By Cole Parkinson
The Horizon School Board has been presented with their audited financial statements as of Aug. 31, 2018.
At the board’s regular meeting on Nov. 28, they were given a brief rundown on this year’s audit presented by Avail LLP.
“Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally-accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement,” said the auditor’s report.
In order to streamline the presentation, the board was presented with a document highlighting some of the main factors in this year’s audit.
The first item listed was financial assets which sees a decline from 2017.
“Financial assets are about $7.9, almost $8 million compared to last year’s $10.5 million,” said auditor Darren Adamson.
Cash and cash equivalents are listed at $2,419,388, accounts receivable is listed at $1,035,824 and portfolio investments are at $4,482,676 for a total of financial assets of $7,937,888.
With cash, receivables and portfolio investments down by about $1.7 million total, Adamson says there are a few factors for why there is a slight decrease.
“Two reasons, one is loss of operations and the other is you spent some on capital assets,” he explained.
“Receivables are down a little over $1 million, down from last year’s $1.9 million. It includes about $387,000 in capital from Warner School. Last year capital receivables were higher so it is down this year. No surprises on the receivables.”
Liabilities on the other side have seen a slight bump compared to the previous year.
Last year, total liabilities were slated at $52,054,999 and this year they are up to $52,935,982.
“The biggest one is deferred revenue. There are two different kinds of deferred revenue that are very different,” said Adamson. “One is deferred revenue not including expended deferred capital revenue, so $1,454,000. That is funding we receive for specific purposes. The other $50.2 million is capital funding that we have received and spent this year and in prior years but we haven’t recognized it as revenue yet.”
“When we get that capital funding we purchase a building or do renovation, we capitalize those costs and expense them over 40 years. We take that funding and amortize it into revenue over the same 40 year period. It is a liability on paper but we don’t have to repay it to anybody,” continued Adamson.
Making up the total liabilities for 2018 is $1,162,095 in accounts payable and accrued liabilities, $51,652,842 in deferred revenue and $121,045 in employee future benefit liabilities.
Net debt for 2018 is set at $44,998,094 while in 2017 it was at $41,542,262.
Non-financial assets are listed at $55,936,773 in 2018 and in 2017 it was $53,940,100 with the biggest chunk of that coming from buildings.
For tangible capital assets, land is listed at $534,275, buildings are $54,391,312 with accumulated amortization, equipment is $562,531 with accumulated amortization.Vehicles are $72,272 with accumulated amortization and computer equipment is $194,600 with accumulated amortization for a total of tangible capital assets of $55,754,990.
Prepaid expenses are set for $181,783 which contributes to the total non-financial assets.
Accumulated surplus has a total of $10,938,679 for 2018, down from 2017’s listing of $12,397,838.
For statement of operations, the audit says Horizon looks to be under budget in their operating surplus as it lists it at $1,457,075 compared to the 2018 budget which listed it at $1,686,593, though both are lower than the 2017 listing of $2,303,329.
The biggest source of revenue for Horizon comes from Alberta Education which provided $43,243,149 while the rest comes from things such as fees, sales and services, investment income, and rental of facilities, among others.
Total revenues come in at $45,694,168, which is a touch lower than what was budgeted at $45,894,916.
Expenses largely come from salaries and benefits as instruction of Early Childhood Services is listed at $1,583,678 and instruction for Grades 1 to 12 is at $33,833,530.
Other expenses include plant operation and maintenance at $6,458,673, transportation at $2,879,211, board and system administration at $1,957,826 and external services at $438,325.
This totals to $47,151,243 for expenses. It was originally budgeted for $47,581,509 which sees a decrease from 2017 totals at $48,097,395.
The board was also presented with a key performance indicator report which is a ‘metric used to evaluate factors that are crucial to the success of an organization’, according to the report introduction.
A key point in the report pointed out by Adamson revolved around comparable averages to other school divisions especially in regard to salaries and benefits.
“You are spending about 73.7 cents of every dollar you bring in on salaries and benefits and the comparable average is about 74,” he said.
Horizon School Division has a total of 427 full-time equivalent employees in 2018, while the comparable average is 523. They have a total of 3,367 students while the comparable average has 4,872.
Horizon is right in line with expense allocation in comparable averages as their instruction is at 75.1 per cent (75.8), plant operation and maintenance is at 13.7 per cent (13.7), transportation is 6.1 per cent (5.9), board and system admin is 4.2 per cent (3.9) and external services is 0.9 per cent (0.8).