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Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

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Page 1: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Finance Report:Audited Financial Statements,

for the year ended March 31, 2014

Bethany Tory, Chief Operating Officer

Page 2: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Outline of process• Jan 29, 2014: Initial meeting with auditors to outline plan

and timelines;• March 6, 2014: Year end requirements package received

by management;• March 11, 2014: Engagement letter signed;• April 17, 2014: Audit strategy memo submitted to FERM

Chair;• April 17 – May 9 & May 13, 2014: Audit on-site work;• May 15, 2014: FERM Committee reviews audited financial

statements;• May 21, 2014: Board reviews audited financial

statements.

Page 3: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Steps to fiscal transparency

• Audited financial statements contain significantly more detail, especially within the notes section;

• Management Discussion & Analysis documents has been made available;

• Advance materials for review prior to arrival at the ACGM;

• Finance Overview session prior to AGM.

Page 4: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Budget to Actuals (FY13-14)Budget Actual Variance

Revenue $15,197,881 $16,435,646 ($1,237,765)

Expense $16,287,790 $16,864,963 ($577,173)

Marketing Creative* $125,000 N/A $125,000Reorganization** $900,000 $958,450 ($58,450)

Total - Expense $17,312,790 $17,823,413 ($510,623)

Revenue over Expense ($2,114,909) ($1,387,767) (727,142)

Based on a Board approved deficit budget of $2.1M, the actual deficit position for Skate Canada was $1.3M - $727K less than anticipated.

*Funding for Marketing Creative approved by the Board of Directors. N/A under actuals as $68K was charged to deferred contribution against the legacy obligation and $50K was capitalized.**Approved by the Board of Directors. Details in note 17 of the audited financial statements.

Page 5: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Statement of Financial Position• Accounts receivable: $1.7M down $3.7M from prior year;• Unbilled revenue: $852K due to revenue recognition

policy change – prior period adjustment;• Accounts payable: $1.7M down $2.5M from prior year;• Investments: Rebalancing the composition of funds due to

investment policy revisions; • Deferred contributions: disclosure in note 11 regarding

World’s Legacy which is tied to the Strategic Plan;• Fund balances: Redefined into separate categories

(unrestricted, internally/ externally restricted and endowment).

Page 6: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Statement of Operations• Sponsorship, TV & marketing: revenue generating

contracts with impact of revenue recognition change (note 14);

• Events: Overall loss of $900K - performance ahead of budget in prior year except for 100th anniversary event;

• Investment Income: realized vs unrealized – generation of cash;

• National Team: Increased - composition of cost of support;

• HR costs: Tracked under budget excluding BOD approved reorganization costs.

Page 7: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Notes to the Statements

• Expanded disclosure to provide a greater level of transparency and understanding of association business for the benefit of the financial statement readers;

• Significant increase to description of funds and treatment of funds;

• Government Assistance (note 12) – identifies level of federal and provincial government assistance received for sport development and event competition support;

• Financial Instruments – further notations to address various financial risks of the association.

Page 8: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Final comments

• Copies available online of:– Audited financial statements;– Budget presentation;– Financial statements presentation;– FERM Committee presentation;– Management Discussion & Analysis.

• Questions?: [email protected]

Page 9: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Finance Report:Budget 2014-2015

Bethany Tory, Chief Operating Officer

Page 10: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Process for Operational Budget• Developed in individual departments;• Cost-containment measures undertaken in

concert with department leads;• Dec 11, 2013: Finance & Enterprise Risk

Management (FERM) Committee review and endorsement of direction;

• Dec 18, 2013: Board of Directors review;• Dec 23, 2013: Final review by FERM and

recommendation to BOD;• Jan 9, 2014: Approved by the BOD.

Page 11: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

ObjectivesThree primary objectives guided development:• Create a balanced baseline or operational budget;– Future event revenue to apply to strategic initiatives and

projects;

• Separate operational and strategic elements; – Strategic elements as part of Strategic Plan with funding from

World’s Legacy;

• Divide into 3 business units, each with multiple departments;– Full allocation of activities including salaries.

Page 12: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Budget: Consolidated

Operations Sport Marketing Total

Revenue 9,340,610 2,761,625 3,708,211 15,810,446

Expense 7,440,405 5,854,283 2,826,003 16,120,691

Profit (Loss) 1,900,205 (3,092,658) 882,208 (310,245)

Page 13: Finance Report: Audited Financial Statements, for the year ended March 31, 2014 Bethany Tory, Chief Operating Officer

Summary

• Budget 2014-2015 reflects direction from both FERM and the Board;

• Importance of reporting and monitoring;• Establish monthly forecasting model;• Continue to focus on cost-containment at all

levels.