Future-Oriented Statement of Operations for the Years Ending
March 31, 2018 and March 31, 2019

for the year ending March 31

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Statement of Management Responsibility

Management is responsible for the Future-Oriented Statement of Operations, including responsibility for the appropriateness of the assumptions on which this statement is prepared. This statement is based on the best information available and on assumptions adopted as at September 30, 2017 and reflects the plans described in the Departmental Plan.

This statement has not been subject to an external audit or review but has been shared with the Privy Council Office (PCO) Departmental Audit Committee and it reflects the committee members' comments.


Michael Wernick
Clerk of the Privy Council and
Secretary to the Cabinet


Ottawa, Canada
April 11, 2018

Mathew Shea
Assistant Deputy Minister
Corporate Services Branch
Chief Financial Officer

Ottawa, Canada
April 11, 2018

Future-Oriented Statement of Operations (unaudited)

(in thousands of dollars)
  Forecast Results
2017–18
Planned Results
2018–19
Expenses
Serve the Prime Minister and Cabinet 113,958 85,788
Internal Services 131,135 102,348
Total Expenses 245,093 188,136
Revenues
Miscellaneous revenues 14 25
Internal services support 201 1,085
Revenues earned on behalf of government (5) (5)
Total Revenues 210 1,105
Net cost of operations before government funding and transfers 244,883 187,031

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 2017–18 is based on actual results as at September 30, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2018–19.

The main assumptions underlying the forecasts are as follows:

  1. PCO's activities will change and can be mostly explained by:
    • A decrease related to spending on the Budget 2016 initiative for PCO; and
    • A decrease for the National Inquiry into Missing and Murdered Indigenous Women and Girls.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on forecasted or historical information.

These assumptions are made as at September 30, 2017.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2017–18 and for 2018–19, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, PCO 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:

  1. The timing and the amount of acquisitions and disposals of equipment, which may affect gains, losses and amortization expense;
  2. implementation of new collective agreements; and
  3. Other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, PCO will not be updating the 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 2011–12 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 accounting policies are as follows:

  1. Expenses

    PCO records expenses on an accrual basis.

    Transfer payments are recorded as expenses in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

    Other 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 provision of bad debts, inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.

  2. Revenues

    Miscellaneous revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

    Revenues that are non-respendable are not available to discharge PCO's liabilities. Although the Clerk of the Privy Council and Secretary to the Cabinet is expected to maintain accounting control, he 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 PCO's gross revenues.

4. Parliamentary authorities

PCO is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to PCO 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, PCO has different net costs 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
2017–18
Planned Results
2018–19
Net cost of operations before government funding and transfers 244,883 187,031
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (1,923) (2,185)
Gain on disposal of tangible capital assets 8 19
Services provided without charge by other government departments (24,071) (23,249)
Prepaid expenses previously charged to authorities (1,317) (1,138)
(Increase) decrease in vacation pay and compensatory leave (2,897) 711
(Increase) decrease in employee future benefits (752) 545
Refund of prior years’ expenditures 193 210
Other 20 -
Total items affecting net cost of operations but not affecting authorities (30,739) (25,087)
Adjustments for items not affecting net cost of operations but affecting authorities:
Increase (decrease) in inventory (1,685) -
Acquisition of tangible capital assets 10,741 5,262
Increase in prepaid expenses 1,390 1,159
Total items not affecting net cost of operations but affecting authorities 10,446 6,421
Requested authorities 224,590 168,365

b) Authorities requested

(in thousands of dollars)
  Forecast Results
2017–18
Planned Results
2018–19
Authorities requested
Vote 1: operating expenditures 209,655 152,017
Statutory amounts 17,443 16,367
Less:
Total authorities requested (8) (19)
Lapsed: Operating (2,500) -
Total authorities requested 224,590 168,365
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