Summary Budgeting and Reporting

March 31/07 Comparative Figures

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March 5, 2007

School Divisions/Districts

Dear Sir/Madam:

Re: March 31, 2007 Comparative Figures

To prepare for the March 31, 2008 limited financial statements that will be consolidated with the Province’s, divisions will need to establish March 31, 2007 comparative figures.  To assist in calculating the necessary accruals for the comparative figures, refer to the list of potential items to be accrued that was prepared last year by the MASBO Finance Committee and is posted on the Summary Budgeting and Reporting website.  It is important to keep materiality in mind both when deciding what needs to be accrued, and also in relation to the level of precision of the accrual.  You may wish to consult with your auditor on this point if clarification is required.

In response to requests at the fall meetings with the MASBO regional groups, I have attached a template for the Operating Fund revenue and expense accounts the Province will require to be reported at March 31/08.  This template is to assist divisions only, and should not be returned to our office.  You will use the calculated figures when compiling the required financial information next spring.

Operating fund expense information at March 31 for the province’s purposes will include totals by second level object only; function totals will not be necessary.

Employee Future Benefits is a new second level object which will roll up to Employee Benefits and Allowances.  As it is not listed on the template, any necessary Employee Future Benefits accruals should be included in the total for Employee Benefits and Allowances.  The credit side of the entry will be to a new liability account, Employee Future Benefits.

Because CPP and EI have caps on the amounts paid per employee, these amounts are not paid evenly throughout the year making it very difficult to accrue the liability accurately.  Keeping materiality related to the accuracy of the accrual in mind, I suggest that you calculate the percentage that each of the benefits were to total teacher salaries at June 30, 2006 and apply that percentage to the March 31 teacher salary accrual.

Printouts with the debenture interest and principal payments and accrued interest to March 31, 2008 will be forwarded to divisions in April or May.

Divisions that have sizeable construction projects underway will need to prepare accruals for unpaid work.  The easiest way to deal with the majority of these costs would be to have your contractor bill you for all unpaid work completed by the end of March.  Other costs to keep in mind may include: materials purchased by the school division; design, installation, engineering and architectural fees; survey and site preparation costs; licenses and inspection fees; and possibly direct labour/salaries of division staff involved in the project, if applicable.  All of these costs would be debited to the new capital account, Assets under Construction.  As with the other accruals, materiality with regard to the amount and to the level of precision should be kept in mind.

If you have any questions about any of the above, please call me at 204-945-5079.

Yours truly,

Original Signed by

Heather Colquhoun
Accounting and Consolidations