Q&A for 2009-10 Training Sessions - Ontario



2009-10 Fall Training Sessions

Q&A

Sections

Q – Are the site participation factor and Effectiveness & Efficiency rating amounts on Section 9 going to be pre-loaded by the Ministry?

A – Yes.

Q – Does a hard copy and soft copy of the specified audit procedures report need to be handed in to the Ministry

A – The Ministry requires boards to send only the signed hard copy.

Schedules

Schedule 1

Q - Where should land held for resale be recorded?

A – Assets held for sale will be included in Schedule 3C – under the section for assets permanently removed from service (PRFS). For the 2009-10 reporting year, boards are required to discuss with their auditors whether the amount is material enough to be reported as financial assets on the statement of financial position. If the board is required to report these assets as financial assets, they should inform their Ministry Finance Officer about the difference between their EFIS submission and the audited financial statements. The ministry will review the EFIS forms for future years to address this.

Schedule 1.1

Q – Can the ministry assist in providing the boards with a tool that will enable them to do the prior year restatements correctly and in a consistent manner?

A – The ministry has provided boards with an excel file titled “2009-10 FS – Working Papers” that can be used to establish restatements of the prior year amounts. A copy of this file has been included on the 2010 fall training website:



Q – Schedule 1.1 for 2009/10 FS does not have School operations & maintenance line, it appears that it is included with Pupil Accommodation.  In your instructions for restating 2008/09 actual or 2009/10 Budget there is no mention regarding School operations & maintenance line restatement.  Should we include that line with Pupil Accommodation amounts since that is what is happening for 2009/10 FS?

A - The School Operations & Maintenance line no longer exists and it is included in the Pupil Accommodation line (item 2.4). The amount should be included in the restatements for the 2008-09 actual and the 2009-10 Budget. This line has also been updated in the restatement template provided to boards.

 

Schedule 3

Q – Under the program breakdown for the Pupil Accommodation expenditures, can we use an allocation / pro-ration to report the breakdown by program?

A – Yes, a pro-ration can be used to split the total expenditure amongst the different programs provided that the allocation method is justifiable. For example, if there is one large project using various funding from different programs, boards can split the total amount of the capital expenditure based on an allocation of the amounts used from each separate funding.

Schedule 3C

Q – We incur some expenses when we dispose the tangible capital asset. Should we report the gross proceeds of disposition or the net proceeds of disposition?

A – Proceeds of disposition should be netted against any costs of sale.

Q – We borrow from our internal reserve to finance the construction of capital projects. The ministry funds the capital projects for the imputed short term interest. Should we capitalize by using the imputed interest cost?

A – Boards should capitalize the interest cost incurred during the construction period. Once the asset is ready for use, the capitalization of interest expense should cease even though the asset may be put into use at a later date. While the ministry funds the board for the short term interest by using imputed interest expense, boards should not capitalize imputed interest cost if they do not incur actual interest expense.

Q – We purchased a land and incurred appraiser’s costs to determine the value of the land. Should the cost of the appraising service be capitalized?

A – The cost of a tangible capital asset includes the purchase price of the asset and other acquisition costs. Fees for the appraising service relating to the purchase of the land should be included with the cost of the land and capitalized if these charges were incurred by the purchasing board. .

Q – We purchased assets and delayed the delivery of the cheque. Should we capitalize the bank charges and interest expenses because of the late delivery?

A – The only interest costs that can be capitalized are interest incurred on borrowing while an asset is in construction. Once an asset is ready for use, interest costs are expensed. Interest costs and bank charges incurred because of late delivery of the cheques should be expensed.

Q – Should we include the mTCA (computers, furniture and equipment etc.) in the asset upload file?

A – Boards are only required to report the asset by asset information for land, land improvement and building to the ministry in the asset upload file.

Q – How do we report long-term betterment projects to an existing building where the completion of the work would last over one fiscal year or capital projects that typically take 3 to 6 months to complete and not finished as of August 31st? Do we report such incurred expenses in a project in progress (PIP) class on EFIS Schedule 3C?

A – As the ministry does not use component-based accounting, the expenditures incurred on betterments are included with the cost of the building and thus amortization starts right away. As per the TCA guide, there is no requirement to wait till the project is finished for amortization to kick in; this works for betterments that are renewal work that are shorter term than e.g. a major retrofit of a school. In cases of larger type projects that last more than a year, in the latter case, board should consult with their auditors as to whether the project costs should be Construction in Progress.

Q – How should boards reflect the amalgamation of a School Authority in the EFIS package? How does this relate to the board’s published financial statements?

A – At September 1, 2009, some of the School Authorities (SA) were amalgamated with District School Boards (DSB).  In EFIS, the SA financial information is included in the 2008-09 columns.  This, however, may not agree to the information in the DSB’s published financial statements.  Depending on materiality and auditor opinion, the 2008-09 financial information would not include the SAs in the published financial statements.  The Ministry will accept a discrepancy between EFIS and the published financial statements with respect to the scenario described above.

Based on the above, school authorities that are being amalgamated will be required to restate their prior year comparatives, using the continuity of interest option which requires a retroactive statement as if the two boards had always been together.

School Authorities that were amalgamated as of Sept 1, 2009 should include all TCA related costs under the column adjustments to opening balances. This will apply to both the Gross Book Value and Amortization amounts.

For the deferred revenue, the board would add the September 1, 2009 school authority data to Schedule 5.1, column 1.  For the employee future benefits, the board would add the September 1, 2009 school authority data to Schedule 10G, columns 1, 2 and 3.  These balances will then flow to the Statement of Financial Position on Schedules 1 and 7.

Q – In the restatement of the 2008-09 FS, are boards required to use the TCA amounts reported in the notes to the 2008-09 FS or are they required to use the opening balances reported on the asset upload file including the values reported on the adjustments to opening balance columns?

A - The opening NBV is the sum of the opening balance as per your 2008-09 Financial Statements notes plus the column on the asset upload file under the columns adjustments to opening balance. The adjusted opening balance (which includes the opening balance column and the adjustments to opening balance columns) on schedule 3C should be the one that is used in the restatement of the prior year amount.

As this is the first year of the full implementation of TCA, there may be some boards that did not report some of their assets in their 08-09 closing balance. The adjustment column allows boards to make necessary changes to revise opening balances for 09-10. In subsequent years, EFIS will not have this column in 2010-11 and future years; the opening balance will be populated from the closing balances in Schedule 3C of the prior year, and any adjustments required will be treated as in-year adjustments.     

Schedule 5

Q – If a board wants to increase their Retirement Gratuities, where do we input the amount?

A – If a board wants to appropriate a larger amount of its accumulated surplus for retirement gratuities it should enter the amount of the increase under column 2 – In-Year Increase / (Decrease), line 2.1.

Schedule 5.2

Q – At what point / stage is the recovered amount reduced and reflected on the flow of funds to the board?

A – The reserves and deferred revenue amounts will be recovered first against any supported NPF amounts under NPP/GPL and then against Early Learning receivable starting in 2010-11. In other words, if a board had supported NPF amount, the amount will be reduced by the available recovery amount (the totals of the reserves and deferred revenues) and therefore lower the amount required for OFA financing in future.

Q – Some boards have early learning amounts that should be part of the capital wrap-up supported amounts. How should this be treated?

A - Early Learning amounts are not part of the supported amount in the Capital Wrap up. Although projects funded from Early Learning are included in the Capital wrap up template (CWT), they are not included in the supported amounts that get populated in section 12and schedule 3 of the CWT. Boards should contact their Ministry Capital Analyst for further information relating to this.

Schedule 5.4

Q – When an asset is sold at a loss this will decrease our boards’ accumulated surplus. In the past the loss did not affect accumulated surplus. Wouldn’t our board be worse off?

A – The change in accounting policy does not change the net impact on accumulated surplus; rather there is just a timing difference of when the impact on accumulated surplus is recognized.

Prior to 2009-10:

Assume the board had an asset which was purchased for $100,000 and later sold for $90,000. Before 2009-10 the board would have expensed this asset when purchased, which would have increased expenses resulting in accumulated surplus to decrease by $100,000. When the board would have sold the asset for $90,000 the revenue would have been deferred until it was used to on future capital purchases. Once the deferred revenue was used on capital purchase the revenue of $90,000 could be recognized by the board in that year. This would increase revenues by $90,000, resulting in an increase in accumulated surplus. Overall, accumulated surplus would have decreased by $10,000 ($90,000-$100,000).

In 2009-10:

In 2009-10, since assets are now capitalized (no longer expensed) the $10,000 loss would be recognized when the asset was sold and would decrease accumulated surplus.

Q – Where would boards classify board administration sites and land in Schedule 5.4?

A – Board administration sites and land would be classified as “Other” on Schedule 5.4.

Q – Do boards need to break out gains and losses separately or can they just net them?

A – Boards will need to break out gain and losses separately as the accounting treatment is different. Gains on restricted assets (land and buildings) are deferred and gains on unrestricted assets (furniture and equipment mostly) are reported as revenue. Losses are reported on schedule 10, schedule of expenses.

Q – Are boards to use net proceeds? For example, nett8ng costs associated with selling a school building.

A – Net proceeds should be used when filling out Schedule 5.4.

Q – Will capital losses impact the surplus / deficits of the board in the 2009-10?

A – All capital losses incurred during 2009-10 reporting year will impact the surplus / deficit for that year. These losses will be reported as part of the unavailable for compliance section of Schedule 5 – the Accumulated Surplus schedule.

Q – Can fundraising proceeds be used towards the construction of playgrounds?

A - Per memorandum 2010:B11, fundraising proceeds should not be used for:

• Items that are funded through the allocated budget of a school board including, but not limited to, core learning materials and textbooks;

• Infrastructure improvements which increase the on-the-ground capacity of a school (e.g., classrooms);

• Facility renewal normally funded through the school renewal grants, such as structural repairs, sanitation or emergency repairs; and

• Administrative expenses.

Fundraising revenues should be used to complement, not replace, funding for public education and provide enhanced student experiences, options and resources. Similar to all capital funding decisions, the capital planning process should guide school decision making.

Fundraising proceeds can be used towards playgrounds as they:

• enhance existing facilities and programs;

• are not specifically funded by Ministry allocations; and

• do not increase the on-the-ground capacity of a school.

The Ministry is drafting a fundraising guideline which will provide further information and examples including those related to capital fundraising. A draft guideline for fees for learning materials is posted on the Ministry’s website at: 

and

.  

Schedule 5.5

Q - Which projects go on this form? Do they have to be committed? If so, what determines the level of commitment? How detailed should the list be?

A – All capital projects or portions of a project that are funded by the accumulated surplus and in respect of which the board has a contractual commitment would be included on this schedule. These are projects relating to amounts reported in items 2.11 through 2.15 on Schedule 5.  If a board has a new capital project of $10M and $8M is funded by the Ministry and the remaining $2M will be from the boards’ accumulated surplus, only the $2M will be reported on Schedule 5.5.

If the board commits to the project in a school year but the project is still not completed (CIP), the board would still include the amount on this schedule, however they would not amortize the project. In the year the project is completed, the board would start to amortize the project.

Schedule 9

Q – Where do items 1.2 and 1.3 on Schedule 9 come from?

A – These two lines are not new lines on Schedule 9 this year. They are populated from Schedule 5.1 – Deferred Revenue. For further details on these amounts, please refer to Data Forms A.2 and A.3.

Q – Would a grant like the Family Services grant received from the Ontario Government qualify to be categorized on line 8.14 – Government of Ontario – Non grant payment?

A – The Family Services grant is received from the Ontario Government. There is a monthly payment that the board receives directly from the Ministry of Social Services / Ministry of Children and Youth Services under the Integrated Services NW program.

As the funds are flowed from other ministries to the school boards directly, they should be treated by school boards as Other Ministry Grants on Schedule 9.

Q – On which line will third party revenue such as CODE (Council of Ontario Directors) be reported on?

A – Boards should report revenue from CODE in the Other Revenue section. .

Schedule 10

Q – What are the guidelines provided by the Ministry on how to split the total amortization between the five expense categories of Schedule 10?

A – There are no set guidelines from the Ministry as to how amortization expenses is to be split between the five expense categories, however, boards are expected to report the amortization expenses based on what the asset amortized is used for. Here are examples of amortization expenses that will be reported under each of the categories:

Instruction – computers used in classrooms, smart boards, and other equipment devices

Administration – board admin buildings, computers and other equipment used in the board offices

Transportation – school buses owned by the board

Pupil Accommodation – school buildings, portables, playgrounds, first-time equipping costs

Other – gym buildings built with school generated funds or other donations

Q – Can we have some examples of types of expenses for TCA amortization that will be included in the other category of column 12?

A – A typical example will be the amortization of an asset that was purchased using School Generated Funds.

Q – Expenses associated with School Generated Funds are currently reported on line 79 under column 05 – Supplies and Services. How are we required to report expenses that belong to the Fees & Contracts Services category? Will any of the cells under the other categories be opened?

A – As a majority of expenses related to School Generated Funds fall under the Supplies and Services category, this is the only column that will have an open cell where the expense amounts are to be input. It was confirmed at OASBO Finance Committee that no other columns need to be “opened” on schedule 10 for the reporting of school generated funds to keep the reporting simple..

Schedule 10ADJ

Q – Do the amortization expenses and write-down amounts included on Schedule 10ADJ to reduce the total adjustments for compliance purposes include both supported and non-supported debt?

A – For the 2009-10 reporting year, compliance is consistent with previous years approach i.e. based on a modified cash basis. Amortization expenses relating to all TCA are included in schedule 10 ADJ, irrespective of how the TCA has been financed. The total amortization and write-down amounts on both Schedule 10 and Schedule 10ADJ should tie back to the total in-year amortization expenses and write-down amounts reported on Schedule 3C.

Q – When will amounts be included / excluded for compliance purposes?

A – Starting in the 2010-11 reporting period, legislative changes have been introduced to better, align compliance to PSAB. As a result, the ministry introduced reporting for Deferred Capita Contribution and amortization expenses are included for compliance - there will be no adjustment for principal payments. This approach is reflected in boards 2010-11 estimates and revised estimates.

Q – Where do the expenses associated from School Generated Funds get reported from?

A – The amounts that get reported under column 18 – School Generated Fund expenses are populated from Schedule 10, line 79. This amount is an input cell on Schedule 10.

Schedule 10F & 10G

Q – We do not have employee benefit expense for each employee group. How can we prepare the schedule 10F and 10G?

A – Actuarial firms can provide breakdown information for major employee groups. For those employee groups where the information is not available, boards need to use the approach they used in the past to allocate the information to individual employee groups.

Q – Actuarial firms already started the preparation of schedule 10F and 10G. It is too late to make the changes this year.

A – Both Mercer and SBCI have been consulted for the changes and can provide the information in the required format. For boards who use actuarial firms other than Mercer and SBCI, boards need to provide best estimate breakdown if their actuarial firm cannot provide the information in the required format.

Q – Should schedules 10F and 10G reconcile to each other in any way?

A – Schedule 10F captures total benefit expense reported on schedule 10 whereas schedule 10G reports benefit expense related to retirement, post employment and termination benefits. For the type of benefits that exist in both Schedule 10F and Schedule 10G, total benefit expense should tie to each other.

Q – Are the breakdowns on Schedule 10F and Schedule 10 to match line by line?

A – It is expected that line by line information on Schedule 10F match that on Schedule 10. If there are material differences, boards need to explain to their Ministry Finance Officer. The total employee benefit expenses reported on Schedule 10F should tie back to the total expenses on Schedule 10, column 03 – Employee Benefits.

Data Forms

Data Form D

Q – Where does the total amount for the Additions of mTCA come from?

A – This amount is calculated and populated on line 25 from the additions and betterments column of Schedule 3C. This amount picks up all the in-year additions and betterments for all mTCA and the total of this amount is what is populated on Data Form D, line 25.

Q – For the mTCA additions, how are the boards to break the amounts into the different expenditure categories?

A – Since the mTCA additions column represents amounts that have been added during the year either as additions or betterments, the board should have records indicating the appropriate expenditure category line the additions belong to.

Q – Is this Data Form only applicable for the current year?

A – This Data Form in its current format is only applicable in 2009-10. However, in 2010-11, this Data Form had been modified as a result of additional changes that have been introduced in the 2010-11 reporting.

Q – Is the total of the additions for the mTCA going to be populated or are boards required to input the amounts?

A – The total of the mTCA additions will be populated on line 25 under column 5. Boards will be required to split this amount within the different expense categories.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download