WSD Financial Facts-Part 4April 22, 2021
Part 4 - Financial Position (Balance Sheet)
|Cash and Bank||-||-||-||-||-||8,148,117|
|School Gen Funds Liab||2,514,032||2,846,670||2,963,223||2,967,202||3,307,394||3,106,950|
|Net Tang Cap Assets||177,241,225||189,880,348||200,059,732||202,700,971||215,344,148||241,049,145|
|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.
|Equity in Tang Cap Assets||59,554,085||64,470,694||72,059,194||73,837,629||78,462,817||81,630,813|
|School Generated Funds||44,037||-7,428||-19,456||-64,404||-134,219||-122,165|
|Other Spec Purpose funds||3,628,826||3,717,942||3,661,855||3,684,347||3,648,704||3,612,409|
|Op Fund Accum Surplus|
|Fin/Doc Mgmt System||34,867||-||-||-||-||-|
|Admin System - Tech||52,514||-||-||-||-||-|
|Medical Intern Prgm||2,107||-||-||-||-||-|
|WiFi High Schools||1,294,978||255,833||-||-||-||-|
|Pilot Full Day Kinder||60,806||60,806||60,806||-||-||-|
|Ment Health Strat Plan||57,925||38,041||14,521||14,521||2,145||-|
|Bd meeting software||50,000||-||-||-||-||-|
|Clinical Support Serv||575,705||-||-||-||-||-|
|New transport routes||569,000||-||-||-||-||-|
|Univ access playgrounds||-||100,000||100,000||180,000||220,000||124,898|
|Data Analytics Artificial Intelligence||-||-||-||-||361,000||260,626|
|Wireless Controllers (Support Maintenance)||-||-||-||-||185,000||52,496|
|Financial HR System||-||-||-||-||2,621,317||2,621,317|
|Lead Water Testing in Schools||-||-||-||-||256,803||92,000|
|Technology Evergreening, Backup Firewall||-||-||-||-||-||258,955|
|Inclusion Support Technology Upgrades||-||-||-||-||-||72,553|
|IC Science Lab Program||-||-||-||-||-||3,651|
|R.B. Russell Greenhouse Program||-||-||-||-||-||14,000|
|Tec Voc Welding Program||-||-||-||-||-||61,407|
|Waterford Springs - Library Books||-||-||-||-||-||160,000|
|Waterford Springs - IT Equipment||-||-||-||-||-||94,331|
|Waterford Springs - Release Time||-||-||-||-||-||10,000|
|Teacher Relocation Allowance||-||-||-||-||-||60,000|
|Non-vested sick leave||-2,259,159||-2,326,754||-2,543,127||-2,849,471||-3,335,026||-2,222,934|
|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 TDE||0.98%||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
|Assets to Liabilities||136.2%||135.8%||136.4%||138.3%||141.3%||135.7%|
|Financial Assets to Liabilities||49.4%||48.8%||48.4%||50.1%||49.9%||47.9%|
|Financial Assets to Liabilities excl. Debentures||96.8%||98.1%||96.7%||101.7%||110.6%||113.7%|
|Net Debt to Total Annual Revenue||26.8%||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.