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WSD Financial Facts-Part 4

December 7, 2021

WSD Financial Facts.pdf

PART 1: INTRODUCTION
PART 2: REVENUES
PART 3: EXPENDITURES
PART 4: FINANCIAL POSITION (BALANCE SHEET)
    Consolidated Financial Position
    Consolidated Accumulated Surplus


Part 4 - Financial Position (Balance Sheet)

Consolidated Financial Position

June 30

2016

2017

2018

2019

2020

2021

 

 

 

 

 

 

 

Financial Assets

 

 

 

 

 

 

  Cash and Bank

-

-

-

-

8,148,117

8,282,940

  Investments/Accrued Inc

 6,647,109 

6,567,818

 6,552,782 

 4,346,271 

 5,897,836 

 5,798,722 

  Receivables

103,379,198 

106,450,772

 111,518,037 

 113,979,019 

 118,524,532 

 123,820,803 

 

 110,026,307 

113,018,590

 118,070,819 

 118,325,290 

 132,570,485 

 137,902,465 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

  Overdraft

23,674,363 

25,273,649

 23,212,519 

 11,613,330 

 0 

 0 

  Payables/Accrued Liab

71,422,097 

74,495,178

 74,993,162 

 77,393,178 

 98,667,843 

 109,160,881 

  Deferred Revenue

14,177,898 

14,161,925

 14,977,661 

 14,674,741 

 14,874,242 

 11,298,400 

  Debentures d

113,405,331 

116,774,329

 119,630,834 

 130,325,014 

 160,056,195 

 175,422,302 

  School Gen Funds Liab

  2,846,670 

2,963,223

 2,967,202 

 3,307,394 

 3,106,950 

 3,442,110 

 

225,526,359 

233,668,304

 235,781,378 

 237,313,657 

 276,705,230 

 299,323,693 

 

 

 

 

 

 

 

Net Debt

-115,500,052 

-120,649,714

-117,710,559 

-118,988,367 

-144,134,745 

-161,421,228 

 

 

 

 

 

 

 

Non-Financial Assets

 

 

 

 

 

 

  Net Tang Cap Assets

189,880,348 

200,059,732

 202,700,971 

 215,344,148 

 241,049,145 

 257,111,167 

  Inventories

  1,058,621 

1,008,109

 1,094,944 

 1,188,987 

 1,190,006 

 1,138,948 

  Prepaids

  5,345,911 

4,688,924

 4,094,626 

 590,626 

 694,028 

 902,640 

 

196,284,880 

205,756,765

 207,890,541 

 217,123,761 

 242,933,179 

 259,152,755 

 

 

 

 

 

 

 

Accumulated Surplus

 80,784,828 

85,107,051

  90,179,982  

 98,135,394 

 98,798,434 

 97,731,527 

 

 

 

 

 

 

 

Net Debt excl. Debentures d

-2,094,721 

-3,875,385

 1,920,275  

 11,336,647 

 15,921,450 

 14,001,074 

d – Debentures are issued by the Province of Manitoba; as such, all principal and interest payments are paid to WSD by the Province.
Therefore the figure shown above of net debt excluding debentures provides a more accurate picture of the financial health of WSD. 


Consolidated Accumulated Surplus

June 30

2016

2017

2018

2019

2020

2021

Equity in Tang Cap Assets

 64,470,694 

72,059,194

 73,837,629 

 78,462,817 

 81,630,813 

86,284,679 

Capital Reserve

4,767,490 

1,399,898

 4,523,350 

 3,488,750 

 2,700,772 

717,648 

School Generated Funds

-7,428 

-19,456

-64,404 

-134,219 

-122,165 

-337,756 

Other Spec Purpose funds

3,717,942 

3,661,855

 3,684,347 

 3,648,704 

 3,612,409

 4,432,655

 

72,948,698 

77,101,491

 81,980,922 

 85,466,05

 87,821,829 

 91,097,226 

Op Fund Accum Surplus

 

 

 

 

 

 

  Designated Surplus

 

 

 

 

 

 

  WiFi High Schools

    255,833 

-

-

-

-

-

  CCTV/Security Systems

      18,830 

-

-

-

-

-

  Pilot Full Day Kinder

      60,806 

60,806

-

-

-

-

  Ment Health Strat Plan

      38,041 

14,521

 14,521 

 2,145 

 - 

 - 

  Musical instruments

 8,216 

8,216

-

-

-

848

  Employee Engagement

      45,000 

45,000

-

-

46,230

-

  Microsoft Sharepoint

      36,640 

-

-

-

-

-

  Staff Restructuring

    166,658 

166,658

-

-

-

-

  Univ access playgrounds

    100,000 

100,000

 180,000 

 220,000 

 124,898 

 - 

  Board enhancements

      33,900 

-

-

-

-

-

  Data Analytics Artificial Intelligence

-

-

-

361,000

260,626

120,687

  Wireless Controllers (Support Maintenance)

-

-

-

185,000

52,496

52,496

  Financial HR System

-

-

-

2,621,317

2,621,317

2,621,317

  Lead Water Testing in Schools

-

-

-

256,803

92,000

3,286

  Department carryovers

    143,539 

217,176

 194,200 

 804,631 

 169,259 

 452,432 

  School carryovers

1,676,993 

1,040,235

 955,969 

 1,299,767 

 1,622,565 

 2,068,701 

  Technology Evergreening, Backup Firewall

-

-

-

-

258,955

-

  Inclusion Support Technology Upgrades

-

-

-

-

72,553

-

  STEAM Program

-

-

-

-

15,899

-

  IC Science Lab Program

-

-

-

-

3,651

2,647

  Math Resources

-

-

-

-

5,279

-

  R.B. Russell Greenhouse Program

-

-

-

-

14,000

-

  Tec Voc Welding Program

-

-

-

-

61,407

-

  Transportation (Cameras)

-

-

-

-

153,835

68,453

  Waterford Springs - Library Books

-

-

-

-

160,000

3,473

  Waterford Springs - IT Equipment

-

-

-

-

94,331

2,596

  Waterford Springs - Release Time

-

-

-

-

10,000

-

  Mentorship Program

-

-

-

-

28,673

28,673

  Teacher Relocation Allowance

-

-

-

-

60,000

60,000

 

2,584,456 

1,652,612

 1,344,690 

 5,750,663 

 5,927,974 

 5,641,470 

  Undesignated Surplus

7,578,428 

8,896,075

 9,703,841 

 10,253,704 

 7,271,565 

 3,619,028 

  Non-vested sick leave

-2,326,754 

-2,543,127

-2,849,471 

-3,335,026 

-2,222,934 

-2,626,197 

 

7,836,130 

8,005,560

 8,199,060 

 12,669,341 

 10,976,605 

 6,634,301 

 

 

 

 

 

 

 

Consolidated Accum Surplus*

 80,784,828 

85,107,051

  90,179,982  

 98,135,394 

 98,798,434 

 97,731,527 

 

 

 

 

 

 

 

Undesig Surpl as a % of TDE

1.91%

2.17%

2.31%

2.42%

1.67%

0.79%


Financial Statement Elements

Financial Assets - are the financial resources an entity controls and can use to pay what it owes to others. These assets include cash, accounts receivable, investments, and assets that are convertible to cash or that generate cash so that the entity can pay its liabilities as they come due. Information about the liquidity of an entity’s financial assets is not presented on the Statement of Financial Position. (Liquidity means how quickly assets can be used to pay bills.) However, the notes to the financial statements include disclosures on the liquidity of an entity’s financial assets.

Liabilities - are existing financial obligations to outside parties at the date of the financial statements. They result from past transactions and events and will lead to the future sacrifice of economic benefits (e.g., financial assets). Common liabilities are accounts payable, debt, employee pension obligations, and unearned revenue. Users should also read the notes to the financial statements to better understand the nature of an entity’s liabilities and when liabilities are due.

Net debt - is a term unique to public sector financial reporting. It is the difference between an entity’s financial assets and liabilities at a point in time. This performance measure provides readers with important information regarding the entity’s requirement to generate future revenues to fund past services and transactions.

Non-financial assets - are assets that an entity will use up when providing future services to the public. These assets are not normally used by an entity to settle its liabilities with external parties. As a result, they are shown separately in the Statement of Financial Position. Often, the most significant group of assets within this category are tangible capital assets, like buildings or roads, which are acquired to provide services over many years. As entities deliver services, the estimated portion of the assets used is recorded as an expense in the Statement of Operations. The balance presented represents the remaining service potential of the non-financial assets.

Consolidated Accumulated Surplus - When total assets exceed total liabilities, the entity is in an accumulated surplus position. An accumulated surplus position means that the entity has net positive resources that, subject to direction of the government or governing board, could be used to provide future services. However, when an entity is in an accumulated deficit position (total liabilities exceed total assets), the entity must fund past transactions and events from future revenues. An accumulated operating deficit position means the entity has borrowed to finance annual operating deficits.

Indicators of Sustainability

June 30

2016

2017

2018

2019

2020

2021

 

 

 

 

 

 

 

Assets to Liabilities

135.8%

136.4%

138.3%

141.3%

135.7%

132.65%

Financial Assets to Liabilities

48.8%

48.4%

50.1%

49.9%

47.9%

46.07%

Financial Assets to Liabilities excl. Debentures

98.1%

96.7%

101.7%

110.6%

113.7%

111.30%

Net Debt to Total Annual Revenue

29.2%

29.1%

27.7%

27.5%

33.1%

35.52%


COMMENTARY ON FINANCIAL HEALTH

  • Tangible Net Capital Assets are increasing at WSD which is an indication that it is striving to acquire sufficient assets to replace those that have been consumed in service delivery; the vast majority of the additions to Tangible Net Capital Assets are funded through Net Debt.
  • Net Debt is increasing at WSD which is normally a sign of unsustainable financial operations. However, as noted previously, the most significant component of WSD’s Net Debt is comprised of debentures issued by the Province of Manitoba; the principal and interest payments for these debentures is paid annually to WSD by the Province so it is therefore funded debt or flow-through debt. Net Debt is used to fund additions to Tangible Net Capital Assets and also used to fund large maintenance items i.e. it is being used partially to fund operations.
  • Current year revenues have exceeded operating expenses during the last six years.
  • The Ratio of Financial Assets to Liabilities, when excluding the effect of debentures, has averaged 105% over the last years which means that Financial Assets have virtually equaled Liabilities. Therefore, WSD has been solvent over the last five years but is financially neutral i.e. neither strong nor weak but viable.
  • Total Accumulated Surplus has steadily increased over five years as has the ratio of Assets to Liabilities which is an indicator of financial strength. That said, Total Accumulated Surplus is comprised primarily in the equity in Tangible Net Capital Assets (approximately 83%). The remainder is comprised of capital reserves, special purpose funds, designated surplus and undesignated surplus.
  • Undesignated surplus is currently just over 1.60% of TDE at $7.3m. This means that the ability to absorb a major financial blow to WSD is rather limited. It translates to approximately one week of expenditures at current spend rates.

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