ROCHESTER — Aspen View Public School (AVPS) division’s year-end financial position was given the thumbs up from its accountant following the 2024 financial audit presented to trustees during their Nov. 21 meeting.
Jeffrey Alliston, chartered professional accountant with Metrix Group made the trek to the hamlet of Rochester to update trustees on this year’s review of the books as of Aug. 31.
“Your net financial asset position is stronger than it was the year before,” Alliston told trustees. At the end of the 2023 fiscal year, the division’s net financial assets sat at $600,000. This year, that figure jumped to $1.6 million.
Alliston gave trustees a breakdown of the division's assets, liabilities, budget versus actuals for the year, and an explanation of the pathway asset retirement obligation dollars must take through the books and expressed confidence in the review.
“No concerns is nice,” said Candy Nikipelo, AVPS board chair. “And if you have no concerns, we have no concerns.”
After Alliston’s review, trustees voted unanimously to move $69,500 out of the operating reserve to cover the unrestricted operating deficit for the year.
“We had budgeted a $350,000 deficit for the year, however with some grants that came through that were unbudgeted and everybody was saving dollars, we were able to come in a bit below where we expected,” said Amber Oko, secretary-treasurer for the division. “But we did technically finish in a deficit.”
Financial position
As of Aug. 31, AVPS assets, including cash, cash equivalents, and investments sat at the $7.5 million mark, an increase of nearly $500,000 from last year.
The divisions liabilities, which encompasses uncollected fees, salary accrual, and employee benefits have reached $5.89 million, down from 2023’s $6.40 million.
According to Alliston, the reduction is thanks to investments towards the division’s asset retirement obligations (ARO). In 2023, AVPS had $3.22 million in ARO on the books, and investments in new infrastructure of demolition of an old building brought that figure down to $2.42 million.
“This has to do with the disposition of the old H.A.K school (in Smoky Lake) and remediation of the building that was being completed,” said Alliston.
He noted AVPS is left with $1.6 million in unspent deferred revenue for the upcoming year, mainly consisting of Infrastructure Maintenance, Renewal and Capital Maintenance and Renewal, and transportation funding from the provincial government.
Non-financial assets such buildings and equipment have remained stable, sitting at $70 million at the end of 2024, or $100,000 less than last year.
Amortization for 2024 totals $2.6 million, and accounts for asset depreciation from usage throughout the year. Buildings accounted for $2.3 million of the amortization costs, while equipment lost $379,000 in value and vehicles depreciated by $70,000.
“Because your schools are all owned supposedly by Alberta Education, it all comes through their funding — there’s a revenue component that comes in that offsets this amortization expense,” said Alliston.
The division’s net assets total $4.8 million, nearly $1 million more than 2023, thanks to investments in and upgrades to infrastructure.
“When we have a building that is nearing end of life, we are capitalizing our large repairs,” said Oko. “We do see that value going up as well.”
Operating reserves dropped by $69,500 to cover the unrestricted deficit for the year, and sit at $2.96 million, or six per cent of the division’s yearly operating expenses. Capital reserves remained untouched and total $1.3 million.
Budget vs. actuals
Incoming funds from the provincial government exceeded AVPS’s initial budget for the year by $2 million, and was $3 million higher than revenue received in 2023.
But federal dollars were $300,000 short of budget and almost $500,000 less than last year’s funding from Ottawa, mainly due to a reduction in First Nation, Métis, and Inuit student dollars.
Collected fees sit $200,000 below budget, but elevated interest rates throughout the year equated to $40,000 of growth for the division’s investments. Alliston noted the growth rate may trend downwards in coming months, a prediction followed by the Dec. 11 cut in interest rates from the Bank of Canada.
Expenses for early childhood service were down $235,000 from last year, but still exceeded budget by $50,000. Costs for K-12 instruction were on par with budget estimates of $31 million, but were up $1.2 million compared to 2023 mainly due to wage increases.
Amortization costs accounted for an additional $400,000 in operations and maintenance expenses in 2024 than in 2023, a jump Alliston credited to amortization of the new H.A Kostash school.
Transportation was $500,000 over budget, with a total spend of $5.38 million for the year. Administration previously noted post-budget contractor negotiations were expected to raise final transportation costs, which contributed towards a $100,000 increase over last year’s expenses.
In all, expenses exceeded the budget by $477,000, and accounted for $1.4 million more spent this year over last.
ARO clarification
A number of trustees asked Alliston and Oko for clarification on the pathway ARO money must take through the books. Despite facing a deficit of $69,500, the statement of operations shows a surplus totalling $916,500.
“From the outside looking in, it looks like we had almost a million dollar surplus, which is actually untrue,” said Nikipelo.
A total of $929,100 in ARO funds from the Government of Alberta for the H.A Kostash schools flowed through the books as revenue, resulting in the skewed surplus despite being over-budget.
“We don’t physically get the money, so unfortunately that makes a big swing on our financial statements,” said Oko. “It’s not that we have that money that we can now spend."
In addition to voting to approve the transfer from operating reserves to cover the deficit, trustees also unanimously agreed to direct administration to write a letter to the Minister of Education to carry the operating reserve balance forward to the current school year.
Oko said due to changes to Alberta Education’s budget portfolio, divisions are permitted to have up to six percent operating reserves, up from the previous three to five per cent maximum.
If approved, the division would keep the $2.96 million in operating reserves rather than the total being recouped by the provincial government.
“We have a really strong case for that, as we’re posting a $500,000 deficit for the upcoming year,” said Oko.
