Future-oriented statement of operations for the years ending March 31, 2020 and March 31, 2021

For the year ending March 31

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(in thousands of dollars)
  Forecast results
2019-20
Planned results
2020-21
Expenses
Serve the Prime Minister and Cabinet 83,547 88,604
Internal services 114,587 99,519
Total expenses 198,134 188,123
Revenues
Miscellaneous revenues 974 1,023
Internal services support 23 24
Revenues earned on behalf of government (12) (13)
Total revenues 985 1,034
Net cost of operations before government funding and transfers 197,149 187,089

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

Notes to the Future-Oriented Statement of Operations (unaudited)

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2019-20 is based on actual results as at December 15, 2019 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2020-21.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at December 15, 2019.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing the Future-Oriented Statement of Operations, the Privy Council Office has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:

After the Departmental Plan is tabled in Parliament, the Privy Council Office will not be updating forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

3. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2019-20, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant account policies are as follows:

  1. Expenses
    Expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.
  2. Revenues
    Other Revenues are recognized in the period giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the department’s liabilities. Although the deputy head is expected to maintain accounting control, he or she has no authority over the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the department’s gross revenues.

4. Parliamentary authorities

The department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the department has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to requested authorities (in thousands of dollars)
  Forecast results
2019-20
Planned results
2020-21
Net cost of operations before government funding and transfers 197,149 187,089
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (2,395) (2,111)
Gain (loss) on disposal of tangible capital assets (10) (12)
Services provided without charge by other government departments (20,900) (21,354)
Increase in vacation pay and compensatory leave (1,943) (1,860)
Increase in employee future benefits 237 (83)
Bad debt expense (37) (8)
Refund of prior years’ expenditures (1,328) (664)
Total items affecting net cost of operations but not affecting authorities (26,376) (26,092)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 4,468 5,006
Change in inventory 95 65
Change in prepaid expenses 50 55
Total items not affecting net cost of operations but affecting authorities 4,613 5,126
Requested authorities forecasted to be used 175,386 166,123
b) Authorities requested (in thousands of dollars)
  Forecast results
2019-20
Planned results
2020-21
Authorities requested:
Vote 1: operating expenditures 168,411 148,368
Statutory amounts 17,155 17,755
Total authorities provided/requested 185,566 166,123
Less: Estimated unused authorities and other adjustments (10,180) -
Requested authorities forecasted to be used 175,386 166,123

The authorities presented reflect current forecasts of statutory items; approved initiatives included in Estimates documents; and estimates of amounts to be allocated from Treasury Board Central Votes.

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