SIAST 2012-13 Annual Report Financials

Annual Report2012-13 Financials

2012-13 SIAST ANNUAL REPORT | 1

MANAGEMENT DISCUSSION & ANALYSISOPERATING ENVIRONMENTThe 2012/13 academic year was the first for SIAST under the leadership of Dr. Larry Rosia, president and CEO. Dr. Rosia’s skills are well suited to maintaining SIAST’s momentum, capturing new opportunities and ensuring that SIAST students have access to high-quality education and that employers have access to a highly skilled workforce.Under Dr. Rosia’s leadership, SIAST obtained status as a polytechnic with Polytechnics Canada. One of 11 members, SIAST is the only post-secondary institution in Saskatchewan to obtain this designation and is one of only four members in the three western provinces. SIAST is a top performer in the Polytechnics Canada group with respect to graduate employment – at 93%, SIAST holds a significant lead over many of the other members.Saskatchewan led Canada with its low unemployment rate, almost half the national average. Saskatchewan placed second nationally with respect to both percentage population growth and percentage growth in the number of people employed. Saskatchewan also placed second with respect to economic growth forecast for 2014 – 3.1% compared to the national average of 2.6%.1

The continued economic success of the province brings with it ongoing demand on SIAST to meet the expanding needs of the labour market. Of note, SIAST continued to struggle with issues around its aging infrastructure and the alarming lack of instructional and student space on its campuses. Further work took place on campus infrastructure planning, especially at SIAST Kelsey Campus in Saskatoon, where overcrowding impedes SIAST’s ability to respond to labour market needs in Saskatchewan’s growing economy. SIAST has also responded to the acute need for student housing by initiating a student housing project at SIAST Palliser Campus in Moose Jaw.SIAST welcomed the public consultations and ensuing recommendation to expand degree-granting beyond Saskatchewan’s two universities, opening up future opportunities for SIAST to offer baccalaureate-level degrees of an applied nature. SIAST’s proposed Bachelor of Psychiatric Nursing program has been approved, and SIAST will begin offering the program in the fall of 2013.

STRATEGY MANAGEMENTSIAST’s planning process involves three key components: a 10-year strategic plan (2009 to 2019), an annual operations forecast, and an annual operating and capital plan. SIAST uses the balanced scorecard approach as its planning and management system, linking strategy implementation with organizational goals and initiatives. The balanced scorecard framework encourages an organization to look at its business from four perspectives: client, internal processes, learning/growth and enterprise sustainability. Key to this approach is the SIAST strategy map and goals.In 2009, SIAST released its 10-year strategic plan, SIAST 2.0 – Defining Tomorrow. This plan set out SIAST’s vision for the future. It included 18 strategic goals to guide SIAST in pursuit of its vision and strategic destination. SIAST is now halfway through the 10-year planning horizon and is conducting a strategic plan refresh, validating the plan against expectations of stakeholders and against the current realities of the

environment within which it operates. By the end of 2012/13, all external consultations with stakeholder groups were completed. The goal of this validation process is to release the updated 10-year plan in time to influence planning for 2014/15 and beyond.In November 2012, the SIAST board received as information the final iteration of SIAST’s balanced scorecard. SIAST will continue to refine the scorecard by ensuring that it sets targets that are aligned with industry benchmarks.In response to an initiative launched by the Ministry of Advanced Education, SIAST embarked upon a program to implement Lean throughout the organization. Lean is a quality improvement methodology that seeks to eliminate waste within a process, while at the same time improving the value delivered to those who use or depend upon the process. To this end, SIAST created the Lean Promotion Office to oversee the selection of processes for review and to manage the application of Lean to these processes. To date, SIAST has successfully completed five Lean projects:• SIAST grievance process;• process for reporting marks to the Saskatchewan Apprenticeship

and Trades Certification Commission;• international student registration process;• network account management process; • payroll efficiency review.

ENTERPRISE RISK MANAGEMENTAs previously indicated, SIAST uses the balanced scorecard as its strategy management system. Current thinking with respect to the balanced scorecard approach incorporates enterprise risk management (ERM) as an integral part of strategic planning. Identification and management of risks associated with strategic goals is essential to the effective execution of strategy and to achievement of these goals. As such, SIAST’s ERM focus for the 2012/13 academic year was on its integration with strategic planning.

In the fall of 2012, strategic planning sessions were held with all academic divisions and administrative services. Using SIAST’s definition of risk, the effect of uncertainty on the achievement of objectives, each division identified the risks associated with its strategic goals. This was the first time that consideration of risks associated with strategy was undertaken by SIAST at the divisional level.

Further work on ERM is pending the refresh of SIAST’s 10-year strategic plan. ERM had identified the risks associated with SIAST’s 18 strategic goals. With the potential of these goals changing as a result of the refresh project, the current risks will need to be validated and modified in response to the changes to the strategic plan.

1 Source: Saskatchewan Economic Checklist June 2013 (http://www.economy.gov.sk.ca/June7-13)

2 | 2012-13 SIAST ANNUAL REPORT

ADOPTION OF NEW ACCOUNTING STANDARDSCommencing with the 2013 fiscal year, SIAST has adopted Public Sector Accounting Standards (PSAS). These financial statements are the first financial statements for which SIAST has applied these standards. There are a number of significant changes that are detailed in Notes 2 and 18. The following are highlights of the changes:• The Statement of Financial Position now reports on net financial

assets (debt) and non-financial assets, with an overall accumulated surplus. Unrestricted operating surplus (previously referred to as unrestricted operating net assets) will continue to be reported in the notes to the financial statements because it remains the best representation of funds accumulated from the current and prior years that are available to fund future years’ operations.

• There is also a new financial statement called Statement of Change in Net Financial Assets (Debt).

• The Statement of Operations reports expenses by function rather than expense category. Reporting by expense category is included in Note 16, and variance analysis will continue to be provided on this basis.

• Government grants are now recognized when authorized, which means most targeted grants are recognized in the current year rather than deferred and matched with the related expenses, as was previously the case.

• Capital grants are recorded in the year authorized as opposed to the previous method of deferral and amortization over the life of the asset.

• Accumulated non–vesting employee benefits (sick leave for SIAST) are now recognized as a liability as detailed in Note 7.

FINANCIAL PERFORMANCE (in thousands of dollars)

In fiscal 2013, SIAST recorded a surplus of $4,431. SIAST had originally budgeted an operating deficit of $364 for the year. This budget has since been adjusted to reflect the adoption of PSAS, as detailed in Note 19, in order to be consistent with the financial results presented in the 2013 financial statements. As a result, the restated budget is a larger deficit of $7,152, caused by the removal of amortization revenue because capital grants are no longer deferred and amortized over the life of the asset. The positive variance of actual to restated budget of $11,583 is made up of two components.The first component of $4,778 is related to the PSAS transition, primarily consisting of targeted and capital grants that would have formerly been deferred but are now recognized in this year’s revenue. The second component of $6,805 is related to operations. The Nursing Division contributed significantly to the positive variance primarily through tuition and salary variances. The number of international students attending SIAST increased dramatically in 2013, and the tuition from these students also contributed to the positive variance. There were positive salary variances in a number of academic and administrative divisions due to vacancies and special project funds that were not utilized. Additionally, savings were realized in a number of non-salary expenses, such as materials, services and travel. Grant revenue also exceeded budget due to the recognition of funding increases effective April 2013. SIAST had budgeted a capital deficit of $1,565, which is restated to a

surplus of $5,223 under PSAS due to the removal of amortization revenue, offsetting the equivalent adjustment to operating income. The actual capital surplus was $3,767, resulting in a negative variance of $1,456.Because SIAST’s annual operating surplus is partially comprised of revenue from grants that are restricted in their use, only the unrestricted portion results in an increase to the unrestricted operating surplus balance. Additional increases to the unrestricted operating surplus were the result of the PSAS-adjusted capital surplus and increased debt due to a sustaining capital loan that replaced SIAST’s capital grant for 2013. The net impact on SIAST’s unrestricted operating surplus was an increase of $5,181 during the year to $8,618. A deficit budget has been approved for 2014, which means that the unrestricted operating surplus will be reduced over the course of the upcoming year. Further reductions will also result from the carry forward of capital and operating amounts that were budgeted for 2013 but not expended prior to year-end.

SIAST is a top performer in the Polytechnics Canada group with respect to graduate

employment – at 93%, SIAST holds a significant

lead over many of the other members.

NOTES TO THE FINANCIAL STATEMENTS


HIGHLIGHTS: ACTUAL 2013 COMPARED TO 2012 (in thousands of dollars)

The surplus for 2013 was $4,431, compared to a deficit of $123 from 2012. • Grant revenue increased by $2,270 or 1.4% due to increased operating

grant and targeted funding.• Contractual services revenue decreased by $1,116 or 3.8% primarily

due to a reduction in international projects compared to the prior year.• Tuition and fees revenue increased by $1,010 or 3.9% largely due to

increased enrolment of international students.• Salaries and benefits expense decreased by $1,314 or 0.9% because

of the majority of the retroactive salary expenses from the previous collective agreement being expensed in 2012.

• Financial assets increased by $2,344 or 8.8% due mainly to an increase in cash, primarily as a result of payroll remittances that were paid in July versus June last year. This also resulted in an offsetting increase to accounts payable. Additionally, funds were received as the result of a loan of $1,515 for sustaining capital that replaced SIAST’s capital grant for 2013 as authorized in the funding letter from the Ministry of Advanced Education.

• Total liabilities decreased by $4,149 or 15.2% because payments made relating to the collective bargaining agreements reduced liability balances in place at last year-end. Additionally, the PSAS requirement to recognize targeted funding that would have previously been deferred resulted in a decrease in deferred revenue. Partially offsetting these decreases were increases to debt due to the loan discussed above as well as an increase in accounts payable due to the payroll remittances also discussed above.

• Overall, the net debt position shifted to a net financial asset position for June 30, 2013, with a change of $6,493. The primary factor in the shift was the operating surplus, with capital also contributing due to the amortization of capital assets exceeding capital acquisitions.

HIGHLIGHTS: ACTUAL 2013 COMPARED TO PLAN 2013 (in thousands of dollars)

The surplus in 2013 was $4,431 compared to a planned operating deficit of $7,152, after restatement to PSAS. The main factors contributing to this surplus were reviewed under Financial Performance above. A discussion of the main revenue and expense category variances follows:• Grant revenues were in excess of budget by $7,195 or 4.7%. This is

primarily the result of $4,252 of grant funding that has been authorized and is therefore required to be recognized under PSAS. The remaining variance is due to funding increases effective April 1, 2013.

• Contractual services revenue was under budget by $3,362 or 10.6% due to lower than anticipated international project revenue as well as continuing education revenue being lower than planned.

• Tuition and fees exceeded the budget by $1,641 or 6.5% primarily due to greater international student enrolments than anticipated as well as core Nursing tuition being greater than projected. Testing and application fees were also greater than planned.

• Sales were greater than budget by $1,107 or 12.7% due to increased cafeteria and textbook sales.

• Salaries and benefits expense was lower than budget by $2,063 or 1.4%. This is mainly due to salary savings in academic divisions, largely the result of vacancies and unspent special project funds.

• Services expense was less than budget by $1,596 or 11.7% primarily due to less international project activity occurring than was planned.

• Travel and professional development was $1,137 or 25.9% less than plan. A significant portion of this variance was due to the flexible benefit plan that was budgeted in this account category but expensed under salaries. The remainder of the savings were primarily due to less international project activity than was planned, although savings were experienced over a number of divisions.

2013 OPERATING REVENUE: BUDGET VS. ACTUAL

2013 OPERATING EXPENSES: BUDGET VS. ACTUAL

020,00040,00060,00080,000

100,000120,000140,000160,000

$ 180,000

Grants Contractual Tuition & Sales Other services fees income

Budget 2013 Actual 2013

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

$ 160,000

Salaries Facilities Services Materials Cost of Other & benefits rental & supplies goods sold



HIGHLIGHTS: PLAN 2014 (in thousands of dollars)

For 2014, SIAST originally budgeted an overall deficit of $2,305, consisting of deficits of $1,318 in operating and $987 in capital. The budget has since been restated based on the treatment of deferred capital contributions under PSAS, as previously discussed. The result is a larger operating deficit of $5,884 and a capital surplus of $3,579; however, the overall deficit remains at $2,305. This deficit will be funded by a draw-down of SIAST’s unrestricted operating surplus. SIAST entered the planning process for the 2014 budget anticipating a significant budgetary shortfall based on status quo expenditures exceeding the anticipated funding increase. The primary factor in the shortfall was increased wages relating to the currently outstanding 2012 – 15 collective agreements, an estimate for which has been incorporated into the 2014 budget.To address this shortfall, SIAST divisions were expected to prepare contingency plans to reduce the planned deficit to a level that could be funded by SIAST’s unrestricted operating surplus. These contingency plans have resulted in decreases in a number of expense categories including materials and supplies, services and travel. In addition to divisional contingency planning, continuing education revenue targets were increased, and a one-year freeze on the replacement of computers for staff and the majority of student labs was implemented.The most significant areas of anticipated change from the 2013 budget to 2014 are:• Grant revenue is expected to increase by $5,483 or 3.6% primarily

due to the operating and capital grant increase.• Tuition and fees are anticipated to increase by 1,688 or 6.7% primarily

due to increased continuing education revenue targets as well as a 4% increase to core tuition.

• Salaries and benefits expense is budgeted to increase by $7,911 or 5.2% due mainly to estimated wage increases as a result of the collective agreements currently outstanding.

HIGHLIGHTS: EXPENSES BY FUNCTION (in thousands of dollars)

Under PSAS, expenses are reported by function rather than expense category on the Statement of Operations. The overall positive budget variances that have been previously discussed are reflected through the expenses by function, with the exception of the ancillary function where overall activity exceeded budget.

CAPITAL SPENDING SUMMARY (in thousands of dollars)

In 2013, SIAST acquired capital assets totaling $8,438, funded via operating funds designated for capital replacement, provincial capital funding and federal capital grants. Amortization exceeded new capital acquisitions resulting in a reduction in tangible capital assets of $2,454.The majority of the minor capital expenditures were made to replace equipment, technology and books. Major capital expenditures during the year were related to facilities enhancements and expansions, with the most notable being the completion of renovations to the building housing the new Mining Engineering Technology program in Saskatoon.

2012 2013 2013 2014 Actual Plan Actual Plan

Operations Annual surplus (deficit) $ (123) $ (7,152) $ 4,431 $ (5,884) Grants 156,903 151,978 159,173 157,460 Contractual services 29,499 31,745 28,383 31,981 Tuition and fees 25,843 25,212 26,853 26,900 Sales 9,085 8,740 9,847 9,361 Salaries and benefits 150,593 151,342 149,279 159,253 Facilities 30,917 31,470 31,544 31,864 Materials and supplies 6,488 6,596 6,175 6,085 Cost of goods sold 5,861 5,377 6,097 5,456 Services 12,669 13,630 12,034 12,856 Amortization 10,882 11,171 10,843 10,838 Travel and PD 3,286 4,386 3,249 4,040

Financial Position Unrestricted operating $ 3,437 $ 1,508 $ 8,618 $ 6,313 surplus

Financial assets 26,618 14,289 28,962 24,891 Liabilities 27,274 18,110 23,125 21,270 Net financial assets (debt) (656) 3,821 5,837 3,621 Tangible capital assets 81,142 77,194 78,688 74,975 Accumulated surplus 81,026 73,874 85,457 79,096

2013 EXPENSES BY FUNCTION: BUDGET VS. ACTUAL

0

20,000

40,000

60,000

80,000

100,000

120,000

$ 140,000

Programs Facilities Student Ancillary Administration services



MANAGEMENTREPORTSEPTEMBER 27, 2013

The financial statements have been prepared by management in accordance with Canadian public sector accounting standards. When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial statements are not precise because they include certain amounts based on estimates and judgments. Management has ensured that the financial statements are presented fairly in all material respects. The financial information presented elsewhere in the annual report is consistent with that in the financial statements.Management has ensured that the organization is in compliance with the provisions of legislation and related authorities.Management maintains a system of internal accounting and administrative controls to provide reasonable assurance that the financial information is relevant, reliable and accurate, and that assets are appropriately accounted for and adequately safeguarded.The board of directors of SIAST is responsible for reviewing and approving the financial statements and, primarily through its audit committee, ensures management fulfills its responsibilities for financial reporting.The audit committee is appointed by the board and is composed of directors who are not employees of SIAST. The audit committee meets periodically with management and with external auditors to discuss internal controls, auditing matters and financial and reporting issues to satisfy itself that each party is properly discharging its responsibilities. The audit committee reviews the financial statements and the external auditors’ report and also considers, for approval by the board, the engagement or reappointment of the external auditors. The audit committee reports its findings to the board for its consideration when approving the financial statements for issuance.The financial statements have been audited by Deloitte LLP and the Provincial Auditor of Saskatchewan in accordance with Canadian generally accepted auditing standards. Deloitte LLP and the Provincial Auditor of Saskatchewan have full and free access to the audit committee.

Dr. Larry RosiaPresident & CEO

Cheryl SchmitzCFO & Vice-President, Administrative Services (Interim)

Sean EngemoenAssociate Vice-President, Financial Services (Acting)


INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF THE LEGISLATIVE ASSEMBLY AND THE BOARD OF DIRECTORS OF SASKATCHEWAN INSTITUTE OF APPLIED SCIENCE AND TECHNOLOGY

We have audited the accompanying financial statements of Saskatchewan Institute of Applied Science and Technology, which comprise the statements of financial position as at June 30, 2013, June 30, 2012 and July 1, 2011 and the statements of operations, changes in net financial assets (debt) and cash flows for the years ended June 30, 2013 and June 30, 2012, and 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 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 financial statements that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 the auditors’ 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, the auditors considers 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, these financial statements present fairly, in all material respects, the financial position of Saskatchewan Institute of Applied Science and Technology as at June 30, 2013, June 30, 2012 and July 1, 2011 and the results of its operations, changes in its net financial assets (debt), and its cash flows for the years ended June 30, 2013 and June 30, 2012 in accordance with Canadian public sector accounting standards.

Deloitte LLP Judy Ferguson, FCA Chartered Accountants Acting Provincial AuditorSaskatoon, Saskatchewan Regina, SaskatchewanSeptember 27, 2013 September 27, 2013


STATEMENTS OF FINANCIAL POSITIONAS AT JUNE 30, 2013, AND JUNE 30, 2012 (in thousands of dollars)

Note 2013 2012 July 1, 2011 (Restated – Note 2) (Restated – Note 2)

Financial assets Cash and cash equivalents 3 $ 18,270 $ 14,934 $ 23,375 Accounts receivable 4 6,293 6,812 5,697 Inventories for resale 5 2,407 2,982 1,868 Portfolio investments 6 1,992 1,890 1,822

28,962 26,618 32,762

Liabilities Accounts payable and accrued liabilities 5,645 3,112 5,732 Salaries and benefits payable 7,126 11,777 10,848 Employee future benefits 7 3,256 3,528 3,607 Debt 9 1,515 – – Deferred revenue 10 5,450 8,522 13,563 Obligation under capital leases 11 133 335 692

23,125 27,274 34,442

Net financial assets (debt) 5,837 (656) (1,680)

Non-financial assets Tangible capital assets 12 78,688 81,142 79,839 Prepaid expenses 932 540 2,990

79,620 81,682 82,829

Accumulated surplus 13 $ 85,457 $ 81,026 $ 81,149

Contractual obligations and contingencies 14, 15

Approved on behalf of the Board:

Ralph Boychuk, Chair

Gary Benning, Audit Committee Chair

The accompanying notes are an integral part of these financial statements.

FOR THE YEARS ENDED JUNE 30, 2013, AND JUNE 30, 2012 (in thousands of dollars)


STATEMENTS OF OPERATIONS


Budget 2013 2012 (Note 19) (Restated – Note 2)

Revenue Grants and contractual services: Government of Saskatchewan $ 173,160 $ 180,211 $ 178,444 Government of Canada 7,570 5,555 5,293 Other governments 258 600 675 Non-government 2,735 1,190 1,990 Tuition and fees 25,212 26,853 25,843 Sales 8,740 9,847 9,085 Donations 1,101 1,341 1,128 Investment income 539 289 470 Other income 341 576 455

219,656 226,462 223,383

Expenses Academic programs 131,835 128,407 129,530 Facilities 34,063 33,346 33,761 Administration 34,316 33,272 33,383Student services 18,747 18,330 18,323 Ancillary 7,847 8,676 8,509

226,808 222,031 223,506

Annual surplus (deficit) (7,152) 4,431 (123)

Accumulated surplus, beginning of year 81,026 81,026 81,149

Accumulated surplus, end of year $ 73,874 $ 85,457 $ 81,026


STATEMENTS OF CHANGE IN NET FINANCIAL ASSETS (DEBT)FOR THE YEARS ENDED JUNE 30, 2013, AND JUNE 30, 2012 (in thousands of dollars)

Budget 2013 2012 (Note 19) (Restated – Note 2)

Net debt at beginning of year $ (656) $ (656) $ (1,680)

Changes during the year: Annual surplus (deficit) (7,152) 4,431 (123) Acquisition of tangible capital assets (7,448) (8,438) (12,379) Proceeds on disposal of tangible capital assets – 22 76 Loss on disposal of tangible capital assets – 27 118 Amortization of tangible capital assets 11,171 10,843 10,882 (Acquisition) use of prepaid expenses 40 (392) 2,450

(3,389) 6,493 1,024

Net financial assets (debt) at end of year $ (4,045) $ 5,837 $ (656)




STATEMENTS OF CASH FLOWS Note 2013 2012 (Restated – Note 2)

Operating transactions Annual surplus (deficit) $ 4,431 $ (123) Items not affecting cash: Amortization of tangible capital assets 10,843 10,882 Loss on disposal of tangible capital assets 27 118 Unrealized (gain) loss on restricted assets 6 (125) 50 Decrease in employee future benefits liability (272) (79) Net decrease in non-cash operating balances 17 (4,488) (6,511)

10,416 4,337

Capital transactions Acquisition of tangible capital assets (8,438) (12,379) Proceeds on disposal of tangible capital assets 22 76

(8,416) (12,303)

Investing transactions Proceeds on disposition of portfolio investments 329 573 Acquisition of portfolio investments (306) (691)

23 (118)

Financing transactions Proceeds from debt financing 1,515 – Repayment of obligation under capital leases (202) (357)

1,313 (357)

Net increase (decrease) in cash and cash equivalents 3,336 (8,441)

Cash and cash equivalents, beginning of year 14,934 23,375

Cash and cash equivalents, end of year $ 18,270 $ 14,934


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEARS ENDED JUNE 30, 2013, AND JUNE 30, 2012 (in thousands of dollars)


1. AUTHORITY AND PURPOSE Saskatchewan Institute of Applied Science and Technology (“the

Institute”) was established as a public educational corporation by the Legislative Assembly of Saskatchewan under The Institute Act and is continued under The Saskatchewan Institute of Applied Science and Technology Act. The Institute is Saskatchewan’s primary provider of post-secondary technical education and skills training and operates campuses in Moose Jaw, Prince Albert, Regina and Saskatoon.

The Institute is a registered charity and is exempt from the payment of income tax.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of accounting These financial statements are prepared by management in accordance

with Canadian Public Sector Accounting Standards (“PSAS”). b. Adoption of Public Sector Accounting Standards Beginning July 1, 2012, the Institute has adopted PSAS as issued

by the Public Sector Accounting Board. The Institute has adopted PSAS without the PS 4200 series of not-for-profit standards.

These financial statements are the first financial statements under PSAS and the transitional provisions of PS 2125 – First-time adoption by government organizations have been applied. The date of transition to PSAS is July 1, 2011, and the Institute has prepared and presented an opening statement of financial position at the date of transition to the new standards. This opening statement of financial position is the starting point for the Institute’s accounting under the new standards.

In accordance with the requirements of PS 2125, the accounting policies set out in Note 2 have been consistently applied except for PS 3410 – Government transfers, which the Institute has elected to apply prospectively effective July 1, 2012, and PS 3450 – Financial instruments and PS 2601 – Foreign currency translation, which are required to be adopted prospectively.

The Institute has applied all the mandatory exceptions and has elected to use the tangible capital asset impairment exemption permitted upon first-time adoption of PSAS. As allowed under the exemption, the Institute has elected not to reassess conditions for a write-down of a tangible capital asset prior to the transition date and instead apply the conditions for a write-down of a tangible capital asset as in PS 3150 – Tangible capital assets on a prospective basis from the date of transition.

Detailed information on how the transition from Canadian generally accepted accounting principles applicable to not-for-profit entities as contained in Part V of the CICA Handbook – Accounting (“GAAP”) to PSAS has affected the Institute’s financial position, financial performance and accumulated surplus is shown in Note 18.

c. Revenue recognition Revenues are recognized in the period in which the transactions or

events occurred that gave rise to the revenues. All revenues are recorded on an accrual basis, except when the accruals cannot be determined with a reasonable degree of certainty or when their estimation is impracticable.

Government transfers (grants and contracts) are recognized as revenues when the transfer is authorized, any eligibility criteria are met and a reasonable estimate of the amount can be made except to the extent that transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers are recognized as deferred revenue when transfer stipulations give rise to a liability. Transfer revenue is recognized in the statement of operations as the stipulation liabilities are settled.

Tuition and student fees and sales of inventory are reported as revenue at the time the services are provided or the products are delivered. Funds received in advance of the fees being earned or the service performed are deferred and recognized when the fee is earned or service performed.

Contributions from other sources are deferred when restrictions are placed on their use by the contributor and are recognized as revenue when used for the specified purpose.

Unrestricted contributions and pledges are recognized as revenue when received. Gifts-in-kind are recorded at the fair market value on the date of their donation if they meet the Institute’s criteria for capitalization. Other in-kind donations of materials and services are not recognized in these financial statements.

Investment income includes interest recorded on an accrual basis, declared dividends, realized gains and losses on the sale of investments and write-downs on investments where the loss in value is determined to be other than temporary. For unrestricted investment assets recorded at fair value, unrealized gains and losses are recorded on the statement of remeasurement gains and losses until settlement.1 Once realized, these gains and losses are recognized in the statement of operations and related balances reversed from the statement of remeasurement gains and losses.

Investment income on externally restricted investment assets is deferred and recognized when the related stipulations are met.

d. Financial instruments Financial instruments of the Institute consist of cash and cash

equivalents, accounts receivable, portfolio investments, accounts payable and accrued liabilities, salaries and benefits payable and debt. All financial instruments are measured at cost or amortized cost except portfolio investments.

Portfolio investments include equities and equity mutual funds quoted in an active market, which are required to be measured at fair value. The Institute has elected to measure the bond component of the portfolio investments at fair value to correspond with how it is evaluated and managed.

1 During the periods presented, there were no unrestricted investment assets measured at fair value and therefore no unrealized gains or losses on unrestricted investment assets. Accordingly, no statement of remeasurement gains and losses has been presented.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Financial instruments (continued)

Unrealized gains and losses from changes in the fair value of financial instruments are recognized in the statement of remeasurement gains and losses, except for those related to restricted assets, which are recorded as deferred revenue until used for the purpose stipulated by the contributor.1 Upon settlement, the cumulative gain or loss is reclassified from the statement of remeasurement gains and losses and recognized in the statement of operations.

All financial assets are tested annually for impairment. When financial assets are impaired, impairment losses are recorded in the statement of operations. A write-down of a portfolio investment to reflect a loss in value is not reversed for a subsequent increase in value.

For financial instruments measured using amortized cost, the effective interest rate method is used to determine interest revenue or expense.

Sales and purchases of investments are recorded on the trade date. Transaction costs are a component of cost for financial instruments measured using cost or amortized cost. Transaction costs are expensed for financial instruments measured at fair value.

e. Cash and cash equivalents Cash and cash equivalents include cash and highly liquid securities

with original terms to maturity of three months or less when purchased. f. Inventories for resale Inventories consist of merchandise and supplies held for resale and

are valued at the lower of cost and net realizable value. Cost for inventories is calculated using the weighted average cost method. Administrative and program supplies and library periodicals are not inventoried.

g. Employee future benefits The employee future benefits liability represents the value of the

accumulating non-vesting sick leave benefits provided to employees of the Institute. A liability and expense is recognized in the period employees render services to the Institute in return for the benefits. The value of the liability and expense of the sick leave benefits are actuarially determined using management’s best estimate of salary escalation, accumulated sick days at retirement, long-term inflation rates and discount rates.

Actuarial valuations are performed periodically by an independent actuary. Amounts are extrapolated in fiscal years in which a full actuarial valuation has not been performed.

h. Tangible capital assets Tangible capital assets are recorded at cost, which includes

amounts that are directly related to the acquisition, installation, design, construction, improvement or betterment of the assets. Capital lease obligations are recorded at the present value of the minimum lease payments excluding executor costs. The discount rate used to determine the present value of the lease payments is the

lower of the Institute’s rate for incremental borrowing or the interest rate implicit in the lease. A schedule of future payments, including interest, is presented in Note 11.

The cost, less residual value, of the tangible capital assets, excluding land, is amortized on a straight-line basis over their estimated useful lives as follows:

Buildings 40 years Leasehold improvements: Properties owned by the 15 years Government of Saskatchewan Other properties Lease term Furniture and equipment 5 to 10 years Computers and software 3 to 5 years Library 5 years

Effective July 1, 2012, the estimated useful life of software was increased to five years from one year to reflect the Institute’s experience. Software with a cost of $46 is now included in the tangible capital asset balance as a result of this change.

Donated capital assets are recorded at their fair market value upon receipt except in situations where fair value cannot be reasonably determined.

Works of art that have cultural, aesthetic or historical value are not included in tangible capital assets because a reasonable estimate of the future benefits associated with such property cannot be made. Information on works of art held by the Institute is disclosed in Note 12.

Tangible capital assets are written down when conditions indicate that they no longer contribute to the Institute’s ability to provide goods and services, or when the value of the future economic benefits associated with the tangible capital assets are less than their net book value. The net write-downs are accounted for as an expense in the statement of operations.

i. Measurement uncertainty The preparation of financial statements in accordance with PSAS

requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Significant areas requiring such estimates relate to the determination of useful lives of tangible capital assets for amortization, the assumptions underlying the calculation of employee future benefits and provisions for contingencies. Actual results may ultimately differ from these estimates.

Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available.



3. CASH AND CASH EQUIVALENTS

2013 2012 July 1, 2011

Cash $ 18,138 $ 14,826 $ 23,250 Cash equivalents 132 108 125

$ 18,270 $ 14,934 $ 23,375

4. ACCOUNTS RECEIVABLE

2013 2012 July 1, 2011

Corporate $ 1,074 $ 818 $ 1,013 Federal government 2,284 1,639 1,732 Provincial government and related entities 2,703 4,103 2,655 Student 131 155 166 Other 171 191 221 Less provision for doubtful accounts (70) (94) (90)

$ 6,293 $ 6,812 $ 5,697

5. INVENTORIES FOR RESALE

2013 2012 July 1, 2011

Bookstores $ 2,275 $ 2,850 $ 1,731 Food services 49 50 52 Shop and service supplies 83 82 85

$ 2,407 $ 2,982 $ 1,868

The cost of inventory sold recognized as an expense during 2013 was $6,097 (2012 – $5,861) and includes inventory write-downs of $45 (2012 – $41).There were no reversals of write-downs of inventory made in prior periods. As of June 30, 2013, there was no inventory pledged as security for liabilities.

6. PORTFOLIO INVESTMENTS Portfolio investments consist of bond and equity mutual funds, individual bonds and individual equities. The portfolio is entirely funded from long-

term endowed and non-endowed gifts with the related investment income externally restricted and primarily for the funding of student scholarships.

2013 2012 July 1, 2011

Mutual funds $ 1,341 $ 1,226 $ 1,070 Equities 465 489 490 Bonds 186 175 262

$ 1,992 $ 1,890 $ 1,822

The portfolio investments recorded a gain of 8.18% in 2013 (2012 – loss of 0.75%). At June 30, 2013, the individual bond portfolio had a weighted average effective yield of 1.59% (2012 – 1.32%; July 1, 2011 – 3.07%) with maturity

dates ranging from less than one year to five years (2012 – less than one year to five years; July 1, 2011 – less than one year to 11 years). The Institute’s portfolio investments are classified as Level 1 financial instruments for which the fair value is determined based on quoted prices in

active markets for identical assets.




7. EMPLOYEE FUTURE BENEFITS

Information about the obligation for employee future benefits is as follows:

2013 2012 July 1, 2011

Actuarial valuation date June 30, 2012 June 30, 2012 June 30, 2012 Significant long-term assumptions used: Salary escalation (excluding step increases) 2.00% 2.00% 2.00% Discount rate 3.35% 2.80% 3.85% Estimated average remaining service life 8 years 8 years 8 years

2013 2012

Liability for employee future benefits: Accrued benefit obligation, beginning of year $ 3,746 $ 3,607 Current period benefit cost 260 233 Interest cost 103 139 Benefit payments (662) (451) Actuarial (gain) loss (113) 218

Accrued benefit obligation, end of year 3,334 3,746 Unamortized net actuarial loss (78) (218)

Liability for employee future benefits $ 3,256 $ 3,528

Employee future benefits expense: Current service cost $ 260 $ 234 Interest cost on benefits 103 139 Amortization of net actuarial loss 27 –

Total employee future benefits expense $ 390 $ 373

Benefits available to employees of the Institute include accumulating non-vesting sick leave. Employees are credited up to 15 days per year for use as paid absences due to illness or injury. Employees are allowed to accumulate unused sick day credits each year and accumulated credits may be used in future years to the extent that

8. PENSION PLANS Institute employees participate in various multi-employer defined benefit

and defined contribution pension plans. The majority of these are administered by the Ministry of Finance. Employer contributions of $7,844 (2012 – $7,685) were expensed during the year. Employer obligations associated with the defined benefits plans, with the exception of the Municipal Employee Pension Plan (MEPP), are the responsibility of the General Revenue Fund of the Government of Saskatchewan. MEPP is a multi-employer defined benefit plan, covering approximately 14,500 active members, of which seven are employees of the Institute.

9. DEBT The Institute has access to a revolving line of credit with the Royal Bank

of Canada (RBC) up to a limit of $10,000. At June 30, 2013, the outstanding balance on the operating line of credit was $1,515 (2012 – nil; July 1, 2011 – nil). Interest is charged on these borrowings

at the RBC prime rate less 0.45%. Interest expense for the year on line of credit debt was $10 (2012 – nil). Subsequent to June 30, 2013, the $1,515 outstanding line of credit

balance was converted to a credit facility utilizing monthly revolving bankers’ acceptance (“BA”) loans. The loan matures and is reissued monthly at progressively smaller amounts until 2028.

Anticipated annual principal repayments over the next five years and thereafter on the BAs are as follows:

2014 $ 104 2015 104 2016 104 2017 104 2018 104 Thereafter 995

$ 1,515

the employee’s illness or injury exceeds the current year’s allocation of credits. For accounting purposes, the Institute measures the accrued benefit obligations and calculates the annual expense for the fiscal period through actuarial valuations.




10. DEFERRED REVENUE

Opening Ending balance Receipts Recognized balance 2012 during year as revenue 2013

Grants and contractual services: Government of Saskatchewan $ 3,798 $ 176,580 $ (180,211) $ 167 Government of Canada 200 5,534 (5,555) 179 Other governments – 600 (600) – Non-government – 1,247 (1,190) 57 Tuition and fees 1,402 27,084 (26,853) 1,633 Donations 3,036 1,703 (1,341) 3,398 Other deferred revenue 86 15 (85) 16

$ 8,522 $ 212,763 $ (215,835) $ 5,450

Opening Ending balance Receipts Recognized balance 2011 during year as revenue 2012

Grants and contractual services: Government of Saskatchewan $ 9,486 $ 172,756 $ (178,444) $ 3,798 Government of Canada 237 5,256 (5,293) 200 Other governments – 675 (675) – Non-government – 1,990 (1,990) – Tuition and fees 1,219 26,026 (25,843) 1,402 Donations 2,575 1,589 (1,128) 3,036 Other deferred revenue 46 89 (49) 86

$ 13,563 $ 208,381 $ (213,422) $ 8,522

Deferred revenue balances relate to the following: Deferred grants and contractual services revenue provided by governments consists of unspent amounts where the funding has stipulations that

create liabilities for the Institute. Non-government grants and contractual services revenue is deferred to the extent that the agreed-upon service remains to be completed.

Deferred tuition and fees represent amounts received for academic services to be provided in future periods. The deferred donations revenue balance represents unspent contributions subject to external restrictions and the related unspent restricted

investment income.



11. OBLIGATION UNDER CAPITAL LEASES

2013 2012 July 1 , 2011

Balance, beginning of year $ 335 $ 692 $ 1,038 Lease payments (202) (357) (346) Additional leases – – –

Balance, end of year $ 133 $ 335 $ 692

Minimum lease payments, including principal and interest, are as follows:

2014 $ 136 Less amount representing interest (3)

Present value of minimum lease payments $ 133

Interest rates on the leases range from 5.31% to 11.74% (2012 – 4.62% to 11.74%; July 1, 2011 – 4.62% to 11.74%). Interest expensed during the year amounted to $15 (2012 – $27).




12. TANGIBLE CAPITAL ASSETS

Leasehold Furniture Computers Land Buildings improvements & equipment & software Library 2013 Total

Cost: Opening balance $ 6,212 $ 8,311 $ 61,511 $ 61,094 $ 16,490 $ 4,703 $ 158,321 Additions – 1,238 1,456 3,486 1,864 394 8,438 Disposals – – – (1,020) (1,923) – (2,943)

Closing balance 6,212 9,549 62,967 63,560 16,431 5,097 163,816

Accumulated amortization: Opening balance – 472 20,953 40,137 11,959 3,658 77,179 Amortization – 277 3,775 4,182 2,200 409 10,843 Disposals – – – (980) (1,914) – (2,894)

Closing balance – 749 24,728 43,339 12,245 4,067 85,128

Net book value $ 6,212 $ 8,800 $ 38,239 $ 20,221 $ 4,186 $ 1,030 $ 78,688

Leasehold Furniture Computers Land Buildings improvements & equipment & software Library 2012 Total

Cost: Opening balance $ 6,212 $ 6,777 $ 57,608 $ 58,425 $ 15,319 $ 4,332 $ 148,673 Additions – 1,534 3,948 3,782 2,740 375 12,379 Disposals – – (45) (1,113) (1,569) (4) (2,731)

Closing balance 6,212 8,311 61,511 61,094 16,490 4,703 158,321

Accumulated amortization: Opening balance – 313 17,097 36,875 11,305 3,244 68,834 Amortization – 159 3,856 4,273 2,176 418 10,882 Disposals – – – (1,011) (1,522) (4) (2,537)

Closing balance – 472 20,953 40,137 11,959 3,658 77,179

Net book value $ 6,212 $ 7,839 $ 40,558 $ 20,957 $ 4,531 $ 1,045 $ 81,142

Net book value at July 1, 2011 $ 6,212 $ 6,464 $ 40,511 $ 21,550 $ 4,014 $ 1,088 $ 79,839

At June 30, 2013, the tangible capital asset balance included equipment under capital leases with a cost of $585 (2012 – $1,030; July 1, 2011 – $1,557) and accumulated amortization of $262 (2012 – $452; July 1, 2011 – $716).

Donated tangible capital assets have been recognized at fair market value at the date of their receipt. The value of donated tangible capital assets received during the year was $65 (2012 – $123).

The Institute owns works of art including paintings and prints displayed at various locations. These collections are not recorded as tangible capital assets.

There were no write-downs of tangible capital assets in the years presented.


NOTES TO THE FINANCIAL STATEMENTS13. ACCUMULATED SURPLUS a. Composition of accumulated surplus

2013 2012 July 1, 2011

Investment in tangible capital assets $ 77,040 $ 80,807 $ 79,147 SIAST Woodland Campus student housing reserve 439 310 182 Unfunded employee future benefits (3,256) (3,528) (3,607) Restricted government transfers 2,616 – – Unrestricted operating surplus 8,618 3,437 5,427

Accumulated surplus $ 85,457 $ 81,026 $ 81,149

b. Investment in tangible capital assets

2013 2012 July 1 , 2011

Tangible capital assets $ 78,688 $ 81,142 $ 79,839 Obligation under capital leases (133) (335) (692) Debt (1,515) – –

Investment in tangible capital assets $ 77,040 $ 80,807 $ 79,147

c. Change in unrestricted operating surplus

2013 2012

Unrestricted operating surplus, beginning of year $ 3,437 $ 5,427 Annual surplus (deficit) 4,431 (123) Decrease (increase) in investment in tangible capital assets 3,767 (1,660) Increase in SIAST Woodland Campus student housing reserve (129) (128) Decrease in employee future benefits liability (272) (79) Increase in restricted government transfers (2,616) –

Unrestricted operating surplus, end of year $ 8,618 $ 3,437

14. CONTRACTUAL OBLIGATIONS The Institute has entered into multiple-year contracts for leases of

facilities and equipment, the delivery of services, and the construction of assets. These contractual obligations will become liabilities in the future when the terms of the contracts are met. Disclosure relates to the unperformed portion of the contracts.

The majority of the facilities are leased on a continuing basis from the Ministry of Central Services. The equipment leases and service contracts are with various private companies.

The future minimum annual payments over the next five years are as follows:

Equipment Facilities & services Total

2014 $ 31,201 $ 1,820 $ 33,021 2015 31,201 333 31,534 2016 31,201 316 31,517 2017 31,201 53 31,254 2018 31,201 – 31,201

The estimated cost to complete major capital projects in progress at June 30, 2013, is approximately $640.



16. EXPENSE BY OBJECT

Budget 2013 2013 2012

Salaries and benefits (Notes 7 and 8) $ 151,342 $ 149,279 $ 150,593 Facilities 31,470 31,544 30,917 Services 13,630 12,034 12,669 Materials and supplies 6,596 6,175 6,488 Cost of goods sold 5,377 6,097 5,861 Amortization 11,171 10,843 10,882 Travel and professional development 4,386 3,249 3,286 Equipment rental and repairs 1,331 1,298 1,221 Scholarships and awards 1,505 1,485 1,471 Loss on disposal of capital assets – 27 118

$ 226,808 $ 222,031 $ 223,506

17. NET CHANGE IN NON-CASH OPERATING BALANCES

2013 2012

Accounts receivable $ 519 $ (1,115) Inventories 575 (1,114) Accounts payable and accrued liabilities 2,533 (2,620) Salaries and benefits payable (4,651) 929 Deferred revenue (3,072) (5,041) Prepaid expenses (392) 2,450

$ (4,488) $ (6,511)

15. CONTINGENT LIABILITIES a. Outstanding legal claims The nature of the Institute’s activities is such that there may be

litigation pending at any time. A liability is recorded, on a case-by-case basis, if the expected loss is both probable and can be reasonably estimated. As at June 30, 2013, an amount of $87 (2012 – $297; July 1, 2011 – $351) has been accrued for outstanding legal claims that management has determined meet the criteria for recording a liability under public sector accounting standards.

As at June 30, 2013, a potential liability exists relating to a lawsuit filed on behalf of certain non-permanent employees claiming damages related to their non-participation in the Public Employees Pension Plan. It is the opinion of management that retroactive pension contributions on behalf of some current and former employees will be necessary; however, the amount cannot be

reasonably estimated. The expense related to this claim will be reflected in the statement of operations in the period in which the cost becomes reasonably determinable. It is also the intention of senior management to request additional support from the Ministry of Advanced Education to fund the cost of a settlement when the amount becomes reasonably determinable.

b. Collective bargaining agreements The Institute has collective bargaining agreements with the

Saskatchewan Government and General Employees’ Union and the SIAST Faculty Association, representing 94% of its employees. These agreements expired June 30, 2012. Negotiations toward new agreements are ongoing, and settlements may result in retroactive salary and benefit increases.



NOTES TO THE FINANCIAL STATEMENTS18. IMPACT OF THE ADOPTION OF PUBLIC SECTOR

ACCOUNTING STANDARDS As described in Note 2, the date of transition for the Institute’s

adoption of PSAS was July 1, 2011. In these financial statements, amounts previously reported in the financial statements prepared under GAAP have been adjusted to comply with PSAS. The impact of adopting the new standards on accumulated surplus as at July 1, 2011, and June 30, 2012, the statements of financial position at July 1, 2011, and June 30, 2012, and the statements of operations and cash flows for the year ended June 30, 2012, is presented below.

Key adjustments to the Institute’s financial statements are as follows: Employee future benefits (1) Under the former GAAP accounting standards, there was no

requirement to record a liability for accumulating but non-vesting employee benefits. Under PSAS, a liability must be recorded for the Institute’s non-vested sick leave plan.

Endowments and deferred revenue (2) Endowments, for which there is no specific guidance under PSAS,

have been reclassified as a liability and included in deferred revenue. Various other types of deferred revenues have been grouped together to form one deferred revenue balance.

Current portion of liabilities (3) Under PSAS, there is no differentiation between current and non-

current portions of liabilities. Accordingly, the current portion and long-term portion of the obligation under capital leases has been combined into one amount.

Capital funding and unamortized deferred capital contributions (4) Under the former GAAP accounting standards, grants and

contributions for acquiring or constructing capital assets were deferred and recognized as revenue on the same basis that the acquired capital assets were amortized. Under PSAS, government transfers without stipulations that create a liability are required to be recognized as revenue when authorized. As such, the unamortized deferred capital contributions liability has been extinguished and is now included as part of accumulated surplus.

Works of art excluded from tangible capital assets (5) An adjustment has been made to remove the value of the Institute’s

art collection from the tangible capital asset balance as PSAS excludes works of art from the definition of a tangible capital asset.

Presentation of accumulated surplus (6) Under PSAS, accumulated surplus shown on the statement of

financial position is only to be split into accumulated operating surplus and, if applicable, accumulated remeasurement gains. Information on reserves and funds is to be presented in the notes to the financial statements. Accordingly, components of accu-mulated surplus presented on the statement of financial position under the former GAAP accounting standards have been combined into one accumulated surplus amount.


Impact of adoption of PSAS on accumulated surplus Summary of adjustments Ref. June 30, 2012 July 1, 2011

Accumulated surplus, as previously reported $ 34,512 $ 31,893 Adjustments Recognize employee future benefits liability 1 (3,528) (3,607) Reclassify endowments as liability 2 (657) (767) Extinguish unamortized deferred capital contributions liability 4 50,814 53,745 Reverse the capitalization of works of art 5 (115) (115)

Accumulated surplus, as restated $ 81,026 $ 81,149



18. IMPACT OF THE ADOPTION OF PUBLIC SECTOR ACCOUNTING STANDARDS (continued)

Statement of Financial Position as at July 1, 2011 Summary of adjustments As reported Restated Ref. June 30, 2011 Adjustment July 1, 2011

Financial assets Cash and cash equivalents $ 23,375 $ – $ 23,375 Accounts receivable 5,697 – 5,697 Inventories 1,868 – 1,868 Investments 1,822 – 1,822

32,762 – 32,762

Liabilities Accounts payable and accrued liabilities 5,732 – 5,732 Salaries and benefits payable 10,848 – 10,848 Employee future benefits 1 – 3,607 3,607 Deferred revenue 2 1,702 11,861 13,563 Deferred contributions 2 7,193 (7,193) – Saskatoon Trades and Skills Centre funding 2 293 (293) – Current portion of obligation under capital leases 3 378 (378) – Obligation under capital leases 3 314 378 692 Deferred capital contributions 2 3,608 (3,608) – Unamortized deferred capital contributions 4 53,745 (53,745) –

83,813 (49,371) 34,442

Net financial debt (51,051) 49,371 (1,680)

Non-financial assets Tangible capital assets 5 79,954 (115) 79,839 Prepaid expenses 2,990 – 2,990

82,944 (115) 82,829

Accumulated surplus 1,4,5,6 – 81,149 81,149 Invested in capital assets 6 25,517 (25,517) – Restricted for endowment 2 767 (767) – Externally restricted 6 182 (182) – Unrestricted operating 6 5,427 (5,427) –

$ 31,893 $ 49,256 $ 81,149


NOTES TO THE FINANCIAL STATEMENTS18. IMPACT OF THE ADOPTION OF PUBLIC SECTOR ACCOUNTING STANDARDS (continued)

Statement of Financial Position as at June 30, 2012 Summary of adjustments As reported Restated Ref. June 30, 2012 Adjustment June 30, 2012

Financial assets Cash and cash equivalents $ 14,934 $ – $ 14,934 Accounts receivable 6,812 – 6,812 Inventories 2,982 – 2,982 Investments 1,890 – 1,890

26,618 – 26,618

Liabilities Accounts payable and accrued liabilities 3,112 – 3,112 Salaries and benefits payable 11,777 – 11,777 Employee future benefits 1 – 3,528 3,528 Deferred revenue 2 2,020 6,502 8,522 Deferred contributions 2 5,489 (5,489) – Saskatoon Trades and Skills Centre funding 2 277 (277) – Current portion of obligation under capital leases 3 202 (202) – Obligation under capital leases 3 133 202 335 Deferred capital contributions 2 79 (79) – Unamortized deferred capital contributions 4 50,814 (50,814) –

73,903 (46,629) 27,274

Net financial debt (47,285) 46,629 (656)

Non-financial assets Tangible capital assets 5 81,257 (115) 81,142 Prepaid expenses 540 – 540

81,797 (115) 81,682

Accumulated surplus 1,4,5,6 – 81,026 81,026 Invested in capital assets 6 30,108 (30,108) – Restricted for endowment 2 657 (657) – Externally restricted 6 310 (310) – Unrestricted operating 6 3,437 (3,437) –

$ 34,512 $ 46,514 $ 81,026




18. IMPACT OF THE ADOPTION OF PUBLIC SECTOR ACCOUNTING STANDARDS (continued)

Statement of Operations for the year ended June 30, 2012 Summary of adjustments As reported Restated Ref. June 30, 2012 Adjustment June 30, 2012

Total revenues 4 $ 226,314 $ (2,931) $ 223,383 Total expenses 1 223,585 (79) 223,506

Annual surplus (deficit) 2,729 (2,852) (123)

Accumulated surplus, beginning of year 1, 4, 5 31,893 49,256 81,149 Annual surplus (deficit) 1, 4 2,729 (2,852) (123) Net change to endowment balance 2 (110) 110 –

Accumulated surplus, end of year $ 34,512 $ 46,514 $ 81,026

Statement of Cash Flows for the year ended June 30, 2012 Summary of adjustments As reported Restated Ref. June 30, 2012 Adjustment June 30, 2012

Operating transactions 1, 2, 4 $ 4,021 $ 316 $ 4,337 Capital transactions (12,303) – (12,303) Investing transactions (118) – (118) Financing transactions 2, 4 (41) (316) (357)

Net decrease in cash and cash equivalents (8,441) – (8,441)

Cash and cash equivalents, beginning of year 23,375 – 23,375

Cash and cash equivalents, end of year $ 14,934 $ – $ 14,934


19. BUDGETED FIGURES Budgeted figures have been provided for comparison purposes

and, except for one adjustment for the adoption of PSAS, reflect the Operating and Capital Plan 2012-13 approved by the Board of Directors on May 15, 2012. The adjustment removes $6,788 of amortization of deferred capital contributions from revenue as capital

funding is no longer deferred and amortized as revenue over the life of the assets acquired. No other transactions resulting in a difference between the former GAAP accounting standards and PSAS were known of during the development of the 2013 budget.

20. FINANCIAL INSTRUMENT RISKS The Institute’s financial instruments include cash and cash

equivalents, accounts receivable, portfolio investments, accounts payable and accrued liabilities, salaries and benefits payable and debt. Management has determined that the Institute has exposure to the following risks from its use of financial instruments.

a. Credit risk The Institute is exposed to the risk resulting from the possibility

that parties may default on their financial obligations. The Institute’s credit risk is largely attributable to corporate and student receivables. This risk is mitigated by proactive credit and collections management.

Credit risk related to other financial instruments is not significant. Other receivables are primarily due from governments and bonds held at June 30, 2013, are guaranteed by a federal or provincial government. The cash balance represents deposits with Canadian chartered banks.

b. Market risk There is a risk that fluctuations in market prices will affect the

value of holdings in the Institute’s portfolio investments. This risk is mitigated by having professional investment managers build and maintain a well-diversified portfolio of securities that complies with the Institute’s investment policy.

c. Interest rate risk The Institute is exposed to interest rate price risk on the fixed

income component of its investment portfolio and interest rate cash flow risk on the income earned on its cash and cash equivalents balance. Interest rate cash flow risk also exists on the debt carried by the Institute. The impact of changes in interest rates is mitigated by the relatively small percentage of financial assets with fixed interest rates and the contribution of investment income to the Institute’s overall revenue. The exposure to interest rate risk related to debt is mitigated by its relatively small size and its small size as compared to the cash and cash equivalents balance.

d. Liquidity risk Liquidity risk is the risk that the Institute will not be able to meet

a demand for cash or fund its obligations as they come due. The Institute manages its liquidity risk by holding assets that can be readily converted into cash and preparing annual operating and capital budgets that are monitored and updated as necessary. A line of credit is also available to provide additional funds to meet short-term current and forecasted financial requirements.

Note 18 Board approved Adjusted ref. budget Adjustment budget

Operating budget Revenue 4 $ 226,444 $ (6,788) $ 219,656 Expense 226,808 – 226,808

Annual operating deficit $ (364) $ (6,788) $ (7,152)

Capital budget Net amortization included in operating budget 4 $ 4,383 $ 6,788 $ 11,171 Increase in debt related to capital 1,500 – 1,500 Capital expenditures (7,448) – (7,448)

Annual capital budget (deficit) surplus $ (1,565) $ 6,788 $ 5,223

Budgeted change in unrestricted operating surplus $ (1,929) $ – $ (1,929)




NOTES TO THE FINANCIAL STATEMENTS21. RELATED PARTIES These financial statements include transactions with related parties.

The Institute is related to all Saskatchewan Crown corporations, ministries, boards and commissions under the common control of the Government of Saskatchewan. The Institute is also related to non-Crown enterprises subject to joint control and significant influence by the Government of Saskatchewan.

During the year, grant and contractual services revenue of $180,211 (2012 – $178,444) was recognized from related parties, the majority of which was provided by the Ministry of Advanced Education.

Routine operating transactions with related parties are settled at exchange amounts that approximate prevailing market prices under normal trade terms.

Transactions during the year, and amounts outstanding at year-end, are as follows: 2013 2012 July 1, 2011

Accounts receivable $ 2,703 $ 4,103 $ 2,655 Accounts payable and accrued liabilities 1,299 790 2,516 Tangible capital asset additions 1,330 4,877 10,828 Other revenue 4,997 2,775 n/a Operating expenses 37,493 34,738 n/a

In addition, the Institute pays provincial sales tax on all its taxable purchases. Taxes paid are recorded as part of the cost of those purchases.


BOARD OF DIRECTORSRalph E. Boychuk, Chair Prince AlbertPamela L. Schwann, Vice-Chair CravenJim Nowakowski, Secretary SaskatoonGarry Benning SaskatoonDonna L. Birkmaier SaskatoonLeah Bitternose SaskatoonErick Erickson ReginaBrenda FitzGerald SaskatoonKerry Heid ReginaTerry Parker ReginaMatthew Shirkey Moose JawBrenda Stevenson Cowessess First NationRobert Stromberg Jackfish LakeArlene Unvoas Swift CurrentMark Vanstone SaskatoonBrent Waldo Moose Jaw

SENIOR MANAGEMENT COUNCILPresident and Chief Executive Officer Dr. Larry RosiaProvost and Vice-President, Academic Arnold Boldt (Interim)

CFO and Vice-President, Cheryl Schmitz (Interim) Administrative ServicesStrategy and Advancement, Vice-President Dr. Anne Neufeld (Interim)

DEANS’ COUNCILAcademic and Research Associate Vice-President Dennis Johnson (Acting)

Basic Education, Dean Della AnaquodBusiness, Dean Dan MacKayBusiness Development and Advancement, Associate Vice-President David HarveyCommunity Services, Dean Nancy DillIndustrial Training, Dean John Erickson (Acting)

Nursing, Dean Dr. Netha DyckScience and Health, Dean Lynda Kushnir PekrulStudent Services, Associate Vice-President Susan McIntyreTechnology, Dean Jamie Hilts

DIRECTORSApplied Research Cristina Holguin-PandoInstructional and Leadership Development Centre Rod GoertzenLearning Technologies Darren MylesLibrary and Testing Services Rian Misfeldt (Acting)

Registrar Kathy LarsenStudent Development Brian Henderson

ADMINISTRATIVE SERVICES ASSOCIATE VICE-PRESIDENTS AND DIRECTORSCommunications and Marketing, Associate Vice-President Patricia GilliesController Patsy Gilchrist Donor and Alumni Relations, Director Pam McLellanEmployee Relations, Director Don SoanesEnterprise Risk Management, Director Melanie Mandtler (Acting)

Facilities Management, Associate Vice-President Mark FachadaFinancial Planning, Director Dani Yonge (Acting)

Financial Services, Associate Vice-President Sean Engemoen (Acting)

Health and Safety, Director Edward LloydHuman Resources, Associate Vice-President Gary EarlesHuman Resources Advisory Services, Director Terence CarswellHuman Resources Strategy Development, Director Terry FouldsInformation Technology Services, Associate Vice-President Garth McCormickInformation Technology Services Architecture, Applications and Data Services, Director Raymond SaundersInformation Technology Services Client and Infrastructure Services, Director Lawrence BoehmInternational Projects, Director Angela WojcichowskyStrategy, Associate Vice-President Ron Colin (Acting)

CAMPUS DIRECTORSSIAST Kelsey Campus, Saskatoon Gerry BonsalSIAST Palliser Campus, Moose Jaw Bill Coulthard (Acting)

SIAST Wascana Campus, Regina Bill CoulthardSIAST Woodland Campus, Prince Albert Larry Fladager

Moose Jaw SIAST Palliser Campus600 Saskatchewan Street at 6th Avenue NWPO Box 1420Moose Jaw SK S6H 4R4306-691-8200

Prince Albert SIAST Woodland Campus1100 - 15th Street EastPO Box 3003Prince Albert SK S6V 6G1306-765-1500

Regina SIAST Wascana Campus4500 Wascana ParkwayPO Box 556Regina SK S4P 3A3306-775-7300

Saskatoon SIAST Kelsey Campus1130 Idylwyld Drive at 33rd Street PO Box 1520Saskatoon SK S7K 3R5306-659-4300

SIAST Administrative Offices400 - 119 4th Avenue South Saskatoon SK S7K 5X2

goSIAST.com

SIAST 2012-13 Annual Report Financials

Documents

Transcript of SIAST 2012-13 Annual Report Financials