Chinook School Division ends the 2017-18 financial year with smaller than expected deficit
The Chinook School Division's financial results for 2017-18 were better than anticipated with a smaller deficit, but future challenges still remain with regard to funding of instructional costs.
A special meeting of the Chinook School Division Board of Education took place on Nov. 26 to approve the auditor's report and the annual report for the period Sept. 1, 2017 to Aug. 31, 2018. Rod Quintin, the Chinook School Division's chief financial officer, spoke about the results after the meeting.
“For the most part we were on or under in all areas of our operation with the exception of facilities,” he said. “About $1.95 million less of a deficit than what we expected. So the deficit ended up around $4 million instead of $5.95 million.”
Actual building operating expenses were higher than the budget amount. He noted that energy expenses were a challenge due to the cold winter and higher than anticipated costs.
“But for the most part everything else went better than planned,” he said. “We watched our expenditures very closely last year so that we could make sure we weren't over budget.”
The savings and the lower deficit was the result of a concerted effort by everyone in the school division.
“Everybody pitched in, whether it was the board and their expenses or the staff and reducing PD [professional development] expenses or even in transportation, where we finally realized some of the savings from buying rightsized buses and their consumption is less than the bigger buses that we had,” he said. “So it was really all throughout the entire budget spending plan.”
A significant change during the 201718 financial year was the end of the school division's involvement with education property tax. Municipalities used to collect the education property tax and forward it to the school division, but since January 2018 the money is paid directly into the provincial government's general revenue fund.
“It really changes the nature of our balance sheet,” he said. “So we don't have any large receivables for property tax anymore. That's all been assumed by the province and now we get primarily a grant. ... So far it's been very positive for our cash flow. We're happy with that and we don't have the work related to looking after the property tax that we used to have.”
The largest portion of the Chinook School Division's deficit in 2017-18 was related to the amortization costs of properties.
“It's an amount of dollars that are shown as the value of the properties that we have that depreciate a little bit every year,” he explained. “About $800,000 or $750,000 was the amount drawn on our unrestricted reserves, which would be our actual cash reserves. So that's the bulk of where we draw our deficits from.”
The school division benefitted from savings in two areas related to staff expenses. Sick leave costs were less than expected, which made a big difference.
“We always build in a little contingency for staff, teaching staff in particular,” he said. “It's one of those ones where you never know with 400 plus teachers what your experience may be around long-term sick leaves and we didn't have the long-term sick leaves that we reasonably should have over time. It does cycle, so we're in a bit of a low point in the cycle in terms of those types of leave.”
Another saving was due to changes in the way the school division handled the appointment of substitute teachers during times when teachers were away from their classrooms.
“A lot of it was due to our reduction in professional development, where they weren't out of the schools, and a lot of it was due to their effort to just find ways to either schedule their appointments differently or cover off internally. That was a plan that we put in place last year that was at least for last year quite successful. We saved about $200,000 on that particular activity alone.”
There were no significant reductions in teaching staff during the 2017-18 budget year. That only happened for the current 2018-19 budget.
“The changes we had last year would have been the central office type staff where we had roughly 34 FTEs [fulltime equivalent] different between what was the year prior to that and last year, but they would have been incorporated into the budget as it was,” he said. “So we're all busier, there's no doubt about that, but we've managed to get through and everything has gone fairly well.”
Quintin cautioned that the cutback in expenses for professional development of teaching staff cannot be sustained in future budgets.
“We have been saying at length to the ministry that we can't sustain this for long,” he said. “We know that we have to continue to build our capacity. We know that we need to start to reinvest in professional development as we go forward. This was more or less our year to really try and cut our costs, but we have not eliminated those particular costs. We've just deferred them.”
For the moment the school division has been able to achieve a cost saving on professional development through a combination of doing less of it and doing things differently.
“A lot of the costs related to professional development are travel related and if they're travelling then there's substitutes,” he explained.
“So if you don't have the day where you bring in a bunch of teachers, you don't have the travel costs, you don't have the substitute costs, and that's the bulk of PD cost, but we know we have to do something.
“I mean, this cannot be sustained for the foreseeable future without adding more money back into the PD. It might look different, it might be more sitebased as opposed to centralized. We haven't quite gotten there yet, but that will be something that we will definitely be doing.”