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:
- 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
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)
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:
- $24.9 million increase in funding related to temporary funds announced in Budget 2019 for Regional Development Agencies;
- $12.5 million increase related to a reprofile of funds as a result of project/contracting delays;
- $8.8 million in temporary funds announced in Budget 2018 in support of the Regional Economic Growth through Innovation (REGI) – Support for Women Entrepreneurship program;
- $6.8 million increase in temporary funding for the Regional Economic Growth through Innovation (REGI) program – Supporting small and medium-sized enterprise users of steel and aluminum initiative; and
- $2.0 million increase in temporary funding announced in Budget 2019 for the Launching a Federal Strategy on Jobs and Tourism.
The increase is offset by a total decrease of $38.1 million in Vote 5 authorities available for use:
- $34.5 million decrease in temporary funding announced in Budget 2017 to promote and advance an innovative and knowledge-based economy in Atlantic Canada;
- $2.3 million decrease for the promotion of jobs in Eastern Canada’s Forestry Sector;
- $1.0 million decrease due to the sunsetting of funding in support of specific projects in innovation, commercialization and community development in New Brunswick; and
- $0.3 million decrease related to the amount transferred from the Department of National Defence in support of the Halifax International Security Forum (2018-2019).
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)
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)
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