10,000 empty seats, $750 million in one-time savings, $72 million in annual savings

VICTORIA - Education Minister Peter Fassbender today released Ernst and Young’s independent review of the Vancouver Board of Education’s (VBE) finances that points to $72 million worth of potential annual savings and revenues, as well as one-time savings of up to $750 million.

“It’s clear from Ernst and Young’s review there are more opportunities for the Vancouver Board of Education to find efficiencies, improve revenues and make better use of facilities,” said Fassbender. “We are confident this review maps a positive path forward for the board that will ultimately benefit students and taxpayers.”

The review contains 52 findings and makes 59 recommendations. The review notes the need for an integrated, long-term strategic plan so the VBE can make better-informed budget decisions in the years ahead. It also recommends VBE address its more than 10,000 empty school seats, which could yield savings of up to $37 million a year, in the long-term facilities plan being developed for June 30.

The review also notes that for more than a decade, the board has consistently forecasted a deficit budget, but has ended each year by adding to its sizeable surplus. The chronic public debate about preliminary budgets only serves to muddy the waters and create anxiety for parents and the public.

June 30 is the deadline for the Vancouver Board of Education to submit its balanced budget to the ministry (something required of all districts). As well, it has until June 30 to provide a written report which demonstrates that the board read and considered the recommendations in the special advisor’s report prior to adopting the 2015-16 budget.

“The report also contains 12 recommendations for the Ministry of Education - and we will act on all of them,” said Fassbender.

In February, VBE trustees wrote to the ministers of Education and Finance to say they projected a minimum budget shortfall of $15 million for the 2015-16 school year. As a result, in March the Education minister appointed Ernst and Young to review, evaluate and make recommendations aimed at helping the recently elected board balance its budget, reduce overhead and find administrative efficiencies, while protecting and enhancing resources for student instruction.

“Even though the newly elected Vancouver Board of Education has indicated it will table a balanced budget, there may be additional short-term recommendations from the review that could be implemented immediately,” said Fassbender. “The ministry is committed to supporting our partners in Vancouver as they move forward in order to remain 100% focused on student outcomes.”

The executive summary can be viewed at:
http://www2.gov.bc.ca/gov/DownloadAsset?assetId=128AFD2AE27F406E91259D69276226DC&filename=moe_vsb_review_report_june_2015_exec_summary.pdf

The full report can be viewed at:
http://www2.gov.bc.ca/gov/DownloadAsset?assetId=F14FC0EBB1C24FAC93A09302BE386549&filename=moe_vsb_review_report_june_2015.pdf

Media Contacts:

Government Communications and Public Engagement
Ministry of Education
250 356-5963

BACKGROUNDER

Review highlights savings opportunities for Vancouver Board of Education

Highlights of review include: 
 
Strategic Financial Planning and Governance

• Establish an accurate and simplified process to develop and approve year-over-year balanced budgets, which support the Vancouver Board of Education’s education outcomes and other priorities,
• Critically review the Amended Budget prior to board approval to ensure accuracy of the budget forecasting and estimate of the Internally Appropriated Expenses not expected to be spent prior to finalizing the Amended Budget to minimize financial reporting variances.
• Achieve sustainable long-range cost saving through shared services, efficient and effective processes, common tools and approaches; clear strategies executed against approved plans. Cost-efficiency and revenue opportunities identified could be upward of $35.5 million annually.
• Develop a comprehensive strategic plan with appropriate operational plans, performance measurement framework, board self-assessment framework and formal risk management processes. Enhance financial oversight through the establishment of an audit committee.

Capital Asset Management

• Capital assets that support improved student outcomes, at least cost through proactive district-wide, long-range planning and capacity management.
• The Vancouver Board of Education commits to considering an aggressive asset rationalization estimated at up to 19 schools, which could have financial benefits of up to $37 million annually and one-time benefits of up to $750 million.

Media Contacts:

Government Communications and Public Engagement
Ministry of Education
250 356-5963