School District No. 48 (Sea To Sky)

Audited Financial Statements of School District No. 48 (Sea To Sky) June 30, 2018

June 30, 2018 Table of Contents Management Report... 1 Independent Auditors' Report... 2-3 Statement of Financial Position - Statement 1 4 Statement of Operations - Statement 2... 5 Statement of Changes in Net Financial Assets (Debt) - Statement 4... 6 Statement of Cash Flows - Statement 5 7 Notes to the Financial Statements... 8-21 Schedule of Changes in Accumulated Surplus (Deficit) by Fund - Schedule 1 (Unaudited)... 22 Schedule of Operating Operations - Schedule 2 (Unaudited)... 23 Schedule 2A- Schedule of Operating Revenue by Source (Unaudited)... 24 Schedule 2B - Schedule of Operating Expense by Object (Unaudited)... 25 Schedule 2C - Operating Expense by Function, Program and Object (Unaudited)... 26 Schedule of Special Purpose Operations - Schedule 3 (Unaudited)... 28 Schedule 3A - Changes in Special Purpose Funds and Expense by Object (Unaudited)... 29 Schedule of Capital Operations - Schedule 4 (Unaudited)... 31 Schedule 4A - Tangible Capital Assets (Unaudited)... 32 Schedule 4B - Tangible Capital Assets - Work in Progress (Unaudited)... 33 Schedule 4C - Deferred Capital Revenue (Unaudited)... 34 Schedule 4D - Changes in Unspent Deferred Capital Revenue (Unaudited)... 35

MANAGEMENT REPORT Ver ion: 6108-5362-3380 Management's Responsibility for the Financial Statements. The accompanying financial statements of School District No. 48 (Sea To Sky) have been prepared by management in accordance with the accounting requirements of Section 23.1 of the Budget Transparency and Accountability Act of British Columbia, supplemented by Re gu lations 257/2010 and 198/2011 issued by the Province of British Columbia Treasury Board, and the integrity and objectivity of these statements are management's responsibility. Management is also responsible for all of the notes to the financial statements and schedules, and for ensuring that this information is consistent, where appropriate, with the information contained in the financial statements. The preparation of 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. Management is also responsible for implementing and maintaining a system of internal controls to provide reasonable assurance that assets are safe gu arded, transactions are properly authorized and reliable financial information is produced. The Board of Education of School District No. 48 (Sea To Sky) (called the "Board") is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control and exercises these responsibilities through the Board. The Board reviews internal financial statements on a quarterly basis and externally audited financial statements yearly. The external auditors, Office of the Auditor General of BC, conduct an independent examination, in accordance with Canadian generally accepted auditing standards, and express their opinion on the financial statements. The external auditors have full and free access to financial management of School District No. 48 (Sea To Sky) and meet when required. The accompanying Independent Auditors' Report outlines their responsibilities, the scope of their examination and their opinion on the School District's financial statements. On behalf of School District No. 48 (Sea To Sky) e of the Chai rp erson of the Board of Education Date Signed Date Signed -- /:{ A.., Date Signed Page 1

INDEPENDENT AUDITOR'S REPORT To the Members of the Board of Education of School District No. 48 (Sea to Sky), and To the Minister of Education, Province of British Columbia I have audited the accompanying financial statements of the School District No. 48 (Sea to Sky) ( the entity ), which comprise the statement of financial position as at June 30, 2018, and the statements of operations, changes in net financial assets (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 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. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I 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 auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation 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. In my view, the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion. Basis for Qualified Opinion As described in Note 2 a) to the financial statements, the entity s accounting treatment for contributions received from governments and for externally restricted contributions received from non-government sources is to initially record them as deferred revenue (a liability) and then recognize revenue in the statement of operations either on the same basis as the related expenditures occur or, in the case of funds for the purchase or construction of capital assets, to

recognize revenue on the same basis as the related assets are amortized. The entity was required to adopt this accounting policy as prescribed by Province of British Columbia Treasury Board Regulation 198/2011. Under Canadian Public Sector Accounting Standards, the entity s method of accounting for contributions is only appropriate in circumstances where the funding meets the definition of a liability. Otherwise, the appropriate accounting treatment is to record contributions as revenue when they are received or receivable. In our opinion certain contributions of the entity do not meet the definition of a liability, and as such the entity s method of accounting for those contributions represents a departure from Canadian Public Sector Accounting Standards. This departure has existed since the inception of the standard, which applies to periods beginning on or after April 1, 2012. When the cumulative effects of this departure to date are adjusted through opening accumulated surplus, the entity s records indicate that the effects of this departure on the current year financial statements is an overstatement of the liability for deferred revenue of 0.17 million, an overstatement of the liability for deferred capital revenue of 40.59 million, an understatement of opening accumulated surplus of 40.78 million, and a current year overstatement of revenue of 0.02 million. Accordingly, the current year surplus is overstated by 0.02 million and net debt is overstated by 40.76 million. Qualified Opinion In my opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of School District No. 48 (Sea to Sky) as at June 30, 2018, and the results of its operations, changes in its net financial assets (debt) and its cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards. Victoria, British Columbia September 20, 2018 Russ Jones, FCPA, FCA Deputy Auditor General

Statement of Financial Position As at June 30, 2018 Financial Assets Cash and Cash Equivalents Accounts Receivable Due from Province - Ministry of Education Other (Note 3) Total Financial Assets Liabilities Accounts Payable and Accrued Liabilities Other (Note 5) Unearned Revenue (Note 6) Deferred Revenue (Note 7) Deferred Capital Revenue (Note 8) Employee Future Benefits (Note 9) International Program Homestay Total Liabilities Net Financial Assets (Debt) Non-Financial Assets Tangible Capital Assets (Note 10) Prepaid Expenses Total Non-Financial Assets Accumulated Surplus (Deficit) 2018 2017 Actual Actual 15,026,623 13,491,208 67,668 31,714 189,270 251,103 15,283,561 13,774,025 4,843,108 5,085,915 1,700,810 1,390,145 327,267 357,419 42,508,485 42,915,013 1,903,189 1,766,100 1,216,970 946,500 52,499,829 52,461,092 (37,216,268) (38,687,067) 50,886,860 51,466,616 342,550 237,200 51,229,410 51,703,816 14,013,142 13,016,749 Statement I Contractual Obligations (Note 14) Approved by the Board S:c s{" r / 2-. Date Signed fl.. S)r r J.. "'' r s t-.'..-/ef" Date Signed Version: 6108-5362-3380 The accompanying notes are an integral part of these financial statements. Page4

Statement of Operations Statement 2 Revenues Provincial Grants Ministry of Education Tuition Other Revenue Rentals and Leases Investment Income Amortization of Deferred Capital Revenue Total Revenue Expenses Instruction District Administration Operations and Maintenance Transportation and Housing Total Expense Surplus (Deficit) for the year Accumulated Surplus (Deficit) from Operations, beginning of year Accumulated Surplus (Deficit) from Operations, end of year 2018 Budget 50,476,035 2,710,500 1,224,350 285,000 86,525 2,200,245 56,982,655 42,416,325 3,001,191 10,047,882 1,786,993 57,252,391 (269,736) 2018 2017 Actual Actual 52,615,501 48,267,960 2,777,142 3,073,885 2,015,717 2,398,459 329,541 282,571 195,604 122,004 2,240,470 2,167,611 60,173,975 56,312,490 44,350,586 41,102,316 2,634,943 2,457,127 10,621,419 10,046,180 1,570,634 1,542,085 59,177,582 55,147,708 996,393 1,164,782 13,016,749 11,851,967 14,013,142 13,016,749 Version: 6108-5362-3380 The accompanying notes are an integral part of these financial statements. PageS

Statement of Changes in Net Financial Assets (Debt) Statement 4 2018 Budget 2018 Actual 2017 Actual Surplus (Deficit) for the year (269,736) 996,393 I, 164,782 Effect of change in Tangible Capital Assets Acquisition of Tangible Capital Assets Amortization of Tangible Capital Assets Total Effect of change in Tangible Capital Assets (364,924) 2,644,947 2,280,023 (2,207,784) 2,787,540 579,756 (1,825,062) 2,653,803 828,741 Acquisition of Prepaid Expenses Use of Prepaid Expenses Total Effect of change in Other Non-Financial Assets (342,550) 237,200 (105,350) (237,200) 329,630 92,430 (Increase) Decrease in Net Financial Assets (Debt), before Net Remeasurement Gains (Losses) 2,010,287 1,470,799 2,085,953 Net Remeasurement Gains (Losses) (Increase) Decrease in Net Financial Assets (Debt) 1,470,799 2,085,953 Net Financial Assets (Debt), beginning of year (38,687,067) (40,773,020) Net Financial Assets (Debt), end of year (37,216,268) (38,687,067) Version: 6108-5362-3380 The accompanying notes are an integral part of these financial statements. Page6

Statement of Cash Flows Operating Transactions Surplus (Deficit) for the year Changes in Non-Cash Working Capital Decrease (Increase) Accounts Receivable Prepaid Expenses Increase (Decrease) Accounts Payable and Accrued Liabilities Unearned Revenue Deferred Revenue Employee Future Benefits Amortization of Tangible Capital Assets Amortization of Deferred Capital Revenue International Education Program Homestay Total Operating Transactions Capital Transactions Tangible Capital Assets Purchased Tangible Capital Assets -WIP Purchased COA AFG Expenditures Total Capital Transactions Financing Transactions Capital Revenue Received Total Financing Transactions Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, beginning of year Cash and Cash Equivalents, end of year Cash and Cash Equivalents, end of year, is made up of: Cash Supplementary Cash Flow Information (Note 21) 2018 2017 Actual Actual 996,393 1,164,782 25,879 75,549 (105,350) 92,430 (242,807) 270,516 310,665 (30,152) (370,884) 137,089 26,578 2,787,540 2,653,803 (2,240,470) (2,167,611) 270,470 145,000 1,909,257 1,830,429 (59,734) (I, 778,903) (1,383,225) (428,881) (44 I,837) (447,041) (299,809) (2,654,825) (2,124,871) 2,280,983 2,189,549 2,280,983 2,189,549 1,535,415 1,895,107 13,491,208 11,596,IOI 15,026,623 13,491,208 15,026,623 13,491,208 15,026,623 13,491,208 Statement 5 Version: 6108-5362-3380 The accompanying notes are an integral part of these financial statements. Page7

School District No. 48 (Sea to Sky) Notes To Financial Statements NOTEl AUTHORITY AND PURPOSE The School District, established on April 12, 1946 operates under authority of the School Act of British Columbia as a corporation under the name of "The Board of Education of School District No. 48 (Sea to Sky)", and operates as "School District No. 48." A board of education ("Board") elected for a fouryear term governs the School District. The School District provides educational programs to students enrolled in schools in the district, and is principally funded by the Province of British Columbia through the Ministry of Education. School District No. 48 (Sea to Sky) is a Registered Charitable Organization, and is exempt from federal and provincial corporate income taxes. NOTE2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Basis of Accounting These financial statements have been prepared in accordance with Section 23.1 of the Budget Transparency and Accountability Act of the Province of British Columbia. This Section requires that the financial statements be prepared in accordance with Canadian public sector accounting standards except in regard to the accounting for government transfers as set out in Notes 2(e) and 2(k). In November 2011, Treasury Board provided a directive through Restricted Contributions Regulation 198/2011 providing direction for the reporting of restricted contributions whether they are received or receivable by the School District before or after this regulation was in effect. As noted in Notes 2(e) and 2(k), Section 23.1 of the Budget Transparency and Accountability Act and its related regulations require the School District to recognize non-capital restricted contributions into revenue in the fiscal period in which the restriction the contribution is subject to is met and require the School District to recognize government transfers for the acquisition of capital assets into revenue on the same basis as the related amortization expense. Canadian public sector accounting standards would require these contributions, if they are government transfers, to be recognized into revenue immediately when received unless they contain a stipulation that meets the definition of a liability. The impact of these differences on the financial statements of the School District are as follows: Year-ended June 30, 2017 -decrease in annual surplus by 1,389,859 June 30, 2017 - increase in accumulated surplus by 42,171,137, a decrease in deferred revenue by 163,362 and a decrease in deferred capital revenue by 40,617,916 Year-ended June 30, 2018 -decrease in annual surplus by 22,889 June 30, 2018 -increase in accumulated surplus by 40,781,278, a decrease in deferred revenue by 166,598 and a decrease in deferred capital revenue by 40,591,781 Pages

School District No. 48 (Sea to Sky) Notes To Financial Statements b) Cash and Cash Equivalents Cash and cash equivalents are readily convertible to known amounts of cash, and are subject to an insignificant risk of change in value. These cash equivalents are redeemable on demand and are held for the purpose of meeting short-term cash commitments rather than for investing. c) Accounts Receivable Accounts receivable are measured at amortized cost and are presented net of allowance for doubtful accounts. d) Unearned Revenue Unearned revenue includes tuition fees received for courses to be delivered in future periods and receipt of proceeds for services or products to be delivered in a future period. Revenue will be recognized in that future period when the courses, services, or products are provided. e) Deferred Revenue and Deferred Capital Revenue Deferred revenue includes contributions received with stipulations that meet the description of restricted contributions in the Restricted Contributions Regulation 198/2011 issued by Treasury Board. When stipulations are met, deferred revenue is recognized as revenue in the fiscal year in a manner consistent with the circumstances and evidence used to support the initial recognition of the contributions received as a liability as detailed in Note 2(k). Funding received for the acquisition of depreciable tangible capital assets is recorded as deferred capital revenue and amortized over the life of the asset acquired as revenue in the statement of operations. This accounting treatment is not consistent with the requirements of Canadian public sector accounting standards which require that government transfers be recognized as revenue when approved by the transferor and eligibility criteria have been met unless the transfer contains a stipulation that creates a liability in which case the transfer is recognized as revenue over the period that the liability is extinguished. See Note 2(a) for the impact of this policy on these financial statements. f) Employee Future Benefits The School District provides certain post-employment benefits including vested and non-vested benefits for certain employees pursuant to certain contracts and union agreements. The School District accrues its obligations and related costs including both vested and non-vested benefits under employee future benefit plans. Benefits include accumulating non-vested sick leave, retirement/severance, vacation, and death benefits. The benefits cost is actuarially determined using the projected unit credit method pro-rated on service and using management's best estimate of expected salary escalation, termination rates, retirement rates and mortality. The discount rate used to measure obligations is based on the cost of borrowing. Page 9

School District No. 48 (Sea to Sky) Notes To Financial Statements The cumulative unrecognized actuarial gains and losses are amortized over the expected average remaining service lifetime (EARSL) of active employees covered under the plan. The most recent valuation of the obligation was performed at March 31, 2016 and projected to March 31, 2019. The next valuation will be performed at March 31, 2019 for use at June 30, 2019. For the purposes of determining the financial position of the plans and the employee future benefit costs, a measurement date of March 31 was adopted for all periods subsequent to July 1, 2004. The School District and its employees make contributions to the Teachers' Pension Plan and Municipal Pension Plan. The plans are multi-employer plans where assets and obligations are not separated. The costs are expensed as incurred. g) Tangible Capital Assets The following criteria apply: Tangible capital assets acquired or constructed are recorded at cost which includes amounts that are directly related to the acquisition, design, construction, development, improvement or betterment of the assets. Cost also includes overhead directly attributable to construction as well as interest costs that are directly attributable to the acquisition or construction of the asset. Donated tangible capital assets are recorded at their fair market value on the date of donation, except in circumstances where fair value cannot be reasonably determined, which are then recognized at nominal value. Work-in-progress is recorded as an acquisition to the applicable asset class at substantial completion. Tangible capital assets are written down to residual value when conditions indicate they no longer contribute to the ability of the School District to provide services or when the value of future economic benefits associated with the sites and buildings are less than their net book value. The write-downs are accounted for as expenses in the Statement of Operations. Buildings that are demolished or destroyed are written-off. Works of art, historic assets and other intangible assets are not recorded as assets in these financial statements. The cost, less residual value, of tangible capital assets (excluding sites), is amortized on a straight-line basis over the estimated useful life of the asset. It is management's responsibility to determine the appropriate useful lives for tangible capital assets. These useful lives are reviewed on a regular basis or if significant events initiate the need to revise. Estimated useful life is as follows: Buildings Furniture & Equipment Vehicles Computer Hardware 40 years 10 years 10 years 5 years Page 10

School District No. 48 (Sea to Sky) Notes To Financial Statements h) Leases Leases that, from the point of view of the lessee, transfer substantially all the benefits and risks incident to ownership of the property to the School District are considered capital leases. These are accounted for as an asset and an obligation. The School District has no capital leases. All leases are accounted for as operating leases and the related payments are charged to expenses as incurred. i) Prepaid Expenses Annual insurance premiums, Municipal property taxes and utility charges, and software maintenance and licensing fees are included as a prepaid expense and stated at acquisition cost and are charged to expense over the periods expected to benefit from it. j) Funds and Reserves Certain amounts, as approved by the Board are set aside in accumulated surplus for future operating and capital purposes. Transfers to and from funds and reserves are an adjustment to the respective fund when approved (see Notes 12 - Interfund Transfers and Note 17 - Internally Restricted Surplus - Operating Fund). k) Revenue Recognition Revenues are recognized in the period in which the transactions or events occurred that gave rise to the revenues. All revenues are recorded on an accrual basis, except when the accruals cannot be determined with a reasonable degree of certainty or when their estimation is impracticable. Contributions received or where eligibility criteria have been met are recognized as revenue except where the contribution meets the criteria for deferral as described below. Eligibility criteria are the criteria that the School District has to meet in order to receive the contributions including authorization by the contributor. For contributions subject to a legislative or contractual stipulation or restriction as to their use, revenue is recognized as follows: Non-capital contributions for specific purposes are recorded as deferred revenue and recognized as revenue in the year related expenses are incurred, Contributions restricted for site acquisitions are recorded as revenue when the sites are purchased, and Contributions restricted for tangible capital assets acquisitions other than sites are recorded as deferred capital revenue and amortized over the useful life of the related assets. Donated tangible capital assets other than sites are recorded at fair market value and amortized over the useful life of the assets. Donated sites are recorded as revenue at fair market value when received or receivable. Page 11

School District No. 48 (Sea to Sky) Notes To Financial Statements The accounting treatment for restricted contributions is not consistent with the requirements of Canadian public sector accounting standards which require that government transfers be recognized as revenue when approved by the transferor and eligibility criteria have been met unless the transfer contains a stipulation that meets the criteria for liability recognition in which case the transfer is recognized as revenue over the period that the liability is extinguished. See Note 2(a) for the impact of this policy on these financial statements. Revenue related to fees or services received in advance of the fee being earned or the service is performed is deferred and recognized when the fee is earned or service performed. Investment income is reported in the period earned. When required by the funding party or related Act, investment income earned on deferred revenue is added to the deferred revenue balance. 1) Expenditures Expenses are reported on an accrual basis. The cost of all goods consumed and services received during the year is expensed. Categories of Salaries Principals, Vice-Principals, and Directors oflnstruction employed under an administrative officer contract are categorized as Principals and Vice-Principals. Superintendents, Assistant Superintendents, Secretary-Treasurers, Trustees and other employees excluded from union contracts are categorized as Other Professionals. Allocation of Costs Operating expenses are reported by function, program, and object. Whenever possible, expenditures are determined by actual identification. Additional costs pertaining to specific instructional programs, such as special and aboriginal education, are allocated to these programs. All other costs are allocated to related programs. Actual salaries of personnel assigned to two or more functions or programs are allocated based on the time spent in each function and program. School-based clerical salaries are allocated to school administration and partially to other programs to which they may be assigned. Principals and Vice-Principals salaries are allocated to school administration and may be partially allocated to other programs to recognize their other responsibilities. Employee benefits and allowances are allocated to the same programs, and in the same proportions, as the individual's salary. Supplies and services are allocated based on actual program identification. m) Financial Instruments A contract establishing a financial instrument creates, at its inception, rights and obligations to receive or deliver economic benefits. The financial assets and financial liabilities portray these rights and obligations in the financial statements. The School District recognizes a financial instrument when it becomes a party to a financial instrument contract. Page 12

School District No. 48 (Sea to Sky) Notes To Financial Statements Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and other liabilities. All financial assets and liabilities are recorded at cost or amortized cost and the associated transaction costs are added to the carrying value of these investments upon initial recognition. Transaction costs are incremental costs directly attributable to the acquisition or issue of a financial asset or a financial liability. Interest and dividends attributable to financial instruments are reported in the statement of operations. All financial assets are tested annually for impairment. When financial assets are impaired, impairment losses are recorded in the statement of operations. n) Measurement Uncertainty Preparation of financial statements in accordance with the basis of accounting described in Note 2(a) requires management to make estimates and assumptions that impact reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods. Significant areas requiring the use of management estimates relate to the potential impairment of assets, rates for amortization and estimated employee future benefits. Actual results could differ from those estimates. NOTE3 ACCOUNTS RECEIVABLE - OTHER RECEIVABLES June 30, 2018 June 30, 2017 Due from Federal Government 89,297 78,239 Due from Other School Districts 5,281 7,156 Other 94,692 165,708 189,270 251,103 NOTE4 REVOLVING CREDIT FACILITY The School District has a revolving credit facility agreement with its financial institution for operating fund purposes and a VISA Business Card Agreement. Under the revolving credit facility agreement the School District may borrow up to 1,075,000 at prime bank interest rates. The School District has never drawn on this facility. Page 13

School District No. 48 (Sea to Sky) Notes To Financial Statements NOTES ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - OTHER June 30, 2018 June 30, 2017 Trade payables 757,200 1,110,625 Salaries and benefits payable 3,647,841 3,538,541 Accrued vacation pay 438,067 436,749 4,843,108 5,085,915 NOTE6 UNEARNED REVENUE June 30, 2018 June 30, 2017 Balance, beginning of year 1,390,145 1,449,879 Increase: Tuition fees collected 2,814,446 2,815,739 Medical fees collected 234,665 198,030 Rental/Lease of facilities collected 39,272 576 3,088,383 3,014,345 Decrease: Tuition fees earned 2,572,292 2,883,445 Medical fees earned 204,850 190,440 Rental/Lease of facilities earned 576 194 2,777,718 3,074,079 Net changes for the year (271,393) (59,734) Balance, end of year 1,700,810 1,390,145 NOTE7 DEFERRED REVENUE Deferred revenue includes unspent grants and contributions received that meet the description of a restricted contribution in the Restricted Contributions Regulation 198/2011 issued by Treasury Board, as the stipulations associated with those grants and contributions have not yet been fulfilled. June 30, 2018 June 30, 2017 Balance, beginning of year 357,419 728,303 Increases: Provincial grants - MOE 4,403,609 2,129,772 Annual Facility Grant 8,597 7,868 Scholarships and Bursaries 24,900 21,950 School Generated Funds 1,142,631 729,103 Decreases: Allocated to Revenue 5,609,889 3,259,577 Balance, end of year 327,267 357,419 Page 14

School District No. 48 (Sea to Sky) Notes To Financial Statements NOTES DEFERRED CAPITAL REVENUE Deferred capital revenue includes grants and contributions received that are restricted by the contributor for the acquisition of tangible capital assets that meet the description of a restricted contribution in the Restricted Contributions Regulation 198/2011 issued by Treasury Board. Once spent, the contributions are amortized into revenue over the life of the asset acquired. June 30, 2018 June 30, 2017 Deferred Capital Revenue, beginning of year 41,480,995 42,389,126 Increases: Capital Additions 1,352,304 817,643 Work in Progress 428,881 441,837 Decreases: Amortization of Deferred Capital Revenue 2,240,470 2,167,611 Deferred Capital Revenue Spent, end of year 41,021,710 41,480,995 Deferred Capital Revenue Unspent, end of year 1,486,775 1,434,018 Deferred Capital Revenue Total, end of year 42,508,485 42,915,013 NOTE9 EMPLOYEE FUTURE BENEFITS Benefits include accumulating non-vested sick leave, retirement/severance, vacation, and death benefits. Funding is provided when the benefits are paid and accordingly, there are no plan assets. Although no plan assets are uniquely identified, the School District has provided for the payment of these benefits. June 30, 2018 June 30, 2017 Reconciliation of Accrued Benefit Obligation Accrued Benefit Obligation - April 1 1,966,298 2,109,082 Service Cost 155,328 155,178 Interest Cost 54,678 52,576 Benefit Payments (124,228) (252,011) Actuarial (Gain) Loss (139,795) (98,527) Accrued Benefit Obligation - March 31 1,912,281 1,966,298 Reconciliation of Funded Status at End of Fiscal Year Accrued Benefit Obligation - March 31 1,912,281 1,966,298 Market Value of Plan Assets - March 31 0 0 Funded Status - Surplus (Deficit) (1,912,281) (1,966,298) Employer Contributions After Measurement Date 60,612 49,525 Benefits Expense After Measurement Date (53,888) (52,502) Unamortized Net Actuarial (Gain) Loss 2,368 203,175 Accrued Benefit Asset (Liability) - June 30 (1,903,189) (1,766,100) Page 15

School District No. 48 (Sea to Sky) Notes To Financial Statements Reconciliation of Change in Accrued Benefit June 30, 2018 Liability Accrued Benefit Liability (Asset) - July 1 1,766,100 Net Expense for Fiscal Year 272,405 Employer Contributions (135,316) Accrued Benefit Liability (Asset) - June 30 1,903,189 June 30, 2017 1,739,522 280,920 (254,342) 1,766,100 Components of Net Benefit Expense Service Cost 156,971 Interest Cost 54,422 Immediate Recognition of Plan Amendment 0 Amortization of Net Actuarial (Gain)/Loss 61,012 Net Benefit Expense (Income) 272,405 155,216 53,101 0 72,603 280,920 Assumptions Discount Rate - April 1 2.75% Discount Rate - March 31 2.75% Long Term Salary Growth - April 1 2.50% Long Term Salary Growth - March 31 2.50% EARSL - March 31 8.5 +seniority +seniority 2.55% 2.75% 2.50% +seniority 2.50% +seniority 8.5 NOTE 10 TANGIBLE CAPITAL ASSETS Net Book Value: Sites Buildings Furniture & Equipment Vehicles Computer Hardware Total June 30, 2018 Opening Cost Cost: July 1, 2017 Additions Sites 5,369,561 0 Buildings 86,462,459 569,058 Furniture & Equipment 2,641,042 1,099,691 Vehicles 3,830,286 189,801 Computer Hardware 1,164,807 349,234 Total 99,468,155 2,207,784 Net Book Net Book Value 2018 Value 2017 5,369,561 5,369,561 40,148,661 41,465,457 2,614,516 1,762,787 1,771,129 1,969,936 982,993 898,874 50,886,860 51,466,615 Disposals Total June 30, 2018 0 5,369,561 0 87,031,517 231,995 3,508,738 78,192 3,941,895 27,697 1,486,344 337,884 101,338,055 Page 16

Accumulated Amortization: Buildings Furniture & Equipment Vehicles Computer Hardware Total June 30, 2017 Cost: Sites Buildings Furniture & Equipment Vehicles Computer Hardware Total Accumulated Amortization: Buildings Furniture & Equipment Vehicles Computer Hardware Total School District No. 48 (Sea to Sky) Notes To Financial Statements Opening Accumulated Amortization Additions July 1, 2017 44,996,998 1,885,858 878,255 247,962 1,860,349 388,609 265,933 265,115 48,001,535 2,787,544 Opening Cost July 1, 2016 Additions 5,369,561 0 86,368,476 93,983 2,262,794 573,791 3,307,009 637,106 669,948 520,181 97,977,788 1,825,061 Restated Opening Accumulated Additions Amortization July 1, 2016 43,069,210 1,927,788 888,123 185,675 1,617,314 356,865 107,780 183,475 45,682,427 2,653,803 Disposals Total June 30, 2018 0 46,882,856 231,995 894,222 78,192 2,170,766 27,697 503,351 337,884 50,451,195 Disposals Total June 30, 2017 0 5,369,561 0 86,462,459 195,543 2,641,042 113,830 3,830,285 25,322 1,164,807 334,695 99,468,154 Disposals Restated Total June 30, 2017 0 44,996,998 195,543 878,255 113,830 1,860,349 25,322 265,933 334,695 48,001,535 Cost as at June 30th, 2018 included Work In Progress amounting to 429,929 (863,079 in 2017). NOTE 11 EMPLOYEE PENSION PLANS The School District and its employees contribute to the Teachers' Pension Plan and Municipal Pension Plan, jointly trusteed pension plans. The boards of trustees for these plans represent plan members and employers and are responsible for managing the pension plans including investing assets and administering benefits. The pension plans are multi-employer defined benefit pension plans. Basic pension benefits provided are based on a formula. As at December 31, 2017, the Teachers' Pension Plan has 46,455 active members and 49,970 retired and inactive members. As at December 31, 2017 the Municipal Pension Plan has 197,279 active members and 135,700 retired and inactive members. Every three years, an actuarial valuation is performed to assess the financial position of the plans and adequacy of plan funding. The actuary determines an appropriate combined employer and member contribution rate to fund the plans. The actuary's calculated contribution rate is based on the entryage normal cost method, which produces the long-term rate of member and employer contributions Page 17

School District No. 48 (Sea to Sky) Notes To Financial Statements sufficient to provide benefits for average future entrants to the plans. This rate is then adjusted to the extent there is any amortization of any funding deficit. The most recent actuarial valuation of the Teachers' Pension Plan as at December 31, 2014 indicated a 500 million funding surplus for basic pension benefits. The results of valuation as at December 31, 2017 will be available in late 2018 and published in next year's annual report. The most recent actuarial valuation for the Municipal Pension Plan as at December 31, 2015 indicated a 2.2 billion funding surplus for basic pension benefits. The next valuation will be as at December 31, 2018 with results available in fall 2019. Employers participating in the Plan record their pension expense as the amount of employer contributions made during the fiscal year ( defined contribution pension plan accounting). This is because the Plan records accrued liabilities and accrued assets for the Plan in aggregate with the result that there is no consistent and reliable basis for allocating the obligation, assets and cost to individual employers participating in the Plan. The School District paid 4,467,837 for employer contributions to the plan in the year ended June 30, 2017 (4,103,930 in 2017). NOTE 12 INTERFUND TRANSFERS During the year the School District transferred 426,599 to the capital fund: 376,421 for the acquisition of equipment, and 50,178 for vehicles. NOTE 13 RELATED PARTY TRANSACTIONS The School District is related through common ownership to all Province of British Columbia ministries, agencies, school districts, health authorities, colleges, universities, and crown corporations. Transactions with these entities, unless disclosed separately, are considered to be in the normal course of operations and are recorded at the exchange amount. NOTE 14 CONTRACTUAL OBLIGATIONS The School District has entered into a number of multiple year contracts for the delivery of services. 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. Photocopier Operating Lease Cost - Xerox June 30, 2019 104,149 June 30, 2020 Thereafter 104,149 104,149 NOTE 15 BUDGET FIGURES Budget figures included in the financial statements were approved by the Board through the adoption of an annual budget on June 14, 2017. Page 18

School District No. 48 (Sea to Sky) Notes To Financial Statements NOTE 16 EXPENSE BY OBJECT June 30, 2018 June 30, 2017 Salaries and benefits Services and supplies Amortization 46,573,138 9,816,904 2,787,540 59,177,582 43,394,046 9,099,859 2,653,803 55,147,708 NOTE17 INTERNALLY RESTRICTED SURPLUS - OPERA TING FUND June 30, 2018 June 30, 2017 Internally Restricted (Appropriated) by the School District for: Teacherage Reserve 131,075 131,075 Construction Education Program 250,000 0 Appropriated in Budget Bylaw 161,155 32,000 School Operating Funds 147,591 (36,798) Student Leaming Grant 0 241,034 Indigenous Language Leaming Policy/Curriculum 6,571 0 SOGI Program 1,390 0 School Generated Funds 892,236 810,236 Vancouver Coastal Health 0 6,650 Whistler Blackcomb Foundation 0 15,000 Community Foundation of Whistler 0 7,500 Community Leaming Programs 10,445 32,129 Professional Development Funds 94,237 55,933 Provincial Education Plan 95,769 47,451 Career Education Society Program 38,862 6,054 Aboriginal Education Targeted Funds 39,191 76,123 Eagle Eye Theatre Reserve 10,952 38,617 DPAC Budget 4,653 4,153 Total Internally Restricted 1,884,127 1,467,157 Unrestricted Operating Surplus 1,989,480 1,289,586 Total Available for Future Operations 3,873,607 2,756,743 NOTE 18 ASSET RETIREMENT OBLIGATION Legal liabilities may exist for the removal or disposal of asbestos in schools that will undergo major renovations or demolition. The value of the liability for asbestos removal or disposal will be recognized in the period in which a reasonable estimate of fair value can be made. As at June 30 th, 2018 the liability is not reasonably determinable. Page 19

School District No. 48 (Sea to Sky) Notes To Financial Statements NOTE 19 ECONOMIC DEPENDENCE The operations of the School District are dependent on continued funding from the Ministry of Education and various governmental agencies to carry out its programs. These financial statements have been prepared on a going concern basis. NOTE20 RISK MANAGEMENT The School District has exposure to the following risks from its use of financial instruments: credit risk, market risk and liquidity risk. The Board ensures that the School District has identified its risks and ensures that management monitors and controls them. a) Credit risk: Credit risk is the risk of financial loss to an institution if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Such risks arise principally from certain financial assets held consisting of cash, amounts receivable and investments. The School District is exposed to credit risk in the event of non-performance by a borrower. This risk is mitigated as most amounts receivable are due from the Province and are collectible. It is management's opinion that the School District is not exposed to significant credit risk associated with its cash deposits as they are placed in recognized British Columbia financial institutions. b) Market risk : Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of currency risk and interest rate risk. Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the foreign exchange rates. It is management's opinion that the School District is not exposed to significant currency risk, as amounts held and purchases made in foreign currency are insignificant. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The School District is exposed to interest rate risk through its cash deposits. It is management's opinion that the School District is not exposed to significant interest rate risk as cash deposits are placed in chequing and interest bearing deposit accounts with the Province of BC and earn nominal interest. c) Liquidity risk: Liquidity risk is the risk that the School District will not be able to meet its financial obligations as they become due. Page 20

School District No. 48 (Sea to Sky) Notes To Financial Statements The School District manages liquidity risk by continually monitoring actual and forecasted cash flows from operations to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the School District's reputation. The School District has a revolving credit facility agreement with its financial institution to borrow up to 1,075,000 for operating fund purposes. Risk Management and insurance services for all school districts in British Columbia are provided by the Risk Management Branch of the Ministry of Finance. NOTE21 SUPPLEMENTARY CASH FLO\V INFORMATION Interest received during the year was 195,604 (122,004 in 2017). Interest received is derived from interest on the Operating Account Balance 76,397 (33,974 in 2017) and from investment in the Ministry of Finance's Central Deposit Program 119,207 (88,030 in 2017). Page 21

Schedule of Changes in Accumulated Surplus (Deficit) by Fund Schedule 1 (Unaudited) Accumulated Surplus (Deficit), beginning of year Changes for the year Surplus (Deficit} for the year lnterfund Transfers Local Capital Net Changes for the year Accumulated Surplus (Deficit), end of year - Statement 2 Operating Special Purpose Fund Fund 2,756,743 1,543,463 (426,599) 1,116,864 3,873,607 - Capital 2018 2017 Fund Actual Actual 10,260,006 13,016,749 11,851,967 (547,070} 996,393 1,164,782 426,599 (1 0,471_) --- _996,393J,164,782 10,139,535 14,013,142 13,016,749 Version: 6108-5362-3380 Page 22

Schedule of Operating Operations Revenues Provincial Grants Ministry of Education Tuition Other Revenue Rentals and Leases Investment Income Total Revenue Expenses Instruction District Administration Operations and Maintenance Transportation and Housing Total Expense Operating Surplus (Deficit) for the year Budgeted Appropriation (Retirement) of Surplus (Deficit) Net Transfers (to) from other funds Local Capital Total Net Transfers Total Operating Surplus (Deficit), for the year Operating Surplus (Deficit), beginning of year Operating Surplus (Deficit), end of year Operating Surplus (Deficit), end of year Internally Restricted (Note I 7) Unrestricted Total Operating Surplus (Deficit), end of year 2018 Budget 46,393,572 2,710,500 333,900 285,000 86,525 49,809,497 38,342,301 3,001,191 6,883,165 1,407,874 49,634,531 174,966 91,534 (266,500) (266,500) 2018 2017 Actual Actual Schedule 2 (Unaudited) 47,732,863 45,828,531 2,777,142 3,073,885 841,425 1,278,502 329,541 282,571 195,604 122,004 51,876,575 50,585,493 38,940,432 38,062,232 2,634,943 2,457,127 7,452,218 7,229,940 1,305,519 1,185,220 50,333,112 48,934,519 1,543,463 1,650,974 (426,599) (565,582) (426,599) (565,582) 1,116,864 1,085,392 2,756,743 1,671,351 3,873,607 2,756,743 1,884,127 1,467,157 1,989,480 1,289,586 3,873,607 2,756,743 Version: 6108-5362-3380 Page 23

Schedule of Operating Revenue by Source Provincial Grants - Ministry of Education Operating Grant, Ministry of Education Other Ministry of Education Grants Pay Equity Funding for Graduated Adults Transportation Supplement Economic Stability Dividend Return of Administrative Savings Carbon Tax Grant Student Leaming Grant FSA Scoring Grant Other ministry of Education Grants Enrollment Adjustments Total Provincial Grants - Ministry of Education Tuition International and Out of Province Students International Program Medical Fees Total Tuition Other Revenues Other School District/Education Authorities Miscellaneous Contributions from Schools & PACs Donations International Program Ancillary Revenue Grants from Others Sale of Assets & Other Revenue School Generated Funds Total Other Revenue Rentals and Leases Investment Income Total Operating Revenue 2018 Budget 45,365,342 371,793 265,534 224,674 52,500 8,696 105,033 46,393,572 2,535,000 175,500 2,710,500 177,600 12,000 97,500 46,800 333,900 285,000 86,525 49,809,497 2018 2017 Actual Actual Schedule 2A (Unaudited) 46,747,408 44,591,073 371,793 371,793 8,948 856 265,534 265,534 29,886 25,554 224,674 224,674 47,783 97,826 241,034 8,187 8,187 28,650 2,000 47,732,863 45,828,531 2,572,292 2,883,445 204,850 190,440 2,777,142 3,073,885 185,890 189,620 145,132 132,297 76,343 85,157 229,634 193,285 90,966 152,485 32,030 77,399 81,430 448,259 841,425 1,278,502 329,541 282,571 195,604 122,004 51,876,575 50,585,493 Version: 6108-5362-3380 Page 24

Schedule of Operating Expense by Object Salaries Teachers Principals and Vice Principals Educational Assistants Support Staff Other Professionals Substitutes Total Salaries Employee Benefits Total Salaries and Benefits Services and Supplies Services Student Transportation Professional Development and Travel Rentals and Leases Dues and Fees Insurance Supplies Utilities Total Services and Supplies Total Operating Expense 2018 Budget 19,608,550 3,256,170 2,277,065 4,675,591 1,917,821 1,140,000 32,875,197 9,305,504 42,180,701 1,748,960 544,400 873,196 186,493 588,296 165,000 1,799,265 1,548,220 7,453,830 49,634,531 2018 2017 Actual Actual Schedule 28 (Unaudited) 19,544,688 19,521,360 3,222,170 3,176,555 2,874,880 2,621,915 5,134,672 5,038,383 1,876,061 1,844,880 1,585,498 1,300,313 34,237,969 33,503,406 8,448,766 8,277,419 42,686,735 41,780,825 1,705,207 1,867,193 462,535 419,820 929,250 779,722 206,703 205,927 431,778 489,107 185,975 190,131 2,278,217 1,892,706 1,446,712 1,309,088 7,646,377 7,153,694 50,333,112 48,934,519 Version: 6108-5362-3380 Page 25

Operating Expense by Function, Program and Object 1 Instruction 1.02 Regular Instruction I.03 Career Programs I.07 Library Services 1.08 Counselling I. IO Special Education 1.30 English Language Leaming 1.31 Aboriginal Education I.41 School Administration I.62 International and Out of Province Students 1.64 Other Total Function 1 4 District Administration 4. I I Educational Administration 4.40 School District Governance 4.4 I Business Administration Total Function 4 5 Operations and Maintenance 5.41 Operations and Maintenance Administration 5.50 Maintenance Operations 5.52 Maintenance of Grounds 5.56 Utilities Total Function 5 7 Transportation and Housing 7.70 Student Transportation Total Function 7 9 Debt Services Total Function 9 Total Functions 1-9 Principals and Teachers Vice Principals Salaries Salaries 15,166,582 815,142 105,636 517,639 593,973 13,768 2,360,065 110,146 694,153 5,507 69,528 138,283 1,769,278 299,222 37,112 70,824 19,544,688 3,222,170-19,544,688 _hl, J7_() Educational Support Other Assistants Staff Professionals Substitutes Total Salaries Salaries Salaries Salaries Salaries Schedule 2C (Unaudited) 264,863 215,549 1,230,339 17,692,475 29,270 8,569 143,475 89,660 41,992 649,291 20,653 48,184 676,578 2,520,357 191,452 5,182,020 56,31 I 755,971 51,877 5,640 265,328 578,564 3,011 2,350,853 80,586 105,190 484,998 107,936 2,874,880 976,499 105,190 1,585,498 28,308,925 11,384 670,228 681,612 109,139 109,139-235,479 688,906 924,385 246,863 1,468,273 1,715,136 135,750 221,232 356,982 2,943,226 81,366 3,024,592 187,331 187,331 3,266,307 302,598 3,568,905 645,003 645,003 645,003 645,003 2,874,880 5,134,672 1,876,061 1,585,498 34,2J7,969 Version: 6108-5362-3380 Page 26