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EY was advised by VBE that operating surpluses typically arise as a result of the following:
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holdback funds are received late in a school year, after the Amended Budget was finalized, and
such money was not anticipated;
average teacher salary is lower than expected and savings from the Wellness program;
benefits surplus withdrawal, premiums holidays and reduction; and
strike and job action savings.
Finding 4.2: A significant difference exists between the forecasted deficits (before
appropriation of prior year surpluses) and the actual results. The difference is
partially caused by unexpected revenue (holdback funds, benefits surplus, and
strike savings) and lower expenses (teachers’ average salaries). The difference is
also caused by expenses that were budgeted for a specific purpose but were not
actually incurred for the full budgeted amount in the designated school year
Recommendation 4.2
Consistent with treatment by the Surrey School District, the Board to estimate the in-year Internally
Appropriated Expenses not expected to be spent prior to approving the Amended Budget to reduce the
difference between the budget and actual operations
4.4.3 Accumulated Surplus and the restriction process
As explained above, Internal Appropriated Expenses and Operating Surpluses accumulate in the
Accumulated Surplus balance until:
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The Internally Appropriated Expenses are incurred; and
The Operating Surpluses are restricted to offset an operating deficit in a future school year.
These funds are internally appropriated, defined by VBE as ‘internally restricted’, in various categories.
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