Archived — FedDev Ontario Financial Statements (Unaudited) —
For the Year Ended March 31, 2013

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Federal Economic Development Agency for Southern Ontario

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013, and all information contained in these statements rests with the management of the Federal Economic Development Agency for Southern Ontario. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgement, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Federal Economic Development Agency for Southern Ontario's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Federal Economic Development Agency for Southern Ontario's Departmental Performance Report, is consistent with these statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Federal Economic Development Agency for Southern Ontario and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The financial statements of the Federal Economic Development Agency for Southern Ontario have not been audited.

The Agency will be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to the Treasury Board Policy on Internal Control. In the interim, the Agency has undertaken a risk-based assessment of the system of ICFR for the year ended March 31, 2013, in accordance with the Treasury Board Policy on Internal Control, and the action plan are summarized in the annex.

space to insert signature
Karen Ellis
President
Signed at Kitchener, Ontario
August 27, 2013

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Linda Cousineau, PhD
Chief Financial Officer

 

Federal Economic Development Agency for Southern Ontario
Statement of Financial Position (Unaudited)
As at March 31, 2013
(in thousands of dollars)
  2013 2012
Liabilities
Accounts payable and accrued liabilities (note 4) 118,355 109,130
Vacation pay and compensatory leave 909 784
Employee future benefits (note 5) 2,201 2,433
Total gross liabilities 121,465 112,347
Total net liabilities 121,465 112,347
Financial assets
Due from Consolidated Revenue Fund 117,832 108,604
Accounts receivable and advances (note 6) 1,286 615
Loans (note 7) 120,163 84,217
Total gross financial assets 239,281 193,436
Financial assets held on behalf of Government
Loans receivable (note 7) (120,163) (84,217)
Total financial assets held on behalf of Government (120,163) (84,217)
Total net financial assets 119,118 109,219
Departmental net debt (2,347) (3,128)
Non-financial assets
Prepaid Expenses 13 0
Tangible capital assets (note 9) 188 183
Total non-financial assets 201 183
Departmental net financial position (2,146) (2,945)
The accompanying notes form an integral part of these financial statements.

space to insert signature
Karen Ellis
President
Signed at Kitchener, Ontario
August 27, 2013

space to insert signature
Linda Cousineau, PhD
Chief Financial Officer

 

Federal Economic Development Agency for Southern Ontario
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31, 2013
(in thousands of dollars)
  2013 2012
Expenses
Community and Economic Development 19,060 68,745
Business Development 95,510 102,895
Technological Innovation 56,882 25,843
Internal Services 20,217 19,456
Expenses incurred on behalf of Government (18,275) (20,948)
Total Expenses 173,394 195,991
Revenues
Amortization of discounts 1,322 23
Gains on disposal of assets   3
Revenues earned on behalf of Government (note 11) (1,322) (23)
Total Revenues 0 3
Net cost of operations before funding and transfers 173,394 195,988
Government funding and transfers
Net cash provided by government 161,362 270,676
Change in due from Consolidated Revenue Fund 9,228 (78,551)
Services provided without charge by other government departments (note 10) 3,605 3,218
Transfer of assets to other government departments (2) 0
Net cost of operations after government funding and transfers (799) 645
Departmental net financial position — Beginning of year (2,945) (2,300)
Departmental net financial position — End of year (2,146) (2,945)

Segmented information (note 11)

The accompanying notes form an integral part of these financial statements.

Federal Economic Development Agency for Southern Ontario
Statement of Change in Departmental Net Debt
(Unaudited)
As at March 31, 2013
(in thousands of dollars)
  2013 2012
Net cost of operations after government funding (799) 645
Change due to tangible capital assets
Acquisition of tangible capital assets 50 50
Amortization of tangible capital assets (43) (43)
Net gain on disposal of tangible capital assets including adjustments 0 3
Transfer to OGD (2) 0
Proceeds from disposal of tangible capital assets 0 (3)
Total change due to tangible capital assets 5 7
Change due to prepaid expenses 13 0
Net decrease in departmental net debt (781) 652
Departmental net debt — Beginning of year 3,128 2,476
Departmental net debt — End of year 2,347 3,128
The accompanying notes form an integral part of these financial statements.
Federal Economic Development Agency for Southern Ontario
Statement of Cash Flows
(Unaudited)
For Year Ended March 31, 2013
(in thousands of dollars)
  2013 2012
Operating Activities
Net cost of operations before government funding and transfers 173,394 195,988
Non cash items:
Amortization of tangible capital assets (43) (43)
Gain (loss) on disposal of capital assets 0 3
Services provided without charge by other government departments (3,605) (3,218)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances 671 (524)
Increase (decrease) in prepaid expenses 13 0
Decrease (increase) in accounts payable and accrued liabilities (9,225) 78,098
Decrease (increase) in vacation pay and compensatory leave (125) (96)
Decrease (increase) in future employee benefits 232 421
Cash used in operating activities 161,312 270,629
Capital investing activities
Acquisitions of tangible capital assets 50 50
Proceeds from sale of tangible capital assets 0 (3)
Cash used in capital investing activities 50 47
Net cash provided by the Government of Canada 161,362 270,676
The accompanying notes form an integral part of these financial statements.
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Federal Economic Development Agency for Southern Ontario
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31, 2013

1. Authority and Objectives

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) was established in August 2009 as a separate organization under Schedule I.1 of the Financial Administration Act.

FedDev Ontario is responsible for responding to southern Ontario's economic challenges to help restore the region to a position of prosperity and place southern Ontario as an important driver in building a stronger Canadian economy.

To fulfill its mandate, FedDev Ontario supports the competitiveness, innovation, and diversification of southern Ontario's economy by: delivering strategic investments to businesses, not-for-profit organizations and communities; establishing and strengthening collaborative partnerships with key economic stakeholders; and representing the region's interests at the federal and national level.

FedDev Ontario focused its efforts in 2012–13 on four program activity areas: technological innovation; business development; community economic development; and internal services. Through these program activities the Agency continues to deliver key programs and services to individuals, businesses, communities, and other key stakeholders across southern Ontario and strengthen its profile as a viable partner in economic development.

Technological Innovation

This program activity supports the southern Ontario economy to be more innovative by creating new products, services, processes and/or markets so as to contribute to the region's competitiveness. This is achieved by: encouraging the region's labour force to be more innovative; focusing on key emerging sectors; and by strengthening linkages between the region's businesses (especially small- and medium-sized enterprises) and its post-secondary institutions. These are the elements necessary to improve the region's productivity, accelerate growth and maintain and enhance the region's living standards in the context of a global innovative economy. Transfer payments in support of this program are made through a variety of initiatives under the authority of the Southern Ontario Development Program (SODP) through the administration of contribution agreements with businesses, not-for-profit organizations, and post-secondary institutions.

Business Development

This program activity supports the 360,000 businesses (especially small- and medium-sized enterprises) in southern Ontario in their efforts to drive competitiveness by providing funding to encourage the creation of start-up companies, helping existing businesses to expand and helping companies improve their productivity. Transfer payments in support of this program are made through a variety of Southern Ontario Advantage (SOA) initiatives under the authority of the SODP through the administration of contribution agreements with businesses, not-for-profit organizations, and post-secondary institutions.

Community Economic Development

This program activity supports the 288 communities (small and large, rural and urban, Francophone and Aboriginal) in southern Ontario that are home to 12.4 million residents. These communities play an important role in enhancing southern Ontario's economic competitiveness and the long-term prosperity of the region. Southern Ontario depends on communities that can attract the best talent and compete for investment as dynamic centres of commerce and learning. Strong communities contribute to a prosperous southern Ontario. Through this program activity, the Agency supports communities and regions throughout southern Ontario to identify local solutions to local challenges and opportunities. Strong, safe and modern communities are essential building blocks for the region's competitiveness and long-term prosperity.

FedDev Ontario continues to work with others, including Infrastructure Canada, the province of Ontario and communities, to support the infrastructure needs within southern Ontario. Transfer payments in support of this program are made through a variety of initiatives under the authority of the Community Futures Program, the Economic Development Initiative, the Eastern Ontario Development Program, the Community Infrastructure Improvement Fund and infrastructure programming like the Building Canada Fund. The Agency will support this program activity through the administration of contribution agreements with businesses, not-for-profit organizations, post-secondary institutions and municipalities.

Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

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2. Summary of Significant Accounting Policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from the Canadians public sector account standards.

Significant accounting policies are as follows:

  1. Parliamentary authorities — The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to FedDev Ontario do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012–13 Report on Plans and Priorities.
  2. Net Cash Provided by Government — FedDev Ontario operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by FedDev Ontario is deposited to the CRF, and all cash disbursements made by FedDev Ontario are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
  3. Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that FedDev Ontario is entitled to draw from the CRF without further appropriations to discharge its liabilities.
  4. Revenues:

    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 FedDev Ontario's liabilities. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding 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 in reduction of the entity's gross revenues.

  5. Expenses — Expenses are recorded on the accrual basis:

    Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

    Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

    Services provided without charge by other government departments for accommodation, and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

  6. Employee future benefits:
    1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government. FedDev Ontario's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. FedDev Ontario's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
    2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the government as a whole.
  7. Accounts and loans receivable are stated at the lower of cost and net recoverable value. However, when the terms of the loans are concessionary, such as those provided with a low or no interest clause, they are recorded at their estimated present value. A portion of the unamortized discount is recorded as revenue each year to reflect the change in the present value of the loans outstanding. Transfer payments that are unconditionally repayable are recognized as loans receivable. A valuation allowance is recorded for accounts and loans receivable where recovery is considered uncertain.
  8. Tangible capital assets — All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. FedDev Ontario does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
    Table 2i. Tangible capital assets
    Asset class Amortization period
    Computer Hardware 4 years
    Machinery and Equipment 10 years
    Vehicles 3 to 7 years
  9. Measurement uncertainty — The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
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3. Parliamentary Authorities

FedDev Ontario receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, FedDev Ontario has different net results of operations for the year on a government funding basis than on an accrual basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to current year authorities used

Reconciliation of net cost of operations to current year authorities used
  2013 2012
(in thousands of dollars)
Net cost of operations before government funding and transfers 173,394 195,988
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (43) (43)
Gain (loss) on disposal of tangible capital assets 0 3
Services provided without charge by other government departments (3,605) (3,218)
Increase in vacation pay and compensatory leave (125) (96)
Decrease in employee future benefits 232 421
Unamortized discount 4,333 (14,317)
Refund of prior years expenditures 1,133 841
Refunds of previous year's accounts payable 5,312 9,488
Other (18) 98
Total items affecting net cost of operations but not affecting authorities 7,219 (6,823)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 50 50
Increase in prepaid expenses 13 0
Advances 2 0
Loans issued on behalf of government 61,044 41,245
Total items not affecting net cost of operations but affecting authorities 61,109 41,295
Current year authorities used 241,722 230,460

b) Authorities provided and used

Authorities provided and used
  2013 2012
(in thousands of dollars)
Authorities provided:
Vote 50 — Operating Expenditures 27,825 31,304
Vote 55 — Contributions 231,948 244,568
Statutory amounts
Employee Benefit Plan 3,033 2,854
Less:
Authorities available for future years 0 (3)
Lapsed: Operating (1,179) (3,800)
Lapsed: Contributions (19,905) (44,463)
Current year authorities used 241,722 230,460
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4. Accounts Payable and Accrued Liabilities

The following table presents details of FedDev Ontario's accounts payable and accrued liabilities:

Accounts payable and accrued liabilities
  2013 2012
(in thousands of dollars)
Accounts payable — Other government departments and agencies 107 461
Accounts payable — External parties 118,137 108,560
Total accounts payable 118,244 109,021
Accrued liabilities 111 109
Total accounts payable and accrued liabilities 118,355 109,130
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5. Employee Future Benefits

a) Pension benefits

FedDev Ontario's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The 2012–13 expense amounts to $2,724,108 ($2,565,461 in 2011–12 — restated), which represents approximately 1.7 times (1.8 times in 2011–12) the contributions by employees.

The Department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

b) Severance benefits

The Department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Severance benefits
  2013 2012
(in thousands of dollars)
Accrued benefit obligation — Beginning of year 2,433 2,854
Expense for the year (47) 251
Benefits paid during the year (185) (672)
Accrued benefit obligation — End of year 2,201 2,433
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6. Accounts Receivable and Advances

The following table presents details of FedDev Ontario's accounts receivable and advances balances:

Accounts receivable and advances
  2013 2012
(in thousands of dollars)
Receivables — Other government departments and agencies 524 524
Receivables — External parties 757 87
Employee advances 5 4
Subtotal 1,286 615
Net accounts receivable 1,286 615
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7. Loans Receivable

The following table presents details of FedDev Ontario's loans and transfer payments recoverable balances:

Loans receivable
  2013 2012
(in thousands of dollars)
Restated
(note 18)
Loans receivable 166,451 119,459
Less: Unamortized discount (8,639) (14,294)
Subtotal 157,812 105,165
Less: Allowance for uncollectibility (37,649) (20,948)
Gross loans receivable 120,163 84,217
Loans held on behalf of Government (120,163) (84,217)
Net Loans Receivable 0 0

a) Loans receivable from unconditionally repayable contributions

The loans receivable portfolio consists of 239 non-interest bearing loans issued in the years from 2009 to 2013 with prescribed annual repayment terms. The loans are recorded at their discounted net present values using market interest rates at the time of the loans. An allowance of $37,648,695 has been recorded.

Unconditionally repayable contributions relate to contributions made to outside parties that must be repaid without qualification.

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8. Contractual Obligations

The nature of FedDev Ontario's activities can result in some large multi-year contracts and obligations whereby FedDev Ontario will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual Obligations
  2014 2015 2016 2017 2018 and
thereafter
Total
(in thousands
of dollars)
Transfer payments 176,842     9,641   186,483
Total 176,842     9,641   186,483
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9. Tangible Capital Assets
(in thousands of dollars)

Tangible Capital Assets (in thousands of dollars)
Capital Asset
Class
Cost Accumulated
Amortization
Net Book Value
Opening
Balance
Acquisi-
tions
Disposals
and
Write-Offs
Closing
Balance
Opening
Balance
Amorti-
zation
Disposals
and
Write-Offs
Closing
Balance
2013 2012
Machinery and
Equipment
$41 $0 $0 $41 $4 $4 $0 $8 $33 $37
Vehicles 310 50 0 360 166 39 0 205 155 144
Computer
hardware
10 0 (10) 0 8 0 (8) 0 0 2
Total $361 $50 $10 $401 $178 $43 $8 $213 $188 $183
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10. Related Party Transactions

FedDev Ontario is related as a result of common ownership to all government departments, agencies, and Crown corporations. FedDev Ontario enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the FedDev Ontario has an agreement with the Department of Industry related to the provision of finance and administration services. During the year, FedDev Ontario received common services which were obtained without charge from other government departments as disclosed below.

(a) Common services provided without charge by other government departments

During the year, FedDev Ontario received services without charge from certain common service organizations, related to accommodation services and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in FedDev Ontario's Statement of Operations and Departmental Net Financial Position as follows:

Common services provided without charge by other government departments (in thousands of dollars)
  2013 2012
Employer's contributions to the health and dental insurance plan 1,574 1,412
Accommodation 2,031 1,806
Total 3,605 3,218

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in FedDev Ontario's Statement of Operations and Departmental Net Financial Position.

(b) Administration of programs on behalf of other government departments

Under a Memorandum of Understanding signed with Infrastructure Canada on August 9, 2009, FedDev Ontario administers four programs. During the year, the Agency incurred expenses of $57,221,776 on behalf of Infrastructure Canada. These expenses are reflected in the financial statements of Infrastructure Canada and are not recorded in these financial statements.

Administration of programs on behalf of other government departments (in thousands of dollars)
  2013 2012
Canada Strategic Infrastructure Fund — Infrastructure Canada 0 35,378
Canada-Ontario Municipal Rural Infrastructure Fund — Infrastructure Canada 814 8,000
Municipal Rural Infrastructure Fund — Infrastructure Canada 1,228 6,500
Building Canada Fund — Infrastructure Canada 55,180 145,240
Total 57,222 195,118
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11. Segmented Information
(in thousands of dollars)

Presentation by segment is based on FedDev Ontario's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program, by major object of expense and by major type of revenue. The segment results for the period are as follows:

Segmented Information (in thousands of dollars)
Expenses Community
Economic
Development
Business
Development
Technological
Innovation
Internal
Services
2013
Total
2012
Total
Transfer payments
Economic Action Plan         0 29,831
Non — Economic Action Plan 26,518 62,476 51,619 0 140,613 133,311
Total transfer payments 26,518 62,476 51,619 0 140,613 163,142
Operating expenses
Salaries and employee benefits 3,926 2,303 4,536 12,800 23,565 22,624
Professional and special services 91 244 206 2,854 3,395 5,993
Accommodation 337 209 369 1,116 2,031 1,807
Travel 75 71 109 1,016 1,271 976
Amortization of tangible capital assets 9 0 0 34 43 43
Communication 2 1 3 331 337 399
Furniture and equipment 1 3 19 637 660 172
Equipment rental and maintenance 0 0 0 21 21 160
Rental 4 3 4 2,013 2,024 789
Utilities, materials and supplies 15 5 14 90 124 187
Postage 0 0 0 24 24 28
Bad debt expense (11,920) 30,195 0 0 18,275 20,948
Other 2 0 3 (719) (714) (329)
Expenses incurred on behalf of Government 11,920 (30,195) 0 0 (18,275) (20,948)
Total operating expenses 4,462 2,839 5,263 20,217 32,781 32,849
Total expenses 30,980 65,315 56,882 20,217 173,394 195,991
Revenues
Amortization of discounts 216 1,106 0 0 1,322 23
Gains on disposals of assets 0 0 0 0 0 3
Revenues earned on behalf of Government (216) (1,106) 0 (0) (1,322) (23)
Total revenues 0 0 0 0 0 3
Net cost of operations before government funding and transfers 30,980 65,315 56,882 20,217 173,394 195,988

12. Comparative Information

Comparative figures have been reclassified to conform to the current year's presentation.

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Summary of the Assessment of Effectiveness of the Systems of Internal Control Over Financial Reporting and the Action Plan of the Federal Economic Development Agency for Southern Ontario for Fiscal Year 2012–13 (Unaudited)

Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting (unaudited)

1. Introduction

In support of an effective system of internal control, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) annually assesses the performance of its financial controls to ensure that:

FedDev Ontario will leverage the results of the periodic core control audits performed by the Office of the Comptroller General. Below is a summary of the results of the assessment conducted during fiscal year 2012–13.

2. Assessment results during fiscal year 2012–13

FedDev Ontario performed an audit to test the Agency's operating effectiveness of internal controls in key areas as follows:

Other cycles were also examined, including entity level controls, payroll and information technology (general and business controls).

For the most part, controls related to payment for goods and services and payment authority were functioning well and form an adequate basis for the Agency's system of internal control. Some adjustments to reinforce segregation of duties were identified and addressed during the fiscal year.

3. Assessment plan

FedDev Ontario will continue to monitor the performance of its system of internal control, with a focus on the core controls related to financial transactions. The Agency will address items identified for remedial action.

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