GUIDE TO COMPLETING THE 2009-10 FINANCIAL STATEMENTS FORMS Section 68 School Authorities (Hospital Boards) GENERAL INSTRUCTIONS: 1. The Financial Statements workbook is “protected” with the exception of unshaded cells which are for data entry. 2. Any questions pertaining to this workbook are to be directed to Emily Wells at (416) 326-1155 or firstname.lastname@example.org. 3. Upon completion of the Financial Statements, please submit two hard copy printouts of the signed statements, including the auditor’s report and notes to the financial statements to: Ms. Diane Strumila Project Manager, Grant Services Financial Analysis and Accountability Branch 17th Floor, Mowat Block 900 Bay Street Toronto, Ontario M7A 1L2 4. A copy of the electronic version of the Financial Statements and notes to the financial statements should also be e-mailed to the following mailbox: email@example.com. 5. Boards are required to submit their financial statements to the ministry by December 15, 2010. NOTES TO THE FINANCIAL STATEMENTS Boards are reminded to file the management report or include a comment thereon in the notes to the financial statements. We encourage you to visit our FAAB extranet site for a listing of illustrative notes to your financial statements. They can be accessed at the following site: http://faab.edu.gov.on.ca Please select Public Sector Accounting Board (PSAB) under the left column and follow this link to the training manual section and finally, illustrative notes to your financial statements. SUMMARY OF CHANGES The following schedules have been deleted, either to conform to PSAB or because they are not applicable to Section 68 School Authorities: Schedule 2.1 – Schedule of Operating Fund Schedule 2.2 – Schedule of Capital Fund Schedule 2.3 – Schedule of Reserve Funds Schedule 2.4 – Schedule of School Activities Fund Schedule 3 – Capital Fund – Expenditures and Financing INSTRUCTIONS FOR THE COMPLETION OF FINANCIAL STATEMENTS: The 2009-10 financial statements consist of the following worksheets: 1. Cover sheet - Please select your respective board number from the “drop-down” box. 2. Table of Contents – An Index of Schedules and their respective page numbers. 3. Schedule 1 – Consolidated Statement of Financial Position - The name of this form has been changed from the Statement of Financial Position, to Consolidated Statement of Financial Position. The presentation of the form has been changed to conform to Public Sector Accounting Board (PSAB) section PS-1200 and guideline PSG-4 with respect to the presentation of funds and reserves. As per PSG-4, paragraph 7, when a government chooses to provide information about any funds or reserves, it does so only in the notes and schedules and not on the statement of financial position. Therefore the following changes have been made: The name of the difference between liabilities and financial assets (item 3) has been changed from Net Financial Asset (Liabilities), to Net Debt The name of the sum of Net Debt (item 3) and Non-Financial Assets (item 4.4) has been changed from Net Assets, to Accumulated Surplus (Deficit) Fund balances and Amounts to be recovered have been removed The information for this schedule comes from data entered on Schedule 7; no other data entry is required. 4. Schedule 1.1 – Consolidated Statement of Operations – The name of this form has been changed from Statement of Financial Activities to Consolidated Statement of Operations. The presentation of the form has been changed to conform to PSAB sections PS-1200 and PSG-4 with respect to the presentation of funds and reserves. This statement shows the revenues and expenses, and calculates the annual and accumulated surplus/(deficit). The 2009-10 Actual column is populated from data entered on Schedules 5, 9, and 10. The 2008-09 Actual and 2009-10 Budget columns must be entered by the board. 2009-10 Budget Restatement (for financial statements comparative purposes): Boards did not budget specifically for the Tangible Capital Assets (TCA), and for amortization, therefore certain balances under the 2009-10 Budget column need to be restated for the 2009-10 Financial Statements per PS1200. The following budgeting reconciliations are required for the 2009-10 Financial Statements: Item 3.1 – Accumulated Surplus / (Deficit) at beginning of year: The accumulated surplus is made up of the fund balances (generally positive/surplus) and amounts to be recovered (ATBR) balances (generally negative/deficit). Boards did not budget for the amounts to be recovered (ATBR), therefore, boards will have to use the actual 2008-09 financial statement closing balance to restate the 2009-10 budget opening balance. Boards did budget their fund balances, so the fund balance will come from the 2009-10 Estimates. Boards also did not budget for the change in accounting policy (PS3150). The impact of this is that the implementation of TCA will increase the accumulated surplus by the net TCA balance at September 1, 2009. The actual number will be used, since a budget amount is not available. The restated amount is calculated as: Budget - From 2009-10 Estimates Operating Fund Sept 1, 2009 XX Capital Fund Sept 1, 2009 XX Reserve Fund Sept 1, 2009 XX School Activities Fund Sept 1, 2009 XX Actual - From 2008-09 Financial Statements ATBR – Total amount at Aug 31, 2009 (XX) Actual - From 2009-10 Financial Statements Net Book Value of TCA – Sept 1, 2009 XX Accumulated Surplus/(Deficit) at the beginning of year (restated) XX To help locate the above balances see Table 1 below. Table 1 – Location of required balances for restatement of Item 3.1 (Accumulated Surplus/(Deficit) at beginning of year Required Balance Where to locate balance Forms Schedule Item/Column Operating Fund Sept 1, 2009 2009-10 Estimates Schedule 2.1 - Item 8.1 Schedule of Operating Fund Capital Fund Sept 1, 2009 2009-10 Estimates Schedule 2.2 – Item 7.1 Schedule of Capital Fund Reserve Fund Sept 1, 2009 2009-10 Estimates Schedule 2.3 – Item 4.1 Schedule of Reserve Funds School Activities Fund Sept 1, 2009 2009-10 Estimates Schedule 2.4 – Item 5.1 Schedule of School Activities ATBR – Total amount – Aug 31, 2008-09 Financial Schedule 1 – Item 7 Col. 2008-09 2009 Statements Statement of Financial Position Net book value of TCA – Sept 1, 2009-10 Financial Schedule 3C – Net Opening Balance at 2009 Statements Book Value Sept 1 Column, Total NBV item Item 2.4 Pupil Accommodation (2009-10 Budget): Boards are required to restate the 2009-10 Budget Column for the Pupil Accommodation expense (item 2.4). Please note that this restatement will not be applicable to Authorities that did not capitalize any assets in the 2009-10 Estimates or Financial Statements. For the 2009-10 Budget (Restated) boards will need to restate the pupil accommodation expense based on their pupil accommodation expenditure from the 2009-10 Estimates, using their estimated TCA expenditures from Schedule 3 (Column 0.1.1) of the 2009-10 Estimates (not applicable to Section 68 School Authorities), and their actual minor TCA additions, amortization and write downs from Schedule 3C of the 2009-10 Financial Statements. The restated amount is calculated as: Budget - From 2009-10 Estimates Pupil accommodation expenditure XX Less: Estimated Capital Expenditures (XX) Actual - From 2009-10 Financial Statements Less: Minor TCA additions (XX) Plus: Amortization and write downs XX Restated – Pupil Accommodation Expense XX To help locate the above balances see Table 2 below. Table 2 – Location of required balances for restatement of 2009-10 Budget, item 2.5 Required Balance Where to locate balance Forms Schedule Item/Column Pupil accommodation expenditure 2009-10 Estimates Schedule 1.1 – Item 2.5, 2009-10 Statement of Financial Budget Column Activities Estimated Capital Expenditures 2009-10 Estimates Schedule 3 – Capital Total of Column 0.1.1 Fund – Page 1 - Expenditures Minor TCA additions 2009-10 Financial Schedule 3C – Gross Sum of Furniture & Statements Book Value Equipment, Computer Hardware & Software and Vehicles from the additions column Amortization and write downs 2009-10 Financial Schedule 3C – Grand Total of Statements Accumulated Amortization and Amortization Write Down Columns Note: Boards are required to distribute the amortization expense and write downs into the five expense categories (Instruction, Administration, Transportation, Pupil Accommodation, and Other) for the 2009-10 Financial Statements. Likewise it would be expected that they would distribute the amortization expense and write downs portion of the restated balance into the specific expense categories (items 2.1, 2.2, 2.3, 2.6) under the 2009-10 Budget (Restated) Column. 5. Schedule 1.2 – Consolidated Statement of Cash Flow – The name of this form has been changed from Statement of Changes in Financial Position to Consolidated Statement of Cash Flow. The presentation of the form has been changed to conform to PSAB section PS-1200. Due to the presentation change, some of the terminology has changed and an additional classification has been added. In Schedule 1.2, cash and cash equivalents are equal to cash plus investments < 90 days minus temporary borrowing, and cash flows are classified by whether they are part of the Operating, Investing or Financing activities. Limited data entry is required for the 2009/10 fiscal year. The majority of the information comes from Schedules 1 and 1.1. You must enter information for the prior year. 6. Schedule 1.3 – Consolidated Statement of Change in Net Debt – This form has been added to conform to Public Sector Accounting Board (PSAB) section PS-1200. The statement of change in net debt reports the acquisition of tangible capital assets in the accounting period as well as other significant (prepaid expenses and supplies inventories) items that explain the difference between the surplus or deficit for the accounting period and the change in net debt in the period. The schedule will track the Tangible Capital Asset activity as well as the other non-financial asset activity. There is a requirement that budget comparatives be reported in this statement. However, given that this is the first year of implementation and that budget numbers are not readily available for proper disclosure, boards would not be required to report numbers under that column in the forms. The statement of change in net debt reports the acquisition of tangible capital assets in the accounting period as well as other significant (prepaid expenses and supplies inventories) items that explain the difference between the Annual Surplus (Deficit) (item 1) and the change in net debt in the period (item 4). 2009-10 Actual The amounts pre-populated for Tangible Capital Asset Activity (items 2.1-2.5) are forwarded from Schedule 3C (Tangible Capital Asset Continuity). Items 3.1 to 3.4 (Other Non-Financial Asset Activity): Boards are required for PSAB purposes to record the inflows and outflows of prepaid expenses and inventories of supplies. In prior years only the net impact was required. Boards would obtain this information from their general ledger. Prior Year Column (2008-09 Actual): Due to the addition of this schedule, boards will need to complete prior year’s Actual (2008-09 Actual) column for the first time. Boards will be required to use their prior year Financial Statement forms and general ledger to complete this column. In future years boards will only need to carry forward the prior year’s Schedule 1.3 amounts. 7. Schedule 3C – Tangible Capital Assets Continuity Schedule – This is a new schedule for the 2009- 10 financial statements. It summarizes amounts that are capitalized as per the TCA Guide and are fully accounted for in the 2009-10 financial statements per Public Sector Handbook Section PS3150. (Please note that the TCA Guide can be found at http://faab.edu.gov.on.ca/CAImplementation.htm.) Expenditures on capital items (e.g. computers, furniture and equipment) that meet the capitalization thresholds outlined in the TCA Guide must be capitalized on Schedule 3C, and amortized on Schedule 10, in order to conform to PSAB. Schedule 3C has three sections: Cost, Accumulated Amortization, and Net Book Value and Disposals. In the Cost section, enter the opening balance of any tangible capital assets as at September 1, 2009. Enter any additions and disposals/deemed disposals. In the Accumulated Amortization section, enter the amortization expense, write-downs and disposals and deemed disposals. In the NBV section, enter any proceeds of disposition (POD) as well as any gain or loss on disposal. 8. Schedule 5 – Detail of Accumulated Surplus (Deficit) – This schedule was formerly known as Reserve Funds (Internally Restricted) Statement of Continuity. It has been deleted to conform to PSAB Sections PS-1200 and PSG-4 with respect to the presentation of funds and reserves. Schedule 5 will now be called Detail of Accumulated Surplus/(Deficit). This schedule has been added to conform to PSAB Section PS-1200, paragraph 37, requiring the board to report, on their statement of financial position, their accumulated surplus or deficit. This amount is defined as the residual interest in its assets after deducting its liabilities. Essentially, this schedule will track the accumulated surplus/(deficit), replacing the former presentation of funds and amounts to be recovered (ATBR). The following table shows where amounts previously recorded in funds and ATBR should now be reported: Item 2008-09 FS 2009-10 FS Operating Fund Schedule 2.1 Schedule 5, line 1.1 Reserve Fund: Reserve for Schedule 5 Schedule 5, line 1.1 Working Funds Reserve Fund: Retirement Schedule 5 Schedule 5, line 2.1 Gratuities Reserve Fund: Other Schedule 5 Schedule 5, lines 2.6-2.10 (Operating) Reserve Fund: Other (Capital) Schedule 5 Schedule 5, lines 2.11-2.15 ATBR – Employee Future Schedule 1 Schedule 5, line 4.1 Benefits ATBR – Interest to be Schedule 1 Schedule 5, line 4.2 Accrued ATBR – Vacation Accrued Schedule 1 Schedule 5, line 4.3 School Activities Fund Schedule 2.4 Schedule 5, line 4.4 In the column called In-Year Increase/Decrease, lines 1.1 to 2.15, enter any activity during the year – earnings or spending in each accumulated surplus account. The In-Year Increase/Decrease for lines 4.1 to 4.3 will be automatically populated based on amounts reported on Schedule 10ADJ. For line 4.4, it is populated based on amounts entered on Schedules 9 and 10. For line 4.5, it is populated based on amounts entered on Schedule 3C. 9. Schedule 5.1 – Deferred Revenues – This schedule should be completed by any Section 68 School Authority that is reporting deferred revenues on Schedules 1 and 7. Many of the current accountability and compliance mechanisms of the grant regulations and other regulations require boards to set aside unspent grant allocations until they are spent on their intended purpose. Additionally, sometimes third parties impose a restriction on how amounts can be spent. Under PSAB, these externally restricted amounts are reported as deferred revenue (a liability) until the restriction is fulfilled. This schedule provides the information required to report on deferred revenue set up by regulation or legislation, as well as third party amounts. It reports the continuity information relating to the balance sheet account called Deferred Revenue. All deferred revenues are to be recorded on this schedule. Transfers to deferred revenue are the amounts put into (column 2) and transfers out of deferred revenue are amounts taken out of (column 4) the deferred revenue liability account. The decrease in deferred revenue is the amount recognized as revenue in the current year, and will be populated on Schedule 9. Any earnings on deferred revenue that are required to be used for the same purpose as the initial deferred revenue amount will be recorded in column 3. If earnings are not required to be used for the same purpose as the initial deferred revenue amount, then the earnings will be recorded on Schedule 9 as interest. The board will enter this amount on Schedule 9 at item 6.1. 10. Schedule 6 – Trust Funds Administered by the Board – Where a Section 68 School Authority administers trust funds, this schedule should be completed. 11. Schedule 7 – Detail of Consolidated Statement of Financial Position– This schedule provides information that is then summarized on the Consolidated Statement of Financial Position. The title has been changed in 2009-10 from Statement of Financial Assets, Financial Liabilities, and Non- Financial Assets. 12. Schedule 9 – Revenues – The name of this form has changed from Operating Fund – Revenues, to Revenues. Since funds will no longer be presented under PSAB (as per PS-1200), all of the operating revenues that were previously recorded in the funds (operating, capital, reserve and school activities funds) will now be recorded on Schedule 9. This schedule has been reorganized to align the headings in Schedule 9 with the summary categories presented on Schedule 1.1 (Consolidated Statement of Operations). 13. Schedule 10 – Expenses – The name of this form has changed from Operating Fund – Expenditures, to Expenses. Information will continue to be entered on an expense (accrual) basis, not an expenditure (cash) basis. Since funds will no longer be presented under PSAB (as per PS-1200), all of the expenses that were previously recorded in the funds (operating, capital, reserve and school activities funds) will now be recorded on Schedule 10. Since TCA is being capitalized per PSAB (PS-3150), capital spending that meets the capitalization threshold per the TCA Guide will not be expensed on Schedule 10; they will be recorded on Schedule 3C – Tangible Capital Asset Continuity Schedule. Only the amortization related to TCA will be recorded on Schedule 10. Amortization will be split into five categories: (i) Instruction (ii) Administration (iii) Transportation (iv) Pupil Accommodation (v) Other Capital expenses that do not meet the capitalization criteria per the TCA Guide will continue to be recorded in column 5 (Supplies and Services). Column 6 (Replacement Furniture and Equipment) has been deleted. Any expenses related to the replacement furniture and equipment that does not meet the capitalization criteria will also be recorded in column 5. Additional lines for Loss on Disposal of TCA have been added for the 2009-10 Financial Statements. In prior years, Schedule 1.1 (Consolidated Statement of Operations) had an adjustment for in-year increases/decreases in Prepaid Expenses and Inventories of Supplies and boards entered the cash amount on Schedule 10. Due to PSAB presentation changes (PS1200), prepaid expenses and inventories of supplies will no longer be separated out on the Statement of Financial Activities. Boards will now record the expenses (not cash amount) resulting from the use of a non-financial asset (prepaid expenses and inventories of supplies) on Schedule 10 under the appropriate expense category (ex. Instruction, Administration, etc.). NOTES: Other non-operating expenses on line 78 are to include only the extraordinary expenses as referred to in the Uniform Code of Accounts, restructuring expenses or expenses that are non-educational and for which the board receives offsetting revenues. Code point 5810 should be used to report NTIP expenses. Special Equipment Amounts (SEA) expenses should be reported at code point 5510. 14. Schedule 10ADJ –Adjustments for Compliance Purposes – The name of this form has changed from Operating Fund – Adjustments for Compliance Purposes, to Adjustments for Compliance Purposes. This form has been changed in that previously column 17 (Increase/(decrease) in Non-Financial Assets – not applicable to Section 68 School Authorities) has been deleted. This adjustment of the change in prepaids, supplies and inventories to expenses is no longer required according to PSAB. There are two new columns added: Amortization and Loss on Disposal of TCA (column 17) and School Generated Funds (column 18). The adjustments are required to restate to the compliance requirement, which for 2009-10, is still on a modified cash basis. The amounts reported here are populated from Schedule 10. Column 13 (Principal Payments & Increase in Sinking Funds on Long term Debt– not applicable to Section 68 School Authorities) is the same as prior years. Column 14 (Increase/(decrease) in Unfunded Liabilities – Interest Accrued – not applicable to Section 68 School Authorities) continues to exclude interest accrual on approved debt from compliance. Column 15 (Increase/(decrease) in Unfunded Liabilities – Vacation Accrued) remains the same approach for 2010-11; however, starting in 2011-12, this amount will no longer be excluded from compliance. As vacation accruals are determined by boards’ vacation policy, boards are encouraged to start looking at options to address this expense. 15. Schedule 10G – Supplementary Information on Employee Future Benefits – This form has been changed to obtain sufficient information from the boards to accommodate additional reporting requirements. The line reporting Retirement / Sick Leave Gratuity Plans has been broken down into two categories. The new reporting lines include: Retirement Gratuity Plans Post Employment Benefits There are three new reporting lines added: Termination Benefits OPSEU Pension Benefits Other Pension Benefits Column 21 – This is a new column that has been added in the 2009-10 financial statements for boards to report the current year expenses as a result of the increase due to plan amendments. This schedule provides a detailed breakdown of the benefit obligations by benefit type. The total liability as of August 31, 2010 on Schedule 10G – line 10, column 4 should be equal to the total Employee Benefits payable reported on Schedule 1 – line 2.6, column 1. Schedule 10G reports information relating to the actuarially determined liabilities and expenses of retirement benefits, post-employment benefits, compensated absences, termination benefits and pension benefits as outlined in Section 3250 and 3255 of the PSA Handbook. Defined benefit plans to be included here include retirement gratuity plans; retirement health, dental, and life plans for retirees, post employment benefits and some types of pension arrangements. Self-insured benefit obligations that arise from specific events that arise from time to time (i.e. event driven benefits), such as obligations for worker’s compensation payments and long-term disability benefits are also reported on this schedule. Exclude from this schedule any defined contribution plans (Section 3250.095) and OMERS, as it is a multi-employer defined benefit plan, which is treated as a defined contribution plan. Also exclude from this schedule any short-term employee benefit plans (i.e. health and dental benefits to current employees). The accounting for these plans is generally straightforward because no actuarial assumptions are required. Please note however that information on any defined contribution plans and OMERS are still required to be disclosed in the Notes to the Financial Statements (PS 3250.100). All amounts reported in this table should follow the accounting guidelines provided in PS 3250 and PS 3255 and should agree to the liabilities and expenses reported in the audited financial statements. (Please refer to PSA Handbook Sections 3250 and 3255 for definitions of various terms related to this schedule.) Column 02: Benefits Expenses 2009-10 For retirement benefits, post-employment benefits and compensated absences that vest or accumulate, the amount reported in this column should include: All components of the retirement benefits expenditure/expense as described in PS 3250.019 including the current period benefit cost; cost of plan amendments; various other recognized amounts or amortized gains and losses as described in the section less any employee contributions during the period PLUS The retirement benefits interest expenditure/expense as described in PS 3250.020 (Note: Expenses related to post-employment benefits and compensated absences that vest or accumulate follow the guidelines set out in Section 3250.19 and Section 3250.20 of the PSA Handbook). For event driven benefits such as worker’s compensation or self-insured long-term disability payments and for termination benefits– the amount reported in this column should include: The expense recognized in the current year as per PS Section 3255.21-.34. Column 03: Benefits Payments 2009-10 Report the cash payments made in respect of the plans such that Opening Liability + Benefit Expenses – Benefits Payments = Closing Liability. Column 05: Unamortized Actuarial Losses/(Gains) as of August 31, 2010 Periodically actuarial gains and losses arise from changes in the accrued benefit obligation and the plan assets resulting from: (a) experience different from that assumed; or (b) changes in an actuarial assumption. To the extent that these actuarial gains and losses have not yet been amortized there will be a difference between the liability reported on the Statement of Financial Position (Col 04 on Schedule 10G) and the “Accrued Benefit Obligation”. Report the unamortized amount of these gains and losses in Col 05. Column 06: Accrued Benefit Obligation as of August 31, 2010 The accrued benefit obligation comes from the latest actuarial report and is “the value of retirement benefits attributed to services rendered by employees and former employees to the accounting date” (PS 3250 Gloss). Columns 07–12: Estimates of Expenses and Payments in Future Years Provide estimates of the benefit expenses and payments (as described in columns 2 and 3 above) that will be incurred by the board over the next three years. This information should be based on the estimates provided to the boards in the actuarial report. Column 21: Current Year Actual Expenses for Increase Due to Plan Amendment The actual expense incurred as a result of increases due to plan amendments should be entered here. This amount is already part of what was entered under column 2. 16. Schedule of Enrolment 2009-10 – Complete the section entitled “Enrolment by Month” as of the last day of each month. You are asked to complete both the number of students and their related full-time equivalence (FTE). Next, complete the section entitled “Enrolment by Grade” as at October 31, 2009 and their related FTE. Finally, complete the total pupil days for 2009/10 (this should be equivalent to the sum of the number of days that the pupils attend in 2009/10). Note: The total number of pupils enrolled by grade as of October 31, 2009 and its full-time equivalency should match code points S1002 and S1013. 17. Schedule of Calculation of 2009/10 Fiscal Year Legislative Grants – This schedule calculates your entitlement to grant. It is automatically populated from information input on previous schedules, therefore there is no data entry required on this schedule. 18. Calculation of Cost per Pupil for Tuition Fee purposes – This schedule shows the calculation required for the determination of tuition fees for a pupil whose parent or guardian does not reside in Ontario. There are no fees payable by one board to another board. It is automatically populated from information input on previous schedules, therefore there is no data entry required on this schedule. 19. Staffing – Report all staffing that corresponds to the salaries and wages column in schedule 10. REMINDER NOTES: Teacher assistants – general, this line will include both teacher assistants and personal care workers.
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