AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2012 [School Act, Sections 147(2)(a), 148, 151(1) and 276]

Transcription

1 School Jurisdiction Code: 19 AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2012 [School Act, Sections 147(2)(a), 148, 151(1) and 276] Red Deer Catholic Regional Division No 39 Legal Name of School Jurisdiction st Street, Red Deer, AB T4N6N8 Mailing Address Telephone and Fax Numbers SCHOOL JURISDICTION MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING The financial statements of Red Deer Catholic Regional Division No 39 presented to Alberta Education have been prepared by school jurisdiction management which has responsibility for their preparation, integrity and objectivity. The financial statements, including notes, have been prepared in accordance with generally accepted accounting principles and follow format prescribed by Alberta Education. In fulfilling its reporting responsibilities, management has maintained internal control systems and procedures designed to provide reasonable assurance that the school jurisdiction's assets are safeguarded, that transactions are executed in accordance with appropriate authorization and that accounting records may be relied upon to properly reflect the school jurisdiction's transactions. The effectiveness of the control systems is supported by the selection and training of qualified personnel, an organizational structure that provides an appropriate division of responsibility and a strong system of budgetary control. Board of Trustees Responsibility The ultimate responsibility for the financial statements lies with the Board of Trustees. The Board reviewed the audited financial statements with management in detail and approved the financial statements for release. External Auditors The Board appoints external auditors to audit the financial statements and meets with the auditors to review their findings. The external auditors were given full access to school jurisdiction records. Declaration of Management and Board Chairman To the best of our knowledge and belief, these financial statements reflect, in all material respects, the financial position and results of operations and cash flows for the year in accordance with generally accepted accounting principles and follow the financial reporting requirements prescribed by Alberta Education. BOARD CHAIR Mrs. Adriana LaGrange Name Original signed Signature SUPERINTENDENT Mr. V. Paul Mason Name Original signed Signature SECRETARY TREASURER OR TREASURER Mr. Roderic M. Steeves Name Original signed Signature 27-Nov-12 Board-approved Release Date c.c. ALBERTA EDUCATION, Financial Reporting & Accountability Branch 8th Floor Commerce Place, Street, Edmonton AB T5J 4L5 Robert.Mah@gov.ab.ca PHONE: (780) (Toll free ) FAX: (780)

2 School Jurisdiction Code: 19 TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT 3 STATEMENT OF FINANCIAL POSITION 4 STATEMENT OF REVENUES AND EXPENSES 5 STATEMENT OF CASH FLOWS 6 STATEMENT OF CHANGES IN NET ASSETS 7 STATEMENT OF CAPITAL ALLOCATIONS 8 NOTES TO THE FINANCIAL STATEMENTS 9 page 2

3 Independent Auditors' Report MNI?. To the Board oftrustees of Red Deer Catholic Regional Division #39: We have audited the accompanying financial statements of Red Deer Catholic Regional Division #39 which comprise the statement of financial position as at August 31, 2012 and the statements of revenues and expenses, cash flows, changes in net assets and capital allocations for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion. In our opinion, the financial statements present fairly, in all material respects, the financial position of Red Deer Catholic Regional Division #39 as at August 31, 2012 and the results of its operations, cash flows, changes in net assets and capital allocations for the year then ended in accordance with Canadian generally accepted accounting principles. Red Deer, Alberta November 27, 2012 MN'? LLf' Chartered Accountants PraxitY. : MEMBER ' GLOBAL ALLIANCE OF INDEPENDENT FIRMS ACCOUNTING > CONSULTING > TAX RD STREET, RED DEER, AB T4N 2E9 TOLL-FREE: P: F: MNP.ca

4 School Jurisdiction Code: 19 STATEMENT OF FINANCIAL POSITION as at August 31, 2012 (in dollars) Restated ASSETS Current assets Cash and temporary investments (Note 3) $12,100,102 $11,025,404 Accounts receivable (net after allowances) (Note 4) $3,309,642 $1,714,802 Prepaid expenses $1,118,673 $1,010,694 Other current assets $245,661 $124,211 Total current assets $16,774,078 $13,875,111 Trust assets (Note 8) $222,706 $1,663,317 Long term accounts receivable (Note 5) $500,000 $500,000 Long term investments (Note 7) $253,015 $240,287 Capital assets (Note 6) Land $361,489 $361,489 Construction in progress $1,167 $0 Buildings $109,191,152 Less: accumulated amortization ($40,060,644) $69,130,508 $71,068,564 Equipment $10,293,432 Less: accumulated amortization ($7,882,302) $2,411,130 $2,442,836 Vehicles $3,547,999 Less: accumulated amortization ($1,926,522) $1,621,477 $1,477,153 Total capital assets $73,525,771 $75,350,042 TOTAL ASSETS $91,275,570 $91,628,757 LIABILITIES Current liabilities Bank indebtedness (Note 9) $0 $0 Accounts payable and accrued liabilities (Note 10) $4,346,159 $3,013,135 Deferred revenue (Note 11) $1,951,093 $2,551,859 Deferred capital allocations (Note 12) $443,893 $691,867 Current portion of long term debt $227, $315,797 Total current liabilities $6,968,442 $6,572,658 Trust liabilities (Note 8) $222,706 $1,663,317 Employee future benefit liabilities (Note 14) $1,835,200 $1,526,282 Long term debt (Note 13) Supported: Debentures and other supported debt $393,919 $622,716 Less: Current portion ($142,297) ($228,797) Unsupported: Debentures and capital loans $3,302,000 $3,387,000 Capital leases $0 $0 Mortgages $0 $0 Less: Current portion ($85,000) ($87,000) Other long term liabilities $0 $0 Unamortized capital allocations (Note 15) $63,331,436 $65,048,768 Total long term liabilities $68,857,964 $71,932,286 TOTAL LIABILITIES $75,826,406 $78,504,944 NET ASSETS Unrestricted net assets $0 $0 Operating reserves $6,241,143 $4,631,540 Accumulated operating surplus (deficit) $6,241,143 $4,631,540 Investment in capital assets $6,498,356 $6,291,549 Capital reserves $2,709,665 $2,200,724 Total capital funds $9,208,021 $8,492,273 Total net assets $15,449,164 $13,123,813 TOTAL LIABILITIES AND NET ASSETS $91,275,570 $91,628,757 Note: Please input "(Restated)" in 2011 column heading where comparatives are not taken from the finalized 2010/2011 Audited Financial Statements filed with Alberta Education. page 4

5 School Jurisdiction Code: 19 STATEMENT OF REVENUES AND EXPENSES for the Year Ended August 31, 2012 (in dollars) Budget Actual Actual Restated REVENUES Government of Alberta $73,062,970 $69,644,581 $67,406,040 Federal Government and/or First Nations $46,429 $10,000 $8,316 Other Alberta school authorities $51,620 $61,000 $48,324 Out of province authorities $433,311 $200,000 $255,624 Alberta Municipalities-special tax levies $0 $0 $0 Fees (Note 16) $1,476,044 $1,213,000 $1,417,922 Other sales and services $751,104 $337,000 $485,907 Investment income $138,827 $100,000 $164,594 Gifts and donations $149,957 $0 $104,149 Fundraising $711,710 $750,000 $853,420 Rental of facilities $108,548 $90,000 $110,240 Gains on disposal of capital assets $41,218 $0 $5,000 Amortization of capital allocations $3,018,526 $2,992,595 $2,884,223 Other revenue $656,159 $350,000 $458,216 Total Revenues $80,646,423 $75,748,176 $74,201,975 EXPENSES Certificated salaries (Note 25) $37,161,188 $36,886,631 $34,586,809 Certificated benefits (Note 25) $8,448,632 $7,904,529 $7,875,930 Non-certificated salaries and wages (Note 25) $11,233,455 $10,952,847 $10,399,189 Non-certificated benefits (Note 25) $2,713,929 $2,628,407 $2,469,164 Services, contracts and supplies $14,677,845 $13,880,659 $14,862,136 Capital and debt services Amortization of capital assets Supported $3,018,526 $2,992,595 $2,884,223 Unsupported $854,802 $792,843 $834,503 Total Amortization of capital assets $3,873,328 $3,785,438 $3,718,726 Interest on capital debt Supported $48,709 $51,832 $78,977 Unsupported $161,736 $156,890 $165,528 Total Interest on capital debt $210,445 $208,722 $244,505 Other interest and charges $1,250 $4,000 $1,301 Losses on disposal of capital assets $0 $0 $0 Other expense $1,000 $0 $1,570 Total Expenses $78,321,072 $76,251,233 $74,159,330 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES BEFORE EXTRAORDINARY ITEM $2,325,351 ($503,057) $42,645 Extraordinary Item $0 $0 $0 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES $2,325,351 ($503,057) $42,645 Note: Please input "(Restated)" where Actual 2011 comparatives are not as presented in the finalized 2010/2011 Audited Financial Statements filed with Alberta Education. Budget 2012 comparatives presented are final budget amounts formally approved by the Board. page 5

6 School Jurisdiction Code: 19 STATEMENT OF CASH FLOWS for the Year Ended August 31, 2012 (in dollars) Restated CASH FLOWS FROM: A. OPERATIONS Excess (deficiency) of revenues over expenses $2,325,351 $42,645 Add (Deduct) items not affecting cash: Amortization of capital allocations revenue ($3,018,526) ($2,884,223) Total amortization expense $3,873,328 $3,718,726 Gains on disposal of capital assets ($41,218) ($5,000) Losses on disposal of capital assets $0 $0 Changes in: Accounts receivable ($1,594,840) $1,278,537 Prepaids and other current assets ($229,429) ($92,531) Long term accounts receivable $0 $0 Long term investments ($12,728) ($15,565) Accounts payable and accrued liabilities $1,333,024 $188,884 Deferred revenue ($600,766) $949,588 Employee future benefit liabilitiies $308,918 $258,301 Other (describe) Non-cash adj. for proceeds on disposal of capital assets $0 $5,000 Total cash flows from Operations $2,343,114 $3,444,362 B. INVESTING ACTIVITIES Purchases of capital assets Land $0 $0 Buildings ($1,009,824) ($4,512,702) Equipment ($578,328) ($561,528) Vehicles ($470,520) ($279,027) Net proceeds from disposal of capital assets $52,000 $0 Other (describe) Construction in progress ($1,167) $0 Total cash flows from Investing activities ($2,007,839) ($5,353,257) C. FINANCING ACTIVITIES Capital allocations $824,423 $3,200,000 Issue of long term debt $0 $0 Repayment of long term debt ($313,797) ($439,514) Add back: supported portion $228,797 $356,515 Other (describe) $0 $0 Total cash flows from financing activities $739,423 $3,117,001 Net cash flows from during the year $1,074,698 $1,208,106 Cash and temporary investments, net of bank indebtedness, at Aug. 31/11 $11,025,404 $9,817,298 Cash and temporary investments, net of bank indebtedness, at Aug. 31/12 $12,100,102 $11,025,404 Note: Please input "(Restated)" where Actual 2011 comparatives are not as presented in the finalized 2010/2011 Audited Financial Statements filed with Alberta Education. page 6

7 STATEMENT OF CHANGES IN NET ASSETS for the Year Ended August 31, 2012 School Jurisdiction Code: 19 (in dollars) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) INTERNALLY RESTRICTED NET ASSETS TOTAL INVESTMENT UNRESTRICTED TOTAL TOTAL NET IN CAPITAL NET OPERATING CAPITAL School & Instruction Related Operations & Maintenance Board & System Administration Transportation External Services ASSETS ASSETS ASSETS RESERVES RESERVES Cols Cols Cols Operating Reserves Capital Reserves Operating Reserves Capital Reserves Operating Reserves Capital Reserves Operating Reserves Capital Reserves Operating Reserves Capital Reserves Balance at August 31, 2011 $13,123,813 $6,291,549 $0 $4,631,540 $2,200,724 $3,631,540 $372,549 $400,000 $666,255 $300,000 $429,648 $300,000 $732,272 $0 $0 Prior period adjustments (describe) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Adjusted Balance, Aug. 31, 2011 $13,123,813 $6,291,549 $0 $4,631,540 $2,200,724 $3,631,540 $372,549 $400,000 $666,255 $300,000 $429,648 $300,000 $732,272 $0 $0 Excess (deficiency) of revenues over expenses $2,325,351 $2,325,351 Board funded capital additions $987,442 $0 $0 ($987,442) $0 ($104,928) $0 ($63,112) $0 ($295,037) $0 ($524,365) $0 $0 Disposal of unsupported capital assets $0 ($10,833) $0 $10,833 $0 $0 $0 $10,833 $0 Disposal of supported capital assets (board funded portion) $0 $0 $0 $0 $0 $0 $0 $0 $0 Direct credits to net assets $0 $0 $0 Amortization of capital assets ($3,873,328) $3,873,328 Amortization of capital allocations $3,018,526 ($3,018,526) Debt principal repayments (unsupported) $85,000 ($85,000) Net transfers to operating reserves ($1,609,603) $1,609,603 $1,309,603 $100,000 $100,000 $100,000 $0 Net transfers from operating reserves $0 $0 $0 $0 $0 $0 $0 Net transfers to capital reserves ($1,485,550) $1,485,550 $167,867 $160,201 $365,389 $792,093 $0 Net transfers from capital reserves $0 $0 $0 $0 $0 $0 $0 Assumption/transfer of other operations' net assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Balance at August 31, 2012 $15,449,164 $6,498,356 $0 $6,241,143 $2,709,665 $4,941,143 $435,488 $500,000 $763,344 $400,000 $500,000 $400,000 $1,010,833 $0 $0 page 7

8 School Jurisdiction Code: 19 STATEMENT OF CAPITAL ALLOCATIONS (EXTERNALLY RESTRICTED CAPITAL CONTRIBUTIONS ONLY) for the Year Ended August 31, 2012 (in dollars) Deferred Capital Allocations Unamortized Capital Allocations Balance at August 31, 2011 $691,867 $65,048,768 Prior period adjustments $0 $0 Adjusted balance, August 31, 2011 $691,867 $65,048,768 Add: Restricted capital allocations from: Alberta Education school building and modular projects $824,423 Other Government of Alberta $0 Federal Government and First Nations $0 Other sources $0 Interest earned on provincial government capital allocations $0 Other capital grants and donations $0 Net proceeds on disposal of supported capital assets $0 Insurance proceeds (and related interest) $0 Donated capital assets fair market value) $0 P3, other ASAP and Alberta Infrastructure managed projects $0 Transferred in capital assets net book value) $0 Current year supported debenture principal repayment $228,797 Expended capital allocations - current year ($1,072,397) $1,072,397 Deduct: Net book value of supported capital assets dispositions, write-offs, or transfer; Other $0 $0 Capital allocations amortized to revenue $3,018,526 Balance at August 31, 2012 $443,893 $63,331,436 * Infrastructure Maintenance Renewal (IMR) Program allocations are excluded from this Statement, since those allocations are not externally restricted to capital. page 8

9 Red Deer Catholic Regional Division #39 1. Incorporation and operations The Red Deer Catholic Regional Division #39 (the "School Jurisdiction") delivers education programs under the authority of the School Act, Revised Statutes of Alberta 2000, Chapter S-3. The School Jurisdiction receives instruction and support allocations under Education Grants Regulation (AR 120/2008). The regulation allows for the setting of conditions and use of grant monies. The School Jurisdiction is limited on certain funding allocations and administrative expenses. 2. Significant accounting policies The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). These financial statements have, in management's opinion, been properly prepared with reasonable limits of materiality and within the framework of the significant accounting policies summarized as follows: Cash and temporary investments Cash and cash equivalents include balances with banks and short-term investments with maturities of three months or less. Cash subject to restrictions that prevent its use for current purposes is included in restricted cash. Inventory (shown as other current assets) Inventory is valued at the lower of cost (first-in, first-out method) and net realizable value. Net realizable value is estimated selling price in the ordinary course of operations Prepaid expenses Certain expenditures incurred and paid before the close of the school year are for specific school supplies, which will be consumed subsequent to year-end, and are accordingly recorded as prepaid expenses. Certain insurance expenses also fall into this category. Investments Held for trading investments are recognized in the balance sheet at fair value. The fair values of the recognized investments are determined based on the available market information. Realized investment income and unrealized gains and losses are reported in the Statement of Revenues and Expenses. Capital assets Capital assets are recorded at cost. estimated useful lives. Buildings Vehicles Equipment Amortization is provided using rates intended to amortize the cost of assets over their Method straight-line straight-line straight-line Rate % % % Only assets with costs in excess of $5,000 are capitalized and amortization is not taken in the year of acquisition. capital allocations received for asset additions are amortized over the same period as the related asset. Any Long-lived assets Long-lived assets consists of capital assets. applicable accounting policies. Long-lived assets held for use are measured and amortized as described in the The School Jurisdiction performs impairment testing on long-lived assets held for use whenever events or changes in circumstances indicate that the carrying value of an asset, or group of assets, may not be recoverable. Impairment is measured as the amount by which the assets' carrying value exceeds its fair value. Any impairment is included in earnings for the year. Prices for similar items are used to measure fair value of long-lived assets. page 9

10 Red Deer Catholic Regional Division #39 2. Significant accounting policies (Continued from previous page) Vacation pay Vacation pay is accrued in the period in which the employee earns the benefit. Employee future benefits The School Jurisdiction's employee future benefit programs consist of a defined benefit plan, a defined contribution multi-employer benefit plan and it also provides other post retirement benefits, including health, dental and life insurance, to its qualifying employees. The School Jurisdiction accrues its obligations under employee future benefit plans and expenses the related costs according to the nature of the plan. The current service and past service costs of the Alberta Teacher Retirement Fund are met by contributions by active members and the Government of Alberta. Under the terms of the Teacher Pension Plan Act, the School Jurisdiction does not make pension contributions for certificated staff. Employee future benefits liability For the other post retirement benefits, the actuarially determined cost of these benefits is accrued over the estimated service lives of employees. Defined contribution pension plan The School Jurisdiction participates in the multi-employer pension plan (Local Authorities Pension Plan) and does not report on any unfunded liabilities. Defined benefit pension plan The actuarial determination of the accrued benefit obligation for pensions used the projected benefit method prorated on service (which incorporates management's best estimate of future salary levels, retirement ages of employees and other actuarial factors). Actuarial gains (losses) arise from the difference resulting from changes in actuarial assumptions used to determine the accrued benefit obligation. The excess of the net accumulated net actuarial gain (loss) over 1 O percent of the greater of the benefit obligation and the fair value of the plan assets is amortized over the remaining service period of active employees. The average remaining service period of active employees covered by the pension plan is one year. Past service costs arising from plan initiation are deferred and amortized on a straight line basis over the average remaining service period of employees active at the date of initiation. Operating and capital reserves Reserves are established at the discretion of the Board of Trustees of the School Jurisdiction, to set aside funds for operating and for future capital expenditures. Such reserves are appropriations of unrestricted net assets. Revenue recognition Revenue is recognized as follows: Instruction and support allocations are recognized in the year to which they relate. Fees for services related to courses and programs are recognized as revenue when such courses and programs are delivered. Capital contributions from the province or other agencies are recorded as deferred capital allocations. Once spent, they are transferred to unamortized capital allocations which are amortized to revenue on the same basis as the capital asset acquired by the grant. Unrestricted contributions are recognized as revenue when received and receivable. fair market value when reasonably determinable. Contributions in-kind are recorded at The School Jurisdiction follows the deferral method of accounting for contributions. Externally restricted contributions are deferred and recognized as revenue in the period in which the restriction is complied with. Endowment funds, which are to be retained as net assets, are recorded as direct increases in trust assets and liabilities in the period in which they are received or receivable. page 10

11 Red Deer Catholic Regional Division #39 2. Significant accounting policies (Continued from previous page) Contributed services Volunteers contribute a considerable number of hours per year to various schools, which are within the School Jurisdiction, to ensure that certain programs are delivered, such as kindergarten, lunch services and fund raising. Because of the difficulty of compiling these hours and the fact that these services are not otherwise purchased, contributed services are not recognized in the financial statements. Measurement uncertainty (use of estimates) The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectibility and an appropriate allowance for doubtful accounts is provided where considered necessary. Amortization is based on the estimated useful lives of capital assets. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in earnings in the periods in which they become known. Financial Instruments Held for trading: The School Jurisdiction has classified the following financial assets and liabilities as held for trading: cash and temporary investments, restricted cash (trust assets), long-term investments, and bank indebtedness. These instruments are initially recognized at their fair value, determined by recent arm's length market transactions for the same instrument. Fair value is approximated by the instrument's initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are recorded on the trade date, and transaction costs are immediately recognized in income. Fees incurred on an exchange of financial liabilities or a modification of the terms of financial liabilities that is accounted for as an extinguishment are included as part of the gain or loss on extinguishment, while any related other costs incurred are recognized in current year earnings. All fees and costs incurred on the exchange or modification of a financial liability not accounted for as an extinguishment, are recognized in current year earnings. Held for trading financial instruments are subsequently measured at their fair value, without any deduction for transactions costs incurred on sale or other disposal. Gains and losses arising from changes in fair value are recognized immediately in income. page 11

12 Red Deer Catholic Regional Division #39 2. Significant accounting policies (Continued from previous page) Loans and receivables: The School Jurisdiction has classified the following financial assets as loans and receivables: accounts receivable and long-term accounts receivable. These assets are initially recognized at their fair value, approximated by the instrument's initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are recorded on the trade date, and transaction costs are immediately recognized in income. Total interest income, calculated using the effective interest rate method, is recognized in net income. Loans and receivables are subsequently measured at their amortized cost, using the effective interest method. Under this method, estimated future cash receipts are exactly discounted over the asset's expected life, or other appropriate period, to its net carrying value. Amortized cost is the amount at which the financial asset is measured at initial recognition less principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, and less any reduction for impairment or uncollectability. Gains and losses arising from changes in fair value are recognized in net income upon derecognition or impairment. Other financial liabilities: The School Jurisdiction has classified the following financial liabilities as other financial liabilities: accounts payable and accrued liabilities, trust liabilities and term debt. These liabilities are initially recognized at their fair value, determined by the discounted cash flow method. Fair value is approximated by the instrument's initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are recorded on the trade date, and transaction costs are immediately recognized in income. Total interest expense, calculated using the effective interest rate method, is recognized in net income. Fees incurred on an exchange of financial liabilities or a modification of the terms of financial liabilities that is accounted for as an extinguishment are included as part of the gain or loss on extinguishment, while any related other costs incurred are recognized in current earnings. All fees and costs incurred on the exchange or modification of a financial liability not accounted for as an extinguishment are included in the carrying amount of the modified financial liability and amortized over its remaining expected life. Any related other costs incurred are recognized in current year earnings. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Under this method, estimated future cash payments are exactly discounted over the liability's expected life, or other appropriate period, to its net carry value. Amortized cost is the amount at which the financial liability is measured at initial recognition less principal repayments, and plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount. Gains and losses arising from changes in fair value are recognized in net income upon derecognition or impairment. page 12

13 Red Deer Catholic Regional Division #39 2. Significant accounting policies (Continued from previous page) Transition to Public Sector Accounting Standards: The School Division will adopt public sector accounting standards for the year ending August 31, 2013 with retrospective application and restatement of the prior school year. The transition is intended to enhance the public accountability and comparability of the financial reporting of the government controlled entities with those of other government organizations. The School Jurisdiction has not yet determined the effect of this change on its financial statements. 3. Cash and temporary investments Effective (Market) Effective (Market) Yield Cost Fair Value Yield Cost Fair Value Cash and cash equivalents 1.25% $12, 100, 102 $12,100, % $11,025,404 $11,025,404 Fixed-income securities % - % - - Government of Canada, % - - % - - direct and auaranteed Provincial, direct, and % - - % - - i:iuaranteed Corporate % - - % - - Municipal % - - % - - Pooled investment funds % - - % - - Total fixed-income securities % - - % - - Total cash and temporary 1.25% ~12, 100, 102 ~12,100, % ~11,025,404 ~11,025,404 investments 4. Accounts receivable Province of Alberta 1,452, ,380 Federal Government 206, ,889 Alberta Municipalities 1,220,743 1,066,168 Other Alberta school jurisdictions 128, ,614 Other 301, ,751 3,309,642 1,714, Long term accounts receivable Long term accounts receivable are unsecured, non-interest-bearing and have no set terms of repayment. page 13

14 6. CAPITAL ASSETS Equipment- Construction Computer in progress - Hardware & Land New Building Buildings Software Estimated Useful life Years 5 Years Historical cost September 1, , , 181,330 1,054,362 Additions - 1,167 1,009, ,985 Transfers in (out) Less disposals including write-offs August 31, ,489 1, ,191,152 1,341,347 Accumulated Amortization September 1, ,112, ,400 Amortization expense - - 2,947, ,880 Transfers in (out) Effect of disposals August 31, ,060, ,280 Net Book Value at August 31, ,489 1, ,130, ,067 page 14 Other Equipment 5-10 Years 8,660, , ,952,085 6,821, , ,292,022 1,660,063 Red Deer Catholic Region Division #39 Total Aug. 31, Total Aug. 31, Vehicles Years 3,183, ,441, , 120, ,521 2,059,839 5,353, (106,082) (106,082) (32,717) 3,547, ,395, ,441,482 1,706,407 46,091,440 42,405, ,415 3,873,328 3,718, (95,300) (95,300) (32,717) 1,926,522 49,869,468 46,091,440 1,621,477 73,525,771 75,350,042

15 '. Red Deer Catholic Regional Division #39 7. Long term investments 2012 Effective (Market) Fair Yield Cost Value Fixed income securities Government of Canada, % - - direct and auaranteed Provincial, direct and % - - i:iuaranteed Municipal % - Corporate % - - Pooled investment funds 4.79% 146, ,687 Total fixed income 4.79% 146, ,687 securities Equities Canadian 0.76% 36,666 36,915 Foreian 14.46% 20,370 19,413 Real Estate % - Absolute return stratei:iies % - - Total equities 7.17% Total long term investments 5.31% 203, ,015 Effective (Market) Yield % % % % 6.46% 6.46% 9.41% 7.04% % % 8.63% 6.93% 2011 Cost Fair Value , , , ,699 36,666 35,627 20,370 16, , , Trust assets and liabilities These balances represent cash that is held in trust by the School Jurisdiction Deferred Salary Leave Plan Scholarship Trusts Urban School Insurance Trust Student Health Initiative Trust (SHIP Banker Board) Children and Youth with Complex Needs (Banker Board) 36,002 83, , , ,758 81, ,254 1,046, ,526 1,663, Bank indebtedness The School Jurisdiction has negotiated a line of credit in the amount of $2,000,000 ($2,000,000 in 2011) that bears interest at the bank prime rate less 0.6%. The line of credit is secured by a borrowing resolution incorporating a first charge over all monies becoming due or payable to the borrower, including municipal levies, covering all revenue of the School Jurisdiction. There was $0 outstanding on the line of credit at August 31, 2012 ($0 in 2011). page 15

16 Red Deer Catholic Regional Division # Accounts payable and accrued liabilities Province of Alberta Alberta Municipalities Other Alberta School Jurisdictions Other trade payables and accrued liabilities 1,263,221 20, ,910 2,860,110 4,346,159 1,176, ,320 1,653,380 3,013, Deferred revenue ADD: DEDUCT: ADD DEFFERED 2011/ /2012 (DEDUCT): DEFFERED REVENUE Restricted Restricted 2011/2012 REVENUE as at Funds Funds Adjustments as at Aug. 31, 2011 Received/ Expended or Returned Aug.31,2012 Receivable (Paid/Pavable) Funds Alberta Education Restricted Operational Fundina: Alberta Initiative for School Improvement 133, , , Children and Youth with Complex Needs Francophone Student Health Services Infrastructure Maintenance Renewal 500,057 1,032,410 1,256, ,613 Institutional Education Programs Portable Modular Unit Relocation Reaional Education Consultina Services Small Class Size Initiative Student Health Initiative (School - 113, , Authorities) SuperNet Services - 137, , Other Alberta Education deferred 811, , ,749 revenue Other Government of Alberta Restricted Fundina: Central Alberta Tech Prep Other Deferred Revenue: Early Registration 137,487 1,138,429 1,173, ,176 Various 7, ,137-1,831 School Generated Funds 962,356 2,896,412 2,522,044 1,336,724 Total 2,551,859 5,772,945 6,373,711-1,951, Deferred capital allocations Deferred capital allocations represent externally-restricted supported capital funds provided for a specific capital purpose that have been received or are receivable by the School Jurisdiction, but the related expenditure has not yet been made at year-end. These unspent deferred capital allocations are not amortized until the expenditure has been made and it is at this time the balance is transferred to the unamortized capital allocations account. page 16

17 , " Red Deer Catholic Regional Division # Long term debt The School Jurisdiction has issued debentures to the Alberta Municipal Finance Corporation bearing interest at 7.63% to 11.50% (7.63% to 11.50% in 2011), due February 1, 2013 to March 1, 2019 (May 1, 2012 to March 1, 2019 in 2011) to finance the construction of school buildings having a carrying value of $5,586,863 ($6,858,343 in 2011) Transportation Facility loan bearing interest at 4.8% repayable in blended monthly instalments that vary. Average monthly payments in 2012 were $20,660 ($20,582 in 2011). Due December ,919 3,302, ,716 3,387,000 Less: current portion 3,695, ,297 3,468,622 4,009, ,797 3,693,919 Principal repayments on long term debt in each of the next five years are estimated as follows: , , , , ,784 Included in current portion is $142,297 of supported debenture debt and $85,000 for the unsupported transportation facility loan. 14. Employee future benefits liabilities Educational subsidy surplus Personal professional development fund Severance liability Vacation accrual Retirement allowance Defined benefit pension plan liability 371, , , , , ,451 1,835, , , , , , ,815 1,526,282 The total expense for employee future benefits, including defined contribution plan expenses, recorded in the financial statements is $769, 133 ($775,625 in 2011 ). page 17

18 .. r Red Deer Catholic Regional Division # Employee future benefits liabilities (Continued from previous page) Defined contribution plan The expense for the defined contribution pension plan is equivalent to the annual contributions of $340,913 ($303, 187 in 2011) for the year ended August 31, At December 31, 2011, the Local Authorities Pension Plan reported an actuarial deficiency of $4,639,390,000 (deficiency of $4,635,250,000 on December 31, 2010). Defined benefit pension plan The School Jurisdiction's unfunded defined benefit pension plan provides non-indexed pension benefits at retirement to enhance the LAPP formula to a full 2% final average earnings formula. The expense and obligations are determined in accordance with Canadian GMP and actuarial principles. Obligations are based on the projected benefits method of valuation that includes employee service to date and present pay levels, as well as a projection of salaries and service to retirement. Total cash payments for pension for 2012, consisting of cash contributed by the School Jurisdiction to its funded pension plans, cash payments directly to the employees or their beneficiaries for its unfunded other benefit plans and cash contributed to its defined benefit plan were $0 ($0 in 2011). Benefits paid by pension plans were $26,700 ($12,300 in 2011). Accrued benefit plan obligation Accrued benefit plan obligation, beginning of year Accrual for services Interest cost Benefit payments Actuarial loss (gain) on accrued benefit plan obligation Accrued benefit plan obligation, end of year ,500 23,900 20,600 (26,700) 10, , ,900 14,500 19,700 (12,300) 25, ,500 The School Jurisdiction measures its accrued benefit obligations and fair value of plan assets for accounting purposes at August 31, Reconciliation of funded status of the benefit plans to the amounts recorded in the financial statements Accrued benefit obligation Balance of unamortized amounts Accrued benefit liability Elements of defined benefit costs recognized in the year Current service cost Interest costs Amortization of experience losses Defined benefit costs recognized (404,100) 55,649 (348,451) ,900 20,600 10,000 54,500 (375,500) 55,685 (319,815) ,500 19,700 5,800 40,000 page 18

19 14. Employee future benefits liabilities (Continued from previous page) Red Deer Catholic Regional Division #39 Significant assumption Accrued benefit obligation discount 4.00% 5.50% 15. Unamortized capital allocations Unamortized capital allocations represent externally-restricted supported capital funds that have been spent, but have yet to be amortized over the useful life of the applicable capital asset to which the restricted capital allocations apply. The unamortized capital allocations account balance is increased by transfers of previously deferred capital allocations expended and decreased by fully-supported debenture principal repayments. 16. Fees Item Transportation fees* Fees chan:1ed for instruction material and supplies** Other Fees Total *Charged under School Act, Section 51 (3) ***Charged under School Act, Section 60 (2) G) 17. School Generated Funds Gross Receipts 85, , ,394 1,476,044 Unexpended School Generated Revenues, Opening Balance August 31, 2011 (A): Current Year Activities - Gross Receipts: Fees Fundraisina Gifts and donations Grants to schools Other sales and services Total gross receipts (B) Current Year Activities - Total Direct Costs Including Cost of Goods Sold to Raise Funds (C) Current Year Activities - Uses of Funds (0) Unexpended School Generated Revenues, Closing Balance August 31, 2012 (E}* 962,356 1,378, , , ,159 2,896, ,640 2,062,404 1,336,724 *E=A+B-C-D 18. Lease commitments The School Jurisdiction has entered into various lease agreements with estimated minimum annual payments as follows: , Economic dependence The School Jurisdiction's primary source of income is from the Alberta Government. continue viable operations is dependent on this funding. The School Jurisdiction's ability to page 19

20 .... ~ Red Deer Catholic Regional Division # Related party transactions Effective 2005(~006, sch~ol jurisdictions are controlled by the Government of Alberta according to the criteria set out in PSAB All entities consohdated or accounted for on a modified equity basis in the accounts of the Government of Alberta are ~o~ re.lated parties of the sc~o~i j~ri~dicti.ons. These include government departments, health authorities, post-secondary mst1tut10.ns and other school JUr1sd1ct1ons m Alberta. The Red Deer Catholic Regional Division #39 had related party transactions for the year ended August 31, 2012 with the following entities, recorded at the exchange amount which is the amount of consideration agreed upon between the related parties. Balances Assets (at cost or Liabilities (at fair Transactions net realizable value) Revenues Expenses value) Government of Alberta: Education 1,452,361 1,263,221 73,062,970 Infrastructure & Transoortation Finance Human Resources Other Gov't Alberta departments Other: Health authorities Other Alberta school jurisdictions 128, ,910 51, ,933 Post secondarv institutions 8, ,136 TOTAL $1,589,127 $1,465,131 $73, 114,590 $310,069 TOTAL $250,183 $1,324,177 $67,406,040 $669, Financial instruments Credit concentration Accounts receivable from the provincial government in connection with grant revenue represents 44% (7% in 2011) and an amount due from the City of Red Deer represents 23% (42% in 2011) of total accounts receivable as at August 31, The School Jurisdiction believes that there is minimal risk associated with the collection of these amounts as they are from government bodies. Allowances for potentially uncollectible accounts receivable are considered each year. Fair value disclosure The carrying amount of cash and temporary investments, accounts receivable, trust assets and liabilities, bank indebtedness, and accounts payable and accrued liabilities approximates their fair values due to the short-term maturities of these items. Canadian generally accepted accounting principles require the disclosure of fair value information for all financial instruments, except in cases where time and cost constraints make such information too difficult to reliably determine. Because relevant and reliable fair value information was not obtainable, the School Jurisdiction has not disclosed fair value information for its long term accounts receivable. The fair value of the School Jurisdiction's long-term debt is estimated using discounted cash flow analysis based on current market rates for such instruments with similar terms and risks. Based on these assumptions, the fair values as at August 31, 2012 of these long-term financial instruments are as follows: Carrying Amount Long-term debt $3,695,919 $4,009, $4,262,860 Fair Value 2011 $4,658,410 page 20

21 Red Deer Catholic Regional Division #39 Interest rate risk Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. In seeking to minimize the risks from interest rate fluctuations, the School Jurisdiction manages exposure through it's normal operating and financing activities. The School Jurisdiction is exposed to interest rate risk primarily through its long term debt of $3,695,919 ($4,009,716 in 2011). 22. Supplemental cash flow information Interest paid 211, , Budgeted amounts The budget was prepared by the School Jurisdiction and approved by the Board of Trustees. purposes only and has not been audited. It is presented for information 24. Change in accounting policy The Government of Alberta remits all funds to the Alberta Teachers Retirement Fund (ATRF) on behalf of the School Division. Historically, this has not been recorded in the School Division's financial statements. During the year, this policy was changed and now requires that the School Division record both the revenue and expense. Revenue from the Government of Alberta and certificated benefits has increased by $3,393,477 in 2011 to reflect retroactive application of this inclusion. Due to changes in the accounting policy related to school generated funds recommended by the Government of Alberta, cash and deferred revenue have both increased by $1, 184,922 as at August 31, As a result cash flows from deferred revenue also increased by $1,184,922. This had no effect on total net assets. Gross school generated funds revenue of $2,087,994 was re-allocated to fees, other revenue, gifts and donations and fundraising by $672,209, $458,216, $104, 149, $853,420 respectively. Gross school generated funds expense of $2,087,994 was re-allocated to services, contracts and supplies. This had no effect on excess of revenues over expenses. page 21

22 Red Deer Catholic Regional Division # Remuneration and monetary incentives The Red Deer Catholic Regional Division #39 had paid or accrued expenses for the year ended August 31, 2012 to or on behalf of the following positions and persons in groups as follows: Board Members FTE: Remuneration Benefits Allowances Performance ERIP's/ other Expenses Bonuses MacKav ,560 5, ,893 Halter ,190 5, LaGranoe ,511 6, ,933 McNiff ,937 5, ,320 Bouchard , 117 5, ,415 Watson ,783 5, ,668 Pelletier ,015 5, ,216 Subtotal 124,113 40, ,416 Mason ,364 34, ,749 Steeves ,491 28, ,992 Certificated teachers ,776,588 8,413, ,236 - Non-Certificated - ot ,974,851 2,644, her Totals 48,190,407 11,162, ,236 64,157 page 22

23 School Jurisdiction Code: 19 UNAUDITED SCHEDULES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2012 [School Act, Section 276] Red Deer Catholic Regional Division No 39 Legal Name of School Jurisdiction st Street, Red Deer, AB T4N6N8 Mailing Address Telephone and Fax Numbers Declaration of Secretary-Treasurer / Chief Financial Officer To the best of my knowledge and belief, these unaudited schedules have been prepared following Alberta Education's reporting requirements for Alberta school jurisdictions. These schedules were submitted to the board for information purposes. SECRETARY TREASURER OR TREASURER Roderic M. Steeves Name Dated and Signed Electronically Signature Dated 28-Nov-12 c.c. ALBERTA EDUCATION, Financial Reporting & Accountability Branch 8th Floor Commerce Place, Street, Edmonton AB T5J 4L5 Robert.Mah@gov.ab.ca PHONE: (780) FAX: (780)

24 School Jurisdiction Code: 19 TABLE OF CONTENTS Page SCHEDULE A Allocation of Revenues and Expenses to Programs 3 SCHEDULE B Operations and Maintenance Program Expense Details 4 page 2 of 4

25 SCHEDULE A School Jurisdiction Code: 19 ALLOCATION OF REVENUES AND EXPENSES TO PROGRAMS /2012 Operations and Maintenance of Board & REVENUES ECS -Grade 12 Schools & System External Instruction Maintenance Shops Transportation Administration Services TOTAL (1) Alberta Education $59,784,267 $6,065,258 $4,552,230 $2,661,215 $0 $73,062,970 (2) Other - Government of Alberta $0 $0 $0 $0 $0 $0 (3) Federal Government and First Nations $46,429 $0 $0 $0 $0 $46,429 (4) Other Alberta school authorities $0 $0 $51,620 $0 $0 $51,620 (5) Out of province authorities $433,311 $0 $0 $0 $0 $433,311 (6) Alberta Municipalities-special tax levies $0 $0 $0 $0 $0 $0 (7) Fees $1,390,769 $85,275 $1,476,044 (8) Other sales and services $366,012 $15,367 $90,548 $279,177 $0 $751,104 (9) Investment income $0 $0 $0 $138,827 $0 $138,827 (10) Gifts and donations $149,957 $0 $0 $0 $0 $149,957 (11) Fundraising $711,710 $0 $0 $0 $0 $711,710 (12) Rental of facilities $0 $108,548 $0 $0 $0 $108,548 (13) Gains on disposal of capital assets $0 $0 $41,218 $0 $0 $41,218 (14) Amortization of capital allocations $0 $3,018,526 $0 $0 $3,018,526 (15) Other revenue $656,159 $0 $0 $0 $0 $656,159 (16) TOTAL REVENUES $63,538,614 $9,207,699 $4,820,891 $3,079,219 $0 $80,646,423 EXPENSES (17) Certificated salaries $36,811,748 $349,440 $0 $37,161,188 (18) Certificated benefits $8,342,208 $106,424 $0 $8,448,632 (19) Non-certificated salaries and wages $7,041,500 $1,262,869 $1,803,474 $1,125,612 $0 $11,233,455 (20) Non-certificated benefits $1,892,973 $300,748 $251,823 $268,385 $0 $2,713,929 (21) SUB - TOTAL $54,088,429 $1,563,617 $2,055,297 $1,849,861 $0 $59,557,204 (22) Services, contracts and supplies $7,885,465 $4,316,646 $1,711,765 $763,969 $0 $14,677,845 (23) Amortization of capital assets $173,658 $3,178,727 $394,081 $126,862 $0 $3,873,328 (24) Interest and charges $1,250 $48,709 $161,736 $0 $0 $211,695 (25) Losses on disposal of capital assets $0 $0 $0 $0 $0 $0 (26) Other expense $1,000 $0 $0 $0 $0 $1,000 (27) TOTAL EXPENSES $62,149,802 $9,107,699 $4,322,879 $2,740,692 $0 $78,321,072 EXCESS (DEFICIENCY) OF REVENUES (28) OVER EXPENSES $1,388,812 $100,000 $498,012 $338,527 $0 $2,325,351 page 3 of 4