2017-2018 Future-Oriented Statement of Operations (Unaudited) Public Health Agency of Canada

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Date published: 2017-02-20

Public Health Agency of Canada
Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31
(in dollars)
  Forecast Results 2016–2017 Planned Results 2017–2018
Expenses
Public Health Infrastructure $ 121,768,076 $ 122,459,069
Health Promotion and Disease Prevention 315,297,172 316,786,800
Health Security 76,629,776 67,270,728
Internal Services 104,126,832 94,620,454
Total expenses 617,821,856 601,137,051
Revenues
Sales of goods and services
Rights and Privileges 41,607 48,475
Services of a non-regulatory nature 14,067,618 14,050,695
Lease and use of public property 53,657 29,356
Interest 10,813 8,993
Other 40,081 40,611
Revenues earned on behalf of Government (238,458) (201,358)
Total revenues 13,975,318 13,976,772
Net cost of operations before government funding and transfers $ 603,846,538  $ 587,160,279

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 the Public Health Agency of Canada’s (the Agency) plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2016-17 is based on actual results as at December 31, 2016 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2017-18.

The main assumptions underlying the forecasts are as follows:

  • The Agency’s activities will remain substantially the same as in the previous year.
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.

These assumptions are made as at December 31, 2016.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2016-17 and for 2017-18, 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, the Agency 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:

  • the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect the amount of revenue earned; and
  • 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, the Agency 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 2016-17, which 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:

(a) Expenses

Expenses are recorded on an accrual basis.

Expenses for the Agency's operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued and expenses are recorded as the benefits are earned by employees under their terms of employment.

Transfer payments are recorded as expenses when the recipients  have met the eligibility criteria and the transfers are authorized by March 31. In the case of  transfers that do not form part of an existing program, the transfers are considered to be authorized when the government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, and provision for valuation on advances, or liabilities, including contingent liabilities, to the extent the future event is likely to occur and a reasonable estimate can be made.

Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

(b) Revenues

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided the Agency has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Other 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 the Agency’s liabilities. Although the deputy head is expected to maintain accounting control, 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 Agency's gross revenues.

4. Parliamentary authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency 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 Agency 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 dollars)
  Forecast Results 2016–2017 Planned Results 2017–2018
Net cost of operations before government funding and transfers $ 603,846,538 $ 587,160,279
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (15,164,716) (14,825,242)
Loss on disposal of tangible capital assets (301,846) (63,289)
Services provided without charge by other government departments (24,795,833) (24,682,775)
Decrease (increase) in vacation pay and compensatory leave 202,510 (161,673)
Decrease (increase) in employee future benefits 364,173 371,457
Refund/adjustment of prior years' expenditures 3,867,085 3,524,349
Statutory spending authority equivalent to revenues earned 13,412,742 13,412,742
Other (829) 14
Total items affecting net cost of operations but not affecting authorities (22,416,714) (22,424,417)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 6,503,695 7,199,069
Proceeds from disposal of Crown assets 39,704 40,316
Total items not affecting net cost of operations but affecting authorities 6,543,399 7,239,385
Requested authorities $587,973,223 $571,975,247
(b) Authorities requested
(in dollars)
  Forecast Results 2016–2017 Planned Results 2017–2018
Authorities requested:
Vote 1 - Operating expenditures $ 341,219,224 $ 322,134,984
Vote 5 - Capital expenditures 6,503,695 7,199,069
Vote 10 - Grants and contributions 195,848,623 200,927,114
Statutory amounts 44,401,681 41,714,080
Requested authorities $ 587,973,223 $571,975,247
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