Quarterly Financial Report — Quarter ended June 30, 2018

Statement outlining results, risks and significant changes in operations, personnel, and programs


1. Introduction

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 2018–19 Main Estimates. This quarterly report has not been subject to an external audit or review.

1.1 Authority, Mandate & 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 2018–19.

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 2018–19 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 money 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:

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.

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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 June 30, 2018.

2.1 Authorities Analysis

Total authorities available for use and planned expenditures decreased to $187.1 million for fiscal year 2018–19, compared to $269.3 million for fiscal year 2017–18, as illustrated in the "Statement of Authorities" table. The net decrease of $82.2 million (or 31 percent) relates to:

Vote 1 – Operating Authorities

Total Vote 1 Operating Authorities available for use for the year ending March 31, 2019 amount to $25.2 million, compared to $24.4 million for fiscal year 2017–18. The net increase of $0.8 million (or 3 percent) in funding is the result of a reprofile request for collective bargaining that was approved by TBS.

Vote 5 – Grants and Contributions

Total Vote 5 Grants and Contributions Authorities available for use for the year ending March 31, 2019 amount to $159.2 million, compared to $242.2 million for fiscal year 2017–18. The net decrease of $83.0 million (or 34 percent) in funding is primarily the result of:

Budgetary Authorities Available
(in millions of dollars)
Budgetary Authorities Avail
Description of graph
Budgetary Authorities Available
  Vote 1–Net Operating Expenditures
($ millions)
Vote 5–Grants and Contributions
($ millions)
Statutory Authorities
($ millions)
2017–18 24.4 242.2 2.8
2018–19 25.2 159.9 2.8
Budgetary Authorities Available
for 2017–18 and 2018–19
Fiscal Year
(in millions of dollars)
2017–18 2018–19
Operating Spending Authorities  24.4 25.2
Program Spending Authorities  242.2 159.2
Statutory Authorities 2.8 2.8

2.2 Expenditure Analysis

Year-to-date expenditures as of June 30, 2018, totaled $40.1 million, an increase of $0.4 million (1 percent) compared to $39.7 million at the same point in 2017. The variance is related primarily to an increase in transfer payment expenditures and a decrease in net operating expenditures.

Year To Date Expenditures as at June 30, 2018
(in millions of dollars)
Year To Date Expenditures as at June 30, 2018 (in millions of dollars)
Description of graph
Year To Date Expenditures as at June 30, 2018
  Vote 1–Net Operating Expenditures
($ millions)
Vote 5–Grants and Contributions
($ millions)
Statutory Authorities
($ millions)
2017–18 5.8 33.1 0.7
2018–19 5.3 34.0 0.7
Year To Date Expenditures as at June 30, 2018
Fiscal Year
(in millions of dollars)
2017–18 2018–19
Operating Spending Authorities  5.8 5.3
Program Spending Authorities 33.1 34.0
Statutory Authorities 0.7 0.7

Budgetary expenditures in the first quarter of 2018–19 totaled $40.1 million, compared to $39.7 million for the same period in 2017–18, as illustrated in the "Departmental Budgetary Expenditures by Standard Object" tables. The net increase of $0.4 million (1 percent) relates to:

Vote 1 (Operating Expenditures)

First quarter expenditures for personnel decreased by $0.5 million (or 8 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.

Expenditures in other standard objects did not see significant fluctuations.

Vote 5 (Grants and Contributions)

Spending on transfer payments in the first quarter is on track with previous year results, showing an increase of $0.9 million (or 3 percent).

(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix.)

First Quarter Budgetary Expenditures
(in millions of dollars)
First Quarter Budgetary Expenditures
Description of graph
First Quarter Budgetary Expenditures
  Vote 1–Net Operating Expenditures
($ millions)
Vote 5–Grants and Contributions
($ millions)
Statutory Authorities
($ millions)
2017–18 5.8 33.1 0.7
2018–19 5.3 34.0 0.7
First Quarter Budgetary Expenditures
Fiscal Year
(in millions of dollars)
2017–18 2018–19
Operating Spending Authorities  5.8 5.3
Program Spending Authorities 33.1 34.0
Statutory Authorities 0.7 0.7

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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 2018–19 highlights the following key risks to achieving its plans and results, and corresponding risk response strategy: evolving economic context and Human Resource management.

4. Significant Changes in Relation to Operations, Personnel and Programs

The Director General of Human Resources retired in the first quarter of 2018–19. In addition, the Canada 150 Community Infrastructure Program has sunset at the end of 2017–18 fiscal year.

Approval by Senior Officials

Original signed by

space to insert Nancy Horsman' signature
James Meddings
President

Ottawa, Canada

Original signed by

Space to insert Kei Moray's signature
Vimal Gopal, CPA CGA
A/Chief Financial Officer

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Statement of Authorities (unaudited)

Table: Statement of Authorities (unaudited)
(in thousands of dollars) Fiscal Year 2018–19   Fiscal Year 2017–18
Total available for use for the year ending March 31, 2019Footnote 1 Used during the quarter ended June 30, 2018 Year to date used at quarter-end   Total available for use for the year ending March 31, 2018Footnote 1 Used during the quarter ended June 30, 2017 Year to date used at quarter-end
Vote 1–Net Operating Expenditures 25,158 5,349 5,350   24,395 5,847 5,847
Vote 5–Grants and Contributions 159,188 34,026 34,026   242,199 33,128 33,128
Budgetary statutory authorities: 2,789 697 697   2,755 689 689
Total authorites 187,135 40,072 40,073   269,349 39,664 39,664

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Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars) Fiscal Year 2018–19 Fiscal Year 2017–18
Planned expenditures for the year ending March 31, 2019Footnote 1 Used during the quarter ended June 30, 2018 Year to date used at quarter-end   Planned expenditures for the year ending March 31, 2018Footnote 1 Used during the quarter ended June 30, 2017 Year to date used at quarter-end
Expenditures:
Personnel Footnote 2 21,134 5,498 5,498   20,306 5,947 5,947
Transportation and communications 813 133 133   766 156 156
Information 329 36 36   414 36 36
Professional and special services 5,023 322 322   5,077 312 312
Rentals 135 27 27   167 14 14
Repair and maintenance 166 7 7   168 29 29
Utilities, materials and supplies 106 10 410   107 12 12
Acquisition of land, buildings and works - - -   - - -
Acquisition of machinery and equipment 169 14 14   54 29 29
Transfer payments 159,188 34,026 34,026   242,198 33,128 33,128
Other subsidies and payments 71 (1) (1)   92 1 1
Total budgetary expenditures 187,134 40,072 40,072   269,349 39,664 39,664
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