Business plan operating procedure for colleges of applied arts and technology

Purpose and application

The business plan allows the college to plan its operations for the fiscal year within the framework outlined in the strategic plan. The business plan identifies to the public and to the government the operational outcomes that the college expects to achieve in the identified year. The Ministry of Colleges and Universities (formerly the Ministry of Training, Colleges and Universities) uses the information provided in college business plans to advise and inform government planning and policy-making.

Section 8 of O. Reg. 34/03 under the Ontario Colleges of Applied Arts and Technology Act, 2002 specifies that colleges are to make the business plan available to the public and to submit it to the Minister. Section 9 addresses the requirement for a balanced budget.

This operating procedure sets out the minimum requirements of an annual business plan and a deficit recovery plan and applies to all colleges of applied arts and technology.

The business plan is due June 30 of each year.

Requirements

Each college is to prepare a business plan each fiscal year consistent with the vision, core businesses, and goals established in the strategic plan. The college is to determine the appropriate format for the business plan so that it appropriately reflects local culture and circumstances.

Audited Financial Statements, Annual Reports, Strategic Plans and Business Plans are to be submitted separately unless so directed by the minister (O. Reg. 34/03,  section 8[1].)

Colleges with subsidiaries, whether they be for-profit, not-for profit, or foundations, are to ensure that these subsidiaries fully comply with the reporting requirements of the Minister’s Binding Policy Directive on Entrepreneurial Activities (for example, those subsidiaries are to provide annually a budget, annual report and audited financial statements per the requirements of the memorandum of understanding between the subsidiary and the college).

The business plan focuses on the college’s operations and is to include the following information with respect to the fiscal year for which it is prepared:

• statement of operational outcomes and identify the goals and objectives of the college
• a description of the major actions the college will take during the year to achieve those operational outcomes
• a description of any significant factors outside the control of the college that are likely to affect the achievement of its outcomes
• a description of how the college will know that it has achieved its outcomes at the end of the year
• the budget for the year

A college’s need to protect its competitive position is recognized. The college will need to balance the need for transparency with the protection of proprietary information.

The CEO (that is, the president) is to report periodically, as established by the board of governors, during the course of the fiscal year to the board of governors on results achieved with respect to the business plan. Where the appropriate performance is not being achieved, the board of governors is to ensure that corrective action is taken.

Annual budget

Colleges are required to submit an annual budget by June 30 of each year, as well as an interim year-end projection based on November 30 financial balances by January 8 of each year.

The budget, which in normal circumstances is expected to be balanced, is to include:

• key assumptions, including projected enrolment and grants
• capital and operating requirements
• projected in-year surplus/deficit

Contact colleges.unit@ontario.ca if you have questions about the format of the budget and interim year-end projection.

Accumulated operating reserves may be accessed as a revenue source to balance expenditures with revenue sources. Each college should strive to maintain accumulated operating reserves (a fund set aside from accumulated surpluses without the impact of accruals) that will be available for carrying out business activities in the future.

Both the annual budget and interim year-end projections are to be approved by the board of governors.

Publication

Make the business plan available to the public by:

• posting it on the college web site
• providing the business plan at no cost for those who do not have internet access

Provide complete copies of the business plan to the:

• College Employer Council
• Higher Education Quality Council of Ontario

Submitting the business plan and deadlines

Send the college’s business plan, approved by the board of governors to:

Director, Postsecondary Accountability Branch
Ministry of Colleges and Universities
colleges.unit@ontario.ca

Include the location of the business plan on the college’s website in your email.

Deadlines

Submit each year on these dates:

• June 30: annual budget
• January 8: interim year-end projection based on November 30 financial balances

Deficit recovery plan

The board of governors is to ensure that the college balances its budget every year, as stipulated in Section 9 of O. Reg. 34/03.

If it appears that the college will not balance its annual budget and that an accumulated deficit is unavoidable in the opinion of the board, the minister's approval is required as stipulated in Section 9 of O. Reg. 34/03. A recovery plan covering the time period (normally two successive years) needed to eliminate an accumulated deficit is to be included along with the request as specified in the Minister’s Binding Policy Directive Governance and Accountability Framework.

An accumulated surplus/deficit is defined under this operating procedure to be the amount determined from the aggregate of the unrestricted net assets and internally restricted net assets balances (a positive amount indicates a surplus and a negative amount indicates a deficit) that appears or is expected to appear on the year-end financial statements, prepared in accordance with generally accepted accounting principles (GAAP).

Internally restricted net assets that are clearly identified in the financial statements as scholarships, bursaries, or student financial assistance are treated as net assets held for endowments and are not included in the determination of a surplus/deficit.

Procedure to obtain minister’s approval

1. The chair of the board of governors is to write to the minister to seek approval for the college to budget and to operate with an accumulated deficit for the fiscal year in question. The request for approval is to be accompanied by the business plan for the fiscal year a recovery plan for eliminating the deficit.
2. College staff are to consult with ministry staff to seek guidance related to the development of the recovery plan.
3. The college is expected to undertake all necessary measures, as part of its recovery plan, to eliminate its accumulated deficit.
4. Upon receipt of written approval from the minister for budgeting with an accumulated deficit the college is to report back to the ministry during the deficit recovery period on a regular basis as outlined in the approval letter.

Summary of responsibilities

Colleges of Applied Arts and Technology

The college is responsible for:

• Developing and implementing the business plan in accordance with ,the budget and the recovery plan, as required.
• Ensuring that the business plan fulfills the requirements of this operating procedure.
• Submitting the business plan to the ministry by June 30 of each year.
• Ensuring that the business plan is made available to the public.
• Monitoring performance against the business plan, reporting back on that performance in the annual report, and taking appropriate action.

Ministry of Colleges and Universities

The ministry is responsible for:

• Using business plans to advise and inform government planning and policy-making.
• Providing guidance to colleges regarding the development of recovery plans.
• Advising the minister on deficit recovery plans.
• Monitoring a college’s progress in the elimination of an accumulated deficit.
• Working with the college system or individual colleges to facilitate corrective action where provincial priorities or expected outcomes are not being achieved.