TABLE OF CONTENTS. Schedule 4: SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES

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2 School Jurisdiction Code: 9 TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT 3 STATEMENT OF FINANCIAL POSITION 5 STATEMENT OF OPERATIONS 6 STATEMENT OF CASH FLOWS 7 STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT) 8 STATEMENT OF REMEASUREMENT GAINS AND LOSSES 9 Schedule 1: SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS 10 Schedule 2: SCHEDULE OF CAPITAL REVENUE 12 Schedule 3: SCHEDULE OF PROGRAM OPERATIONS 13 Schedule 4: SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES 14 Schedule 5: SCHEDULE OF CASH, CASH EQUIVALENTS, AND PORTFOLIO INVESTMENTS 15 Schedule 6: SCHEDULE OF CAPITAL ASSETS 16 Schedule 7: SCHEDULE OF REMUNERATION AND MONETARY INCENTIVES 17 Schedule 8: UNAUDITED SCHEDULE OF FEE REVENUES 18 Schedule 9: UNAUDITED SCHEDULE OF DIFFERENTIAL FUNDING 19 Schedule 10: UNAUDITED SCHEDULE OF CENTRAL ADMINISTRATION EXPENSES 20 NOTES TO THE FINANCIAL STATEMENTS 21

3 Independent Auditors' Report To the Board of Directors The FFCA Charter School Society We have audited the accompanying financial statements of The FFCA Charter School Society, which comprise the statement of financial position as at August 31, 2016, and the statement of operations, cash flow, change in net financial assets and remeasurement gains and losses and the related schedules 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 public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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. 3

4 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of The FFCA Charter School Society as at August 31, 2016, and the results of its operations, cash flows, changes in net assets and remeasurement gains and losses for the year then ended in accordance with Canadian public sector accounting standards. Other Matters The budgeted amounts included in the financial statements as at and for the year ended August 31, 2016 and the schedules of fee revenue, differential funding and central administration expenses for the year ended August 31, 2016 are unaudited. Calgary, Canada November 23, 2016 CHARTERED PROFESSIONAL ACCOUNTANTS 4

5 STATEMENT OF FINANCIAL POSITION As at August 31, 2016 (in dollars) School Jurisdiction Code: FINANCIAL ASSETS Cash and cash equivalents (Schedule 5; Note 4) 2,583,453 2,377,296 Accounts receivable (net after allowances) (Note 5) 289, ,322 Portfolio investments (Schedule 5; Note 6) 3,226,867 3,157,463 Other financial assets Total financial assets 6,099,977 5,761,081 LIABILITIES Bank indebtedness Accounts payable and accrued liabilities (Note 7) 461, ,744 Deferred revenue (Note 8) 2,870,625 2,568,392 Employee future benefit liabilities (Note 9) 251, ,219 Liability for contaminated sites Other liabilities Debt Supported: Debentures and other supported debt Unsupported: Debentures and capital loans Mortgages Capital leases (Note 10) 172, ,462 Total liabilities 3,755,915 3,455,817 Net financial assets (debt) 2,344,062 2,305,264 NONFINANCIAL ASSETS Tangible capital assets (Schedule 6; Note 11) Land Construction in progress 789, ,787 Buildings 2,009,600 Less: Accumulated amortization (1,836,565) 173, ,212 Equipment 1,131,794 Less: Accumulated amortization (961,336) 170, ,768 Vehicles Less: Accumulated amortization Computer Equipment 2,700,210 Less: Accumulated amortization (2,616,967) 83, ,441 Total tangible capital assets 1,216,624 1,378,208 Prepaid expenses 194,032 64,504 Other nonfinancial assets Total nonfinancial assets 1,410,656 1,442,712 Accumulated surplus (Schedule 1; Note 12) 3,754,718 3,747,976 Accumulating surplus / (deficit) is comprised of: Accumulated operating surplus (deficit) 3,754,718 3,747,976 Accumulated remeasurement gains (losses) 3,754,718 3,747,976 Contractual obligations (Note 22) Contingent liabilities The accompanying notes and schedules are part of these financial statements. 5

6 STATEMENT OF OPERATIONS For the Year Ended August 31, 2016 (in dollars) School Jurisdiction Code: 9 Budget Actual Actual REVENUES Alberta Education 31,731,037 Other Government of Alberta Federal Government and First Nations Other Alberta school authorities Out of province authorities Alberta municipalitiesspecial tax levies Property taxes Fees (Schedule 8; Note 13) 2,874,560 Other sales and services 20,000 Investment income 125,000 Gifts and donations Rental of facilities Fundraising 212,500 Gains on disposal of capital assets 31,750,028 30,672,612 75,468 93, , ,001 3,046,212 2,861, , , , ,338 54,692 42,610 24,799 12, , ,869 1, Other revenue Total revenues 34,963,097 36,272,292 34,791,324 EXPENSES Instruction ECS 1,366,570 1,479,808 1,201,600 Instruction Grades ,798,318 27,739,621 26,779,869 Plant operations and maintenance 2,554,201 2,822,939 2,611,853 Transportation 3,175,473 2,967,289 3,002,506 Board & system administration 1,440,175 1,255,893 1,586,723 External services Total expenses 35,334,737 36,265,550 35,182,551 Operating surplus (deficit) (371,640) 6,742 (391,227) The accompanying notes and schedules are part of these financial statements. 6

7 School Jurisdiction Code: 9 STATEMENT OF CASH FLOWS For the Year Ended August 31, 2016 (in dollars) CASH FLOWS FROM: A. OPERATING TRANSACTIONS Operating surplus (deficit) 6,742 (391,227) Add (Deduct) items not affecting cash: Total amortization expense 542, ,802 Gains on disposal of tangible capital assets (1,241) (674) Losses on disposal of tangible capital assets Expended deferred capital revenue recognition (231,413) (231,417) Deferred capital revenue writedown / adjustment Donations in kind Changes in: Accounts receivable (63,335) 708 Prepaids (129,528) 70,821 Other financial assets Nonfinancial assets Accounts payable, accrued and other liabilities 6, ,632 Deferred revenue (excluding EDCR) 533,646 92,212 Employee future benefit liabilities 13, ,219 Other (describe) Total cash flows from operating transactions 676, ,076 B. CAPITAL TRANSACTIONS Purchases of tangible capital assets Land Buildings (175,286) (79,112) Equipment (64,007) (90,367) Vehicles Computer equipment (124,737) (40,601) Net proceeds from disposal of unsupported capital assets 14,636 30,094 Other (Construction in Progress) (30,101) (759,787) Total cash flows from capital transactions (379,495) (939,773) C. INVESTING TRANSACTIONS Purchases of portfolio investments (69,404) (1,043,588) Dispositions of portfolio investments Remeasurement (gains) losses reclassified to the statement of operations Change in endowments Other (describe) Total cash flows from investing transactions (69,404) (1,043,588) D. FINANCING TRANSACTIONS Issue of debt Repayment of debt Other factors affecting debt (describe) Issuance of capital leases Repayment of capital leases (21,288) (13,707) Other factors affecting capital leases (describe) Other (describe) Total cash flows from financing transactions (21,288) (13,707) Increase (decrease) in cash and cash equivalents 206,157 (1,506,992) Cash and cash equivalents, at beginning of year 2,377,296 3,884,288 Cash and cash equivalents, at end of year 2,583,453 2,377,296 The accompanying notes and schedules are part of these financial statements. 7

8 School Jurisdiction Code: 9 STATEMENT OF CHANGE IN NET FINANCIAL ASSETS (NET DEBT) For the Year Ended August 31, 2016 (in dollars) Budget Operating surplus (deficit) 6,742 (391,227) Effect of changes in tangible capital assets Acquisition of tangible capital assets (364,030) (210,080) Amortization of tangible capital assets 542, ,802 Net carrying value of tangible capital assets disposed of 13,395 29,420 Writedown carrying value of tangible capital assets Other changes (30,101) (759,787) Total effect of changes in tangible capital assets 161,584 (466,645) Changes in: Prepaid expenses (129,528) 70,821 Other nonfinancial assets Net remeasurement gains and (losses) Endowments Increase (decrease) in net financial assets (net debt) 38,798 (787,051) Net financial assets (net debt) at beginning of year 2,305,264 3,092,315 Net financial assets (net debt) at end of year 2,344,062 2,305,264 The accompanying notes and schedules are part of these financial statements. 8

9 School Jurisdiction Code: 9 STATEMENT OF REMEASUREMENT GAINS AND LOSSES For the Year Ended August 31, 2016 (in dollars) Accumulated remeasurement gains (losses) at beginning of year Prior Period Adjustment (Explain) Prior Period Adjustment (Explain) Unrealized gains (losses) attributable to: Portfolio investments Other Amounts reclassified to the statement of operations: Portfolio investments Other Net remeasurement gains (losses) for the year Accumulated remeasurement gains (losses) at end of year The accompanying notes and schedules are part of these financial statements. 9

10 SCHEDULE 1 SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS for the Year Ended August 31, 2016 (in dollars) School Jurisdiction Code: 9 INTERNALLY RESTRICTED ACCUMULATED ACCUMULATED ACCUMULATED INVESTMENT ENDOWMENTS UNRESTRICTED TOTAL TOTAL SURPLUS REMEASUREMENT OPERATING IN TANGIBLE SURPLUS OPERATING CAPITAL GAINS (LOSSES) SURPLUS CAPITAL RESERVES RESERVES ASSETS Balance at August 31, ,747,976 3,747, ,115 1,306,861 1,500,000 Prior period adjustments: Adjusted Balance, August 31, ,747,976 3,747, ,115 1,306,861 1,500,000 Operating surplus (deficit) 6,742 6,742 6,742 Board funded tangible capital asset additions (395,120) 395,120 Disposal of unsupported tangible capital assets or board funded portion of supported (13,395) 13,395 Writedown of unsupported tangible capital assets or board funded portion of supported Net remeasurement gains (losses) for the year Endowment expenses & disbursements Endowment contributions Reinvested endowment income Direct credits to accumulated surplus (Describe) Amortization of tangible capital assets Capital revenue recognized Debt principal repayments (unsupported) Additional capital debt or capital leases Net transfers to operating reserves Net transfers from operating reserves Net transfers to capital reserves (542,320) 542, ,413 (231,413) 21,288 (21,288) (309,756) 309,756 13,395 (13,395) Net transfers from capital reserves Assumption/transfer of other operations' surplus Other Changes Balance at August 31, ,754,718 3,754, ,981 2,011,737 1,500,000 10

11 SCHEDULE 1 SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS for the Year Ended August 31, 2016 (in dollars) School Jurisdiction Code: 9 INTERNALLY RESTRICTED RESERVES BY PROGRAM Balance at August 31, 2015 Prior period adjustments: School & Instruction Related Operations & Maintenance Board & System Administration Transportation Operating Reserves Capital Reserves Operating Reserves Capital Reserves Operating Reserves Capital Reserves Operating Reserves Capital Reserves External Services Operating Reserves Capital Reserves 651,930 1,500, , ,693 (270,510) Adjusted Balance, August 31, 2015 Operating surplus (deficit) 651,930 1,500, , ,693 (270,510) Board funded tangible capital asset additions Disposal of unsupported tangible capital assets or board funded portion of supported Writedown of unsupported tangible capital assets or board funded portion of supported Net remeasurement gains (losses) for the year Endowment expenses & disbursements Endowment contributions 469,288 (74,168) 13,395 Reinvested endowment income Direct credits to accumulated surplus (Describe) Amortization of tangible capital assets Capital revenue recognized Debt principal repayments (unsupported) Additional capital debt or capital leases Net transfers to operating reserves Net transfers from operating reserves Net transfers to capital reserves Net transfers from capital reserves Assumption/transfer of other operations' surplus Other Changes Balance at August 31, 2016 (247,535) 240, , ,147 (13,395) 873,683 1,500, , ,302 (114,363) 11

12 SCHEDULE 2 SCHEDULE OF CAPITAL REVENUE (EXTERNALLY RESTRICTED CAPITAL REVENUE ONLY) for the Year Ended August 31, 2016 (in dollars) 9 Unexpended Deferred Capital Revenue Proceeds on Unexpended Disposal of Deferred Provincially Surplus from Provincially Capital Expended Approved Provincially Funded Revenue from Deferred & Funded Approved Tangible Capital Other Capital Projects (A) Projects (B) Assets (C) Sources (D) Revenue Balance at August 31, ,632 Prior period adjustments Adjusted balance, August 31, ,632 Add: Unexpended capital revenue received from: Alberta Education school building & modular projects (excl. IMR) 789,251 Infrastructure Maintenance & Renewal capital related to school facilities Other sources: Other sources: Unexpended capital revenue receivable from: Alberta Education school building & modular (excl. IMR) Other sources: Other sources: Interest earned on unexpended capital revenue Other unexpended capital revenue: Proceeds on dispoition of supported capital Insurance proceeds (and related interest) Donated tangible capital assets: Alberta Infrastructure managed projects Transferred in (out) tangible capital assets net book value) Expended capital revenue current year Surplus funds approved for future project(s) (789,251) 789,251 Other adjustments: Deduct: Net book value of supported tangible capital dispositions or writeoffs Other adjustments: Capital revenue recognized Alberta Education 169,184 Capital revenue recognized Other Government of Alberta 6,061 Capital revenue recognized Other revenue 56,168 Balance at August 31, ,251 12,219 (A) (B) (C) (D) Balance of Unexpended Deferred Capital Revenue at August 31, 2016 (A) + (B) + (C) + (D) 789,251 Unexpended Deferred Capital Revenue (A) Represents funding received from the Government of Alberta to be used toward the acquisition of new approved tangible capital assets with restricted uses only. Please specify department if funds received from a source other than Alberta Education. (B) Represents any surplus of funding over costs from column (A) approved by Minister for future capital expenditures with restricted uses only. (C) Represents proceeds on disposal of provincially funded restricteduse capital assets to be expended on approved capital assets per 10(2)(a) of Disposition of Property Reg. 181/2010. (D) Represents capital revenue received from entities OTHER THAN the Government of Alberta for the acquisition of restricteduse tangible capital assets. 12

13 SCHEDULE 3 School Jurisdiction Code: 9 SCHEDULE OF PROGRAM OPERATIONS for the Year Ended August 31, 2016 (in dollars) Plant Operations Board & REVENUES Instruction and System External ECS Grades 1 12 Maintenance Transportation Administration Services TOTAL TOTAL (1) Alberta Education 1,291,347 25,219,065 2,422,918 1,436,744 1,379,954 31,750,028 30,672,612 (2) Other Government of Alberta 75,468 75,468 93,271 (3) Federal Government and First Nations (4) Other Alberta school authorities 464, , ,001 (5) Out of province authorities (6) Alberta municipalitiesspecial tax levies (7) Property taxes (8) Fees 70,414 1,290,220 1,685,578 3,046,212 2,861,114 (9) Other sales and services 6, ,093 3,907 1,114 3, , ,235 (10) Investment income 139,339 1, , ,338 (11) Gifts and donations 54,692 54,692 42,610 (12) Rental of facilities 12,870 11,929 24,799 12,600 (13) Fundraising 11, , , ,869 (14) Gains on disposal of tangible capital assets 1,241 1, (15) Other revenue (16) TOTAL REVENUES 1,380,205 27,481,230 2,902,919 3,123,436 1,384,502 36,272,292 34,791,324 EXPENSES (17) Certificated salaries 779,313 17,447, ,965 18,453,964 17,967,080 (18) Certificated benefits 66,944 3,700,353 47,327 3,814,624 3,607,317 (19) Noncertificated salaries and wages 262,566 2,661, , ,318 4,361,771 4,299,284 (20) Noncertificated benefits 61, , ,432 64, , ,945 (21) SUB TOTAL 1,170,487 24,434,396 1,223, ,808 27,610,676 26,860,626 (22) Services, contracts and supplies 294,344 2,997,423 1,346,996 2,957, ,700 8,045,252 7,780,972 (23) Amortization of supported tangible capital assets 2,070 42, ,403 5, , ,417 (24) Amortization of unsupported tangible capital assets 10, ,487 70,555 5, , ,385 (25) Supported interest on capital debt (26) Unsupported interest on capital debt (27) Other interest and finance charges 2,033 41,777 9,500 13,992 67,302 67,151 (28) Losses on disposal of tangible capital assets (29) Other expense (30) TOTAL EXPENSES 1,479,808 27,739,621 2,822,939 2,967,289 1,255,893 36,265,550 35,182,551 (31) OPERATING SURPLUS (DEFICIT) (99,603) (258,391) 79, , ,609 6,742 (391,227) 13

14 SCHEDULE 4 School Jurisdiction Code: 9 Expensed IMR, Unsupported TOTAL Utilities Modular Unit Facility Planning & Amortization Supported TOTAL Operations and EXPENSES Custodial Maintenance and Relocations & Operations & Other Capital & Debt Operations and Maintenance Telecomm. Lease Payments Administration Expenses Services Maintenance Uncertificated salaries and wages 684, , , , ,889 Uncertificated benefits 180,487 40,536 8, , ,295 Subtotal Remuneration 864, , ,429 1,223,985 1,107,184 Supplies and services 258, , , ,813 Electricity 224, , ,587 Natural gas/heating fuel 150, ,017 88,367 Sewer and water 63,890 63,890 54,633 Telecommunications 2,003 2,003 2,278 Insurance 24,715 24,715 24,772 ASAP maintenance & renewal payments Amortization of tangible capital assets Supported 181, , ,405 Unsupported 70,555 70,555 31,525 Total Amortization 70, , , ,930 Interest on capital debt Supported Unsupported Lease payments for facilities 5,537 5,537 13,289 Other interest charges SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES for the Year Ended August 31, 2016 (in dollars) Losses on disposal of capital assets TOTAL EXPENSES 1,122, , ,979 5, ,144 70, ,403 2,822,939 2,611,853 SQUARE METRES School buildings 29, ,039.8 Non school buildings Note: Custodial: All expenses related to activities undertaken to keep the school environment and maintenance shops clean and safe. Maintenance: All expenses associated with the repair, replacement, enhancement and minor construction of buildings, grounds and equipment components. This includes regular and preventative maintenance undertaken to ensure components reach or exceed their life cycle and the repair of broken components. Maintenance expenses exclude operational costs related to expensed IMR & Modular Unit relocations, as they are reported on separately. Utilities & Telecommunications: All expenses related to electricity, natural gas and other heating fuels, sewer and water and all forms of telecommunications. Expensed IMR & Modular Unit Relocation & Lease Pmts: All operational expenses associated with noncapitalized Infrastructure Maintenance Renewal projects, modular unit (portable) relocation, and payments on leased facilities. Facility Planning & Operations Administration: All expenses related to the administration of operations and maintenance including (but not limited to) contract administration, clerical functions, negotiations, supervision of employees & contractors, school facility planning & project 'administration', administration of jointuse agreements, and all expenses related to ensuring compliance with health and safety standards, codes and government regulations. Unsupported Amortization & Other Expenses: All expenses related to unsupported capital assets amortization and interest on unsupported capital debt. Supported Capital & Debt Services: All expenses related to supported capital assets amortization and interest on supported capital debt. 14

15 SCHEDULE 5 School Jurisdiction Code: 9 SCHEDULE OF CASH, CASH EQUIVALENTS, AND PORTFOLIO INVESTMENTS for the Year Ended August 31, 2016 (in dollars) Cash & Cash Equivalents Average Effective (Market) Yield Cost Amortized Cost Amortized Cost Cash 2,533,453 2,533,453 2,377,296 Cash equivalents Government of Canada, direct and guaranteed 0.00% Provincial, direct and guaranteed 0.00% Corporate 0.00% Municipal 0.00% Pooled investment funds 0.00% Other, including GIC's 2.20% 50,000 50,000 Total cash and cash equivalents 0.04% 2,583,453 2,583,453 2,377,296 See Note 4 for additional detail. Portfolio Investments Average Effective (Market) Yield Cost Fair Value Balance Balance Long term deposits 4.18% 36,491 36,491 35,028 Guranteed interest certificates 2.20% 3,190,376 3,190,376 3,122,435 Fixed income securities Government of Canada, direct and guaranteed 0.00% Provincial, direct and guaranteed 0.00% Municipal 0.00% Corporate 0.00% Pooled investment funds 0.00% Total fixed income securities 0.00% Equities Canadian 0.00% Foreign 0.00% Total equities 0.00% Supplemental integrated pension plan assets 0.00% Restricted investments 0.00% Other (Specify) 0.00% Other (Specify) 0.00% Total portfolio investments 2.22% 3,226,867 3,226,867 3,157,463 See Note 6 for additional detail. The following represents the maturity structure for portfolio investments based on principal amount: Under 1 year 0.0% 0.0% 1 to 5 years 100.0% 100.0% 6 to 10 years 0.0% 0.0% 11 to 20 years 0.0% 0.0% Over 20 years 0.0% 0.0% 100.0% 100.0% 15

16 SCHEDULE 6 School Jurisdiction Code: 9 SCHEDULE OF CAPITAL ASSETS for the Year Ended August 31, 2016 (in dollars) Tangible Capital Assets Computer Construction In Hardware & Total Total Land Progress Buildings Equipment Vehicles Software Estimated useful life 2550 Years 510 Years 510 Years 35 Years Historical cost Beginning of year 759,787 2,425,312 1,134,760 2,575,473 6,895,332 Prior period adjustments Additions 30, ,286 64, , ,131 Transfers in (out) Less disposals including writeoffs (590,998) (66,973) (657,971) 789,888 2,009,600 1,131,794 2,700,210 6,631,492 Accumulated amortization Beginning of year 2,131, ,992 2,465,032 5,517,124 Prior period adjustments Amortization 296,463 93, , ,320 Other additions Transfers in (out) Less disposals including writeoffs (590,998) (53,578) (644,576) 1,836, ,336 2,616,967 5,414,868 Net Book Value at August 31, , , ,458 83,243 1,216,624 Net Book Value at August 31, , , , ,441 1,378,208 Total cost of assets under capital lease Total amortization of assets under capital lease , , , ,812 16

17 SCHEDULE 7 SCHEDULE OF REMUNERATION AND MONETARY INCENTIVES for the Year Ended August 31, 2016 (in dollars) Negotiated Performance Other Accrued Board Members: FTE Remuneration Benefits Allowances Bonuses ERIP's / Other Paid Unpaid Benefits Expenses A. Patel, Chair 4, C. Beaucage, Vice Chair 11, ,025 A. Chu C. Rios 4, ,015 S. Schroh 11, ,967 W. Weinheimer 3, P. Wilson 4, , Subtotal 40,153 1, ,967 Roger Nippard, Superintendent ,149 47, , , Reta Morgan, Secretary/Treasurer ,690 30, , , Certificated teachers ,236,815 3,757, Noncertificated other ,173, , TOTALS ,815,735 4,781, , ,159 17

18 SCHEDULE 8 UNAUDITED SCHEDULE OF FEE REVENUES for the Year Ending August 31, 2016 (in dollars) School Jurisdiction Code: 9 Actual 2016 Actual 2015 FEES Transportation fees 1,685,578 1,651,406 Basic instruction supplies (text books, including lost or replacement fees, course materials) 532, ,109 Technology user fees 0 0 Alternative program fees 0 0 Fees for optional courses (band, art, etc.) 503, ,877 Fees for students from other boards 0 0 Tuition fees (international & out of province) 0 0 Kindergarten & preschool 15,906 16,125 Extracurricular fees (sports teams and clubs) 75,450 36,880 Field trips (related to curriculum) 233, ,302 Lunch supervision fees 0 0 Locker rental; locks; student ID; uniforms; library, student union, and fitness fees 0 26,415 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 Other (describe)* 0 0 TOTAL FEES 3,046,212 2,861,114 *PLEASE DO NOT USE "SCHOOL GENERATED FUNDS" AS A CATEGORY Please disclose amounts paid by parents of students that are recorded as "Other sales and services" or "Other revenue" (rather than fee revenue): Actual 2016 Actual 2015 Cafeteria sales, hot lunch, milk programs 6,600 18,781 Special events, graduation, tickets 90,622 96,550 Student travel (international, recognition trips, noncurricular) 0 0 Sales or rentals of other supplies/services (clothing, agendas, yearbooks) 66, ,987 Adult education revenue 0 0 Child care & before and after school care 0 0 Other (describe) 0 0 Other (describe) 0 0 Other (describe) 0 0 TOTAL 163, ,318 18

19 SCHEDULE 9 9 UNAUDITED SCHEDULE OF DIFFERENTIAL FUNDING for the Year Ended August 31, 2016 (in dollars) First Nations, Metis & Inuit (FNMI) ECS Program Unit Funding (PUF) PROGRAM AREA English as a Second Language (ESL) Inclusive Education Funded Students in Program Federally Funded Students REVENUES Alberta Education allocated funding 47, , ,882 Other funding allocated by the board to the program TOTAL REVENUES 47, , ,882 EXPENSES (Not allocated from BASE, Transportation, or other funding) Instructional certificated salaries & benefits 21, ,554 Instructional noncertificated salaries & benefits 25,173 1,008, ,082 SUB TOTAL 47,109 1,162, ,082 Supplies, contracts and services 152,323 Program planning, monitoring & evaluation Facilities (required specifically for program area) Administration (administrative salaries & services) 35,704 74,299 Other (please describe) Other (please describe) TOTAL EXPENSES 47,109 1,198, ,704 NET FUNDING SURPLUS (SHORTFALL) (774,069) (430,822) Small Schools by Necessity (Revenue only) 19

20 SCHEDULE 10 School Jurisdiction Code: 9 UNAUDITED SCHEDULE OF CENTRAL ADMINISTRATION EXPENSES for the Year Ended August 31, 2016 (in dollars) Allocated to Board & System Administration Allocated to Other Programs Salaries & Supplies & Salaries & Supplies & EXPENSES Benefits Services Other TOTAL Benefits Services Other TOTAL Office of the superintendent 362,743 10, , ,947 Educational administration (excluding superintendent) Business administration 303,403 75, , ,126 Board governance (Board of Trustees) 42,058 76, , ,422 Information technology 12,000 12,000 12,000 Human resources 63,037 5,483 68,520 68,520 Central purchasing, communications, marketing Payroll 52,625 24,670 77,295 77,295 Administration insurance 21,141 21,141 21,141 Administration amortization 11,393 11,393 11,393 Administration other (admin building, interest) 87,716 87,716 87,716 Other (Audit) 39,376 39,376 39,376 Other (Legal) 53,965 53,965 53,965 Other (Bank Fees) 13,992 13,992 13,992 TOTAL EXPENSES 823, , ,583 1,255,893 1,255,893 20

21 The FFCA Charter School Society Financial Statements August 31, 2016

22 The FFCA Charter School Society Notes to Financial Statements August 31, Purpose of the Society The Society delivers educational programs, operating as The FFCA Charter School Society ("Society") under the authority of the School Act, Chapter S3, Statutes of Alberta, January The Society was incorporated on March 21, 1996 under the Societies Act of Alberta. Through a charter established with the Minister of Education, the Society operates a charter school from seven locations. The campuses provide education from kindergarten to Grade 12. The Charter was renewed for fifteen years on August 31, The Society receives funding for instruction and support under Education Grants Regulation (AR 120/2008). The regulation allows for the setting of conditions and use of grant monies. The Society is limited on certain funding allocations and administrative expenses. The Society is incorporated under the Societies Act of Alberta as a notforprofit organization and is a registered charity and, as such, is exempt from income taxes. 2. Significant accounting policies These financial statements have been prepared in accordance with Canadian public sector accounting standards. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below: (a) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, bank balances and guaranteed investment certificates ("GIC") that have a maturity of less than 90 days from yearend. (b) 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 the yearend and are accordingly recorded as prepaid expenses. (c) Portfolio investments GIC s, term deposits and other investments not quoted in an active market are reported at cost or amortized cost. Portfolio investments in equity instruments that are quoted in an active market are recorded at fair value and the associated transaction costs are expensed upon initial recognition. The change in the fair value is recognized in the Statement of Remeasurement Gains and Losses as a remeasurement gain or loss until the portfolio investments are derecognized. Upon derecognition, the accumulated remeasurement gains or losses associated with the derecognized portfolio investments are reversed and reclassified to the Statement of Operations. 21

23 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 Impairment is defined as a loss in value of a portfolio investment that is other than a temporary decline and is included in the Statement of Operations. In the case of an item in the fair value category, a reversal of any net remeasurement gains recognized in previous reporting periods up to the amount of the writedown is reported in the Statement of Remeasurement Gains and Losses. A subsequent increase in value would be recognized on the Statement of Remeasurement Gains and Losses and realized on the Statement of Operations only when sold. (d) Tangible capital assets Purchased tangible capital assets are recorded at cost. Contributed tangible capital assets are recorded at fair market value at the date of contribution. Only tangible capital assets with costs in excess of 5,000 are capitalized. Leases that, from the point of view of the lessee, transfer substantially all the benefits and risks incident to ownership of the property to the Society are considered capital leases. These are accounted for as an asset and an obligation. Capital lease obligations are recorded at the present value of the minimum lease payments excluding executor costs. The discount rate used to determine the present value of the lease payments is the lower of the Society's rate for incremental borrowing or the interest rate implicit in the lease. Amortization on capital assets is provided on a straightline basis over the following range of years: Site improvements Portable buildings Other equipment Computer hardware and software Leasehold improvements Leasehold improvements central office 4 years 1 to 5 years 3 to 5 years 2 to 3 years 1 to 5 years 5 years Capital assets are tested for impairment when circumstances arise that indicate impairment may have occurred. (e) Deferred revenue Deferred revenue includes contributions received for operations which have stipulations that meet the definition of a liability. These contributions are recognized by the Society once it has met all eligibility criteria to receive the contributions. When stipulations are met, deferred revenue is recognized as revenue in the fiscal year in a manner consistent with the circumstances and evidence used to support the initial recognition of the contributions received as a liability. 22

24 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 Deferred revenue also include contributions for capital expenditures. Deferred capital revenue represents externally restricted capital funds that have been expended but have yet to be amortized over the useful life of the related capital asset. Amortization over the useful life of the related capital asset is due to certain stipulations related to the contributions that require that the Society to use the asset in a prescribed manner over the life of the associated asset. (f) 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. Unrestricted donations are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Donations in kind are recorded at fair market value when reasonably determinable. Externally restricted contributions are deferred and recognized as revenue in the period in which the related expenses are incurred. (g) Teachers' Retirement Fund Contributions by the Province of Alberta Teachers' Retirement Fund (TRF) contributions by the Province for current service are a component part of education's system costs and are formally recognized in the accounts of the school jurisdictions, even though the jurisdiction has no legal obligation to pay these costs. The amount of current service contributions are recognized as revenue from the Province and as certificated benefits expense. (h) Pensions Pension costs included in these financial statements as part of salary and benefits comprise the cost of employer and Provincial contributions for current service of support staff employees during the year. For the school year ended August 31, 2016, the amount contributed to the Teachers' Retirement Fund by the Province was 2,250,173 (2015 2,121,651). The Society participates in a multiemployer pension plan, the Local Authorities Pension (LAPP) Plan, and does not report on any unfunded liabilities. The expense for this pension plan is equivalent to the annual contributions of 827,693 for the year ended August 31, 2016 ( ,213). At December 31, 2015, the Local Authorities Pension Plan reported a deficiency of 923,416 (2014 2,454,636). 23

25 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 (i) Vacation pay Vacation pay is accrued in the period in which the employee earns the benefit. The value of earned vacation not yet taken and included in accounts payable and accrued liabilities as at August 31, 2016 is 45,246 ( ,221). (j) Financial instruments A contract establishing a financial instrument creates, at its inception, rights and obligations to receive or deliver economic benefits. The financial assets and financial liabilities portray these rights and obligations in the financial statements. The Society recognizes a financial instrument when it becomes a party to a financial instrument contract. Financial instruments consist of cash and cash equivalents, accounts receivable, portfolio investments, accounts payable and accrued liabilities, employee future benefit liabilities and capital leases. Unless otherwise noted, it is management s opinion that the Society is not exposed to significant credit and liquidity risks, or market risk, which includes currency, interest rate and other price risks. All of the Society's financial assets and liabilities are recorded at cost or amortized cost and the associated transaction costs are added to the carrying value of items in the cost or amortized cost upon initial recognition. The gain or loss arising from derecognition of a financial instrument is recognized in the Statement of Operations. Impairment losses such as writedowns or writeoffs are reported in the Statement of Operations. (k) Contributed materials and services Contributed materials and services which are used in the normal course of the Society's operations and would otherwise have been purchased are recorded at their fair value at the date of contribution if fair value can be reasonably estimated. Volunteers assist the Society in carrying out certain activities. Because of the difficulty of determining their fair market value and the fact that such assistance is generally not otherwise purchased, contributed services of this nature are not recognized in the financial statements. (l) Operating and capital reserves Reserves are established at the discretion of the Board of Directors of the Society to set aside funds for operating and capital purposes. Such reserves are appropriations of unrestricted surplus. 3. Measurement uncertainty The valuation of accounts receivable is based on management's best estimate of the provision for doubtful accounts. The valuation of employee future benefit liability is based on management s best estimate of the expected salaries in effect at the end of the employment contracts. 24

26 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 The valuation of tangible capital assets is based on management's best estimates of the future recoverability of these assets and the determination of costs subject to classification as capital assets. The amounts recorded for amortization of the tangible capital assets are based on management's best estimates of the remaining useful lives and period of future benefit of the related assets. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. 4. Cash Average Effective Yield Amortized Cost Average Effective Yield Amortized Cost Cash deposits 2.0% 2,533, % 2,323,501 Guaranteed investment certificate 2.2% 50,000 53, Accounts receivable 2,583,453 2,377, GIC interest Alberta Education 59,598 73,187 58,365 Federal Government 137, ,486 Other receivables 19,557 26,471 Total 289, ,322 The Society did not have an allowance for doubtful accounts as at August 31, 2016 and 2015 as all receivables are considered collectible. 6. Portfolio investments (a) The portfolio investments consist of First Calgary common shares of 36,491 ( ,028) and nonredeemable Guaranteed Investment Certificates of 3,190,376 (2015 3,122,435), bearing interest at 2.2% per annum and maturing in November The fair value of these investments approximates carrying value. Average Effective (Market) Yield Common shares 0% 36,491 35,028 Guaranteed interest certificates 2.2% 3,190,376 3,122,435 Total portfolio investments 3,226,867 3,157,463 25

27 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 (b) Portfolio investments: Maturity structure for fixed income securities based on principal amount to 5 years 2.2% 2.2% 7. Accounts payable and accrued liabilities Other Alberta school jurisdictions 7,250 8,615 Salaries and benefit costs 134, ,545 Other trade payables and accrued liabilities 319, , , , Deferred revenue Source and Grant or Fund Type Deferred Revenue as at August 31, 2015 ADD: 2015/2016 Restricted Funds Received/ Receivable DEDUCT: 2015/2016 Restricted Funds Expended (Paid/Payable) Deferred Revenue as at August 31, 2016 Unexpended deferred operating revenue Alberta Education Alberta Initiative for School Improvement 25,000 (25,000) Portable/Modular Unit Relocation 84,044 (84,044) Modernization\Replacement 789, ,251 Other Alberta Education deferred revenue 86,970 (86,970) Other Deferred Revenue Fees 2,297,929 2,069,155 (2,297,929) 2,069,155 Landlord Central Office 5,402 (5,402) Other Provincial deferred revenue 12,122 (6,061) 6,061 Fundraising Society 56,925 (50,767) 6,158 Total unexpended deferred operating revenue 2,568,392 2,858,406 (2,556,173) 2,870,625 26

28 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 Source and Grant or Fund Type Deferred Revenue as at August 31, 2014 ADD: 2014/2015 Restricted Funds Received/ Receivable DEDUCT: 2014/2015 Restricted Funds Expended (Paid/Payable) Deferred Revenue as at August 31, 2015 Unexpended deferred operating revenue Alberta Education Alberta Initiative for School Improvement 55,740 (30,740) 25,000 Portable/Modular Unit Relocation 168,089 (84,045) 84,044 Other Alberta Education deferred revenue 170,281 1,830 (85,141) 86,970 Other Deferred Revenue Fees 2,213,465 2,297,929 (2,213,465) 2,297,929 Landlord Central Office 10,802 (5,400) 5,402 Other Provincial deferred revenue 18,183 (6,061) 12,122 Fundraising Society 89,220 18,474 (50,769) 56,925 Total unexpended deferred operating revenue 2,707,597 2,336,416 (2,463,821) 2,568, Employee future benefits liabilities , ,219 During the year ended August 31, 2015, the Society entered into agreements with key employees that entitles the individuals to retiring allowances upon the expiry of their employment contract agreements, or any extensions of the employment contract agreements, or the cessation of employment for any reasons other than termination for just cause. The contracts were entered at the beginning of 2015 and are being accreted based on a rate of 5% over the 5 year life. 10. Obligations under capital lease Two obligations under capital lease, each repayable in twenty quarterly instalments of 1,570, including interest at 5.76%, secured by specific office equipment, due December ,174 38,732 Obligation under capital lease, repayable in twelve quarterly instalments of 186, including interest at 7.16%, secured by specific office equipment, due July ,068 Obligation under capital lease, repayable in twenty quarterly instalments of 2,985, including interest at 7.11%, secured by specific office equipment, due August ,429

29 The FFCA Charter School Society Notes to Financial Statements August 31, 2016 Obligation under capital lease, repayable in twenty quarterly instalments of 1,400, including interest at 6.72%, secured by specific office equipment, due March ,337 Obligation under capital lease, repayable in twenty quarterly instalments of 1,455, including interest at 6.43%, secured by specific office equipment, due November ,386 Obligation under capital lease, repayable in twenty quarterly instalments of 1,493, including interest at 6.77%, secured by specific office equipment, due November ,186 21,333 Obligation under capital lease, repayable in twenty quarterly instalments of 2,995, including interest at 7.43%, secured by specific office equipment, due June ,377 40,361 Obligation under capital lease, repayable in twenty quarterly instalments of 1,125, including interest at 4.52%, secured by specific office equipment, due June ,679 Seven obligations under capital lease, each repayable in twenty quarterly instalments of 990 including interest at 6.40%, secured by specific office equipment, due December ,967 81,607 Payments due on obligations under capital lease are as follows: , , , , , , , ,462 Payments representing interest (25,928) 172,174 28

30 The FFCA Charter School Society Notes to Financial Statements August 31, Tangible capital assets Buildings Equipment Computer Hardware and Software Construction in Progress Total Cost At August 31, ,346,200 1,108,532 2,534,872 5,989,604 Additions 79,112 90,367 40, , ,867 Less: Disposals including writeoffs (64,139) (64,139) At August 31, ,425,312 1,134,760 2,575, ,787 6,895,332 Additions 175,286 64, ,737 30, ,131 Less: Disposals including writeoffs (590,998) (66,973) (657,971) At August 31, ,009,600 1,131,794 2,700, ,888 6,631,492 Accumulated depreciation, amortization and impairment losses At August 31, ,933, ,727 2,280,503 5,078,041 Additions 197,289 91, , ,802 Less: Disposals including writeoffs (34,719) (34.719) At August 31, ,131, ,992 2,465,032 5,517,124 Additions 296,463 93, , ,320 Less: Disposals including writeoffs (590,998) (53,578) (644,576) Balance at August 31, ,836, ,336 2,616,967 5,414,868 Net book value at Balance at August 31, , , , ,787 1,378,208 Balance at August 31, , ,458 83, ,888 1,216,624 Included in furniture and equipment are assets under capital lease with a net book value of 143,176 ( ,822). Amortization of assets under capital lease is 65,257 ( ,325) and is included in amortization expense. Amortization expense for the year is 542,320 ( ,802). This amount has been allocated to technology, facilities, general and administrative and campus resources expenses. Amortization expense includes a writeoff related to a disposed asset under capital lease of 13,395 Building disposals including writeoffs relate to items with a nil net book value which were removed from tangible capital assets as the related school is no longer occupied.. 29

31 The FFCA Charter School Society Notes to Financial Statements August 31, Accumulated surplus The Society's accumulated surplus is summarized as follows: Unrestricted surplus 3,754,718 3,747,976 Accumulated surplus from operations 2,011,737 1,306,861 Capital reserves 1,500,000 1,500,000 Investment in tangible capital assets 242, ,115 Accumulated surplus 3,754,718 3,747,976 The Society has recorded a provision for employee future benefits. Since this provision is not required to be funded by current operations, accumulated surplus is adjusted as follows: Accumulated surplus from operations 2,011,737 1,306,861 Employee future benefits (251,372) (238,219) Adjusted accumulated surplus (1) 1,760,365 1,068,642 (1) Adjusted accumulated surplus represents unspent funding available to support the Society's operations for the year. 13. Fees Transportation fees* 1,685,578 1,651,406 Fees charged for instruction material and supplies** 532, ,109 Electives, activity, field trips, etc. 828, ,599 * Charged under School Act, Section 51(3) ** Charged under School Act, Section 60(2)(j) 3,046,212 2,861,114 30

32 The FFCA Charter School Society Notes to Financial Statements August 31, School generated funds School generated funds, beginning of year 449, ,998 Gross receipts Fees 812, ,474 Fundraising 254, ,869 Gifts and donations 49,559 36,786 Other sales and services 213, ,537 Total gross receipts 1,779,138 1,681,806 Total related expenses and uses of funds 1,281, ,966 Total direct costs including cost of goods sold to raise funds 192, ,360 School generated funds, end of year 305, ,480 Balance included in Accumulated Surplus (Operating Reserve) 305, , Trusts under administration The Society has trusts under administration that are not included in these financial statements as follows: Scholarship trusts 78,168 69,787 School Council Character Fund 15,147 20,476 ASBOA Zone 4 3,169 2,259 Calgary Charters (Critical Response Team) 3,000 Association of School Councils 810 1,345 Total 100,294 93,867 31

33 The FFCA Charter School Society Notes to Financial Statements August 31, Noncash transaction During the year, the acquisition of equipment was directly financed through an obligation under capital lease in the amount of 64, Economic dependence on related third party The Society's primary source of income is from the Alberta Government. The Society's ability to continue viable operations is dependent on this funding. 18. Financial instruments The Society is exposed to the following significant financial risks: (a) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The financial instruments that potentially subject the Society to a significant concentration of credit risk consist primarily of cash and portfolio investments as well as accounts receivable. The Society mitigates its exposure to credit loss by placing its cash with a major financial institution and mitigates its exposure to credit loss on accounts receivable by transacting with credit worthy customers and regularly reviewing these financial instruments. (b) Interest rate risk 19. Budget amounts Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Society is exposed to interest rate price risk to the extent that the obligations under capital lease, cash and portfolio investments bear interest at fixed rates. The 2016 budget for the Society was approved by the Board and has been reported in the financial statements for information purposes only. These budgeted amounts have not been audited. 32