Atlantic Canada Opportunities Agency – Quarterly Financial Report for the quarter ending December 31, 2019

Atlantic Canada Opportunities Agency

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 2019-2020 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 2019-2020 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

This section highlights significant changes to the fiscal quarter results as of December 31, 2019.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for fiscal year 2019-2020 are $71.6 million with no significant variance compared to $70.4 million as of December 31, 2018.

Vote 1 authorities used year-to-date have increased to $49.4 million at the end of the third quarter this fiscal year with no significant variance compared to $47.2 million as of December 31, 2018.

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, 2018-2019 and 2019-2020.

(in thousands of dollars)

Long description - Graph 1

For the year ending March 31, 2019, total authorities available for use for Vote 1 is $70,412 in thousands of dollars, while year to date authorities used for Vote 1 is $47,163 in thousands of dollars.

For the year ending March 31, 2020, total authorities available for use for Vote 1 is $71,607 in thousands of dollars, while year to date authorities used for Vote 1 is $49,422 in thousands of dollars.

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for the year ending March 31, 2020, amount to $268.0 million, a decrease of $19.3 million compared to the $287.3 million available for use as of December 31, 2018. The decrease of $19.3 million, or 6.7%, is explained by:

A total decrease of $40.6 million in Vote 5 authorities available for use related to:

The decrease is offset by a total increase of $21.3 million in Vote 5 authorities available for use:

Vote 5 authorities used year-to-date have increased from $130.0 million last fiscal year to $145.8 million this fiscal year. This $15.8 million increase in authorities used, or 12.1%, 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, 2018-2019 and 2019-2020.

(in thousands of dollars)[1]

Long description - Graph 2 

For the year ending March 31, 2019, total authorities available for use for Vote 5 is $287,337 in thousands of dollars, while year to date authorities used for Vote 5 is $130,042 in thousands of dollars.

For the year ending March 31, 2020, total authorities available for use for Vote 5 is $268,045 in thousands of dollars, while year to date authorities used for Vote 5 is $145,809 in thousands of dollars.

Note: Total authorities available for use in 2018-19 include an amount of $12.5 million that was reprofiled to fiscal year 2019-20 due to client projects delays. This overstates the Total authorites available for use in 2018-19. Actual Total authorities available for use as of December 31, 2018 were of $274.5 million. This compares to $268.0 million in Total authorities available for use as of December 31, 2019.

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for the year ending March 31, 2020, have increased by $0.3 million, or 3.9%, to $8.6 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.

Net budgetary statutory authorities used year-to-date at quarter-end have also increased by 4.6% when compared to the previous fiscal year, with approximately $6.4 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, 2018-2019 and 2019-2020.

(in thousands of dollars)

Graph 3: Comparison of Net Budgetary Authorities and Expenditures for Statutory Authorities as of December 31, 2018-2019 and 2019-2020.
Long descrption - Graph 3 

For the year ending March 31, 2019, total authorities available for use for Statutory authorities is $8,287 in thousands of dollars, while year to date authorities used for Statutory authorities is $6,126 in thousands of dollars.

For the year ending March 31, 2020, total authorities available for use for Statutory authorities is $8,614 in thousands of dollars, while year to date authorities used for Statutory authorities is $6,411 in thousands of dollars.

Statement of the Agency’s Budgetary Expenditures by Standard Object

The Agency’s budgetary expenditures by Standard Object for the year-to-date at quarter-end were $201.6 million, which reflects an increase of $18.3 million, or 10%, from the $183.3 million[2] in overall expenditures for the quarter ended December 31, 2018. The variance by Standard Object relates mainly to transfer payments. The variance is explained in the Statement of Authorities: Vote 5 – Grants and Contributions.

Planned personnel expenditures for the year ending March 31, 2020 have increased by $5.6 million, or 8.8%, when compared to planned personnel expenditures for the year ending March 31, 2019. The variance is mainly due to increased authorities from revised collective agreements and the operating budget carry forward from 2018-2019 that was partially allocated as personnel authorities. The operating budget carry forward will be re-allocated as Operating via the 2019-20 year-end closing processes.

Risks and Uncertainties

ACOA conducts an annual risk assessment process to update its corporate risk profile. The key corporate risks identified for 2019-2020 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, 2020

Stéphane Lagacé, CPA-CMA
Chief Financial Officer
Moncton, Canada

Date : February 21, 2020

Statement of Authorities (unaudited)

Fiscal year 2019-2020 (in thousands of dollars)

Authorities Total available for use for the year ending March 31, 2020* Used during the quarter ended December 31, 2019 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures 71,607 18,110 49,422
Vote 5 - Grants and contributions 268,045 58,274 145,809
Budgetary statutory authorities 8,614 2,137 6,411
Total authorities 348,266 78,521 201,642

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

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

Agency's budgetary expenditures by Standard Object (unaudited)

Fiscal year 2019-2020 (in thousands of dollars)

Expenditures Planned expenditures for the year ending March 31, 2020* Expended during the quarter ended December 31, 2019 Year-to-date expended at quarter-end
Personnel 68,406 17,672 48,722
Transportation and communications 2,772 966 2,257
Information 580 53 324
Professional and special services 4,746 845 1,894
Rentals 1,816 401 1,379
Repair and maintenance 368 16 207
Utilities, materials and supplies 399 70 165
Acquisition of machinery and equipment 1,077 192 252
Transfer payments 268,045 58,274 145,809
Other subsidies and payments 57 32 633
Total net budgetary expenditures 348,266 78,521 201,642

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[3] Year-to-date expended at quarter-end[3]
Personnel 62,847 15,436 45,875
Transportation and communications 2,905 892 2,111
Information 542 119 257
Professional and special services 5,964 880 1,722
Rentals 2,272 366 1,555
Repair and maintenance 1,849 20 65
Utilities, materials and supplies 532 70 246
Acquisition of machinery and equipment 1,658 80 140
Transfer payments 287,337 59,455 130,042
Other subsidies and payments 129 1,042 1,318
Total net budgetary expenditures 366,036 78,360 183,331

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

[1] Adjustment to total authorities available for use in 2018-2019 due to rounding

[2] Adjustment to reflect expenditures as of December 31, 2018 (publication error)

[3] Previous years’ figures have been realigned between standard objects to better reflect the Receiver General Chart of Accounts definition

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