I. 2020 21 BUDGET

I. 2020-21 BUDGET

NWC is projecting an operating deficit of approximately $35K for 2020-21. Given the uncertainty regarding the 20-21 fiscal year resulting in a reduced program plan, staffing compliment and reduced travel budgets, a balanced budget was still not possible. The College sees increased costs relating to investment in technology and facilities as the College works to reduce barriers and provide safe, cleaning working and learning environment. The health and safety of our staff and students is of the utmost importance as we enter into a blended delivery model this next year. The College will continue to implement mitigation strategies throughout the year to reduce the deficit. These strategies include vacancy management and further reductions to travel and operations budgets where possible.

PART A. Projected Business Financial Statements and Key Assumptions

NWC develops a financial plan that supports our strategic objectives and priorities for the present and future years. The financial plan is based on needs, strategic direction, and stewardship to ensure that NWC remains accountable to our students and to the communities we serve.

The financial plan is based on estimates of revenues and expenses made on the basis of available information. Some estimates can be made with a fair amount of certainty. However, external factors such as enrollment levels, negotiations with third parties, and the economy have caused a degree of uncertainty. Overall, we are confident that our financial projections maximize the provided funding. This plan supports the achievement of strategic goals of the College and the Government of Saskatchewan.

Key Assumptions

Financial projections for NWC are based on the latest information available from internal College sources, and direction from the Ministries of Advanced Education and Immigration & Career Training.

In addition to the assumptions articulated in section A, the following are specific budget assumptions: a) 2020/21 Ministry Advanced Education Operating funding is known as per funding letter. b) 2020/21 Ministry of Immigration & Career Training program funding is known per the budget letter and subsequent EAL funding letter. c) Under-22 funding for ABE programming has been forecasted using 2019/20 rates. d) Tuition rates are reflected at status quo from 2019/20. e) Agency payments have been budgeted at a 2% increase. f) Inflation although immaterial has been forecasted at 1%. g) Projecting lower enrolments.

PART B. Financial Impacts of Identifiable Risks

Third-party contracts

Due to COVID-19, there is a great deal of uncertainty as to whether our partners will be able to invest in training. We are anticipating less under 22s because of reduced seats. There is significant uncertainty as to sponsor support for student tuitions based on blended delivery and competing priorities for their resources.

We are taking a conservative approach regarding expectations of contract revenue. The program and financial plans are based on NWC achieving realistic but revised targets. Our plans are founded on third party contract revenue from business, industry, and First Nations. These contracts are vital to the overall operations of the College. While the College is working to increase third-party funding, there is additional risk due to the economic impacts of COVID-19. Adjustments to operations and programs would be required should we not realize these targets.

Enrollment levels

Student tuition accounts for approximately $1.6M of the 2020/21 financial plan slightly less given the 0% increase in tuition rates. In a blended delivery model under COVID-19, it is uncertain how many students will be attracted to postsecondary education. While we are confident in the approach used to estimate enrollment levels, there is no guarantee it will be realized. Should enrollments not reach expected levels, we may need to adjust the program plan during the year to minimize the impact.

Saskatchewan Innovation and Opportunity Scholarship

NWC received $57,900 for the SIOS program in 2020/21. The introduction of the Student Emergency Fund drawing from these resources, will negatively impact the number and amount of scholarships available to students. The College is concerned that the expectation of matching resources may be not be realized given the economic impact of COVID-19 on local businesses and partners as well as the College’s inability to hold fundraising events at this time.

Pandemic Response

An investment was made in new equipment and supplies to ensure cleaning and sanitizing on facilities to meet increased standards and current safety protocols. The new equipment and supplies do create efficiencies but due to the numerous program delivery sites, and the increased requirements due to COVID-19, there will be a need to invest in more personnel. There may be difficulty recruiting qualified staff at our rural locations, procurement and delivery of supplies on a timely basis, and the ability to accurately forecast the additional cost.

Other Factors

In November 2020, the College will once again put forward proposals to access resources provided by the Preventive Maintenance and Renewal Fund, geared toward facility and infrastructure areas requiring attention. Without access to these funds, our capital reserve will be quickly depleted.

Surplus Utilization/Deficit Management Plan

Reserve Utilization

NWC has funds established for specific activities. They have been restricted, either internally or externally, through a formal review when surpluses are finalized through the audit process. These are established reserves for the College.

Operating Fund Components of this reserve are funds allocated to our administrative system (HR and Accounting) and our Professional Development Fund for in-scope employees at the College.

Capital Fund This reserve is set up to meet capital needs of the College. Priority areas identified include investments in facilities, furnishings, vehicles, information technology and equipment.

Scholarship Fund This reserve consists of funds accumulated through donations, and the SIOS Program. The Scholarship Fund Reserve is an externally restricted reserve. Changes in the Fund balance are dependent upon the success of fundraising campaigns and the subsequent awarding of scholarships.

Residence Fund Reserve This fund exists to address future maintenance and improvement needs of Meadow Lake’s student housing. Surplus from residence operations contribute to this reserve on an annual basis.

Unrestricted Operating Reserve In order to ensure the College retains the flexibility to respond to unforeseen issues, we will strive to maintain an unrestricted operating reserve within 3% of the operating budget.

Other strategic priorities have been identified, which include the need for a new facility for program delivery, system upgrades, and information technology initiatives. In order to address all the priorities, the College may have to reallocate reserves and engage other parties to find effective funding solutions.

Deficit Management

NWC significantly reduced operating expenses over the past three years and continued in 2019/20. Managing the deficit in 2020/21 is planned through further efficiencies, vacancy management when possible and use of reserves. NWC has a robust financial monitoring process that includes regular reviews with a governance Finance Committee, enabling appropriate and timely responses to pressures on our finances. This is not a sustainable long-term solution. Due to the uncertainties surrounding COVID-19, NWC will continue to monitor the progress of programs, services and our financial situation; making necessary changes where needed to mitigate impacts on staff and students.