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1 2012-13 Financial Statements Training Information Session for School Boards and External Auditors Financial Analysis and Accountability Branch Fall 2013.

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Presentation on theme: "1 2012-13 Financial Statements Training Information Session for School Boards and External Auditors Financial Analysis and Accountability Branch Fall 2013."— Presentation transcript:

1 Financial Statements Training Information Session for School Boards and External Auditors Financial Analysis and Accountability Branch Fall 2013

2 Agenda  Regulation Changes & Sick Bank Liability  Unpaid Days & Health Care Benefit Plan Reserves  Major Changes to Financial Statements  Financial Reporting  March Report – Common Issues  EFIS Modernization Project  School Data Reporting  Revised Estimates 2

3 Regulation Changes & Sick Bank Liability

4 Benefit Enhancements Subsequent to July 2012  Negotiations with other bargaining units, subsequent to the signing of the July 2012 OECTA Memorandum of Understanding(MOU), lead to the implementation of, or enhancement to the following employee benefits:  Sick leave/Short-term Sick leave and Disability Plan  Maternity leave benefits  Graduated Return to work  Attendance Recognition  Non-vested retirement gratuities  Years of service eligibility for retirement gratuities Other changes  Voluntary unpaid leave of absence  Unpaid days 4

5 Sick leave/Short-Term Sick-Leave Disability Plan  Employees receive 11 sick days per year paid at 100% salary which may be used for personal illness or for purposes as defined in the collective agreement.  They receive 120 days short term leave and disability days paid at 90% or 66 2/3% (66 2/3% may apply to some school board employee groups). These are to be used for personal illnesses only.  Any of the unused 11 sick days may be carried forward to the following year only and can be used to top-up illnesses paid at 90% salary to 100% salary in that year.  All unused sick days from the previous fiscal year expire at the end of the current fiscal year and a new sick bank is established with unused sick days from the current year.  Any miscellaneous leave days that are charged to sick leave days and provided to employees as per the collective agreement (maximum of 5 days are allowed) are never accumulated and expire at the end of each fiscal year. 5

6 Short-term Sick Leave Plans  120 Short-term Sick leave and Top-up days are paid at 90% without 3 rd party adjudication, but still subject to boards’ internal review processes, for the following bargaining and non- bargaining units: OSSTF, ETFO, AEFO and principals and vice- principals.  OECTA bargaining group has the option to elect the original plan as negotiated in the July 2012 OECTA MOU (which requires 3 rd party adjudication), or the plan as negotiated in the April 2013 OSSTF MOU (as above).  CUPE’s plan differs slightly in that it initially offers 66 2/3% salary, but where medical evidence or documentation exists, the employee is upgraded to 90% salary.  School boards will select the OSSTF or OECTA sick leave plan for their non- bargaining units (excluding principals and vice-principals). A board could therefore have more than one type of sick leave plan.  For CESS (Support Staff unions), APSSP and Dufferin-Peel Education Resource Worker’s Association, where an English Catholic board has two sick leave plans, the bargaining unit may choose between the OSSTF and OECTA sick plan model. Where a Catholic board has only one plan, these bargaining units will have the same plan. 6

7 Short-term Sick Leave and Graduated Return to Work Top-up Short-term Sick Leave top-up  1 sick bank day will provide top-up to 100% salary for 10 STLDP days paid at 90%.  Top-up days used are divisible (ie. if an employee works a 0.5 day, the remaining 0.5 day is paid at 90% and a 0.05 banked day (10% x 0.5 day) may be used to top-up to 100%.  For , two days are provided for top-up as a transition to the new plan. If any of the two days have not been used by they end of the fiscal year, they cannot be accumulated and carried forward into Graduated Return to Work  For graduated return to work, an employee may use their 11 sick days and their 120 STLDP days to top-up their salary to 100% or 90% for the portion of the day not worked (the 11 sick days and 120 STLDP are divisible for top-up).  Payments under WSIB or LTD for the graduated return to work program should be considered first when determining the sick days needed to top-up to 100% or 90% salary. 7

8 WSIB – School Board Top-Up WSIB (regulation under PSFA)  WSIB top-up shall be paid for a maximum of 4 ½ years and shall not be deducted from sick leave.  Only those employees who were entitled to top-up their WSIB benefits under their collective agreement using their accumulated sick leave credits can qualify for this top-up.  For employees who were receiving WSIB benefits on the first work day of , 4 ½ years top-up shall be reduced by the length of time that the employee received WSIB benefits prior to September 1, 2012 relating to the same accident.  Employees who were receiving WSIB benefits as of August 31, 2012 and continue to receive them in but no longer had sick leave credits as of August 31, 2012 are not entitled to receive top-up 8

9 Short-term Sick Leave – LTOs, Eligibility Long-term Occasional  LTOs on a full year assignment receive 11 sick days at 100% and 60 STLDP days at 90%. Depending on the sick plan model (ie. CUPE, OECTA July 2012) some LTOs can receive 66 2/3% pay for their STDLP days and may qualify for 90% pay if their illness/injury meet the terms and conditions of their specific plan.  LTOs on less than a full year assignment receive 11 sick days and 60 STLDP reduced/prorated to reflect the length of the assignment relative to a full working year. Expanded Eligibility for sick leave plan  The new sick leave plan includes all employees who accumulated sick leave credits under the old sick leave plan and also includes some employees who previously did not accumulate sick credits:  ETFO and OSSTF employees who are employed for more than 24 hrs per week  All permanent employees, other than casual employees, who are part of CUPE (i.e. lunch room supervisors). 9

10 Short-term Sick Leave – Other Provisions  The new sick leave plan also contains provisions addressing:  Application of sick days in instances of absences on the first day of the year  Employees, who are represented by a bargaining unit other than a teacher’s bargaining unit (with the exception of ETFO), may be eligible for additional sick leave credits in a fiscal year, if −under the previous collective agreement they had LTD plans with wait periods exceeding 131 days and, −they do not have the option of reducing their wait period  Sick leave credits for part time employees  Sick leave entitlements for employees who begin work part way through the year  Discretionary compassionate leave top up not exceeding 2 days 10

11 Maternity Benefits  Most employees on maternity leave are eligible for a minimum of 8 weeks of maternity benefits topped up to 100% salary through a Supplemental Employment Benefit Plan.  Where a board’s existing maternity benefits plan is superior to the 8 weeks at 100%, the existing plan may be meshed such that 6 weeks are paid at 100% and the remaining benefits under the superior plan are paid.  For CUPE employees (specifically seasonal employees), they may receive additional sick leave credits but only if within six weeks after the birth of a child, the employee is eligible for EI. 11

12 VLAP and Attendance Recognition  Voluntary leave of absence (VLAP)  Employees may apply for up to 5 unpaid leave of absence days for personal reasons for  These days must be scheduled in advance prior to September 15, 2013 and be made in writing  Includes: ETFO, OSSTF, CESS, AEFO, OECTA, CUPE, APSSP, Educations Assistants Associations  Excludes: Principals and Vice-Principals, non-bargaining  Attendance Recognition  Only in effect for school year  For participating bargaining units, if an employee has taken one unpaid day (voluntary or mandatory) and has used less than 6 sick days, then the member shall receive payment for one day equivalent to his/her daily rate  Also applies to LTOs  Includes: ETFO, OSSTF, OECTA, CESS, APSSP, EA Associations  Excludes: Principals and Vice-Principals, non-bargaining, CUPE 12

13 Implementation of Labour Enhancements Ontario regulation 1/13 (sick leave regulation) was updated in June 2013 for the following:  Includes changes made to the sick leave plan since the July 2012 OECTA MOU, AEFO, APSSP MOUs and the December 2012 CUPE MOU  Updated to allow OECTA the option to choose a sick leave plan and school boards to choose a sick leave plan for their non-bargaining units  Includes the MOUs or agreements made with OSSTF, ETFO and Principals and Vice- Principals  Includes enhancements to the LTOs sick leave plan to change from 10 sick days to 11 and to improve STDLP for employees with terms of less than a year  Includes new provisions: attendance recognition and graduated return to work programs  Updated non-vested retirement gratuities payout formula from $0.10 to up to $0.25 payout  Updated to expand eligibility of sick leave plan to additional employee groups  Includes additional boards with change in eligibility threshold 13

14 Implementation of Labour Enhancements Ontario Regulation 2/13 made under the Putting Students First Act, 2012, addressed certain other provisions. PSFA was repealed early this year and boards will therefore need to implement through their collective bargaining process the following:  Changes to maternity benefits from 6 weeks to 8 weeks at 100% pay  Voluntary leave of absence program  Changes relating to unpaid days 14

15 Additional Funding  Due to the recent labour enhancements, the Province has announced the following additional funding to help school boards implement the labour framework:  $10 million to help implement sick leave benefit plan reforms  $30 million per year beginning for a potential increase in supply teacher costs  One-time funding for sick leave top-up banks reported as of August 31, 2013  One-time funding for non-vested retirement gratuities and retirement gratuities years of service threshold  $15 million for payroll system and training support  $60 million to address the residual costs of unpaid days, and $3 million to extend the sick leave eligibility to a wider group of employees  $10 million representing efficiencies in professional development that will account for 16% of the total cost of October 11, 2013 unpaid day 15

16 Future Funding Consideration  Maternity leave – additional support under consideration to reflect increase from 6 weeks to 8 weeks of maternity benefits  Attendance Recognition – additional support in to cover any incremental costs related to eligible staff that use less then 6 sick days  The above funding, as well as some presented in the previous slide will be conditional upon boards meeting the requirements in the Deputy’s memorandum issued August 20,  Confirm by August 29, 2013 through to ministry agreement in principle to append MOU to Collective agreement  Statement of attestation and board resolution - September 30, 2013  Copy of local CA with appended MOU by October 31,

17 Determination of Sick Bank Liability  Boards will have a sick bank liability to report at the end of each school year representing the expected usage of sick days for those with banked days.  Memorandum 2013:SB 23 issued. A actuarial evaluation of the sick bank liability will be required from boards.  Boards will be provided with a one time funding for the sick bank based on the liability reported in the actuarial report.  A template will be filled out based on information provided by the boards and actuaries calculating the sick bank liability.  The liability will be calculated using the number of employees with banked days, the average daily salary and the sick day usage factor. 17

18 Sick Bank Liability Calculation  The sick day usage factor is calculated using the following:  Based on historical sick leave data of and : (1) Actuaries will determine what percentage of employees with banked days will use those days in the following year (e.g. of the employees with banked days, 10% will use them in the following year for top-up) (2) Actuaries will estimate, for the group of employees who are expected to use their sick bank in the following year, the average number of banked sick days they will use (e.g. for those employees who use their sick bank for top-up, they will use an average of 1.0 day) −For example: if there are 1000 employees with banked days, 100 employees are expected to use these days in the following year, and the 100 employees are expected to use on average 1.0 day in the following year  Based on these two factors, the sick day usage factor is 0.1 days (10% x 1.0 days). 18

19 Sick Bank Liability Calculation  This factor is then applied to all employees with banked days and the average daily salary of this employee group is applied. −For example: Based on the number of employees with banked days and the sick leave usage factor, it is expected that 100 days will be used in the following year for top-up (1000 employees x 0.1 days). If the average daily salary of the group is $400, then the liability will be $40K (100 days * $400).  At the end of each year, a new liability is determined based on the number of employees with banked days and any remaining liability from the previous year is reversed.  Boards will be able to use the template in the following years to help calculate their liability without having to obtain an actuarial valuation.  Boards may choose to have their actuaries in the following years update the factors used in determining the sick leave usage factor based on more updated information. 19

20 Sick Bank Liability Template 20

21 Labour Related Memoranda Issued in : B1 – Enhancements to the Memoranda of Understanding 2013 : B2 – Technical Clarifications to the Memoranda of Understanding 2013 : B3 – Implications of the MOU with CUPE and Further Technical Clarifications 2013 : B9 – Implications of the MOU with OSSTF 2013 : B10 – Systems Support to Implement Labour Framework Reforms 2013 : B11 – Implications of the 2013 MOU with CUPE 2013 : B14 – Implications of the Updated MOU with AEFO 2013 : B15 – Amended Regulations on Sick leave and Non-vested Retirement Gratuities 2013 : B16 – Terms and Conditions of Employment for Principals and Vice-Principals 2013 : B17 – Implications of the MOU with ETFO 2013 : B19 – Implications of the MOU with Collaborative Education Support Staff 2013 : B20 – Clarification Regarding Appending of Memoranda of Understanding 2013 : B21 - Eligibility for Conditional Support for Appending Terms of 2013 Memoranda of Understanding 2013 : SB07 – Enhancements to the Memoranda of Understanding – Retirement Gratuities and Sick Leave Top-up 2013 : SB23 - Actuarial Valuation for Sick leave top-up liability 2013 : SB24 - Health Care Benefit Plan Reserves 2013 : LR01 – OSSTF MOU – Implementation Committee – Memo : LR02 – OSSTF MOU – Implementation Committee – Memo 2 21

22 QUESTIONS ON REGULATION CHANGES & SICK BANK LIABILITY? 22

23 UNPAID DAYS & HEALTH CARE BENEFIT PLAN RESERVES

24 Unpaid Days  Memorandums of Understanding  All permanent teachers are required to take one mandatory unpaid professional development (PD) day on Friday, December 20, 2013  Offsetting measures are permitted to reduce the remaining 2 unpaid days (October 11, 2013 and March 7, 2014) that teachers are required to take −Permanent teachers will be required to take a further unpaid day on Friday March 7 th, 2014 if offsetting measures do not achieve sufficient savings at least equal to the value of one day’s pay −Savings in excess of those required to offset unpaid days shall be retained by the Board  A committee, with equal representation from the local board and bargaining units, should be created to track the progress −Committee was to be in place by June

25 Unpaid Days  Offsetting Measures 1.Voluntary Unpaid Leave of Absence Program (VLAP) −Effective May 1, Efficiencies in the delivery of professional development −16% of the cost of an unpaid day (provided by government) 3.Early Retirement Incentive Plan (ERIP) −Can be introduced, at the discretion of the board, in the event that the savings in 1 and 2 are not projected to provide sufficient cost recovery for one unpaid day −$5,000 payment to any teacher who retires between the end of November 2013 and the last day of Semester 1 4.Other Cost Savings Measures 25

26 Unpaid Days  Funding  Limited to Boards that have incorporated the MOU into their local collective agreements  Amount not to exceed 1 day cost (this threshold has been shared with individual boards during summer)  Funding Adjustments  Board does not meet the 1 day savings target −Ministry to fund difference between 1 day of savings target and actual savings from offsetting measures  Board meets 1 day savings target but does not meet 2 days savings target −Ministry to fund difference between 2 days of savings and actual savings from offsetting measures  Board meets 2 days savings target −Savings in excess of those required to offset unpaid days shall be retained by the Board 26

27 Unpaid Days  Unpaid Days Template  Ministry has provided a template through memo 2013:SB 20 to assist the Reconciliation Committee in tracking and reporting the savings from the offsetting measures  Boards are to submit the final template to the Ministry by March 15, 2014  Funding adjustment will be made to the Board’s base for transfer payment purposes upon receipt of the completed template  Funding adjustment will only be made to Boards who have incorporated/appended the respective MOU’s into local collective agreements 27

28 Unpaid Days  Unpaid Days Template  Savings Target for the Board (item 1) −Savings targets equivalent to one unpaid day for bargaining units in the board have been sent by the Ministry to individual boards −Template requires boards to input the savings target equivalent to two unpaid days; therefore Boards must multiply the savings target provided to the Board by 2 28

29 Unpaid Days  Unpaid Days Template  Voluntary Unpaid Leave of Absence (VLAP) (items 2 to 5) −Boards are to separately report the information for teaching and non-teaching staff for both the and school years under the VLAP section –Boards to report total number of days taken by union members at item 2 –Boards to report the savings from actual employees’ salary due to VLAP at item 3 –Board to report supply teaching/replacement costs incurred as a result of VLAP at item 4  Efficiencies in the delivery of Professional Development (item 6) −16% of one day savings −Calculated based on 50% of item 1(which would be equal to the target provided to individual boards) 29

30 Unpaid Days  Unpaid Days Template  Early Retirement Incentive Plan (ERIP) (items 8 to 10) −Board to report total savings from ERIP and total ERIP payments ($5,000 per teacher)  Other Offsetting Measures (items 11 to 13) −Board to provide description of Other Offsetting Measures used and then report the related savings and expenses  Funding Adjustment −Funding adjustment is calculated based on the total savings from offsetting measures at item 14 −Amount automatically populated on one of items 15 through 17 depending on savings (i.e. if Board meets 1 day savings target, funding adjustment would be populated on item 16) 30

31 Health Care Benefit Plan Reserves  Provincial Benefits Plan  MOU’s provide for the establishment of a working group to investigate the creation of one or more provincial benefit plans for the education sector  Working group consists of various representatives - teachers’ federations, support staff unions, school boards, other staff associations including Principals & Vice-Principals, the government of Ontario (Ministries of Education and Finance), and independent experts 31

32 Health Care Benefit Plan Reserves  Withdrawals from Health Care Benefit Plan Reserves  In order to ensure the fiscal sustainability of the health care benefit plans, the withdrawal of any monies from any health care benefit plan reserves, surpluses and/or deposits shall require the approval of the Minister of Education.  All such withdrawals shall be reported to the committee  Although no committee has been established to date, the Ministry is moving forward with the approval process  In absence of the committee, the Ministry will share all approvals with the appropriate bargaining group  Restriction on reserves is in effect for the two years covered by the MOU (2012/13, and 2013/14) 32

33 Health Care Benefit Plan Reserves  Approval Process  Ministry issued memorandum 2013:SB 24 outlining the approval process.  Approval is required for the withdrawal of any monies or a reduction in the benefit premium rates  Health Care Benefit Plan Reserves Template must be filled out for all ministry approval requests −Note that an updated version has been posted to the website  Please forward all requests to −Patrick Pelletier at −copy Marie Li at 33

34 Health Care Benefit Plan Reserves  Health Care Benefit Plan Reserves Template  Premium Rate Section −Section has been split into two areas –Premium Rate – Single (active employees) –Premium Rate – Family (active employees) −Boards are to report the historical premium rates under the through columns and the current rate if already implemented under the column −If the Board has not yet implemented rate change and is requesting a premium rate reduction, they would report this rate on the Proposed rate line under the column  Board/Employee Share Section −Under the employee group column, Boards are to enter the employee groups included in the plan −The employee portion of the plan must be reported, where premium costs are shared between the board and employee groups 34

35 Health Care Benefit Plan Reserves  Health Care Benefit Plan Reserves Template  Financial Information Section −Section is a summary of specific financial information that would agree with reports from the Board’s insurance provider −Financial Information required (if available) A.Ending Assets Balance B.Accrued Liabilities Balance (Incurred but no Reported) C.Claims Fluctuation Reserve (CFR) where applicable D.Available Balance for Withdrawal »Cell should be manually calculated from subtracting the Incurred but not Reported balance and Claims Fluctuation Reserve from the Ending Assets Balance [ (A) – (B) – (C )] »Balance would be the accumulated surplus ending balance less the Claims Fluctuation Reserve required to be withheld −Additional information –If applicable, please indicate actual in-year withdrawals from prior years 35

36 Health Care Benefit Plan Reserves  Health Care Benefit Plan Reserves Template  Requests for a withdrawal of funds only −Please complete the Financial Information Section and the Board/Employee Share Section −Please indicate the reason for the withdrawal space provided at the end of the template −Please also forward the insurance provider’s reports (current year plus two prior years)  Requests for Premium Rate Reduction −Please complete all 3 sections of the template (Premium Rate Section, Financial Information Section and the Board/Employee Share Section) −Please indicate the reason for the premium rate reduction in the space provided at the end of the template −Please also forward a copy of the insurance provider’s statements (current year plus two prior years) 36

37 QUESTIONS ON UNPAID DAYS & HEALTH CARE BENEFIT PLAN RESERVES? 37

38 MAJOR CHANGES IN FINANCIAL STATEMENTS

39 Major Changes in Financial Statements  Schedule 3 – Capital Expenditures  First six pages of Schedule 3 have been simplified to combine the capital expenditures reporting with the calculation of the grant entitlement −Screens 1 to 3 have been removed and the former Screens 4 to 6 have been updated to include capital expenditures reporting −Capital expenditures are no longer reported by detailed asset class similar to Schedule 3C −Boards are to report capital expenditures in four classes 1.Land (item 4.1) 2.Non-Land (item 4.2) 3.Moveable Type Assets (item 4.3) 4.Capitalized interest (items 4.5 and 4.6) 39

40 Major Changes in Financial Statements  Schedule 3 – Capital Expenditures  Capitalized interest is separated into land (item 4.5) and non-land (item 4.6)  Two new lines have been added on page 1 to calculate the capital shortfall related to capitalized interest −Item 6.4, Allocation for capital short term interest: Amounts are populated from Section 11 −Item 6.5, Capitalized interest in excess of allocation: Calculates the shortfall by subtracting the capitalized interest reported under item 4 –Assumes that all the allocation relates to non-land for columns 1 through 4 (i.e. Calculation is item 6.4 – item 4.6) –Assumes that all the allocation relates to land for columns 5 (i.e. Calculation is item 6.4 – item 4.5) 40

41 Major Changes in Financial Statements  Schedule 3 – Capital Expenditures  Two new pages have been added for reporting capital expenditures by projects funded by the Capital Priorities Grant – Major Capital Programs (page 6) and Capital Priorities Grant – Land (page 7) −Approved project names, regulation references and approved allocation will be pre-loaded −Boards are to report both expenditures (excluding capitalized interest) up to August 31, 2012 and in-year expenditures −In-year capitalized interest for land and non-land are to be reported in columns 14.1 and 14.2 on page 6 and column 7 on page 7. −Total in-year expenditure amounts for land, building, moveable type assets, capitalized interest-land, capitalized interest-non-land on pages 6 and 7 will automatically be populated in Columns 4 and 5 at item 4 on page 1 41

42 Major Changes in Financial Statements  Schedule 5 – Accumulated Surplus/(Deficit)  Opening Balances: −Column 1, Balance at September 1, 2012, can be populated using the import opening balance file including unfunded liabilities for employee future benefits −All opening balance cells will be input cells to allow reallocation or restatement if required  Employee Future Benefits – Early Retirement Incentive Plan −A new line (item 4.1.1) has been added for Early Retirement Incentive Plan (ERIP) −ERIP opening balance liability will need to be reallocated from either the retirement gratuity liability line (item 4.1) or the other than retirement gratuity liability line (item 4.1.3) 42

43 Major Changes in Financial Statements  Schedule 5 – Accumulated Surplus/(Deficit)  Employee Future Benefits −The opening balances entered for retirement gratuity (item 4.1), early retirement incentive plan (item 4.1.1) and retirement, health dental, life insurance plans (item 4.1.2) are forwarded to Schedule 10G, page 2 for the calculation of amortization −The in-year increase/decrease (column 3) for employee future benefits (items 4.1, and 4.1.2) is calculated on Schedule 10G and includes 1.In-year amortization of the liability into compliance 2.Actuarial and/or curtailment gains (losses) from plan changes 43

44 Major Changes in Financial Statements  Schedule 10G – Supplementary Information on Retirement Benefits and Termination Benefits  A new line (item 3 – Compensated Absences) has been added for Boards to report the year end liability for the Short Term Leave and Disability Plan (STLDP) top-up enhancement −Amount reported should be based on the actuarially determined sick bank liability as of August 31, 2013 −Liability reported in Column 4 at item 3 will be populated in Section 17 −Boards are to report benefit expenses and payments due to the 2 days sick leave top-up credits available for in columns 2 and 3 at item 3 44

45 Major Changes in Financial Statements  Schedule 10G – Supplementary Information on Retirement Benefits and Termination Benefits  Compensated Absences Example: −A Board’s actuarially determined sick bank liability as of August 31, 2013 is $5M and their in-year benefit expenses and payments due to the 2 days sick leave top-up credits were $0.5M −The Board would report the following –Benefits Expenses (Col. 2, item 3): »Accrual sick bank liability5,000,000 »Plus: Benefit expense due to top-up 500,000 5,500,000 –Benefits Payments (Col. 3, item 3): »$0.5M benefit payments –Liability as of August 31, 2013 (Col. 4, item 3): »Calculated ending liability would equal the benefit expense reported in Col. 2 ($5.5M) less the benefit payment reported in Col.3 ($0.5M) 45

46 Major Changes in Financial Statements  Schedule 10G – Supplementary Information on Retirement Benefits and Termination Benefits  A new line (item 1.1) has been added for Early Retirement Incentive Plan (ERIP) −ERIP opening balance liability will need to be reallocated from either the retirement gratuity liability line (item 1) or the other than retirement gratuity liability line (items 8 or 9) 46

47 Major Changes in Financial Statements  Schedule 10G – Supplementary Information on Retirement Benefits and Termination Benefits  Column 2.1 has remained open for the Financial Statements as implications of the Memoranda of Understanding (MOU) with bargaining units may still impact some plans. −Boards are to report the amount included in benefits expenses (Col. 2) that are because of –A change in the plan due to the Memorandum of Understanding (MOU) –A plan curtailment –A memorandum from the Ministry –A letter from the Ministry −The gains/losses due to theses changes shall be excluded from compliance in

48 Major Changes in Financial Statements  Schedule 10G – Supplementary Information on Retirement Benefits and Termination Benefits – Page 2  A second page has been added to track the amortization of the liabilities into compliance  Boards are to input the actuarial determined EARSL as of Aug 2012 at item 1.4 for the retirement gratuity (Col. 15) and early retirement incentive plans (Col.15.1)  Any adjustments to accelerate the amortization would be reported at item 1.5 for retirement gratuity (Col.15) and early retirement incentive plans (Col. 15.1) and at item 2.5 for retirement health/dental/life insurance plans (Col. 16)  For , the actuarial and/or curtailment gains (losses) from plan changes that are entered on under column 2.1 of Schedule 10G - page 1, will be included in the total in-year increase/decrease at items 1.9 and 2.9, as these gains/losses will be excluded from compliance. 48

49 Major Changes in Financial Statements  Schedule 10ADJ – Adjustments for Compliance Purposes  Column Change in Retirement Health/Dental/Life Insurance unamortized liability −Column has been added to include the amortization of the liability into compliance −For , the actuarial and/or curtailment gains (losses) from plan changes reported on Schedule 10G, column 2.1, will be included in the total in-year increase/decrease −Total expenses at item 90 is populated from Schedule 10G, page 2, item 2.9  Column 18 - Change in Retirement Gratuity & ERIP −Column has been updated to include the amortization of the ERIP liability into compliance −For , the actuarial and/or curtailment gains (losses) from plan changes reported on Schedule 10G, column 2.1, will be included in the total in-year increase/decrease −Total expenses at item 90 is populated from Schedule 10G, page 2, item 1.9, Col

50 Major Changes in Financial Statements  Schedule 10F – Schedule of Employee Benefits  Similar to Schedule 10G, a new column (Column 3) has been added to report compensated absences 50

51 Major Changes in Financial Statements  Schedule 10.5 – Supply Teachers  A new Schedule has been added for boards to report Supply Teachers expense into two periods −September 1, 2012 to March 31, 2013 (7-month period) −April 1, 2013 to August 31, 2013 (5-month period)  The Schedule has two lines −Salaries and Wages expense (item 1.1) −Employee Benefits expense (item 1.2)  The total expense column, Col. 3 for both salaries and wages and employee benefits will be populated from the amounts reported on Schedule 10 (item 52)  Boards are to report the 7-month expenses in Col. 1  The 5-month expenses (Col. 2) are calculated from the total column (Col. 3) less the amount reported for the 7-month expenses (Col. 1)  March reports will be revised to capture these on a go forward basis 51

52 Major Changes in Financial Statements  Schedule Deferred Revenue and Schedule 9 - Revenues  Full Day Kindergarten-EPO Funding −Schedule 5.1: A new line, item has been added to report the continuity for the deferred revenue for Full Day Kindergarten-EPO funding excluding special education −Schedule 9: A new line (item 2.7.1) has been added to Schedule 9 to report revenue for Full-Day Kindergarten-EPO funding excluding special education −Boards are to report Full-Day Kindergarten-EPO funding either through deferred revenue on Schedule 5.1 or on Schedule 9 52

53 Major Changes in Financial Statements  Schedule 5.3 – Deferred Capital Contributions Continuity  Total Unsupported Capital Spending Pre-August 31, 2010 (item 2.1.3) has been split into two lines −Item 2.1.1, Sinking Fund Interest to be Earned −Item Other Unsupported Capital Spending Pre-August  Split was to better align Schedule 5.3 with the Capital Analysis and Planning Template (CAPT)  Boards are required to split prior year’s pre-August 31, 2010 balance at August 31, 2012 between items and  Item is a calculated cell and is populated from the amount reported at item less

54 Major Changes in Financial Statements  Section 1A / 1B – Summary of Allocations  Additional lines (item and 1.92) have been added to Section 1A to include funding of labour-related enhancements (see below). These are not part of the operating allocation for 1% compliance calculation.  An additional line (item ) has also been added to Section 1B to include funding of labour-related enhancements  Labour-related enhancements allocation is populated from Section 17  Section 17 – Other Grants (Labour-Related Enhancements)  Three lines have been included for amendments made to the Grants for Student Needs (GSN) regulation for labour related enhancements −One-time payout of non-vested sick days(pre-loaded based on templates submitted and payments made) −Change to Eligibility Threshold (pre-loaded based on March Report) −Compensated absences – sick leave top-up from 90% to 100% (from Sch 10G) 54

55 Major Changes in Financial Statements  Section 1.1 – Pupil Foundation Allocation  Two new lines have been added (item and 1.1.9) for the incremental supply teacher adjustment funding per Table 30 in the GSN regulation  Data Form D – Variance Report  Column 1.1, Labour-Related Enhancements has been added for Boards to report how they allocated the funds received for labour-related enhancements 55

56 Executive Office Restraint  Attestations required at the time of submitting the and financial statements  Boards that did not achieve the full 10% in , must submit an attestation form for  For further details please review Memorandum 2011:SB21 dated June 14,

57 Capital Analysis and Planning Template (CAPT)  Anticipated release of the CAPT V#3 is end of September.  Year End Submission  Required to be submitted to the Ministry by November 29th,  The template should be updated to reflect financial statement year end of August 31,  Approval To Proceed Submission  When a board submits a request for approval to proceed to tender for a project, they are required to submit the CAPT.  CAPT submission includes updating information on the specific project along with a financial update to reflect their most recent EFIS submission. 57

58 Capital Analysis and Planning Template (CAPT)  Training Manual for the CAPT will be posted on the FAAB website. It includes detailed instructions for completing the CAPT for year-end purposes and for when a board submits future requests for an approval to proceed to tender for a capital project.  Ministry will be providing an update at OASBO Finance on Oct 4th  Capital Analysts and Financial Analysts are also available to assist boards in completing the CAPT. 58

59 Financial Statement Submission Summary  Boards are required to submit:  Financial Statements to the Ministry under EFIS by November 15, 2013  Two signed copies of the following printed out from the active EFIS submission of the Financial Statements –Compliance Report –Schedule 1, 1.1, 1.2, 1.3, 9, 10 and 10ADJ –Section 1A summary  Attestation Forms on Executive Office Restraint (if applicable)  Sick bank liability template  Warning message explanation report  CAPT by November 30,

60 QUESTIONS ON MAJOR CHANGES TO FINANCIAL STATEMENTS? 60

61 FINANCIAL REPORTING

62 Financial Reporting  PS 3510 – Tax Revenue  Adoption of PS 3510 – Tax Revenue required for Financial Statements −The province determines property tax not school boards, therefore property tax will no longer show as revenue on the financial statements −Property tax will be included in provincial grants −Boards can elect to segregate amount in a provincial grants revenue note −Boards to work with external auditors for proper disclosure in Financial Statements  Schedule 1.1, Consolidated Statement of Operations will keep local taxation on a separate line (item 1.3) for consolidation purpose 62

63 Financial Reporting  PS 3450, Financial Instruments & PS 2601, Foreign Currency Transaction  These sections will have limited impact on school boards  August 2013 revision release clarified the effective date for government organizations to apply Financial Instruments and Foreign Currency Transaction standards  Standards will not apply to school boards until fiscal years beginning on or after April 1,

64 QUESTIONS ON FINANCIAL REPORTING? 64

65 MARCH REPORT – COMMON ISSUES

66 Required Submissions  Boards are required to submit the following documents to the Ministry a week after the due date of the March Report EFIS form submissions (Mid-May)  Signed Accountant’s Report / Specified Procedures  Prescribed Working Papers  Signed Management Report  Boards can either submit hard copies or PDF version to 66

67 Prescribed Working Papers  Submitted version should be the version reviewed by the auditors  Subtotals in Schedules 19 and 20 worksheets should agree back to EFIS submissions  Working paper Statement of Financial Position (Line 6.3) should agree to EFIS Schedule 19 – Accumulated Surplus (Deficit), Closing Balance as of March 31 st (Line 6.3)  Working paper total revenues & expenses (Lines 10 & 12) should agree to EFIS Total Revenues (Line 10) and Total Expenses (Line 12)  If the school generated fund/subsidiary information was included in the trial balance, the ending balance/revenue/expense as of March should be first removed from trial balance in column C.7 and C.8 and then only the ending balance as of August be added back in column G and H. 67

68 Schedule 20 SUP - Supplementary Information  Supplementary Information  7-month activities for subsidiaries and school generated funds are not included in Schedule 20  Only extraordinary and non-recurring transactions are reported in Schedule 20 SUP  Need to meet two criteria: a.Extraordinary and/or non-recurring in nature and are not part of the regular normal business transactions b.Each transaction amount must be equal to or greater than $500,000  If the criteria are met, report a.Description of the extraordinary and/or non-recurring transaction b.Amount of the revenues, expenses, assets and liabilities 68

69 Schedule 20 SUP - Notes to the Financial Statements  Notes to Financial Statements  Default reporting is what was reported in the last financial statements  If format in F/S is different from M/R, report based on substances and adopt the Schedule 20SUP format  Boards should not leave schedule 20SUP blank if any of the four types of notes was disclosed in financial statements. 69 Is any of the four types of notes disclosed in F/S? New notes with amount over $5M? Report the updated notes No reporting in schedule 20 SUP Report the amount disclosed in the financial statements Has the amount changed by over $5M? Yes No Yes No Yes

70 TCA Inter - Entity Transaction  Inter-entity transaction is eliminated upon consolidation in public account reporting  In the March Report, boards are required to identify these transactions and report them in the bottom section of Schedule 22  In the financial statements, boards need to provide the 4 digits GRE number in the GBV_ADD_SRCE and GBV_DISP_SRCE column in the asset upload file 70

71 Asset Upload File  A Required Submission with the Audited Financial Statements  Pipe Delimited File  Requires details on Land, Buildings and Land Improvements on an asset by asset basis  Ministry collects tangible capital asset information from school boards to support continuity schedules on capital asset reporting  Upload Application requires data to be entered a specific format and order to summarize the data into Schedule 3C 71

72 Pipe Delimited File Details  Information must be presented in the same order as shown on the handout  Source Codes  The source codes for additions and disposals should be entered accurately  If the addition or disposal was to an external source, enter 0000 accordingly  If the addition or disposal was to another GRE (Government Reporting Entity), enter the 4 digit GRE number corresponding to the entity the transaction was with correctly  Enter the Disposal Type accordingly  C = Complete disposal  P = Partial disposal  N = No disposal (asset was not disposed of) 72

73 Grant Revenues Reporting  Ministry reconciles grant reported by boards against provincial system information for the Ministry’s fiscal year reporting (April to March)  As the grant can be reported in various types of format (Revenue, A/R change, A/P change, D/R, DCC, etc.), Ministry converts board reported data back to cash basis  Common mistakes a.Non-provincial grant (i.e. federal grant, 3 rd party grant) reported as provincial grant or vise versa b.Third party revenue (i.e. revenue from other school boards) is reported as grant c.Grant is netted against related expense (should report the gross amount) d.Grant received by subsidiary is not reported as provincial grant 73

74 QUESTIONS ON MARCH REPORT – COMMON ISSUES? 74

75 EFIS Modernization Project

76 EFIS 1.0 (Old)  Originally implemented in 2002  Demands have increased  Reporting is more complex  In 2002: 73 pages 2013: 155 pages  Now also includes Child Care Submissions  Uses a combination of excel spreadsheets (Appendix C) and the application  Currently supported by one vendor  Does not meet the government’s minimum ITS standards

77 EFIS 2.0 (New)  Not just an update of EFIS  Entirely new system with a different look and feel  Uses Oracle Hyperion Planning software  This software is currently used by TCU and is the emerging standard for budgeting and planning within the OPS.

78 Benefits for DSB’s  Eliminates the use of peripheral spreadsheets  Increased reporting and analysis capabilities – allowing boards to access their data  Uses “Smart View” to integrate with Excel  Will provide more forecasting capabilities  Easier and more streamlined data entry  Overall business processes won’t change (i.e. Est., Rev. Est., FS and March Report submissions)

79 Implementation Plan  Initial development has already started  Stakeholder workgroup has been formed  Currently recreating the Revised Estimates on the new platform  Plan to go LIVE with Release 1 for the Estimates (March 2014)  Training for school boards in early 2014 – Details to be determined

80 Who’s involved  Project Development Team creating the application using Hyperion Planning  FAAB EFIS Team are learning the Planning application and assisting in the design and development.  After implementation, FAAB will be responsible for changes to the grant calculations and forms just as they do now with current EFIS.

81 EFIS 2.0 Workgroup  Draft Terms of Reference and Workgroup Membership (attached)  12 Boards represented  Marion Jarrell - On contract to provide input on the design, development and implementation from a user’s perspective

82 Section 2 – Input Tab 82

83 Section 2 – Benchmark Tab 83

84 Section 2 – Table Amount Tab 84

85 Section 2 – Calculated Tab 85

86 Sample of Reports

87 Schedule 10 – Input Tab 87

88 Schedule 10 – Alternate Input Slide 88

89 Schedule 10 - “Smartview” 89

90 QUESTIONS ON EFIS MODERNIZATION PROJECT? 90

91 SCHOOL DATA REPORTING

92 School Data Reporting  Will be included as part of the new application rather than as a separate spreadsheet  Will need to pre-populate the Facilities, BSID’s and School ID’s and School Types prior to release  Longer term – have better direct integration with other Ministry systems such as SFIS, ONSIS  New procedure will be implemented to ensure that the Ministry and DSB’s will have all of the required information prior to March of each year

93 School Data Reporting  School based funding is calculated in Appendix C. These calculations require a number of pieces of school metadata as shown in the matrix below: 93 Funding MetadataTop Up School Foundation Supported SchoolALF Parent Engagement SFIS #X BSID # XXXX On the Ground CapacityX School ID XXXX School TypeX X GIS mapping XXX X

94 School Data Reporting  Historically, some schools were missing some of this metadata in Estimates, Revised Estimates and only finalized it in the Financial Statements.  Missing metadata = miscalculated or missing funding  This resulted in fiscal planning challenges for both the Ministry and School Boards  As part of the Estimates process, boards were asked to report new and closed schools to the Ministry by the end of June  This final list of schools with completed metadata will be used in the Revised Estimates and Financial Statements. 94

95 School Data Reporting  The Ministry will further enhance this process starting with Estimates cycle.  The proposed process will be:  At the end of November 2013, the Ministry will send to the boards two lists of all operating schools for and based on the Ministry’s most current information with all the available metadata (Ie. A list of schools as per Appendix C without the grant calculation part)  Boards are asked to review the lists to: −Identify any new schools missing on the list −Identify any schools to be closed on the list −Provide any missing metadata (e.g. SFIS#, BSID#, address, GIS mapping confirmation)  Boards to return the reviewed lists to the Ministry by the end of January

96 School Data Reporting  The Ministry will use the data on the lists to assign a School ID and School Type for schools as required The Ministry will use the data on the lists to assign a School ID and School Type for schools as required.  Any schools that are NOT on the reviewed lists will not be entitled to school based funding for Financial Statements and Estimates and Revised Estimates.  Please note that the data collected in this process is based on the assumption that the calculation of school level funding in the future remains the same as the current calculation. If the calculation changes in the future, the data to be collected may have to be changed accordingly. 96

97 School Data Reporting  Where to get the metadata:  School Boards are responsible for getting and updating the SFIS # and the OTG in the SFIS system  Mapping of a school site is done in the GIS system  The Capital Program & Policy Branch can provide assistance  BSID # is obtained through ONSIS group and should then be entered by the school board into the SFIS system  You DO NOT need to wait until November to ensure your board will have the correct school metadata.  Start getting it ASAP when a new school is confirmed to be constructed and the site information available  This will ensure the necessary data is already on the list when it is send to the boards for validation. 97

98 QUESTIONS ON SCHOOL DATA REPORTING? 98

99 2013/14 REVISED ESTIMATES

100 Funding on labour enhancements  Funding will be included under :  Pupil Foundation Allocation (Section 1.1) – amount reported on the unpaid days template due in March 2014  School Foundation Allocation (Section 1.3) – GSN table amounts for Principal and Vice-Principal unpaid days  Cost Adjustment – non teaching staff (Section 7) – GSN table amounts for non-teaching staff sick leave benefits and maternity leave enhancements  Subject to approval of GSN regulation amendment in September 2013  Payment will be included in the monthly grant base:  P&VP unpaid days, non-teaching staff cost adjustment will be paid after the receipt of the Revised Estimates  Teaching staff unpaid days will be paid after the receipt of the unpaid days template 100

101 Revised Schedule 10C on School Operations and Maintenance Expenses  Recommendations from the School Operations Working Group which was formed as a result of the Provincial Discussion Table (PDT) Agreement between CUPE, other support staff unions and the school board associations signed in May  Consists of members from PDT unions, school board associations and the Ministry.  The Working Group considers transparency and consistency in school board financial reporting critical to an effective accountability process at the local and provincial level and to the continued effectiveness of Ministry funding.  The revised Schedule 10C will:  improve the consistency of reporting among boards  provide a more detail level of reporting  enhance the ability to analyze and compare board spending at the provincial level 101

102 Early Years Leadership Strategy Expenses  An EPO grant from the Ministry Early Learning Division  Funding will be flowed in December 2013 upon receiving signed agreement and required reports  Release time and start up costs are one-time funding. Other components will continue in future years  Appendix L is to reconcile the expenses with the funding allocation.  Allocation data is pre-populated.  Based on the funding reconciliation guidelines outlined in the Project Agreement, the EFIS template will calculate:  Recovery for enveloped allocations which have not been spent (if applicable); and  Recovery for allocations which are less than actual expenses (if applicable). 102

103 QUESTIONS ON 2013/14 REVISED ESTIMATES? 103

104 THE END 104


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