Statement outlining results, risks and significant changes in operations, personnel, and programs
- 1. Introduction
- 2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
- Statement of Authorities (unaudited)
- Table 1: Departmental budgetary expenditures by Standard Object (unaudited)
1. Introduction
This quarterly report has been prepared by management as required by section 65.1 of theFinancial 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 2017–18 Main Estimates. This quarterly report has not been subject to an external audit or review.
1.1 Authority, Mandate and Program Activities
The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is mandated to "strengthen southern Ontario's economic capacity for innovation, entrepreneurship and collaboration; and promote the development of a strong and diversified southern Ontario economy.”
Further details on FedDev Ontario’s authorities, mandate and program activities can be found in Part II of the Main Estimates and FedDev Ontario’s Departmental Plan for 2017–18.
1.2 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 2017–18 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.
1.3. FedDev Ontario's Financial Structure
FedDev Ontario manages its expenditures under two votes:
- Vote 1—Net operating expenditures include the Agency’s authorities related to personnel costs, operation and maintenance expenditures; and
- Vote 5—Grants and contributions include all authorities related to transfer payments.
Expenses under budgetary statutory authorities, for which payments are made under a law previously approved by Parliament and which are not part of the annual appropriations bills, include items such as employer’s portion of the employee benefit plan.
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 September 30, 2017.
2.1 Authorities Analysis
Total authorities available for use and planned expenditures increased to $270.6 million for fiscal year 2017–18; compared to $257.8 million for fiscal year 2016–17, as illustrated in the "Statement of Authorities" table. The net increase of $12.8 million (or 5 percent) relates to:
- $1.2 million decrease in Vote 1 (Operating Authorities);
- $14.5 million increase in Vote 5 (Grants and Contributions Authorities); and
- $0.5 million decrease in Statutory Authorities.
Vote 1 – Operating Authorities
Total Operating Authorities available for use for the year ending March 31, 2018 amount to $25.7 million, compared to $26.9 million for fiscal year 2016–17. The net decrease of $1.2 million (or 4 percent) in funding is the result of:
- The sun-setting of authorities transferred to FedDev Ontario for the delivery of the Building Canada Fund ($1.2 million);
- Targeted savings identified in Budget 2016 ($0.1 million); and
- Increased Operating Budget Carry-Forward in 2017–18 ($0.1 million).
Vote 5 – Grants and Contributions
Total Vote 5 Grants and Contributions Authorities available for use for the year ending March 31, 2018 amount to $242.2 million, compared to $227.7 million for fiscal year 2016–17. The net increase of $14.5 million (or 6 percent) in funding is the result of:
- An increase of $24.4 million in funding for the Canada 150 Community Infrastructure Program; brought forward from 2016–17;
- A net decrease of $9.2 million in grants to the City of Brantford to support the Brantford Greenwich-Mohawk Brownfield Remediation project and Mohawk Lake Remediation project;
- A decrease of $3 million in funding for the Southern Ontario Prosperity Initiatives, reflecting funding transferred to other departments for strategic projects; and
- An increase of $2.3 million to the Advanced Manufacturing Fund, re-profiled from previous years.
Budgetary Authorities Available
(in millions of dollars)
| Fiscal Year (in millions of dollars) |
||
|---|---|---|
| 2016–17 | 2017–18 | |
| Operating Spending Authorities | 26.9 | 25.7 |
| Program Spending Authorities | 227.7 | 242.2 |
| Statutory Authorities | 3.2 | 2.8 |
2.2 Expenditure Analysis
Year-to-date expenditures as of September 30, 2017 totaled $84.9 million, an increase of $18.4 million (27.7 percent) compared to $66.5 million at the same point in 2016. The variance is related primarily to an increase in transfer payment expenditures of $18.1 million, attributed to the accelerated spending in the Southern Ontario Prosperity Initiatives and Advanced Manufacturing Fund as the programs reach the fourth year of the five-year program cycle.
Year-to-Date Expenditures
as of September 30, 2017
| Fiscal Year (in millions of dollars) |
||
|---|---|---|
| 2016–17 | 2017–18 | |
| Operating Spending Authorities | 12.1 | 12.6 |
| Program Spending Authorities | 52.8 | 71 |
| Statutory Authorities | 1.6 | 1.4 |
Budgetary expenditures in the second quarter 2017–18 totaled $45.3 million, compared to $28.7 million for the same period in 2016–17, as illustrated in the "Departmental Budgetary Expenditures by Standard Object" tables. The net increase of $16.6 million (58 percent) relates to:
- $0.6 million decrease in Vote 1 (Operating) expenditures;
- $17.3 million increase in Vote 5 (Grants and Contributions) expenditures; and
- $0.1 million decrease in Statutory expenditures.
Vote 1 (Operating Expenditures)
Second quarter expenditures for personnel increased by $0.8 million (or 14 percent) compared to the same period in the previous fiscal year, primarily a result of retroactive salary payments made in 2017–18 related to the settlement of public service collective agreements. Professional and Special Services decreased by $1.5 million as a result of the timing of invoicing for services provided by other government departments. Transportation and telecommunications has seen a notable increase, with year-to-date spending of $0.4 million (104 percent increase over the same period in 2016–17) and second quarter spending of $0.2 million (130 percent increase over the same period in 2016–17), influenced by increased costs related to employee relocation.
Expenditures in other standard objects decreased by $0.1 million for the quarter and the year, and did not see significant fluctuations, with individual variances ranging between -$51,000 and +$1,000 in the quarter, and -$39,000 and + $7,000 year-to-date.
Vote 5 (Grants and Contributions)
Spending on transfer payments in the second quarter accelerated, both year-to-date and compared to the second quarter of 2016, with expenditures of $71 million year-to-date. This is attributed to the grants and contributions life cycle, seeing a typical ramp-up in spending as projects enter year four of the Agency’s five-year mandate.
(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix.)
Second Quarter Budgetary Expenditures
| Fiscal Year (in millions of dollars) |
||
|---|---|---|
| 2016–17 | 2017–18 | |
| Operating Spending Authorities | 7.3 | 6.8 |
| Program Spending Authorities | 20.6 | 37.8 |
| Statutory Authorities | 0.8 | 0.7 |
3. Risks and Uncertainties
FedDev Ontario maintains a Corporate Risk Profile, which identifies and assesses risks that could impact the objectives of the Agency. To minimize potential financial impact, FedDev Ontario maintains a strong system of budgeting, forecasting and internal controls, helping to mitigate financial risks related to the Agency’s funding authorities.
FedDev Ontario’s Departmental Plan for 2017–18 highlights the following key risks to achieving its plans and results, and corresponding risk response strategy: evolving economic context, managing information and Human Resource management.
4. Significant Changes in Relation to Operations, Personnel and Programs
FedDev Ontario has no significant changes to report for the second quarter of 2017–18
Approved by Senior Officials:
James Meddings
President
Michael Hammond, CPA CGA
Chief Financial Officer
Ottawa, Canada
November 29, 2017
Federal Economic Development Agency for Southern Ontario
Quarterly Financial Report
For the quarter ended
Statement of Authorities (unaudited)
| (in thousands of dollars) | Total available for use for the year ending March 31, 2018Note 1 |
Used during the quarter ended September 30, 2017 |
Year to date used at quarter-end |
|---|---|---|---|
| Vote 1 – Net Operating expenditures | 25,682 | 6,755 | 12,602 |
| Vote 5 – Grants and Contributions | 242,199 | 37,829 | 70,957 |
| Budgetary statutory authorities | 2,755 | 689 | 1,378 |
| Total authorities | 270,636 | 45,273 | 84,937 |
| (in thousands of dollars) | Total available for use for the year ending March 31, 2017Note 1 |
Used during the quarter ended September 30, 2016 |
Year to date used at quarter-end |
|---|---|---|---|
| Vote 1 – Net Operating Expenditures | 26,870 | 7,299 | 12,113 |
| Vote 5 – Grants and Contributions | 227,680 | 20,557 | 52,816 |
| Budgetary statutory authorities | 3,214 | 804 | 1,607 |
| Total authorities | 257,764 | 28,660 | 66,536 |
Federal Economic Development Agency for Southern Ontario
Quarterly Financial Report
For the quarter ended
Table 1: Departmental budgetary expenditures by Standard Object (unaudited)
| (in thousands of dollars) | Planned expenditures for the year ending March 31, 2018Note 1 | Expended during the quarter ended September 30, 2017 | Year to date used at quarter-end |
|---|---|---|---|
| Expenditures: | |||
| PersonnelNote 2 | 21,593 | 6,562 | 12,509 |
|
Transportation and communications
|
766 | 242 | 397 |
| Information | 414 | 4 | 40 |
| Professional and special services | 5,077 | 599 | 911 |
| Rentals | 167 | 20 | 34 |
| Repair and maintenance | 168 | (7) | 22 |
| Utilities, materials and supplies | 107 | 14 | 26 |
|
Acquisition of land, buildings and works
|
- | - | - |
|
Acquisition of machinery and equipment
|
54 | 7 | 36 |
| Transfer payments | 242,198 | 37,829 | 70,957 |
| Other subsidies and payments | 92 | 3 | 4 |
| Total budgetary expenditures | 270,636 | 45,273 | 84,936 |
| (in thousands of dollars) | Planned expenditures for the year ending March 31, 2017Note 1 | Expended during the quarter ended September 30, 2016 | Year to date used at quarter-end |
|---|---|---|---|
| Expenditures: | |||
| PersonnelNote 2 | 23,018 | 5,745 | 10,929 |
|
Transportation and communications
|
997 | 105 | 195 |
| Information | 494 | 55 | 79 |
| Professional and special services | 4,418 | 2,090 | 2,373 |
| Rentals | 172 | 30 | 36 |
| Repair and maintenance | 316 | 16 | 36 |
| Utilities, materials and supplies | 301 | 13 | 19 |
|
Acquisition of land, buildings and works
|
- | - | - |
|
Acquisition of machinery and equipment
|
350 | 36 | 37 |
| Transfer payments | 227,680 | 20,557 | 52,816 |
| Other subsidies and payments | 18 | 13 | 16 |
| Total budgetary expenditures | 257,764 | 28,660 | 66,536 |