Atlantic Canada Opportunities Agency
2019-2020
Quarterly Financial Report For the quarter ended June 30, 2019

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 June 30, 2019.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for fiscal year 2019-2020 are $66.0 million with no significant variance compared to $66.1 million as of June 30, 2018.

Vote 1 authorities used year-to-date have increased from $15.3 million at the end of the first quarter in 2018-2019 to $15.9 million this 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 June 30, 2018-2019 and 2019-2020.

(in thousands of dollars)

Comparison of Net Budgetary Authorities and Expenditures for Vote 1 as of June 30, 2018-2019 and 2019-2020.

(D)

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, an increase of $16.9 million compared to the $251.1 million available for use as of June 30, 2018. The increase of $16.9 million, or 6.7%, is explained by:

A total increase of $55.0 million in Vote 5 authorities available for use related to:

The increase is offset by a total decrease of $38.1 million in Vote 5 authorities available for use:

Vote 5 authorities used have increased from $27.8 million last fiscal year to $33.3 million this fiscal year. This $5.5 million increase in authorities used, or 19.7%, 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 June 30, 2018-2019 and 2019-2020.

(in thousands of dollars)

Comparison of Net Budgetary Authorities and Expenditures for Vote 5 as of June 30, 2018-2019 and 2019-2020.

(D)

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for the year ending March 31, 2020, have increased by $0.4 million, or 4.5%, 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.

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 $2.1 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 June 30, 2018-2019 and 2019-2020.

(in thousands of dollars)

Comparison of Net Budgetary Authorities and Expenditures for Statutory Authorities as of June 30, 2018-2019 and 2019-2020.

(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, 2019, were $51.3 million, which reflects an increase of $6.1 million, or 13.5%, from the $45.2 million in overall expenditures for the quarter ended June 30, 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.

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 : July 31, 2019

Marc Gagnon
Acting Chief Financial Officer
Moncton, Canada

Date : July 31, 2019

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
June 30,
2019
Year-to-
date
used
at
quarter-
end
Vote 1 - Net operating expenditures 65,988 15,880 15,880
Vote 5 - Grants and contributions 268,045 33,284 33,284
Budgetary statutory authorities 8,573 2,137 2,137
Total authorities 342,606 51,301 51,301

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
June 30,
2018
Year-to-
date
used
at
quarter-
end
Vote 1 - Net operating expenditures 66,1381 15,341 15,341
Vote 5 - Grants and contributions 251,0971 27,804 27,8042
Budgetary statutory authorities 8,201 2,042 2,042
Total authorities 325,436 45,187 45,187

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

1 Adjustment due to rounding
2 Adjustment per approved quarterly financial report (publication error)

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
June 30,
2019
Year-to-
date
expended
at
quarter-
end
Personnel 64,500 15,468 15,468
Transportation and communications 2,368 741 741
Information 496 206 206
Professional and special services 4,060 355 355
Rentals 1,553 854 854
Repair and maintenance 315 171 171
Utilities, materials and supplies 341 38 38
Acquisition of machinery and equipment 921 23 23
Transfer payments 268,045 33,284 33,284
Other subsidies and payments 7 161 161
Total net budgetary expenditures 342,606 51,301 51,301

Fiscal year 2018-2019 (in thousands of dollars)

Expenditures Planned
expenditures
for the year
ending
March 31,
2019*
Expended
during the
quarter
ended
June 30,
20183
Year-to-
date
expended
at
quarter-end3
Personnel 61,910 15,236 15,236
Transportation and communications 2,310 689 689
Information 431 53 53
Professional and special services 4,742 406 406
Rentals 1,807 686 686
Repair and maintenance 1,470 12 12
Utilities, materials and supplies 423 98 98
Acquisition of machinery and equipment 1,318 15 15
Transfer payments 250,943 27,804 27,804
Other subsidies and payments 82 188 188
Total net budgetary expenditures 325,436 45,187 45,187

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

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

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