Public Health Agency of Canada Quarterly Financial Report - For the quarter ended September 30, 2018

Table of contents

• 1.0 Introduction
  • 1.1 Authority, Mandate and Program
  • 1.2 Basis of Presentation
• 2.0 Highlights of Fiscal Quarter Results
  • 2.1 Significant Changes to Authorities
    • Vote 1 – Operating Expenditures
    • Vote 5 – Capital Expenditures
    • Vote 10 - Grants and Contributions (G&C)
  • 2.2 Significant Changes to Expenditures
    • Vote 1 – Operating Expenditures
    • Vote 10 - Grants and Contributions (G&C)
• 3.0 Risks and Uncertainty
• 4.0 Significant Changes in Relation to Operations, Personnel and Programs
• 5.0 Approval by Senior Officials
• 6.0 Statement of Authorities (unaudited)
• 7.0 Agency Budgetary Expenditures by Standard Object (unaudited)

1.0 Introduction

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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report.  This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates.  Please note that this quarterly financial report has not been subject to an external audit or review.

1.1 Authority, Mandate and Program

The Public Health Agency of Canada was created within the federal Health Portfolio in September 2004.  The core mandate of the Agency is to deliver on the Government of Canada's commitment to increase its focus on public health in order to help protect and improve the health and safety of all Canadians and to contribute to strengthening public health capacities across Canada. 

The Agency has the responsibility to:

• contribute to the prevention of disease and injury, and the promotion of health;
• enhance the quality and quantity of surveillance data and expand the knowledge of disease and injury in Canada;
• provide federal leadership and accountability in managing national public health events;
• strengthen intergovernmental collaboration on public health and facilitate national approaches to public health policy and planning;
• serve as a central point for sharing Canada's expertise with international partners and to translate international knowledge and approaches to inform and support Canada's public health priorities and programs.

The Agency aims to achieve a strategic outcome of protecting Canadians and empowering them to improve their health by providing strategic policy advice and support to the Minister of Health on a range of Core Responsibilities, including:

• Health Promotion and Chronic Disease Prevention;
• Infectious Disease Prevention and Control; and
• Health Security.

The Agency also delivers a number of grant and contribution programs related to these programs.

Further information on the mandate, roles, responsibilities and program of the Agency can be found in the 2018-19 Departmental Plans and the 2018-19 Main Estimates.

1.2 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting.  The accompanying Statement of Authorities (Section 6.0) includes the Agency's spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Agency consistent with the Main Estimates and Supplementary Estimates for the 2018-19 fiscal year.

The authority of Parliament is required before moneys can be spent by the Government.  Approvals 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.

The Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process.  However, the spending authorities voted by Parliament remain on an expenditure basis. 

2.0 Highlights of Fiscal Quarter Results

This section highlights the significant items that contributed to the net increase in resources available for the year, as well as a net increase in actual expenditures for the second quarter of 2018-19, ending September 30, 2018.

The following graph provides a comparison of the net budgetary authorities and expenditures as of September 30, 2017 and September 30, 2018 for the Department's combined Vote 1, Vote 5, Vote 10 and Statutory Votes.

Text description

The graph above provides a comparison of the net budgetary authorities and expenditures as of September 30, 2018 and September 30, 2017 for the Agency's combined Vote 1, Vote 5, Vote 10 and Statutory Votes. As at September 30, 2018, PHAC had a total of $679.4 million in authorities available for spending compared to $604.0 million on September 30, 2017. PHAC's expenditures as at September 30, 2018 were $361.0 million compared to $292.1 million on September 30, 2018.

As at September 30, 2018, the Agency had a total of $679.4 million in authorities available for spending compared to $604.0 million on September 30, 2017.  The Agency's year to date expenditures as at September 30, 2018 were $361.0 million compared to $292.1 million on September 30, 2017.  Both authorities and expenditures fluctuate as the year progresses to reflect additional funding received throughout the fiscal year. 

2.1 Significant Changes to Authorities

When compared to the second quarter of the previous fiscal year, the authorities available for spending for the year have increased by $75.4 million or 12%, from $604.0 million to $679.4 million.  This change in authorities is comprised of an increase in Vote 1 – Operating Expenditures ($5.5 million), a decrease in Vote 5 – Capital ($1.6 million) and an increase in Vote 10 - Grants and Contributions ($70.5 million) as well as an increase in Budgetary Statutory Authorities ($0.8 million).

Vote 1 – Operating Expenditures

The Agency's Vote 1 increased by $5.5 million or 2.0 %, mainly due to:

• Funding for Adapting to the Impacts of Climate Change;
• Funding related to Government advertising programs;
• Transfer from the Treasury Board Secretariat of Canada to the Public Health Agency of Canada for the Collective Bargaining Agreements;
• Funding for Canada's G7 Presidency in 2018 and hosting the Charlevoix Summit and supporting events;

Offset by:

• A decrease in funding profile to Acquire Medical Countermeasures for Smallpox and Anthrax Preparedness;
• An decrease in funding from the 2017-18 reprofile for Reinvestment of royalties from intellectual property.

Vote 5 – Capital Expenditures

The Agency's Vote 5 decreased by $1.6 million or 20 %, mainly due to:

• An decrease in funding for 2017-18 reprofile of Reinvestment of royalties from intellectual property; and
• A decrease in funding for the 2017-18 reprofile for Ebola Preparedness and Response Initiatives to protect Canadians at home and abroad.

Vote 10 - Grants and Contributions (G&C)

The Agency's Vote 10 increased by $70.5 million or 33 %, mainly due to:

• An increase in funding for the Healthy Seniors Pilot Project;
• An increase in funding for Strengthening the Canadian Drugs and Substances Strategy;

Offset by:

• A decrease due to the sunset of funding for the Indigenous Early Learning and Child Care Infrastructure and Programming.

2.2 Significant Changes to Expenditures

The second quarter expenditures increased by $90.4 million, or 66 %, in 2018-19, compared to 2017-18, from $137.0 million to $227.3 million. 

This overall increase in spending is mainly due to a:

• decrease in Vote 1 – Operating Expenditures of $7.9 million (from $104.4 million to $96.5 million); and
• an increase in Vote 10 - Grants and Contributions of $98.3 million (from $22.7 million to $121.0 million).

Vote 1 – Operating Expenditures

The Agency's Vote 1 second quarter 2018-19 expenditures decreased by $7.9 million over the same quarter in 2017-18 mainly due to retroactive salary payments made in 2017-18 for the current and previous year, offset with installment payments to Health Canada through the Shared Services Partnership Agreement.

Vote 10 - Grants and Contributions (G&C)

The Agency's Vote 10 second quarter 2018-19 expenditures increased by $98.3 million over the same quarter in 2017-18 mainly due to the timing of payments in the current quarter.

3.0 Risks and Uncertainty

The Public Health Agency of Canada's plans and commitments respond to, and are shaped by, changes in the domestic and global public health situation and outlook. The dominant financial risk faced by the Agency is the requirement to respond in the event of an outbreak of disease such as a pandemic influenza. During such a public health event, resources would be reallocated to support a response. The Government of Canada also has mechanisms in place for departments and agencies to access additional funds in emergency situations should they be required. The Agency relies on the skills and experience of its employees to detect, monitor and respond to changes in the health environment. The Agency also relies on close and effective collaborative relationships with local, provincial and global partners and stakeholders to ensure a coordinated response to urgent issues. The Agency continues to strengthen its preparation and response capabilities in order to prevent, detect and respond to public health events.

The Public Health Agency of Canada's Corporate Risk Profile provides a snapshot of the key corporate risks. The Agency monitors its corporate risks and associated risk responses to identify areas of opportunity and to reflect progress made in implementing measures to mitigate risk.

4.0 Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel and programs during this quarter.

5.0 Approval by Senior Officials

Approved by:

Dr. Siddika Mithani, President    
Public Health Agency of Canada            
Ottawa, Canada
Date:

Carlo Beaudoin, Chief Financial Officer
Public Health Agency of Canada            
Ottawa, Canada
Date:

6.0 Statement of Authorities (unaudited)

Public Health Agency of Canada

For the quarter ended September 30, 2018

STATEMENT OF AUTHORITIES (unaudited)
(in thousands of dollars)

	Fiscal year 2018-2019			Fiscal year 2017-2018
	Total available for use for the year ending March 31, 2019Appendix 6 Footnote *	Used during the quarter ended   September 30, 2018	Year to date used at quarter-end	Total available for use for the year ended March 31, 2018Appendix 6 Footnote *	Used during the quarter ended September 30, 2017	Year to date used at quarter-end
Vote 1 - Operating expenditures	343,743	96,451	150,775	338,210	104,385	162,121
Vote 5 - Capital expenditures	6,191	431	553	7,747	139	213
Vote 10 - Grants and contributions	286,843	120,992	192,838	216,327	22,736	112,945
(S) Contributions to employee benefit plans	29,072	7,268	14,536	28,261	7,066	14,131
(S) Spending of proceeds from the disposal of surplus Crown assets	89	12	43	65	12	22
(S) Spending of revenues pursuant to section 4.2 of the Department of Health Act	13,413	2,180	2,180	13,413	2,637	2,637
Total authorities	679,351	227,334	360,925	604,023	136,975	292,069
Appendix 6 Footnote * Includes only authorities available for use and granted by Parliament at quarter end. Appendix 6 Return to footnote * referrer

7.0 Agency Budgetary Expenditures by Standard Object (unaudited)

Public Health Agency of Canada

For the quarter ended September 30, 2018

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)

	Fiscal year 2018-2019			Fiscal year 2017-2018
	Planned expenditures for the year ending March 31, 2019	Expended during the quarter ended September 30, 2018	Year to date used at quarter-end	Planned expenditures for the year ending March 31, 2018	Expended during the quarter ended September 30, 2017	Year to date used at quarter-end
Expenditures:
Personnel	228,463	51,414	97,381	226,404	61,828	106,882
Transportation and communications	7,560	1,748	3,029	7,055	1,573	2,684
Information	16,797	1,269	1,539	14,992	2,236	2,406
Professional and special services	97,480	43,758	46,644	102,112	41,669	44,828
Rentals	2,818	919	1,980	2,665	1,209	1,940
Repair and maintenance	3,169	766	1,633	3,321	796	1,456
Utilities, materials and supplies	22,414	3,566	11,857	17,089	2,779	15,542
Acquisition of lands, buildings and works	0	9	25	0	3	3
Acquisition of machinery and equipment	12,061	861	1,486	12,663	620	1,169
Transfer payments	286,843	120,992	192,838	216,327	22,736	112,945
Other subsidies and payments	2,270	2,174	2,777	1,919	1,886	2,571
Total gross budgetary expenditures	679,875	227,476	361,189	604,547	137,335	292,426
Less revenues netted against expenditures:
Other Fees and Charges	0	0	0	0	0	0
Rights and Privileges	0	0	0	0	0	0
Services Non-Regulatory	524	142	264	524	360	357
Services Regulatory	0	0	0	0	0	0
Total Revenues netted against expenditures	524	142	264	524	360	357
Total net budgetary expenditures	679,351	227,334	360,925	604,023	136,975	292,069