Atlantic Canada Opportunities Agency
2018-2019
Quarterly Financial Report for the quarter ended December 31, 2018
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. It has been prepared by management as required by section 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 2018-2019 Part II of the Main Estimates.
Basis of Presentation
This quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities is consistent with the Main Estimates and the Supplementary Estimates (A) for the 2018-2019 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 results reporting process, the Agency prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies. However, the spending authorities 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.
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 the fiscal quarter results as of December 31, 2018.
Statement of Authorities: Vote 1 – Net Operating Expenditures
Total authorities available for fiscal year 2018-2019 are $70.4 million compared to $68.7 million as of December 31, 2017. The increase of $1.8 million, or 2.6%, is explained by the following:
- a $0.4 million increase in temporary funds announced in Budget 2018 in support of the Regional Economic Growth through Innovation (REGI) – Support for Women Entrepreneurship Program, and
- a $1.4 million increase in compensation allocations resulting from revised collective agreements.
Vote 1 authorities used year-to-date at quarter-end have decreased from $48.9 million in 2017-2018 to $47.2 million this fiscal year. This $1.7 million decrease in authorities used, or 3.5% is mainly explained by a decrease in personnel costs associated with retroactive payments resulting from collective agreements last fiscal year.
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 December 31, 2017-2018 and 2018-2019.
(in thousands of dollars)
Statement of Authorities: Vote 5 – Grants and Contributions
Total authorities available for use for the year ending March 31, 2019, amount to $287.3 million, an increase of $3.5 million compared to the $283.8 million available for use as of December 31, 2017. The increase of $3.5 million, or 1.2%, is explained by:
A total increase of $28.5 million in Vote 5 authorities available for use related to:
- $10.6 million in temporary funding announced in Budget 2017 to promote and advanceand innovate and knowledge-based economy in Atlantic canada;
- $8.9 million in temporary funds announced in Budget 2018 in support of the Regional Economic Growth through Innovation (REGI) – Support for Women Entrepreneurship Program;
- $8.9 million in reinvestment of receipts from repayable contributions to support activities related to fostering the development of institutions and enterprises, with emphasis on those of small and medium size;
- $0.1 million in funding from the Department of Fisheries and Oceans to Atlantic Canada Opportunities Agency for the Basin Head Project, and
The increase is offset by a total decrease of $25.0 million in Vote 5 authorities available for use:
- $16.6 million related to the termination of funding for the Canada 150 Community Infrastructure Program (CIP 150);
- $4.9 million related to the termination of funding for the spruce budworm outbreak intervention program;
- $3.3 million reduction in funding from the Department of National Defense in support of a project;
- $0.2 million reduction in funding for the Roadmap for Canada Official Languages.
Vote 5 authorities used have decreased from $132.4 million last fiscal year to $130.0 million this fiscal year. This $2.3 million decrease in authorities used, or 1.8%, is mainly due to the timing of contribution payments compared to the previous fiscal year.
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 December 31, 2017-2018 and 2018-2019.
(in thousands of dollars)
Statement of Authorities: Budgetary Statutory Authorities
Budgetary statutory authorities available for use for the year ending March 31, 2019, have increased by $0.3 million, or 3.7%, to $8.3 million compared to the previous fiscal year at the same time. The increase is due to the regular yearly adjustments to the employee benefit plan to correctly reflect planned requirements.
There are no significant variances in net budgetary statutory authorities used year-to-date at quarter-end compared to the previous fiscal year, with an amount of $6.1 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 December 31, 2017-2018 and 2018-2019.
(in thousands of dollars)
Statement of the Agency’s Budgetary Expenditures by Standard Object
The Agency’s budgetary expenditures by Standard Object for the quarter ended December 31, 2018, were $78.4 million, which reflects an increase of $0.1 million, or 0.2%, from the $78.2 million in overall expenditures for the quarter ended December 31, 2017. This variance over the previous fiscal year’s third quarter is deemed insignificant.
Risks and Uncertainties
ACOA conducts an annual risk assessment process to update its corporate risk profile. The key corporate risks identified for 2018-2019 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 entity-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:
Francis P. McGuire Deputy Head Moncton, Canada
Date : February 25, 2019
Stéphane Lagacé, CPA-CMA Chief Financial Officer Moncton, Canada
Date : February 18, 2019
Statement of Authorities (unaudited)
Fiscal year 2018-2019 (in thousands of dollars)
| Authorities | Total available for use for the year ending March 31, 2019* | Used during the quarter ended December 31, 2018 | Year-to-date used at quarter-end |
|---|---|---|---|
| Vote 1 - Net operating expenditures | 70,412 | 16,863 | 47,163 |
| Vote 5 - Grants and contributions | 287,337 | 59,455 | 130,042 |
| Budgetary statutory authorities | 8,287 | 2,042 | 6,126 |
| Total authorities | 366,036 | 78,360 | 183,331 |
Fiscal year 2017-2018 (in thousands of dollars)
| Authorities | Total available for use for the year ending March 31, 2018* | Used during the quarter ended December 31, 2017 | Year-to-date used at quarter-end |
|---|---|---|---|
| Vote 1 - Net operating expenditures | 68,656 | 13,275 | 48,853 |
| Vote 5 - Grants and contributions | 283,817 | 62,955 | 132,387 |
| Budgetary statutory authorities | 7,991 | 1,993 | 5,978 |
| Total authorities | 360,464 | 78,223 | 187,218 |
*Includes only Authorities available for use and granted by Parliament at quarter-end.
Agency's budgetary expenditures by Standard Object (unaudited)
Fiscal year 2018-2019 (in thousands of dollars)
| Expenditures | Planned expenditures for the year ending March 31, 2019* | Expended during the quarter ended December 31, 2018 | Year-to-date expended at quarter-end |
|---|---|---|---|
| Personnel | 62,847 | 15,433 | 45,858 |
| Transportation and communications | 2,905 | 952 | 2,172 |
| Information | 542 | 119 | 257 |
| Professional and special services | 5,964 | 880 | 1,723 |
| Rentals | 2,272 | 332 | 1,075 |
| Repair and maintenance | 1,849 | 20 | 65 |
| Utilities, materials and supplies | 532 | 70 | 244 |
| Acquisition of machinery and equipment | 1,658 | 56 | 561 |
| Transfer payments | 287,337 | 59,455 | 130,042 |
| Other subsidies and payments | 129 | 1,043 | 1,334 |
| Total net budgetary expenditures | 366,036 | 78,360 | 183,331 |
Fiscal year 2017-2018 (in thousands of dollars)
| Expenditures | Planned expenditures for the year ending March 31, 2018* | Expended during the quarter ended December 31, 2017 | Year-to-date expended at quarter-end |
|---|---|---|---|
| Personnel | 60,864 | 12,218 | 48,079 |
| Transportation and communications | 2,900 | 823 | 1,934 |
| Information | 541 | 71 | 214 |
| Professional and special services | 5,956 | 899 | 2,152 |
| Rentals | 2,268 | 494 | 1,142 |
| Repair and maintenance | 1,844 | 34 | 220 |
| Utilities, materials and supplies | 531 | 52 | 230 |
| Acquisition of machinery and equipment | 1,655 | 101 | 578 |
| Transfer payments | 283,817 | 62,955 | 132,387 |
| Other subsidies and payments | 88 | 576 | 282 |
| Total net budgetary expenditures | 360,464 | 78,223 | 187,218 |
*Includes only Authorities available for use and granted by Parliament at quarter-end.
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