Wellington Catholic District School Board

Transcription

1 Consolidated financial statements of Wellington Catholic District School Board

2 Table of contents Management Report... 1 Independent Auditor s Report Consolidated statement of financial position... 4 Consolidated statement of operations... 5 Consolidated statement of cash flows... 6 Consolidated statement of change in net debt

3 Deloitte LLP 4210 King Street East Kitchener ON N2P 2G5 Canada Tel: Fax: Management Report Management s responsibility for the consolidated financial statements The accompanying consolidated financial statements of the Wellington Catholic District School Board are the responsibility of the Board s management and have been prepared in accordance with the Financial Administration Act, supplemented by Ontario Ministry of Education memorandum 2004:B2 and Ontario Regulation 395/11 of the Financial Administration Act, as described in Note 1 to the consolidated financial statements. The preparation of consolidated financial statements necessarily involves the use of estimates based on management s judgment, particularly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. Board management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded, transactions are properly authorized and recorded in compliance with legislative and regulatory requirements, and reliable financial information is available on a timely basis for preparation of the consolidated financial statements. These systems are monitored and evaluated by management. The Audit Committee meets with management and the external auditors to review the consolidated financial statements and discuss any significant financial reporting or internal control matters prior to their recommendation to the Board of Trustees to approve the consolidated financial statements. The consolidated financial statements have been audited by Deloitte LLP, independent external auditors appointed by the Board of Trustees. The accompanying Independent Auditor s Report outlines their responsibilities, the scope of their examination and their opinion on the Board s consolidated financial statements. Director of Education Superintendent of Corporate Services And Treasurer Don Drone Tracy McLennan November 19, 2013

4 Deloitte LLP 4210 King Street East Kitchener ON N2P 2G5 Canada Tel: Fax: Independent Auditor s Report To the Board of Trustees of Wellington Catholic District School Board We have audited the accompanying consolidated financial statements of Wellington Catholic District School Board (the Board ), which comprise the consolidated statement of financial position as at, the consolidated statements of operations, cash flows and change in net debt for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation of these consolidated financial statements in accordance with the basis of accounting described in Note 1 to the consolidated financial statements, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of the consolidated 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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

5 Opinion In our opinion, the consolidated financial statements of Wellington Catholic District School Board as at and for the year ended are prepared, in all material respects, in accordance with the basis of accounting described in Note 1 to the consolidated financial statements. Emphasis of Matter Without modifying our opinion, we draw attention to Note 1 to the consolidated financial statements which describes the basis of accounting used in the preparation of these consolidated financial statements and the significant differences between such basis of accounting and Canadian public sector accounting standards. Chartered Professional Accountants, Chartered Accountants Licensed Public Accountants November 19, 2013 Page 3

6 Consolidated statement of financial position as at $ $ Financial assets Cash 4,116,130 4,378,184 Accounts receivable 3,394,104 3,107,292 Accounts receivable - Government of Ontario - approved capital (Note 2) 71,806,529 75,402,476 Total financial assets 79,316,763 82,887,952 Financial liabilities Bank indebtedness and short-term borrowings (Note 3) - 445,000 Accounts payable and accrued liabilities 4,970,633 5,229,204 Net long-term liabilities (Note 4) 71,701,591 75,469,605 Deferred revenue (Note 6) 2,435,889 1,714,459 Retirement and other employee future benefits (Note 8) 2,552,328 2,839,170 Deferred capital contributions (Note 7) 98,605, ,441,403 Total financial liabilities 180,265, ,138,841 Net debt (100,948,683) (104,250,889) Non-financial assets Tangible capital assets (Note 9) 113,398, ,248,506 Prepaid expenses 222, ,955 Total non-financial assets 113,621, ,493,461 Accumulated surplus (Note 10) 12,672,607 12,242,572 Contractual obligations and contingent liabilities (Note 13) Approved on behalf of the Board Chairman of the Board Director of Education The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. Page 4

7 Consolidated statement of operations year ended Budget Actual Actual (Note 1n)) $ $ $ Revenues Provincial grants - Grants for Student Needs 84,168,854 83,568,612 85,477,065 Provincial grants - other 3,656,268 3,908,690 2,040,577 Other fees and revenues 678,159 1,260,227 1,557,627 Investment income 75, , ,216 Deferred capital contributions - grants recognized (Note 7) 4,513,684 4,125,127 4,086,291 School generated funds 3,263,733 3,398,829 3,418,981 Total revenues 96,355,698 96,362,791 96,734,757 Expenses Instruction 70,715,165 70,829,950 66,755,502 Administration 3,069,013 2,571,097 3,454,421 Transportation 3,845,427 3,766,963 3,676,877 Pupil accommodation 15,643,185 15,207,553 14,931,677 Other 18, ,077 25,237 School generated funds 3,267,681 3,350,116 3,396,861 Total expenses (Note 11) 96,558,471 95,932,756 92,240,575 Annual (deficit) surplus (202,773) 430,035 4,494,182 Accumulated surplus at beginning of year 10,854,770 12,242,572 7,748,390 Accumulated surplus at end of year (Note 10) 10,651,997 12,672,607 12,242,572 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. Page 5

8 Consolidated statement of cash flows year ended $ $ Operating transactions Annual surplus 430,035 4,494,182 Non-cash items Amortization of tangible capital assets 4,154,780 4,216,088 Deferred capital contributions - grants recognized (Note 7) (4,125,127) (4,086,291) Change in non-cash assets and liabilities (Increase) decrease in accounts receivable (286,812) 2,323,516 Decrease in accounts payable and accrued liabilities (258,571) (580,270) Decrease (increase) in prepaid expenses 22,258 (72,522) Increase in deferred revenue 221, ,235 Decrease in employee future benefits payable (286,842) (3,903,349) (128,899) 2,998,589 Capital transactions Acquisition of tangible capital assets (1,304,867) (2,862,083) Financing transactions Decrease in bank indebtedness and short-term borrowings (445,000) (160,000) Long-term liabilities issued - 5,398,603 Debt repayments and sinking fund contributions (3,768,014) (9,096,768) Decrease in accounts receivable - Government of Ontario approved capital 3,595,947 2,965,862 Increase (decrease) in deferred revenue 500,050 (81,568) Additions to deferred capital contributions (Note 7) 1,288,729 2,575,609 1,171,712 1,601,738 Change in cash (262,054) 1,738,244 Cash, beginning of year 4,378,184 2,639,940 Cash, end of year 4,116,130 4,378,184 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. Page 6

9 Consolidated statement of change in net debt year ended $ $ Annual surplus 430,035 4,494,182 Tangible capital asset activity Acquisition of tangible capital assets (1,304,867) (2,862,083) Amortization of tangible capital assets 4,154,780 4,216,088 2,849,913 1,354,005 Other non-financial asset activity Acquisition of prepaid expenses (220,891) (243,218) Use of prepaids 243, ,696 22,258 (72,522) Decrease in net debt 3,302,206 5,775,665 Net debt at beginning of year (104,250,889) (110,026,554) Net debt at end of year (100,948,683) (104,250,889) The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. Page 7

10 1. Significant accounting policies The consolidated financial statements have been prepared by management in accordance with the basis of accounting described below. a) Basis of accounting The consolidated financial statements have been prepared in accordance with the Financial Administration Act supplemented by Ontario Ministry of Education memorandum 2004:B2 and Ontario Regulation 395/11 of the Financial Administration Act. The Financial Administration Act requires that the consolidated financial statements be prepared in accordance with the accounting principles determined by the relevant Ministry of the Province of Ontario. A directive was provided by the Ontario Ministry of Education within memorandum 2004:B2 requiring school boards to adopt Canadian public sector accounting standards commencing with their year ended August 31, 2004 and that changes may be required to the application of these standards as a result of regulation. In 2011, the government passed Ontario Regulation 395/11 of the Financial Administration Act. The Regulation requires that contributions received or receivable for the acquisition or development of depreciable tangible capital assets and contributions of depreciable tangible capital assets for use in providing services, be recorded as deferred capital contributions and be recognized as revenue in the statement of operations over the periods during which the asset is used to provide service at the same rate that amortization is recognized in respect of the related asset. The regulation further requires that if the net book value of the depreciable tangible capital asset is reduced for any reason other than depreciation, a proportionate reduction of the deferred capital contribution along with a proportionate increase in the revenue be recognized. For Ontario school boards, these contributions include government transfers, externally restricted contributions and, historically, property tax revenue. The accounting policy requirements under Regulation 395/11 are significantly different from the requirements of Canadian public sector accounting standards which require that: government transfers, including amounts previously recognized as tax revenue, which do not contain a stipulation that creates a liability, be recognized as revenue by the recipient when approved by the transferor and the eligibility criteria have been met in accordance with public sector accounting standard PS3410; and externally restricted contributions be recognized as revenue in the period in which the resources are used for the purpose or purposes specified in accordance with public sector accounting standard PS3100. As a result, revenue recognized in the statement of operations and certain related deferred revenues and deferred capital contributions would be recorded differently under Canadian Public Sector Accounting Standards. b) Reporting entity The consolidated financial statements reflect the assets, liabilities, revenues and expenses of the reporting entity. The reporting entity is comprised of all organizations accountable for the administration of their financial affairs and resources to the Board and which are controlled by the Board, including the school generated funds, which include the assets, liabilities, revenues, expenditures and fund balances of various organizations that exist at the school level and which are controlled by the Board are reflected in the consolidated financial statements. Consolidated entities Wellington Catholic District School Board Wellington-Dufferin Student Transportation Services School Generated Funds All material inter-organizational transactions and balances between these organizations are eliminated upon preparation of the consolidated financial statements. Page 8

11 1. Significant accounting policies (continued) c) Trust funds Trust funds and their related operations administered by the Board are not included in the consolidated financial statements as they are not controlled by the Board. d) Cash Cash consists of cash on deposit with the Board s bankers. e) Deferred revenue Certain amounts are received pursuant to legislation, regulation or agreement and may only be used in the conduct of certain programs or in the delivery of specific services and transactions. These amounts are recognized as revenue in the fiscal year the related expenditures are incurred or services performed. f) Deferred capital contributions Contributions received or receivable which have been spent on acquiring or developing a depreciable tangible capital asset for use in providing services, or any contributions in the form of depreciable tangible assets received or receivable for use in providing services, shall be recognized as deferred capital contribution as defined in Ontario Regulation 395/11 of the Financial Administration Act. These amounts are recognized as revenue at the same rate as the related tangible capital asset is amortized. The following items fall under this category: Government transfers received or receivable for capital purpose. Other restricted contributions received or receivable for capital purpose. Amounts previously recognized as Property taxation revenues which were historically used to fund capital assets (see Note 1 (n)). g) Retirement and other employee future benefits The Board provides defined retirement and other future benefits to specified employee groups. These benefits include pension, life insurance and health care benefits, retirement gratuity and workers compensation. In 2012 changes were made to the Board s retirement gratuity plan, sick leave plan and post-retirement health and dental plan. The Board has adopted the following policies with respect to accounting for these employee benefits: (i) The costs of self-insured retirement and other employee future benefit plans are actuarially determined using management s best estimate of salary escalation, accumulated sick days at retirement, insurance and health care costs trends, disability recovery rates, long-term inflation rates and discount rates. In prior years, the cost of retirement gratuities that vested or accumulated over the periods of service provided by the employee were actuarially determined using management s best estimate of salary escalation, accumulated sick days at retirement and discount rates. As a result of the plan change, the cost of retirement gratuities are actuarially determined using the employee s salary, banked sick days and years of service as at August 31, 2012 and management s best estimate of discount rates. The changes resulted in a plan curtailment and any unamortized actuarial gains and losses are recognized as at August 31, Any actuarial gains and losses arising from changes to the discount rate are amortized over the expected average remaining service life of the employee group. For self-insured retirement and other employee future benefits that vest and accumulate over the periods of service provided by employees, such life insurance and health care benefits for retirees, the cost is actuarially determined using the projected benefits method prorated on service. Under this method, the benefit costs are recognized over the expected average service life of the employee group. The changes to the retiree health, life and dental plans resulted in a plan curtailment and any unamortized actuarial gains and losses associated with the employees impacted by the change were recognized as at August 31, Page 9

12 1. Significant accounting policies (continued) g) Retirement and other employee future benefits (continued) (i) For those self-insured benefit obligations that arise from specific events that occur from time to time, such as obligations for worker s compensation, long-term disability and life insurance and health care benefits for those on disability leave, the cost is recognized immediately in the period the events occur. Any actuarial gains and losses that are related to these benefits are recognized immediately in the period they arise. (ii) The costs of multi-employer defined pension plan benefits, such as the Ontario Municipal Employees Retirement System pensions, are the employer s contribution due to the plan in the period. (iii) The costs of insured benefits are the employer s portion of insurance premiums owed for coverage of employees during the period. h) Tangible capital assets Tangible capital assets are recorded at historical cost less accumulated amortization. Historical cost includes the costs directly related to the acquisition, design, construction, development, improvement or betterment of tangible capital assets. Cost includes overheads directly attributable to construction and development. Estimated historical cost was used to record existing tangible capital asset accounting, if the actual cost was unknown when the board first started to prepare to implement tangible capital asset accounting. Leases which transfer substantially all of the benefits and risks incidental to ownership of property are accounted for as leased tangible capital assets and are amortized over the usefil life of the asset acquired. All other leases are accounted for as operating leases and the related payments are charged to expenses as incurred. Amortization is reflected on a straight-line basis over the estimated useful life of the assets at the following amortization rates: Asset Estimated useful life in years Land improvements with finite lives 15 Buildings 40 Portable structures 20 Other buildings 20 Furniture and equipment 10 Computer hardware and software 5 Vehicles 5 Capital leased assets term of lease Assets under construction are not amortized until the asset is available for productive use. Land permanently removed from service and held for resale is recorded at the lower of cost and estimated net realizable value. Cost includes amounts for improvements to prepare the land for sale or servicing. Buildings permanently removed from service and held for resale cease to be amortized and are recorded at the lower of carrying value and estimated net realizable value. Tangible capital assets which meet the criteria for financial assets are reclassified as assets held for sale on the Consolidated Statement of Financial Position. Works of art and cultural and historic assets are not recorded as assets in these consolidated financial statements. Page 10

13 1. Significant accounting policies (continued) i) Government transfers Government transfers, which include legislative grants, are recognized in the consolidated financial statement in the period in which events giving rise to the transfer occur, providing the transfers are authorized, any eligibility criteria have been met and reasonable estimates of the amount can be made. Government transfers for capital are recorded as deferred capital contributions (DCC) in accordance with Ontario Regulation 395/11. Amounts are recognized into revenue as the liability is extinguished over the useful life of the asset. j) Investment income When required by the funding government or related Act, investment income earned on externally restricted funds such as pupil accommodation, education development charges and special education forms part of the respective deferred revenue balances. k) Long-term debt Long-term debt is recorded net of related sinking fund asset balances. l) Budget figures Budget figures have been provided for comparison purposes and have been derived from the budget approved by the Trustees. The budget approved by the Trustees is developed in accordance with the provincially mandated funding model for school boards and is used to manage program spending within the guidelines of the funding model. As the Board only prepares a budget for the consolidated statement of operations, the budget figures in the consolidated statement of changes in net debt have not been provided. m) Use of estimates The preparation of a consolidated financial statement in conformity with the basis of accounting described in Note 1 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenditures during the year. Accounts subject to significant estimates include accrued liabilities, actuarial valuations for employee future benefits, collectability of accounts receivables to determine the allowance for doubtful accounts, the historical cost and useful lives of tangible capital assets and the useful lives of deferred capital contributions. Actual results could differ from these estimates. n) Change in accounting policy During the year, the Board adopted Public Sector Accounting Standards Handbook Section 3510 Tax Revenue. Section 3510 provides clarity as to which government should recognize tax revenue. This change required revenues previously presented as local taxation to be presented as provincial grants and has been applied retroactively and prior periods have been reclassified. Adoption of the new standard had no impact previously reported accumulated surplus beginning of year, total revenues, annual surplus or accumulated surplus end of year. 2. Accounts receivable - Government of Ontario The Province of Ontario replaced variable capital funding with a one-time debt support grant in Wellington Catholic District School Board received a one-time grant that recognizes capital debt as of that is supported by the existing capital programs. The Board receives this grant in cash over the remaining term of the existing capital debt instruments. The Board may also receive yearly capital grants to support capital programs which would be reflected in this account receivable. The Board has an account receivable from the Province of Ontario of $71,806,529 ( $75,402,476) as at with respect to this one-time grant. Page 11

14 3. Bank indebtedness and short-term borrowings The Board has credit facilities available to a maximum of $10 million to address operating requirements and to bridge capital expenditures. As at, the amount drawn was $Nil ( $445,000). This is an operating loan bearing interest at a rate of prime less 0.25 percent. 4. Net long-term liabilities Net long-term liabilities reported on the consolidated statement of financial position is comprised of the following: $ $ Debenture # (15647) 6.125%, maturing December ,000 Debenture # A3 6.55%, maturing October ,106,486 15,786,256 Debenture # %, maturing October ,145,605 22,048,042 Refinance SF Debenture %, maturing November, ,669,389 5,158,455 Debenture #6 - sinking fund Debenture %, maturing October ,354,430 3,354,430 Non-revolving bank loan 5.75%, maturing July ,400,000 6,800,000 EDC loan 5.020%, maturing December , ,666 GPL Stage #1 - loan 4.56%, maturing November ,222,682 1,264,058 GPL Stage #2 - loan 4.90%, maturing November ,072,744 1,104,284 GPL Stage #3 - loan 5.062%, maturing March ,625,375 3,721,873 GPL Stage #4 - loan 5.232%, maturing April , ,592 PTR 4.833%, maturing March ,497,564 5,627,456 Growth Schools 4.833%, maturing March ,870,225 9,079,805 New pupil places, OFA 4.762%, maturing November , ,874 Obligation under capital leases 5.75%, maturing November ,616 72,804,356 76,418,407 Less: sinking fund assets (1,102,765) (948,802) Balance as at August 31 71,701,591 75,469,605 Principal payments relating to net long-term liabilities of $71,701,591 outstanding as at are due as follows: Principal and sinking fund contributions Interest Total $ $ $ ,601,461 3,944,014 13,545, ,134,592 3,416,584 6,551, ,182,742 3,260,633 6,443, ,346,411 3,096,966 6,443, ,193,879 2,828,321 8,022,200 Thereafter 47,242,506 17,488,462 64,730,968 71,701,591 34,034, ,736,571 Included in net long-term debt are outstanding debentures of $3,354,430 ( $3,354,430) secured by sinking fund assets with a carrying value of $1,102,765 ( $948,802) and a market value of $1,100,796 ( $1,007,411). Sinking fund assets are comprised of short-term notes and deposits, government and government-guaranteed bonds and debentures and corporate bonds. Page 12

15 5. Debt charges and capital loans and leases interest The expenditure for debt charges, capital loans and capital leases interest includes principal and interest payments as follows: $ $ Principal payments on long-term liabilities 3,768,014 9,096,768 Interest payments on long-term liabilities 4,078,256 4,307,569 7,846,270 13,404,337 Included in debt repayment and sinking fund contributions on the consolidated statement of cash flows in total of $3,768,014 ( $9,096,768) are principal payments on long-term debt of $3,729,497 ( $8,975,893) and sinking fund interest revenue of $38,517 ( $120,875). 6. Deferred revenue Revenues received and that have been set aside for specific purposes by legislation, regulation or agreement are included in deferred revenue and reported on the consolidated statement of financial position. Deferred revenue set-aside for specific purposes by legislation, regulation or agreement as at is comprised of: Externally Balance restricted Revenue Balance as at revenue and recognized as at August 31, investment in the August 31, 2012 income period 2013 $ $ $ $ Energy efficient schools - operating 20, ,361 Energy efficient schools - capital 8,836-8,836 - Renewable energy 16,144-4,252 11,892 Green schools pilot 29,859-29,859 - School condition improvement 222, , , ,558 School renewal 320, , , ,529 Child care retrofit - 172, ,900 School generated funds 1,144-1,144 - Special equipment amount formula based funding 180, , , ,147 Third party 91,366 75,707 67, ,061 Other education programs other 632, , , ,639 Gain on disposal - school building 190, ,802 1,714,459 2,188,480 1,467,050 2,435,889 Page 13

16 7. Deferred capital contributions Deferred capital contributions include grants and contributions received that are used for the acquisition of tangible capital assets in accordance with regulation 395/11 that have been expended by year end. The contributions are amortized into revenue over the life of the asset acquired $ $ Deferred capital contributions at beginning of year 101,441, ,952,085 Additions to deferred capital contributions 1,288,729 2,575,609 Revenue recognized in the period (4,125,127) (4,086,291) Deferred capital contributions at end of year 98,605, ,441, Retirement and other employee future benefits Other Total Total employee employee employee Retirement future future future gratuities benefits benefits benefits $ $ $ $ Accrued employee future benefit obligations 951,492 1,582,929 2,534,421 2,839,170 Unamortized actuarial gain 17,907-17,907 - Employee future benefits liability 969,399 1,582,929 2,552,328 2,839, Other Total Total Sick employee employee employee Retirement leave future future future gratuities benefits benefits benefits benefits $ $ $ $ $ Current year benefit cost , , ,104 Interest on accrued benefit obligation 29,624-52,740 82, ,552 Recognized acturial loss (gain) 363,000 - (280,050) 82,950 - Gain on plan amendments - 50,508-50,508 - Recognized acturial loss (gain) on plan curtailments ,003,412 Change in accrued benefit obligations, due to plan curtailment (5,675,212) Employee future benefits expense (income) 392,624 50, , ,986 (2,925,144) Payments in the year 458,392 23, , , ,205 Above amounts exclude pension contributions to the Ontario Municipal Employees Retirement System, a multi-employer pension plan, described below. Page 14

17 8. Retirement and other employee future benefits (continued) Plan changes In 2012, changes were made to the Board s retirement gratuity plan, sick leave plan and retiree health, life and dental plan. As a result, employees eligible for a retirement gratuity will receive payout upon retirement based on their accumulated vested sick days under the plan, years of service and salary as of August 31, All accumulated non-vested sick days were eliminated as of September 1, 2012, and were replaced with a new short term leave and disability plan. In 2013, further changes were made to the short term leave and disability plan. Under the new short term leave and disability plan, 11 unused sick leave days may be carried forward into the following year only, to be used to top-up benefits received under the short term leave and disability plan in that year. A new provision was established as of representing the expected usage of sick days that have been carried forward for benefit top-up in the following year. Retirement life insurance and health care benefits have been grandfathered to existing retirees and employees who retired in Effective September 1, 2013, any new retiree accessing Retirement Life Insurance and Health Care Benefits will pay the full premiums for such benefits and will be included in a separate experience pool that is self-funded. Actuarial assumptions With the exception of Workplace Safety and Insurance Board obligations the accrued benefit obligations for employee future benefit plans as at are based on actuarial valuations for accounting purposes as at. These actuarial valuations were based on assumptions about future events. The economic assumptions used in these valuations are the Board s best estimate of expected rates of: % % Inflation Interest Discount on accrued benefit obligations Expected average service life - retirement gratuity benefit Wage and salary esclation - - Health care cost escalation Dental care cost esclation Retirement benefits i) Ontario Teacher s Pension Plan Teachers and related employee groups are eligible to be members of Ontario Teacher s Pension Plan. Employer contributions for these employees are provided directly by the Province of Ontario. The pension costs and obligations related to this plan are a direct responsibility of the Province. Accordingly, no costs or liabilities related to this plan are included in the Board s consolidated financial statements. ii) Ontario Municipal Employees Retirement System All non-teaching employees of the Board are eligible to be members of the Ontario Municipal Employees Retirement System (OMERS), a multi-employer pension plan. The Board contributions equal the employee contributions to the plan. During the year ended, the Board contributed $1,225,282 ( $1,083,274) to the plan. As this is a multi-employer pension plan, these contributions are the Board s pension benefit expenses. No pension liability for this type of plan is included in the Board s consolidated financial statements. Page 15

18 8. Retirement and other employee future benefits (continued) Retirement benefits (continued) iii) Retirement gratuities The Board provides retirement gratuities to certain groups of employees hired prior to specified dates. The Board provides these benefits through an unfunded defined benefit plan. The benefit costs and liabilities related to this plan are included in the Board s consolidated financial statements. Prior to 2012, the amount of gratuities payable to eligible employees at retirement was based on their salary, accumulated sick days, and years of service at retirement. As a result of the plan change in 2012, the amount of the gratuities payable to eligible employees at retirement is now based on their salary, accumulated sick days, and years of service at August 31, In 2012, the changes to the Board s retirement gratuity plan resulted in a one-time increase to the Board s obligation of $83,596 and a corresponding curtailment loss was reported in the consolidated statement of operations for the year ended August 31, iv) Retirement life insurance and health care benefits The Board continues to provide life insurance, dental and health care benefits to certain employee groups after retirement until the members reach 65 years of age. The premiums are based on the Board experience and retirees premiums are subsidized by the Board. The benefit costs and liabilities related to the plan are provided through an unfunded defined benefit plan and are included in the Board s consolidated financial statements. Effective September 1, 2013, employees retiring on or after this date, will no longer qualify for Board subsidized premiums or contributions. The changes to the Board s retirement health, life and dental plans resulted in a one-time reduction to the Board s obligation of $426,948 and a corresponding curtailment gain was reporting in the consolidated statement of operations and accumulated surplus for the year ended August 31, Other employee future benefits i) Workplace Safety and Insurance Board obligations The Board is a Schedule 2 employer under the Workplace Safety and Insurance Act and, as such, assumes responsibility for the payment of all claims to its injured workers under the Act. Occurrences over $1,000,000 are insured by excess of loss coverage. Beginning January 1, 2005 the Board began participating in the Workers Compensation Assistance Program with the School Boards Co-operative Inc. (SBCI). For an annual fee, this program provides funds to Participating Members that incur claim costs on any workers compensation incident between $300,000 and $1,000,000. The Board is self-insured for all other occurrences. The benefit costs and liabilities related to this plan are included in the Board s consolidated financial statements. The Board does not fund these obligations in advance of payments made under the Act. The benefit costs and liabilities related to this plan are included in the Board s consolidated financial statements. Plan changes made in 2012 requires school boards to provide salary top-up for employees receiving payments from the Workplace Safety and Insurance Board, where the previously negotiated collective agreement included such provision. This resulted in a one-time increase to the Board s obligation of $52,090 and was recognized as at August 31, In 2013, a 4 ½ year salary top-up maximum was determined, which did not have an impact on the Board s obligation. As of, these obligations, as actuarially determined, amounted to $372,599 ( $488,910) and are included in the Board s current year benefit costs. There is a contingent liability relating to the Board s participation in the Workers Assistance Program due to exposure to claims in excess of funds collected by SBCI. ii) Long-term disability benefits The Board provides long-term disability benefits including partial salary compensation and payment of life insurance premiums and health care benefits during the period an employee is unable to work or until their normal retirement date. The benefit costs and liabilities are included in the Board s consolidated financial statements. Page 16

19 8. Retirement and other employee future benefits (continued) Other employee future benefits (continued) iii) Life insurance benefits The Board provides a separate life insurance benefits plan for certain retirees. The premiums are based on the Board experience and employees are required to pay 100% of the premium costs. The benefit costs and liabilities related to the subsidization of these retirees under this group plan are included in the Board s consolidated financial statements. iv) Health care and dental benefits The Board sponsors a separate plan for retirees to provide group health care and dental benefits. The premiums are based on experience or demographics of the group and employees are required to pay 100% of the premium costs. v) Sick leave benefits As a result of the plan changes which occurred in 2012, the Board s liability related to compensated absences from sick leave accumulations was eliminated, resulting in a one-time reduction to the obligation of $3,328,448 and a corresponding curtailment gain was reported in the consolidated statement of operations and accumulated surplus for the year ended August 31, 2012 vi) Sick leave top-up benefits As a result of changes made in 2013 to the short term sick leave and disability plan, a maximum of 11 unused sick leave days from the current year may be carried forward into the following year only, to be used to top-up salary for illnesses paid through the short-term leave and disability plan in that year. The benefit costs expensed in the financial statements are $23,081 ( $Nil). The accrued benefit obligation for the sick leave top-up is based on an actuarial valuation for accounting purposes as of. This actuarial valuation is based on assumptions about future events. Page 17

20 9. Tangible capital assets a) Opening and closing balances with activities for the year ended. Cost Accumulated amortization Net book value Balance Balance Balance Balance as at as at as at as at September 1, August 31, September 1, August 31, August 31, August 31, 2012 Additions Disposals Amortization Disposals $ $ $ $ $ $ $ $ $ $ Land 13,669, ,669, ,669,357 13,669,357 Land improvements 306,426 13, ,238 42,085 21,117-63, , ,341 Buildings (40 years) 132,922,659 1,046, ,969,607 33,524,437 3,483,220-37,007,657 96,961,950 99,398,222 Portable structures 1,993, ,600 1,808,255 1,210,509 96, ,600 1,120, , ,346 Furniture and equipement 4,400, ,649 1,999,815 2,509,768 2,870, ,456 1,999,815 1,218,360 1,291,408 1,530,215 Computer hardw are and softw are 870, , , , , , , , , ,342 Vehicles - over 1 ton 25, ,527 8,296 5,743-14,039 11,488 17,231 Capital leased assets 178, , ,719 35, ,353 17,818 53,452 Pre-acquisition cost-land - 15,866-15, , ,367,204 1,304,867 2,390, ,282,060 38,118,698 4,154,780 2,390,011 39,883, ,398, ,248,506 Write-down of tangible capital assets The write-down of tangible capital assets during the year was $Nil ( $Nil). Page 18

21 10. Accumulated surplus Accumulated surplus consists of the following: $ $ Revenues recognized for land 10,733,064 10,227,267 Employee future benefits to be covered in the future (1,588,617) (2,839,170) Amounts restricted for future use by board motion 2,264,566 3,557,884 Other 1,263,594 1,296,591 Accumulated surplus 12,672,607 12,242, Expenses by object The following is a summary of the current and capital expenses reported on the consolidated statement of operations by object: Budget Actual Actual $ $ $ Salary and wages 63,082,214 63,046,665 63,399,528 Employee benefits 9,443,621 9,410,947 5,445,043 Staff development 170, , ,087 Supplies and services 8,954,200 9,072,790 8,964,497 Interest charges on capital 4,130,082 4,078,256 4,307,569 Rental expenses 20,368 19,754 24,563 Fees and contract services 5,317,765 5,313,651 5,137,915 Other 897, , ,469 Transfer to other boards ,816 Amortization of tangible capital assets 4,542,872 4,154,780 4,216,088 96,558,471 95,932,756 92,240, Ontario School Board Insurance Exchange The Board is a member of the Ontario School Board Insurance Exchange (OSBIE), a reciprocal insurance company licensed under the Insurance Act. OSBIE insures general public liability, property damage and certain other risks. Liability insurance is available to a maximum of $20 million per occurrence. The ultimate premiums over a five year period are based on the reciprocal s and the Board s actual claims experience. Periodically, the Board may receive a refund or be asked to pay an additional premium based on its pro-rata share of claims experience. The current five year term expires December 31, Contractual obligations and contingent liabilities a) There are no operating lease commitments as at. b) In the normal course of operations, the Board becomes involved in various claims and legal proceedings. While the final outcome with respect to claims and legal proceedings pending at cannot be predicted with certainty, it is in the opinion of the Board that their resolution will not have a material adverse effect on the Board s financial position or results of operations. Page 19

22 14. Trust funds The Board s trust funds include the Student Awards/Scholarships and Self-Funded Leaves. The total net assets of the trust funds at are $116,209 ( $121,210) and $133,423 ( $118,642) respectively. 15. Transportation consortium On February 9, 2009 the Wellington-Dufferin Student Transportation Services (STWDSTS) was incorporated. On September 1, 2009 the Board entered into an agreement with the following Boards: Conseil scolaire du district catholique Centre-Sud, Conseil scolaire de district du Centre Sud-Ouest, Upper Grand District School Board and the Dufferin-Peel Catholic District School Board in order to provide common administration for each of the Boards. Under the agreement, decisions related to the financial and operating activities are shared. No partner is in a position to exercise unilateral control. The entity is proportionately consolidated into the Board s consolidated financial statements whereby the Board s pro-rata share of revenues and expenses of the consortium are included in the Board s consolidated financial statements. Inter-organizational transactions and balances have been eliminated. The following provided condensed financial information: Board Board Total portion Total portion $ $ $ $ Financial position Financial assets 91,728 15, ,749 37,090 Liabilities 210,525 35, ,974 50,872 Accumulated deficit (118,797) (19,958) (87,225) (13,782) Operations Revenues 22,244,698 3,737,109 21,531,243 3,401,936 Expenditures 22,276,270 3,743,285 21,570,845 3,407,579 Annual deficit (31,572) (6,176) (39,602) (5,643) Accumulated deficit at beginning of year (87,225) (13,782) (47,623) (8,139) Accumulated deficit at end of year (118,797) (19,958) (87,225) (13,782) Page 20