Atlantic Canada Opportunities Agency 2017-2018
Quarterly Financial Report for the quarter ended June 30, 2017

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 2017-2018 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 for the 2017-2018 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:

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 June 30, 2017.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for fiscal year 2017-2018 are $63.4 million compared to $64.2 million as of June 30, 2016. The decrease of $0.8 million, or 1.2%, is explained by the following:

Vote 1 authorities used year-to-date at quarter-end have increased from $14.9 million in 2016-2017 to $15.9 million this fiscal year. This $1.0 million increase in authorties used, or 6.7%, is explained by an increase in personnel costs due to retroactive payments resulting from revised collective agreements.

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 June 30, 2016-2017 and 2017-2018.

(in thousands of dollars)

qfr-q1-2018-image001
(D)

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for the year ending March 31, 2018, amount to $240.2 million, a decrease of $3.3 million compared to the $243.5 million available for use as of June 30, 2016. The decrease of $3.3 million, or 1.4%, is explained by:

A total decrease of $5.7 million in Vote 5 authorities available for use:

The decrease is offset by a total increase of $2.4 million in Vote 5 authorities available to support the spruce budworm outbreak intervention program as announced in Budget 2014.

Vote 5 authorities used have increased from $20.0 million last fiscal year to $22.9 million this fiscal year. This $2.9 million increase in authorities used, or 14.5%, is 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 June 30, 2016-2017 and 2017-2018.

(in thousands of dollars)

qfr-q1-2018-image002
(D)

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for the year ending March 31, 2018, have decreased by $0.8 million, or 9.3%, to $8.0 million compared to the previous fiscal year at the same time. The decrease 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 when compared to the previous fiscal year, with approximately $2.0 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 June 30, 2016-2017 and 2017-2018.

(in thousands of dollars)

qfr-q1-2018-image003
(D)

Statement of the Agency’s Budgetary Expenditures by Standard Object

The Agency’s budgetary expenditures by Standard Object for the quarter ended June 30, 2017, were $40.7 million, which reflects an increase of $1.4 million, or 3.6%, from the $39.3 million in overall expenditures for the quarter ended June 30, 2016. The variance by Standard Object relates mainly to transfer payments. The variance is 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 2017-2018 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.

Approval by Senior Officials

Approved by:

Francis P. McGuire
Deputy Head
Moncton, Canada

Date : August 23 , 2017

Denise Frenette, CA
Chief Financial Officer
Moncton, Canada

Date : August 21 , 2017

Statement of Authorities (unaudited)

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 June 30, 2017 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures 63,352 15,885 15,885
Vote 5 - Grants and contributions 240,222 22,853 22,853
Budgetary statutory authorities 7,991 1,993 1,993
Total authorities 311,565 40,731 40,731

Fiscal year 2016-2017 (in thousands of dollars)

Authorities Total available for use for the year ending March 31, 2017* Used during the quarter ended June 30, 2016 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures 64,222 14,901 14,901
Vote 5 - Grants and contributions 243,460 20,019 20,019
Budgetary statutory authorities 8,815 2,204 2,204
Total authorities 316,497 37,124 37,124

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

Agency's budgetary expenditures by Standard Object (unaudited)

Fiscal year 2017-2018 (in thousands of dollars)

Expenditures Planned expenditures for the year ending March 31, 2018* Expended during the quarter ended June 30, 2017 Year-to-date expended at quarter-end
Personnel 58,758 16,243 16,243
Transportation and communications 2,316 564 564
Information 432 71 71
Professional and special services 4,757 325 325
Rentals 1,812 268 268
Repair and maintenance 1,472 167 167
Utilities, materials and supplies 424 99 99
Acquisition of machinery and equipment 1,322 277 277
Transfer payments 240,222 22,853 22,853
Other subsidies and payments 50 (136) (136)
Total net budgetary expenditures 311,565 40,731 40,731

Fiscal year 2016-2017 (in thousands of dollars)

Expenditures Planned expenditures for the year ending March 31, 2017* Expended during the quarter ended June 30, 2016 Year-to-date expended at quarter-end
Personnel 60,062 15,012 15,012
Transportation and communications 2,864 526 526
Information 358 42 42
Professional and special services 6,907 727 727
Rentals 1,397 304 304
Repair and maintenance 432 144 144
Utilities, materials and supplies 314 37 37
Acquisition of machinery and equipment 1,097 265 265
Transfer payments 243,460 20,020 20,020
Other subsidies and payments (394) 47 47
Total net budgetary expenditures 316,497 37,124 37,124

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

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