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Specified Audit Proceduresfor
Capital Wrap-Up Template
Financial Analysis & Accountability Branch
September 2010
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Purpose & Background
Capital Wrap-Up: Province is assuming $8.6B of Boards’ debts as of August 31, 2010
Each Board’s supported debt as determined through the Capital Wrap-Up Template (CWT) will represent the Accounts Receivable balance from the Government of Ontario on the 2009-10 F/S
Ministry must meet audit requirements for Public Accounts
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Submission Timelines
Ministry to review Boards’ submitted CWT from 2010-11 Estimates(These were submitted July 31, 2010 with estimates to August 31, 2010)
A Ministry reviewed template will be sent to Boards in early October
Boards will update their reviewed CWT based upon actual information as of August 31, 2010
Boards to submit updated CWT and specified audit procedures report with 2009-10 audited F/S – Deadline November 15, 2010 unless an extension has been granted by the Ministry
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Debt Schedule
Agreed total principal outstanding of all debentures as at August 31, 2010 to 2009-10 audited F/S
Agreed each outstanding principal debenture balance as at August 31, 2010 to the notes in the 2009-10 audited F/S
For all new debentures issued in 2009-10, agreed the original amount of the debenture (face value), interest rate and terms to debenture agreements/by-laws
For debentures issued prior to 2009-10, agreed the original amount of the debenture (face value), interest rate and terms to either the debenture by-law, audited notes to the F/S or auditors’ prior year working papers
For each debenture, agreed the future debt payments (principal and interest) to supporting documentation (i.e. the amortization schedule in debenture agreement)
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Debt Schedule continued
Agreed sinking fund (SF) contributions (up to August 31, 2010) for each SF debenture to supporting documentation (i.e. SF debenture by-law and/or amortization schedule)
Agreed future SF contributions for each SF debenture to supporting documentation (i.e. SF debenture by-law and/or amortization schedule)
Agreed the amount to be refinanced for each sinking fund debenture to supporting documentation (i.e. SF debenture by-law, Board motion/minutes)
Agreed assumed rate of return for each sinking fund debenture to supporting documentation (i.e. SF debenture by-law, Board motion/minutes)
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Project Eligibility Amounts Schedule
Column 14 Represents:
1. Actual project costs incurred up to August 31, 2010; and
2. Estimated remaining project costs to be completed based upon approvals at August 31, 2010
Select 5 most recently completed permanent space projects
For actual project costs incurred up to August 31, 2010, obtain detailed listing from G/L and vouch the 5 largest invoices
Amounts to be Constructed should be nil as the sample is selected from completed projects
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Not Permanently Financed (NPF)
Agreed opening NPF balance in 2009-10 FS Section 12 of EFIS to closing Capital Fund balance from audited 2008-09 F/S
Agreed closing NPF balance in 2009-10 FS Section 12 of EFIS to opening NPF balance in Section 12 worksheet of CWT
Select 5 projects based on 5 largest NPF balances from Column 21 of Project Eligibility Amounts Schedule of CWT
NPF = Total Project Costs – Long-Term (LT) Financing – Cash Contributions
For Project Costs in Column 14: For actual project costs incurred up to August 31, 2010, obtain detailed listing from G/L and vouch 5 largest transactions to invoices.
For LT Financing in Columns 19 and 20: Review Board’s allocation of debenture balances to each project and agree to supporting documentation (i.e. Board motion)
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Not Permanently Financed (NPF) continued
For Cash contributions in Column 18:
For amounts recorded in Column 18, agree to Board motion/Ministry approval letter.
If no Cash reported in Column 18, enquire of Board if there was a Board motion or Ministry approval for the project and agree amount to Column 18.
For Amounts to be Constructed in Column 17.7 & 22:
Agreed to a summary of estimated project costs.
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Project Debenture Matrix
Select 3 largest OFA and 3 largest Non-OFA debentures
Agree Board’s allocation of debt to different projects to supporting documentation. Examples include:
Board minutes/motions Debenture by-laws Debenture agreement
If the total allocation of the debt is less than 80% of the value of the debenture based upon supporting documentation, obtain explanation from Board.
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Pupil Accommodation Debt Reserve (PADR) Balance
Consists of New Pupil Places (NPP), School Renewal and Other Reserves
The NPP portion of the reserve will reduce the Accounts Receivable balance from the Government of Ontario on the 2009-10 FS
Boards will be able to keep School Renewal and Other reserves
Table in the CWT will be completed by the Board
Balance of School Renewal reserve as of August 31, 2009 will be pre-loaded by the Ministry
Review the 2009-10 transactions and agree to 2009-10 active EFIS FS or supporting documentation
Provide a description and amount of other capital reserves reported in the 2008-09 FS
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Leasing Report
Sample size: Select 50% of items reported up to a max of 4
Review each selected lease and ensure meets PSG 2 of CICA HB
Agree original capitalized value based upon lease agreement
Agree remaining capitalized value based upon lease agreement/amortization schedule
Agree implicit rate to lease agreement
Agree 2009-10 capital lease amount and lease escalator to lease agreement
Agree lease start and end date to lease agreement
Agree future annual lease amounts to lease agreement
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Contacts
Anthony Yeung
Manager
Transfer Payment Accountability Unit
(416) 314-0790
Cheryl Dalrymple
Finance Officer
Transfer Payment Accountability Unit
(416) 325-2038
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QUESTIONS ??
