In-year Deficit Approval Form

In accordance with section 231 of the Education Act and Ontario Regulation 280/19, Calculation of Maximum In-Year Deficit, school boards must seek Minister approval in the following situations:

• the school board has an in-year deficit that exceeds the lesser of the accumulated surplus available for compliance from the preceding year, or one percent of its operating allocation (Compliance Report item 4 is “Yes”)

• the school board is reporting an in-year deficit for a third consecutive fiscal year, irrespective of the amount of the deficit (Compliance Report item 3 is “Yes”)

• an in-year deficit elimination plan (IYDEP) is required (Compliance Report item 5.1 is “Yes”) and the school board cannot provide a plan to eliminate the deficit within the required timelines (Compliance Report item 5 is “Yes”)

A new ministry approval is required if the projected in-year deficit has increased from any previously approved amounts related to the same school year.

Approval from the ministry must be obtained at any point during the school year when it becomes known to the board that:

• its projected in-year deficit will exceed the threshold set out in O. Reg. 280/19,

• the school board is expected to incur a third consecutive in-year deficit that was not previously reported, or

• if an IYDEP is required and the school board does not have an approved IYDEP that eliminates the in-year deficit by the required timelines.

Please follow the steps noted below to ensure you obtain the required ministry approval:

• The school board must be using the “Board Working Version”. If you are using another version, please copy the file to “Board Working Version”. (Refer to the EFIS 2.0 User Guide, section 7.1.1, for instructions on copying data between versions.)

• Select the “In-year Deficit Approval” form under the Forms -> Compliance folder in the task list, and open the corresponding report from the Reports folder of the task list.

• The input form contains four tabs, which correspond to the sections that appear on the report; the ministry has prepopulated the required data elements in section II (based on Schedule 5). As the data is pulling from Schedule 5, it requires the school board to have entered some data in EFIS to calculate, at a minimum, the forecasted in-year deficit.

• The school board should complete Section III “Confirmation on cause of in-year deficit”.

• The school board should complete Section IV “Factors causing in-year deficit”. School boards should provide the necessary level of detail to ensure the approval process is as expedient as possible. Where the in-year deficit is due to multi-year issues, please provide the details of the amounts per impacted school year. Type of Factors Causing In-year Deficit:

  • Multi-year structural: Ongoing cost pressure that will continue unless alternative measures are taken. May or may not be within the school board’s control. This would be opposed to a one-time cost pressure.

  • Multi-year non-structural: Ongoing cost pressure that will resolve itself without taking alternative measures. May or may not be within the school board’s control.

  • One-time: Cost pressure that will not continue in the future.

• The school board should then complete Section V “Cost Saving Measures Already Taken to Reduce the In-year Deficit”, indicating the saving measure, the amount, and an explanation of the measure/s taken to reduce the in-year deficit, if any. Costs saving measures already taken to eliminate the school board’s in-year deficit will strengthen the case for the in-year deficit approval request.

• Once Sections III, IV, and V have been completed, review the form for any error and warning messages. These messages should be cleared prior to its finalization.

• Once finalized, copy the file to “Board FO Viewable Version”.

• The Senior Business Official of the school board must request the approval from the ministry by sending an e-mail to their ministry Financial Analyst informing them that an in-year deficit is being requested and the necessary data has been input into the “In-year deficit approval form” of the “Board FO Viewable Version” version.

• The ministry will review the request and seek any additional clarification that is required to process the approval request.

• Upon confirmation of receipt of the school board’s request, Ministry staff will review the information submitted and a response will be provided in a timely manner. If the deficit is structural in nature, or the request represents a high financial risk that places future balanced budgets at risk, more time may be required to evaluate the situation and provide direction.

• Once the request has been approved, the ministry Financial Analyst will inform the school board of the approved amount which will be automatically transferred to the school board’s working version and all draft versions in EFIS under the “Total amount of Minister approved in-year deficit” (item 7 in the Compliance Report).