mother earth's children's charter school society financial ... financial statement august...

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Mother Earth's Children's Charter School Society Financial Statements August 31, 2014

School Jurisdiction Code: 154

AUDITEDFINANCIAL STATEMENTS

FOR THE YEAR ENDED AUGUST 31,2014[School Act, Sections 147(2)(a), 148, 151(1) and 276]

Mother Earth's Children's Charter School SocietyLegal Name of School Jurisdiction

RR 5 Stony Plain, AS T7Z 1X4Mailing Address

Phone 780-702-7531 Fax 780-848-2395Telephone & Fax Numbers, and Email Address

SCHOOL JURISDICTION MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The financial statements of Mother Earth's Children's Charter School Societypresented to Alberta Education have been prepared by school JUriSdiction management which has responSibility fortheir preparation, integrity and objectivity. The financial statements, including notes, have been prepared in accordancewith Canadian Public Sector Accounting Standards and follow format prescribed by Alberta Education.

In fulfilling its reporting responsibilities, management has maintained internal control systems and procedures designedto provide reasonable assurance that the school jurisdiction's assets are safeguarded, that transactions are executedin accordance with appropriate authorization and that accounting records may be relied upon to properly reflect theschool jurisdiction's transactions. The effectiveness of the control systems is supported by the selection and trainingof qualified personnel, an organizational structure that provides an appropriate division of responsibility and a strongsystem of budgetary control.

Board of Trustees ResponsibilitvThe ultimate responsibility for the financial statements lies with the Board of Trustees. The Board reviewed the auditedfinancial statements with management in detail and approved the financial statements for release.

External AuditorsThe Board appoints external auditors to audit the financial statements and meets with the auditors to review their findings.The external auditors were given full access to school jurisdiction records.

Declaration of Manaf.lement and Board ChairTo the best of our knowledge and belief, these financial statements reflect, in all material respects, the financial position,results of operations and cash flows for the year in accordance with Canadian Public Sector Accounting Standards.

BOARD CHAIR

Brenda NelsonName

SUPERINTENDENT

Ed WittchenName

SECRETARY-TREASURER OR TREASURER

Anita LeMoignan !!I? "fuJI/V' ,CJ1L ~Name ---~ ~ SigRat~

November 17, 2014Board-approved Release Date

Coco ALBERTA EDUCATION, Financial Reporting & Accountability Branch8th Floor Commerce Place, 101SS-102Street, Edmonton A6 TSJ 4LSEMAIL: [email protected]: (780) 422-0312 (Toll free 310-0000) FAX: (780) 422-6996

mailto:[email protected]


TABLE OF CONTENTS

Page

3

4

5

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8

9

11

12

13

14

STATEMENT OF CHANGE IN NET DEBT

INDEPENDENT AUDITOR'S REPORT

NOTES TO THE FINANCIAL STATEMENTS

SCHEDULE OF PROGRAM OPERATIONS

SCHEDULE OF CAPITAL REVENUE

SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS

STATEMENT OF REMEASUREMENT GAINS AND LOSSES

STATEMENT OF CASH FLOWS

STATEMENT OF OPERATIONS

STATEMENT OF FINANCIAL POSITION

SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES

2

Accounting › consulting › tAx200, 5019 - 49th aVenue; leduC ab; t9e 6t5

P: 780-986-2626 F: 780-986-2621 www.MnP.ca 3

Independent Auditors’ Report

To the Trustees of Mother Earth's Children's Charter School Society:

We have audited the accompanying financial statements of Mother Earth's Children's Charter School Society,which comprise the statement of financial position as at August 31, 2014 and the statements of operations, cashflows, change in net debt, and remeasurement gains and losses, and the schedules of changes in accumulatedsurplus, capital revenue, program operations, and plant operations and maintenance expenses for the year thenended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith Canadian auditing standards, and for such internal control as management determines is necessary toenable the preparation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with Canadian public sector accounting standards. Those standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors’ judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of MotherEarth's Children's Charter School Society as at August 31, 2014 and the results of its operations, changes in netdebt and its cash flows for the year then ended in accordance with Canadian Public Sector AccountingStandards.

Leduc, AlbertaNovember 17, 2014 Chartered Accountants


2014 2013

FINANCIAL ASSETS

Cash and cash equivalents (Note 3) 211,366$ 210,604$

Accounts receivable (net after allowances) (Note 4) 17,955$ 32,212$

Portfolio investments (Note 5) 51,430$ 151,430$

Other financial assets -$ -$

Total financial assets 280,751$ 394,246$

LIABILITIES

Bank indebtedness (Note 3) 8,814$ 54,547$

Accounts payable and accrued liabilities (Note 6) 94,659$ 48,223$

Deferred revenue (Note 7) 8,243$ 2,000$

Employee future benefit liabilities -$ -$

Other liabilities -$ -$

Debt

Supported: Debentures and other supported debt -$ -$

Unsupported: Debentures and capital loans -$ -$

Capital leases -$ -$

Mortgages -$ -$

Total liabilities 111,716$ 104,770$

Net financial assets (debt) 169,035$ 289,476$

NON-FINANCIAL ASSETS

Tangible capital assets (Note 8)

Land -$ -$

Construction in progress -$ -$

Buildings -$

Less: Accumulated amortization -$ -$ -$

Equipment 126,907$

Less: Accumulated amortization (90,688)$ 36,219$ 58,046$

Vehicles 327,135$

Less: Accumulated amortization (122,113)$ 205,022$ 237,735$

Computer Equipment 132,435$

Less: Accumulated amortization (132,435)$ -$ 5,484$

Total tangible capital assets 241,241$ 301,265$

Prepaid expenses 5,914$ 20,695$

Other non-financial assets -$ -$

Total non-financial assets 247,155$ 321,960$

Accumulated surplus 416,190$ 611,436$

Accumulating surplus / (deficit) is comprised of:

Accumulated operating surplus (deficit) 416,190$ 611,436$

Accumulated remeasurement gains (losses) -$ -$

416,190$ 611,436$

Contractual obligations (Note 9)

Contingent liabilities

The accompanying notes and schedules are part of these financial statements.

As at August 31, 2014 (in dollars)

STATEMENT OF FINANCIAL POSITION

4


Budget Actual Actual2014 2014 2013

Alberta Education 565,174$ 800,423$ 906,773$

Other - Government of Alberta -$ -$ -$

Federal Government and First Nations 957,676$ 841,244$ 862,961$

Other Alberta school authorities -$ -$ -$

Out of province authorities -$ -$ -$

Alberta municipalities-special tax levies -$ -$ -$

Property taxes -$ -$ -$

Fees 20,000$ -$ -$

Other sales and services 2,000$ 48,397$ 41,691$

Investment income 2,500$ 4,434$ 7,155$

Gifts and donations 110,833$ 113,821$ 74,290$

Rental of facilities 4,000$ 5,034$ 11,019$

Fundraising -$ -$ -$

Gains on disposal of capital assets -$ -$ -$

Other revenue -$ -$ 184,685$

Total revenues 1,662,183$ 1,813,353$ 2,088,574$

Instruction (ECS - Grade 12) 1,219,856$ 1,149,259$ 1,364,700$

Plant operations and maintenance 283,246$ 471,437$ 608,560$

Transportation 190,121$ 203,877$ 250,853$

Board & system administration 181,238$ 184,026$ 194,699$

External services -$ -$ -$

Total expenses 1,874,461$ 2,008,599$ 2,418,812$

(212,278)$ (195,246)$ (330,238)$

STATEMENT OF OPERATIONS

For the Year Ended August 31, 2014 (in dollars)

EXPENSES

Operating surplus (deficit)


REVENUES

5

154

2014 2013

CASH FLOWS FROM:

A. OPERATING TRANSACTIONS

Operating surplus (deficit) (195,246)$ (330,238)$

Add (Deduct) items not affecting cash:

Total amortization expense 60,024$ 59,191$

Gains on disposal of tangible capital assets -$ -$

Losses on disposal of tangible capital assets -$ 16,437$

Expended deferred capital revenue recognition -$ -$

Deferred capital revenue write-off -$ -$

Donations in kind -$ -$

Changes in:

Accounts receivable 14,257$ 81,925$

Prepaids 14,781$ (535)$

Other financial assets -$ -$

Non-financial assets -$ -$

Accounts payable and accrued liabilities 46,436$ (49,956)$

Deferred revenue (excluding EDCR) 6,243$ (287,035)$

Employee future benefit liabilitiies -$ -$

Other (describe) -$ 47,746$

Total cash flows from operating transactions (53,505)$ (462,465)$

B. CAPITAL TRANSACTIONS

Purchases of tangible capital assets

Land -$ -$

Buildings -$ -$

Equipment -$ -$

Vehicles -$ (178,677)$

Computer equipment -$ -$

Net proceeds from disposal of unsupported capital assets -$ 71,000$

Other (describe) -$ (47,746)$

Total cash flows from capital transactions -$ (155,423)$

C. INVESTING TRANSACTIONS

Purchases of portfolio investments -$ (100,000)$

Dispositions of portfolio investments 100,000$ -$

Remeasurement gains (losses) reclassified to the statement of operations -$ -$

Other (describe) -$ -$

Total cash flows from investing transactions 100,000$ (100,000)$

D. FINANCING TRANSACTIONS

Issue of debt -$ -$

Repayment of debt -$ -$

Other (describe) -$ -$

Total cash flows from financing transactions -$ -$

Increase (decrease) in cash and cash equivalents 46,495$ (717,888)$

Cash and cash equivalents, at beginning of year 156,057$ 873,945$

Cash and cash equivalents, at end of year 202,552$ 156,057$



School Jurisdiction Code:

STATEMENT OF CASH FLOWS

Capital asset purchase in accounts payable

Capital asset purchase in accounts payable

6

154

Budget 2014 2013

2014

Operating surplus (deficit) (212,278)$ (195,246)$ (330,238)$

Effect of changes in tangible capital assets

Acquisition of tangible capital assets -$ -$ (178,677)$

Amortization of tangible capital assets 65,138$ 60,024$ 59,191$

Net carrying value of tangible capital assets disposed of -$ -$ 87,437$

Write-down carrying value of tangible capital assets -$ -$ -$

Other changes -$ -$ -$

Total effect of changes in tangible capital assets 65,138$ 60,024$ (32,049)$

Changes in:

Prepaid expenses -$ 14,781$ (535)$

Other non-financial assets -$ -$ -$

Net remeasurement gains and (losses) -$ -$ -$

Endowments -$ -$ -$

Decrease (increase) in net debt (147,140)$ (120,441)$ (362,822)$

Net debt at beginning of year 289,476$ 289,476$ 652,298$

Net debt at end of year 142,336$ 169,035$ 289,476$

School Jurisdiction Code:

STATEMENT OF CHANGE IN NET DEBT

For the Year Ended August 31, 2014


7


2014 2013

Accumulated remeasurement gains (losses) at beginning of year -$ -$

Unrealized gains (losses) attributable to:

Portfolio investments -$ -$

Other -$ -$

Amounts reclassified to the statement of operations:

Portfolio investments -$ -$

Other -$ -$

Net remeasurement gains (losses) for the year -$ -$

Accumulated remeasurement gains (losses) at end of year -$ -$

STATEMENT OF REMEASUREMENT GAINS AND LOSSES



8


ACCUMULATED ACCUMULATED ACCUMULATED INVESTMENT ENDOWMENTS UNRESTRICTED TOTAL TOTAL

SURPLUS REMEASUREMENT OPERATING IN TANGIBLE SURPLUS OPERATING CAPITAL

GAINS (LOSSES) SURPLUS CAPITAL RESERVES RESERVES

ASSETS

Balance at August 31, 2013 611,436$ -$ 611,436$ 301,265$ -$ 310,171$ -$ -$

Prior period adjustments:

-$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$

Adjusted Balance, August 31, 2013 611,436$ -$ 611,436$ 301,265$ -$ 310,171$ -$ -$

Operating surplus (deficit) (195,246)$ (195,246)$ (195,246)$

Board funded tangible capital asset additions -$ -$ -$ -$Disposal of unsupported tangible capital

assets -$ -$ -$ -$ -$Disposal of supported tangible capital assets

(board funded portion) -$ -$ -$ -$ -$Write-down of unsupported tangible capital

assets -$ -$ -$ -$ -$Write-down of supported tangible capital

assets (board funded portion) -$ -$ -$ -$ -$

Net remeasurement gains (losses) for the year -$ -$

Endowment expenses -$ -$ -$ -$

Direct credits to accumulated surplus -$ -$ -$ -$ -$ -$ -$ -$

Amortization of tangible capital assets -$ (60,024)$ 60,024$

Capital revenue recognized -$ -$ -$

Debt principal repayments (unsupported) -$ -$ -$

Externally imposed endowment restrictions -$ -$ -$ -$

Net transfers to operating reserves -$ -$ -$

Net transfers from operating reserves -$ -$ -$

Net transfers to capital reserves -$ -$ -$

Net transfers from capital reserves -$ -$ -$Assumption/transfer of other operations'

surplus -$ -$ -$ -$ -$ -$ -$

Balance at August 31, 2014 416,190$ -$ 416,190$ 241,241$ -$ 174,949$ -$ -$

SCHEDULE OF CHANGES IN ACCUMULATED SURPLUSfor the Year Ended August 31, 2014 (in dollars)

INTERNALLY RESTRICTED

9

Balance at August 31, 2013

Prior period adjustments:

Adjusted Balance, August 31, 2013

Operating surplus (deficit)

Board funded tangible capital asset additions

Disposal of unsupported tangible capital

assetsDisposal of supported tangible capital assets

(board funded portion)Write-down of unsupported tangible capital

assetsWrite-down of supported tangible capital

assets (board funded portion)

Net remeasurement gains (losses) for the year

Endowment expenses

Direct credits to accumulated surplus

Amortization of tangible capital assets

Capital revenue recognized

Debt principal repayments (unsupported)

Externally imposed endowment restrictions

Net transfers to operating reserves

Net transfers from operating reserves

Net transfers to capital reserves

Net transfers from capital reserves

Assumption/transfer of other operations'

surplus

Balance at August 31, 2014


-$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$

-$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$

External Services

INTERNALLY RESTRICTED RESERVES BY PROGRAM

Operating

Reserves

Capital

Reserves

Operating

Reserves

Capital

Reserves

for the Year Ended August 31, 2014 (in dollars)

Operating

Reserves

Capital

Reserves

Operating

Reserves

Capital

Reserves

Operating

Reserves

Capital

Reserves

School & Instruction Related Operations & Maintenance Board & System Administration Transportation

SCHEDULE OF CHANGES IN ACCUMULATED SURPLUS

10

154

SCHEDULE OF CAPITAL REVENUE

(EXTERNALLY RESTRICTED CAPITAL REVENUE ONLY)for the Year Ended August 31, 2014 (in dollars)

Proceeds on Unexpended

Disposal of Deferred

Provincially Surplus from Provincially Capital Expended

Approved Provincially Funded Revenue from Deferred

& Funded Approved Tangible Capital Other Capital

Projects (A) Projects (B) Assets (C) Sources (D)Revenue

Balance at August 31, 2013 -$ -$ -$ -$ -$

Prior period adjustments -$ -$ -$ -$ -$

Adjusted balance, August 31, 2013 -$ -$ -$ -$ -$

Add:

Unexpended capital revenue received from:

Alberta Education school building & modular projects (excl. IMR) -$

Infrastructure Maintenance & Renewal capital related to school facilities -$

Other sources: (Describe) -$ -$

Other sources (Describe) : -$ -$

Unexpended capital revenue receivable from:

Alberta Education school building & modular (excl. IMR) -$

Other sources: (Describe) -$ -$

Other souces: (Describe) -$ -$

Interest earned on unexpended capital revenue -$ -$ -$ -$

Other unexpended capital revenue: (Describe) -$

Net proceeds on disposal of supported tangible capital assets -$ -$

Insurance proceeds (and related interest) -$ -$

Donated tangible capital assets (Explain): -$

Alberta Schools Alternative Program (ASAP), Building Alberta School Construction Program, (BASCP) and other Alberta Infrastructure managed projects -$

Transferred in (out) tangible capital assets (amortizable, @ net book value) -$

Expended capital revenue - current year -$ -$ -$ -$ -$

Surplus funds approved for future project(s) -$ -$

Other adjustments (Explain): -$ -$ -$ -$ -$

Deduct:

Net book value of supported tangible capital dispositions or write-offs -$

Other adjustments (Explain): -$ -$ -$ -$ -$

Capital revenue recognized - Alberta Education -$

Capital revenue recognized - Other Government of Alberta -$

Capital revenue recognized - Other revenue -$

Balance at August 31, 2014 -$ -$ -$ -$ -$

(A) (B) (C) (D)

Balance of Unexpended Deferred Capital Revenue at August 31, 2014 (A) + (B) + (C) + (D) -$

Unexpended Deferred Capital Revenue

(A) - Represents funding received from the Government of Alberta to be used toward the acquisition of new approved tangible capital assets with restricted uses only.

(B) - Represents any surplus of funding over costs from column (A) approved by Minister for future capital expenditures with restricted uses only.

(C) - Represents proceeds on disposal of provincially funded restricted-use capital assets to be expended on approved capital assets per 10(2)(a) of Disposition of Property Reg. 181/2010.

(D) - Represents capital revenue received from entities OTHER THAN the Government of Alberta for the acquisition of restricted-use tangible capital assets.

Unexpended Deferred Capital Revenue

11


2013

Plant Operations Board &REVENUES Instruction and System External

(ECS- Grade 12) Maintenance Transportation Administration Services TOTAL TOTAL

(1) Alberta Education 386,138$ 206,603$ 13,845$ 193,837$ -$ 800,423$ 906,773$

(2) Other - Government of Alberta -$ -$ -$ -$ -$ -$ -$

(3) Federal Government and First Nations 734,537$ 106,707$ -$ -$ -$ 841,244$ 862,961$

(4) Other Alberta school authorities -$ -$ -$ -$ -$ -$ -$

(5) Out of province authorities -$ -$ -$ -$ -$ -$ -$

(6) Alberta municipalities-special tax levies -$ -$ -$ -$ -$ -$ -$

(7) Property taxes -$ -$ -$ -$ -$ -$ -$

(8) Fees -$ -$ -$ -$ -$

(9) Other sales and services 26,834$ 18,717$ -$ 2,846$ -$ 48,397$ 41,691$

(10) Investment income -$ -$ -$ 4,434$ -$ 4,434$ 7,155$

(11) Gifts and donations 24,321$ 54,500$ 35,000$ -$ -$ 113,821$ 74,290$

(12) Rental of facilities -$ 5,034$ -$ -$ -$ 5,034$ 11,019$

(13) Fundraising -$ -$ -$ -$ -$ -$ -$

(14) Gains on disposal of tangible capital assets -$ -$ -$ -$ -$ -$ -$

(15) Other revenue -$ -$ -$ -$ -$ -$ 184,685$

(16) TOTAL REVENUES 1,171,830$ 391,561$ 48,845$ 201,117$ -$ 1,813,353$ 2,088,574$

EXPENSES

(17) Certificated salaries 563,731$ -$ -$ 563,731$ 772,031$

(18) Certificated benefits 120,804$ -$ -$ 120,804$ 129,654$

(19) Non-certificated salaries and wages 276,438$ 106,639$ 82,812$ 72,097$ -$ 537,986$ 566,115$

(20) Non-certificated benefits 25,618$ 10,729$ 12,430$ 6,175$ -$ 54,952$ 61,781$

(21) SUB - TOTAL 986,591$ 117,368$ 95,242$ 78,272$ -$ 1,277,473$ 1,529,581$

(22) Services, contracts and supplies 153,629$ 335,796$ 75,923$ 105,376$ -$ 670,724$ 813,065$

(23) Amortization of supported tangible capital assets -$ -$ -$ -$ -$ -$ -$

(24) Amortization of unsupported tangible capital assets 9,039$ 18,273$ 32,712$ -$ -$ 60,024$ 59,191$

(25) Supported interest on capital debt -$ -$ -$ -$ -$ -$ -$

(26) Unsupported interest on capital debt -$ -$ -$ -$ -$ -$ -$

(27) Other interest and finance charges -$ -$ -$ 378$ -$ 378$ 538$

(28) Losses on disposal of tangible capital assets -$ -$ -$ -$ -$ -$ 16,437$

(29) Other expense -$ -$ -$ -$ -$ -$ -$

(30) TOTAL EXPENSES 1,149,259$ 471,437$ 203,877$ 184,026$ -$ 2,008,599$ 2,418,812$

(31) 22,571$ (79,876)$ (155,032)$ 17,091$ -$ (195,246)$ (330,238)$OPERATING SURPLUS (DEFICIT)

SCHEDULE OF PROGRAM OPERATIONSfor the Year Ended August 31, 2014 (in dollars)

2014

12


Expensed IMR, Unsupported 2014

Utilities Modular Unit Amortization Supported TOTAL

EXPENSES Custodial Maintenance and Relocations & & Other Capital & Debt Operations and

Telecomm. Lease Payments Expenses Services Maintenance

Uncertificated salaries and wages 54,168$ 18,405$ -$ -$ 34,066$ 106,639$ 106,639$

Uncertificated benefits 4,673$ 3,591$ -$ -$ 2,465$ 10,729$ 10,729$

Sub-total Remuneration 58,841$ 21,996$ -$ -$ 36,531$ 117,368$ 117,368$

Supplies and services 7,450$ 11,638$ -$ -$ 33,340$ 52,428$ 52,428$

Electricity 34,414$ 34,414$ 34,414$

Natural gas/heating fuel 25,444$ 25,444$ 25,444$

Sewer and water 1,288$ 1,288$ 1,288$

Telecommunications 3,946$ 3,946$ 3,946$

Insurance 26,519$ 26,519$ 26,519$

Amortization of tangible capital assets

Supported -$ -$

Unsupported 18,273$ 18,273$ 18,273$

Total Amortization 18,273$ 18,273$ -$ 18,273$

Interest on capital debt

Supported -$ -$

Unsupported -$ -$ -$

Lease payments for facilities 191,757$ 191,757$ 191,757$

Other interest charges -$ -$ -$

Losses on disposal of capital assets -$ -$ -$

TOTAL EXPENSES 66,291$ 33,634$ 65,092$ 191,757$ 96,390$ 18,273$ 471,437$ -$ 471,437$

School buildings 4,417.0

Non school buildings 0.0

All expenses related to activities undertaken to keep the school environment and maintenance shops clean and safe.

All expenses associated with the repair, replacement, enhancement and minor construction of buildings, grounds and equipment components. This includes regular and preventative

maintenance undertaken to ensure components reach or exceed their life cycle and the repair of broken components. Maintenance expenses exclude operational costs related to

expensed IMR & Modular Unit relocations, as they are reported on separately.

All expenses related to electricity, natural gas and other heating fuels, sewer and water and all forms of telecommunications.

All operational expenses associated with non-capitalized Infrastructure Maintenance Renewal projects, modular unit (portable) relocation, and payments on leased facilities.

All expenses related to the administration of operations and maintenance including (but not limited to) contract administration, clerical functions, negotiations, supervision of employees

& contractors, school facility planning & project 'administration', administration of joint-use agreements, and all expenses related to ensuring compliance with health and safety standards,

codes and government regulations.

All expenses related to supported capital assets amortization and interest on supported capital debt.

SQUARE METRES

SCHEDULE OF PLANT OPERATIONS AND MAINTENANCE EXPENSES

for the Year Ended August 31, 2014 (in dollars)

Facility Planning &

Operations

Administration

SUB-TOTAL

Operations &

Maintenance

Custodial:

Note:

Supported Capital & Debt Services:

Facility Planning & Operations Administration:

Expensed IMR & Modular Unit Relocation & Lease Pmts:

Utilities & Telecommunications:

Maintenance:

13

MOTHER EARTH’S CHILDREN’S CHARTER SCHOOL SOCIETYNOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 2014

14

1. Authority and purpose

Mother Earth’s Children’s Charter School Society (the “Society”) delivers educational programs underthe authority of the School Act, Revised Statutes of Alberta 2000, Chapter S-3. It is not taxable underSection 149(1) of the Income Tax Act.

The Society receives funding for instruction and support under Education Grants Regulation (AR120/2008). The regulation allows for the setting of conditions and use of grant monies. The Society islimited on certain funding allocations and administration expenses.

2. Significant accounting policies

These financial statements have been prepared in accordance with the CICA Canadian public sectoraccounting standards (PSAS). The financial statements have, in management’s opinion, beenproperly prepared within reasonable limits of materiality and within the framework of the accountingpolicies summarized below:

Revenue recognition

Revenue is recorded on an accrual basis. Instruction and support allocations are recognized inthe year to which they relate. Fees for services related to courses and programs are recognizedas revenue when such courses and programs are delivered.

Eligibility criteria are criteria that the Society has to meet in order to receive certain contributions.Stipulations describe what the Society must perform in order to keep the contributions.Contributions without eligibility criteria or stipulations are recognized as revenue when thecontributions are authorized by the transferring government or entity. Contributions with eligibilitycriteria but without stipulations are recognized as revenue when the contributions are authorizedby the transferring government or entity and all eligibility criteria have been met.

Contributions with stipulations are recognized as revenue in the period the stipulations are met,except when and to the extent that the contributions give rise to an obligation that meets thedefinition of a liability in accordance with Section PS 3200. Such liabilities are recorded asdeferred revenue.

Expenses

Expenses are reported on an accrual basis. The cost of all goods consumed and servicesreceived during the year is expensed.

Actual salaries of personnel assigned to two or more programs are allocated based on the timespent in each program. Employee benefits and allowances are allocated to the same programs,and in the same proportions, as the individual’s salary. Supplies and services are allocated basedon actual program identification.


AUGUST 31, 2014

15

2. Significant accounting policies (continued)

Prepaid expenses

Certain expenditures incurred and paid before the close of the school year are for specific schoolsupplies, which will be consumed subsequent to the year-end, and are accordingly recorded asprepaid expenses. Certain insurance expenses also fall into this category.

Portfolio investments

The Society has investments in GIC’s that have maturity dates greater than 3 months. GIC’s notquoted in an active market are reported at cost or amortized cost.

Detailed information regarding portfolio investments is disclosed in Note 5.

Asset classification

Assets are classified as either financial or non-financial. Financial assets are assets that could beused to discharge existing liabilities or finance future operations. Non-financial assets areacquired, constructed or developed assets that do not normally provide resources to dischargeexisting liabilities but are employed to deliver services, may be consumed in normal operationsand are not for resale in the normal course of operations. Non-financial assets include tangiblecapital assets and prepaid expenses.

Tangible capital assets

Tangible capital assets are initially recorded at cost which includes amounts that are directlyattributable to acquisition, construction, development or betterment of the asset. Donatedtangible capital assets are recorded at their fair market value at the date of donation, except incircumstances where fair value cannot be reasonably determined, when they are then recognizedat nominal value. Transfers of tangible capital assets from related parties are recorded at originalcost less accumulated amortization. Tangible capital assets are amortized on a straight-line basisover the estimated useful life as follows:

Equipment 10 to 20 yearsVehicles 10 yearsComputer equipment 5 years

Only capital assets with a cost in excess of $5,000 are capitalized. No amortization is recorded inthe year of acquisition.

Vacation pay

Vacation pay is accrued in the period in which the employee earns the benefit.


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Program reporting

The Society’s operations have been segmented as follows:

ECS-Grade 12 Instruction: The provision of Early Childhood Services education andgrades 1 – 12 instructional services that fall under the basic public education mandate.

Plant Operations and Maintenance: The operation and maintenance of all schoolbuildings and maintenance shop facilities as well as the operations of the Hot Lunchprogram.

Transportation: The provision of regular and special education bus services (to and fromschool), whether contracted or board operated, including transportation facilities.

Board and System Administration: The provision of board governance and system-based/central office administration.

External Services: All projects, activities, and services offered outside the publiceducation mandate for ECS children and students in grades 1-12. Services offeredbeyond the mandate for public education are to be self-supporting, and Alberta Educationfunding may not be utilized to support these programs.

The allocation of revenue and expenses are reported by program, source, and object on theSchedule of Program Operations.

Pensions

Pension costs included in these statements comprise the cost of employer contributions forcurrent service of employees during the year.

The current and past service costs of the Alberta Teachers Retirement Fund are met bycontributions by active members and the Government of Alberta. Under the terms of theTeachers Pension Plan Act, the Society does not make pension contributions for certificated staff.The Government portion of the current service contribution to the Alberta Teachers RetirementFund on behalf of the jurisdiction is included in both revenue and expenses. For the school yearended August 31, 2014, the amount contributed to the Teachers’ Retirement Fund by theProvince was $68,791 (2013 - $71,308).

The Society participates in a multi-employer pension plan, the Local Authorities Pension Plan,and does not report on any unfunded liabilities. The Society does not make pension contributionsfor the staff. At December 31, 2013, the Local Authorities Pension Plan reported an actuarialdeficiency of $4,861,516,000 (2012 – deficiency of $4,977,303,000).


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Financial instruments

A contract establishing a financial instrument creates, at its inception, rights and obligations toreceive or deliver economic benefits. The financial assets and financial liabilities portray theserights and obligations in the financial statements. The Society recognizes a financial instrumentwhen it becomes a party to a financial instrument contact.

The Society’s financial instruments consist of cash and cash equivalents, accounts receivable,portfolio investments, bank indebtedness and accounts payable and accrued liabilities. Unlessotherwise indicated, it is management's opinion that the Society is not exposed to significantcredit and liquidity risks, or market risk, which includes currency, interest rate and other pricerisks.

Portfolio investments in equity instruments quoted in active markets and derivates are recorded atfair value. All other financial assets and liabilities are recorded at cost or amortized cost and theassociated transaction costs are added to the carrying value of items in the cost or amortized costupon initial recognition. The gain or loss arising from derecognition of a financial instrument isrecognized in the Statement of Operations. Impairment losses such as write-downs or write-offsare reported in the Statement of Operations.

Cash and cash equivalents

Cash and cash equivalents include cash and investments that are readily convertible to knownamounts of cash and that are subject to an insignificant risk of change in value. These short-terminvestments have a maturity of three months or less at acquisition and are held for the purpose ofmeeting short-term cash commitments rather than for investing.

Accounts receivable

Accounts receivable are shown net of allowance for doubtful accounts.

Deferred revenue

Deferred revenue includes contributions received for operations which have stipulations that meetthe definition of a liability per Public Sector Accounting Standards (PSAS) PS 3200. Thesecontributions are recognized by the Society once it has met all eligibility criteria to receive thecontributions. When stipulations are met, deferred revenue is recognized as revenue in the fiscalyear in a manner consistent with the circumstances and evidence used to support the initialrecognition of the contributions as a liability.

Contributed services

Volunteers contribute a considerable number of hours per year to schools to ensure that certainprograms are delivered, such as kindergarten, lunch services and the raising of school generatedfunds. Because of the difficulty of compiling these hours and the fact that these services are nototherwise purchased, contributed services are not recognized in the financial statements.


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Contributed supplies

Supplies to support the hot lunch program are donated to the Society. These supplies consist ofperishable food products nearing expiry, with no market value. Because of the difficulty indetermining the value of the contributions due to the fact that there is no market for theseproducts, contributed supplies are not recognized in the financial statements.

Measurement uncertainty

The precise determination of many assets and liabilities is dependent on future events. As aresult, the preparation of financial statements for a period involves the use of estimates andapproximations, which have been made using careful judgement. Actual results could differ fromthose estimates. Significant areas requiring the use of management estimates relate to thepotential impairment of assets, rates for amortization and estimated employee future benefits.

3. Cash and cash equivalents and bank indebtedness

2014 2013

AverageEffective

(Market) YieldCost

AmortizedCost

AmortizedCost

Cash 0.10 - 0.60% $211,366 $211,369 $210,604

Bank indebtedness (8,814) (8,814) (54,547)

Total cash and bank indebtedness $202,552 $202,555 $156,057

The Society has negotiated an overdraft facility in the amount of $50,000 with Servus Credit Unionwith an overdraft interest rate of prime. At August 31, 2014, there were no drawings on this overdraftfacility (2013 - $29,865). Bank indebtedness consists of outstanding cheques issued in excess of theoperating bank balance.

4. Accounts receivable2014 2013

Federal Government $ 6,847 $ 8,713Other 1,300 6,952Foundations 10,408 10,647Payroll advances 600 5,900

19,155 32,212Less: allowance for doubtful accounts (1,200) -

$ 17,955 $ 32,212


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5. Portfolio investments

2014 2013

AverageEffective(Market)

Yield

Cost Fair Value

AverageEffective(Market)

Yield

CostFair

Value

Long term deposit 0.90% $51,430 $51,430 1.00% $51,430 $51,430

Long term deposit 2.15% $100,00 $100,000

Total portfolio investments 0.90% $51,430 $51,430 1.53% $151,430 $151,430

The following is the maturity structure for fixed income securities based on the principal amount:

2014 2013

3 months to 5 years 100% 100%

6 to 10 years - -

11 to 20 years - -

Over 20 years - -

100% 100%

It is management’s opinion that there has been no impairment during the year.

6. Accounts payable and accrued liabilities2014 2013

Trade payables and accrued liabilities $ 18,927 $ 19,841Foundations 50,750 750Federal Government 24,982 27,632

$ 94,659 $ 48,223


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7. Deferred revenue

SOURCE AND GRANT OR FUND TYPE DEFERREDREVENUE

as atAug. 31, 2013

ADD:2013/2014

Restricted FundsReceived/Receivable

DEDUCT:2013/2014

Restricted FundsExpended

(Paid/Payable)

ADD(DEDUCT):2013/2014

Adjustmentsor Returned

Funds

DEFERREDREVENUE

as atAug. 31, 2014

Alberta Education Restricted Operational Funding:

Lease - $200,000 $191,757 - $8,243

Other Deferred Revenue:

School rental fees $2,000 - $2,000 - -


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8. Tangible capital assets

August 31, 2014

Vehicles EquipmentComputerEquipment Total

Historical cost

Beginning of year $327,135 $126,907 $132,435 $586,477

Additions - - - -

Transfers in (out) - - - -

Less disposals including write-offs - - - -

$327,135 $126,907 $132,435 $586,477

Accumulated amortization


Amortization expense 32,713 21,827 5,484 60,024



$122,113 $90,688 $132,435 $285,212

Net book value at end of year $205,022 $36,219 - $241,241


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8. Tangible capital assets (continued)

August 31, 2013

Vehicles EquipmentComputerEquipment Total

Historical cost


Additions 178,677 - - 178,677


Less disposals including write-offs (87,437) - - (87,437)

$327,135 $126,907 $132,435 $586,477

Accumulated amortization


Amortization expense 23,590 21,828 13,775 59,193



$89,400 $68,861 $126,951 $285,212

Net book value at end of year $237,735 $58,046 $5,484 $301,265


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9. Contractual obligations

The Society is committed to a lease agreement with a related party, The Friends of MECCSEducation Foundation, which expires January 31, 2022. As per the lease agreement, the Societyshall pay $350,000 per annum as rent in respect of each year of the term. Each year this amount issubject to change based on Friends of MECCS Education Foundation board approval.

10. Economic dependence

The Society’s primary sources of revenue are received from the Province of Alberta and theGovernment of Canada. The Society’s ability to continue viable operations is dependent on thisfunding.

11. Related party transactions

All entities consolidated in the accounts of the Government of Alberta are related parties of schooljurisdictions. These include government departments, health authorities, post-secondary institutionsand other school jurisdictions in Alberta.

All related-party transactions are in the normal course of business and are measured at the exchangeamount, which is the amount of consideration established and agreed to by the related parties.

Friends of MECCS Education Foundation (the “Foundation”) is a related party as its board of directorsincludes management and board members from the Society. These two entities have not beenconsolidated as it was determined that there is no common control. The Society and the Foundationpay expenses on behalf of one another, which are then fully reimbursed at cost. The Society alsopays the Foundation rent for the use of the school and related property. These transactions are in thenormal course of operations and have been measured at the exchange amount, which is the amountof consideration agreed to by the parties.

Balances Transactions

FinancialAssets (at cost)

Liabilities (atamortized cost)

Revenues Expenses

Government of AlbertaEducation - $8,243 $800,423 -Other Gov’t of Alberta departments - - - -

OtherPost-secondary institutions - - - -Friends of MECCS Education

Foundation$10,408 $50,750 - $191,757

TOTAL 2013-2014 $10,408 $58,993 $800,423 $ 191,757

TOTAL 2012-2013 $17,509 $750 $1,091,459 $476,353


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12. School generated funds

2014 2013Deferred school generated revenue, beginning of year $ - $ -Gross receipts:

Other sales and services 18,718 19,939Current year activities – total direct costs including cost of goods soldto raise funds

18,718 19,939

Deferred school generated revenue, end of year $ - $ -

13. Budget amounts

The budget was prepared by the school jurisdiction and approved by the Board of Trustees on May13, 2013.

14. Remuneration and monetary incentives

The Society had paid or accrued expenses for the year ended August 31, 2014 to or on behalf of thefollowing positions and persons in groups as follows:

Performance

Board Members: FTE Remuneration Benefits Allowances Bonuses Expenses

Chair - Brenda Nelson 1.0 $0 $0 $0 $0 $0 $269Dale Friedel 1.0 $0 $0 $0 $0 $0 $0Emil Durocher 1.0 $0 $0 $0 $0 $0 $0Terry Regamey 1.0 $0 $0 $0 $0 $0 $389Garrett Strawberry 1.0 $0 $0 $0 $0 $0 $366Allan Ross 1.0 $0 $0 $0 $0 $0 $492Clifford Cardinal 1.0 $0 $0 $0 $0 $0 $0Rod Burnstick 1.0 $0 $0 $0 $0 $0 $0

0.0 $0 $0 $0 $0 $0 $00.0 $0 $0 $0 $0 $0 $00.0 $0 $0 $0 $0 $0 $00.0 $0 $0 $0 $0 $0 $0

Subtotal 8.0 $0 $0 $0 $0 $0 $1,516

Certificated teachers 7.0 $563,731 $120,804 $0 $0 $0 $0Non-certificated - other 13.6 $537,986 $54,952 $0 $0 $0 $0

TOTALS $1,101,717 $175,756 $0 $0 $0 $1,516

ERIP's /

Other

The Superintendent, Ed Wittchen is paid based on contract and not wages. He received $72,920(2013 - $77,883) as per his contract.

Benefits include government portion of the current service contribution to the Alberta TeachersPension Fund on behalf of the school jurisdiction.


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15. Going concern

These financial statements have been prepared on a going concern basis, which contemplates therealization of assets and the payment of liabilities in the ordinary course of operations. Should theSociety be unable to continue as a going concern, it may be unable to realize the carrying value of itsassets and to meet its liabilities as they become due.

The continuation of the Society is dependent upon the continuing availability of Federal and Provincialfunding, the additional funding of third parties, and upon adherence to budgeted expenses. Thesefinancial statements do not reflect the adjustments or reclassification of assets and liabilities whichwould be necessary if the Society were unable to continue its operations.

16. Additional information

The following information is required to comply with the disclosure requirements of the CharitableFund-raising Act and Regulation:

Gross contributions received were $100,986. Gross contributions were disposed of through various expenditures which have been detailed on

the schedule of program operations and were in excess of 10% of the gross contributionsreceived.

There were no expenses incurred for the purposes of soliciting contributions. No amounts were paid as remuneration to employees whose principal duties involve fundraising.

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