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WSD Financial Facts-Part 4

April 22, 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 30201520162017201820192020







Financial Assets





  Cash and Bank-----8,148,117
Investments/Accrued Inc 5,070,281  6,647,109 6,567,818 6,552,782  4,346,271  5,897,836 
  Receivables 99,179,931 103,379,198 106,450,772 111,518,037  113,979,019  118,524,532 

104,250,212  110,026,307 113,018,590 118,070,819  118,325,290  132,570,485 







Liabilities





  Overdraft16,002,624 23,674,363 25,273,649 23,212,519  11,613,330  0 
  Payables/Accrued Liab75,445,814 71,422,097 74,495,178 74,993,162  77,393,178  98,667,843 
  Deferred Revenue13,698,374 14,177,898 14,161,925 14,977,661  14,674,741  14,874,242 
  Debentures d103,572,283 113,405,331 116,774,329 119,630,834  130,325,014  160,056,195 
  School Gen Funds Liab  2,514,032   2,846,670 2,963,223 2,967,202  3,307,394  3,106,950 

211,233,127 225,526,359 233,668,304 235,781,378  237,313,657  276,705,230 







Net Debt-106,982,915 -115,500,052 -120,649,714-117,710,559 -118,988,367 -144,134,745 







Non-Financial Assets





  Net Tang Cap Assets177,241,225 189,880,348 200,059,732 202,700,971  215,344,148  241,049,145 
  Inventories  1,113,142   1,058,621 1,008,109 1,094,944  1,188,987  1,190,006 
  Prepaids  5,185,686   5,345,911 4,688,924 4,094,626  590,626  694,028 

183,540,053 196,284,880 205,756,765 207,890,541  217,123,761  242,933,179 







Accumulated Surplus 76,557,138  80,784,828 85,107,051  90,179,982   98,135,394  98,798,434 







Net Debt excl. Debentures d-3,410,632 -2,094,721 -3,875,385 1,920,275   11,336,647  15,921,450 


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 30201520162017201820192020
Equity in Tang Cap Assets 59,554,085  64,470,694 72,059,194 73,837,629  78,462,817  81,630,813 
Capital Reserve6,191,166 4,767,490 1,399,898 4,523,350  3,488,750  2,700,772 
School Generated Funds      44,037 -7,428 -19,456-64,404 -134,219 -122,165 
Other Spec Purpose funds3,628,826 3,717,942 3,661,855 3,684,347  3,648,704  3,612,409

69,418,114 72,948,698 77,101,491 81,980,922  85,466,052  87,821,829 
Op Fund Accum Surplus





  Designated Surplus





  Fin/Doc Mgmt System      34,867   - ----
  Admin System - Tech      52,514   - ----
  Medical Intern Prgm 2,107   - ----
  WiFi High Schools1,294,978     255,833 ----
CCTV/Security Systems      18,830       18,830 ----
  Pilot Full Day Kinder      60,806       60,806 60,806---
  Ment Health Strat Plan      57,925       38,041 14,521 14,521  2,145  - 
  Audiology Systems 8,838   - ----
  Musical instruments      28,011  8,216 8,216---
  Employee Engagement      45,000       45,000 45,000--46,230
  Kitchen upgrades    224,445   - ----
  Dreambox    173,000   - ----
  Microsoft Sharepoint      53,443       36,640 ----
  Audio/Video Recording    150,000   - ----
  Bd meeting software      50,000   - ----
  Washroom Reno's    483,637   - ----
  Clinical Support Serv    575,705   - ----
  Staff Restructuring    166,658     166,658 166,658---
  New transport routes    569,000   - ----
  Univ access playgrounds  -     100,000 100,000 180,000  220,000  124,898 
  Board enhancements  -       33,900 ----
  Data Analytics Artificial Intelligence----361,000260,626
  Wireless Controllers (Support Maintenance)----185,00052,496
  Financial HR System----2,621,3172,621,317
  Lead Water Testing in Schools----256,80392,000
  Department carryovers  -     143,539 217,176 194,200  804,631  169,259 
  School carryovers1,445,939 1,676,993 1,040,235 955,969  1,299,767  1,622,565 
  Technology Evergreening, Backup Firewall-----258,955
  Inclusion Support Technology Upgrades-----72,553
  STEAM Program-----15,899
  IC Science Lab Program-----3,651
  Math Resources-----5,279
  R.B. Russell Greenhouse Program-----14,000
  Tec Voc Welding Program-----61,407
Transportation (Cameras)-----153,835
  Waterford Springs - Library Books-----160,000
  Waterford Springs - IT Equipment-----94,331
  Waterford Springs - Release Time-----10,000
  Mentorship Program-----28,673
  Teacher Relocation Allowance-----60,000

5,495,703 2,584,456 1,652,612 1,344,690  5,750,663  5,927,974 
Undesignated Surplus3,902,480 7,578,428 8,896,075 9,703,841  10,253,704  7,271,565 
  Non-vested sick leave-2,259,159 -2,326,754 -2,543,127-2,849,471 -3,335,026 -2,222,934 

7,139,024 7,836,130 8,005,560 8,199,060  12,669,341  10,976,605 







June 30201520162017201820192020
Consolidated Accum Surplus* 76,557,138  80,784,828 85,107,051  90,179,982   98,135,394  98,798,434 







Undesig Surpl as a % of TDE0.98%1.91%2.17%2.31%2.42%1.67%

 

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 30201520162017201820192020







Assets to Liabilities136.2%135.8%136.4%138.3%141.3%135.7%
Financial Assets to Liabilities49.4%48.8%48.4%50.1%49.9%47.9%
Financial Assets to Liabilities excl. Debentures96.8%98.1%96.7%101.7%110.6%113.7%
Net Debt to Total Annual Revenue26.8%29.2%29.1%27.7%27.5%33.1%

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 103% 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 1.67% 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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