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< Oronu Weekly l imes, Wednesday, June 22, 1988-9 AUDITORS' REPORT To The Northumberland & Newcastle We have examined the Balance Sheet of The Northumberland Northumberland and Newcastle Board of Education as at 31 December 1987, and the Revenue Fund Statement of Operations Operations and the Capital Fund. Statement of Operations for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests and other procedures as we considered necessary in the circumstances. In our opinion, these financial statements present- fairly the financial position of the Board as at 31 December 1987 and the results of its operations for the year then ended in accordance with the accounting principles described in note 1 to the financial statements applied on a basis consistent consistent with that of the preceding year. Cobourg, Ontario 30 March 1988 Langhorne Lynch Lillico, Licence Number 1071 The Northumberland and Newcastlè Board of Education BALANCE SHEET as at 31 December 1987 ASSETS Current assets Cash $ 568,003 Accounts receivable Municipalities Under-requisitions (elementary) 19,151 Under-requisitions (secondary) 12,450 Supplementary taxes, etc. 709,710 Other school boards 417,330 Government of Ontario 3,319,693 Government of Canada 184,907 Other 46,201 Other current assets ' 487,208 Total current assets $5,764,653 Capital outlay to be recovered in future years 2,911,537 . $8,676,190 LIABILITIES Current Liabilities Bank & other short-term borrowing $ 158,973 Accounts payable '«Municipalities Over-requisitions (elementary) 19,151 Over-requisitions (secondary) 12,450 Trade payables accrued liabilities ■ 2,552,072 Total current liabilities, $2,742,646 Net long-term liabilities 2,104,488 Reserve for working funds 1,611,755 Equity in reserve funds 2,217,301 , , $8,676,190 Revenue Fund and Statement of Operations for the year ended 31 December 1987 Elementary Secondary Expenditure Business administration $ 441,254 $ 459,669 General administration 293,746 305,834 Computer services 292,899 . 304,856 Instruction. 33,583,096 26,258,720 Plant operation & maintenance 4,453,354 " 4,067,375 Transportation 3,158,637 2,440,710 Tuition fees 61,100 168,000 Capital expenditure (non-allocable) 1,930,953 461,816 Debt charges & capital loan interest , 194,243 368,918 Other operating expenditure 138,045 137,704 Non-operating expenditure excluding transfers to reserves 252,726 , 183,102 Total expenditure $44,800,053 $35,156,704 Board of Education Recovery of Expenditure Other school boards - tuition fees and miscellaneous Government of Ontario, miscellaneous Government of Canada Individual - tuition fees Other revenue, excluding transfers from reserves $ 53,249 72,959 • 176,558 5,710 759,615 $ 779,737 111,417 62,295 . 124,984 1,200,837 Total recovery of expenditure $ 1,068,091 ■ $ 2,279,270 Net expenditure $43,731,962 $32,877,434 Financing of Net Expenditure Government of Ontario General Legislative Grants $26,093,540 $17,499,743 Local Taxation Local taxation raised in the current year Decrease (increase) in reserve other than reserve for refund of taxes $18,043,619 (405,197) $15,931,300 (553,609) Total local taxation $17,638,422 $15,377,691 Total financing $43,731,962 $32,877,434 CAPITAL FUND STATEMENT OF OPERATIONS for the year ended 31 December 1987 Capital expenditure Fixed assets Buildings, furniture & equipment $2,957,933 School sites & improvement to sites • 148.369 Total capital expenditure $3,106,302 r Capital financing Capital expenditure |rom the revenue fund $3,106,302 Total capital financing $3,106,302 2 Liability for Sick Leave Benefits (a) , Under the sick leave benefit plan, unused sick leave can accumulate and employees may become entitled entitled to a cash payment when they leave the Board's employment on retirement. The estimated cost of these accumulated days as at 31 December" 1987 to the extent that they may be used used to determine the retirement gratuity to an employee on retirement, amounts to aproximately $6,425,000 for elementary and $5,783,000 for secondary. secondary. In 1987 the Board paid $573,048 (1986 -$578,200) under this benefit plan. (b) An amount of $867,132 is included in Equity in Reserve Funds and is available to assist in meeting future obligations of the plan. 3. Net Long-Term Liability Repayments Qf the net long-term liabilities outstanding of $2,104,488 principal amounting to $1,717,913 plus interest amounting to $537,044 is payable over the next five years as follows: Principal Interest Total 1988 423,213 175,365 598,578 1989 441,343 140,054- 581,397 1990 442,722 103,929 546,651 .1991 293,665 71,443 365,108 , 1992 116,970 46,253 163,223 Total 1,717,913 537,044 2,254,957 NOTES TO THE FINANCIAL STATEMENTS ■ 31 December 1987 1. Accounting Principles The financial statements have been prepared by the Board using accounting principles that are prescribed by the Ministry of Education and are considered ap- ' propriate for Ontario School Boards. These principles principles are in accordance with generally accepted accounting accounting principles except as follows: (a) Accrual Accounting Revenue and expenditure are accounted for on the' accrual basis of accounting, with the following exceptions: exceptions: i) No provision is made for interest on unmatured debenture debt from the date of payment to the year-end. ii) No provision is made to record the liability for retirement and/or sick leave benefits accruing over the working lives of employees except as described in note 3(b). , . (b) Fixed Assets Fixed assets are charged to current expenditure unless financed by long-term debt. Principal and interest interest charges on net long-term liabilities are included as expenditures in the period due. Fixed assets including including capital leases, described as capital outlay to be recovered in future years, are included on the ■ balance sheet only to the extent of the balances of the related net long-term liabilities outstanding and of the related temporary financing at the year-end. ' (c) Reserves and Reserve Funds Reserves and reserve funds represent funds-appropriated funds-appropriated for general and specific purposes and are charged or credited to revenue fund operations in the year appropriated or drawn down. The amounts in reserves and reserve funds are approved by the Board and are within the limits defined in the Education Act. (d) Under/Over Requistion of Taxes The difference, between the net expenditures of any year and dismounts received to finance these ex-' penditures'is"carried forward to the subsequent,year to either increase or reduce the net revenue require- * ment from ratepayers. * Debt Charges & Capital Loan Interest The revenue fund expenditure for debt charges and capital loan interest includes principal and interest payments as follows: Principal payments on long Elementary Secondary Total term liabilities Interest payments on long term $191,047 $347,676 $538,723 liabilities 72,729 89,041 161,770 $263,776 $436,717 $700,493 5, Pension Plan Costs 6. 1988 1989 1990 1991 .1992 $103,145 135,500 135,500 77,500 20,000 The lease payments for office space are also subject to an annual inflation escalation clause. All non-teaching employees of the school board are eligible to be members of the Ontario Municipal Employees Retirement System which is a multiemployer multiemployer final average pay contributory plan. Employer contributions made to the plan during the year by the Qoard amounted to $404,027 (1986 $364,352). Those amounts have been included in employee benefits expense in the Schedule of Expenditure. Expenditure. Not shown in the financial statements of the Board are the employer's contributions to the Jeachefs' Superannuation Fund. The funding for such is provided provided directly by the Government of Ontario. Ontario School Board Insurance Exchange The Board joined effective January ,1987 for a five year period, the Ontario School Board Insurance Exchange Exchange (OSBIE), a'reciprocal insurance company licenced under the Insurance Act. OSBIE insures general publit liability, property damage and certain other risks. Operating Lease Obligations * The Board has long-term operating lease obligations for administration office, and warehouse space which expire between 1988 and 1992. The committed lease payments for the'next five years are as follows: