Atlantic Canada Opportunities Agency Quarterly Financial Report for the quarter ended December 31, 2014

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs

Introduction

This quarterly financial report should be read in conjunction with the Main Estimates as well as Canada’s Economic Action Plan 2012 (Budget 2012). It has been prepared by management as required by subsection 65.1 of the Financial Administration Act (FAA) and in the form and manner prescribed by the Treasury Board. This quarterly report has not been subjected to an external audit or review.

A summary description of the Atlantic Canada Opportunities Agency (ACOA) program activities can be found in the 2014-2015 Part II of the Main Estimates.

Basis of Presentation

This quarterly financial report has been prepared by management using an expenditure basis of accounting and a special purpose financial reporting framework designed to meet financial information needs with respect to the total authorities available for use. The accompanying Statement of Authorities is consistent with the Main Estimates for the 2014‑2015 fiscal year and includes ACOA’s total authorities available for use as granted by Parliament and those used by the Agency during this quarter. Authorities available for use are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory authorities for specific purposes. The authority of Parliament is required before moneys can be spent by the government.

When Parliament is dissolved for the purposes of a general election, section 30 of the FAA authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

As part of the departmental performance reporting process, the Agency prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies. However, the total authorities available for use voted by Parliament remain on an expenditure basis of accounting.

ACOA Financial Structure

ACOA manages its expenditures under two votes:

• Vote 1 – Net operating expenditures includes the Agency’s authorities related to personnel costs (e.g. salaries) and operation and maintenance expenditures (e.g. travel).
• Vote 5 – Grants and contributions includes all authorities related to transfer payments.

In previous fiscal years ACOA had portfolio responsibility for the Enterprise Cape Breton Corporation (ECBC) and Vote 10 – Payments to Enterprise Cape Breton Corporation was reported under ACOA in the Main Estimates. ECBC prepared its own quarterly financial statements as this vote was not included in the financial figures or in the analysis of the Agency’s Quarterly Financial Report. On June 19, 2014, ECBC was dissolved. The economic and community development activities of ECBC and its associated budget have been transitioned over to ACOA. Other ECBC activities such as real property holdings, environmental remediation of former mine sites, and human resources obligations of the former Cape Breton Development Corporation are overseen by Public Works and Government Services Canada (PWGSC).

The Vote 10 – Payments to Enterprise Cape Breton Corporation has been transferred to ACOA and PWGSC votes. Associated expenditures and authorities for activities transferred to ACOA are reported in this Quarterly Financial Report.

Costs under Statutory Authorities, which represent payments made under legislation approved previously by Parliament and which are not part of the annual appropriation bills, include such items as the employer’s share of the employee benefits plan and other minor items.

The Agency’s total net budgetary expenditures used year-to-date at quarter-end were $157.0 million compared to $162.8 million in the previous fiscal year. This $5.8 million decrease is mainly related to transfer payments. As explained in the Statement of Authorities for grants and contributions, a $6.4 million decrease in expenditures of transfer payments is attributable to a $4.3 million advance made to the former ECBC for the delivery of ACOA programs, $6.3 million from the sunsetting of the CIFF program, offset by an increase of $4.2 million due to the timing in the processing of claims for various transfer payment programs. Increases in budgetary expenditures used year-to-date at quarter-end in other Standard Objects total $0.6 million.

Significant Changes in Relation to Operations, Personnel and Programs

Authorities and expenditures of the former ECBC have been fully incorporated into this report.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs, make it easier for Canadians and businesses to deal with the federal government, and modernize and reduce the back office.

Savings continue to be achieved in 2014-2015 through the streamlining of a number of positions in the areas of communications, finance and administration, audit, human resources services, policy, and program oversight and delivery. Savings are also being achieved by restructuring workloads and functions to make the delivery of programs and services more efficient and by realigning grants and contributions to focus on projects with greater economic impact.

To mitigate potential financial risks and uncertainties, several of the measures identified above were taken in fiscal years 2012-2013 and 2013-2014 to ensure that total savings of $16.4 million materialize. Progress and costs related to the implementation of these reduction measures continue to be monitored closely.

Approval by Senior Officials

Approved by:

Statement of Authorities (unaudited)

Fiscal year 2014-2015 (in thousands of dollars)

Fiscal year 2013-2014 (in thousands of dollars)

*Includes only Authorities available for use and granted by Parliament at quarter-end.

Agency’s budgetary expenditures by Standard Object (unaudited)

Fiscal year 2014-2015 (in thousands of dollars)

Fiscal Year 2013-2014 (in thousands of dollars)