ARCHIVED - Health Canada Quarterly Financial Report - For the quarter ended June 30, 2011
Table of Contents
Introduction
Health Canada is the federal department responsible for helping Canadians maintain and improve their health. In keeping with the Department's commitment to making this country's population among the healthiest in the world as measured by longevity, lifestyle and effective use of the public health care system, its main responsibilities are as a regulator, a service provider, a catalyst for innovation, a funder, and an information provider. A summary of Health Canada's program activities may be found in Part II of the Main Estimates. Health Canada administers the Canada Health Act which embodies national principles to ensure a universal and equitable publicly-funded health care system.
This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act in the form and manner prescribed by the Treasury Board, and should be read in conjunction with the Main Estimates and Supplementary Estimates.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities presents the spending authorities granted to Health Canada by Parliament and those used by the Department consistent with the Main Estimates and Supplementary Estimates for the 2011-12 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.
Parliamentary authority is required before any money can be spent by the Government. Such authorities are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.
As part of the departmental performance reporting process, Health Canada prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.
The quarterly report has not been subject to an external audit or review.
Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results
This quarterly financial report reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 27, 2011.
The following graph provides a comparison of net budgetary authorities and expenditures for the quarter ended June 30, 2010 and June 30, 2011.
Comparison of Net Budgetary Authorities and Expenditures for the Quarter Ended June 30, 2010 and June 30, 2011 (in Millions $)
Total authorities available for the year as at June 30, 2011 have decreased $254.4 million as compared with the same quarter of the prior year. This decrease is primarily due to the sunsetting of programs including First Nations and Inuit Health Services Program Integrity, Chemical Management Plan, Clean Air Regulatory Agenda, Federal Contaminated Sites Action Plan and Adaptation to Climate Change, which the Department is currently seeking to renew. The decrease in authorities available at June 30, 2011 has been partially offset by an increase in statutory authorities of $62.4 million for Canada Health Infoway Inc. statutory grant, reflecting a difference in timing of expenditures made in this fiscal year as compared with last year.
During the first quarter of the 2011-12 fiscal year, total budgetary expenditures were $873.7 million compared with $798.9 million reported in the same period of 2010-11, representing an increase of $74.9 million or 9.4%.
This increase is primarily due to a change in timing of transfer payments to Canada Health Infoway Inc. in the amount of $62.4 million. The funds for this statutory grant are expended according to the identified cash flow requirements of that organization for the fiscal year.
In addition, there was an overall increase in Vote 10 - Grants and contributions expenditures of $17.7 million resulting from changes in timing of payments made under grant agreements as well as increases in First Nations and Inuit Health contribution spending. This increase in transfer payments was partially offset by decreases resulting from the sunsetting of the Canada Economic Action Plan in 2010-11.
Compared to the prior year, there was also a net decrease in Vote 1 - Operating expenditures of $7.2 million. This is attributable to the impact of sunsetting programs. The aforementioned reductions are primarily reflected in the decreases for professional and special services.
Risks and Uncertainties
At Health Canada, risk management is a fundamental underpinning of good management and decision-making. Moreover, risk management is a truly integrated process designed to address risk in any area or level within the Department, whether at strategic, program or project levels, in order to provide reasonable assurance regarding the achievement of corporate objectives and desired outcomes.
Health Canada faces the risk of adverse financial constraints due to challenges arising in response to emerging issues and increasing health care costs. All departments are expected to operate within their allotted budgets. Shifts in the operating environment for unforeseeable events such as H1N1; responding to an increasingly complex environment driven by the globalization of health products and rapid technological change; and addressing financial constraints from rising program costs associated with delivering health care services to First Nations and Inuit can create pressures and result in a reallocation of resources away from other programs. If the risk materializes it could potentially have an adverse impact program implementation and the Department's capacity to deliver services to Canadians.
The Department has risk mitigation strategies in place to manage these pressures and constraints to ensure that impacts on critical programs and service to Canadians are minimized. Further, the Department is seeking opportunities to address sustainability and is ensuring that investment plan priorities are established, projects are prioritized and that major upcoming expenditures are integrated with the departmental operating plans.
Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. Management has reviewed and continues to consider various options to adjust to this constraint in funding. The impact on departmental activities is being managed through a variety of mitigation strategies.
Significant Changes in Relation to Operations, Personnel and Programs
Ms. Glenda Yeates was appointed Deputy Minister in April 2010.
Mr. Jamie Tibbetts was appointed to the position of Chief Financial Officer, on March 14, 2011. In the interim, from April 2010, Mr. Germain Tremblay, the Deputy Chief Financial Officer fulfilled the responsibilities of the position.
There have been no other significant changes in relation to operations, personnel and programs over the last year.
Approved by:
Glenda Yeates
Deputy Minister
Ottawa, Canada
Date: August 22, 2011
Jamie Tibbetts
Chief Financial Officer
Ottawa, Canada
Date: August 22, 2011
Statement of Authorities (unaudited)
| Total available for use for the year ending March 31, 2012* | Used during the quarter ended June 30, 2011 | Year to date used at quarter-end | |
|---|---|---|---|
|
* Includes only Authorities available for use and granted by Parliament at quarter end |
|||
| Vote 1 - Operating expenditures | 1,734,817 | 375,512 | 375,512 |
| Vote 5 - Capital expenditures | 30,043 | 182 | 182 |
| Vote 10 - Grants and contributions | 1,444,698 | 401,549 | 401,549 |
| (S) Contributions to employee benefit plans | 134,151 | 33,538 | 33,538 |
| (S) Minister of Health - Salary and motor car allowance | 78 | 19 | 19 |
| (S) Spending of proceeds from the disposal of surplus Crown assets | 180 | 48 | 48 |
| (S) Refunds of amounts credited to revenues in previous years | 492 | 492 | 492 |
| (S) Canada Health Infoway Inc. | 62,387 | 62,387 | 62,387 |
| (S) Collection agency fees | 14 | 14 | 14 |
| Total authorities | 3,406,860 | 873,741 | 873,741 |
| Total available for use for the year ending March 31, 2011* | Used during the quarter ended June 30, 2010 | Year to date used at quarter-end | |
|---|---|---|---|
|
* Includes only Authorities available for use and granted by Parliament at quarter end |
|||
| Vote 1 - Operating expenditures | 1,988,889 | 382,724 | 382,724 |
| Vote 5 - Capital expenditures | 38,576 | 1,575 | 1,575 |
| Vote 10 - Grants and contributions | 1,510,370 | 383,855 | 383,855 |
| (S) Contributions to employee benefit plans | 122,825 | 30,706 | 30,706 |
| (S) Minister of Health - Salary and motor car allowance | 79 | 19 | 19 |
| (S) Spending of proceeds from the disposal of surplus Crown assets | 497 | 8 | 8 |
| (S) Refunds of amounts credited to revenues in previous years | 55 | 55 | 55 |
| (S) Canada Health Infoway Inc. | 0 | 0 | 0 |
| (S) Collection agency fees | 3 | 3 | 3 |
| Total authorities | 3,661,294 | 798,945 | 798,945 |
Departmental Budgetary Expenditures by Standard Object (unaudited)
| Planned expenditures for the year ending March 31, 2012* | Expended during the quarter ended June 30, 2011 | Year to date used at quarter-end | |
|---|---|---|---|
|
* Includes only Authorities available for use and granted by Parliament at quarter end |
|||
| Expenditures: | |||
| Personnel | 879,509 | 212,185 | 212,185 |
| Transportation and communications | 243,545 | 35,663 | 35,663 |
| Information | 12,596 | 335 | 335 |
| Professional and special services | 403,187 | 68,707 | 68,707 |
| Rentals | 15,697 | 3,238 | 3,238 |
| Repair and maintenance | 34,084 | 11,517 | 11,517 |
| Utilities, materials and supplies | 394,897 | 89,626 | 89,626 |
| Acquisition of lands, buildings and works | 6,022 | 41 | 41 |
| Acquisition of machinery and equipment | 38,444 | 4,879 | 4,879 |
| Transfer payments | 1,507,085 | 463,957 | 463,957 |
| Other subsidies and payments | 990 | (2,912) | (2,912) |
| Total gross budgetary expenditures | 3,536,056 | 887,236 | 887,236 |
| Less revenues netted against expenditures: | |||
| Rights and privileges | 52,165 | 4,091 | 4,091 |
| Services non-regulatory | 21,876 | 3,371 | 3,371 |
| Services regulatory | 55,155 | 6,033 | 6,033 |
| Total revenues netted against expenditures | 129,196 | 13,495 | 13,495 |
| Total net budgetary expenditures | 3,406,860 | 873,741 | 873,741 |
| Planned expenditures for the year ending March 31, 2011* | Expended during the quarter ended June 30, 2010 | Year to date used at quarter-end | |
|---|---|---|---|
|
* Includes only Authorities available for use and granted by Parliament at quarter end |
|||
| Expenditures: | |||
| Personnel | 882,148 | 210,112 | 210,112 |
| Transportation and communications | 231,678 | 36,782 | 36,782 |
| Information | 27,486 | 459 | 459 |
| Professional and special services | 487,136 | 74,862 | 74,862 |
| Rentals | 15,696 | 3,583 | 3,583 |
| Repair and maintenance | 46,614 | 11,147 | 11,147 |
| Utilities, materials and supplies | 471,532 | 89,372 | 89,372 |
| Acquisition of lands, buildings and works | 4,256 | 914 | 914 |
| Acquisition of machinery and equipment | 52,590 | 5,202 | 5,202 |
| Transfer payments | 1,510,370 | 383,855 | 383,855 |
| Other subsidies and payments | 1,413 | (2,769) | (2,769) |
| Total gross budgetary expenditures | 3,730,919 | 813,519 | 813,519 |
| Less revenues netted against expenditures: | |||
| Rights and privileges | 20,556 | 6,174 | 6,174 |
| Services non-regulatory | 21,434 | 1,298 | 1,298 |
| Services regulatory | 27,635 | 7,102 | 7,102 |
| Total revenues netted against expenditures | 69,625 | 14,574 | 14,574 |
| Total net budgetary expenditures | 3,661,294 | 798,945 | 798,945 |
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