2004/05 audited financial statements an overview november 9, 2005

2004/05 Audited Financial Statements

An Overview

November 9, 2005

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Agenda

Highlights

Review of Statements

PHRD Schools & Sites

ADLC

Enrolments94/95 03/04 04/05

Proj.

04/05

Actual

Kindergarten-Community

Schools

403 321 274 369

Grades 1-12-Community

Schools

4954 4080 3937 3986

Vista Virtual 0 1107 1108 1238

Total K-12

Excl. Virtual

5357

5357

5508

4401

5319

4211

5593

4355

Average CEU Completion Rate

Jurisdiction

Average

Jurisdiction

Average, excl. Vista Virtual

02/03 (gr. 11 & 12) 24.96 33.76

03/04 (gr. 11 & 12) 19.28 33.20

04/05 (gr. 10-12) 23.05 35.39

NOTE: 1092 of the 1238 Vista Virtual students are in grades 10-12. Because these students only register for 1-2 courses each, their completion average (04/05=7.68) distorts the PHRD Community Schools average.

ADLC Highlights

Total Students Served: 04/05 – 14,651; 3,363.34 FTE 03/04 - 13,449; 3,276.48 FTE % increase = 8.94% (+2.65% FTE)

Funded Students Served: 04/05 – 12,502; 2,254.56 FTE 03/04 - 11,359; 2,161.35 FTE % increase = 10.06% (+4.31% FTE)

04/05 Operating Surplus (Deficit)

Pembina Hills Regional Div. No. 7 $358,675 03/04 = $(116,355)

Alberta DistanceLearning Centre $29,500 03/04 = $198,804

Operating & Capital ReservesPHRD $4.82 million (03/04=$4.72 million)

Represents 11.5% of 04/05 operational expenses (03/04=11%)Operating Reserves only = $2.6 million, or 6.30% of operational expenses

ADLC $0.98 million (03/04=$0.97 million)

Represents 10% of 04/05 operational expenses

(03/04 =10%)

The Statements

A Quick Overview

Statement of Financial Position (aka Balance Sheet)

Primary purpose - to present the PHRD’s economic resources, obligations and net assets (equity) at August 31

Assets - funded by liabilities and/or equity

Balance Sheet - some unique terms

School Generated Funds (SGF) funds under control & responsibility of schools (eg.

yearbook sales, grad fees, etc) Balance Sheet states the ending bank balances of

SGF’s.

Deferred Capital Allocations funds received for capital projects (eg. Block

Modernization funds) that have not been expended at August 31

Balance Sheet - some unique terms

Unamortized capital allocations supported capital funds that have been expended

but have yet to be amortized over the useful life of the applicable assets purchased

Represents the provincial government’s equity in our school buildings

Overview - PHRD Balance Sheet

(in millions)

2005

2004

Assets $24.94 $26.90

Liabilities $16.64 $18.95

Reserves $4.82 $4.72

Equity in Fixed Assets $3.48 $3.23

Total Liabilities & Equity

$24.94

$26.90

Overview - ADLC Balance Sheet

(in millions)

2005

2004

Assets $3.72 $3.35

Liabilities $1.89 $1.55

Reserves $0.98 $0.97

Equity in Fixed Assets $0.85 $0.83

Total Liabilities & Equity

$3.72

$3.35

Statement of Revenues and Expenses (aka Income Statement)

Provides information on PHRD’s operations for the year.Surplus (Deficit) of revenue over expenses represents the change in PHRD’s unrestricted resources as a result of operations for the year.Surplus (Deficit) does not account for unsupported capital additions or transfers to and from reserves.Comparative 2004/05 budget figures are those approved May 12, 2004. They do not account for budget adjustments throughout the year (eg. actual Sept enrolment)

Overview - PHRD Statement of Revenues and Expenses

(in millions)

2005

2004

Revenues $42.13 $41.73

Expenses $(41.77) $(41.84)

Surplus (Deficit) of Revenues over Expenses

$0.36

$(0.11)

Overview - ADLC Statement of Revenues and Expenses

(in millions)

2005

2004

Revenues $10.04 $9.42

Expenses $(10.01) $(9.22)

Surplus (Deficit) of Revenues over Expenses

$0.03

$0.20

Statement of Changes in Net Assets (aka Statement of Changes in Equity)

“Total net assets” = equity Equity represents the jurisdiction’s residual

interest (value) in the assets.

To fully understand the nature of PHRD’s financial activities in the period, information is required about changes to net assets as a result of: Operations Capital assets Assets that are externally and internally restricted.

Statement of Changes in Net Assets (aka Statement of Changes in Equity)

The statement of changes in net assets provides critical financial information and shows the extent to which PHRD’s activities have resulted in an increase or decrease in net assets

Overview - PHRD Statement of Changes in Equity

(in millions) 2005 2004

Operating Reserves:

Schools & Co-op Pool $2.55 $2.11

Support Services (incl. Brd&Sys Admin)

$0.09 $0.28

External Services $0.05 $0.06

Capital Reserves:

Swan Hills Property Disposition $0.03 $0.00

Op. & Maint $0.13 $0.09

Transportation $0.39 $0.60

Reserves @ Regionalization $1.58 $1.58

Total Reserves $4.82 $4.72

Equity in Fixed Assets $3.48 $3.23

Total Net Assets $8.30 $7.95

Overview - ADLC Statement of Changes in Equity

(in millions)

2005

2004

Operating Reserve - General $0.65 $0.74

Operating Reserve - Initiatives

$0.33

$0.14

Capital Reserve $0.00 $0.09

Total Reserves $0.98 $0.97

Equity in Fixed Assets $0.85 $0.83

Total Net Assets $1.83 $1.80

Statement of Cash Flows

Reports and explains the PHRD total changes in cash equivalents as a result of activities during the year PHRD experienced a decrease in cash flow from

the beginning of the year of $251,248 ADLC experienced an increase in cash flow from

the beginning of the year of $905,704 Main contributor to increased cash flow was @ Aug

31/04 PHRD owed ADLC $680,779 vs. @ Aug 31/05, ADLC owed PHRD $115,550 (net difference - $796,329)

PHRD Schools & Sites

Summary Information

Renewed Funding Framework

04/05 marked the 1st year of the Renewed Funding Framework

The renewed framework is an allocation system and is not intended to provide expenditure direction. Jurisdictions have enhanced flexibility to spend funding as they choose to meet needs of their students’ and local priorities

This supports the principle of flexibility

InstructionBudget Surplus/

(Deficit) – Sept/04 (budget adjusted

for actual enrolment)

Actual Surplus/

(Deficit) 2004/05

Community

Schools

$(67,730) $181,429

Co-op Pool $100,000 $259,719

Total Instruction (03/04 = $34,405)

$32,270 $441,148

Instruction

Instructional Operating Reserves @ Aug 31/05 - $2,547,106 (03/04=$2,105,958) Community Schools - $1,362,717 (03/04=$1,181,285) Co-op Pool - 800,293 (03/04=$234,545) WAN (telephone system) - 0 (03/04=$306,029) Vista Virtual - 384,096 (03/04=$384,096)

Average program cost per FTE student in Kindergarten to Grade 12 - $6,566 03/04=$6,381

Co-op Pool04/05 Surplus/(Deficit) = $259,719 03/04 = $66,013

Variance Analysis

Revenue Expenses

Class Size Initiative - +$737,093 Class Size Initiative - +$737,093

Small School by Necessity - +$333,973 Video Conferencing/Smart Board (cost shared with AISI) - +$85,000

Socio Economic Status - +$125,308 VOIP Communication System - +$378,873

Stabilization Funding - +$117,432 Other net variances - +$2,481

FNMI - +$69,360

Hutterite funding - +$20,000

Video-Conferencing 1 time funding - +$60,000

Co-op Pool (cont.)

Operating Reserve @ Aug 31/05 = $800,293

Recommendation for disbursement of reserve to be discussed at November 24, 2005 Administrators’ meetingRecommendation will be placed on

December 14, 2005 Regular Board Meeting Agenda

Barrhead Composite High School

04/05 Surplus/(Deficit) - $(8,313) 03/04 = $85,775

04/05 budgeted transfer from operating reserve(deficit) - $75,000

Average high school CEU completion rate – 38.49 (gr. 10-12) 03/04 (gr 11&12) = 37.77

Operating Reserve @ Aug 31/05 - $323,972

Barrhead Elementary School

04/05 Surplus/(Deficit) - $34,79903/04 = $(43,350)

04/05 budgeted Surplus/(Deficit) - $(64,066)

Operating Reserve @ Aug 31/05 - $205,195

Busby School

04/05 Surplus/(Deficit) - $(2,472)03/04 = $(8,579)

04/05 budgeted Surplus/(Deficit) - $(6,493)

Operating Reserve @ Aug 31/05 - $51,040

Dapp School

04/05 Surplus/(Deficit) - $(19,112)03/04 = $13,291

03/04 budgeted Surplus/(Deficit) - $(15,000)

Operating Reserve @ Aug 31/05 - $168,404

Dunstable School

04/05 Surplus(Deficit) - $7,48003/04 = $(7,043)

04/05 budgeted Surplus/(Deficit) - $(2,277)

Operating Reserve @ Aug 31/05 - $94,874

Eleanor Hall School

04/05 Surplus/(Deficit) - $(266) 03/04 = $(32,043)

04/05 budgeted Surplus/(Deficit) - $696

Operating Reserve @ Aug 31/05 - $(32,976) A 2 year deficit reduction plan has been developed

by the school, with approx. $20,000 of the accumulated deficit to be recaptured in the 05/06 school year and the balance in 06/07

Fort Assiniboine School

04/05 Surplus/(Deficit) - $3,71203/04 = $(19,588)

Includes Forestry Funding of $82,341

04/05 budgeted Surplus/(Deficit) - $(22,783)

Average high school CEU completion rate – 33.26 (gr 10-12) 03/04 (gr 11&12)=29.69

Operating Reserve @ Aug 31/05 - $52,323

Hillman Colony School04/05 Surplus/(Deficit) - $(2,990)

Low enrolment continues to be a challenge 04/05 – 2 Kindergarten students; 14 students in grades

1-9

05/06 change in ESL funding for Hutterite students in Colony Schools – 5 yr. Max. funding limit may be waived for individual students

Operating Reserve @ Aug 31/05 - $3,010

Jarvie School

04/05 Surplus/(Deficit) - $(19,664)03/04 = $5,118

04/05 budgeted Surplus/(Deficit) - $(20,489)

Operating Reserve @ Aug 31/05 - $871

Meadowview School

04/05 Surplus/(Deficit) - $(17,181) 03/04 = $662

$17,810 in Federal CAP funding remaining for future years’ expenditures

04/05 budgeted Surplus/(Deficit) - $(29,746)

Operating Reserve @ Aug 31/05 - $36,997

Neerlandia School

04/05 Surplus/(Deficit) - $22,43203/04 = $(11,531)

04/05 budgeted Surplus/(Deficit) - $4,740

Operating Reserve @ Aug 31/05 - $142,488

R.F. Staples Secondary School

04/05 Surplus/(Deficit) - $38,273 03/04 = $(131,058)

04/05 budgeted Surplus/(Deficit) - $(78,176)

Average high school CEU completion rate – 37.19 (gr 10-12) 03/04 (gr 11&12)=34.81

Operating Reserve @ Aug 31/05 - $152,788

Sunniebend Colony School

04/05 Surplus/(Deficit) - $4,153

Low enrolment continues to be a challenge 04/05 – 3 Kindergarten students; 11 students in grades

1-10

05/06 change in ESL funding for Hutterite students in Colony Schools – 5 yr. Max. funding limit may be waived for individual students

Operating Reserve @ Aug 31/05 - $5,153

Swan Hills School04/05 Surplus/(Deficit) - $65,425 03/04 = $56,394

04/05 budgeted Surplus/(Deficit) - $32,214

Average high school CEU completion rate – 37.54 (gr 10-12) 03/04 (gr 11&12)=29.53

Operating Reserve @ Aug 31/05 - $64,393

Vimy School

04/05 Surplus/(Deficit) - $29,614 03/04 = $(34,895)

04/05 budgeted Surplus/(Deficit) - $28,235

Operating Reserve @ Aug 31/05 - $(4,129)

W.R. Frose School

04/05 Surplus/(Deficit) - $(17,384) 03/04 = $(7,994)

04/05 budgeted Surplus/(Deficit) - $10,901

Operating Reserve @ Aug 31/05 - $(31,313)A 2 year deficit reduction plan is being

developed by the school

Westlock Elementary School

04/05 Surplus/(Deficit) - $55,65503/04 = $(77,073)

04/05 budgeted Surplus/(Deficit) - $72,546

Operating Reserve @ Aug 31/05 - $132,915

Outreach Centres

04/05 combined surplus/(deficit) - $7,268 03/04 = $(122,981)

Combined CEU completion rate – 15.91 (gr. 10-12) 03/04 (gr 11&12) = 15.14

Combined Operating Reserves @ Aug 31/05 - $(3,288) Accumulated deficit to be recovered in 05/06

Vista Virtual

A virtual school operated by PHRD

PHRD contracts the ADLC OnLine Program to provide instruction. Similarly, other school jurisdictions contract ADLC OnLine to provide instruction for their virtual programs.

1,238 students were registered with Vista Virtual in 04/05 03/04 – 1,107

High School CEU completion rate = 7.68 (gr 10-12) 03/04 (gr 11&12)=6.69 lower completion due to students taking only a portion of their

courseload thru OnLine

04/05 instructional funding received - $1,863,223

Operations & Maintenance of Schools

04/05 Surplus/(Deficit) - $(102,983) 03/04=$(1,639)

04/05 Surplus/(Deficit), excluding gain on sale from Swan Hills House - $(130,972) Projected Surplus/(Deficit) - $(178,470)

Responsibility for funding of PO&M transferred from Alta. Infrastructure & Transportation to Alta. Education effective April 1, 2005 PO&M funding for boards from April 1-Aug 31/05 not finalized

Based April 1-Aug 31/05 estimate on letter received from AIT in October, 2004

Based on summer of 2005 announcement from AIT, 05/06 PO&M funding should increase approx. $300,000 over 04/05 levels

Operations & Maintenance of Schools

Average cost per FTE student in Kindergarten to Grade 12 - $1,345 03/04 - $1,329

Average cost, excluding debenture & BQRP costs - $766 03/04 - $729

Reserves @ Aug 31/05 Operating - $(80,735) Capital (for future fleet replacements) - $131,084 Capital –Swan Hills Property Disposition (for future

upgrades to Swan Hills School) - $27,990

Student Transportation

04/05 Surplus/(Deficit) - $(6,237) 03/04=$102,823

04/05 budgeted Surplus/(Deficit) - $46,129 An annual surplus is required in the transportation

area to help fund the cost of replacement buses for the division owned fleet

Student TransportationAverage cost per student transported - $1,320

02/03 - $1,261 03/04 - $1,335

Operating Reserve @ Aug 31/05 - $109,351

Capital Reserve (for future fleet replacements) - $392,962 Represents funding for approx. 5 buses

Board & System Administration

04/05 Surplus/(Deficit) - $32,903 03/04=$(35,778)

Average cost per FTE student in Kindergarten to Grade 12 - $355 (03/04 - $375) Variance attributable to replacement of computer

workstations in 03/04 as well as employee recognition program start-up costs

Average cost per ADLC Funded FTE student - $175

Operating Reserve @ Aug 31/05 - $56,906

External Services

04/05 Surplus/(Deficit) - $(6,156)03/04=$(147,356)

Operating Reserves @ Aug 31/05:Bhd. Adult Learning - $22,519Bhd. Adult Literacy - $12,719SHARE (Swan Hills) - $15,041

Alberta Distance Learning Centre

ADLC - Operating

04/05 Surplus/(Deficit) - $29,50003/04=$198,804

Operating Reserve at August 31/05 - $981,684 Initiatives Operating Reserve - $330,009General Operating 651,675