Compliance Report - Balanced In-Year Position

This report assesses the school board’s compliance with the balanced budget requirement as per Education Act s231(1) and the maximum allowable in-year deficit as per Ontario Regulation 280/19, Calculation of Maximum In-Year Deficit. If an in-year deficit is not authorized as per O. Reg 280/19, the school board will need to request Minister approval for a non-compliant deficit unless the school board has previously received approval for an amount equal to or greater than the reported in-year deficit.

This form outlines all the conditions where a school board may need to submit a deficit approval request, which include the following:

• The school board has an in-year deficit for a third consecutive year.

• The school board is reporting an in-year deficit greater than the lower of:

  • The school board’s accumulated surplus (available for compliance) for the preceding fiscal year. If the school board does not have an accumulated surplus, the number determined under this paragraph is deemed to be zero.

  • One per cent of the school board’s operating revenue for the fiscal year.

• The school board did not submit an In-Year Deficit Elimination Plan that eliminates the deficit by the required timelines as per O. Reg 280/19 (refer to the In-Year Deficit Elimination Plan section) where required (i.e. the in-year deficit is within the allowable threshold above and the school board is not reporting an in-year deficit for a third consecutive year).

Item 1 - Compliance - Multi-Year Recovery Plan

Select “Yes” from the drop-down list if the school board is in a multi-year recovery plan.

The balanced budget calculation does not apply if the school board is in a financial recovery plan. In such cases, compliance would be based on the provisions of the financial recovery plan (Education Act s231(4)).

Item 2 - Balanced Budget Determination

The in-year surplus/(deficit) for compliance purposes is calculated at item 2.3 as:

• Item 2.1.1 (revenues excluding school generated funds), less
• Item 2.1.2 (land revenues), less
• Item 2.1.3 (in-year revenues for ARO), less
• Item 2.2 (expenses for compliance purposes).

The revenues are calculated as the total revenues from Schedule 9 less school generated funds, revenues recognized for the purchase of land, and revenues related to ARO. The expenses come from Schedule 10ADJ.

Item 3 - Consecutive In-Year Deficits

Calculates the school board’s compliance as it relates to reporting an in-year deficit for a third consecutive year. If the school board is reporting an in-year deficit for the current year (item 2.3) and it has reported in-year deficits in the two previous years (items 3.1 and 3.2), then Item 3 will be “Yes”. The school board’s in-year deficit is non-compliant and the school board may need to submit an in-year deficit approval request. The school board may update item 3.2 if a more current position for the prior year is available.

Item 4 - Maximum Allowable Deficit

Calculates the school board’s compliance as it relates the maximum allowable in-year deficit threshold. One per cent of the school board’s operating revenue for the fiscal year is calculated at item 4.2. The school board’s accumulated surplus for the preceding fiscal year is loaded at item 4.3, from Schedule 5, item 3, column 1. If the in-year deficit exceeds the lower of items 4.2 and 4.3, item 4 will be “Yes” as the in-year deficit exceeds the allowable threshold, and the school board may need to submit an in-year deficit approval request.

Item 5 - In-Year Deficit Elimination Plan (IYDEP) Requirement

Calculates the school board’s compliance based on whether the in-year deficit elimination plan (IYDEP), if required, eliminates the in-year deficit within the required timelines:

• If a new plan (from In-Year Deficit Elimination Plan, item 1.1) is required and the school board’s IYDEP eliminates the in-year deficit within two years, the school board is compliant.

• If an updated plan (from In-Year Deficit Elimination Plan, item 1.1) is required, and the school board’s IYDEP eliminates the in-year deficit in one year, the school board is compliant.

Item 5 will be “Yes” if the IYDEP does not eliminate the deficit within required timelines and the school board may need to submit an in-year deficit approval request.

Items 6 and 7 - Minister Approval Requirement

If any of items 3, 4 or 5 are “Yes” then item 6 will be “Yes” as the in-year deficit is non-compliant and would be subject to Minister approval. Item 7 is the amount of Minister approved in-year deficit and is preloaded based on any previous approval received from the Minister for this school year.

Item 8 - Determination of In-Year Position Compliance Status

Assesses the overall compliance of the in-year surplus/(deficit) based on any previous approval received from the Minister. If the in-year deficit at item 2.3 exceeds item 7, the board will need to submit a deficit approval request. Please refer to the In-Year Deficit Approval Form section of the instructions for details on submitting a deficit approval request.

Relationship to other schedules:

• In-year revenues and expenses in the Balanced Budget Determination section are calculated as follows:

  • Item 2.1.1 (In-year revenues): Schedule 9, item 10.0 less item 4

  • Item 2.1.2 (In-year land revenues): Schedule 5.6 col. 3, item 1.2 + 1.3 + 1.3.1 – 1.4 – 1.4.1 + Schedule 5.5 Total Capital Land Projects, col. 5.1 + col. 6.1 – Schedule 5.1 item 13.8, col. 6

  • Item 2.1.3 (In-year revenues for ARO): Schedule 3A item 1.3.2, col. 20 – col. 19 + item 1.3.3, col. 20 + Schedule 9 item 8.

  • Item 2.2 (In-year expenses for compliance purposes): Schedule 10ADJ item 90, col. 30.

• The operating allocation used in the compliance calculation (item 4.1) is loaded from Section 1A (item 7), and the prior year accumulated surplus available for compliance (item 4.3) is loaded from Schedule 5 (item 3, column 1).

• The in-year surplus/(deficit) for two years prior to the current year (item 3.1) and for the prior year (item 3.2) are loaded from the applicable Compliance Report from the board-submitted 2023-24 Financial Statements (item 1.3) and 2024-25 Revised Estimates (item 2.3).

• The IYDEP requirement to eliminate the deficit within the required timeline (item 5.2) is assessed based on the In-Year Deficit Elimination Plan (item 2.0 if an Updated Plan (item 1.1) is required or item 3.0 if a New Plan (item 1.1) is required).

• The approved in-year deficit at item 7 is loaded from the Deficit Approval report if a school board has a Minister-approved deficit. In the Revised Estimates, it is loaded from the same line from the current year’s Estimates cycle, unless there has been a new deficit approval. In the Financial Statements, it is loaded from the same line in the current year’s Revised Estimates cycle.