Ministry approval process for 2012-13 In-Year Deficit - Financial ...

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Ministry approval process for 2012-13 In-Year Deficit - Financial ...

Ministry of Education

Ministère de l’Éducation

Financial Analysis and

Direction de l’analyse et de la

Accountability Branch

responsabilité financières

21 st Floor, Mowat Block 21 e étage, édifice Mowat

900 Bay Street 900, rue Bay

Toronto, Ontario M7A 1L2

Toronto, Ontario M7A 1L2

Tel.: (416) 327-9356 Tél. : (416) 327-9356

Fax: (416) 325-2007 Téléc.: (416) 325-2007

Email: Andrew.Davis@Ontario.ca Courriel: Andrew.Davis@Ontario.ca

Ontario

2012: SB11

MEMORANDUM TO:

FROM:

Superintendents of Business and Finance

Andrew Davis

Director

Financial Analysis and Accountability Branch

DATE: May 18, 2012

SUBJECT:

Ministry approval process for 2012-13 In-Year Deficit

I am writing to remind you that in accordance with section 231 of the Education Act,

school boards must seek the Minister’s approval for an in-year deficit that exceeds the

lesser of: 1) the accumulated surplus from the preceding year or 2) one percent of the

board’s operating revenue. The approval from the Ministry must be obtained prior to the

final board’s approval of the budget.

Approval process

Where boards are tabling a deficit in its 2012-13 budget that is not in compliance with

the thresholds described above, a formal request for ministry approval should be sent

by email to your Ministry’s Finance Officer and copied to Diane Strumila, Project

Manager Grant Services. The approval request must include a completed version of

the Ministry’s deficit approval template (excel file). Boards can access the template

using the “Reports” option in EFIS.

Upon confirmation of receipt of the board’s request, Ministry staff will review the

information submitted and a response will be provided in a timely way. If the deficit is

structural in nature, or the request represents a high financial risk that places future

balanced budgets at risk, more time may be required to evaluate the situation and

provide direction.

It should be noted that this approval process applies to Estimates as well as other

reporting cycles in the year (i.e. board’s interim reporting and Revised Estimates).

Changes to 2012-13 Template

The excel template has been revised this year to improve its user-friendliness as well as

improving the information it gathers to help the Ministry to make a more informed

assessment of the board’s financial situation. The following changes are included in this

year’s template:

Ministry Approval Process for 2012-13 In-Year Deficit Page 1 of 2

Memorandum 2012:SB11 from Andrew Davis May 18, 2012


A new table is added to provide details of the board’s accumulated surplus which

is similar to Schedule 5 in the EFIS forms. This would reflect the board’s

projection of its accumulated surplus/deficit as of August 31, 2013;

A question is added to the template which asks for the board’s confirmation that

its projected in-year deficit does not include any expenses or pressures that are

due to non-compliance with the current proposed fiscal parameters (i.e. salary

freeze, changes to sick days plans and retirement gratuities, etc.);

In the previous template, boards were asked to provide a breakdown of its inyear

deficit by permanent and non-permanent factors. In this year’s template,

boards are asked to provide the updated forecast of their 2011-12 in-year

deficit/surplus and explain the changes that are being proposed for the 2012-13

budget to arrive at the projected deficit. When explaining the changes in 2012-13

budget, boards are asked to indicate if a change is one-time, multi-year, time

limited (i.e. an initiative or pressure may span for more than one year but is not

expected to be long term) or is related to prior year.

Please contact your Ministry Finance Officer or the following contacts should you have

questions regarding the Ministry’s approval process:

Diane Strumila

Project Manager, Grant Services

Email: Diane.strumila@ontario.ca

Phone: (416) 325-8524

Anthony Yeung

Manager, Transfer Payment Accountability Unit

Email: Anthony.yeung@ontario.ca

Phone: (416) 314-0790

Andrew Davis

Director

Financial Analysis and Accountability Branch

cc:

Directors of Education

Ministry Approval Process for 2012-13 In-Year Deficit Page 2 of 2

Memorandum 2012:SB11 from Andrew Davis May 18, 2012

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