Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs
This quarterly financial report should be read in conjunction with the Main Estimates. 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 2015-2016 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 2015‑2016 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 monies 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 were 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 now overseen by Public Works and Government Services Canada (PWGSC).
Vote 10 – Payments to Enterprise Cape Breton Corporation was 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.
Highlights of Fiscal Quarter and Fiscal Year-to-Date Results
The following section highlights significant changes to fiscal quarter results as of September 30, 2015.
Statement of Authorities: Vote 1 – Net Operating Expenditures
Total authorities available for fiscal year 2015-2016 are $67.5 million compared to $67.2 million as of September 30, 2014. This represents a increase of $0.3 million, or 0.4% as explained below.
A total increase of $1.3 million in Vote 1 authorities available for use
- $1.2 million resulting from the dissolution of ECBC; and
- $0.1 million for negotiated collective bargaining.
Offset by a total decrease of $1.0 million in Vote 1 authorities available for use
- $0.8 million resulting from the reorganization of regional federal councils;
- $0.1 million related to contributions to government initiatives; and
- $0.1 million related to the operating budget carry-forward.
Vote 1 authorities used year-to-date at quarter-end have decreased from $32.5 million in 2014-2015 to $29.5 million this fiscal year. This $3.0 million decrease in authorities used, or 9.2%, is explained by: a $1.8 million decrease for a one-time transition payment in 2014-2015 for the implementation of salary payments in arrears by the Government of Canada; a reduction of $0.7 million in operating expenses previously advanced to the former ECBC for the delivery of ACOA programs; and a decrease of $0.5 million related to normal cash flow fluctuations quarter to quarter.
Graph 1 illustrates the total authorities available for use for the year as well as the amount used year-to-date at quarter-end.
Graph 1: Comparison of Net Budgetary Authorities and Expenditures for Vote 1 as of September 30, 2014-2015 and 2015-2016.
(in thousands of dollars)
D
Statement of Authorities: Vote 5 – Grants and Contributions
Total authorities available for use for the year ending March 31, 2016, amount to $225.6 million, an increase of $9.3 million compared to the $216.3 million available for use as of September 30, 2014. The increase of $9.3 million, or 4.3%, is explained by:
Increases totaling $13.3 million
- $6.1 million resulting from the dissolution of ECBC;
- $5.7 million to support specific projects in innovation, commercialization and community development in New Brunswick; and
- $1.5 million in funding to support the spruce budworm outbreak intervention as announced in Budget 2014.
These increases were offset by decreases totaling $4.0 million in collection of repayable contributions.
Vote 5 authorities used year-to-date at quarter-end have increased from $53.9 million last fiscal year to $56.6 million this fiscal year. This $2.7 million increase in authorities used, or 5.0%, is mainly attributable to the payment of claims in support of projects related to the new authorities received as explained in the previous paragraphs.
Graph 2 illustrates the total authorities available for use for the year as well as the amount used year-to-date at quarter-end.
Graph 2: Comparison of Net Budgetary Authorities and Expenditures for Vote 5 as of September 30, 2014-2015 and 2015-2016.
(in thousands of dollars)
D
Statement of Authorities: Budgetary Statutory Authorities
Budgetary statutory authorities available for use for the year ending March 31, 2016, have increased by $0.3 million, or 3.5%, to $8.6 million when compared to the previous fiscal year at the same time. The increase is explained by $0.2 million from the dissolution of ECBC and $0.1 million for negotiated collective agreements and employee benefit plan adjustments.
There are no significant variances in net budgetary statutory authorities used year-to-date at quarter-end compared to the previous fiscal year, with approximately $4.3 million used.
Graph 3 illustrates the total authorities available for use for the year as well as the amount used year-to-date at quarter-end.
Graph 3: Comparison of Net Budgetary Authorities and Expenditures for Statutory Authorities as of September 30, 2014-2015 and 2015-2016.
(in thousands of dollars)
D
Statement of the Agency’s Budgetary Expenditures by Standard Object
The Agency’s budgetary expenditures by Standard Object for the quarter ended September 30, 2015, were $90.4 million, which reflects a decrease of $0.2 million, or 0.2%, from the $90.6 million in overall expenditures for the quarter ended September 30, 2014. The variance by Standard Object relates mainly to professional and special services, other subsidies and payments and transfer payments. The variance under professional and special services is mainly attributable to advances made in 2014-2015 to the former ECBC for the delivery of ACOA programs. The variance in other subsidies and payments is mainly explained by the one-time transition payment for implementing salary payment in arrears as explained in the Statement of Authorities: Vote 1 – Net Operating Expenditures. The variance in transfer payments is mainly explained by payments on projects related to the new authorities received as explained in the Statement of Authorities: Vote 5 - Grants and Contributions.
Risks and Uncertainties
ACOA conducts an annual risk assessment process to update its corporate risk profile. The key corporate risks identified for 2015-2016 do not have a direct impact on financial reporting. However, ACOA is managing the regular financial risks associated with running the organization and has implemented appropriate mitigation measures. The financial risks are mitigated in large part by the implementation of strong internal controls over financial reporting. These include the periodic assessment of entry-level controls, general computer controls and controls in ACOA’s key business processes such as payments on grants and contributions, regular operating expenses and accounts receivable.
Furthermore, ACOA manages its budgetary and allocation processes through a well-defined framework supported by a series of automated financial controls. Periodic forecasts are required and analyses are done regularly to ensure that funds are properly managed.
Significant Changes in Relation to Operations, Personnel and Programs
There have been no significant changes in relation to operations, personnel and programs impacting the results of this quarter.
Approval by Senior Officials
Approved by:
Paul J. LeBlanc
Deputy Head Moncton, Canada
___________________
Date: November 16, 2015 |
Denise Frenette, CA
Chief Financial Officer Moncton, Canada
____________________
Date: November 12, 2015 |
Statement of Authorities (unaudited)
Fiscal year 2015-2016 (in thousands of dollars)
| |
Total available for use
for the year ending
March 31, 2016* |
Used during the quarter ended
September 30, 2015 |
Year-to-date
used
at
quarter-end |
|---|
Vote 1 - Net operating expenditures |
67,470 |
15,218 |
29,455 |
Vote 5 - Grants and contributions |
225,574 |
37,035 |
56,590 |
Budgetary statutory authorities |
8,634 |
2,153 |
4,313 |
Total authorities |
301,678 |
54,406 |
90,358 |
Fiscal year 2014-2015 (in thousands of dollars)
|
Total available for use for the year ending
March 31, 2015* |
Used during the
quarter ended September 30, 2014 |
Year-to-date used
at
quarter-end |
|---|
| Vote 1 - Net operating expenditures |
67,207 |
15,616 |
32,541 |
| Vote 5 - Grants and contributions |
216,270 |
34,247 |
53,889 |
| Budgetary statutory authorities |
8,361 |
2,086 |
4,172 |
| Total authorities |
291,838 |
51,949 |
90,602 |
*Includes only Authorities available for use and granted by Parliament at quarter-end.
Agency’s budgetary expenditures by Standard Object (unaudited)
Fiscal year 2015-2016 (in thousands of dollars)
|
Planned expenditures for the year ending March 31, 2016* |
Expended during the quarter ended September 30, 2015 |
Year-to-date used at quarter-end |
|---|
| Expenditures : |
|
|
|
| Personnel |
59,859 |
15,007 |
29,695 |
| Transportation and communications |
4,557 |
410 |
966 |
| Information |
456 |
54 |
105 |
| Professional and special services |
9,122 |
700 |
1,097 |
| Rentals |
1,665 |
519 |
575 |
| Repair and maintenance |
319 |
16 |
169 |
| Utilities, materials and supplies |
424 |
119 |
163 |
| Acquisition of machinery and equipment |
363 |
218 |
586 |
| Transfer payments |
225,574 |
37,035 |
56,590 |
| Other subsidies and payments |
(661) |
328 |
411 |
| Total net budgetary expenditures |
301,678 |
54,406 |
90,358 |
Fiscal Year 2014-2015 (in thousands of dollars)
|
Planned expenditures for the year ending March 31, 2015* |
Expended during the quarter ended September 30, 2014 |
Year-to-date used at quarter-end |
|---|
| Expenditures : |
|
|
|
| Personnel |
58,892 |
15,508 |
30,092 |
| Transportation and communications |
4,664 |
551 |
951 |
| Information |
516 |
135 |
187 |
| Professional and special services |
9,336 |
989 |
2,060 |
| Rentals |
1,705 |
488 |
597 |
| Repair and maintenance |
326 |
40 |
198 |
| Utilities, materials and supplies |
434 |
52 |
82 |
| Acquisition of machinery and equipment |
371 |
44 |
362 |
| Transfer payments |
216,270 |
34,247 |
53,890 |
| Other subsidies and payments |
(676) |
(105) |
2,182 |
Total net budgetary
expenditures |
291,838 |
51,949 |
90,602 |
*Includes only Authorities for use and granted by Parliament at quarter-end.