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AUDITOR REPORT To the Members of the Legislative Assembly

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AUDITOR REPORT To the Members of the Legislative Assembly Powered By Docstoc
					                                           AUDITOR'S REPORT


To the Members of the Legislative Assembly of Saskatchewan

I have audited the statement of financial position of the Saskatchewan Student Aid Fund as at March 31,
2004 and the statements of revenue, expenditure and net financial assets, and cash flows for the year
then ended. The Fund's management is responsible for preparing these financial statements for
Treasury Board's approval. 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 plan and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of
the Fund as at March 31, 2004 and the results of its operations and its cash flows for the year then ended
in accordance with Canadian generally accepted accounting principles.




Regina, Saskatchewan                                                       Fred Wendel, CMA, CA
May 13, 2004                                                               Provincial Auditor
                                                                                        Statement 1


                           SASKATCHEWAN STUDENT AID FUND
                           STATEMENT OF FINANCIAL POSITION
                                   As At March 31


                                                                       2004              2003
FINANCIAL ASSETS
Financial Assets:

               Due from General Revenue Fund (Note 8)              $   40,128,833   $    61,651,240
               Accrued Interest                                           157,790          246,383
               Other Receivables                                        2,377,061         1,893,428
               Student Loans Receivable (Note 7)                       56,445,339        40,115,216


Total Financial Assets                                             $   99,109,023   $   103,906,267



LIABILITIES AND NET FINANCIAL ASSETS
Liabilities:

               General Revenue Fund Interest Payable               $      710,731   $      584,461
               General Revenue Fund Loan (Note 9)                      83,239,602        86,239,602
               Due to Royal Bank of Canada (Note 5)                     6,688,310         9,641,463
               Bursaries and Study Grants Payable (Note 6)              1,624,857         2,744,611
               Other Accounts Payable                                     307,012          486,681


Total Liabilities                                                  $   92,570,512   $    99,696,818


Net Financial Assets (Statement 2)                                      6,538,511         4,209,449


                                                                   $   99,109,023   $   103,906,267




                           (See accompanying notes to financial statements)
                                                                                                  Statement 2
                              SASKATCHEWAN STUDENT AID FUND
                 STATEMENT OF REVENUE, EXPENDITURE AND NET FINANCIAL ASSETS
                                  For the Year Ended March 31
                                                         BUDGET          ACTUAL 2004                 2003
REVENUE:
 Appropriation from General Revenue Fund             $   37,120,000      $     30,520,000     $    17,244,000
 Grant – Federal Canada Study                             5,818,000             5,521,767           5,230,592
 Interest Payments from General Revenue Fund                970,000               963,828           1,254,085
 Interest on Student Loans                                1,275,000             1,966,891           1,149,832
 Loan Discount Amortization                               2,800,000             2,641,658           1,411,336
 Recovery of Bad Debt Allowance                                  ---              352,498             305,494
 Other Income                                               150,000               293,025             218,411
                                                         48,133,000            42,259,667          26,813,750
EXPENDITURE:
 Loan Forgiveness Grants                             $           ---     $         97,865     $        81,492
 Saskatchewan Student Bursaries                          17,525,000            15,694,847          15,878,910
 Saskatchewan Study Grants                                4,620,000             3,948,358           3,708,257
 Canada Study Grants – Students with Dependents           4,818,000             4,106,685           4,103,607
 Federal Canada Study Grants – Other                      1,000,000             1,415,082           1,126,985
 Provincial Canada Study Grants - Other                     300,000               114,860             135,721
 Special Incentive Loan Remissions                        2,500,000             2,252,680           2,120,172
 Risk Premium                                                    ---             (259,923 )            18,477
 Loan Guarantee                                                  ---               (5,442 )           111,088
 Debt Reduction in Repayment                                 50,000                62,408             214,759
 Permanent Disability/Death Benefit                         250,000               525,399             169,290
 Interest Relief Grants                                   1,300,000               574,115             149,364
 Class A Interest – Royal Bank Loans                             ---             (910,109 )        (1,511,981 )
 Bad Debt Expense                                         5,800,000             4,709,567           5,655,824
 Interest Grants to Students                              4,100,000             3,258,749           3,415,150
 Interest on General Revenue Fund Loan                    3,819,000             2,735,587           2,418,805
 Collection Costs                                           300,000                60,998             115,969
 Service Provider Fees                                    1,050,000               811,280             680,497
 Interest Payments - Medical Students                        40,000                25,049                  ---
 Bursaries and Scholarships                                 661,000               712,550             711,400
                                                         48,133,000            39,930,605          39,303,786

Increase in Net Financial Assets for the Year        $            ---    $      2,329,062     $ (12,490,036 )
Net Financial Assets, Beginning of Year                   4,209,449             4,209,449          16,699,485
Net Financial Assets, End of Year to Statement 1     $    4,209,449      $      6,538,511     $     4,209,449


                            (See accompanying notes to financial statements)
                                                                                                Statement 3

                           SASKATCHEWAN STUDENT AID FUND
                              STATEMENT OF CASH FLOWS
                               For the Year Ended March 31



                                                                         2004                    2003
Cash Provided by (used in) Operating Activities:


   Excess of Revenue over Expenditure                               $     2,329,062        $ (12,490,036 )


   Change in Non-Cash Working Capital Items:
       Decrease in Accrued Interest                                            88,593                3,730
       Decrease in Appropriation Due from General Revenue Fund                      ---         1,300,000
       (Increase) in Other Receivables                                        (483,633 )        (1,827,139 )
       (Increase) in Student Loans Receivable                           (16,330,123 )          (14,575,064 )
       Increase in General Revenue Fund Interest Payable                      126,270             186,270
       (Decrease) in Due to Royal Bank of Canada                         (2,953,153 )           (6,426,955 )
       (Decrease) Increase in Bursaries and Grants Payable               (1,119,754 )              95,343
       (Decrease) in Other Accounts Payable                                   (179,669 )          (258,093 )
   Net Change in Non-Cash Working Capital Items                    $    (20,851,469 )      $ (21,501,908 )


   Financing Activities:
       (Decrease) Increase in General Revenue Fund Loan Payable $        (3,000,000 )      $   23,449,999
   Net Change in Financing Activities                              $     (3,000,000 )      $   23,449,999


Net (Decrease) in Due from General Revenue Fund                         (21,522,407 )          (10,541,945 )


Due from General Revenue Fund, Beginning of Year                        61,651,240             72,193,185


Due from General Revenue Fund, End of Year                          $   40,128,833         $   61,651,240




                           (See accompanying notes to financial statements)
                   SASKATCHEWAN STUDENT AID FUND
                  NOTES TO THE FINANCIAL STATEMENTS
                             March 31, 2004

1. Authority                                      •   A Remission benefit for Special
                                                      Incentive Students provides a maximum
The Saskatchewan Student Aid Fund (the                of $200 per week of study for the first 60
Fund) operates under the authority of The             weeks of post-secondary schooling ever
Student Assistance and Student Aid Fund               taken.
Act, 1985. The primary purpose of the Fund
is to support the Saskatchewan Student            •   Debt Reduction in Repayment provides
Assistance Program. The Department of                 a one-time reduction of student loan
Learning (the Department) administers the             payable to a maximum of $3,000 for
Fund and the Saskatchewan Student                     borrowers who have been granted the
Assistance Program.                                   maximum allowable interest relief
                                                      benefits available and continue to
2. Description of the Program                         experience financial hardship.

Under the terms of the Saskatchewan               •   A provision for borrowers with
Student Assistance Program, student loans             Permanent Disabilities provides loan
are provided to qualifying individuals based          forgiveness to borrowers who suffer
on a determination of need. Loans are                 from a permanent disability that impairs
interest-free while the student is in full-time       the borrower’s ability to repay their loan.
studies. They become repayable on the                 The permanent disability must have
first day of the seventh month following              been sustained while in a period of study
discontinuance of studies or graduation,              or before the first day of the seventh
however, interest begins to accrue on the             month after the borrower ceases to be a
first day of the first month following                full-time student.
discontinuance of studies or graduation.
                                                  Special incentive loan remission grants are
There are five debt reduction benefits            available to disadvantaged students;
offered through the Fund:                         Saskatchewan Student Bursaries and
                                                  Canada/Saskatchewan Study Grants are
•   The Saskatchewan Student Bursary              granted to all borrowers who meet the
    provides a bursary to all students with a     requirements specified by the
    need over $200 per week up to $275            Saskatchewan Student Assistance Program
    per week in the borrower’s first 170          Administrative Guidelines. If the value of
    weeks of post-secondary study ever            loan remission grants exceed the borrower’s
    taken.                                        loan balance, the excess is applied to their
                                                  Canada Student Loan.
•   The Canada/Saskatchewan Study
    Grants provide grants to students with
    dependants to cover their need between
    $275 per week and $400 per week.
                                                -2-

The Debt Reduction in Repayment and                   retained responsibility for loan approval.
Provision for Borrowers with Permanent                The Agreement covered loans approved
Disabilities benefits were introduced in the          between August 1, 1996 and July 31, 2001.
2001/02 fiscal year in conjunction with the           As part of the Agreement, students who had
signing of the Canada–Saskatchewan                    previously received provincially funded
Integration Agreement for the                         loans and who were still in school, had their
Harmonization and Administration of                   loan balances transferred to the Royal Bank
Federal and Provincial Student Loan                   when the Department approved their new
Programs as described below.                          Royal Bank loans.

Interest relief grants are provided to                The Department negotiated an additional
borrowers in repayment who are unable to              agreement with the Royal Bank to transfer
meet their repayment obligations due to               to the Royal Bank substantially all of the
financial hardship. Applicants are eligible           loans held by the Fund. This agreement
for these grants for 54 months.                       came into effect on October 1, 1997 and
                                                      remained in force until December 31, 1999.
In addition to debt reduction benefits                Borrowers who were not in default, had
granted to students to reduce their debt              more than seven monthly payments still
levels upon consolidation of their loans, the         owing and were not on interest relief were
Fund provides student assistance by                   eligible to be transferred. Borrowers who
holding student loans in interest free status         had their loans transferred to the Royal
during periods of study and for a maximum             Bank retain the rights associated with their
of six months between periods of study.               loans (i.e. interest rate, repayment term and
                                                      interest relief eligibility were transferred with
In May 1999, the Province of Saskatchewan             the loan). Loans held by the Royal Bank
signed a ten year agreement with the                  are eligible for all of the debt reduction
Canada Millennium Scholarship Foundation.             benefits of the Saskatchewan Student
For the 2003/04 loan year, this agreement             Assistance Program including the new
will provide approximately $9,300,000 in              benefits introduced with the signing of the
millennium bursaries to approximately 3,000           Canada-Saskatchewan Integration
Saskatchewan post-secondary students.                 Agreement.

Prior to August 1, 1996, the Province                 In addition to debt reduction benefits to be
provided funding for student loans, and all           applied against borrower loans as described
loan administration was undertaken by staff           above, the Fund pays to the Royal Bank
of the Department. Under a Risk Sharing               costs associated with maintaining lender
Student Loans Agreement (the Agreement)               financed loans in interest free status while
signed between the Department and the                 students are in school, interest relief
Royal Bank of Canada on March 12, 1996,               benefits granted to borrowers experiencing
the Royal Bank became the financier of                financial hardship in the repayment of their
student loans and assumed responsibility              loans, and a 5% risk premium upon
for the disbursement, management and                  consolidation of individual student loans.
collection of student loans. The Department
                                               -3-

On June 19, 2001, the Province entered into
an agreement with the Government of                  b) Use of Estimates
Canada to integrate the delivery and
administration of Canada and                            The preparation of financial statements
Saskatchewan student loans. The Canada-                 in accordance with Canadian generally
Saskatchewan Integration Agreement for                  accepted accounting principles requires
the Harmonization and Administration of                 management to make estimates and
Federal and Provincial Student Loans                    assumptions that affect the reported
Programs became effective August 1, 2001.               amounts of assets and liabilities at the
In conjunction with the agreement, the                  date of the financial statements and the
Department provides loan authorization for              reported amounts of revenues and
both Saskatchewan and Canada student                    expenditures during the reporting period.
loans, and the Province is re-established as            Actual results could differ from those
the financier of Saskatchewan student                   estimates.
loans. On behalf of the Department and the
Government of Canada, two external                      Measurement uncertainty impacts Due
agencies manage the disbursement,                       to the Royal Bank of Canada (Note 5),
administration and repayment of integrated              Bursaries and Grants Payable (Note 6)
student loans. On behalf of the Province,               and Student Loans Receivable (Note 7).
Human Resources and Skills Development
Canada (HRSD) is responsible for the
collection of bankrupt and defaulted loans.          c) Student Loans Receivable

Student benefits associated with the                    Student loans are carried at the amount
Saskatchewan Student Assistance Program                 advanced plus accrued interest. Simple
as described above are applicable to                    interest is charged on loans following
Canada/Saskatchewan integrated loans. In                the interest-free in school period.
addition to student benefits paid by the                Payments on loans are first applied to
Fund, Canada Millennium bursaries are                   interest, then to outstanding principal.
funded by the Canada Millennium
Scholarship Foundation and are applied                  For loans held by the Fund, allowances
against student loan balances.                          are deducted from loans receivable for
                                                        the following:

3. Significant Accounting Policies                      i)     estimated uncollectible loans due to
                                                               default on repayment, based on
The financial statements are prepared in                       past collection experience;
accordance with Canadian generally
accepted accounting principles. The                     ii)    the amount of concessionary grant
following accounting policies are considered                   associated with holding student
significant:                                                   loans in interest free status; and

a) Accrual Basis                                        iii)   estimated debt reduction benefits.

   The financial statements are prepared
   on the accrual basis of accounting.
                                                -4-

4. Loans Held by the Student Aid                      The recorded allowance for uncollectible
   Fund                                               loans for loans issued subsequent to July
                                                      31, 2001 is $14,096,888 (2003 –
Loans held by the Fund consist of amounts             $9,143,807). Variability on the recorded
owing by borrowers for loans granted prior            allowance is approximately $705,000 per
to the Canada-Saskatchewan Integration                1% change in estimated default rate (2003 –
Agreement (2004 – $3,809,524; 2003 -                  $457,000 per 1% change).
$5,415,876), and subsequent to the
integration agreement (2004 – $95,634,023;            Loans in repayment are subject to interest
2003 – $70,125,103). Loans issued prior to            rate risk related to repayment terms. The
the Canada-Saskatchewan Integration                   current portfolio of loans in repayment have
Agreement ($3,809,524) include $498,361               effective interest rates of 5.00% to 12.00%
in payouts made to the Royal Bank during              (2003 – 5.00% to 12.00%). Under The
the period October 1, 1997 to March 31,               Student Assistance and Student Aid Fund
2004 under the Risk Sharing Student Loans             Regulations, 1990, the Minister charges
Agreement. These payments were made in                interest rates as set pursuant to the Canada
instances where students declared                     Student Loans Act.
bankruptcy prior to loan consolidation.
                                                      There are two methods that have been used
These loans were not previously recognized
                                                      by the Minister to determine interest rates.
as Loans Held by the Student Aid Fund.
                                                      Firstly, each year in August, the Federal
                                                      government sets the interest rates to be
The Fund is exposed to credit-related
                                                      charged for students graduating during the
losses in the event that borrowers default on
                                                      next 12 months. This rate is based on
repayment of their student loans. Credit risk
                                                      average open market yield for the previous
represents the maximum amount at risk if
                                                      6 months on mid-term (5-10 years)
the borrowers defaulted on their
                                                      Government of Canada bonds plus 1%.
repayments. The Fund’s credit risk on
                                                      Rates determined in this manner have
student loans receivable is represented by
                                                      applicability to loans issued prior to the
Gross Student Loans Receivable, end of
                                                      Royal Bank agreement.
year in Note 7.
                                                      For loans issued under the Canada-
The recorded allowance for uncollectible
                                                      Saskatchewan integration agreement,
loans for loans issued prior to August 1,
                                                      interest rates are set at the option of the
2001 is $2,590,432 (2003 – $3,941,553).
                                                      student either at prime plus 2.5% (floating
This allowance could reasonably be
                                                      rate) or prime plus 5.0% (fixed rate) at the
expected to fluctuate between $1,967,000
                                                      time of loan consolidation.
and $2,291,000 within the next twelve
months (2003 – $3,725,766 and
$4,139,658).
                                                    -5-

Interest rates for consolidated loans are as follows:


                                                              2004                               2003
                                                             Total                              Total
            Interest Rate                                   Balance                            Balance

   Less than 8.0%                                       $   22,660,998                     $    8,877,912
   8.0%-8.9%                                                 1,420,211                          2,248,412
   9.0%-9.9%                                                 1,265,633                          2,326,266
   10.0%-10.9%                                                  80,595                            140,355
   11.0% or greater                                            120,464                            151,459

   Loans Consolidated (Note 7)                          $   25,547,901                     $ 13,744,404




The fair value and repayment period of                      rate of interest. In 2004, the estimated
loans receivable have not been disclosed                    projected market rate of interest is 4.55%
because it is not practicable to determine                  (2003 – 6.13%). It is reasonable to expect
the loan repayments with sufficient                         this interest rate to fluctuate between 4.30%
reliability. There are a number of factors                  and 4.80% over the next 12 months (2003 –
needed to estimate the timing and the                       5.88% to 6.38%).
amount of loan repayments. These factors
include the Fund’s historical experience,
applications for interest relief, debt                      Interest Relief Accrual
reduction, economic conditions, and the
necessity to rely on the actions of a large                 Interest relief is paid to the bank at the
number of individuals.                                      lender prime rate of interest in effect at the
                                                            time the borrower applies for relief. It is
                                                            estimated that the interest relief accrual will
5. Due to Royal Bank of Canada                              be paid to the bank on behalf of applicants
                                                            over an eleven-year period, and at the
The Fund estimates amounts due to the                       projected market rate.
Royal Bank. Estimation is a factor in the
following:
                                                            Risk Premium Accrual

Class A Interest Accrual                                    A risk premium equal to 5% of borrowers’
                                                            outstanding loan balance is paid to the bank at
Currently, interest accruing on student loans               the time each student loan becomes repayable.
                                                            The accrual is an estimate of future risk
is not paid by the borrower as long as the
                                                            premiums associated with loans of borrowers
borrower is in school. The Fund pays this                   currently in school. This estimate is calculated
interest to the Royal Bank. The interest                    after considering potential debt reduction
accrual is an estimate, based on the current                benefits, and the capitalization of student loan
loan receivable balance of students in                      interest at the time of consolidation.
school, the projected time that students will
remain in school, and the projected market
                                                   -6-

Special Incentive Loan Remission and Loan                Permanent Disability Accrual
Forgiveness Grant Accrual
                                                         The Permanent Disability benefit provides
The Fund will pay the Royal Bank expected                loan forgiveness to borrowers who become
future special incentive loan remission                  permanently disabled while in a period of
grants and any outstanding loan forgiveness              study or before the first day of the seventh
grants. An estimate of the total percentage              month after the borrower ceases to be a full-
of students that will qualify for these grants           time student. The accrual is an estimate of
is used to determine these accruals.                     future costs based on historical utilization.


Loan Guarantee Accrual                                   Debt Reduction in Repayment

The Fund guarantees loans in the event of                This benefit provides a one-time reduction
death or bankruptcy of the borrower if the               in student loan payable to a maximum of
event occurs prior to loan consolidation.                $3,000 for borrowers experiencing financial
The amount paid to the bank is equal to the              hardship. The accrual is an estimate of
loan balance outstanding on the date of                  future costs based on actuarial estimates.
death or bankruptcy. The accrual is an
estimate of future costs based on historical             These accruals could reasonably be
trends.                                                  expected to fluctuate within the next twelve
                                                         months as follows:




                                                           2004                           2003 Actual
                                             Actual          Range of Accruals

 Class A Interest Loans Accrual             $1,219,859     $1,151,000 to 1,289,000         $2,837,274
 Interest Relief Accrual                     2,107,255      1,450,000 to 2,766,000          2,323,955
 Risk Premium Accrual                         719,958               n/a                     1,289,625
 Special Incentive Loan Remission Accrual    1,011,908        863,000 to 1,160,000          1,366,182
 Loan Forgiveness Accrual                    1,100,745        431,000 to 1,159,000          1,105,449
 Loan Guarantee Accrual                       150,963               n/a                       274,739
 Permanent Disability Accrual                 189,213          148,000 to 231,000             234,443
 Debt Reduction in Repayment Accrual          174,199          133,000 to 216,000             198,174
                                            $6,674,100                                     $9,629,841
 Saskatchewan Student Bursaries                 8,582               n/a                         9,120
 Canada Study Grants                            1,942               n/a                           962
 Saskatchewan Study Grants                      3,686               n/a                         1,540

 Due to Royal Bank of Canada                $6,688,310                                     $9,641,463
                                                         -7-
6. Bursaries and Grants Payable
Bursaries and Grants Payable represents benefits earned by students which are most likely to
be applied against Canada Student Loan balances.

Included in Bursaries and Grants Payable is $1,493,876 (2003 – $2,615,973) in Special
Incentive Loan Remissions. In calculating the Loan Remission accrual, estimates of the percent
of students that will qualify for the benefit are used. The percentage used in this fiscal year is
57.25% (2003 – 59.22%). The variability in the accrual is approximately $120,000 (2003 –
$74,000) for every 1% change in the qualifying percentage.


7. Student Loans Receivable
                                                                           2004                 2003

          Loans outstanding, beginning of year                           $75,540,959         $55,337,091

Add:      New loans during the year                                       60,715,223          59,581,442
          Recognition of Royal Bank Buybacks                                 498,361                   ---
          Interest earned on student loans                                 1,946,825           1,032,363


Deduct:   Loan repayments net of payments on written off accounts          (4,270,579 )       (2,419,600 )
          Amounts authorized to reduce loans at the Service Providers     (33,407,411 )      (36,822,260 )
          Amounts authorized to reduce loans at the Royal Bank                   (38,372 )       (55,899 )
          Loans written off                                                (1,541,459 )       (1,112,178 )


          Gross student loans receivable, end of year*                   $99,443,547         $75,540,959


Deduct:   Allowance for interest relief                                    (2,018,567 )       (1,911,831 )
          Allowance for Debt Reduction in Repayment                          (157,649 )          (96,751 )
          Allowance for Permanent Disability/Death Benefit                   (538,807 )         (114,480 )
          Interest Grants to Students                                      (4,895,756 )       (4,278,665 )
          Canada Study Grants Payable                                      (2,727,148 )       (2,637,360 )
          Saskatchewan Study Grants Payable                                (2,010,636 )       (1,879,619 )
          Student Bursaries Payable                                       (11,674,236 )      (10,074,055 )
          Remission                                                        (2,288,089 )       (1,347,622 )
          Allowances estimated on prior year’s experience:
                  Allowance for uncollectible loans before recovery       (16,687,320 )      (13,085,360 )


          Student loans receivable, end of year                          $56,445,339         $40,115,216


              *Includes Consolidated Loans of $25,547,901 (2003 - $13,744,404)
                                                 -8-

Interest Grants to Students                            variability in interest relief accrual is
                                                       approximately $134,000 (2003 – $72,000).
Interest Grants to Students gives                      In calculating the Loan Remission accrual,
recognition to the benefit afforded students           estimates of the percent of students that will
by holding provincially funded loans in                qualify for the benefit are used. The
interest free status while they are in school.         percentage used in this fiscal year is
The amount of estimated benefit is                     57.25% (2002 – 59.22%). The variability in
considered to be a “concessionary grant”               the accrual is approximately $120,000
and is offset against the Student Loans                (2003 – $74,000) for every 1% change in
Receivable balance. The allowance was                  the qualifying percentage. Variability for
calculated assuming that students remain in            Debt Reduction in Repayment and
school for an average of three years, and              Provision for Borrowers with Permanent
applying the provincial government eight               Disability is not material to these
year borrowing rate which averaged 4.91%               statements.
in 2004 (2003 – 5.51%).
                                                       Saskatchewan Student Bursaries and
                                                       Saskatchewan Study Grants have been
Provisions for Other Student Benefits                  reduced by approximately $7,145,000 (2003
                                                       – $7,679,000), which is a portion of the
In addition to the Allowances for                      $9,300,000 received from the Canada
Uncollectible Loans and Interest Grants to             Millennium Scholarship Foundation.
Students, Student Loans Receivable are
offset by Saskatchewan Student Bursaries
Payable, Canada Study Grants Payable,                  8. Due from the General Revenue
Saskatchewan Study Grants Payable, and                    Fund
accruals for Interest Relief ($2,018,567),
Remission ($2,288,089), Debt Reduction in              The Fund's bank accounts are included in
Repayment ($157,649) and a Provision for               the Consolidated Offset Bank Concentration
Permanent Disability/Death Benefit                     arrangement for the Government of
($538,807). Elements of estimation pertain             Saskatchewan.
to the accruals established for Interest
Relief, Remission, Debt Reduction in                   The Fund’s earned interest is calculated
Repayment and the Provision for                        and paid quarterly by the General Revenue
Permanent Disability/Death Benefit.                    Fund to the Fund using the General
                                                       Revenue Fund's thirty day borrowing rate
For loans issued under the                             and the Fund’s average daily bank account
Canada/Saskatchewan integration                        balances.
agreement the interest relief accrual
($1,961,447) was calculated using an                   Included in this amount is $24,300 of
estimated interest rate of 7.81% (2003 –               restricted funds used for scholarships.
9.14%). For every plus or minus .50%
change in interest rate estimate, the
                                               -9-


9. General Revenue Fund Loan                         11. Millennium Trust
Effective August 1, 2001, the Province               On May 7, 1999 the Province and the
assumed responsibility for the financing of          Canada Millennium Scholarship Foundation
student loans. A loan from the General               entered into a ten-year agreement for the
Revenue Fund is provided to the Student              administration of General Awards provided
Aid Fund to support this role.                       to students by the Canada Millennium
                                                     Scholarship Foundation. Under the
The interest rate charged on the General             agreement, the Province is to receive “in
Revenue Fund Loan is at the Province’s               trust monies” to be paid to qualifying
eight year cost of borrowing. The                    students and is responsible to ensure that
Province’s average eight year cost of                the funds are properly disbursed.
borrowing rate for 2004 was 4.91% (2003 –
5.51%). Under the terms of the loan                  The funds were previously received in trust
agreement, the Student Aid Fund makes                by the Minister of Finance but beginning
quarterly loan payments to the General               with the 2002-03 loan year, payment of
Revenue Fund. The dollar amount of                   General Awards by the Canada Millennium
required loan payment is calculated as the           Scholarship foundation is received in trust
sum of debt reduction benefits applied               by the Student Aid Fund.
against student loans, the principal portion
of student payments and accounts written             Millennium funds are allocated to each
off.                                                 Province based on the Province’s share of
                                                     the population of Canada. For the 2003-04
                                                     loan year, Saskatchewan’s allocation of
10. Related Party Transactions                       Canada Millennium Scholarship General
                                                     Awards was $9,298,500. This amount is
In accordance with established government            reflected in the Foundation’s March, 2004
practice, all administrative and occupancy           approval of qualifying students as provided
costs are paid by the Department of                  to the Foundation by the Student Financial
Learning - General Revenue Fund.                     Assistance Branch.
Accordingly, no provision for these costs is
reflected in these financial statements.             At March 31, 2004 net assets held on behalf
Costs for loans sent to collection agencies          of the Canada Millennium Scholarship
are paid by the Fund. Other related party            foundation by the Student Aid Fund were
transactions are disclosed separately in             $5,577.
these financial statements.

				
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