Quarterly Financial Report — Quarter ended June 30, 2015
Statement outlining results, risks and significant changes in operations, personnel, and programs
- Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
- Risks and Uncertainties
- Significant Changes in Relation to Operations, Personnel and Programs
- Statement of Authorities (unaudited)
- Table 1: Departmental Budgetary Expenditures by Standard Object (unaudited)
This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board Accounting Standard 1.3. This report should be read in conjunction with the 2015–16 Main Estimates. This quarterly report has not been subject to an external audit or review.
Authority, Mandate & Program Activities
As Canada's most populous region—home to more than 12.7 million residents living in 288 communities—southern Ontario is a key contributor to the Canadian economy. The Government of Canada created the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) in 2009 as part of Canada's Economic Action Plan. FedDev Ontario works with communities, businesses and not‑for‑profit organizations in southern Ontario to actively promote the region and build a strong foundation of investment and partnerships to help secure Canada's long‑term prosperity.
Through the support of businesses and organizations, FedDev Ontario is able to advance innovative technologies and leverage community capacity to develop regionally‑based economic solutions. FedDev Ontario works as a co‑investor, convenor, champion and delivery agent and intentionally directs its resources to activities with the greatest regional impacts.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes FedDev Ontario's spending authorities granted by Parliament and those used by FedDev Ontario—consistent with the Main Estimates for the 2015–16 fiscal year. This quarterly report has been prepared using a special‑purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.
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.
FedDev Ontario uses the full accrual method of accounting to prepare and present its annual financial statements that are part of its performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of Fiscal Quarter and Fiscal Year‑to‑Date (YTD) Results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended .
Planned departmental spending in fiscal year 2015–16 totals $215.3 million, an $8.5 million increase over that available at the close of the first quarter in the 2014–15 fiscal year. This comprises an $8.6 million increase in program authorities and $0.1 million decrease in operating authorities.
The decrease of $0.1 million in operating authorities is a result of changes to the administration of the Ontario Federal Council. The $8.6 million increase in program authorities is the result of an increase to the Advanced Manufacturing Fund ($12.0 million) and decrease to the Southern Ontario Prosperity Initiatives ($3.4 million), both representing funding that was reprofiled from 2014–15 to 2015–16.
Over 85 percent of FedDev Ontario's planned spending is allocated to program authorities (grants and contributions). The remaining 15 percent is used to fund internal support services, such as communications, policy development, finance and human resources. This funding is also used to support FedDev Ontario's efforts as a convener and champion within southern Ontario.
2.2 Expenditure Analysis
In the first quarter of the 2015–16 fiscal year, total budgetary expenditures were $21.1 million compared to $6.5 million reported in the same period of 2014–15. This represents a year‑over‑year increase of $14.6 million, or 225 percent.
Quarterly spending includes $15.2 million on programs and $5.9 million on operating expenditures. Spending on operating costs has decreased slightly compared to $6.4 million for the same period in 2014–15 and program expenditures have increased by $15.1 million.
Statement of Departmental Budgetary Expenditures by Standard Object
The following provides additional analysis of key variances at the Standard Object level.
Used During the Quarter
Spending on transfer payments was $15.2 million in the first quarter of 2015–16, compared to $0.1 million in the same quarter of 2014–15. The reason for the variance is that the first quarter of 2014–15 was the beginning of the Agency's second mandate: the project intake cycle for the new suite of programming had just opened and there were very few applicants that had been approved for funding and that had submitted expenditure claims by the end of that quarter. The higher level of expenditures recorded in the first quarter of 2015–16 reflects the steady growth in the number of applications that have been approved for funding in the year since the new intake opened, many of whom submitted project‑related expense claims this quarter.
Personnel‑related expenditures totaled $5.4 million; remaining unchanged from the same period in 2014–15.
The following Standard Objects have relatively low expenditures, so small variances in the dollar value of spending will result in large percentage variances. This is anticipated to normalize during the annual cycle.
There is a year‑over‑year decrease in expenditures related to rentals ($9,000 or 60 percent) which is related to the timing of the billing cycle and should normalize in future quarters.
During the first quarter of 2015–16, expenditures increased for repair and maintenance ($34,000 or 486 percent), acquisition of machinery and equipment ($62,000 or 1,033 percent) and utilities and materials ($4,000 or 44 percent). These increases are primarily attributed to FedDev Ontario's headquarters relocation to Waterloo and the costs associated with fitting up the new office space.
Transportation and communications expenditures are consistent with the previous year. Professional and special services expenditures have increased by $127,000, or 76 percent, which is mostly driven by the timing of multi‑year charges from other government departments and costs associated with the office relocation.
Other subsidies and payments expenditures have decreased by $649,000, or 101 percent, due to increased previous year spending related to the implementation of pay in arrears by the Government of Canada.
3. Risks and Uncertainties
FedDev Ontario is actively managing the risks identified in the previous year related to the expenditure of transfer payment authorities. For example, a strong system of budgeting, forecasting and controls is in place to help mitigate financial risks relating to the Agency's funding authorities.
4. Significant Changes in Relation to Operations, Personnel and Programs
On , the Government of Canada launched the Canada 150 Community Infrastructure Program (CIP 150), with FedDev Ontario delivering the southern Ontario portion of up to $44.4 million over two years. During the first quarter, FedDev Ontario allocated resources to develop the program and launch the application intake, receiving more than 1,100 applications
During the first quarter of 2015–16 FedDev Ontario completed the relocation of its headquarters to 139 Northfield Drive West in Waterloo, Ontario.
Subsequent to the quarter-end, Nancy Horsman was appointed as FedDev Ontario's President effective .
Approval by Senior Officials
Original signed by
Original signed by
Chief Financial Officer
Statement of Authorities (unaudited)
|Fiscal Year 2015–16
(in thousands of dollars)
|Fiscal Year 2014–15
(in thousands of dollars)
|Total available for use for the year ending March 31, 2016Footnote 1||Used during the quarter ended June 30, 2015||Year to date used at quarter-end||Total available for use for the year ending March 31, 2015Footnote 1||Used during the quarter ended June 30, 2014||Year to date used at quarter-end|
|Vote 50—Net Operating Expenditures||25,859||5,123||5,123||26,037||5,619||5,619|
|Vote 55—Grants and Contributions||186,240||15,214||15,214||177,632||79||79|
|Budgetary statutory authorities:|
|Employee benefit plans||3,151||788||788||3,093||773||773|
|Minister of State—car allowance||2||1||1||2||1||1|
|Total budgetary authorities||215,252||21,126||21,126||206,764||6,472||6,472|
Table 1: Departmental budgetary expenditures by Standard Object (unaudited)
|Fiscal Year 2015-16
(in thousands of dollars)
|Fiscal Year 2014-15
(in thousands of dollars)
|Planned expenditures for the year ending March 31, 2016Footnote 1||Used during the quarter ended June 30, 2015||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2015Footnote 1||Used during the quarter ended June 30, 2014||Year to date used at quarter-end|
|Transportation and communications||943||110||110||847||112||112|
|Professional and special services||4,458||295||295||5,671||168||168|
|Repair and maintenance||570||41||41||131||7||7|
|Utilities, materials and supplies||124||13||13||74||9||9|
|Acquisition of land, buildings, and works||36||-||-||5||-||-|
|Acquisition of machinery and equipment||349||68||68||200||6||6|
|Other subsidies and payments||21||(5)||(5)||34||644||644|
|Total budgetary expenditures||215,252||21,126||21,126||206,764||6,472||6,472|
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