ARCHIVED - Going With the Flow: Your Guide to Completing the Quarterly Cashflow Forecast and Record of Expenditures Form

About this guide

This guide provides a quick and easy introduction to the Quarterly Cashflow Forecast and Record of Expenditures Form, describing its various components and explaining the reporting process. It is most helpful to have a blank version of the Cashflow handy when reading through, as the Guide refers quite often to specific sections of the form.

If you need further information or have questions about the Cashflow after reading this Guide, don't hesitate to contact your Program Consultant.

The Cashflow

Health Canada's Quarterly Cashflow Forecast and Record of Expenditures Form is a reporting tool that allows you to identify your project funding needs on a monthly basis. It is also an excellent planning resource that helps you identify and pursue your project goals and objectives.

Of course, the most important fact about the Cashflow is that it's your key to unlocking the release of quarterly funding from Health Canada.

The Cashflow comes in both paper and electronic formats; the electronic versions are available in Microsoft Excel and Lotus 123 spreadsheets. Whatever the format, the Cashflow performs the same functions. Namely, it:

• indicates your project's need for funding;
• serves as your basis for payment and, when applicable, determines the amount of each advance payment your project receives;
• provides a cumulative quarterly record of project expenses; and
• reconciles your project planned budget with actual expenditures.

In tandem with your Detailed Budget Submission -- which was approved at either the beginning of your project or the start of the fiscal year -- the Cashflow represents the official authorization to advance monies to your project.

Check your Contribution Agreement to determine whether your project will receive payments on an advance or reimbursement basis. The Reporting Plan of your Agreement also tells you when you're required to submit Cashflows. On average, they're submitted five times a year: once at the start of your project to forecast your cash requirements, and then at the end of each quarter.

A guided tour

The Cashflow is made up of a number of different sections for recording information related to your project and its finances. It begins at the top with the basics:

• Project Number: as indicated on your Contribution Agreement. The first four digits refer to your funding program.
• Program Name: the Health Canada program under which your project is funded.
• Organization Name: the name of your organization.
• Fiscal Year: the fiscal year in which the project is currently funded. Every fiscal year runs from April 1 of one calendar year to March 31 of the next. You list both years.

Just like your Detailed Budget Submission, the Cashflow has seven budget items:

1. Personnel
2. Travel
3. Materials
4. Equipment
5. Rent / Utilities
6. Evaluation
7. Other

Refer to your Financial Management Guide or program guidelines for further details on what, exactly, these budget items include.

Each Fiscal Year is broken down into four quarters:

Q1 = 1st quarter (April-June)
Q2 = 2nd quarter (July-September)
Q3 = 3rd quarter (October-December)
Q4 = 4th quarter (January-March)

Under each quarter, you will find the following three columns:

Planned: where you list your project quarterly cash requirements for each budget item.

Actual: where you record your project actual expenditures for each budget item per quarter.

Difference: where you show the difference between your Planned and Actual amounts for each quarter.

Your Planned and Actual amounts contribute to the following totals on the Cashflow:

Total Expenditures this Fiscal Year: the cumulative total of each quarter's Actual amounts. As the year goes on, these figures constantly change.

Total Amount Requested from Program this Fiscal Year: the cumulative total of all recorded Actual amounts to date plus future Planned amounts for each
budget item.

Monthly Forecasts / Actual Expenditures: this is the breakdown of how you would like your project funding to be paid out each quarter, and serves as the basis for the quarterly or monthly payments made by Health Canada. The figures must add up to the totals for each corresponding quarter. As each quarter goes by, the Planned amounts will change to Actual amounts accordingly.

Finally, at the bottom of the Cashflow: Authorized Signature: this is to be signed by the person in your organization with financial signing authority -- as indicated on the Financial Signing Authority form previously submitted to Health Canada. It is absolutely imperative that this section of the Cashflow be completed; otherwise, the release of funds will not be authorized.

The Process

Getting Started

As noted previously, Cashflows are typically submitted five times a year: once at project start-up and subsequently at the end of each quarter.

When planning or reporting expenditures, it is best to try rounding your figures to the nearest dollar. Remember to claim only those costs related directly to your project.

Expenses must always be shown in the months they occur. Not when the work is done necessarily, but when it is paid for during the fiscal year. That's why it's a sound practice to make purchases at the start of each quarter: the odds are good that by the end of the quarter the invoice will have been paid.

Above all, don't forget that your total budget can't be changed without written approval from Health Canada, and that the total of your Actual expenditures and Planned amounts can never exceed your total project budget.

Make sure that every relevant section of your Cashflow is completed before you submit. If your Cashflow is incomplete, or if an unapproved amount shows up in your Cashflow, the release of your funds will be delayed. Check your figures for accuracy before submitting.

To verify your calculations, confirm that your Total Amount Requested from Program this Fiscal Year is equal to your Monthly Forecasts / Actual Expenditures total, and that both of these totals are also equal to your Budget total.

Finally, always keep a copy of your Cashflow on record; you'll need each previous quarter's information to complete the next quarter's submission!

The Initial Cashflow

Your first Cashflow shows only your Planned amounts based on your approved budget by Health Canada. In other words, this is your ideal spending forecast. It is based on your best estimate of how much money you'll require, and when.

Try to plan accurately. If you simply divide your total annual budget into four equal quarterly amounts, you'll very likely encounter challenges down the road. Some periods are bound to be more cash-intensive for your project than others.

The Steps

1. Fill in your basic project information at the top of the Cashflow.
2. Refer to your Detailed Budget Submission and your own calculations of cash requirements per quarter. Break down the total amounts for each budget category into quarters, and enter these figures as Planned amounts. Make sure that the totals for each budget category are equal to your approved budget amounts. The sum total of all your Planned amounts must equal the sum total of your project budget.
3. Your Actual columns for every quarter will be blank.
4. Your Difference columns will be blank.
5. Total Expenditures this Fiscal Year will be blank.
6. The Total Amount Requested from Program this Fiscal Year is the sum total of each quarter's Planned amounts.
7. Calculate all subtotals as required, making sure your Total Amount Requested from Program this Fiscal Year equals your total project budget. All figures should balance horizontally and vertically across all columns.
8. The Monthly Forecasts / Actual Expenditures section should reflect your cash requirements for each month. The sum total of this row must always equal your total project budget.
9. If applicable to your project, complete the Other box located at the bottom left of the form, itemizing any Planned expenses reported in the Other budget item.
10. Have the Cashflow signed by the authorized person within your organization.
11. Make a copy of the Cashflow for your records and submit! Remember that you can send an advance copy of your Cashflow by fax, but the original must be sent to Health Canada.

First Quarter

After your first quarter, once you e actually incurred some project-related expenses, you will have a better sense of how accurate your forecast really is. Based on the Difference between your Planned and Actual amounts for Q1, you'll likely have to adjust your Planned amounts for future quarters.

It is important to note that the Planned amounts for past quarters cannot be changed.

The Steps

1. Fill in your basic project information at the top of the Cashflow.
2. Copy your Q1 Planned amounts from your previous submission.
3. Record your Actual expenditures for Q1.
4. Calculate the Difference between your Q1 Planned and Actual amounts.
5. Complete the Planned columns under Q2, Q3 and Q4; these can be adjusted from your previous Cashflow depending on whether you have overspent or underspent in Q1.
6. Enter your Total Expenditures this Fiscal Year: these will be identical to your Q1 Actuals.
7. Calculate the Total Amount Requested from Program this Fiscal Year as follows: Q1 Actual + Q2 Planned + Q3 Planned + Q4 Planned.
8. Calculate all subtotals as required, making sure your Total Amount requested to the program this fiscal year equals your total project budget. All figures should balance horizontally and vertically across all columns.
9. Calculate your Monthly Forecasts / Actual Expenditures by recording your Q1 Actual expenditures (broken down monthly) as well as your Planned for future quarters (again, broken down monthly). The sum total of this row must equal your total project budget.
10. Complete the Other box located at the bottom left of the form, itemizing any Planned and actual expenses reported in the Other budget line.
11. Have the Cashflow signed by the authorized person within your organization.
12. Make a copy of the Cashflow for your records and submit! Remember that you can send an advance copy of your Cashflow by fax, but the original must be sent to Health Canada.

Second Quarter

Q2 proceeds very similarly to Q1.

The Steps

1. Fill in your basic project information at the top of the Cashflow.
2. Copy Q1 Planned, Actual and Difference and Q2 Planned amounts from your previous submission.
3. Record your Actual expenditures for Q2.
4. Calculate the Difference between your Planned and Actual amounts in Q2.
5. Complete the Planned columns under Q3 and Q4; these can be adjusted from your previous Cashflow depending on whether you have overspent or underspent in Q2.
6. Enter your Total Expenditures this Fiscal Year: these will correspond to the sum of your Q1 and Q2 Actuals.
7. Calculate the Total Amount Requested from Program this Fiscal Year as follows: Q1 Actual + Q2 Actual + Q3 Planned + Q4 Planned.
8. Calculate all subtotals as required, making sure your Total Amount Requested by Program this Fiscal Year equals your total project budget. All figures should balance horizontally and vertically across all columns.
9. Calculate your Monthly Forecasts / Actual Expenditures by recording your Q1 and Q2 Actual expenditures (broken down monthly) as well as your Planned for future quarters (again, broken down monthly). The sum total of this row must equal your total project budget.
10. Complete the Other box located at the bottom left of the form, itemizing any Planned and actual expenses reported in the Other budget line.
11. Have the Cashflow signed by the authorized person within your organization.
12. Make a copy of the Cashflow for your records and submit! Remember that you can send an advance copy of your Cashflow by fax, but the original must be sent to Health Canada.

Third Quarter

Once you have completed your Q3 Cashflow, you will have a good idea about whether you'll end the year on budget or underbudget. If you expect to come in underbudget, this is the time to let your Program Consultant know.

The Steps

1. Fill in your basic project information at the top of the Cashflow.
2. Copy Q1, Q2 Planned, Actual and Difference and Q3 Planned amounts from your previous submission.
3. Record your Actual expenditures for Q3.
4. Calculate the Difference between your Planned and Actual amounts in Q3.
5. Complete the Planned column under Q4; this can be adjusted from your previous Cashflow depending on whether you've overspent or underspent in Q 3 .
6. Enter your Total Expenditures this Fiscal Year: these will correspond to the sum of your Q1, Q2 and Q3 Actuals.
7. Calculate the Total Amount Requested from Program this Fiscal Year as follows: Q1 Actual + Q2 Actual + Q3 Actual + Q4 Planned.
8. Calculate all subtotals as required, making sure your Total amount requested from program this fiscal year equals your total project budget. All figures should balance horizontally and vertically across all columns.
9. Calculate your Monthly Forecasts / Actual Expenditures by recording your Q1, Q2 and Q3 Actual expenditures (broken down monthly) as well as your Planned for the fourth quarter (again, broken down monthly). The sum total of this row must equal your total project budget.
10. Complete the Other box located at the bottom left of the form, itemizing any Planned and actual expenses reported in the Other budget line.
11. Have the Cashflow signed by the authorized person within your organization.
12. Make a copy of the Cashflow for your records and submit! Remember that you can send an advance copy of your Cashflow by fax, but the original must be sent to Health Canada.

Fourth Quarter

As the government's accounting period ends on March 31, make sure that any goods and services received prior to March 31 are included in your Q4 Actuals, even if those items aren't yet paid for.

The Steps

1. Fill in your basic project information at the top of the Cashflow.
2. Copy the Planned, Actual and Difference amounts from Q1, Q2, Q3 and your Q4 planned from your previous submission.
3. Record your Actual expenditures for Q4.
4. Calculate the Difference between your Planned and Actual amounts for Q4.
5. Enter your Total Expenses this Fiscal Year: these will correspond to the sum of your Q1, Q2, Q3 and Q4 Actuals.
6. Calculate the Total Amount Requested from Program this Fiscal Year as follows: Q1 Actual + Q2 Actual + Q3 Actual + Q4 Actual.
7. Calculate all subtotals as required, making sure your Total Amount Requested from Program this Fiscal Year equals your total project budget. If it is not, you have either overspent or underspent. For more information on over- and underspending, see the Questions and Answers section that follows. All figures should balance horizontally and vertically across all columns.
8. Calculate your Monthly Forecasts / Actual Expenditures by recording your Actual expenditures for all quarters (broken down monthly). The sum total of this row must equal your total project budget.
9. Complete the Other box located at the bottom left of the form, itemizing any actual expenses reported in the Other budget line.
10. Have the Cashflow signed by the authorized person within your organization.
11. Make a copy of the Cashflow for your records and submit! Remember that you can send an advance copy of your Cashflow by fax, but the original must be sent to Health Canada.

Questions and Answer

The above quarter-by-quarter description of how to complete the Cashflow form covers all the basics. The following frequently asked questions deal with some of the additional issues that may come up from time to time.

• What happens if we're late in submitting our Cashflow?
  Any delay in submitting the Cashflow will delay the release of funds to your project.
• What happens if we overspend?
  If you overspend in any of the first three quarters of the fiscal year, simply reduced your Planned spending amounts for the quarters to come. If, at the end of the fourth quarter, you find you've overspent, your organization will be responsible for paying for the extra expenditures out of its own monies.
• What happens if we underspend?
  If you underspend in any of the first three quarters of the fiscal year, you can carry the unspent monies over into the quarters to come. However you cannot carry unspent monies over from one fiscal year to the next, so any adjustments must be made within the same fiscal year. If you end the fiscal year having underspent, you will be required to return the excess funds to the Receiver General of Canada.
• Can we transfer funds between categories?
  Yes, but some transfers required prior approval from Health Canada. Simply follow the guidelines set out in your Financial Management Guide or contact your Health Canada Program Consultant for further details.
• Should we report in-kind contributions?
  While in-kind contributions aren't accounted for on the Cashflow -- because no cash is attached to them -- they should be listed on a separate sheet and included when you file for the quarter. If your project receives in-kind contributions, refer to your Financial Management Guide for the details on proper reporting.
• What if we find out we've made a mistake reporting our Actual
  expenditures in a previous quarter?
  You can change any previous Actual amount to correct a mistake or omission in a previously submitted Cashflow. Make sure you make the change in both the past quarter Actual column and in the Monthly Forecasts / Actual Expenditures row. Your adjustments to future Planned amounts -- to compensate for the change -- must also be recorded. This makes sure that all your totals continue to balance. While you can change past Actual amounts, you cannot change a previous quarter's Planned amounts. Any changes to past Actual amounts should be highlighted to ensure that they are immediately apparent to anyone reviewing the Cashflow.