2009-10 Financial Statement EFIS Forms September 2010 Ministry of Education Training Sessions

2009-10 Financial StatementEFIS Forms

September 2010Ministry of EducationTraining Sessions

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Agenda – Part A

Changes to Sections

Section 1: Summary of Allocations Section 9: Transportation Allocation Section 11 – Primary Class Size Reduction Section 11 – Full Day Kindergarten Section 16 – Declining Enrolment Section 17 – Other Grants

Presented by Finance Officers

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Agenda – Part B

Overview of accounting changes

Schedule 1: Consolidated Statement of Financial Position

Schedule 1.1: Consolidated Statement of Operations

Schedule 1.2: Consolidated Statement of Cash Flow

Schedule 1.3: Consolidated Statement of Change in Net Debt

Schedule 5: Detail of Accumulated Surplus/(Deficit)

Schedule 5.5: List of Committed Capital Projects Funded by Accumulated Surplus

Presented by Patrick Pelletier

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Agenda – Part C

Schedule 5.4: Proceeds of Disposition Calculations

Schedule 5.1: Deferred Revenue Continuity

Presented by Karyn Morra

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Agenda – Part D

Schedule 5.2: Accounts Receivable Continuity – Government of Ontario – Approved Capital

Schedule 9: Revenues

Schedule 10: Expenses

Schedule 10ADJ: Adjustments for Compliance Purposes

Data Form D: Net Expenditure

Schedule 3: Capital Expenditures

Data Form A.3: Revenue Recognition Criteria/Enveloping Criteria

Presented by Soundari Vigneshwaran

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Agenda - Part E

Schedule 3C: Tangible Capital Asset Continuity

Schedule 10F: Employee Benefits

Schedule 10G: Supplementary Information on Retirement Benefits, Post-employment Benefits, Compensated Absences and Termination Benefits

Presented by Andrew Yang

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Agenda - Part F

Note 1: Significant accounting policies

Note 2: Change in accounting policy

Note 4: Accounts receivable – Government of Ontario

Note 12: Tangible Capital Assets

Note 17: Budget data

Note 18: Partnership in Transportation Consortium

Note 19: Accounting for Contributions Used for Capital

Presented by Andrew Yang

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Part A – Changes to Sections

Section 1: Summary of Allocations Section 9: Transportation Allocation Section 11 – Primary Class Size Reduction Section 11 – Full Day Kindergarten Section 16 – Declining Enrolment Section 17 – Other Grants

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Section 1 – Summary of Allocations

New Lines Added:

Capital Debt Support (1.29 & 1.51)

Full Day Kindergarten (1.30 & 1.52)

Green Schools Pilot(1.31)

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Section 9 – Transportation Allocation

Changes:

Monthly average diesel benchmarks (9.14)

Effectiveness and Efficiency amount (9.19)

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Section 11–Primary Class Size Reduction

Change:

After the Ministry reviewed the historical costs and conducted discussions with the board on future requirements, the maximum entitlement may have been revised from the original entitlement provided to the boards in 2005-06. (11.40.1.1)

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Section 11 – Capital Transitional Adj.

Change:

EFIS now allows for leasing costs that occurred in the current year as eligible for funding (11.70.1.3)

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Section 11 – Full Day Kindergarten

New Section:

Allocation to provide funding for eligible capital expenditures which were incurred in the 2009-10 school year.

Funding also provided for interest of short term interest costs

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Section 16 – Declining Enrolment

Change:

School operations related to S23 programs provided in board facilities is now included in the calculation of the School Operations before top up (16.13.14)

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Section 17 – Other Grants

Change:

Green Schools Pilot initiative allocation (17.2.1)

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Common Errors in Submissions

Incomplete submission package

Published Financial Statements – No Management Report

Differences between information reported in EFIS and the audited Financial Statements

F/S have not been corrected to reflect prior errors noted in FO Reviews

Appendix G not completed or completed for incorrect year.

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Financial Statement Submission Package

A complete submission includes:• Two (2) signed copies of Schedules 1, 1.1,1.2,1.3 and Section

1, printed from the active EFIS submission• Two (2) hard copies of the audited financial statements with the

auditors’ and management reports and notes

• Active EFIS file

• Submit to the mail box: [email protected] • Electronic copy of Appendix C • Electronic copy of Warning Report in Excel along with

explanations • Electronic copy of Capital Wrap-Up

• Due date is November 15, 2010

mailto:[email protected]

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Questions?

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Part B – Changes to Schedules

Overview of accounting changes

Schedule 1: Consolidated Statement of Financial Position

Schedule 1.1: Consolidated Statement of Operations

Schedule 1.2: Consolidated Statement of Cash Flow

Schedule 1.3: Consolidated Statement of Change in Net Debt

Schedule 5: Detail of Accumulated Surplus/(Deficit)

Schedule 5.5: List of Committed Capital Projects Funded by Accumulated Surplus

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Overview of reporting changes

Moved funds and reserves to accumulated surplus as at September 1, 2009 as per PS-1200.

Implemented tangible capital assets (TCA) as at September 1, 2009 as per PS-3150.

Restated deferred revenue (proceeds of disposition) as a result of implementing PS3150.

Forms DO NOT include deferred capital contributions (DCC).

Forms DO NOT include the new compliance model, as this will be effective September 1, 2010.

Updated terminology to be on an accrual basis (ex. expenses), rather than on a cash basis (ex. expenditures).

Included the impact of the capital wrap-up as at August 31, 2010.

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PSAB Standard being implemented

PS1200 – Financial Statement Presentation

.31 - Financial statements should include a statement of financial position, a statement of operations, a statement of change in net debt, and a statement of cash flow.

PS3150 – Tangible Capital Assets

.07 - Tangible capital assets should be accounted for and reported as assets on the statement of financial position

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Consolidated Statement Schedules

Schedules 1 through 1.3 have been updated to conform to PSAB section PS-1200 and guideline PSG-4

Schedule names changed to

Schedule 1 – Consolidated Statement of Financial Position Schedule 1.1 – Consolidated Statement of Operations Schedule 1.2 – Consolidated Statement of Cash Flow Schedule 1.3 – Consolidated Statement of Change in Net Debt

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Schedule 1 – Consolidated Statement of Financial Position

Presentation changes

Temporary investments (item 1.2): Temporary investments are transitional or current in nature, such as short-term investments made to obtain a return on a temporary basis (> 90 days and < 1 year)

Long-term investments (item 1.5): Long-Term Investments are investments greater than one year from date of acquisition in organizations that do not form part of the government reporting entity (> 1 year)

A/R – Approved Capital (item 1.4): Line has been added to segregate the portion of accounts receivable related to the Capital Wrap-Up.

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Schedule 1 – Consolidated Statement of Financial Position


Net Debt (item 3): The name of the difference between liabilities (item 2.7) and financial assets (item 1.7) has changed to Net Debt

Tangible Capital Assets (item 4.3): Schedule now includes a line for Tangible Capital Assets under Non-Financial Assets due to the implementation of TCA as of September 1, 2009 (PS-3150)

Accumulated Surplus (Deficit) (item 5): The name of the sum of Net Debt (item 3) and Non-Financial Assets (item 4.4) has been changed to Accumulated Surplus (Deficit)

Fund balances and Amounts to be recovered have been removed

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Schedule 1.1 – Consolidated Statement of Operations


Expenses (item 2): The name of item 2 has changed from Expenditures to Expenses as boards are now reporting on a full accrual basis

Annual Surplus/(Deficit) (item 3): Revenues (item 1.9) less expenses (item 2.8) is now Annual Surplus/(Deficit) – previously Net revenue(expenditure)

The following items have been added Accumulated Surplus / (Deficit) at beginning of year (item 3.1) Accumulated Surplus / (Deficit) at end of year (item 3.2)

The following items have been removed The Increase in Non-Financial Assets Change in Net Assets/Liabilities Change in Amounts to be Recovered Change in Fund Balances

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2009-10 Budget (Restated & Unaudited)

Amounts under the 2009-10 Budget column need to be restated and reconciled for the Financial Statements

Capitalization of Tangible Capital Assets (TCA), amortization, and amounts to be recovered were not budgeted for Estimates

Actual and Budget amounts will both need to be used for the restated amounts

Actual amounts only to be used when boards did not budget at Estimates

Items to be restated/reconciled Item 3.1: Accumulated Surplus/(Deficit) at beginning of year Items 2.1 – 2.6: Expenses

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Item 3.1 Restatement/Reconciliation of opening accumulated surplus/(deficit):

Accumulated Surplus includes Fund Balances (generally positive/surplus) Amounts to be Recovered (ATBR) balances (generally

negative/deficit) Net book value of TCA Portion of Proceeds of Disposition relating to the NBV of

disposed assets to be included in A/S

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Item 3.1 Restatement/Reconciliation of opening accumulated surplus/(deficit):

Budget amounts will be used for Fund Balances (generally positive/surplus) as at Sept 1, 2009

Actual amounts will be used for Amounts to be Recovered (ATBR) balance (generally

negative/deficit) as at Aug 31, 2009 Net book value of TCA as at Sept 1, 2009 Portion of Proceeds of Disposition relating to the NBV of

disposed assets as at Sept 1, 2009

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Item 3.1 Restatement/Reconciliation: The restated amount is calculated as:

Budget at Sept. 1st, 2009 - From 2009-10 EstimatesOperating Fund (from Sch. 2.1, item 8.1) XXCapital Fund (from Sch. 2.2, item 7.1) XXReserve Fund (from Sch. 2.3, item 4.1) XX School Activity Fund (from Sch. 2.4, item 5.1) XX

Actual at Aug. 31, 2009 - From 2008-09 Financial Statements ATBR – Total amount (from Sch. 1, item 7) (XX)

Actual at Sept. 1st, 2009 - From 2009-10 Financial Statements Net Book Value of TCA (Sch 3C, total NBV) XX Accum. Surplus: Portion of POD (Sch. 5, item 4.9) XX

Accum. Surplus/(Deficit) at the beginning of year (restated) XX

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Item 2.4 Restatement/Reconciliation for Pupil Accommodation expense:

Budget amounts will be used for Pupil accommodation expenditure Estimated Capital Expenditures on Land and Buildings

Actual amounts will be used for Minor TCA Additions (First time equipping) Amortization Write downs

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2009-10 Budget (Restated & Unaudited) Item 2.4 Restatement/Reconciliation:

The restated amount is calculated as:

Budget - From 2009-10 Estimates

Pupil Accommodation Expenditure (Sch. 1, item 2.5) XX

Less: Estimated Capital Expenditures (Sch. 3, Col. 0.1.1) (XX)

Actual - From 2009-10 Financial Statements

Less: Minor TCA Additions (from Sch. 3C – first time equipping) (XX)

Plus: Amortization (from Sch. 3C) XX

Plus: Write downs (from Sch. 3C) XX

Restated – Pupil Accommodation Expense XX

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Items 2.1, 2.2, 2.3, and 2.6 Restatements:

Amortization and write downs distributed to the five expense categories for 2009-10 Financial Statements

Restatements to include Actual Amortization Expense and Write downs from 2009-10 Financial Statements

Boards required to reallocate the Actual amortization and write downs from the Pupil Accommodation expense to the other 4 specific expense categories Instruction (item 2.1) Administration (item 2.2) Transportation (item 2.3) Other (item 2.6)

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Full amortization/write downs included in pupil accommodation expense after restatement above

Deduct amortization/write down portion related to other expense categories from pupil accommodation expense

Reallocate portion of amortization/ write down from Pupil Accommodation to the specific expense category

Note that mTCA additions that are not first time equipping would need to be deducted from items 2.1, 2.2, 2.3, and 2.6 as part of the restatement

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2008-09 Actual (Restated)

Item 2.4 Restatement/Reconciliation:

Only Actual amounts from the 2008-09 Financial Statements required

Actual amounts that are required Pupil Accommodation Expenditure TCA Additions (Land, buildings and first time equipping) Amortization (buildings and first time equipping) Write downs

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Item 2.4 Restatement/Reconciliation:

The restated amount is calculated as:

Actual - From 2008-09 Financial Statements

Pupil Accommodation Expenditure (Sch. 1, item 2.5) XX

Less: Actual additions (Sch. 3C – land, buildings, first time equipping) (XX)

Plus: Amortization (from Sch. 3C, buildings, first time equipping) XX

Plus: Write downs (from Sch. 3C, total write downs) XX

Restated – Pupil Accommodation Expense XX

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2008-09 column to be restated to include Actual Amortization Expense and Write downs from 2008-09 Financial Statements

Boards required to reallocate the Actual amortization and write downs from the Pupil Accommodation expense to the other 4 specific expense categories Instruction (item 2.1) Administration (item 2.2) Transportation (item 2.3) Other (item 2.6)

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Full amortization/write downs included in pupil accommodation expense after restatement above

Boards that did not split amortization by categories in prior you could allocate amortization proportionately based on 2009-10 amortization (proposed approach)

Deduct amortization/write down portion related to other expense categories from pupil accommodation expense

Reallocate portion of amortization/ write down from Pupil Accommodation to the specific expense category

Note that mTCA additions that are not first time equipping would need to be deducted from items 2.1, 2.2, 2.3 and 2.6 as part of the restatement

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Schedule 1.2 – Consolidated Statement of Cash Flows

Statement Details: This statement replaces the previous Statement of Changes in Financial

Position The Statement of Cash Flows shows how a board generated and used

cash and cash equivalents in the accounting period and the change in cash and cash equivalents in the period

It also shows the cash and cash equivalents at the beginning and end of the accounting period

Presentation Changes:

Statement includes 4 sections Operating Transactions Capital Transactions - New Investing Transactions Financing Transactions

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Schedule 1.2 – Consolidated Statement of Cash Flows


Item 2.1 has been created to add back the non-cash items (including amortization, write downs and gain/loss on disposal)

Items 2.9 and 2.10 have been added to include the (increase) decreases in prepaid expenses and inventories of supplies.

Items 3.1 (Proceeds on sale of TCA) and 3.2 (Cash used to acquire TCA) have been created to include the capital cash flows.

Item 5.2 (Temporary borrowings) has been added; in prior years amount was netted and included with Cash and Cash Equivalents (item 6)

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Schedule 1.3 Statement of Change in Net Debt

Statement Details:

The statement of Change in Net Debt reports the extent of the change in the board’s net debt resulting from tangible capital asset activity and other non-financial asset activity (prepaid expenses and inventories of supplies) in the accounting period

The statement also reports the net debt at the beginning and end of the year


Tangible Capital Asset Activity include Acquisition, Amortization, Write-downs of tangible capital assets Proceeds on sale of tangible capital assets and the gain/loss on the sale of

tangible capital assets Other Non-Financial Asset Activity

Acquisition and consumption of supplies inventories Acquisition and use of prepaid expenses

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Instructions for EFIS:

Tangible Capital Asset Activity:

2009-10 Actual: Tangible Capital Asset Activity balances are automatically forwarded

from amounts recorded on Schedule 3C (Tangible Capital Assets Continuity) and Schedule 5.4 (Proceeds of Disposition Calculation)

2008-09 Actual (Restated): Due to the addition of Schedule 1.3, boards will need to complete the

2008-09 Actual (Restated) column using prior year’s Schedule 3C

2009-10 Budget: Given that this is the first year of implementation and that budget

numbers are not readily available for proper disclosure, boards would not be required to report numbers under the budget column

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Instructions for EFIS (continued):

Other Non-Financial Asset Activity:

2009-10 Actual and 2008-09 Actual (Restated): Boards are required for PSAB purposes to record the inflows and

outflows of prepaid expenses and inventories of supplies In prior year only the net impact was required Boards would obtain this information from their general ledger

2009-10 Budget: Given that this is the first year of implementation and that budget

numbers are not readily available for proper disclosure, boards would

not be required to report numbers under the budget column

4343

New Schedule 5 – Detail of Accumulated Surplus / (Deficit)

Purpose:

To be in compliance with PS1200 Standard was effective for fiscal years starting on or

after January 1, 2009, therefore Boards are required to implement for 2009-10 school year

Boards were required to reallocate fund balances and amounts to be recovered to new accumulated surplus accounts at the beginning of the school year

4444


Replacing Schedules 2.1 to 2.4, Old Schedule 5 and Appendix I

Previously

4 fund accounts Operating (Schedule 2.1) Capital (Schedule 2.2) Reserve (Schedule 2.3 and old Schedule 5) School Activity (Schedule 2.4)

4 amount to be recovered (ATBR) accounts (Appendix I) Employee Future Benefits Interest to be accrued Vacation accrued Capital Financing

4545


Starting in 2009-10:

3 Accumulated Surplus (Deficit) accounts

Available for Compliance - Unappropriated Available for Compliance – Internally Appropriated Unavailable for Compliance

These 3 classifications will start to be used for compliance purposes in the 2010-11 School Year per Education Act, 231.(1)

4646


Breakdown of Accumulated Surplus (Deficit) allocation

Available for Compliance – Unappropriated includes Total Operating (previously operating fund and working funds) (formerly Sch. 2.1 and

reserve for working funds, item 1.2 on old Sch. 5)

Available for Compliance – Internally Appropriated includes Retirement Gratuities (formerly on old Sch. 5) WSIB (formerly on old Sch. 5) Pupil Accommodation Debt Reserve (NPP portion) (formerly on item 1.7 on

old Sch 5) Pupil Accommodation Debt Reserve (School Renewal portion) (formerly on

item 1.7 on old Sch 5) Pupil Accommodation Debt Reserve (Other) (formerly on item 1.7 on old Sch

5) Pupil Accommodation (NPP) – Deferred Revenue (new - discussed later in

presentation) Other Purposes Operating (formerly on old Sch. 5) Other Purposes Capital (formerly on old Sch. 5)

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Unavailable for Compliance

Employee Future Benefits (formerly on Appendix I – ATBR) Interest to be Accrued (formerly on Appendix I – ATBR) Vacation Accrued (formerly on Appendix I – ATBR) Debt (formerly capital financing on Appendix I – ATBR) Not Permanently Financed Amounts (formerly item 7.2 on Sch. 2.2) School Generated Funds (formerly on Sch. 2.4 and item 1.3 on Sch. 5) Net TCA (new – discussed later in presentation) Receivable from Province re: Capital Wrap-Up (new – discussed later in

presentation) Net Book Value of Proceeds of Disposition (new – discussed later in

presentation) Committed Capital Projects (new – from Schedule 5.5)

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Reallocation of fund/ ATBR accounts to accumulated surplus

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Schedule 5 – Detail of Accumulated Surplus / (Deficit)

Pupil Accommodation Debt Reserve:

Boards must separately enter the portion of the pupil accommodation debt reserve that is related to NPP (item 2.3.2), School Renewal (item 2.4), and Other (item 2.5)

The sum of the 3 cells must equal the 2008-09 closing balance of the Pupil Accommodation Debt Reserve (Item 1.7 on prior year’s Schedule 5)

The split is required for the calculation of the net receivable from the Province as a result of the Capital Wrap-up

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Schedule 5.5 – Committed Capital Projects

Purpose:

Schedule includes a listing of all capital projects expenditures on which the board committed accumulated surplus.

Board must set accumulated surplus aside to support the future amortization related to these projects

Boards will record the continuity of the committed capital projects on this schedule

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Schedule 5.5 – Committed Capital Projects

Instructions for EFIS:

Boards are to allocate the portion of annual surplus that they wish to use in future years on specific capital items in items 2.11 through 2.15 on Schedule 5

In the year the board incurs costs on the projects, it will decrease this amount from the Internally Appropriated: Other Purposes – Capital line and will increase Unavailable for Compliance: Committed Capital Projects (item 4.10) by the same amount through Schedule 5.5 – List of Committed Capital Projects Funded by Accumulated Surplus.

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Questions?

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Part C – Changes to Schedules


Schedule 5.1: Deferred Revenue Continuity

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The implementation of TCA as per PS 3150 will require changes on how proceeds of disposition are reflected in the financials.

The amount of proceeds available for future capital purchases (per Reg. 446/98) will remain the same.

Old presentation: The entire proceeds were recorded as deferred revenue on

Schedule 5.1.

2009-10 presentation: Only the gain will be recorded as deferred revenue on

Schedule 5.1. The remainder of the proceeds will be recorded on Schedule 5

(Detail of accumulated surplus).

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Schedule 5.4: Rationale for Change

Before 2009-10: Boards expensed TCA, thus no gains or losses were recorded when the

assets were sold. For real property, the entire proceeds on sale would have been recorded

as revenue, but due to Reg. 446/98, this revenue was deferred.

In 2009-10: Boards capitalize TCA and are required to restate opening TCA balances. TCA that was expensed in the past will be restated to show a TCA and a

corresponding increase to accumulated surplus. Since TCA is being restated, the proceeds of disposition deferred revenue

(POD-DR) must also be restated to reduce the amount of revenue that would have been recognized under PS3150.

This restatement is in accordance with PSAB standards and Reg. 446/98.

Impact: Requires opening balance restatement and change in in-year transaction

presentation.

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Schedule 5.4: In-Year JEs Before 2009-10

JE1 DR: Asset expense 100,000

CR: Cash 100,000

To purchase asset. Asset completely expensed.

JE2 DR: Cash 120,000

CR: Revenue from proceeds 120,000

To sell asset. No NBV to remove from books.

JE3 DR: Revenue from proceeds 120,000

CR: Deferred Revenue 120,000

Deferred revenue contains the entire proceeds of disposition.

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Schedule 5.4: In-Year JEs in 2009-10 (Gain)JE4 DR: TCA 100,000

CR: Cash 100,000 To purchase asset. Asset capitalized.

JE5 DR: Cash 120,000CR: Gain on Sale 20,000CR: NBV 100,000

To sell asset at a gain. NBV removed from books.

JE6 DR: Gain on Sale 20,000CR: Deferred Revenue 20,000

Gain deferred as per regulation.

JE7 DR: Accumulated Surplus (Net TCA) 100,000CR: Accumulated Surplus (NBV of POD) 100,000

Entry in G/L to track portion of proceeds. Not entered in financials.

Proceeds of $120,000 are tracked in deferred revenue ($20,000) and accumulated surplus (NBV of POD) account ($100,000).

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Schedule 5.4: In-Year JEs in 2009-10 (Loss)

JE8 DR: TCA 100,000CR: Cash 100,000

To purchase asset. Asset capitalized.

JE9 DR: Cash 90,000 DR: Loss on Sale 10,000

CR: NBV 100,000 To sell asset at a loss. NBV removed from books.

JE10 DR: Accumulated Surplus (NBV of POD) 10,000CR: Loss on Sale 10,000

When closing out Statement of Operations to Accumulated Surplus, the loss will be segregated.

JE11 DR: Accumulated Surplus (Net TCA) 100,000CR: Accumulated Surplus (NBV of POD) 100,000

Entry in G/L to track portion of proceeds.

Proceeds of $90,000 are tracked in accumulated surplus (NBV of POD) account ($100,000 - $10,000 = $90,000).

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Schedule 5.4: Opening Balance Restatement

Since the accumulated surplus opening balance was restated due to PS3150, the opening deferred revenue balance must also be restated.

The August 31, 2009 deferred revenue balance contains historical proceeds.

The deferred revenue for September 1, 2009 must be reduced to contain only the historical gains.

The entry required is:

DR: Deferred Revenue [Proceeds – Gains]

CR: Accumulated Surplus (NBV of POD) [Proceeds – Gains]

To restate deferred revenue opening balance to include only gains.

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Schedule 5.4: Opening Balance Implementation

Boards must look at all the sales that are reflected in their August 31, 2009 deferred revenue balances for proceeds of disposition.

These records will be available since boards were required to record the deferred revenue initially.

Using the first in, first out principle, the deferred revenue will contain the proceeds from sales that took place most recently, likely since TCA started to be tracked in 2005.

Boards must note the NBV of each asset sold. With the proceeds and NBV, boards can identify the

gain or loss on each sale.

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Schedule 5.4: Opening Balance Calculations

Assume a board had $1M in deferred revenue for proceeds of disposition at August 31, 2009, related to three assets.

Proceeds of Disposition

Net Book Value

Gain on Sale Loss on Sale

Asset 1 $200,000 $150,000 $50,000 n/a

Asset 2 $300,000 $400,000 n/a $100,000

Asset 3 $500,000 $350,000 $150,000 n/a

Total $1,000,000 $900,000 $200,000 $100,000

DR: Deferred Revenue 800,000

CR: Accumulated Surplus (NBV of POD) 800,000

To restate deferred revenue opening balance to include only gains.

Calculated as proceeds ($1,000,000) less gains ($200,000).

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Schedule 5.4: EFIS Entries

New Schedule 5.4 was created to track proceeds of disposition for capital policy purposes.

The schedule is for tracking proceeds on sale of real property (i.e. tracking for Reg. 446/98).

This is because deferred revenue alone does not hold the entire proceeds.

The other part of the proceeds is reflected in accumulated surplus unavailable for compliance (NBV of POD line).

Accumulated surplus (NBV of POD)+ Deferred revenue (Gain on Disposal)= Total proceeds of disposition

Note: In all cases, boards are required to complete items 1.1 to 1.10. In consultation with their auditors, boards should consider materiality in deciding whether or not to complete items 2.1 to 3.10.

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Schedule 5.4: EFIS Entries for Opening Balance

Record August 31, 2009 closing proceeds of disposition deferred revenue balances in column 1 on Schedule 5.4 (ex. $1,000,000).

Record August 31, 2009 gain determined in column 5 on Schedule 5.4 (ex. $200,000).

Automatically transferred to the opening balance column on Schedule 5.1 (Deferred Revenue, items 2.22, 2.23 or 2.24).

The portion in accumulated surplus ($1,000,000 - $200,000 = $800,000) will automatically be calculated.

Automatically transferred to opening balance column on Schedule 5 (Detail of Accumulated Surplus, item 4.9).

Boards are to keep the three disposition categories School Buildings Prohibitive to Repair Other (includes land)

SAMPLE DATA

Opening Balance


Net Book Value


Total $1,000,000 $900,000 $200,000 $100,000

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Schedule 5.4: EFIS Entries, In-Year Activity (Gain)

Record in-year proceeds of disposition in column 2 on Schedule 5.4 (ex. $120,000).

Automatically included in Schedule 3C, screen 3, in the Proceeds of Disposition column by Asset Upload.

Record in-year gain on sale in column 6 on Schedule 5.4 (ex. $20,000).

Automatically transferred to the Contributions Received column on Schedule 5.1 (Deferred Revenue, items 2.22, 2.23 or 2.24).

Automatically included in Schedule 3C, screen 3, in the Gain/(Loss) column by Asset Upload.

Record the net book value of the asset sold in column 12 on Schedule 5.4 (ex. $100,000).

Automatically transferred to the Schedule 5 (Detail of Accumulated Surplus) In-Year Change column (item 4.9).

SAMPLE DATA

In-Year Transaction


Net Book Value


Total $120,000 $100,000 $20,000 n/a

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Schedule 5.4: EFIS Entries, In-Year Activity (Loss)

Record in-year proceeds of disposition in column 2 on Schedule 5.4 (ex. $90,000).

Automatically included in Schedule 3C, screen 3, in the Proceeds of Disposition column by Asset Upload.

Record the total of in-year losses on sale in column 13 on Schedule 5.4 (ex. -$10,000)

Automatically included in Schedule 3C, screen 3, in the Gain/(Loss) column by Asset Upload.

Automatically included on Schedule 10 in the Loss on Disposal of TCA line (item 80.1, Col.12).


Record the net book value of the asset sold in column 12 on Schedule 5.4 (ex. $100,000).


SAMPLE DATA

In-Year Transaction


Net Book Value


Total $90,000 $100,000 n/a $10,000

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Schedule 5.4: In-Year Approvals

The entire proceeds of disposition will be used when they are expensed against projects for which the Ministry issued an approval.

The change in accounting methodology does not alter this policy. Continuing the same example, the board has $1,120,000 of proceeds

available for use ($1,000,000 opening plus $120,000 in-year) on the School Buildings item 1.1.

The board has $220,000 of deferred revenue available to recognize as revenue ($200,000 opening plus $20,000 in-year), item 2.1.

In accumulated surplus, the board has $900,000 accumulated surplus ($800,000 opening plus $100,000 in-year), item 3.1

Assume the board spends $500,000 of its Ministry approval. Record the approval spent at item 1.1, Col. 3.

The board can use a maximum of $220,000 of its deferred revenue available; this amount is automatically included at column 9.

The balance of the Ministry approval amount, calculated as $500,000 less $220,000 = $280,000, will be automatically deducted at:

Sch. 5.4, item 3.1, Col. 14 Sch. 5 (Detail of Accumulated Surplus, item 4.9, Col. 2),

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Schedule 5.1: Deferred Revenue

The deferred revenue schedule is similar to the old schedule in that it has: Operating and capital sections Legislative and non-legislative grant sections

Differences include: ALL deferred revenue is now recorded on Schedule 5.1.

Previously, Schedule 5.1 contained only a partial listing of deferred revenue, with some amounts being recorded separately in Other Deferred Revenue on Schedule 7.

Term ‘externally restricted reserve’ changed to ‘deferred revenue’. Removed the term ‘reserve’ throughout. Pupil Accommodation allocation is now split into two lines. New line for Transfer of pupil accommodation – NPP closing balance

to revenues Format is similar to 2010-11 Estimate form, but does not include DCC.

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Schedule 5.1: Deferred Revenue

Divided form into sections: Legislative Grants Other Ministry of Education Grants Other Provincial Grants (ex. other ministries) Third Party amounts (ex. school boards, colleges, hospitals, federal government,

…)

New Lines: Internal Audit Green Schools Pilot Insurance Proceeds for Capital Appurtances. Board Level Donations raised specifically for capital purchases. School Generated Funds raised specifically for capital purchases.

Changed Lines: Proceeds of Disposition Reserve changed to Gain on Disposal as explained in

Schedule 5.4 section.

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Schedule 5.1: Deferred Revenue – Pupil Accommodation

Change Now split into two lines

Line 2.2.1 Pupil Accommodation – School Renewal Line 2.2.2 Pupil Accommodation – NPP

Purpose To determine the portion of deferred revenue related to NPP that will be recovered

against the approved capital debt amount from the capital wrap-up.

Implication on EFIS Boards required to input:

Opening balance at September 1, 2009 (Col. 1) Earnings on deferred revenue (Col. 3) Transfers to revenues (Col. 4)

Amounts for NPP are populated based on information in Data A3 less amounts inputted on line 2.2.1.

Additional line, 2.2.3 (Transfer of pupil accommodation – NPP closing balance to revenue) is included to transfer the deferred revenues closing balance related to NPP on line 2.2.2, Col. 5 to revenues. Amount also populated in Sch. 5.2 A/R for Approved Capital (item 2.1, Col. 8)

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Questions?

Lunch

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Part D – Changes to Schedules and Data Forms

Schedule 5.2: Accounts Receivable Continuity – Government of Ontario – Approved Capital

Schedule 9: Revenues

Schedule 10: Expenses

Schedule 10ADJ: Adjustments for Compliance Purposes

Data Form D: Net Expenditure

Schedule 3: Capital Expenditures

Data Form A.3: Revenue Recognition Criteria/Enveloping Criteria

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Schedule 5.2 - Accounts Receivable Continuity

This is a new schedule in 2009-10 used to track the board’s net account receivable from the province for eligible capital expenditures

Per SB memo 10, the Ministry is wrapping up the capital grant allocation model The purpose of this schedule is to summarize the transactions that make up the

net amount of eligible capital debt, net of NPP reserves and NPP deferred revenues that the Province will recognize as revenue

Receivable from the Province Items 1.1 to 1.9 on this schedule calculate the amounts receivable from the Province

that relate to the wrap-up of existing capital programs

Recovery of Pupil Accommodation Debt Reserve & NPP Deferred Revenues balance The receivable from the province is reduced to the extent the board has a payable to

the province related to the Pupil Accommodation debt reserve Also reduced by the amounts of the NPP deferred revenue transferred into revenues Any amounts receivable for Early Learning should not be included in the schedule.

Will be part of “regular” amount receivable – Government of Ontario

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Schedule 5.2 - A/R from Province (cont’d)

This schedule is completed using information from the Capital Wrap-Up Template as well as pre-populated amounts from Schedule 5 – Details of Accumulated Surplus / (Deficit) and Schedule 5.1 – Deferred Revenue

Supported permanently financed amount (column 1) The total supported permanently financed amount is entered by the boards

using the Capital Wrap-Up Template (EFIS Section 12 tab) and represents the portion of the outstanding debt that the Ministry will recognize as part of the capital grant allocation wrap-up

Supported not permanently financed (NPF) amount (column 2) The total supported NPF amount is also entered by the boards using amounts

from the Capital Wrap-Up Template EFIS Schedule 3 (pg 3) tab. This represents the portion of NPF that the Ministry will recognize as part of the capital grant allocation wrap-up

If the board has pre-financed (i.e. the board has obtained financing but has not yet made any expenditures), no amount will appear in column 2. Any supported financing will be included in column 1

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Total Receivable Balance as at August 31, 2010 (column 3) The total supported debt both permanently financed and not permanently financed is

reported here under column 3, line 1.9

Amount of NPP allocation previously flowed that remained in PA Debt Reserve The reserve balance, and the NPP deferred revenue balance as of August 31, 2010 is

offset against the revenue on the wrap-up From a cash flow perspective, the reserves as of August 31, 2010 will be recovered

through offsets against amounts owing for future capital grant entitlements or against cash payable to school boards for supported debt servicing costs, or a combination of both

Ensures that the debt from approved capital expenditures is not funded twice; once through funding allocated for capital purposes but not spent, and again through the Ministry’s one time grant

The columns 4, 5 and 6 of Schedule 5.2 are used to recover this pupil accommodation debt reserve as at August 31, 2010

The debt reserve amount in column 4 is pre-populated from Schedule 5, column 3, items 2.3.2, 2.4 and 2.5. This amount is reduced by the school renewal and the other components reported on columns 5 and 6 (Schedule 5, column 3, items 2.4 and 2.5) to arrive at the NPP Component of the PA Debt Reserve to be recovered

Column 8 populates the Pupil Accommodation – NPP deferred revenue closing balance before recovery from Schedule 5.1

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The amount of the net receivable from the Province as at August 31, 2010 calculated on Schedule 5.2 is summarized in the transaction as follows to record the receivable from the Province and revenue to the board:

DR: Accounts Receivable – Government of Ontario (Schedule 5.2) $XXX,XXX,XXX

CR: Revenue (Schedule 9, item 1.1) $XXX,XXX,XXX

To record a receivable from the province as at August 31, 2010, based on the supported capital debt (net of reserves / deferred revenue)

This entry shows that boards will record a receivable from the Province, and a corresponding revenue as of August 31, 2010

The receivable is reported separately on Schedule 1, line 1.4 – Accounts Receivable – Government of Ontario, Approved Capital. The revenue side of this entry is pulled as part of Schedule 9, item 1.1 – Legislative grants current year

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Schedule 9 – Revenues

The purpose of this schedule is to collect revenue information All revenues reported on this Schedule (including all legislative grants, federal

grants, third party revenues, etc)

Major Changes Name changed from Operating Fund Revenues to Revenues All capital and operating revenues previously recorded in the funds schedules will

now be included on Schedule 9 (funds no longer presented under PSAB – 1200) The schedule has been reorganized to align the headings with the summary

categories presented on Schedule 1.1 (Consolidated Statement of Operations) Line 1.1 – legislative grants (current year) includes Capital Wrap-Up net receivable

from province New lines added for:

School Generated Funds (lines 4.1 and 4.2) Lines 8.12 and 8.13 for Board Level donations Net gain on disposal of assets to be reported on line 8.16 New lines included to report Amounts from Deferred Revenue

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Schedule 9 – (cont’d)

Amounts from Deferred Revenue pre-populated onto 5 categories on Schedule 9 from Schedule 5.1:

All amounts received from the Government of Ontario that are non-grants e.g. secondments of staff to EDU are to be reported on line 8.14 – Government of Ontario: Non-grant payments

New line added for Net Gain on disposal of assets – line 8.16. This will be shown if the total gain/loss on disposal from Schedule 3C less the deferred gain on disposal proceeds subject to restriction (reported on Schedule 5.1) is a positive number

Schedule 5.1, Column 4

Line 2.8 Amounts from Deferred Revenue - Other Ministry of Education Grants Lines 1.13 + 2.13Line 2.23 Amounts from Deferred Revenue - Other Ministries Lines 1.21 + 2.20Line 2.26 Amounts from Deferred Revenue - Other GRE Lines 1.23 + 1.24 + 1.25Line 5.5 Amounts from Deferred Revenue - Federal Government Lines 1.26 + 2.27Line 8.15 Amounts from Deferred Revenue - Other Third Party Lines 1.28 + 1.29 + 1.30 + 1.31 + 2.35 - 2.27

Schedule 9

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Schedule 10 – Expenses

The purpose of this schedule is to collect expense information on a PSAB basis by expenditure category within functional areas and will be reported on a fully accrual basis

Expenses reported under the five categories in accordance with the Uniform Code of Accounts:

Instruction Administration Transportation Pupil Accommodation Other

Major Changes Name changed from Operating Fund Expenditures to Expenses

All expenses previously reported in the funds will now be recorded on Schedule 10 under PSAB (as per PS-1200)

New lines added for reporting amortization expenses and net loss on disposal

Replacement Furniture and Equipment column removed (previously column 6)

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Schedule 10 – (cont’d)

Tangible Capital Assets reporting: Capital spending that meets the capitalization criteria per the TCA guide

will not be reported on Schedule 10; they will be included on the TCA Continuity Schedule 3C as well as Capital Expenditures Schedule 3

Capital expenses that do NOT meet the capitalization criteria are to be reported under column 05 – Supplies and Services

Column 05 includes also items related to Replacement of Furniture and Equipment and “Other Capital” items considered as operating

Amortization expenses related to TCA to be recorded on Schedule 10 and split into the five categories; total of amortization expenses reported on Schedule 10, column 12 to tie back to the in-year amortization expenses reported on TCA Schedule 3C

New line added for Loss on Disposal of TCA – line 80.1. This will be reported if the total gain/loss on disposal from Schedule 3C less the deferred gain on disposal proceeds subject to restriction is a negative number

Prepaid Expenses and Inventories of Supplies reporting: Previously expense reported on schedule 10 reflected goods and services

acquired. Expenses are now required to be reported on a full accrual basis (i.e. reflect goods and services consumed)

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Schedule 10 ADJ - Adjustments for Compliance Purposes

The Ministry has introduced legislative changes effective 2010-11 that would more closely align compliance to PSAB. For 2009-10, the current compliance model still applies

The purpose of this is to calculate adjusted expenses for compliance purposes.

This schedule captures all the adjustments to the expenses reported on Schedule 10 to arrive at the Adjusted Expenditures for Compliance purposes

The adjusted amounts are carried forward to Data Form D and used for variance analysis purposes

Major Changes Previous column for Increase/(Decrease) in Non-Financial Assets deleted New columns added for :

Amortization and Net Loss on Disposal of TCA; and School Generated Funds

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Schedule 10ADJ – Data Entry

Principal payments and increase in sinking funds on long-term debt continue to be included in adjustments for compliance

This column total = Debt principal payments + sinking fund contributions + increase due to interest in the sinking fund assets

Adjustments to interest and vacation accrual remain the same as in prior periods.

For employee future benefits (EFB), boards must enter the increase/decrease in the unfunded EFB liability as in prior periods

Amortization expenses and loss on disposal excluded for compliance purposes as they do not represent cash payments. This is pre-populated from Schedule 10

Amortization expenses reported on column 17 under the respective expenditure categories

Loss on disposal reported on column 17 under the Pupil Accommodation category

Expenses related to School Generated Funds are also excluded for compliance as they represent funds raised for specific purposes at the school level. To be pre-populated on column 18 under the Other category

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Schedule 10ADJ (cont’d)

Total expenses column (i.e. column 21) in Schedule 10 ADJ is pre-populated from the total in Schedule 10 and adjusted by the amounts in column 22

The Adjusted Expenditures for Compliance (column 23) is carried forward to Data Form D to be used for variance analysis

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Data Form D

Purpose of this form is to show the current year’s funding allocations with respect to the net adjusted expenditures of the board. Line 17 of the form reflects the in-year operating results of the board before the impact of capital debt servicing costs and school renewal

Major Changes

Columns reporting allocations from the various funds have been removed. These include:

Prior year surplus / (deficit) Net expenditures before transfers from reserves Capital expenditures funded from Operating Transfers from reserve and school activities funds Allocations and adjustments to entitlement for non-compliance

Two new columns added to report The amortization relating to mTCA. The amount on the total line is brought from Schedule

3C, screen 2, column for Amortization Expense (column 5) The distribution of Transfers to Deferred Revenue (column 9); previously reported on one

line

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Completing Data Form D

Data Form D starts with the Adjusted Expenditures for Compliance pulled from Schedule 10ADJ

The form is divided into two parts:

Calculation of Net Expenditures for Compliance Allocations and Variances

Transfers to and from Deferred Revenue (legislative grants)

Columns reporting to and from Deferred Revenue are to report amounts from Schedule 9, items 1.2 and 1.3

The total of the column 8 – Transfer from deferred revenues excludes the amounts of the transfer to revenues on Schedule 5.1, item 2.2.3 which is included in the amounts that is recovered from NPP reserves

This will be populated into lines 18 – School Renewal and / or line 20 – New Pupil Places, Best Start

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Data Form D – Relationship to other Schedules

Total Revenue (Schedule 9)

Less: School Generated Funds (Schedule 9)

Less: Capital Wrap-Up net receivable (Schedule 5.2)

Less: Deferred Revenue recognized in current year less Pupil Accommodation amounts (Schedule 5.1)

Less: Adjusted Expenditures for Compliance Purposes (Schedule 10ADJ)

Plus: mTCA amortization expenses (Schedule 3C)

Equals the Variance Reported on Data Form D

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Schedule 3 - Capital Expenditures

The purpose of this form is to capture the total capital expenditures incurred during the year broken down by the different functional areas

All capital expenditures recorded as Capitalized Expenditures on Schedule 3 column 1 should tie back to the total of the additions and betterments column recorded in the TCA continuity (i.e. Schedule 3C)

This form is entirely input by boards

Major Changes

Name changed from Capital Fund – Expenditures and Financing to Capital Expenditures

The summary section – Land, Buildings and Other TCA’s by Asset Class removed

Columns 0.1.1 and 0.1.2 deleted

The entire screen 2 has been removed

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Schedule 3 - Capital Expenditures

Boards are asked to report capital expenditures on the different expense categories as broken down on Schedules 10 and 10ADJ

Instruction Administration Transportation Pupil Accommodation Other

Pupil Accommodation expenses to be reported as incurred by the following programs:

School Renewal Good Places to Learn New Pupil Places, Best Start Growth Schools, PCS, Capital Transitional Adjustment and PTR projects Full-time kindergarten accommodation Energy Efficient Schools

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Data Form A.3 - Revenue Recognition/Enveloping Criteria

Data Form A. 3 replaces the previous Data Form A.2 for reporting the enveloping provisions for pupil accommodation allocations

The purpose of the form is to align the enveloping criteria with the continuity of the Deferred Revenue balance for Pupil Accommodation and also track the “Accumulated Eligible Expenditures” where boards have incurred eligible expenditures in advance of the revenue

Data Form will no longer be applicable as of next year due to the capital wrap-up as of August 31, 2010

Major Changes

The opening balance populates from the 2008-09 (FO reviewed file) closing balance on this data form

Two new lines have been introduced to segregate amounts for the following. These amounts will be pulled from Schedule 3:

School Renewal spent on capitalizable items New Pupil Places and Best Start spent on capitalizable items

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Questions?

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Part E – Changes to Schedules

Schedule 3C: Tangible Capital Asset Continuity

Schedule 10F: Employee Benefits

Schedule 10G: Supplementary Information on Retirement Benefits, Post-employment Benefits, Compensated Absences and Termination Benefits

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Schedule 3C – TCA Continuity

Main Changes

One new section – Leasehold Improvements To capture betterments to assets under operating leases First time to collect the information All cells except for the closing balance are enter cells Refer to Appendix J of TCA guide for opening balance establishment

Adjustments to opening balance are available to all asset classes

IMPORTANT – Adjustment to opening balance should be recorded as prior year restatement, not the in year activities

Net Book Value – Opening Balance is calculated from GBV/AA opening and Adjustments to Opening Balance. It is carried forwarded to schedule 5 line 4.5

Three new columns: Transfers Between Asset Classes Closing Balance from Asset Upload Data Error Message

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Schedule 3C – TCA Continuity New Columns

Transfer Between Asset Classes Only applies to land, land improvements and buildings Transfer between regular asset classes and PRFS and between owned assets

and capital leased assets Grand total of transfer has to be zero

Closing Balance from Asset Upload Data and Error Message These two new columns are to cross check data integrity Only applies to land, land improvement, building 40/20, building PRFS, CIP/PAC Opening balances in Schedule 3C are preloaded from 0809 financial statements Transfer between asset classes are entered by boards In year change (including adjustments to opening balance) are preloaded from

data upload file Closing balance August 31, 2010 column will be calculated using information

from different sources (0809 F/S, board enter and data upload file) Ending balances from data upload file will be carried forwarded into column

“closing balance from asset upload data” Two ending balances have to agree otherwise there will be error message

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Schedule 10F - Employee Benefits Boards are required to refer to PSA Handbook Section 3250

and 3255 for terminologies used in schedule 10F and 10G Retirement Benefits, Post-Employment Benefits, Compensated

Absences and Termination Benefits is broken down into four categories

Retirement Benefits Retirement Health, Dental, Life Insurance Plans etc. Post-employment Benefits/Compensated Absences Termination Benefits

Three new categories are added Worker's Compensation Benefits OPSEU Pension Plan Other Pension Plan These categories were included in “other” in the past

No change to following categories Life Insurance / Long-Term Disability Statutory Employee Benefits Extended Health Benefits - Current Employees OMERS Other

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Schedule 10G – Benefits Obligations

Two new columns Column 21 – Expense Increase Due to Plan Amendment

a. Information purpose - Expense increase due to plan amendment is included in the benefits expense

b. Starting 2010-11, boards will be responsible for the increase for compliance Column 22 – Discount rate used in actuarial assessment

Retirement/Sick Leave Gratuity Plans is broken down into two categories

Retirement Gratuity Plans Post Employment Benefits/Compensated Absences

Three new categories are added Termination Benefits, OPSEU Pension Benefits and Other Pension Benefits These categories were included in “other” in the past

No change to following categories Retirement Health, Dental, Life Insurance Plans etc. Long-term Disability Plans Workers Compensation Benefits

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Questions?

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Further Information

1) Finance OfficerAs a first point of contact, please direct queries to your finance officer, who will coordinate with the Reporting Entity Team to resolve your query.

2) Reporting Entity Team

Andrew Yang Elizabeth Sulkovsky

Project Manager Senior Business & Policy Analyst

416-325-4212 416-325-8527

[email protected] [email protected]

Soundari Vigneshwaran Patrick Pelletier

Business Analyst Business Analyst

416-326-9168 416-325-2058

[email protected] [email protected]





Documents

2009-10 Financial Statement EFIS Forms September 2010 Ministry of Education Training Sessions