Archived — FedDev Ontario Financial Statements (Unaudited) —
For the Year Ending March 31, 2014

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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, 2014, 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 Federal Economic Development Agency for Southern Ontario 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 Federal Economic Development Agency for Southern Ontario has initiated a risk‑based assessment of the system of ICFR in the year ended March 31, 2014, in accordance with Treasury Board Policy on Internal Control, and the action plan is summarized in Annex A.

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

Federal Economic Development Agency for Southern Ontario
Statement of Financial Position (Unaudited)
For Year Ended March 31, 2014
(in thousands of dollars)
  2014 2013
Financial assets
Due from Consolidated Revenue Fund 76,899 117,832
Accounts receivable and advances (note 6) 2,175 1,286
Loans Receivable (note 7) 124,132 120,163
Total financial assets 203,206 239,281
Financial assets held on behalf of Government
Loans receivable (note 7) (124,132) (120,163)
Total financial assets held on behalf of Government (124,132) (120,163)
Total net financial assets 79,074 119,118
Liabilities
Accounts payable and accrued liabilities (note 4) 76,971 118,355
Vacation pay and compensatory leave 1,076 909
Employee future benefits (note 5) 292 2,201
Total liabilities 78,339 121,465
Net financial asset 735 (2,347)
Non‑financial assets
Prepaid expenses 0 13
Tangible capital assets (note 9) 203 188
Total non­financial assets 203 201
Departmental net financial position 938 (2,146)
The accompanying notes form an integral part of these financial statements.
Federal Economic Development Agency for Southern Ontario
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31, 2014
(in thousands of dollars)
  2014
Planned Results
2014 2013
Expenses
Technological Innovation 63,380 54,253 56,882
Business Development 54,679 63,994 95,510
Community and Economic Development 55,688 73,703 19,060
Internal Services 16,285 19,862 20,217
Expenses incurred on behalf of Government (8,715) (7,190) (18,275)
Total expenses 181,317 204,622 173,394
Revenues
Amortization of discounts 2,666 73 1,322
Gains on disposal of assets 0 21 0
Other revenue 0 44 0
Revenues earned on behalf of Government (2,666) (117) (1,322)
Total revenues 0 21 0
Net cost of operations before funding and transfers 181,317 204,601 173,394
Government funding and transfers
Net cash provided by Government 196,100 244,862 161,362
Change in due from Consolidated Revenue Fund (17,758) (40,933) 9,228
Services provided without charge by OGDs (note 10) 3,553 3,756 3,605
Transfer of assets to other government departments 0 0 (2)
Net cost of operations after government funding and transfers (578) (3,084) (799)
Departmental net financial position – Beginning of year (2,079) (2,146) (2,945)
Departmental net financial position – End of year (1,501) 938 (2,146)
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 Financial Assets (Unaudited)
For Year Ended March 31, 2014
(in thousands of dollars)
  2014
Planned Results
2014 2013
Net cost of operations after government funding (578) (3,084) (799)
Change due to tangible capital assets
Acquisition of tangible capital assets 110 76 50
Amortization of tangible capital assets (57) (48) (43)
Net gain on disposal of tangible capital assets including adjustments
0 21 0
Proceeds from disposal of tangible capital assets 0 (34) 0
Transfer to OGD 0 0 (2)
Total change due to tangible capital assets 53 15 5
Change due to prepaid expenses (11) (13) 13
Net increase in net financial asset 536 3,082 781
Net financial asset – Beginning of year (2,283) (2,347) (3,128)
Net financial asset – End of year (1,747) 735 (2,347)
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, 2014
(in thousands of dollars)
  2014 2013
Operating activities
Net cost of operations before government funding and transfers 204,601 173,394
Non cash items:
Amortization of tangible capital assets (48) (43)
Gain (loss) on disposal of tangible capital assets 21 0
Services provided without charge by OGDs (note 10) (3,756) (3,605)
Variations in Statement of Financial Position
Increase in accounts receivable and advances 889 671
Increase (decrease) in prepaid expenses (13) 13
Decrease (increase) in accounts payable and accrued liabilities 41,384 (9,225)
Increase in vacation pay and compensatory leave (167) (125)
Decrease in future employee benefits 1,909 232
Cash used in operating activities 244,820 161,312
Capital investing activities
Acquisitions of tangible capital assets 76 50
Proceeds from sale of tangible capital assets (34) 0
Cash used in capital investing activities 42 50
Net cash provided by the Government of Canada 244,862 161,362
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, 2014

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, non‑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 2013–14 on four program areas: technological innovation; business development; community economic development; and internal services. Through these program areas, FedDev Ontario continues to deliver key programs and services to individuals, businesses, communities, and other key stakeholders across southern Ontario and strengthen its profile as a willing and capable partner in economic development.

2013–14 marked the final year of FedDev Ontario's first five‑year mandate. Budget 2013 renewed FedDev Ontario for another five years. As a result of this renewal, several new initiatives were launched to respond more effectively to the economic circumstances facing southern Ontario. Projects funded under the new Southern Ontario Prosperity Initiative (Investing in Business Innovation, Investing in Business Growth and Prosperity, Investing in Commercialization Partnerships, and Investing in Regional Diversification), the Advanced Manufacturing Fund, the renewal of the Eastern Ontario Development Program and the Economic Development Initiative, and other ongoing programs will be taken into account in next year's financial statements.

Technological Innovation

This program 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 small‑ and medium‑sized enterprises (SMEs) to be more innovative; focusing on key emerging sectors; and strengthening linkages between the region's businesses (especially SMEs) and its post‑secondary institutions. These are the elements necessary to improve the region's productivity and accelerate growth in the context of a global economy. Transfer payments in support of this program are made through a variety of Southern Ontario Advantage initiatives under the authority of the Southern Ontario Development Program through the administration of contribution agreements with businesses, not‑for‑profit organizations, and post‑secondary institutions.

Business Development

This program 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, (through access to capital - debt and equity financing, including venture and angel capital); help existing businesses expand; and help companies improve their productivity. Transfer payments in support of this program are made through a variety of Southern Ontario Advantage initiatives under the authority of the Southern Ontario Development Program through the administration of contribution agreements with businesses, not‑for‑profit organizations, and post‑secondary institutions.

Community Economic Development

This program supports the 288 communities (small and large, rural and urban and Francophone and Aboriginal) in southern Ontario that are home to 12.4 million residents. These communities play a key 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, and in turn, strong communities contribute to a prosperous southern Ontario. This program 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, and infrastructure programming such as Community Infrastructure Investment Fund (CIIF, which sunsetted and was not renewed) and the Building Canada Fund. FedDev Ontario will support this program through the administration of contribution agreements with businesses, not‑for‑profit organizations, post‑secondary institutions, and municipalities.

Internal Services

The Internal Services program supports all strategic outcomes and is common across government. 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.

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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 and in the Statement of 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 and the Statement of Change in Net Financial Assets are the amounts reported in the future‑oriented financial statements included in the 2013–14 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:

    Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

    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, 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:

    Estimated useful life of the asset
    Asset class Amortization period
    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 accounting 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
  2014 2013
(in thousands of dollars)
Net cost of operations before government funding and transfers 204,601 173,394
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (48) (43)
Gain (loss) on disposal of tangible capital assets 21 0
Services provided without charge by other government departments
(3,756) (3,605)
Increase in vacation pay and compensatory leave (167) (125)
Decrease in employee future benefits 1,909 232
Unamortized discount (7,791) 4,333
Refund of prior years expenditures 593 1,133
Refunds of previous year's accounts payable 5,594 5,312
Other 0 (18)
Total items affecting net cost of operations but not affecting authorities (3,645) 7,219
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 76 50
Increase (decrease) in prepaid expenses (13) 13
Advances (2) 2
Loans issued on behalf of government 33,263 61,044
Total items not affecting net cost of operations but affecting authorities 33,324 61,109
Current year authorities used 234,280 241,722

b) Authorities provided and used

Authorities provided and used
  2014 2013
(in thousands of dollars)
Authorities provided:
Vote 50 — Operating Expenditures 28,733 27,825
Vote 55 — Contributions 214,718 231,948
Statutory amounts  3,257 3,033
Less:
Authorities available for future years (34) 0
Lapsed: Operating (1,845) (1,179)
Lapsed: Contributions (10,549) (19,905)
Current year authorities used 234,280 241,722
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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
  2014 2013
(in thousands of dollars)
Accounts payable — Other government departments and agencies 228 107
Accounts payable — External parties 76,548 118,137
Total accounts payable 76,776 118,244
Accrued liabilities 195 111
Total accounts payable and accrued liabilities 76,971 118,355
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5. Employee Future Benefits

a) Pension benefits

FedDev Ontario's employees participate in the Public Service Pension Plan (the Plan), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two 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 FedDev Ontario contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada's Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2013–14 expense amounts to $2,886,053 ($2,724,108 in 2012–13). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012–13) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012–13) the employee contributions.

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.

b) Severance benefits

FedDev Ontario provides severance benefits to its employees based on eligibility, years of service and salary at termination. 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
  2014 2013
(in thousands of dollars)
Accrued benefit obligation — Beginning of year 2,201 2,433
Expense for the year (833) (47)
Benefits paid during the year (1,076) (185)
Accrued benefit obligation — End of year 292 2,201
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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
  2014 2013
(in thousands of dollars)
Receivables — Other government departments and agencies 67 524
Receivables — External parties 2,104 757
Employee advances 4 5
Net accounts receivable 2,175 1,286
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7. Loans Receivable

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

Loans receivable
  2014 2013
(in thousands of dollars)
Loans receivable 178,897 166,451
Less: Unamortized discount (11,622) (8,639)
Subtotal 167,275 157,812
Less: Allowance for uncollectibility (43,143) (37,649)
Gross loans receivable 124,132 120,163
Loans held on behalf of Government (124,132) (120,163)
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 2014 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 $43,143,385 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
  2015 2016 2017 Total
(in thousands of dollars)
Transfer payments 22,059 5,081 9,640 36,780
Total 22,059 5,081 9,640 36,780

The contractual obligations for 2015 and 2016 are related to nine projects under the Prosperity Initiative that have been extended beyond 2013–14 due to construction delays and other project related issues. Of these projects, six are being extended under the Investing in Business Growth and Productivity Initiative, and three are being extended under the Investing in Regional Diversification Initiative.

The 2017 contractual obligation is due to continued administration of the Brantford Brownfield Remediation project through the allocation of $9.6 million in funding to respond to community needs.

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9. Tangible Capital Assets

Tangible Capital Assets (in thousands of dollars)
  Cost
(in thousands of dollars)
Accumulated Amortization
(in thousands of dollars)
Net Book Value
(in thousands of dollars)
Capital Asset
Class
Opening
Balance
Acquisi-
tions
Disposals
and
Write‑Offs
Closing
Balance
Opening
Balance
Amorti-
zation
Disposals
and
Write‑Offs
Closing
Balance
2014 2013
Machinery and
Equipment
41 0 0 41 8 4 0 12 29 33
Vehicles 360 76 47 389 205 44 34 215 174 155
Total 401 76 47 430 213 48 34 227 203 188
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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, FedDev Ontario has an agreement with the Department of Industry Canada related to the provision of finance and administration services. During the year, FedDev Ontario received common services that 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
  2014 2013
(in thousands of dollars)
Employer's contributions to the health and dental insurance plan 1,511 1,574
Accommodation 2,245 2,031
Total 3,756 3,605

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 2013–14, FedDev Ontario incurred expenses of $15,280,266 ($57,221,776 in 2012–13) 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
  2014 2013
(in thousands of dollars)
Canada Strategic Infrastructure Fund — Infrastructure Canada 0 0
Canada‑Ontario Municipal Rural Infrastructure Fund — Infrastructure Canada 108 814
Municipal Rural Infrastructure Fund — Infrastructure Canada 30 1,228
Building Canada Fund — Infrastructure Canada 15,142 55,180
Total 15,280 57,222
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11. Segmented Information (in thousands of dollars)

Presentation by segment is based on FedDev Ontario's Program Alignment Architecture (PAA). 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 programs, 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 Technological Innovation Business Development Community Economic Development Internal Services 2014 Total 2013 Total
Transfer payments
Transfers to non-profit organizations
50,685 51,182 38,283 0 140,150 143,017
Transfers to Industry 0 2,760 0 0 2,760 (4,807)
Transfer to other levels of government
0 0 30,004 0 30,004 2,403
Total transfer payments 50,685 53,942 68,287 0 172,914 140,613
Operating expenses
Salaries and employee benefits
2,945 2,895 4,534 12,708 23,082 23,565
Professional and special services
161 40 42 4,799 5,042 3,395
Accommodation 376 236 390 1,243 2,245 2,031
Travel 57 43 66 614 780 1,271
Amortization 0 0 1 47 48 43
Communication 1 0 0 336 337 337
Furniture and equipment
2 4 4 331 341 660
Equipment repair and maintenance
2 0 0 17 19 21
Rental 9 0 0 364 373 2,024
Utilities, materials and supplies
13 2 19 87 121 124
Postage 0 0 0 15 15 24
Bad debt expense 0 6,831 359 0 7,190 18,275
Other operating expenses
2 1 1 (699) (695) (714)
Expenses incurred on behalf of Government
0 (6,831) (359) 0 (7,190) (18,275)
Total operating expenses 3,568 3,221 5,057 19,862 31,708 32,781
Total expenses 54,253 57,163 73,344 19,862 204,622 173,394
Revenues
Amortization of discounts
0 5 68 0 73 1,322
Net gains (losses) on disposal of assets
0 0 0 21 21 0
Other revenue 0 3 41 0 44 0
Revenues earned on behalf of Government
0 (8) (109) 0 (117) (1,322)
Total revenues 0 0 0 21 21 0
Net cost from continuing operations 54,253 57,163 73,344 19,841 204,601 173,394
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Annex A

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 2013–14.

2. Assessment results during fiscal year 2013–14

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 FedDev Ontario's system of internal control. Some adjustments to reinforce segregation of duties and information management 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.

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