Consolidated financial statements of - Toronto District ... District School...Notes to the consolidated financial statements ... Toronto District School Board Consolidated statement of financial position ... 2014 consolidated financial statements.

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  • Consolidated financial statements of

    Toronto District School Board August 31, 2014

  • Toronto District School Board August 31, 2014 Table of contents Management Report

    Independent Auditors Report ............................................................................................................................ 1-2

    Consolidated statement of financial position ......................................................................................................... 3

    Consolidated statement of operations ................................................................................................................... 4

    Consolidated statement of change in net debt ...................................................................................................... 5

    Consolidated statement of cash flows ................................................................................................................... 6

    Notes to the consolidated financial statements ................................................................................................ 7-24

  • Management Report Year ended August 31, 2014 Re: Managements Responsibility for the Consolidated Financial Statements The accompanying consolidated financial statements of the Toronto District School Board are the responsibility of the Board management and have been prepared in accordance with the Financial Administration Act, supplemented by Ontario Ministry of Education memorandum 2004:B2 and Ontario Regulation 395/11 of the Financial Administration Act, as described in Note 1(a) to the consolidated financial statements. The preparation of consolidated financial statements necessarily involves the use of estimates based on managements judgment, particularly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. Board management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded, transactions are properly authorized and recorded in compliance with legislative and regulatory requirements, and reliable financial information is available on a timely basis for preparation of the consolidated financial statements. These systems are monitored and evaluated by management. The Audit Committee of the Board meets with management and the external auditors to review the consolidated financial statements and discuss any significant financial reporting or internal control matters prior to their approval of the consolidated financial statements. The consolidated financial statements have been audited by Deloitte LLP, independent external auditors appointed by the Board. The accompanying Independent Auditors Report outlines their responsibilities, the scope of their examination and their opinion on the Boards consolidated financial statements.

    December 17, 2014

  • Deloitte LLP 5140 Yonge Street Suite 1700 Toronto ON M2N 6L7 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca

    Independent Auditors Report To the Board of Trustees of The Toronto District School Board We have audited the accompanying consolidated financial statements of Toronto District School Board, which comprise the consolidated statement of financial position as at August 31, 2014 and the consolidated statements of operations, change in net debt and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Managements Responsibility for the Consolidated Financial Statements Management is responsible for the preparation of these consolidated financial statements in accordance with the basis of accounting described in Note 1(a) to the consolidated financial statements, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

  • Page 2

    Basis for Qualified Opinion In common with many school boards, individual schools derive revenue from school fundraising activities held throughout the year. Adequate documentation and controls were not in place throughout the year to allow us to obtain satisfactory audit verification as to the completeness of these revenues. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the individual schools and we were not able to determine whether adjustments might be necessary to school fundraising revenue, annual surplus and cash flows from operating activities for the years ended August 31, 2014 and 2013, financial assets as at August 31, 2014 and 2013 and accumulated deficit as at September 1 and August 31 for both the 2014 and 2013 fiscal years. Our opinion was modified accordingly because of the possible effects of this limitation in scope. Qualified Opinion In our opinion, except for the possible effect of the matter described in the Basis for Qualified Opinion paragraph, the consolidated financial statements of Toronto District School Board for the year ended August 31, 2014 are prepared, in all material respects, in accordance with the basis of accounting described in Note 1(a) to the consolidated financial statements. Emphasis of Matter Without modifying our opinion, we draw attention to Note 1(a) to the consolidated financial statements which describes the basis of accounting used in the preparation of these consolidated financial statements and the significant differences between such basis of accounting and Canadian public sector accounting standards.

    Chartered Professional Accountants, Chartered Accountants Licensed Public Accountants December 17, 2014

  • Toronto District School BoardConsolidated statement of financial positionas at August 31, 2014(In thousands of dollars)

    2014 2013$ $

    Financial assetsCash 125,052 47,387 Due from City of Toronto 282,083 260,862 Accounts receivable (net of allowance of $6,684 (2013 - $4,851)) 22,192 21,303 Accounts receivable - Province of Ontario (Note 2) 505,062 538,147 Mortgage receivable (Note 3) 5,200 4,700 Funds on deposit (Note 4(f)) 112,702 104,722 Properties held for sale (Note 5) 17 1,625

    Total financial assets 1,052,308 978,746

    LiabilitiesShort-term borrowing (Note 6) 44,296 73,637 Accounts payable and accrued liabilities 206,218 186,457 Due to Province of Ontario 12,276 16,619 Accrued vacation pay 15,622 15,890 Deferred revenue (Note 7) 165,107 123,756 Deferred capital contributions (Note 8) 1,871,048 1,781,998 Retirement and other employee future benefits payable (Note 4) 442,621 459,871 Net long term debt (Note 9) 473,526 471,896

    Total liabilities 3,230,714 3,130,124 Net debt (2,178,406) (2,151,378)

    Non-financial assetsTangible capital assets (Note 10) 1,969,824 1,909,455 Prepaid expenses and supplies 6,823 7,680

    Total non-financial assets 1,976,647 1,917,135 Accumulated deficit (Note 11) (201,759) (234,243)

    Commitments and contingencies (Notes 12 and 13)

    Approved by

    The accompanying notes to the consolidated financial statementsare an integral part of this financial statement.

    Page 3

  • Toronto District School BoardConsolidated statement of operationsyear ended August 31, 2014(In thousands of dollars)

    Budget 2014 2013$ $ $

    RevenuesProvincial grants

    Grants for student needs (Note 15) 2,587,986 2,581,251 2,604,560 Other 187,624 192,458 135,154

    Federal grants and fees 24,000 22,601 22,737 Other fees and revenues 73,705 96,591 93,209 School fundraising 40,000 41,975 35,100 Amortization of deferred capital contributions 103,675 100,212 93,516

    Total revenues 3,016,990 3,035,087 2,984,276

    Expenses (Note 14)Instruction 2,343,172 2,347,156 2,304,252 Administration 77,835 85,701 79,404 Transportation 55,294 55,826 54,017 School operations and maintenance 315,584 324,819 304,608 Pupil accommodation 158,112 144,122 131,543 Other programs 2,506 2,997 3,968 School funded activities 40,000 41,982 35,366

    Total expenses 2,992,503 3,002,603 2,913,158

    Annual surplus 24,487 32,484 71,118 Accumulated deficit, beginning of year (254,884) (234,243) (305,361) Accumulated deficit, end of year (230,397) (201,759) (234,243)

    The accompanying notes to the consolidated financial statementsare an integral part of this financial statement.

    Page 4

  • Toronto District School BoardConsolidated statement of change in net debtyear ended August 31, 2014(In thousands of dollars)

    2014 2013$ $

    Annual surplus 32,484 71,118 Acquisition of tangible capital assets (166,850) (158,777) Amortization of tangible capital assets 101,639 96,480 Net book value of tangible capital assets reclassified as

    properties held for sale during the year (Note 5) 4,842 5,989 (27,885) 14,810

    Acquisition of inventories of supplies (7,900) (8,178) Acquisition of prepaid expenses (4,676) (5,330) Consumption of inventories of supplies 8,103 9,048 Use of prepaid expenses 5,330 5,473 Change in net debt (27,028) 15,823 Net debt, beginning of year (2,151,378) (2,167,201) Net debt, end of year (2,178,406) (2,151,378)

    The accompanying notes to the consolidated financial statementsare an integral part of this financial statement.

    Page 5

  • Toronto District School BoardConsolidated statement of cash flowsyear ended August 31, 2014(In thousands of dollars)

    2014 2013$ $

    Operating activitiesAnnual surplus 32,484 71,118 Items not involving cash

    Amortization 101,639 96,480 Net book value of tangible capital assets reclassified as properties

    held for sale during the year (Note 5) 4,842 5,989 Net transfer from deferred capital contributions to

    deferred revenue (Note 8) (1,836) (5,649) Deferred capital contributions recognized (Note 8) (100,212) (93,516)

    Change in non-cash assets and liabilitiesIncrease in due from City of Toronto (21,221) (93,679) Increase in accounts receivable (889) (281) Decrease (increase) in accounts receivable - Province of Ontario 16,446 (5,828) Decrease in prepaid expenses and supplies 857 1,012 Decrease in properties held for sale 1,608 300 Increase in accounts payable and accrued liabilities

    and accrued vacation pay 19,493 3,777 (Decrease) increase in due to Province of Ontario (4,343) 12,379 (Decrease) increase in deferred revenues - operating (3,289) 1,622 Decrease in retirement and other employee future benefits payable (17,250) (40,337)

    28,330 (46,613)

    Capital activityAcquisition of tangible capital assets (166,850) (158,777)

    Investing activitiesIssuance of mortgage receivable (500) - (Increase) decrease in funds on deposit (7,980) 14,008

    (8,480) 14,008

    Financing activitiesCapital grant contributions (Note 8) 191,098 157,571 Increase in deferred revenue - capital 44,640 55,702 Decrease (increase) in accounts receivable - Province of Ontario Capital 16,639 (41,166) Short term borrowing - net (29,341) (3,375) Long-term debt repayments (17,026) (16,492) Issuance of long-term debt 18,656 37,825

    224,666 190,065

    Net increase (decrease) in cash 77,665 (1,317) Cash, beginning of year 47,387 48,704 Cash, end of year 125,052 47,387

    The accompanying notes to the consolidated financial statementsare an integral part of this financial statement.

    Page 6

  • Toronto District School Board Notes to the consolidated financial statements August 31, 2014 (Tabular amounts in thousands of dollars)

    Page 7

    1. Significant accounting policies

    The consolidated financial statements are the representations of management and are prepared in accordance with the basis of accounting as described in Note 1a) below.

    Significant accounting policies adopted are as follows:

    (a) Basis of accounting

    The financial statements have been prepared in accordance with the Financial Administration Act supplemented by Ontario Ministry of Education memorandum 2004:B2 and Ontario Regulation 395/11 of the Financial Administration Act.

    The Financial Administration Act requires that the financial statements be prepared in accordance with the accounting principles determined by the relevant Ministry of the Province of Ontario. A directive was provided by the Ontario Ministry of Education within memorandum 2004:B2 requiring school boards to adopt Canadian public sector accounting standards commencing with their year ended August 31, 2004 and that changes may be required to the application of these standards as a result of regulation.

    In 2011, the government passed Ontario Regulation 395/11 of the Financial Administration Act. The Regulation requires that contributions received or receivable for the acquisition or development of dep...

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