SOPSOC and Trust Accounts
What’s Happening in Your School? ◊
by John Vegt, SCSBC Director of Finance ◊
The Ministry of Education annually requires from each independent school a Statement of Per Student Operating Costs, more affectionately known as SOPSOC. This statement purports to calculate the school operating costs per full time equivalent (FTE) student for all K-12 students including international students, First Nations students and 1/16th of each registered home schooled student. If the school offers Distributed Learning (DL) there is a separate DL SOPSOC form which adds the FTE DL students.
Excluded from the calculation are any special need expenses. Any capital and certain other expenses included in the school’s statement of expenses such as depreciation, interest on long term debt, property taxes, rental expenses and bad debts may also be excluded. Replacement of furniture and equipment must be included even though these may be capitalized on the balance sheet. Principal payments and interest on debt incurred for operations must also be included.
The purpose of this report is to compare the school’s operating cost to the cost per FTE student of the public school district in which the independent school is located. If the cost is below the public school cost, then the independent school is eligible for the full 50% government grant, assuming it meets all the other conditions for the Group One grant. If the independent school FTE cost is higher than the FTE cost of the public school district, then the grant is reduced to 35%. Obviously this remains an important calculation, and ought to be monitored carefully by each school board annually.
In many schools, separate trust (bank) accounts are kept for athletic trips, mission trips, band /choir trips, yearbooks, science field trips, overseas travel and many other events and projects. Boards and business managers need to ask, “What is a school’s responsibility to account and manage these expenses and how they are funded?”
There are several issues that should be considered:
Trust bank accounts and transactions should have oversight and be accounted for by the business/accounting office and not exclusively by teaching staff or volunteers
Internal controls such as signing authority, ability to issue tax receipts, expense approvals, bank reconciliations should be documented for these transactions
Extra-curricular expenses paid through the school’s accounts must be included in SOPSOC. If extra-curricular expenses are not part of the school’s curriculum then those may be excluded
As many of these funds are material, the source of funds and the expenditures should be included in the financial statements of the school
At minimum, trust account bank balances, revenues and expenditures should be disclosed in either a note to the financial statements
The key to reviewing your school’s finances relating to trust accounts is to ensure the school has ownership, control and appropriate reporting of transactions, which often do not end up in the school’s financial statements. Schools have a fiduciary responsibility regarding these trust accounts, and many times expenses included in these trust accounts are part of normal school operating costs that should be included in the SOPSOC report. For further information regarding SOPSOC calculations and trust accounts, feel free to contact me through the SCSBC office.