Financial Statements Calgary Roman Catholic Separate School District No. 1
RESPONSIBILITY FOR FINANCIAL REPORTING The accompanying financial statements of Calgary Roman Catholic Separate School District No.1 have been prepared in accordance with the Canadian Public Sector Accounting Standards of the Chartered Professional Accountants of Canada and are the responsibility of management. Management maintains a system of internal controls designed to provide reasonable assurance that the assets are safeguarded and that reliable financial information is available on a timely basis. The system includes formal policies and procedures and an organizational structure that provides for appropriate delegation of authority and segregation of responsibilities. The Board of Trustees oversees management s responsibilities for financial reporting through the Audit Committee. The Audit Committee reviews the financial statements and recommends them to the Board for approval. The financial statements have been audited by Ernst & Young LLP, independent external auditors appointed by the Board. The Auditor s responsibility is to express and opinion on whether the financial statements are fairly presented in accordance with generally accepted accounting principles. The Auditor s report outlines the scope of the Auditor s examination and opinion. On behalf of management, Gary Strother, Chief Superintendent John Deausy, Superintendent, Finance & Business
INDEPENDENT AUDITORS' REPORT To the Board of Trustees of Calgary Roman Catholic Separate School District No. 1 We have audited the accompanying financial statements of Calgary Roman Catholic Separate School District No. 1, which comprise the statement of financial position as at, and the statements of operations, changes in net debt, and cash flows 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 auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audit 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 Calgary Roman Catholic Separate School District No. 1 as at, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. Calgary, Canada November 30, 2016 A member firm of Ernst & Young Global Limited
STATEMENT OF FINANCIAL POSITION As at August 31 2016 2015 $ $ FINANCIAL ASSETS Cash and cash equivalents [notes 3 and 5] 77,492,465 98,692,817 Accounts receivable [note 4] 34,652,620 22,188,850 Other financial assets 196,800 Total financial assets 112,341,885 120,881,667 LIABILITIES Accounts payable and accrued liabilities [notes 5 and 6] 71,551,816 49,024,469 Unexpended deferred operating revenue [note 7] 5,398,712 6,263,689 Unexpended deferred capital revenue [note 8] 10,461,384 41,111,189 Expended deferred capital revenue [note 9] 435,026,665 361,412,979 Employee future benefit liabilities [note 10] 6,369,614 6,142,355 Long-term debt [note 11] 290,172 511,479 Total liabilities 529,098,363 464,466,160 NET DEBT (416,756,478) (343,584,493) NON-FINANCIAL ASSETS Tangible capital assets, net [note 12] 466,175,806 394,169,015 Prepaid expenses 3,246,723 3,061,713 Other non-financial assets 933,621 538,766 Total non-financial assets 470,356,150 397,769,494 ACCUMULATED SURPLUS [note 13] 53,599,672 54,185,001 Commitments and contingencies [notes 14, 15, 16 and 17] See accompanying notes On behalf of the Board: Trustee Trustee
STATEMENT OF OPERATIONS Year ended August 31 2016 2016 2015 Budget Actual Actual $ $ $ [note 27] REVENUES Alberta Education 461,066,525 459,668,753 449,123,067 Property taxes 81,440,705 92,966,500 85,344,095 Other - Government of Alberta 283,108 507,597 500,736 Federal Government and First Nations 1,154,042 1,290,904 1,203,311 Other Alberta school authorities 210,293 165,076 Student fees [note 22] 15,238,807 11,634,559 11,599,148 Other sales and services 3,832,662 6,812,236 6,631,678 Investment income 709,424 1,106,294 1,139,924 Gifts and donations 2,569,405 2,617,971 2,958,132 Rental of facilities 1,992,967 2,108,259 2,255,726 Fundraising 3,022,378 2,998,346 3,317,802 Gain (loss) on disposal of tangible capital assets 25,000 52,405 (42,072) Other 4,994 10,192 602,232 571,340,017 581,984,309 564,798,855 EXPENSES [notes 10, 11, 18, 19 and 20] Schools and instruction 436,129,451 442,541,567 423,187,108 Board, administration and instructional support 50,104,419 49,878,118 46,817,947 Plant operations and maintenance 69,102,218 73,745,776 74,505,339 Transportation 16,003,929 16,404,177 15,906,254 571,340,017 582,569,638 560,416,648 OPERATING SURPLUS (DEFICIT) (585,329) 4,382,207 See accompanying notes
STATEMENT OF CASH FLOWS Year ended August 31 2016 2015 $ $ OPERATING ACTIVITIES Operating surplus (deficit) (585,329) 4,382,207 Add (deduct) items not affecting cash Amortization of tangible capital assets 20,862,306 20,984,706 Loss (gain) on disposal of tangible capital assets (52,405) 42,072 Expended deferred capital revenue recognition (16,916,243) (17,235,858) Donations in kind (9,524) Net change in non-cash operating activities [note 21] 47,844,622 59,949,115 Cash provided by operating activities 51,152,951 68,112,718 CAPITAL ACTIVITIES Acquisition of tangible capital assets (92,761,368) (20,829,401) Proceeds from disposal of tangible capital assets 188,626 34,441 Net change in non-cash capital activities [note 21] 20,219,439 3,660,716 Cash used in capital activities (72,353,303) (17,134,244) Net increase (decrease) in cash and cash equivalents during the year (21,200,352) 50,978,474 Cash and cash equivalents, beginning of year 98,692,817 47,714,343 Cash and cash equivalents, end of year 77,492,465 98,692,817 See accompanying notes
STATEMENT OF CHANGES IN NET DEBT Year ended August 31 2016 2016 2015 Budget Actual Actual $ $ $ [note 27] Operating surplus (deficit) (585,329) 4,382,207 Acquisition of tangible capital assets (93,005,318) (23,099,581) Amortization of tangible capital assets 20,862,306 20,984,706 Carrying value of tangible capital asset disposals 136,221 84,801 Acquisition of prepaid expenses (185,010) (687,891) Use of other non-financial assets (394,855) (82,017) (Increase) decrease in net debt (73,171,985) 1,582,225 NET DEBT, BEGINNING OF YEAR (343,584,493) (343,584,493) (345,166,718) NET DEBT, END OF YEAR (343,584,493) (416,756,478) (343,584,493) See accompanying notes
SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS Year ended August 31 Accumulated surplus Investment in tangible capital assets 2016 Unrestricted surplus Operating reserves Capital reserves $ $ $ $ $ [note 13] [note 13] Balance, beginning of year 54,185,001 32,756,036 8,282,728 5,696,303 7,449,934 Operating deficit (585,329) (585,329) Board funded tangible capital asset additions 2,475,389 (2,434,883) (40,506) Disposal of unsupported tangible capital assets (136,221) (52,405) 188,626 Amortization of Board funded tangible capital assets (3,946,063) 3,946,063 Transfers to operating reserves (2,763,322) 2,763,322 Transfers from operating reserves 4,358,505 (4,358,505) Balance, end of year 53,599,672 31,149,141 10,751,357 4,101,120 7,598,054 Accumulated surplus Investment in tangible capital assets 2015 Unrestricted surplus Operating reserves Capital reserves $ $ $ $ $ [note 13] [note 13] Balance, beginning of year 49,802,794 32,544,874 3,048,741 6,019,509 8,189,670 Operating surplus 4,382,207 4,382,207 Board funded tangible capital asset additions 4,036,523 (3,262,346) (774,177) Disposal of unsupported tangible capital assets (76,513) 42,072 34,441 Amortization of Board funded tangible capital assets (3,748,848) 3,748,848 Transfers to operating reserves (4,374,458) 4,374,458 Transfers from operating reserves 4,697,664 (4,697,664) Balance, end of year 54,185,001 32,756,036 8,282,728 5,696,303 7,449,934 See accompanying notes
1. AUTHORITY AND PURPOSE Calgary Roman Catholic Separate School District No. 1 [the "district"] was established under the authority of the School Act, Revised Statutes of Alberta, Chapter S-3, to provide education programs to The City of Calgary and surrounding areas. The district receives instruction and support allocations under the Education Grants Regulation 120/2008 from the Government of Alberta and by way of municipal property taxes. The regulation allows for the setting of conditions and use of grant monies. The district is limited on certain funding allocations and administration expenditures. The district is registered as a charitable organization under the Income Tax Act (Canada) and, therefore, is exempt from income taxes. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements of the district have been prepared by management in accordance with Canadian Public Sector Accounting Standards ["PSAS"] without not-for-profit provisions, Section PS 4200 of the Chartered Professional Accountants of Canada ["CPA Canada"] Public Sector ["PS"] Accounting Handbook. The significant accounting policies are summarized below. Reporting entity The financial statements include all of the assets, liabilities, revenues and expenses of the district. Funds generated at the schools are included as assets, liabilities, revenues and expenses of the district when the accountability, control and ownership of these funds rest with the district and are under the control of the school. Funds are raised through non-instructional fees and fundraising activities. Measurement uncertainty The preparation of financial statements in conformity with PSAS requires management to make estimates and assumptions that impact reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are reviewed periodically by management and, as adjustments become necessary, they are reported in the period in which they become known. Measurement uncertainty that may be material to these financial statements exists 1
for the liability for employee future benefits because actual experience may differ significantly from actuarial estimations and for the useful lives of tangible capital assets and related amortization because the estimate of useful life is based on management s assumptions. Actual results could differ from these estimates. Trust funds Trust funds held for other organizations and administered by the district are not included in the financial statements [note 24]. Financial assets Financial assets are assets that could be used to discharge existing liabilities or to finance future operations and are not for consumption in the normal course of operations. [i] Cash and cash equivalents Cash and cash equivalents include cash and investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value. These short-term investments have a maturity of three months or less at acquisition and are held for the purpose of meeting short-term cash commitments rather than for investing. [ii] Accounts receivable Accounts receivable includes education property taxes receivable, provincial grants receivable, federal goods and services tax rebates and other receivables. Other receivables are recorded at cost less valuation allowances. Valuation allowances are recorded where collectability is considered doubtful. [iii] Other financial assets Other financial assets include refundable deposits. Non-financial assets Non-financial assets generally are assets held for consumption in the provision of services. These assets do not normally provide resources to discharge the liabilities of the district. 2
[i] Tangible capital assets Tangible capital assets have useful lives extending beyond the accounting period, are held for use by the district and are not intended for sale in the ordinary course of operations. Tangible capital assets acquired or constructed are recorded at cost and include all costs directly attributable to the acquisition, design, construction, development, installation and betterment of the tangible capital asset. The costs of the depreciable tangible capital assets are amortized on a straight-line basis over their estimated useful lives as follows: Buildings Furniture and equipment Computer software and hardware Vehicles Site development 10 to 40 years 5 to 10 years 5 years 5 to 10 years 20 to 30 years Work in progress is not amortized as these assets are not available for use. Once completed and available for use, these assets are amortized in accordance with the district's accounting policy. Donated tangible capital assets are recorded at their fair market value at the date of donation when reasonably determinable; otherwise, they are recognized at nominal value. Transfers of tangible capital assets from related parties are recorded at original cost less accumulated amortization. [ii] Prepaid expenses Prepaid expenses are amounts paid for goods and services which will provide economic benefits in one or more future periods. [iii] Other non-financial assets Other non-financial assets include inventory of supplies and deposits for the provision of services. Inventory of supplies is carried at the lower of cost, determined on a first-in, first-out basis, and replacement cost. Liabilities Liabilities are obligations arising from transactions and events occurring prior to the financial statement date. 3
[i] Accounts payable and accrued liabilities Accounts payable and accrued liabilities include amounts owing to third parties and employees for work performed, goods supplied and services rendered, but not yet paid, at the financial statement date. Amounts are generally payable within one year. [ii] Unexpended deferred operating revenue Unexpended deferred operating revenue includes contributions received with stipulations that meet the definition of a liability, other than unexpended deferred capital revenue as described below. Unexpended deferred operating revenue is recognized as revenue when the stipulations are met. [iii] Unexpended deferred capital revenue Unexpended deferred capital revenue represents externally restricted funds received or receivable by the district for the purpose of acquiring or developing a depreciable tangible capital asset, but the related expenditure has not been made by the financial statement date. These contributions are recorded by the district once it has met all eligibility criteria to receive the contributions. These contributions must also have stipulations that meet the definition of a liability when expended. When expended, this unexpended deferred capital revenue is transferred to expended deferred capital revenue. [iv] Expended deferred capital revenue Expended deferred capital revenue represents contributions received or receivable containing stipulations that meet the definition of a liability, for the purpose of acquiring depreciable tangible capital assets. It consists of contributions which are transferred from unexpended deferred capital revenue when expended. The expended deferred capital revenue account balance is also increased by debenture debt, originally incurred for the purpose of acquiring capital assets, the payment of which is made by the Government of Alberta on behalf of the district. Where the Government of Alberta has entered into contracts [private-public partnerships] for the design, build, and finance of schools and modular classrooms on behalf of the district, expended deferred capital revenue is recorded in the amount of the estimated fair value of these assets transferred to the district. Expended deferred capital revenue is amortized to revenue on the same basis as the amortization on the related tangible capital assets acquired. 4
[v] Employee future benefit liabilities Employee future benefit liabilities represent retirement and post-employment benefits that accrue to the district's employees. The cost of these benefits is recorded in the reporting period that the benefits are earned by employees. Employee future benefit liabilities include the non-registered Supplemental Executive Retirement Program ["SERP"] and retirement allowances. SERP is a defined benefit pension plan supplemental to the Local Authorities Pension Plan [LAPP] or the Alberta Teachers' Retirement Fund [ATRF], as appropriate, for which the district is responsible for the entire cost. The District and certain members of senior administration participate in this plan. This is an unfunded pension arrangement with no assets. It is not a registered pension plan and not subject to pension regulations. SERP enhances the LAPP/ATRF benefits formula to a full 2 per cent final average earnings pension plan which provides for the portion of the accrued pension that is in excess of the Income Tax Act (Canada) maximum for each participant. The liability relating to SERP is actuarially determined using the projected accrued benefit cost method pro-rated on service and management's best estimate of expected inflation, salary escalation, termination and retirement rates and mortality. The discount rate used to measure obligations is based on the cost of borrowing. Actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service life of the related employee groups. Actuarial valuations are performed periodically. An actuary extrapolates these valuations when a valuation is not done in the current fiscal year. Retirement allowances relate to employees who are members of the Canadian Union of Public Employees, Unifor, and exempt employees. The allowance is based on years of service and salary. The liability relating to retirement allowances is actuarially determined using the accrued benefit actuarial cost method and is based on management's best estimate of salary escalation, termination and retirement rates and mortality. The discount rate used to measure obligations is based on the cost of borrowing. Actuarial gains and losses are amortized on a straight-line basis over the expected average remaining service life of the related employee groups. Actuarial valuations are performed periodically. An actuary extrapolates these valuations when a valuation is not done in the current fiscal year. Employee future benefit liabilities also include post-employment benefit continuation and retirement allowances for certain members of senior administration. These benefits have not been actuarially determined. They have been accounted for using current benefit rates and estimated retirement ages. 5
[vi] Liability for contaminated sites Contaminated sites are a result of contamination being introduced into air, soil, water or sediment of a chemical, organic or radioactive material or live organism that exceeds an environmental standard. A liability for remediation of contaminated sites, net of expected recoveries, is recognized when a site is not in productive use and an environmental standard exists, contamination exceeds the environmental standard, the district is directly responsible or accepts responsibility, future economic benefits are expected to be given up and a reasonable estimate of the amount can be made. The estimate would include costs directly attributable to remediation activities, post-remediation operation, maintenance and monitoring costs and costs of assets acquired, to the extent they have no alternative use, that are an integral part of the remediation strategy. [vii] Asset retirement obligations Asset retirement obligations represent legal obligations associated with the retirement of tangible capital assets that result from the acquisition, construction, development or normal operation of the assets. The liability is recognized in the period in which it is incurred when a reasonable estimate of the amount can be made. The obligations are measured initially at fair value, determined using present value methodology, and the resulting costs are capitalized as part of the related tangible capital asset cost. In subsequent periods, the liability is adjusted for accretion and any changes in the amount or timing of the underlying future cash flows. The capitalized asset retirement cost is amortized on the same basis as the related asset and accretion expense is included in the Statement of Operations. Accumulated surplus Accumulated surplus represents the financial assets and non-financial assets of the district less liabilities. It consists of the accumulated balance of the operating surplus (deficit) arising from the operations of the district. Certain amounts of the accumulated surplus as established at the discretion of the Board of Trustees of the district, or externally, have been designated for future operating and capital expenditures. These internally restricted amounts, which are the operating and capital reserves, are not available for use without approval of the Board of Trustees. Revenue recognition Revenues are recorded on an accrual basis, which recognizes revenues as they are earned and measurable. 6
[i] Government transfers Revenue recognition of government transfers is dependent upon the terms of the transfer, namely, eligibility criteria and stipulations. Eligibility criteria are criteria that the district has to meet in order to receive the contributions from a transferring government. Stipulations describe how the district must use the contributions or the actions it must perform in order to keep the contributions. Contributions without eligibility criteria or stipulations are recognized as revenue when the contributions are authorized by the transferring government. Contributions with eligibility criteria but without stipulations are recognized as revenue when the contributions are authorized by the transferring government and all eligibility criteria have been met. [ii] Property taxes Property taxes are levied and collected on a calendar year basis. The education property tax mill rate is set by the Government of Alberta. The district has elected, by way of Board resolution, to directly requisition tax revenues from the properties of separate school supporters. Tax revenues are recognized on the basis of time with 1/12 th of the total tax revenue assessed recorded monthly. [iii] Restricted revenues Contributions with or without eligibility criteria but with stipulations are recognized as revenue in the period the contributions are authorized and all eligibility criteria have been met, except when and to the extent that the contributions give rise to an obligation that meets the definition of a liability. Liabilities are recorded as unexpended deferred operating revenue, unexpended deferred capital revenue or expended deferred capital revenue depending on the terms and conditions of the contributions. Funds received other than government transfers, such as donations and fees that are externally restricted are recognized as revenue in the period in which the funds are used for the purpose specified. Externally restricted funds received before this criterion has been met are reported as unexpended deferred operating revenue, unexpended deferred capital revenue or expended deferred capital revenue depending on the terms and conditions of the funds, provided it meets the definition of a liability. [iv] Donated tangible capital assets Donated tangible capital assets are recognized as revenue when received or receivable, except when the donated tangible capital assets give rise to an obligation that meets the definition of a liability in which case it is recorded as expended deferred capital revenue and recognized as 7
revenue when the restrictions have been met. Donated tangible capital assets are recorded at fair market value when reasonably determinable. [v] Donated materials and services Donated materials are recognized as revenue when received or receivable. Donated materials are recorded at fair market value when reasonably determinable, when they are used in the normal course of the district's operations and when they would otherwise have been purchased. Volunteers assist schools operated by the district in carrying out certain activities. Because of the difficulty in determining the fair value of the services and the fact that such assistance is generally not otherwise purchased, the value of contributed services is not recognized in the financial statements. Multi-employer defined benefit pension plans The district and its staff participate in several multi-employer defined benefit pension plans. Multiemployer defined benefit pension plans are accounted for as a defined contribution plan whereby the district's contributions for current and past service pension benefits required for participating staff during the year are recorded as an expense; the net pension assets or liabilities of the plans are not recognized in the financial statements. The district's certificated staff is required to participate in the Alberta Teachers' Retirement Fund. The current service and past service costs of the Alberta Teachers' Retirement Fund are shared equally by active members and the Government of Alberta. Active members are solely responsible for the additional 10 per cent cost-of-living pension adjustment provision. Under the terms of the Teachers' Pension Plans Act, the district does not make pension contributions for certificated staff. The contributions by the Government of Alberta for the district's certificated staff are recorded as an increase in expense and an increase in Government of Alberta revenue. An actuarial valuation of the plan is performed annually. Funding deficiencies under the plan are amortized by additional contributions from active members and the Government of Alberta over a fifteen-year period. However, funding deficiencies relating to the additional 10 per cent cost-of-living pension adjustment provision is amortized by additional contributions from active members only. The district and its non-certificated staff participate in the multi-employer Local Authorities Pension Plan. Members and employers make contributions to this pension plan. Contributions are shared between the members and employers with employers paying one per cent more. An actuarial valuation of the plan is performed annually. Funding deficiencies under the plan are amortized by additional contributions from members and employers over a fifteen-year period. 8
The district and certain members of senior administration participate in a multi-employer registered Supplemental Integrated Pension Plan ["SIPP"]. This plan is supplemental to the Local Authorities Pension Plan or the Alberta Teachers' Retirement Fund, as appropriate. Employers are solely responsible for contributions to this pension plan. An actuarial valuation of the plan is performed every three years. Funding deficiencies under the plan are amortized by additional contributions over a fifteen-year period. Financial instruments Financial instruments are any contracts that give rise to financial assets of one entity and financial liabilities of another entity. Because they represent contractual arrangements, they do not include government transfers. The district's financial instruments recognized in the statement of financial position consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and long-term debt. All financial instruments are recorded at cost or amortized cost and the associated transaction costs are added to the carrying value upon initial recognition. The gain or loss arising from derecognition of a financial instrument and impairment losses such as write-downs are reported in the Statement of Operations. Expenses Expenses are reported on an accrual basis. Expenses are recognized in the period that the events giving rise to the expense occurs and there is a legal or constructive obligation to pay. Changes in accounting policies [i] Effective September 1, 2015, the district adopted PS 2200, Related party disclosures, and PS 3420, Inter-entity transactions, new accounting standards issued by the Public Sector Accounting Board. These accounting standards are effective for fiscal years beginning on or after April 1, 2017, though earlier adoption is permitted. PS 2200 defines a related party and establishes disclosures required for related party transactions. PS 3420 establishes standards on how to account for and report transactions between public sector entities that comprise a government s reporting entity from both a provider and recipient perspective. The change in accounting policy was applied on a retroactive basis to September 1, 2014 and did not have any impact on the financial statements. [ii] Effective September 1, 2015, the district adopted PS 3210, Assets, a new accounting standard issued by the Public Sector Accounting Board, effective for fiscal years beginning on or after April 1, 2017, though earlier adoption is permitted. PS 3210 provides guidance for applying the 9
definition of assets set out in Financial Statement Concepts, PS 1000, and establishes general disclosure standards for assets. Disclosure of information about the major categories of assets that are not recognized is required. The application of this new standard did not have any impact on the financial statements. [iii] Effective September 1, 2015, the district adopted PS 3320, Contingent assets, a new accounting standard issued by the Public Sector Accounting Board, effective for fiscal years beginning on or after April 1, 2017, though earlier adoption is permitted. PS 3320 defines and establishes disclosure standards on contingent assets. Contingent assets are possible assets arising from existing conditions involving uncertainty. Disclosure of information about contingent assets is required when the occurrence of the confirming future event is likely. The application of this new standard did not have any impact on the financial statements. [iv] Effective September 1, 2015, the district adopted PS 3380, Contractual rights, a new accounting standard issued by the Public Sector Accounting Board, effective for fiscal years beginning on or after April 1, 2017, though earlier adoption is permitted. PS 3380 defines and establishes disclosure standards on contractual rights. Contractual rights are rights to economic resources arising from contracts or agreements that will result in both an asset and revenue in the future. Disclosure of information about contractual rights is required including a description about their nature, extent and timing. The application of this new standard did not have any impact on the financial statements. [v] Effective September 1, 2015, the district adopted PS 3430, Restructuring transactions, a new accounting standard issued by the Public Sector Accounting Board, effective for fiscal years beginning on or after April 1, 2018, though earlier adoption is permitted. PS 3430 defines a restructuring transaction and establishes standards for recognizing and measuring assets and liabilities transferred in a restructuring transaction. A restructuring transaction is a transfer of an integrated set of assets and/or liabilities, together with related program or operating responsibilities without consideration based primarily on the fair value of the individual assets and liabilities transferred. The application of this new standard did not have any impact on the financial statements. 3. CASH AND CASH EQUIVALENTS Cash equivalents are investments that have original maturity dates of 90 days or less. The term deposits bear interest at 0.75% to 1.40% [2015 1.05% to 1.45%]. 10
2016 2015 $ $ Cash 3,066,064 1,389,939 Term deposits 74,426,401 97,302,878 Total 77,492,465 98,692,817 4. ACCOUNTS RECEIVABLE 2016 Allowance for Total receivables doubtful accounts Net receivables $ $ $ Municipalities - property taxes 16,178,449 16,178,449 Government of Alberta and other related parties 16,365,964 16,365,964 Federal Government 1,269,520 1,269,520 Other 868,523 (29,836) 838,687 Total 34,682,456 (29,836) 34,652,620 2015 Allowance for Total receivables doubtful accounts Net receivables $ $ $ Municipalities - property taxes 16,168,255 16,168,255 Government of Alberta and other related parties 4,883,911 4,883,911 Federal Government 767,152 767,152 Other 409,085 (39,553) 369,532 Total 22,228,403 (39,553) 22,188,850 11
5. CREDIT FACILITIES The district has a $2,000,000 demand operating credit facility and a $15,000,000 demand seasonal operating facility from June 1 to July 31 annually with interest at the bank s prime rate less 0.50%. A borrowing resolution to a maximum of the district's accounts receivable as per the most recent audited financial statements, covering all revenue of the district, has been provided as collateral for these facilities. At and August 31, 2015, no amount of the demand credit facilities was outstanding. The district has a purchasing card facility in the amount of $2,500,000 [2015 - $2,500,000], of which $359,805 was outstanding at [2015 - $416,587] and included in accounts payable and accrued liabilities. 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 2016 2015 $ $ Government of Alberta and other related parties 19,330,084 17,927,635 Federal Government 5,077,934 567,051 Alberta municipalities 117,105 490,179 Salaries and benefits payable 10,795,442 11,140,723 Other trade payables and accrued liabilities 36,231,251 18,898,881 Total 71,551,816 49,024,469 12
7. UNEXPENDED DEFERRED OPERATING REVENUE Restricted 2015 funds received/ receivable Revenue recognized in the year 2016 $ $ $ $ Alberta Education Infrastructure Maintenance Renewal 2,150,158 8,325,179 (10,238,904) 236,433 Regional Collaborative Calgary & Area 2,807 1,052,152 (1,015,672) 39,287 Other Alberta Education 37,103 129,213 (102,182) 64,134 Other Government of Alberta University of Alberta Wellness Fund Project 35,575 50,000 (85,575) Other Government of Alberta [note 23] 59,559 239,200 (266,687) 32,072 Other School Generated Funds [note 23] 2,207,620 9,795,371 (9,581,038) 2,421,953 Student fees 1,307,417 3,381,232 (2,537,335) 2,151,314 Donations 288,439 691,859 (672,756) 307,542 Lease revenue 139,928 (16,791) 123,137 Other 35,083 268,446 (280,689) 22,840 Total 6,263,689 23,932,652 (24,797,629) 5,398,712 13
Restricted 2014 funds received/ receivable Revenue recognized in the year 2015 $ $ $ $ Alberta Education Alberta Initiative for School Improvement 7,191 (7,191) Infrastructure Maintenance Renewal 15,767,739 (13,617,581) 2,150,158 Full Day Kindergarten Pilot 2,800,000 (2,800,000) Regional Collaborative Calgary & Area 414,675 (411,868) 2,807 Other Alberta Education 14,320 28,760 (5,977) 37,103 Other Government of Alberta University of Alberta Wellness Fund Project 100,000 (64,425) 35,575 Other Government of Alberta [note 23] 93,630 83,507 (117,578) 59,559 Other School Generated Funds [note 23] 1,867,268 9,490,034 (9,149,682) 2,207,620 Student fees 1,203,497 3,758,269 (3,654,349) 1,307,417 Donations 265,368 835,961 (812,890) 288,439 Lease revenue 156,719 (16,791) 139,928 Other 6,755 304,162 (275,834) 35,083 Total 6,414,748 30,783,107 (30,934,166) 6,263,689 14
8. UNEXPENDED DEFERRED CAPITAL REVENUE Transferred to expended 2015 Restricted funds received/ receivable deferred capital revenue [note 9] Adjustments or returned funds 2016 $ $ $ $ $ Government of Alberta capital transfers 40,826,376 60,680,270 (90,072,890) (1,186,468) 10,247,288 Interest earned on capital transfers 233,623 142,096 (213,089) 162,630 Other 51,190 276 51,466 Total 41,111,189 60,822,642 (90,285,979) (1,186,468) 10,461,384 Transferred to expended 2014 Restricted funds received/ receivable deferred capital revenue [note 9] Adjustments or returned funds 2015 $ $ $ $ $ Government of Alberta capital transfers 57,659,605 (16,820,857) (12,372) 40,826,376 Interest earned on capital transfers 215,168 18,455 233,623 Other 48,999 2,191 51,190 Total 48,999 57,876,964 (16,802,402) (12,372) 41,111,189 15
9. EXPENDED DEFERRED CAPITAL REVENUE Transferred from unexpended deferred 2015 capital revenue [notes 8 and 21] Transferred in - tangible capital assets Capital revenue recognized Net book value of capital dispositions 2016 $ $ $ $ $ $ Government of Alberta capital transfers 361,412,979 90,285,979 243,950 (16,916,243) 435,026,665 Total 361,412,979 90,285,979 243,950 (16,916,243) 435,026,665 Transferred from unexpended deferred 2014 capital revenue [notes 8 and 21] Transferred in - tangible capital assets Capital revenue recognized Net book value of capital dispositions 2015 $ $ $ $ $ $ Government of Alberta capital transfers 359,594,067 16,802,402 2,260,656 (17,235,858) (8,288) 361,412,979 Total 359,594,067 16,802,402 2,260,656 (17,235,858) (8,288) 361,412,979 16
10. EMPLOYEE FUTURE BENEFIT LIABILITIES Employee future benefits consist of the following: 2016 2015 $ $ Retirement allowances [i] 5,089,200 4,889,800 Defined benefit pension plan liability [ii] 393,700 343,600 Executive retirement allowances [iii] 691,714 718,955 Post-employment benefits [iii] 195,000 190,000 Total 6,369,614 6,142,355 [i] Retirement allowances The actuarial valuation of the plan was performed as of. Benefit plan obligations are as follows: 2016 2015 $ $ Accrued benefit obligation, beginning of year 4,889,800 4,743,400 Current service cost 352,900 303,000 Interest cost 237,200 263,000 Benefit payments (394,900) (387,400) Amortization of experience (gain) loss 4,200 (32,200) Accrued benefit obligation, end of year 5,089,200 4,889,800 There are no defined benefit plan assets. 17
Reconciliation of the funded status of the benefit plans to the amounts recorded in the financial statements is as follows: 2016 2015 $ $ Pension obligation 5,644,500 4,917,100 Plan deficit 5,644,500 4,917,100 Unamortized experience loss (555,300) (27,300) Accrued benefit obligation 5,089,200 4,889,800 The significant actuarial assumptions used in measuring the district's accrued benefit obligation and expense are as follows: 2016 2015 Discount rate - obligation 4.40% 4.70% Discount rate - expense 4.70% 5.90% Rate of compensation increase 0% from 2016-2018, 2.0% in 2019, 2.2% thereafter 2% in 2016, 2.5% thereafter Remaining service life 10 years 10 years [ii] Defined benefit pension plan liability The district participates in a non-registered Supplemental Executive Retirement Program [note 2] which is a defined benefit plan for certain members of senior administration. The actuarial valuation of the plan was performed as of. 18
Defined benefit plan obligations are as follows: 2016 2015 $ $ Accrued benefit obligation, beginning of year 343,600 300,600 Current service cost 51,000 45,400 Interest cost 13,400 12,000 Amortization of experience gain (14,300) (14,400) Accrued benefit obligation, end of year 393,700 343,600 There are no defined benefit plan assets. Reconciliation of the funded status of the benefit plans to the amounts recorded in the financial statements is as follows: 2016 2015 $ $ Pension obligation 266,900 230,300 Plan deficit 266,900 230,300 Unamortized experience gain 126,800 113,300 Accrued benefit obligation 393,700 343,600 The significant actuarial assumptions used in measuring the district's accrued benefit obligation and expense are as follows: 2016 2015 $ $ Discount rate - obligation 5.20% 5.25% Discount rate - expense 5.25% 6.15% Rate of compensation increase 3.50% 3.50% Remaining service life 9 years 10 years 19
[iii] Other employee future benefits These include retirement allowances for certain members of senior administration and postemployment benefit continuation for all members of senior administration. 11. LONG-TERM DEBT Long-term debt is comprised of debentures issued by the Alberta Capital Finance Authority at interest rates ranging from 7.875% to 10.125% per annum which mature at various dates to 2020. All debenture principal and interest payments are fully supported [funded] by the Government of Alberta. Principal and interest payments required over each of the next four years are as follows: Principal $ Interest $ Total $ 2017 221,307 27,845 249,152 2018 47,598 6,306 53,904 2019 16,067 1,961 18,028 2020 5,200 494 5,694 Total 290,172 36,606 326,778 Interest on long-term debt incurred during the year ended was $37,473 [2015 - $58,966]. 20
12. TANGIBLE CAPITAL ASSETS 2016 Land Work in progress Buildings Site development Furniture and equipment Computer software and hardware Vehicles Total $ $ $ $ $ $ $ $ Historical cost Beginning of year 6,069,298 16,743,411 587,510,152 43,941,502 21,219,125 15,640,831 2,201,440 693,325,759 Additions 92,059,625 671,746 209,562 64,385 93,005,318 Transfers to (from) (15,953,955) 12,643,084 750,489 449,268 2,111,114 Disposals (769,773) (1,741,229) (58,054) (152,792) (2,721,848) 6,069,298 92,849,081 599,383,463 44,691,991 20,598,910 17,903,453 2,113,033 783,609,229 Accumulated amortization Beginning of year 252,671,245 22,036,219 12,829,783 10,161,367 1,458,130 299,156,744 Amortization for the year 14,777,057 1,960,841 2,023,601 1,930,942 169,865 20,862,306 Disposals (769,773) (1,690,364) (23,222) (102,268) (2,585,627) 266,678,529 23,997,060 13,163,020 12,069,087 1,525,727 317,433,423 Net book value, end of year 6,069,298 92,849,081 332,704,934 20,694,931 7,435,890 5,834,366 587,306 466,175,806 21
2015 Land Work in progress Buildings Site development Furniture and equipment Computer software and hardware Vehicles Total $ $ $ $ $ $ $ $ Historical cost Beginning of year 6,069,298 2,487,989 583,602,658 43,099,552 21,869,173 13,297,351 2,127,828 672,553,849 Additions 22,366,688 271,111 137,591 324,191 23,099,581 Transfers to (from) (8,111,266) 3,907,494 841,950 936,919 2,424,903 Disposals (1,858,078) (219,014) (250,579) (2,327,671) 6,069,298 16,743,411 587,510,152 43,941,502 21,219,125 15,640,831 2,201,440 693,325,759 Accumulated amortization Beginning of year 237,707,059 20,109,409 12,358,671 8,715,995 1,523,774 280,414,908 Amortization for the year 14,964,186 1,926,810 2,288,121 1,655,035 150,554 20,984,706 Disposals (1,817,009) (209,663) (216,198) (2,242,870) 252,671,245 22,036,219 12,829,783 10,161,367 1,458,130 299,156,744 Net book value, end of year 6,069,298 16,743,411 334,838,907 21,905,283 8,389,342 5,479,464 743,310 394,169,015 22
The Government of Alberta has entered into contracts [public-private partnerships] for the design, build, finance, and maintenance of schools and modular classrooms on behalf of the district. The cost of modular classrooms incurred in 2016 was $127,572 and the cost of modular classrooms incurred in 2015 was $2,260,656. These contributed assets have been transferred to the district at their estimated fair value as determined by the Government of Alberta based upon the competitively bid contract to construct these assets. The Government of Alberta has incurred manpower costs on behalf of the district in the amount of $116,378 which was recorded as an increase to tangible capital assets. Instructional equipment was donated in kind to the district in 2015 in the amount of $9,524. Prior to the existence of the Joint Use Agreement ["JUA"] between the City of Calgary, the Calgary Board of Education and the district in March 1985, the district either purchased sites or, in some instances, acquired certain school sites from the City of Calgary for a nominal cost [$1 per site]. Subsequent to the JUA, the district receives school sites at no cost. 13. ACCUMULATED SURPLUS The schedule of changes in accumulated surplus provides detailed information on the changes in accumulated surplus. The following provides detailed information on the changes in the reserves: 2016 Balance, beginning of year Appropriated Utilized Balance, end of year $ $ $ $ Operating reserves School and instruction 5,415,621 2,763,322 (4,358,505) 3,820,438 Plant operations and maintenance 280,682 280,682 5,696,303 2,763,322 (4,358,505) 4,101,120 Capital reserves School and instruction 232,900 232,900 Plant operations and maintenance 76,865 188,626 (40,506) 224,985 Board and system administration 7,140,169 7,140,169 7,449,934 188,626 (40,506) 7,598,054 Total reserves 13,146,237 2,951,948 (4,399,011) 11,699,174 23
2015 Balance, beginning of year Appropriated Utilized Balance, end of year $ $ $ $ Operating reserves School and instruction 5,007,963 4,374,458 (3,966,800) 5,415,621 Plant operations and maintenance 280,682 280,682 Transportation 730,864 (730,864) 6,019,509 4,374,458 (4,697,664) 5,696,303 Capital reserves School and instruction 231,500 1,400 232,900 Plant operations and maintenance 43,824 33,041 76,865 Board and system administration 7,914,346 (774,177) 7,140,169 8,189,670 34,441 (774,177) 7,449,934 Total reserves 14,209,179 4,408,899 (5,471,841) 13,146,237 14. CONTRACTUAL OBLIGATIONS The district has entered into contracts for the delivery of services and construction of tangible capital assets. These contractual obligations will become liabilities in the future when the terms of the contracts are met. Disclosure relates to the unperformed portion of the contracts. 2016 $ 2015 $ Building projects 71,102,675 69,512,427 Service providers 6,276,769 9,680,470 Total contractual obligations 77,379,444 79,192,897 24
Building Service projects providers $ $ 2016-17 55,092,805 2,083,399 2017-18 16,009,870 1,828,803 2018-19 1,734,478 2019-20 630,089 71,102,675 6,276,769 Building projects include the district's obligation for the new schools in Evanston, Auburn Bay, Aspen Woods, Cranston, New Brighton, Legacy, Skyview Ranch, Silverado, Sherwood and Mahogany areas, modernizations at St. Vincent de Paul, St. Cyril and St. Francis and modular classrooms. Building projects also include the district's obligation for Infrastructure Maintenance Renewal projects and maintenance projects at non-school buildings. It is anticipated that these costs will be fully funded by Alberta Education with the exception of maintenance projects at nonschool buildings. Service providers include the district's obligation to purchase minimum volumes of electricity and gas at a fixed price. 15. CONTINGENT LIABILITIES The district may, from time to time, be involved in legal proceedings, claims and litigation that arise in the ordinary course of business. In the event that any such claims or litigation are resolved against the district, management does not anticipate any material impact from such outcomes or resolutions on the business, financial condition, or results of operations of the district at the present time. The district is a member of The Urban Schools Insurance Consortium ["USIC"], a licensed reciprocal insurance exchange under Alberta's Insurance Act, which facilitates the placement of property and liability insurance coverage for 14 jurisdictions throughout the province of Alberta. Member contributions pay for premiums on insurance policies and self-insure a portion of each member's risk exposure. Also, premium rebates are received by the reciprocal from the insurer's favourable claims experience. Each member could become liable for its proportionate share of any claim losses in excess of the funds held by the reciprocal. The district's share of the accumulated USIC funds as at was $603,375 [2015 - $676,523]. This amount has not been recognized in the district's financial statements as the accumulated funds are payable only upon membership termination or dissolution of the reciprocal. 25
16. LIABILITY FOR CONTAMINATED SITES The district has one site which is not in productive use, which was formerly used as a school site. There has not been any historical use of this site that would warrant an environmental assessment. As a result, a liability for the remediation of contaminated sites has not been recognized. 17. ASSET RETIREMENT OBLIGATIONS The district has a legal obligation to remove hazardous material located on the site of non-school buildings upon their disposal. As at, none of the non-school buildings were scheduled for a major renovation or demolition. As no settlement date can be estimated, the fair value of the obligation cannot be determined and therefore a liability has not been recognized. 18. EXPENSES BY OBJECT 2016 2015 $ $ Certificated salaries 299,322,360 287,747,123 Certificated benefits 70,850,779 65,925,797 Non-certificated salaries and wages 75,830,543 72,284,065 Non-certificated benefits 20,392,528 18,763,333 Services, contracts and supplies 94,327,425 93,776,474 Amortization of tangible capital assets [note 12] 20,862,306 20,984,706 Interest and charges [note 11] 431,107 427,732 Other expense 552,590 507,418 Total expenses 582,569,638 560,416,648 26