The Board of Education of the Saskatoon School Division No

Consolidated Financial Statements of

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Year ended August 31, 2016

Deloitte LLP Suite 400, PCS Tower 122 – 1st Avenue S Saskatoon, SK S7K 7E5 Canada

Tel: 306-343-4400 Fax: 306-343-4480 INDEPENDENT AUDITOR’S REPORT www.deloitte.ca To the Trustees of the Board of Education of the Saskatoon School Division No. 13 of Saskatchewan (“the School Division”):

We have audited the accompanying consolidated financial statements of the School Division, which comprise the consolidated statement of financial position as at August 31, 2016, the consolidated statements of operations and accumulated surplus from operations, remeasurement gains, changes in net financial assets and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the School Division as at August 31, 2016, and its consolidated results of operations, consolidated remeasurement gains, and the changes in its consolidated net financial assets and its consolidated cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Chartered Professional Accountants Licensed Professional Accountants

Saskatoon, Saskatchewan November 29, 2016 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Consolidated Statement of Financial Position as at August 31, 2016

2016 2015 Financial Assets Cash and Cash Equivalents 19,470,805 22,879,623 Accounts Receivable (Note 8) 2,743,637 2,595,693 Portfolio Investments (Note 4) 24,519,512 19,500,000 Total Financial Assets 46,733,954 44,975,316

Liabilities Accounts Payable and Accrued Liabilities (Note 9) 5,892,809 7,787,933 Long-Term Debt (Note 10) 12,834,183 17,715,538 Liability for Employee Future Benefits (Note 6) 5,392,300 5,194,700 Deferred Revenue (Note 11) 7,207,872 7,423,585 Total Liabilities 31,327,164 38,121,756

Net Financial Assets 15,406,790 6,853,560

Non-Financial Assets Tangible Capital Assets (Schedule C) 253,048,388 187,707,101 Prepaid Expenses 522,620 542,455

Total Non-Financial Assets 253,571,008 188,249,556

Accumulated Surplus (Note 14) 268,977,798 195,103,116

Accumulated Surplus is Comprised of: Accumulated Surplus from Operations 268,968,371 195,103,116 Accumulated Remeasurement Gains and Losses 9,427 - Total Accumulated Surplus (Note 14) 268,977,798 195,103,116

Contractual Obligations and Commitments (Note 17)

The accompanying notes and schedules are an integral part of these statements. THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Consolidated Statement of Operations and Accumulated Surplus from Operations for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual (Note 15) REVENUES Property Taxation 109,348,585 109,832,637 106,259,797 Gran t s 189,851,406 191,409,360 125,118,559 Tuition and Related Fees 3,387,880 2,883,699 3,368,794 School Generated Funds 4,955,000 5,081,969 5,006,384 Complementary Services (Note 12) 3,394,896 3,219,204 3,073,127 External Services (Note 13) 6,789,704 9,085,202 7,432,133 Other 1,263,000 1,321,128 1,306,804 Total Revenues (Schedule A) 318,990,471 322,833,199 251,565,598

EXP ENS ES Governance 833,147 887,883 741,120 Administration 6,898,819 6,372,234 6,522,780 Instruction 186,009,381 182,932,354 176,765,027 Plant 35,368,997 34,054,924 34,931,496 Transportation 7,273,559 6,777,884 6,607,151 Tuition and Related Fees 283,000 325,496 281,020 School Generated Funds 4,955,000 5,583,073 5,280,105 Complementary Services (Note 12) 3,480,379 3,483,102 3,191,910 External Services (Note 13) 6,853,806 7,974,085 6,571,074 Other Expenses 581,500 576,909 715,888 Total Expenses (Schedule B) 252,537,588 248,967,944 241,607,571

Operating Surplus for the Year 66,452,883 73,865,255 9,958,027

Accumulated Surplus from Operations, Beginning of Year 195,103,116 195,103,116 185,145,089

Accumulated Surplus from Operations, End of Year 261,555,999 268,968,371 195,103,116

The accompanying notes and schedules are an integral part of these statements.

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Consolidated Statement of Remeasurement Gains for the year ended August 31, 2016

2016 2015

Accumulated Remeasurement Gains (Losses), Beginning of Year - - Unrealized gains attributable to: Portfolio investments 9,427 - Net remeasurement gains for the year 9,427 -

Accumulated Remeasurement Gains, End of Year 9,427 -

The accompanying notes and schedules are an integral part of these statements.

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Consolidated Statement of Changes in Net Financial Assets for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual (Note 15)

Net Financial Assets, Beginning of Year 6,853,560 6,853,560 4,101,068

Changes During the Year Operating Surplus for the Year 66,452,883 73,865,255 9,958,027 Acquisition of Tangible Capital Assets (Schedule C) (81,107,012) (77,327,211) (20,698,627) Amortization of Tangible Capital Assets (Schedule C) 12,380,000 11,985,924 13,493,287 Net Change in Other Non-Financial Assets - 19,835 (195)

(2,274,129) 8,543,803 2,752,492

Net Remeasurement Gains - 9,427 -

Change in Net Financial Assets (2,274,129) 8,553,230 2,752,492

Net Financial Assets, End of Year 4,579,431 15,406,790 6,853,560

The accompanying notes and schedules are an integral part of these statements.

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Consolidated Statement of Cash Flows for the year ended August 31, 2016

2016 2015 OPERATING ACTIVITIES Operating Surplus for the Year 73,865,255 9,958,027 Add (Deduct) Non-Cash Items Included in Surplus (Schedule D) (58,407,147) 8,298,882 Net Change in Non-Cash Operating Activities (Schedule E) (2,041,346) (419,758)

Cash Provided by Operating Activities 13,416,762 17,837,151 CAPITAL ACTIVITIES Cash Used to Acquire Tangible Capital Assets (6,934,140) (14,981,031)

Cash Used by Capital Activities (6,934,140) (14,981,031)

INVESTING ACTIVITIES Cash Used to Acquire Portfolio Investments (24,510,085) (19,500,000) Proceeds on Disposal of Portfolio Investments 19,500,000 20,000,000

Cash Provided (Used) by Investing Activities (5,010,085) 500,000

FINANCING ACTIVITIES Proceeds from Issuance of Short-Term Loans - 5,076,098 Repayment of Long-Term Debt (4,881,355) (4,448,435)

Cash Provided (Used) by Financing Activities (4,881,355) 627,663

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,408,818) 3,983,783

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 22,879,623 18,895,840

CASH AND CASH EQUIVALENTS, END OF YEAR 19,470,805 22,879,623

The accompanying notes and schedules are an integral part of these statements.

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

1. AUTHORITY AND PURPOSE

The school division operates under the authority of The Education Act, 1995 of Saskatchewan as a corporation under the name of “The Board of Education of the Saskatoon School Division No. 13 of Saskatchewan” and operates as “Saskatoon Public Schools”. The school division provides education services to residents within its geographic region and is governed by an elected board of trustees. The school division is funded mainly by grants from the Government of Saskatchewan and a levy on the property assessment included in the school division’s boundaries at mill rates determined by the provincial government. The school division is exempt from income tax and is a qualified donee for charity purposes under the Income Tax Act.

2. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with Canadian public sector accounting standards for other government organizations as established by the Public Sector Accounting Board (PSAB) and as published by the Chartered Professional Accountants of Canada (CPA Canada). Significant aspects of the accounting policies adopted by the school division are as follows:

a) Basis of Accounting The consolidated financial statements are prepared using the accrual basis of accounting.

b) Reporting Entity and Consolidation The consolidated financial statements include all of the assets, liabilities, revenues and expenses of the school division reporting entity. The school division reporting entity is comprised of all the organizations which are controlled by the school division. All of the assets, liabilities, revenues and expenses of controlled organizations are consolidated line-by-line after adjusting the accounting policies to a basis consistent with the accounting policies of the school division. Inter-organizational transactions and balances have been eliminated.

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Controlled Entities Control is defined as the power to govern the financial and operating policies of another organization with the expected benefits or risk of loss to the school division. Control exists so long as the school division has the power to govern, regardless of whether the school division chooses to exercise this power.

• Saskatoon Public Schools Foundation Corp. (the “Foundation”) is incorporated under the Saskatchewan Non-Profit Corporations Act, 1995 and was established to carry on activities which are for the charitable purpose of the advancement of education and enhancement of the quality of education offered by the school division. The Foundation has registered charity status.

• Board of Education of the Saskatoon Division No. 13 Trust Fund (the “Charity”) became redundant when the school division acquired qualified donee status in 2015. As a result, the trust fund was voluntarily revoked in March, 2016. Qualified donee status, like registered charity status, enables the school division to issue tax deductible receipts for donations used to support educational initiatives.

c) Measurement Uncertainty and the Use of Estimates Canadian public sector accounting standards require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the year. Measurement uncertainty that may be material to these consolidated financial statements exists for: • the liability for employee future benefits of $5,392,300 (2015 - $5,194,700 ) because actual experience may differ significantly from actuarial estimations. • property taxation revenue of $109,832,637 (2015 - $106,259,797) because final tax assessments may differ from initial estimates. • useful lives of capital assets and related amortization of $11,985,924 (2015 - $13,493,287) because the actual useful lives of the capital assets may differ from their estimated economic lives. • the liability for employee pensions of $399,000 (2015 - $1,536,000) because actual experience may differ significantly from actuarial estimations. • assets under construction recorded for joint-use school projects of $75,587,476 (2015 - $5,194,405) as during construction both construction progress and construction costs are based on estimates.

These estimates and assumptions are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the periods in which they become known.

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While best estimates are used for reporting items subject to measurement uncertainty, it is reasonably possible that changes in future conditions, occurring within one fiscal year, could require material changes in the amounts recognized or disclosed.

d) Financial Instruments Financial instruments are any contracts that give rise to financial assets of one entity and financial liabilities or equity instruments of another entity. A contract establishing a financial instrument creates, at its inception, rights and obligations to receive or deliver economic benefits. The school division recognizes a financial instrument when it becomes a party to the contractual provisions of a financial instrument. The financial assets and financial liabilities portray these rights and obligations in the consolidated financial statements. Financial instruments of the school division include cash and cash equivalents, accounts receivable, portfolio investments, accounts payable and accrued liabilities and long-term debt. Financial instruments are assigned to one of the two measurement categories: fair value, or cost or amortized cost. i) Fair Value

Fair value measurement applies to portfolio investments in equity instruments that are quoted in an active market.

Any associated transaction costs are expensed upon initial recognition. Unrealized changes in fair value are recognized in the consolidated statement of remeasurement gains until they are realized, at which time they are transferred to the consolidated statement of operations and accumulated surplus from operations.

Fair value is determined by quoted prices (unadjusted) in active markets for identical assets or liabilities.

When a decline in fair value is determined to be other than temporary, the amount of the loss is removed from any accumulated remeasurement gains and reported in the consolidated statement of operations and accumulated surplus from operations. Foreign currency transactions are translated at the exchange rate prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the exchange rate prevailing at the consolidated financial statement date. The school division believes that it is not subject to significant unrealized foreign exchange translation gains and losses arising from its financial instruments.

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ii) Cost or Amortized Cost

All other financial instruments are measured at cost or amortized cost. Transaction costs are a component of the cost of financial instruments measured using cost or amortized cost. For financial instruments measured using amortized cost, the effective interest rate method is used to determine interest revenues or expenses. Impairment losses such as write-downs or write-offs are reported in the consolidated statement of operations and accumulated surplus from operations.

Gains and losses on financial instruments, measured at cost or amortized cost, are recognized in the consolidated statement of operations and accumulated surplus from operations in the period the gain or loss occurs. e) Financial Assets Financial assets are assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations. Valuation allowances are used where considered necessary to reduce the amounts reported for financial assets to their net realizable value. Cash and Cash Equivalents consist of cash, bank deposits and highly liquid investments with initial maturity terms of three months or less and held for the purpose of meeting short-term operating cash commitments rather than for investing purposes. Accounts Receivable includes federal grants receivable, provincial grants receivable and other receivables. Provincial grants receivable represent capital grants earned but not received at the end of the fiscal year, provided reasonable estimates of the amounts can be made. Grants are earned when the events giving rise to the grant have occurred, the grant is authorized and any eligibility criteria have been met. Other receivables are recorded at cost less valuation allowances. These allowances are recorded where collectability is considered doubtful. Portfolio Investments consist of GICs, term deposits, and securities made to obtain a return on a temporary basis with maturity terms between three months and one year. The school division values its portfolio investments in accordance with its policy for financial instruments, as described in Note 2 (d).

f) Non-Financial Assets Non-financial assets are assets held for consumption in the provision of services. These assets do not normally provide resources to discharge the liabilities of the school division unless they are sold. Tangible Capital Assets have useful lives extending beyond the accounting period, are used by the school division to provide services to the public and are not intended for sale

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in the ordinary course of operations. Tangible capital assets of the school division include land, land improvements, buildings, buildings short-term, other vehicles, furniture and equipment, computer hardware and software, audio visual equipment, and assets under construction. Tangible capital assets are recorded at cost (or estimated cost when the actual cost is unknown) and include all costs directly attributable to the acquisition, design, construction, development, installation and betterment of the tangible capital asset. The school division does not capitalize interest incurred while a tangible capital asset is under construction. Tangible capital asset costs that are directly paid for by the Government of Saskatchewan on behalf of the school division, under the joint-use schools project (JUSP) agreement, are valued at the total progress payments made during construction and the present value of the future capital payments discounted to the date the asset is available for use using the Government of Saskatchewan’s borrowing rate for long-term debt in effect at the time of signing the JUSP agreement. During construction, the costs of the assets are recognized using the percentage of completion method based on construction progress and are classified as assets under construction. The cost of depreciable tangible capital assets, net of any residual value, is amortized on a straight line basis over their estimated useful lives as follows: Land improvements (pavement, fencing, lighting, etc.) 20 years Buildings 50 years Buildings – short-term (portables, storage sheds, outbuildings, garages) 20 years Other vehicles – passenger 5 years Other vehicles – heavy (graders, 1 ton truck, etc.) 10 years Furniture and equipment 10 years Computer hardware and audio visual equipment 5 years Computer software 5 years

Assets under construction are not amortized until completed and placed into service for use. Assets that have a historical or cultural significance, such as works of art, monuments and other cultural artifacts, are not recognized as tangible capital assets because a reasonable estimate of future benefits associated with these properties cannot be made.

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Prepaid Expenses are prepaid amounts for goods or services which will provide economic benefits in one or more future periods. Prepaid expenses include insurance premiums, Saskatchewan School Boards Association membership fees and Workers’ Compensation premiums. g) Liabilities Liabilities are present obligations arising from transactions and events occurring prior to year-end, which will be satisfied in the future through the use of assets or another form of economic settlement. Accounts Payable and Accrued Liabilities include accounts payable and accrued liabilities owing to third parties and employees for work performed, goods supplied and services rendered, but not yet paid, at the end of the fiscal period. Long-Term Debt is comprised of capital loans with initial maturities of more than one year and are incurred for the purpose of financing capital expenses in accordance with the provisions of The Education Act, 1995. Liability for Employee Future Benefits represents post-employment and compensated absence benefits that accrue to the school division's employees. The cost of these benefits is recorded as the benefits are earned by employees. The liability relating to these benefits is actuarially determined using the projected benefit method pro-rated on service. Actuarial valuations are performed periodically using assumptions including discount rate, inflation, salary escalation, termination and retirement rates and mortality. An actuary extrapolates these valuations when a valuation is not done in the current fiscal year. Actuarial gains and losses are amortized on a straight line basis over the expected average remaining service life of the related employee groups. Deferred Revenue from Non-government Sources represents fees or payments for services received in advance of the fee being earned or the services being performed, and other contributions for which the contributor has placed restrictions on the use of the resources. Revenue from tuition and related fees is recognized as the course is delivered; revenue from contractual services is recognized as the services are delivered; and revenue from other contributions is recognized in the fiscal year in which the resources are used for the purpose specified by the contributor. h) Employee Pension Plans

Employees of the school division participate in the following pension plans: Multi-Employer Defined Benefit Plans Teachers participate in the Saskatchewan Teachers’ Retirement Plan (STRP) or the Saskatchewan Teachers’ Superannuation Plan (STSP). The school division’s obligation for

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these plans is limited to collecting and remitting contributions of the employees at rates determined by the plans. Defined Benefit Plan Administered by the School Division The school division administers a defined benefit plan to employees who are not eligible to participate in the teachers’ pension plans described above. The net pension liability is the difference between the value of the accrued benefit obligation and the market value of related pension plan assets, net of unamortized actuarial gains and losses, and is reflected in these consolidated financial statements in Note 9 - Accounts Payable and Accrued Liabilities. The cost of pension benefits earned by employees is actuarially determined using the projected benefit method pro-rated on service and using assumptions including the pension plan's expected investment yields, discount rates, inflation, salary escalations, mortality of members, terminations and the ages at which members will retire. Actuarial gains and losses are changes in the value of the accrued benefit obligation and the pension fund assets resulting from the difference between the actual and expected results or resulting from changes in actuarial assumptions. Actuarial gains and losses are deferred and amortized over the average remaining service life of the related employee groups. i) Revenue Recognition

Revenues are recorded on the accrual basis. Revenues are recognized in the period in which the transactions or events occurred that gave rise to the revenues, provided the amount to be received can be reasonably estimated and collection is reasonably assured.

The school division’s sources of revenues include the following:

i) Government Transfers (Grants) Grants from governments are considered to be government transfers. In accordance with PS3410 standard, government transfers are recognized as revenues when the transfer is authorized, all eligibility criteria have been met, the amount can be estimated and collection is reasonably assured except when, and to the extent, stipulations by the transferor give rise to an obligation that meets the definition of a liability. For transfers with stipulations, revenue is recognized in the consolidated statement of operations and accumulated surplus from operations as the stipulation liabilities are settled.

ii) Property Taxation Property tax is levied and collected on a calendar year basis. Uniform education property tax mill rates are set by the Government of Saskatchewan. Tax revenues are recognized on the basis of time with 1/12th of estimated total tax revenue recorded in

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each month of the school division’s fiscal year. The tax revenue for the September to December portion of the fiscal year is based on the actual amounts reported by the City of Saskatoon for the calendar taxation year. For the January to August portion of its fiscal year, the school division estimates tax revenue based on estimate information provided by the City of Saskatoon who levies and collects the property tax on behalf of the school division. The final annual taxation amounts are reported to the school division by the City of Saskatoon following the conclusion of each calendar taxation year, and any difference between final amounts and the school division’s estimates is recorded as an adjustment to revenue in the next fiscal year.

iii) Fees and Services Revenues from tuition fees and other fees and services are recognized in the year they are earned. Amounts that are restricted pursuant to legislation, regulation or agreements with external parties that may only be used in the conduct of certain programs or in the delivery of specific services and transactions are initially recorded as deferred revenue and subsequently recognized as revenue in the fiscal year the related expenses are incurred or services are performed.

iv) Interest Income Interest is recognized on an accrual basis when it is earned.

v) Other (Non-Government Transfer) Contributions Unrestricted contributions are recognized as revenue in the year received or in the year the funds are committed to the school division if the amount can be reasonably estimated and collection is reasonably assured. Externally restricted contributions are contributions for which the contributor has placed restrictions on the use of the resources. Externally restricted contributions are deferred until the resources are used for the purpose specified, at which time the contributions are recognized as revenue. In-kind contributions are recorded at their fair value when they are received.

3. SHORT-TERM BORROWINGS

Bank indebtedness consists of a demand operating line of credit with a maximum borrowing limit of $25.0 million that bears interest at a rate of prime minus 1% per annum with ScotiaBank. This line of credit is authorized by a borrowing resolution by the board of education and is secured by operating revenue of the school division. This line of credit was approved by the Minister of Education on January 21, 2013. There was no balance drawn on the line of credit at August 31, 2016 or August 31, 2015.

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4. PORTFOLIO INVESTMENTS

Portfolio investments are comprised of the following:

2016 2015

Portfolio investments in the cost and amortized cost category: Cost Cost GICs $ 22,000,000 $ 19,500,000 Term deposits 2,000,000 - Total portfolio investments reported at cost and amortized cost 24,000,000 19,500,000

Portfolio investments in the fair value category: Cost Fair Value Cost Fair Value Equity investments in active market 510,085 519,512 - - Total portfolio investments reported at fair value 510,085 519,512 - - Total portfolio investments $ 24,519,512 $ 19,500,000

5. EXPENSES BY FUNCTION AND ECONOMIC CLASSIFICATION

Salaries & Goods & Amortization 2016 2015 Debt Service Function Benefits Services of TCA Actual Actual Governance $ - $ 887,883 $ - $ - $ 887,883 $ 741,120 Administration 5,517,296 669,870 - 185,068 6,372,234 6,522,780 Instruction 167,502,220 13,421,697 - 2,008,437 182,932,354 176,765,027 Plant 12,106,214 12,156,291 - 9,792,419 34,054,924 34,931,496 Transportation - 6,777,884 - - 6,777,884 6,607,151 Tuition and Related Fees - 325,496 - - 325,496 281,020 School Generated Funds - 5,583,073 - - 5,583,073 5,280,105 Complementary Services 2,967,054 516,048 - - 3,483,102 3,191,910 External Services 4,387,779 3,586,306 - - 7,974,085 6,571,074 Other - 17,636 559,273 - 576,909 715,888 TOTAL $ 192,480,563 $ 43,942,184 $ 559,273 $ 11,985,924 $ 248,967,944 $ 241,607,571

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6. EMPLOYEE FUTURE BENEFITS

The school division provides certain post-employment, compensated absence and termination benefits to its employees. These benefits include accumulating non-vested sick leave, severance benefits, retirement gratuity, and vacation banks. The liability associated with these benefits is calculated as the present value of expected future payments pro-rated for service and is recorded as Liability for Employee Future Benefits in the consolidated statement of financial position. Morneau Shepell Ltd, a firm of consulting actuaries, performed an actuarial valuation as at March 31, 2015 and extrapolated the results to estimate the Liability for Employee Future Benefits as at August 31, 2016. Details of the employee future benefits are as follows:

2016 2015 Actuarial extrapolation date Aug. 31, 2016 Aug. 31, 2015 Long-term assumptions used: Discount rate at end of period 2.10% 2.50% Inflation and productivity rate (excluding merit and promotion) 3.20% 3.20% Expected average remaining service life (years) 15 15

Liability for Employee Future Benefits 2016 2015 Accrued Benefit Obligation - beginning of year $ 6,342,000 $ 4,152,200 Current period service cost 527,400 350,000 Interest cost 164,700 123,200 Benefit payments (561,400) (203,700) Actuarial losses 264,400 1,920,300 Accrued Benefit Obligation - end of year 6,737,100 6,342,000 Unamortized Net Actuarial Losses (1,344,800) (1,147,300) Liability for Employee Future Benefits $ 5,392,300 $ 5,194,700

Employee Future Benefits Expense 2016 2015 Current period service cost $ 527,400 $ 350,000 Amortization of net actuarial (gain) / loss 66,900 (61,100) Benefit cost 594,300 288,900 Interest cost 164,700 123,200 Total Employee Future Benefits Expense $ 759,000 $ 412,100

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7. PENSION PLANS

Multi-Employer Defined Benefit Plans Information on the multi-employer pension plans to which the school division contributes is as follows: Saskatchewan Teachers’ Retirement Plan (STRP) or Saskatchewan Teachers’ Superannuation Plan (STSP) The STRP and STSP provide retirement benefits based on length of service and pensionable earnings. The STRP and STSP are funded by contributions by the participating employee members and the Government of Saskatchewan. The school division’s obligation to the STRP and STSP is limited to collecting and remitting contributions of the employees at rates determined by the plans. Accordingly, these consolidated financial statements do not include any expense for employer contributions to these plans. Net pension assets or liabilities for these plans are not reflected in these consolidated financial statements as ultimate responsibility for retirement benefits rests with the Saskatchewan Teachers’ Federation for the STRP and with the Government of Saskatchewan for the STSP. Details of the contributions to these plans for the school division’s employees are as follows:

2016 2015 STRP STSP TOTAL TOTAL Number of active School Division members 2,248 32 2,280 2,299 Member contribution rate (percentage of salary) 10.20-12.40 6.05-7.85 6.05-12.40 6.05-11.30 Member contributions for the year $ 14,538,777 $ 159,281 $ 14,698,058 $ 12,922,061

Defined Benefit Plan Administered by the School Division The school division administers a defined benefit plan to employees who are not eligible to participate in the teachers’ pension plans which provides benefits based on length of service and pensionable earnings. The net pension liability represents accrued pension benefits less the fair value of related pension assets and the balance of unamortized experience gains and losses and is reflected in these consolidated financial statements as accounts payable as the school division is ultimately responsible for the funding of these pension obligations. Actuarial valuations for accounting purposes are performed at least triennially using the projected accrued benefit actuarial cost method. The most recent valuation was prepared by

18 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

AON Consulting, an actuarial services firm, as at December 31, 2013. The accrued benefit obligation reported in the tables below is based on the extrapolation of the 2013 valuation. Details of the plan are as follows:

2016 2015 Number of active School Division members 936 933 Number of former members, superannuates and surviving spouses 469 432 Member contribution rate (percentage of salary) 8.10% 7.60% School Division contribution rate (percentage of salary) 9.40% 9.60% Member contributions $ 3,020,000 $ 2,642,000 School Division contributions $ 3,382,000 $ 3,444,000 Benefits paid $ (5,143,000) $ (4,902,000) Actuarial extrapolation date Aug/31/2016 Aug/31/2015 Long-term assumptions used: Salary escalation rate 3.50% 3.50% Expected rate of return on plan assets 6.85% 6.35% Discount rate 6.85% 6.85% Inflation rate 2.50% 2.50% Expected average remaining service life (years) 12 12

19 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Net Pension Liability 2016 2015 Accrued Benefit Obligation - beginning of year $ 107,798,000 $ 106,634,000 Current period benefit cost 4,660,000 4,740,000 Interest cost 7,368,000 6,678,000 Benefit payments (5,143,000) (4,902,000) Actuarial gains - (3,965,000) Plan amendments - (1,387,000) Accrued Benefit Obligation - end of year 114,683,000 107,798,000 Pension Plan Assets at market value - beginning of year 104,609,000 94,460,000 Employer contributions 3,382,000 3,444,000 Employee contributions 3,020,000 2,642,000 Return on plan assets 7,209,000 6,036,000 Actuarial gains 2,833,000 2,929,000 Benefit payments (5,143,000) (4,902,000) Pension Plan Assets at market value - end of year (1) 115,910,000 104,609,000 Funded Status - Pension Plan Surplus (Deficit) 1,227,000 (3,189,000) Unamortized Net Actuarial Gains (Losses) 1,626,000 (1,653,000) Net Pension Liability $ (399,000) $ (1,536,000)

(1) Pension plan assets consist of: 2016 2015 Fixed income securities 23.2% 22.6% Equity investments 56.4% 59.0% Mortgage 8.4% 8.9% Real estate 12.0% 9.5% 100.0% 100.0%

Pension Expense 2016 2015 Current period benefit cost $ 4,660,000 $ 4,740,000 Amortization of net actuarial loss 446,000 1,019,000 Plan amendments - (1,387,000) Employee contributions (3,020,000) (2,642,000) Pension Cost 2,086,000 1,730,000 Interest cost on the average accrued benefit obligation 7,368,000 6,678,000 Expected return on average pension plan assets (7,209,000) (6,036,000) Net Interest Cost 159,000 642,000 Total Pension Expense $ 2,245,000 $ 2,372,000

20 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

8. ACCOUNTS RECEIVABLE

All accounts receivable presented on the consolidated statement of financial position are net of any valuation allowances for doubtful accounts. Details of accounts receivable balances are as follows:

2016 2015 Federal Grants Receivable - Operating $ 118,220 $ - Provincial Grants Receivable - Capital 1,137,499 997,961 Other Receivables 1,487,918 1,597,732 Total Accounts Receivable $ 2,743,637 $ 2,595,693

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Details of accounts payable and accrued liabilities are as follows:

2016 2015 Accrued Salaries and Benefits $ 2,526,282 $ 2,420,848 Accounts Payable - Operating 2,366,271 1,829,154 Accounts Payable - Capital 601,256 2,001,931 Accrued Pension Liability (Note 7) 399,000 1,536,000 Total Accounts Payable and Accrued Liabilities $ 5,892,809 $ 7,787,933

21 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

10. LONG-TERM DEBT

Details of long-term debt are as follows:

2016 2015 Capital Loans: (a) Monthly payments of principal and interest combined of $42,044, interest rate of 3.68%; due on the last day of each month through to May 30, 2033 (TD Willowgrove Construction Loan) $ 6,302,007 $ 6,568,629 (b) Monthly payments of principal and interest combined of $53,322, interest rate of 4.64%; due on the last day of each month through to June 30, 2018 (CIBC Energy Efficiency #2) 1,122,501 1,695,774 (c) Monthly payments of principal and interest combined of $51,691, interest rate of 5.09%; due on the last day of each month through to November 30, 2017 (BMO Energy Efficiency #1) 751,237 1,317,454 (d) Monthly payments of principal and interest combined of $133,147, interest rate of 5.07%; due on the last day of each month through to November 30, 2016 (BMO Tommy Douglas Construction Loan) 399,382 1,934,343 (e) Monthly payments of principal and interest combined of $95,513, interest rate of 4.75%; due on the last day of each month through to November 30, 2016 (TD Centennial Construction Loan) 283,016 1,387,121 (f) Monthly payments of principal and interest combined of $24,354, interest rate of 2.47%; due on the last day of each month through to April 30, 2025 (BMO City Park Collegiate Repurpose Loan) 2,278,109 2,510,812 (g) Monthly payments of principal and interest combined of $45,255, interest rate of 1.79%; due on the last day of each month through to March 31, 2019 (BMO Technology Loan) 1,369,965 1,883,430 (h) Monthly payments of principal and interest combined of $8,058, interest rate of 1.77%; due on the last day of each month through to February 29, 2020 (BMO Portable Loan) 327,966 417,975 Total Long-Term Debt $ 12,834,183 $ 17,715,538

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Future principal repayments over the next 5 years are estimated as follows:

Capital Loans 2017 $ 3,009,112 2018 1,835,221 2019 958,996 2020 614,179 2021 584,581 Thereafter 5,832,094 Total $ 12,834,183

Principal and interest payments on the long-term debt are as follows:

2016 2015 Principal $ 4,881,355 $ 4,448,435 Interest 559,273 696,740 Total $ 5,440,628 $ 5,145,175

11. DEFERRED REVENUE

Details of deferred revenues are as follows:

Balance Additions Revenue Balance as at during the recognized as at Aug. 31, 2015 Year in the Year Aug. 31, 2016 Capital projects: Federal capital tuition $ 111,388 $ 2,276 $ - $ 113,664 Total capital projects deferred revenue 111,388 2,276 - 113,664 Other deferred revenue: Property taxes 5,097,645 5,306,276 5,097,645 5,306,276 Foreign student tuition 1,779,606 1,334,747 1,779,606 1,334,747 Foundation deferred donations 434,946 704,502 686,263 453,185 Total other deferred revenue 7,312,197 7,345,525 7,563,514 7,094,208 Total Deferred Revenue $ 7,423,585 $ 7,347,801 $ 7,563,514 $ 7,207,872

23 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

12. COMPLEMENTARY SERVICES

Complementary services represent those services and programs where the primary purpose is other than K-12 learning/learning support, but which have the specific objective of enhancing the school division’s ability to successfully deliver its K-12 curriculum/learning programs.

Following is a summary of the revenues and expenses of the Complementary Services programs operated by the school division in 2016 and 2015:

Summary of Complementary Services Revenues and Expenses, by Program Literacy for Youth in Other Li fe Pre-K Uplift Custody Programs 2016 2015 Revenues: Operating Grants $ - $ 2,579,937 $ 21,426 $ 122,354 $ 311,181 $ 3,034,898 $ 2,875,557 Fees and Other Revenues 148,747 - - - 35,559 184,306 197,570 Total Revenues 148,747 2,579,937 21,426 122,354 346,740 3,219,204 3,073,127 Expenses: Other Related Fees - - - 142,126 - 142,126 48,085 Salaries & Benefits 87,379 2,348,236 58,294 - 473,145 2,967,054 2,817,313 Instructional Aids - 40,424 1,027 - 212,847 254,298 172,129 Supplies and Services - - 386 - 5,193 5,579 56,984 Non-Capital Equipment - - - - 3,500 3,500 (6,367) Communications ------(8) Travel ------2,901 Professional Development (Non-Salary Costs) - 25,822 2,700 - 1,111 29,633 28,028 Student Related Expenses 64,777 - 15,640 - - 80,417 72,845 Contracted Transportation & Allowance - - - - 495 495 - Total Expenses 152,156 2,414,482 78,047 142,126 696,291 3,483,102 3,191,910

Excess (Deficiency) of Revenues over Expenses $ (3,409) $ 165,455 $ (56,621) $ (19,772) $ (349,551) $ (263,898) $ (118,783)

The purpose and nature of each Complementary Services program is as follows: • Literacy for life was identified by the Board of Education as a strategic priority; the school division is committed to the goal of all students, K-8, reading and writing at or above grade level in multiple subject areas. • The Pre-K program provides educational services to students aged 3 and 4. • The Uplift program helps students develop employment skills to ensure they can operate successfully in the workplace. • The Youth in Custody program provides educational services to young offenders. • Other programs consist of numerous programs that enhance the learning objectives of the school division.

24 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

13. EXTERNAL SERVICES

External services represent those services and programs that are outside of the school division’s learning/learning support and complementary programs. These services have no direct link to the delivery of the school division’s K-12 programs nor do they directly enhance the school division’s ability to deliver its K-12 programs.

Following is a summary of the revenues and expenses of the External Services programs operated by the school division in 2016 and 2015:

Summary of External Services Charity/ Revenues and Expenses, Associate Qualified Other by Program Schools* Cafeteria Donee Whitecap Programs 2016 2015 Revenues: Operating Grants $ 5,007,899 $ - $ - $ 1,312,614 $ 25 $ 6,320,538 $ 6,152,846 Capital Grants ------110,059 Fees and Other Revenues - 245,617 548,505 - 1,970,542 2,764,664 1,169,228 Total Revenues 5,007,899 245,617 548,505 1,312,614 1,970,567 9,085,202 7,432,133 Expenses: Other Related Fees 1,642,491 - - 580,845 - 2,223,336 2,180,623 Salaries & Benefits 3,365,408 183,080 - 720,991 118,300 4,387,779 4,090,760 Instructional Aids - - 82,388 91,603 283,826 457,817 (91,766) Supplies and Services - 263,165 1,389 1,538 105,989 372,081 326,494 Non-Capital Equipment - - 469,039 325 (10,000) 459,364 4,738 Building Operating Expenses - - - - 27,246 27,246 25,759 Communications - - - - 26 26 12,675 Travel - - - 1,953 - 1,953 199 Professional Development - - - 7,867 - 7,867 5,163 Student Related Expenses - - 17,500 19,116 - 36,616 16,429 Total Expenses 5,007,899 446,245 570,316 1,424,238 525,387 7,974,085 6,571,074 Excess (Deficiency) of $ - $ (200,628) $ (21,811) $ (111,624) $ 1,445,180 $ 1,111,117 $ 861,059 Revenues over Expenses

*Associate Schools - see table below for details of revenues and expenses by school

The purpose and nature of each External Services program is as follows: • The school division supports the operations of the Saskatoon Christian School and the Saskatoon Misbah School as associate schools. Associate schools require a religious affiliation and approvals from both the school division and the Ministry of Education to operate as associate schools. • Cafeteria operations provide nutritious meals for students and staff. • The school division has qualified donee status. This enables the school division to issue tax deductible receipts for donations used to support educational initiatives.

25 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

• Through federal funding, the school division supports the operations of the Whitecap Dakota Elementary School. In addition, the school division received a grant from the Ministry of Education directed towards literacy initiatives at Whitecap School; related unspent funding is targeted for future literacy projects at the school. • Other programs consists of numerous programs that are outside of the learning objectives of the school division.

Saskatoon Saskatoon Summary of Associate School Revenues and Expenses, Christian Misbah Details by School School School 2016 2015 Revenues: Operating Grants $ 3,320,640 $ 1,687,259 $ 5,007,899 $ 4,910,651 Total Revenues 3,320,640 1,687,259 5,007,899 4,910,651 Expenses: Other Related Fees 882,444 760,047 1,642,491 1,695,154 Salaries & Benefits 2,438,196 927,212 3,365,408 3,215,479 Total Expenses 3,320,640 1,687,259 5,007,899 4,910,633 Excess of Revenues over Expenses $ - $ - $ - $ 18

14. ACCUMULATED SURPLUS

Accumulated surplus represents the financial assets and non-financial assets of the school division less liabilities. Accumulated surplus is comprised of the following two amounts: i) Accumulated surplus from operations which represents the accumulated balance of net surplus arising from the operations of the school division and school generated funds as detailed in the table below; and ii) Accumulated remeasurement gains which represent the unrealized gains and losses associated with changes in the value of financial instruments recorded at fair value as detailed in the statement of remeasurement gains. Certain amounts of the accumulated surplus from operations, as approved by the board of education, have been designated for specific future purposes. These internally restricted amounts are included in the accumulated surplus presented in the consolidated statement of financial position. The school division does not maintain separate bank accounts for the internally restricted amounts.

26 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Details of accumulated surplus are as follows:

Additions Reductions August 31 during the during the August 31 2015 year year 2016 Invested in Tangible Capital Assets: Net Book Value of Tangible Capital Assets $ 187,707,101 $ 77,327,211 $ 11,985,924 $ 253,048,388 Less: Debt owing on Tangible Capital Assets (17,715,538) - (4,881,355) (12,834,183) 169,991,563 77,327,211 7,104,569 240,214,205

PMR maintenance project allocations (1) 2,089,670 4,275,919 868,462 5,497,127 Internally Restricted Surplus: Capital projects: Designated for tangible capital asset expenditures 3,193,496 - 748,222 2,445,274 3,193,496 - 748,222 2,445,274 Othe r: School generated funds 2,548,517 - 248,310 2,300,207 School budget carryovers 1,584,567 - 322,323 1,262,244 Specialized school equipment 1,000,000 - - 1,000,000 Curriculum renewal 1,460,000 - - 1,460,000 Staff professional development 800,000 - - 800,000 Technology replacement 650,000 600,000 - 1,250,000 System application 1,125,000 - - 1,125,000 Civic elections 135,139 60,000 - 195,139 Facility repairs related to rentals 231,953 15,000 - 246,953 Trustee education 43,000 - - 43,000 Facility operating 332,201 - - 332,201 Security camera 50,000 - - 50,000 Mount Royal facility partnership 169,486 - - 169,486 Alternate funds 216,872 - 51,013 165,859 Whitecap Pre-K 26,241 - 7,363 18,878 Whitecap Literacy 115,005 - 74,391 40,614 Whitecap K-4 school - - 39,203 (39,203) 10,487,981 675,000 742,603 10,420,378 Public Charities: Foundation 207,368 916,965 - 1,124,333 Charity 423,418 - 423,418 - Qualified Donee - 401,608 - 401,608 630,786 1,318,573 423,418 1,525,941 Unrestricted Surplus 8,709,620 155,826 - 8,865,446 Total Accumulated Surplus from Operations 195,103,116 83,752,529 9,887,274 268,968,371 Accumulated Remeasurement Gain - 9,427 - 9,427 Total Accumulated Surplus $ 195,103,116 $ 83,761,956 $ 9,887,274 $ 268,977,798

(1) PMR Maintenance Project Allocations represent transfers received from the Ministry of Education as funding support for maintenance projects on the school division’s approved 3 year capital maintenance plans. Unspent funds at the end of a fiscal year are designated for future approved capital plan maintenance project expenditures.

27 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

The purpose and nature of each Internally Restricted Surplus amount is as follows:

Internally restricted surplus Capital projects represent funds allocated by the Board for capital construction.

School generated funds primarily represents fees collected from students participating in a variety of co-curricular activities including school clubs, music groups and sports teams. Each of these initiatives is treated as a unique program and the identity of program balances are maintained year over year.

School budget carryovers represent the unspent portion of budgets allocated to individual schools.

Specialized school equipment represents funds to be used for practical and applied arts programs.

Curriculum renewal represents funds to be used to purchase student resources for curricular programming and implementation.

Staff professional development represents funds to be used for staff professional development initiatives based on the school division’s strategic direction.

Technology replacement represents funds to be used for purchases of computers, digital overhead projectors, smart boards and other related technology hardware.

System application represents funds to be used to assist in addressing the major system software needs of the school division.

Civic elections represents funds set aside to cover the cost of civic elections which are held every four years.

Facility repairs related to rentals represents funds to be used to cover repairs to school property resulting from public rental of facilities.

Trustee education represents funds to be used to support members of the Board of Trustees’ education.

Facility operating represents funds available to the facilities department to assist with operational activities.

Security camera represents funds to be directed toward the replacement or addition of security cameras in school division facilities.

28 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Mount Royal facility partnership reserve represents the component part of the tenant agreements with Saskatoon Trades and Skills Centre and Saskatchewan Polytechnic designated for major maintenance and capital items at the expanded Mount Royal Collegiate.

Alternate funds represent funds received from external parties for specific projects.

Whitecap Pre-K represents startup funds for a Whitecap pre-kindergarten program.

Whitecap Literacy represents funds to be directed towards literacy initiatives at Whitecap School.

Whitecap K-4 is an alliance school providing kindergarten to grade 4 school programming on the Whitecap Dakota First Nation. The program funding is received from the federal government.

Public Charities The Foundation carries on activities which are for the charitable purpose of the advancement of education and enhancement of the quality of education offered by the school division.

The Charity became redundant when the school division acquired qualified donee status in 2015; the trust fund was voluntarily revoked in 2016.

The division’s Qualified Donee tax status enables it to receive donations which are used to support educational initiatives.

15. BUDGET FIGURES

Budget figures included in the consolidated financial statements were approved by the board of education on June 2, 2015 and the Minister of Education on August 20, 2015.

16. RELATED PARTIES

These consolidated financial statements include transactions with related parties. The school division is related to all Government of Saskatchewan ministries, agencies, boards, school divisions, health authorities, colleges, and crown corporations under the common control of the Government of Saskatchewan. The school division is also related to non-crown enterprises that the Government jointly controls or significantly influences. In addition, the school division is related to other non-government organizations by virtue of its economic interest in these organizations.

29 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Related Party Transactions Transactions with these related parties are in the normal course of operations. Amounts due to or from and the recorded amounts of transactions resulting from these transactions are included in the consolidated financial statements and the table below. They are recorded at exchange amounts which approximate prevailing market rates charged by those organizations and are settled on normal trade terms.

2016 2015 Revenues: Ministry of Education - operating $ 119,910,384 $ 119,869,488 Ministry of Education - capital 78,203,667 12,012,490 Ministry of Education - other 395,818 202,820 Ministry of Health 21,426 79,358 Ministry of Social Services 33,109 13,729 Saskatchewan Government Insurance 914,557 889,368 Saskatchewan Polytechnic 209,520 264,609 $199,688,481 $133,331,862 Expenses: SaskPower $ 824,517 $ 857,207 SaskTel 168,595 221,112 SaskEnergy 1,197,692 1,476,485 Saskatchewan Workers' Compensation Board 606,374 617,324 Good Spirit School Division - public section trust 226,514 50,984 Other - 5,542 $ 3,023,692 $ 3,228,654 Accounts Receivable: Ministry of Education $ 1,308,740 $ 998,868 Ministry of Social Services 800 - Saskatchewan Polytechnic 35,114 36,409 Other School Divisions 1,463 58,613 $ 1,346,117 $ 1,093,890 Accounts Payable and Accrued Liabilities: SaskEnergy $ 16,317 $ 5,029 SaskPower 100,472 106,566 SaskTel 6,686 6,859 Saskatchewan Government Insurance 30,412 62,918 $ 153,887 $ 181,372 In addition, the school division pays Provincial Sales Tax to the Saskatchewan Ministry of Finance on all its taxable purchases and customer sales on items that are deemed taxable. Taxes paid are recorded as part of the cost of those purchases. A portion of the operating grant revenue from the Ministry of Education includes funding allocated to principal and interest repayments on some school board loans.

30 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Other transactions with related parties and amounts due to/from them are described separately in the consolidated financial statements or notes thereto.

17. CONTRACTUAL OBLIGATIONS AND COMMITMENTS

Significant contractual obligations and commitments of the school division are as follows:

Estimated completion date Amount Willowgrove Elementary School 2017 $ 1,100,357 Roofing - Alvin Buckwold 2017 383,000 Roofing - Confederation Park 2017 429,550 Roofing - Lester B. Pearson 2017 159,162 Roofing - Prince Phillip 2017 169,350 Roofing - River Heights 2017 263,401 Roofing - Roland Michener 2017 179,700 Roofing - Vincent Massey 2017 213,056 Roofing - Walter Murray 2017 204,300 Portables - Centennial Collegiate 2017 395,304 Portables - Henry Kelsey 2017 162,732 Portables - Willowgrove 2017 170,505 Technology 2017 253,644 $ 4,084,061

The school division has ongoing service commitments for transportation, energy, school/office equipment and a property lease. Other contracts and commitments are as follows:

Buses Taxis Energy Copiers Property Lease Total 2017 $ 6,678,403 $ 536,000 $ 760,740 $ 345,390 $ 224,000 $ 8,544,533 2018 6,704,748 - 380,630 - 224,000 7,309,378 2019 6,772,847 - 50,910 - 112,000 6,935,757 2020 4,545,627 - 51,720 - - 4,597,347 2021 4,681,996 - - - - 4,681,996 Thereafter 25,603,075 - - - - 25,603,075 $ 54,986,696 $ 536,000 $ 1,244,000 $ 345,390 $ 560,000 $ 57,672,086

31 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

18. JOINT-USE SCHOOLS PROJECT AGREEMENT

In August 2015, the Government of Saskatchewan entered into a 32 year public-private partnership with Joint-Use Mutual Partnership to design, finance, build and maintain schools in the communities of Evergreen, Hampton, Rosewood and Stonebridge in Saskatoon on behalf of the school division. The Government of Saskatchewan will be responsible for all capital, maintenance and operating payments over the term of the public-private partnership agreement with ownership of the schools vesting with the school division. Under the Accountability Agreement between the Government of Saskatchewan and school division, the school division receives the benefit of payments made by the Government of Saskatchewan. Therefore, during period of construction, the school division will record capital grant revenue from the Ministry of Education and tangible capital assets on the percentage of completion basis.

19. RISK MANAGEMENT

The school division is exposed to financial risks from its financial assets and liabilities. These risks include credit risk, liquidity risk and market risk (consisting of interest rate risk and foreign exchange risk).

i) Credit Risk Credit risk is the risk to the school division from potential non-payment of accounts receivable. The credit risk related to the school division's receivables from the provincial government, federal government and their agencies are considered to be minimal. For other receivables, the school division has adopted credit policies which include implementation of credit limits and close monitoring of overdue accounts. The school division does not have a significant exposure to any individual customer. Management reviews accounts receivable on a case by case basis to determine if a valuation allowance is necessary to reflect impairment in collectability. The aging of other accounts receivable as at August 31, 2016 was:

Total 0-30 days 30-60 days 60-90 days Over 90 days Other Receivables $ 1,333,354 $ 436,690 $ 72,948 $ 2,473 $ 821,243

32 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

ii) Liquidity Risk Liquidity risk is the risk that the school division will not be able to meet its financial obligations as they come due. The school division manages liquidity risk by maintaining adequate cash balances, budget practices and monitoring and cash flow forecasts. The following table sets out the contractual maturities of the school division’s financial liabilities:

August 31, 2016 Within 6 months 6 months to 1 year 1 to 5 years > 5 years Accounts payable and accrued liabilities (excludes accrued pension liability) $ 5,382,377 $ 61,164 $ 50,268 $ - Long-term debt 1,504,556 1,504,556 3,992,977 5,832,094 Total $ 6,886,933 $ 1,565,720 $ 4,043,245 $ 5,832,094

iii) Market Risk The school division is exposed to market risks with respect to interest rates and foreign currency exchange rates, as follows: Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The school division’s interest rate exposure relates to cash and cash equivalents and portfolio investments. The school division also has an authorized bank line of credit of $25.0 million with interest payable monthly at a rate of prime minus 1% per annum. Changes in the bank's prime rate can cause fluctuation in interest payments and cash flows. There was no balance outstanding on this credit facility as of August 31, 2016. The school division minimizes these risks by:

• holding cash in an account at a Canadian bank, denominated in Canadian currency • investing in GICs and term deposits for short terms at fixed interest rates • managing cash flows to minimize utilization of its bank line of credit • managing its interest rate risk on long-term debt through the exclusive use of fixed rate terms for its long-term debt

33 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at August 31, 2016

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The school division is exposed to currency risk on purchases denominated in U.S. dollars for which the related accounts payable balances are subject to exchange rate fluctuations; however, the school division believes that it is not subject to significant foreign exchange risk from its financial instruments.

34 A-1 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule A: Consolidated Supplementary Details of Revenues for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

Property Taxation Revenue Tax Levy Revenue Property Tax Levy Revenue 107,586,585 107,084,476 103,208,656 Revenue from Supplemental Levies - 1,033,647 999,808 Total Property Tax Revenue 107,586,585 108,118,123 104,208,464 Grants in Lieu of Taxes Federal Government 2,900,000 740,397 2,869,479 Provincial Government - 1,910,032 - Total Grants in Lieu of Taxes 2,900,000 2,650,429 2,869,479 Other Tax Revenues Treaty Land Entitlement - Urban - - 136,494 House Trailer Fees 62,000 51,699 47,598 Total Other Tax Revenues 62,000 51,699 184,092

Deletions from Levy Other Deletions (1,200,000) (987,614) (1,002,238) Total Deletions from Levy (1,200,000) (987,614) (1,002,238)

Total Property Taxation Revenue 109,348,585 109,832,637 106,259,797

Grants

Operating Grants Ministry of Education Grants Operating Grant 111,857,000 112,135,236 112,216,701 Total Ministry Grants 111,857,000 112,135,236 112,216,701 Other Provincial Grants - 102,140 - Grants from Others 1,012,926 914,557 889,368 Total Operating Grants 112,869,926 113,151,933 113,106,069

Capital Grants Ministry of Education Capital Grants 76,981,480 78,203,667 12,012,490 Other Capital Grants - 53,760 - Total Capital Grants 76,981,480 78,257,427 12,012,490

Total Grants 189,851,406 191,409,360 125,118,559

35 A-2 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule A: Consolidated Supplementary Details of Revenues for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

Tuition and Related Fees Revenue Operating Fees Tuition Fees Federal Government and First Nations 810,000 850,549 783,346 Individuals and Other 2,505,000 2,012,977 2,541,148 Total Tuition Fees 3,315,000 2,863,526 3,324,494

Other Related Fees 72,880 20,173 44,300 Total Operating Tuition and Related Fees 3,387,880 2,883,699 3,368,794

Total Tuition and Related Fees Revenue 3,387,880 2,883,699 3,368,794

School Generated Funds Revenue Curricular Student Fees - 1,187,222 1,054,895 Total Curricular Fees - 1,187,222 1,054,895 Non-Curricular Fees Commercial Sales - GST - - 2,653 Grants and Partnerships - 138,168 120,374 Students Fees - 491,178 593,310 Other 4,955,000 3,265,401 3,235,152 Total Non-Curricular Fees 4,955,000 3,894,747 3,951,489

Total School Generated Funds Revenue 4,955,000 5,081,969 5,006,384

Complementary Services Operating Grants Ministry of Education Grants Operating Grant 2,644,896 2,702,291 2,715,895 Other Ministry Grants - 106,113 52,820 Other Provincial Grants - 92,100 93,087 Other Grants 750,000 134,394 13,755 Total Operating Grants 3,394,896 3,034,898 2,875,557 Fees and Other Revenue Other Revenue - 184,306 197,570 Total Fees and Other Revenue - 184,306 197,570

Total Complementary Services Revenue 3,394,896 3,219,204 3,073,127

36 A-3 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule A: Consolidated Supplementary Details of Revenues for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

External Services Operating Grants Ministry of Education Grants Operating Grant 4,974,104 5,072,857 4,936,892 Other Ministry Grants - 150,000 150,000 Federal Grants 1,094,600 1,097,655 1,053,918 Other Grants 240,000 26 12,036 Total Operating Grants 6,308,704 6,320,538 6,152,846 Capital Grants Other Capital Grants - - 110,059 Total Capital Grants - - 110,059 Fees and Other Revenue Tuition and Related Fees 228,000 218,733 229,452 Other Revenue 253,000 2,545,931 939,776 Total Fees and Other Revenue 481,000 2,764,664 1,169,228

Total External Services Revenue 6,789,704 9,085,202 7,432,133

Other Revenue Miscellaneous Revenue 186,000 81,523 148,840 Sales & Rentals 807,000 1,046,294 878,402 Investments 270,000 193,311 279,562

Total Other Revenue 1,263,000 1,321,128 1,306,804

TOTAL REVENUE FOR THE YEAR 318,990,471 322,833,199 251,565,598

37 B-1 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule B: Consolidated Supplementary Details of Expenses for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

Governance Expense Board Members Expense 324,500 280,510 294,526 Professional Development- Board Members 48,000 21,880 39,912 Elections - 30,523 - Other Governance Expenses 460,647 554,970 406,682

Total Governance Expense 833,147 887,883 741,120

Administration Expense Salaries 4,860,940 4,904,052 4,846,373 Benefits 1,024,590 613,244 699,788 Supplies & Services 360,283 282,718 328,107 Non-Capital Furniture & Equipment 33,200 5,908 10,021 Building Operating Expenses 229,407 217,974 296,629 Communications 95,207 81,617 84,900 Travel 5,000 1,201 - Professional Development 110,192 80,452 64,529 Amortization of Tangible Capital Assets 180,000 185,068 192,433

Total Administration Expense 6,898,819 6,372,234 6,522,780

Instruction Expense Instructional (Teacher Contract) Salaries 129,896,218 129,457,149 124,553,555 Instructional (Teacher Contract) Benefits 7,225,218 6,957,124 6,921,530 Program Support (Non-Teacher Contract) Salaries 27,317,859 27,202,005 26,074,251 Program Support (Non-Teacher Contract) Benefits 5,166,000 3,885,942 3,843,303 Instructional Aids 5,583,605 5,607,026 5,598,948 Supplies & Services 4,054,424 3,745,113 3,426,589 Non-Capital Furniture & Equipment 1,341,700 1,256,362 1,196,039 Communications 415,558 464,937 350,088 Travel 320,700 282,044 270,568 Professional Development 841,167 801,686 778,368 Student Related Expense 1,446,932 1,264,529 1,312,894 Amortization of Tangible Capital Assets 2,400,000 2,008,437 2,438,894

Total Instruction Expense 186,009,381 182,932,354 176,765,027

38 B-2 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule B: Consolidated Supplementary Details of Expenses for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

Plant Operation & Maintenance Expense Salaries 10,072,000 10,146,649 9,907,203 Benefits 2,822,520 1,959,565 2,020,439 Supplies & Services - 111,997 100,895 Non-Capital Furniture & Equipment 205,236 150,670 118,350 Building Operating Expenses 12,176,295 11,665,643 11,704,790 Communications 22,440 22,893 16,484 Travel 193,941 178,450 177,929 Professional Development 76,565 26,638 23,446 Amortization of Tangible Capital Assets 9,800,000 9,792,419 10,861,960

Total Plant Operation & Maintenance Expense 35,368,997 34,054,924 34,931,496

Student Transportation Expense Supplies & Services - - 10,417 Contracted Transportation 7,273,559 6,777,884 6,596,734

Total Student Transportation Expense 7,273,559 6,777,884 6,607,151

Tuition and Related Fees Expense

Tuition Fees 33,000 37,496 25,520 Other Fees 250,000 288,000 255,500

Total Tuition and Related Fees Expense 283,000 325,496 281,020

School Generated Funds Expense Academic Supplies & Services - 1,220,897 1,065,485 Cost of Sales - (93) 4,678 School Fund Expenses 4,955,000 4,362,269 4,209,942

Total School Generated Funds Expense 4,955,000 5,583,073 5,280,105

39 B-3 THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule B: Consolidated Supplementary Details of Expenses for the year ended August 31, 2016

2016 2016 2015 Budg et Actual Actual

Complementary Services Expense Other Fees - 142,126 48,085 Instructional (Teacher Contract) Salaries & Benefits 1,641,000 1,724,449 1,642,385 Program Support (Non-Teacher Contract) Salaries & Benefits 1,008,540 1,242,605 1,174,927 Instructional Aids 47,839 254,298 172,129 Supplies & Services 758,000 5,579 56,985 Non-Capital Furniture & Equipment - 3,500 (6,367) Communications - - (8) Travel - - 2,901 Professional Development (Non-Salary Costs) 25,000 29,633 28,028 Student Related Expenses - 80,417 72,845 Contracted Transportation & Allowamces - 495 -

Total Complementary Services Expense 3,480,379 3,483,102 3,191,910

External Service Expense Other Fees 2,266,040 2,223,336 2,180,623 Administration Salaries & Benefits 126,170 117,571 119,071 Instructional (Teacher Contract) Salaries & Benefits 3,774,846 3,997,619 3,757,338 Program Support (Non-Teacher Contract) Salaries & Benefits 189,966 272,589 214,351 Instructional Aids 253,937 457,817 (91,766) Supplies & Services 201,321 372,081 326,494 Non-Capital Furniture & Equipment 3,772 459,364 4,738 Building Operating Expenses 21,478 27,246 25,759 Communications 5,539 26 12,675 Travel 3,000 1,953 199 Professional Development (Non-Salary Costs) 4,986 7,867 5,163 Student Related Expenses 2,751 36,616 16,429

Total External Services Expense 6,853,806 7,974,085 6,571,074

Other Expense Interest and Bank Charges Current Interest and Bank Charges 2,500 17,636 19,148 Interest on Capital Loans 579,000 559,273 696,740 Total Interest and Bank Charges 581,500 576,909 715,888

Total Other Expense 581,500 576,909 715,888

TOTAL EXP ENS ES FOR THE YEAR 252,537,588 248,967,944 241,607,571

40 Schedule C THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule C: Consolidated Supplementary Details of Tangible Capital Assets For the year ended August 31, 2016

Furniture Computer Land Buildings Other and Hardware and Computer Assets Audio Visual Under Land Improvements Buildings Short-Term Vehicles Equipment Equipment Software Construction 2016 2015

Tangible Capital Assets - at Cost Opening Balance as of September 1 12,521,311 417,286 285,942,181 11,244,283 341,692 5,099,631 7,968,096 1,861,183 8,578,041 333,973,704 316,090,954 Additions/Purchases - - - - 25,032 451,453 424,255 58,927 76,367,544 77,327,211 20,698,627 Disposals - - - (15,000) (58,348) (262,922) (1,457,565) (1,308,994) - (3,102,829) (2,815,877) Transfers to (from) - - 6,627,411 957,763 - - - - (7,585,174) - - Closing Balance as of August 31 12,521,311 417,286 292,569,592 12,187,046 308,376 5,288,162 6,934,786 611,116 77,360,411 408,198,086 333,973,704

Tangible Capital Assets - Amortization Opening Balance as of September 1 - 71,286 135,406,220 2,210,904 198,298 2,700,702 4,069,891 1,609,302 - 146,266,603 135,589,193 Amortization of the Period - 20,864 9,264,343 609,353 53,368 528,816 1,386,957 122,223 - 11,985,924 13,493,287 Disposals - - - (15,000) (58,348) (262,922) (1,457,565) (1,308,994) - (3,102,829) (2,815,877) Closing Balance as of August 31 N/A 92,150 144,670,563 2,805,257 193,318 2,966,596 3,999,283 422,531 N/A 155,149,698 146,266,603

Net Book Value Opening Balance as of September 1 12,521,311 346,000 150,535,961 9,033,379 143,394 2,398,929 3,898,205 251,881 8,578,041 187,707,101 180,501,761 Closing Balance as of August 31 12,521,311 325,136 147,899,029 9,381,789 115,058 2,321,566 2,935,503 188,585 77,360,411 253,048,388 187,707,101 Change in Net Book Value - (20,864) (2,636,932) 348,410 (28,336) (77,363) (962,702) (63,296) 68,782,370 65,341,287 7,205,340

Disposals Historical Cost - - - 15,000 58,348 262,922 1,457,565 1,308,994 - 3,102,829 2,815,877 Accumulated Amortization - - - 15,000 58,348 262,922 1,457,565 1,308,994 - 3,102,829 2,815,877 Net Cost ------Price of Sale ------Gain (Loss) on Disposal ------

THE BOARD OF EDUCATION OF THE SASKATOON SCHOOL DIVISION NO. 13 OF SASKATCHEWAN

Schedule D: Consolidated Non-Cash Items Included in Surplus for the year ended August 31, 2016

2016 2015

Non-Cash Items Included in Surplus Amortization of Tangible Capital Assets (Schedule C) 11,985,924 13,493,287 In-Kind Ministry of Education Capital Grant for Joint-Use Schools Project included in the Surplus (Note 18) (70,393,071) (5,194,405)

Total Non-Cash Items Included in Surplus (58,407,147) 8,298,882

Schedule E: Consolidated Net Change in Non-Cash Operating Activities for the year ended August 31, 2016

2016 2015

Net Change in Non-Cash Operating Activities Decrease (Increase) in Accounts Receivable (147,944) 3,341,648 Decrease in Accounts Payable and Accrued Liabilities (1,895,124) (2,888,282) Increase in Liability for Employee Future Benefits 197,600 208,400 Decrease in Deferred Revenue (215,713) (1,081,329) Decrease (Increase) in Prepaid Expenses 19,835 (195)

Total Net Change in Non-Cash Operating Activities (2,041,346) (419,758)