College on Track to Fulfill its Mandate Appointments in Investigations and Hearings Register Available Electronically Through College Library College Proposes Changes to Teachers' Qualifications Ontario Divisional Court Upholds College Fitness to Practise Decision Council Establishes Fee Stabilization Fund Change Adds Flexibility to Accreditation Process Council Adopts Proposed Accreditation Regulation Standards of Practice Become College Bylaw Discipline Decision Highlights of the 1999 Annual Report

Financial Statements for the year ended December 31, 1999

March 10, 2000

Auditors' Report

To the Members of the Ontario College of Teachers

We have audited the balance sheet of the Ontario College of Teachers as at December 31, 1999 and the statements of operations and members' equity, and cash flows for the year then ended. These financial statements are the responsibility of the College's management. 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 plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the College as at December 31, 1999 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Pricewaterhouse Coopers LLP
Chartered Accountants

Balance Sheet As at December 31, 1999 (in thousands of dollars)
	1999	1998
Assets Current assets
Cash and short-term investments	7,025	4,531
Accounts receivable	205	308
	12,642	10,801
Deferred election costs (note 2)	48	193
Deferred membership registration costs (note 2)	443	591
Capital assets (notes 2 and 3)	4,921	5,178
	12,642	10,801
Liabilities Current liabilities
Accounts payable and acrued liabilities	1,541	1,221
Capital lease obligations (note 4)	43	140
Deferred lease inducement (notes 2 and 5)	2,559	2,757
	4,143	4,118
Members' Equity (note 6)
Reserve for working capital (note 6)	5,800	5,8000
Reserve for fee stabilization (note 6)	2,000	–
Unappropriated balance	699	883
	8,499	6,683
	12,642	10,801

 

Statement of Operations For the year ended December 31, 1999 (in thousands of dollars)
	1999	1998
Revenue
Annual membership fees	15,777	15,603
Other fees	1,193	1,059
Advertising	341	201
Interest and Other	565	435
	17,876	17,298
Expenses
Employee compensation	8,016	7,319
Council and committees	177	174
General services to members	1,517	1,208
Professional Affairs	315	244
Investigations and Hearings	1,106	485
Operating support	4,003	3,761
Asset amortization	926	865
	16,060	14,056
Excess of revenue over expenses for the year	1,816	3,242

 

Statement of Members' Equity For the year ended December 31, 1999 (in thousands of dollars)
				1999	1998
	Reserve for working capital (note6) $	Reserve for fee stabilization (note6) $	Unappropriated $	Total $	Total $
Balance – Beginning of year	5,800	–	883	6,683	3,441
Excess of revenue over expenses for the year	–	–	1,816	1,816	3,242
Appropriation	–	2,000	(2000)	–	–
Balance – End of year	5,800	2,000	699	8,499	6,683

 

Statement of Cash Flows For the year ended December 31, 1999 (in thousands of dollars)
	1999 $	1998 $
Cash provided by (used in)
Operating activities
Excess of revenue over expenses for the year	1,816	3,342
Add: Non-cash items reflected in operations
Amortization of capital assets	633	577
Amortization of deferred membership registration costs	148	151
Amortization of deferred election costs	145	137
Amortization of deferred lease inducement	(198)	(198)
Changes in non-cash working capital items
Accounts receivable	103	(198)
Accounts payable and accrued liabilities	354	(318)
	3,001	3,393
Investing activities
Leasehold improvements	(74)	(218)
Office furnishings and equipment	(302)	(127)
	(376)	(345)
Financing activities
Repayment of capital lease liability	(131)	(99)
Increase in cash and short-term investments during the year	2,494	2,949
Cash and short-term investments – Beginning of year	4,531	1,582
Cash and short-term investments – End of year	7,025	4,531

 

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Notes to Financial Statements

December 31, 1999

(tabular amounts are in thousands of dollars)

1. Ontario College of Teachers' mandate
   

The Ontario College of Teachers (the College) was established by an Act of the Ontario Legislature, which was proclaimed on July 5, 1996. The College is an independent, self-regulating professional body with authority to license and regulate the practice of teaching in Ontario. The affairs of the College are managed and administered by a Council comprised of 31 members, of whom 17 are members elected by the membership.

2. Summary of significant accounting policies

The financial statements of the College have been prepared in accordance with Canadian generally accepted accounting principles.

The more significant aspects are:

1. Deferred election costs
   Council elections are normally held every three years. The cost of conducting these elections is deferred and amortized over the term of the elected members.
2. Deferred membership registration costs
   To establish an initial registry of members, the College launched a campaign to acquire names and addresses of Ontario teachers and validated eligibility against the Ministry of Education records. This initial cost is being amortized over six years, commencing in 1997.
3. Capital assets
   Capital assets are recorded at historical cost and are amortized on a straight-line basis over their estimated useful lives, as follows:

Computer equipment = 33 1/3% per annum
Furniture and equipment = 10% per annum
Leasehold improvements = Over the remaining term of the lease

4. Deferred lease inducement
   As described in note 5, the College is amortizing the lease inducement over the term of the lease.
5. Not for profit
   As a not-for-profit professional membership organization, the College is not liable for income taxes.

3. Capital assets
   

   			1999	1998
   	Cost $	Accumulated amortization	Net $	Net $
   Furniture	1,647	463	1,184	1,255
   Office Equipment	297	81	216	223
   Leasehold improvements	4,048	742	3,306	4,487
   	6,624	1,703	4,921	5,178
   The capital assets acquired by the College relate to office and meeting space at 121 Bloor Street East, Toronto.

4. Capital lease obligations

The College has acquired computer hardware and other office equipment through leasing arrangements. At December 31, 1999, the College had capital lease obligations amounting to $140,000 at implicit rates of interest ranging from 6.7% to 8.0%. The future minimum annual payments are as follows:

		$
Year ending December 31
	2000	97
	2001	43
140

5. Commitments

1. Premises lease commitment

In September 1996, the College entered into a long-term lease agreement, which expires November 30, 2012. The lease is for office space at 121 Bloor Street East, Toronto. In addition to a rent-free period until November 30, 1997 (valued at $615,300), the College obtained an allowance for leasehold improvements of $2,356,891, which is repayable out of rental payments.
The estimated annual rental payments, including a provision for operating costs under the lease agreement, are as follows:

		$
Year ending December 31
	2000	1,110
	2001	1,110
	2002	1,110
	2003	1,110
	2004-2012	11,207
15,647

In accordance with guidance provided by the Canadian Institute of Chartered Accountants, the College reports an average rental cost for premises over the term of the lease agreement and amortizes the benefit of the lease inducements over the same period, which commenced in 1997.

2. Other operating lease commitments

The College has entered into various operating lease commitments for computer hardware and other office equipment.
The estimated annual payments for these operating lease commitments are as follows:

		$
Year ending December 31
	2000	245
	2001	117
	2002	27
389

6. Members' equity and reserve accounts

The Council of the College has established two reserves of members' equity balances. The first is a reserve for working capital, established in 1997 and 1998 in recognition of the need to provide working capital for continuing operations. The balance in the reserve for working capital as at December 31, 1999 is $5,800,000.

In 1999, the Council established a reserve for fee stabilization to help moderate the potential for fee increases in future years. The balance in the reserve for fee stabilization as at December 31, 1999 is $2,000,000.

7. Uncertainty due to the Year 2000 issue

The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. Although the change in date has occurred, it is not possible to conclude that all aspects of the Year 2000 Issue that may affect the College, including those related to suppliers, stakeholders or other third parties, have been fully resolved.

8. Comparative amounts

Certain comparative amounts have been reclassified from those previously presented to conform with the presentation of the 1999 financial statements.

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