BARRHEAD/WESTLOCK-After originally budgeting for an operating deficit of $2.27 million, the Pembina Hills School Division managed to end the 2019-2020 school year with an operating surplus of $2.118 million due in part to a reduction in expenses from the school shutdown.
That’s according to the Audited Financial Statements for the year ending Aug. 31, 2020, which were approved by Pembina Hills trustees at their Nov. 25 meeting.
This unusual year had a turbulent beginning as a result of the newly-elected United Conservative Party (UCP) government delaying the release of a provincial budget until Oct. 24, 2019.
Secretary-treasurer Tracy Leigh said the province opted to eliminate the division’s Class Size and School Fee Reduction grants, which ended up costing the division $2 million in funding.
While the province also provided Pembina Hills a one-time transition grant of $2 million, a further decrease in enrolment cost the division more than $5000,000 in funding.
In the statement of operations, Pembina Hills was originally budgeted to generate $59.862 million, but actual revenue came in at $60,197,042.
Leigh said this difference was largely because the province gave Pembina Hills permission to re-purpose about $600,000 of their Infrastructure and Maintenance Renewal (IMR) grant, which was placed into income.
Indeed, the amount of funding from the Government of Alberta increased from $56.411 million to $57.38 million despite the elimination of the two grants mentioned earlier.
Other sources of revenue actually decreased. For instance, Pembina Hills had budgeted for $716,689 in revenue from fees but the actual amount generated was $589,164.
Sales of serves and products was also budgeted at $1.926 million but ended up coming in at $1.449 million.
Donations also saw a decrease of around $85,000 because the division was unable to do any fundraising while schools were shut down, Leigh noted.
On the other hand, the expenses side of the statement of operations was greatly impacted by the shift to at-home learning in the last three months of the year. Pembina Hills had originally budgeted for $62,135,116 in expenses, but it actually came in at $58,078,464.
Seventy-seven per cent of the division’s expenses relate to instruction, and there was the potential for increased costs in this category as the result of a new agreement with the Alberta Teacher’s Association taking effect on Sept. 1, 2019, which included a small increase in benefits.
However, the division’s actual costs related to Grade 1-12 instruction were $2 million lower than budgeted because of the cancellation in classes from April to June. Transportation expenses also fell by roughly $900,000 from what was budgeted.
Incidentally, Leigh took note of a breakdown in costs relating to certificated and non-certificated staff. The former accounts for 51 per cent of instructional expenses while the latter accounts for 25 per cent.
Operation and maintenance expenses increased slightly, while expenses for board and system admin decreased by about $29,000.
Incidentally, the school shutdown also prompted the province to give the division a Capital Maintenance Renewal (CMR) grant of $2.5 million as part of an overall effort to stimulate the economy. That grant ended up accelerating a number of long-term maintenance projects within the division.
Trustee Wendy Scinski asked Leigh why there was $942,085 listed under expenses for “external services” when originally nothing was budgeted.
Leigh explained that this expense was related to services for adults at Vista Virtual School.
While revenue from adult services is part of sales of services, the expense was erroneously lumped in with instruction. When preparing the financial statements, she broke it out as its own expense.
Leigh also went through the statement of financial position, which lists the division’s assets and liabilities.
As of Aug. 31, 2020, Pembina Hills had assets totaling $14.537 million and liabilities of $7.6 million. That leaves the division with net financial assets of $6.9 million.
On the assets side, the division has $5.4 million in accounts receivable, which includes $3.8 million in funding it has yet to receive from Alberta Education.
This is because of additional CEUs (Credit Enrolment Units) realized by Vista Virtual School, which offered a summer school program for the first time in 2020. Leigh noted the number of CEUs achieved by the distance learning program was nearly doubled this year.
On the liabilities side, the division has $5.1 million in accounts payable and $2.5 million in unspent deferred contributions (ie. money received from Alberta Education that has not yet been spent).
Leigh made note of one additional accounting change that’s going to have to be accounted in future years: a liability related to contaminated sites within the division.
She said director of facilities Tracy Tyreman has arranged for an organization to come out and conduct testing at school sites for contamination, such as spillage from a gas station near a school.
“Depending on what they find, we will have a liability that we’re going to have to record in future years,” she said.
