Despite a heavy bill for snow removal and cuts to transportation funding, the Pembina Hills school division finished the 2013 financial year with an operating surplus of $1.74 million, while the Alberta Distance Learning Centre (ADLC) also ended in the black with a $710,000 surplus.
That was the good news delivered to Pembina Hills trustees last Wednesday as they reviewed the audited financial statements for both the division and the ADLC in 2013, prior to passing a motion to release the statements to the public.
Secretary-treasurer Tracy Meunier said her presentation was based on the culmination of financial data based on the division’s planning, which began in January of 2012.
One of the key responsibilities of the board during planning is to set priorities through the Education Plan and then establish an allocation formula, based on revenue that comes from the province. A budget is approved by the board each May.
Meunier noted the audited financial statements kept very broad strokes. However, there will be an opportunity at a subsequent meeting to review each school’s finances, along with the allocation formula and the co-op pool.
Meunier noted there was a big change this year in the presentation of the financial statements due to the adoption of Canadian Public Sector Accounting (PSA) standards.
Adopting the new standards has been a topic of discussion in Canada for years; Alberta was one of the last hold-outs, Meunier noted.
“For the normal layman, you don’t see a lot of those changes, but it does impact how you look at your statement of financial position,” she said.
For example, assets generally represented liabilities plus reserves plus equity in fixed assets before the PSA standards were applied. Now, their assets represent net debt (how much is owed the division) plus non-financial assets equaling an accumulated surplus.
“What does that mean? It’s numbers mixed a different way,” she said.
As a result, Meunier cautioned that some figures in the financial statements may be misleading at a glance; for instance, net financial assets for Pembina Hills is a deficit of $6.81 million, but that number gets immediately swallowed by their non-financial assets, which total $20.26 million.
The end result is an accumulated surplus of $13.45 million, which represents $7.49 million in operating reserves, $1.6 million in capital reserves and $4.3 million in fixed assets.
“You don’t have $13 million sitting in a sock under your bed,” she said. “And you don’t have $6.8 million in debt.”
Meunier listed some other changes applied as a result of the PSA standards, such as School-Generated Funds (SGF).
School-generated funds are funds under the control and responsibility of schools and are generally the result of activities like yearbook sales, milk drives, field trip fundraisers and so on.
Generally, the division has nothing to do with SGFs, but the division is now required to incorporate those into the audited financial statements. This was included in their $7.08 million in cash-on-hand, she noted.
Meunier summed up the division’s financial position as a simple deduction of expenses from revenue.
Meunier said Pembina Hills had $55.92 million in revenue this year, which included $52.55 million in funding from the province, $1.1 million in fees, $881,000 from fundraising and the balance from a number of other sources.
As well, Pembina Hills incurred a total of $54.18 million in expenses, including $41.2 million spent on instruction, $5.8 million on plant operations, $5 million on transportation and $2 million on administration.
In the end, there was a surplus of revenue over expenses of $1.74 million.
That surplus was almost three times higher than the surplus that Pembina Hills finished with in 2012, which was $550,000.
“Did your financial results achieve the intent of the spring of 2012 (when the board set the allocation formula)? By and large they did,” she said.
“Where your allocation formula didn’t hit the mark were things out of your control, like when the province took away fuel price contingency funding (as part of the last provincial government).”
Meanwhile, the Alberta Distance Learning Centre had a $710,000 surplus after subtracting $25.11 million in expenses from $25.82 million in revenue. Last year’s surplus was $440,000.
Meunier highlighted a number of factors that broke down the reported surplus, such as a $2.02 million surplus in instruction.
Plant operations experienced a $198,244 deficit this year. Meunier noted this was due in part to the major snowfall encountered last year; their snow removal expenses during the past year came to $99,000.
Property insurance also went up a full 39 per cent last year – resulting in a $20,000 deficit – due to the flooding in southern Alberta. She also noted property insurance has gone up 35 per cent this year due to fires and flooding in southern Alberta.
A waterline break at R.F. Staples School in Westlock also cost the division $50,000. The waterline break occurred in August and resulted in a huge spike in the school’s water consumption. Luckily, Meunier noted the town was able to find a break and shut it down “just inches from frying all the boilers.”
“Our water consumption spiked by $10,000 in August when there are no kids around,” she said.
Vehicle expenditures also went up over 15 per cent – a total of $23,000 over budget. As well, the province discontinued its price contingency funding, which left Pembina Hills without an extra $208,000.
Administration actually finished the year with a surplus of $69 – basically breaking even in the context of a multi-million dollar budget.
Meunier gave the board a note of caution: Pembina Hills must pay more attention to the supports for instruction. “It costs money to operate our buildings; it costs money to get children back and forth to school; it costs money for board administration,” she said. “You can’t do it for nothing.”
