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New West school district holds comfortable, albeit declining financial situation

The New Westminster school district still has some padding in its budgets to deal with any unexpected expenses, though that padding is looking thinner than the year prior.
kim morris
In her final board meeting, former secretary-treasurer Kim Morris with the New West school district delivered the financial statements to the school board.

The New Westminster school district still has some padding in its budgets to deal with any unexpected expenses, though that padding is looking thinner than the year prior.

In her final presentation to school board, outgoing secretary-treasurer Kim Morris delivered her summary of the 2018/19 fiscal year, including some of the indicators the district keeps an eye on to monitor its financial health.

In its bookkeeping, the district keeps track of its cash and liquid assets and weighs that against its liabilities, such as a heating bill that will need to be paid in the future. The district hopes to have more cash and/or liquid assets than the value of its liabilities in order to keep paying its bills. A higher ratio also means flexibility in the district’s ability to handle emergent issues.

In other words, the district needs to keep its cash asset ratio and its liquidity ratio above 1:1 compared to its liabilities. By the end of last year, the cash asset ratio had dropped to 1.49:1, a figure still comfortably above 1:1 but a drop from the 2:1 ratio from the year prior.

Similarly, the liquid asset ratio had landed at 1.69:1, which had dropped from 2.04:1 the year prior.

Part of the reason for the declining ratios, said Morris, who vacated her position last week, is the New Westminster Secondary replacement construction project, which left the district with more bills to pay.

The district also keeps track of its working capital per student – the value of its combined assets, minus its liabilities and divided by the number of students. This year, the district landed at $1,767 per student, a drop from $2,027 in 2018.

Morris said there’s no particular goal with the working capital per student indicator except to monitor over time “to determine the board’s ability to spend per student in the future.”

Having $0 working capital per student would mean the district has no extra money for spending on new initiatives and emergent needs in the future, she said.

Morris’s report to the board was preceded by an audit from accounting firm KPMG, which gave Morris’s work a passing grade. In fact, the audit, which looked at accounting policies, accounting estimates and financial disclosures, noted no significant changes or issues in any category.