed regularly for permanent impairment.

f) Deferred Revenue Certain amounts are received pursuant to legislation, regulation or agreement and may only be used in the conduct of certain programs or in the delivery of specific services and transactions. These amounts are recognized as revenue in the fiscal year the related expenditures are incurred or services performed.

g) Retirement and Other Employee Future Benefits The Board provides defined retirement and other future benefits to specified employee groups. These benefits include pension, life insurance, health care benefits, dental benefits, retirement gratuity, worker’s compensation and long-term disability. The Board has adopted the following policies with respect to


Page 10

accounting for these employee benefits: (i) The costs of self insured retirement and other employee future benefit plans

are actuarially determined using management’s best estimate of salary escalation, accumulated sick days at retirement, insurance and health care costs trends, disability recovery rates, long-term inflation rates and discount rates.

For self insured retirement and other employee future benefits that vest or accumulated over the periods of service provided by employees, such as retirement gratuities and life insurance & health care benefits for retirees, the cost is actuarially determined using the projected benefits method prorated on service. Under this method, the benefit costs are recognized over the expected average service life of the employee group. Any actuarial gains and losses related to the past service of employees are amortized over the expected average remaining service life of the employee group. For those self insured benefit obligations that arise from specific events that occur from time to time, such as obligations for worker’s compensation, long-term disability and life insurance & health care benefits for those on disability leave, the cost is recognized immediately in the period the events occur. Any actuarial gains and losses that are related to these benefits are recognized immediately in the period they arise.

(ii) The costs of multi-employer defined pension plan benefits, such as the Ontario Municipal Employees Retirement System pensions, are the employer’s contributions due to the plan in the period;

(iii) The costs of insured benefits are the employer’s portion of insurance

premiums owed for coverage of employees during the period.

h) Tangible Capital Assets

Tangible capital assets are recorded at historical cost less accumulated

amortization. Historical cost includes amounts that are directly attributable to

acquisition, construction, development or betterment of the asset, as well as

interest related to financing during construction. When historical cost records

were not available, other methods were used to estimate the costs and

accumulated amortization.

Leases which transfer substantially all of the benefits and risks incidental to

ownership of property are accounted for as leased tangible capital assets. All

other leases are accounted for as operating leases and the related payments are

charged to expenses as incurred.

Tangible capital assets, except land, are amortized on a straight line basis over

their estimated useful lives as follows:


Page 11

Asset Estimated Useful Life in Years

Land improvements with finite lives 15 Buildings and building improvements 40 Portable Structures 20 Other Buildings 20 First–time equipping of schools 10 Furniture 10 Equipment 5-15 Computer hardware 5 Computer software 5 Vehicles 5-10 Leasehold improvements Over the lease term

Assets under construction and assets that relate to pre-acquisition and pre-construction costs are not amortized until the asset is available for productive use. Land permanently removed from service and held for resale is recorded at the lower of cost and estimated net realizable value. Cost includes amounts for improvements to prepare the land for sale or servicing. Buildings permanently removed from service and held for resale cease to be amortized and are recorded at the lower of carrying value and estimated net realizable value. Tangible capital assets which meet the criteria for financial assets are reclassified as “assets held for sale” on the Consolidated Statement of Financial Position. Works of art and cultural and historic assets are not recorded as assets in these consolidated financial statements.

i) Government Transfers Government transfers, which include legislative grants, are recognized in the consolidated financial statements in the period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met and reasonable estimates of the amount can be made. Government transfers for capital that meet the definition of a liability are referred to as deferred capital contributions. Amounts are recognized into revenue as the liability is extinguished over the useful life of the asset.

j) Investment Income Investment income is reported as revenue in the period earned. When required by the funding government or related Act, investment income earned on externally restricted funds such as pupil accommodation, education


Page 12

development charges and special education forms part of the respective deferred revenue balances.

k) Long-term Debt

Long-term debt is recorded net of related sinking fund asset balances.

l) Budget Figures Budget figures have been provided for comparison purposes and have been derived from the budget approved by the Trustees. The budget approved by the Trustees is developed in accordance with the provincially mandated funding model for school boards and is used to manage program spending within the guidelines of the funding model. Given differences between the funding model and the basis of accounting used by the school board in the preparation of the financial statements, the budget figures presented have been adjusted to conform with this basis of accounting as it is used to prepare the consolidated financial statements. The budget figures are unaudited.

m) Use of Estimates The preparation of consolidated financial statements in conformity with the basis of accounting described in note 1a requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the year. Amounts subject to significant estimates include liabilities for employee future benefits and useful lives of tangible capital assets. Actual results could differ from these estimates.

2. CHANGE IN ACCOUNTING POLICIES In fiscal 2011, the Board early adopted Public Sector Accounting Handbook section 3410 Government Transfers as described in Note 1a. This change has been applied retroactively and prior periods have been restated. Government transfers for capital that meet the definition of a liability are referred to as deferred capital contributions. Amounts are recognized into revenue as the liability is extinguished over the useful life of the asset. At the direction of the Ministry, the Board has calculated the opening deferred capital contribution balance as at September 1, 2010 as the value of the depreciable tangible capital assets less the unsupported capital debt, both at August 31, 2010 with a restatement of 2009-2010 financial statements. The unsupported capital debt is the portion of the board’s outstanding debt that is not supported by Ministry funding. This calculation provides a cost effective solution to determine the opening balance, allowing for the standard to be implemented retroactively. Retroactive implementation results in a set of financial statements


Page 13

that is relevant, understandable to the user, and comparable over periods and amongst school boards in Ontario. This change in accounting policy has changed amounts reported in the prior period as follows:

Accumulated surplus at August 31, 2010:

Accumulated surplus, as previously reported 57,785

Reclassify deferred revenue proceeds of disposition (313)

Transfer to deferred capital contributions (50,283)

Accumulated surplus, as restated 7,189

Annual surplus for the year ended August 31, 2010:

Annual surplus, as previously reported 16,032

Plus: Amounts recognized in revenue 3,298

Less: In-year Provincial capital contributions (5,130)

Annual surplus, as restated 14,200

The impact for the year ended August 31, 2011 is as follows:

Annual surplus for the year ended August 31, 2011:

Annual surplus, as per prior year policy 12,265

Less: In-year Provincial capital contributions (11,280)

Plus: Amounts recognized in revenue 2,253

Subtotal (9,027)

Annual surplus, as currently reported 3,238

Provincial grants have decreased by the subtotal above.

3. INVESTMENTS Investments are comprised as follows:

2011 2010

Cost Market Value Cost

Market Value Maturity Date Rate

Term deposit Nov 17, 2014 2.45% 2,002 2,002 2,002 2,002

Term deposit Feb 16, 2012 1.40% 2,001 2,001 2,001 2,001

Term deposit

2,001 2,001

Debenture

46 54

4,003 4,003 6,050 6,058


Page 14

These investments are assessed regularly for impairment and are written down if a permanent impairment exists.

4. ACCOUNTS RECEIVABLE - GOVERNMENT OF ONTARIO The Province of Ontario (Province) replaced variable capital funding with a one-time debt support grant in 2009-10. Keewatin-Patricia District School Board received a one-time grant that recognizes capital debt as of August 31, 2010 that is supported by the existing capital programs. The Board receives this grant in cash over the remaining term of the existing capital debt instruments. The Board may also receive yearly capital grants to support capital programs which would be reflected in this account receivable. Included in accounts receivable is an amount from the Province of $23,044 as at August 31, 2011 with respect to capital grants.

5. DEFERRED REVENUE Revenues received and that have been set aside for specific purposes by legislation, regulation or agreement are included in deferred revenue and reported on the Consolidated Statement of Financial Position. Deferred revenue set-aside for specific purposes by legislation, regulation or agreement as at August 31, 2011 is summarized below:

Balance as

at August 31, 2010

(Restated - note 2) Increase Decrease

Balance as at August

31, 2011

Classroom Expense 1,630 0 1,630 0 Proceeds of Disposition 313 45 0 358

Energy Efficient Schools - Capital 635 1,286 1,508 413

Other 919 15,869 16,264 524

Total Deferred Revenue 3,497 17,200 19,402 1,295

6. DEFERRED CAPITAL CONTRIBUTIONS Government transfers for capital that meet the definition of a liability are referred to as deferred capital contributions. Amounts are recognized into revenue as the liability is extinguished over the useful life of the asset. The Ministry provided direction to the school boards in the establishment of the opening balance of the deferred capital contributions as disclosed in Note 2.


Page 15

2011 2010 (Restated -

note 2)

Balance as at August 31, 2010 50,283 48,484 Additions to deferred capital contributions 11,325 5,130 Revenue recognized in the period (2,253) (3,134) Transfers (to) deferred revenue (60) (197)

Balance as at August 31, 2011 59,295 50,283

7. RETIREMENT AND OTHER EMPLOYEE FUTURE BENEFITS Retirement and other employee future benefits liabilities:

2011 2010

Retirement

Benefits

Other Employee

Future Benefits

Total Employee

Future Benefits

Total Employee

Future Benefits

Accrued Employee Future Benefit Obligations at August 31 9,270 7,091

16,361

13,143

Unamortized Actuarial Gains (Losses) at August 31

(68)

(2,363)

(2,431) 1

Employee Future Benefits Liability at August 31 9,202 4,728

13,930

13,144


Page 16

Retirement and other employee future benefits expense:

2011 2010

Retirement

Benefits

Other Employee

Future Benefits

Total Employee

Future Benefits

Total Employee

Future Benefits

Current Year Benefit Cost 606 397

1,003

926

Interest on Accrued Benefit Obligation 354 251

605

541

Recognized Actuarial gains (losses) 13 170

183 9

Increase due to plan amendment (C&P) 0 0 0

(42)

Recognized unamortized actuarial losses (gains) on plan amendments 68

(240)

(172)

(1)

Employee Future Benefits Expenses1 1,041 578

1,619

1,433

1 Excluding pension contributions to the Ontario Municipal Employees Retirement System, a multi-employer

pension plan, described below.

Retirement Benefits

(i) Ontario Teacher’s Pension Plan

Teachers and related employee groups are eligible to be members of Ontario Teacher’s Pension Plan. Employer contributions for these employees are provided directly by the Province of Ontario. The pension costs and obligations related to this plan are a direct responsibility of the Province. Accordingly, no costs or liabilities related to this plan are included in the Board’s consolidated financial statements.

(ii) Ontario Municipal Employees Retirement System

All non-teaching employees of the Board are eligible to be members of the Ontario Municipal Employees Retirement System (OMERS), a multi-employer pension plan. The plan provides defined pension benefits to employees based on their length of service and rates of pay. The Board contributions equal the employee contributions to the plan. During the year ended August 31, 2011, the Board contributed $906 (2010 - $805) to the plan. As this is a multi-employer pension plan, these contributions are the Board’s pension benefit expenses. No pension liability for this type of plan is included in the Board’s consolidated financial statements.


Page 17

(iii) Retirement Gratuities

The Board provides retirement gratuities to certain groups of employees hired prior to specified dates. The amount of the gratuities paid to eligible employees at retirement is based on their salary, accumulated sick days, and years of service at retirement. The Board provides these benefits through an unfunded defined benefit plan. The benefit costs and liabilities related to this plan are included in the Board’s consolidated financial statements.

(iv) Retirement Life Insurance and Health Care Benefits

The Board continues to provide life insurance, dental and health care benefits to certain employee groups after retirement until the members reach 65 years of age. The Board provides these benefits through an unfunded defined benefit plan. The benefit costs and liabilities related to this plan are included in the Board’s consolidated financial statements.

Other Employee Future Benefits

(i) Workplace Safety and Insurance Board Obligations The Board is a Schedule 2 employer under the Workplace Safety and Insurance Act and, as such, assumes responsibility for the payment of all claims to its injured workers under the Act. The Board does not fund these obligations in advance of payments made under the Act. The benefit costs and liabilities related to this plan are included in the Board’s consolidated financial statements.

(ii) Long-term Disability Life Insurance and Health care Benefits The Board provides life insurance, dental and health care benefits to employees on long-term disability leave. Employees in receipt of long-term disability benefits are responsible for the payment of the premium on life insurance and deemed premium on health care benefits. The Board is responsible for any costs in excess of the employee contributions through an unfunded defined benefit plan. The costs of salary compensation paid to employees on long-term disability leave are fully insured and not included in this plan.

The Board has restricted a portion of its accumulated surplus for certain of these

employee future benefit obligations in the amount of $739, at August 31, 2011

(2010 $854).

(iii) Sick Leave Benefits

The Board provides compensated absences from sick leave accumulations

through an unfunded defined benefit plan. The benefit costs expensed in the

financial statements are $633 (2010 - $500).


Page 18

The accrued benefit obligations for sick leave benefits as at August 31, 2011 are based on actuarial valuations for accounting purposes as at August 31, 2010. These actuarial valuations were based on assumptions about future events. The economic assumptions used in these valuations are the Board’s best estimates of expected rates of:

(iv) Life Insurance Benefits

The Board provides a separate life insurance benefits plan for certain retirees.

The premiums are based on the Board experience. The benefit costs and

liabilities related to the subsidization of these retirees under this group plan are

included in the Board’s consolidated financial statements.

(v) Health Care and Dental Benefits

The Board sponsors a separate plan for retirees to provide group health care and

dental benefits. The premiums are based on experience or demographics of the

group and the Board is required to pay 100% of the premium costs.

Actuarial Assumptions 2011 2010

Inflation

% 2.0

% 2.0

Wage and salary escalation 3.0 3.0 Insurance and health care cost escalation 6.0–10.0 6.5-10.5 Discount on accrued benefit obligations 4.0 4.5

8. NET LONG TERM DEBT

Debenture debt, capital loans and obligation under capital leases reported on the Consolidated Statement of Financial Position comprises of the following:

Capital Loans Maturity Date Rate 2011 2010

TD Canada Trust Loan #5 - monthly payment of $115 09/26/2012 6.330% 13,925 14,408

Loan #6 - monthly payment of $45 06/30/2013 6.690% 5,410 5,578

Loan #6a -monthly payments of $34 11/30/2014 5.780% 3,751 3,934

Good Places to Learn - Ontario Financing Authority

Loan #1 - semi-annual payment of $142 11/15/2031 4.560% 3,743 3,853

Loan #2 - semi-annual payments of $63 03/03/2033 4.900% 1,690 1,732

Loan #3 - semi-annual payments of $37 03/13/2034 5.062% 985 1,007

Sinking Fund Debenture- Golden L.C.

0 586

Subtotal

29,504 31,098

Less: Sinking Fund Assets

0 (582)

Balance as at August 31 29,504 30,516


Page 19

Principal and interest payments relating to net debenture debt, capital loans and leases of $35,526 outstanding as at August 31, 2011 are due as follows:

Principal Interest Total

2012 1,068 1,738 2,806

2013 19,039 851 19,890

2014 418 471 889

2015 3,343 289 3,632

2016 219 264 483

Thereafter 5,417 2,409 7,826

Total 29,504 6,022 35,526

(Retirement of sinking funds in the year that they mature is not included as payments in the above chart.)

Included in net debenture debt are outstanding sinking fund debentures of $0 (2010 - $586) secured by sinking fund assets.

9. TEMPORARY BORROWING

The Board has an operating line of credit with a Canadian financial institution. The maximum drawings under the terms of the operating line are $5,000 to address operating requirements and/or to bridge capital expenditures. At year end the Board was not using its operating line. The Board has temporary borrowing of $101 for credit cards as at August 31, 2011. There is a second line of credit to cover costs of the new Dryden elementary school. The maximum drawings under the terms of the capital line are $13,000. At year end, the Board had not drawn funds for construction costs.

10. DEBT CHARGES, CAPITAL LOANS AND LEASES INTEREST

2011 2010

Principal payments on long-term liabilities including contributions to sinking funds

1,008 1,032

Interest payments on long-term liabilities

1,813 1,930

Interest payments on temporary financing of capital projects

91 19

2,912 2,981


Page 20

Included in debt repayment and sinking fund contributions on the Consolidated Statement of Cash Flows in total of $1,011 (2010 - $1,048) are principal payments on long-term debt of $1,008 (2010 - $938), sinking fund interest of $3 (2010 - $16) and sinking fund contributions of $0 (2010 - $94).

11. EXPENSES BY OBJECT The following is a summary of the expenses reported on the Consolidated Statement of Operations by object:

2011 2011 2010

Budget Actual Actual

(Un-audited)

Expenses: Salary and wages 54,339 54,908 53,941

Employee benefits 8,855 8,370 7,635

Staff development 711 716 697

Supplies and services 11,008 9,444 10,038

Interest charges on capital 1,807 1,905 1,949

Rental expenses 70 44 41

Fees and contract services 5,680 5,075 6,851

Other 902 845 844

Transfer to other boards 0 145 89

Amortization of tangible capital assets 2,895 2,932 3,805

Loss on disposal 0 15 165

86,267 84,399 86,055

12. BOARD PERFORMS DUTIES OF A MUNICIPAL COUNCIL

The Board performs the duties of levying and collecting taxes, conducting elections of members, etc. in territory without municipal organization. The outlay by the Board in 2011 in respect of performing duties of municipal council is reported by area in a separate statement. Since January 1, 2009, the City of Thunder Bay collects the taxes in territory without municipal organization on behalf of the Board. Certain costs are recoverable through a levy on all rateable property in the area and other approved costs are recoverable through an offset to the local taxation revenue.


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13. TANGIBLE CAPITAL ASSETS

Cost

Accumulated Amortization

Net Book Value

Balance

September 1, 2010

Additions and

Transfers Disposals

Balance August 31,

2011

Balance September

1, 2010 Amortization

Disposals, Write-offs,

Adjustments

Balance August

31, 2011

Balance August

31, 2011

Balance August

31, 2010

Land 1,202 0 0 1,202

1,202 1,202 Land Improvements 395 80 0 475

70 29 99

376 325

Buildings 96,620 2,705 649 98,676

31,911 2,431 589 33,753

64,923 64,709

Furniture and Equipment 2,226 574 380 2,420

1,367 403 380 1,390

1,031 859

Vehicles 318 51 0 369

115 69 184

185 203

Construction In Progress 4,996 8,066 13,062

0 0

13,062 4,996

Total 105,757 11,476 1,029 116,204

33,463 2,932 969 35,426

80,779 72,294

a) Assets under construction

Assets under construction having a value of $13,062 (2010 - $4,996) have not been amortized. Amortization of these assets will

commence when the asset is put into service.

b) Write-down of Tangible Capital Assets

The write-down of tangible capital assets during the year was $0 (2010 - $111).

c) Asset inventories for resale (assets permanently removed from service)

The Board has identified $19 in building properties that qualify as “assets permanently removed from service” and which have

been included in the net book value ending balance as of August 31, 2011.


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14. TRUST FUNDS

Trust funds administered by the Board amounting to $303 (2010 - $298) have not been

included in the consolidated statement of financial position nor have their operations

been included in the consolidated statement of operations.

15. ONTARIO SCHOOL BOARD INSURANCE EXCHANGE (OSBIE) The school board is a member of the Ontario School Board Insurance Exchange, a reciprocal insurance company licensed under the Insurance Act. OSBIE insures general public liability, property damage and certain other risks. Liability insurance is available to a maximum of $20,000 per occurrence. The ultimate premiums over a five year period are based on the reciprocal’s and the Board’s actual claims experience. Periodically, the Board may receive a refund or be asked to pay an additional premium based on its pro rata share of claims experience. The current five year term expires December 31, 2016.

16. CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES

At year end, contracts are in effect for the construction of the following capital projects: Estimated Project Percent Competed Cost at year-end New Dryden Elementary School 15,995 85% Energy efficiency project 3,133 92% The Board has a contractual obligation through the Northwestern Ontario Student Services Consortium for transportation services with various providers for up to five years ending July 31, 2016. The value of the contract and portion attributable to the Board fluctuates year to year based on ridership and the routes added or subtracted. For 2011 – 2012, the contracts are valued at $5,152 of which $3,760 is estimated to be attributed to the Board. During the normal course of operations, various proceedings and claims have been filed against the Board. The Board reviews the validity of these claims and proceedings and management believes any settlement would be adequately covered by its insurance policies and would not have a material effect on the consolidated financial position or future consolidated results of operations of the Board. Accordingly, no provision has been made in these consolidated financial statements for any liability that may result. Any losses arising from these actions will be recorded in the year that the related litigation is settled. The Board is a Schedule 2 employer under the Workplace Safety & Insurance Board (WSIB) of Ontario. Schedule 2 employers are self-insured for WSIB claims. The actuarial estimate of the contingent liability as at August 31, 2011 for Future Economic Loss awards that may be approved in the future for school board employees is $0 (2010-$104).


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17. SEGMENTED INFORMATION The Keewatin-Patricia District School Board is a government institution that provides primarily education services. No additional disclosure on a segmented basis was considered necessary as the Board considers all the services and activities they provide to be encompassed in the segment of education.

18. BUDGET DATA The unaudited budget data presented in these consolidated financial statements is based upon the 2011 budgets approved by the Board on June 21, 2010. The budget was prepared in June 2010, prior to the release of the Government Transfers standard, which was released in March 2011. As a result, there are some changes in how the deferred capital contribution taken in to income is calculated for the Financial Statements, versus for the budget. This includes the treatment of sinking fund interest and other components. The chart below reconciles the approved budget to the budget figures reported in the Consolidated Statement of Operations. Where amounts were not budgeted for, the actual amounts for 2011 were used in order to adjust the budget numbers to reflect the same basis of accounting as that used to report the actual results. As boards only budget the Statement of Operations, the budget figures in the Consolidated Statement of Change in Net Debt have not been provided.

Consolidated Statement of Operations (Unaudited)


2011 Budget

Change 2011 Budget

(Restated - note 2)

REVENUES Total Revenues as in the 2010-11 Budget 85,940

Deduct: Adjustment due to Northwestern Student Services Consortium 1,649

Total Revenue 85,940 1,649 84,291

EXPENSES Total Expenses as in the 2010-11 Budget 87,916

Deduct: Adjustment due to Northwestern Student Services Consortium (1,649)

Total Expenses 87,916 (1,649) 86,267

Annual Deficit (1,976)

(1,976)

Accumulated Surplus at beginning of year 247 1,210 1,457

Accumulated Surplus / (Deficit) at end of year (1,729) 1,210 (519)


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19. PARTNERSHIP IN NORTHWESTERN ONTARIO STUDENT SERVICES CONSORTIUM Effective the first day of the 2010-11 school year the Board entered into an agreement with Kenora Catholic District School Board and The Northwest Catholic District School Board and Conseil Scolaire de District Catholique des Aurores Boreales in order to provide common administration of student transportation in the Region. This agreement was executed in an effort to increase delivery efficiency and cost effectiveness of student transportation for each of the Boards. Under the agreement, decisions related to the financial and operating activities of Northwestern Ontario Student Services Consortium are shared. No partner is in a position to exercise unilateral control. The Board’s consolidated financial statements reflect proportionate consolidation, whereby they include the assets that it controls, the liabilities that it has incurred, and its pro-rata share of revenues and expenses. The following provides condensed financial information.

2011

Total Board Portion

Operations:

Revenues 5,096 3,773

Expenses 5,096 3,773

Annual Surplus 0 0

20. REPAYMENT OF “55 SCHOOL BOARD TRUST” FUNDING On June 1, 2003, the Board received $9,353 from The 55 School Board Trust for its capital related debt eligible for provincial funding support pursuant to a 30-year agreement it entered into with the trust. The 55 School Board Trust was created to refinance the outstanding not permanently financed (NPF) debt of participating boards who are beneficiaries of the trust. Under the terms of the agreement, The 55 School Board Trust repaid the Board’s debt in consideration for the assignment by the Board to the trust of future provincial grants payable to the Board in respect of the NPF debt. As a result of the above agreement, the liability in respect of the NPF debt is no longer reflected in the Board’s financial position.

financial statements - keewatin-patricia district school board financial... · 2010 actual annual...

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