Quarterly Financial Report — For the Quarter Ended June 30, 2019
Statement outlining results, risks and significant changes in operations, personnel and programs
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. This report should be read in conjunction with the 2019–20 Main Estimates. This quarterly report has not been subject to an external audit or review.
1.1 Authority, Mandate and Core Responsibility
The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is mandated to "strengthen southern Ontario's capacity for innovation, economic development and growth."
Details and additional information on FedDev Ontario's authorities, mandate and core responsibility can be found in Part II of the Main Estimates and FedDev Ontario's Departmental Plan for 2019–20.
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 2019–20 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:
- 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 the Government of Canada'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 June 30, 2019.
2.1 Authorities Analysis (Vote 1 – Operating and Vote 5 – Grants and Contributions)
Total authorities available for use and planned expenditures increased to $261.5 million for fiscal year 2019–20, compared to $187.1 million at the same point in fiscal year 2018–19, as illustrated in the "Statement of Authorities" table. The net increase of $74.4 million (or 40 percent) relates to:
- $4.2 million increase in Vote 1 (Operating Authorities);
- $69.4 million increase in Vote 5 (Grants and Contributions Authorities); and
- $0.8 million increase in statutory authorities.
Vote 1 – Operating Authorities
Total Vote 1 Operating Authorities available for use for the year ending March 31, 2020 amount to $29.3 million, compared to $25.2 million for fiscal year 2018–19. The net increase of $4.2 million (or 17 percent) in operating funding is attributed to the increased funding provided to the Agency for the delivery of the Regional Economic Growth through Innovation Program.
Vote 5 – Grants and Contributions
Total Vote 5 Grants and Contributions Authorities available for use for the year ending March 31, 2020 amount to $228.6 million, compared to $159.2 million for fiscal year 2018–19. The net increase of $69.4 million (or 44 percent) in funding is explained by:
- $17.4 million decrease due to adjustments to grants and contributions authorities as a result of reprofiling of funds over multiple fiscal years
- $21.9 million increase for the Regional Economic Growth through Innovation Program
- $39.0 million increase for the Steel and Aluminum Initiative
- $3.7 million increase for funding for the Canadian Experiences Fund
- $16.1 million in funding brought forward from prior years for the Southern Ontario Prosperity Program
- $5.9 million increase for the Women Entrepreneurship Strategy
- $0.2 million increase for a grant with the City of Brantford
(in millions of dollars)
|Operating Spending Authorities||25.2||29.3|
|Program Spending Authorities||159.2||228.6|
2.2 Expenditure Analysis
Budgetary expenditures in the first quarter of 2019–20 totaled $29.1 million, compared to $40.1 million for the same period in 2018–19, as illustrated in the "Departmental Budgetary Expenditures by Standard Object" tables. The net decrease of $11 million (27 percent) relates to:
- $0.7 million increase in Vote 1 (Operating) expenditures;
- $11.9 million decrease in Vote 5 (Grants and Contributions) expenditures; and
- $0.2 million increase in statutory expenditures.
Vote 1 (Operating Expenditures)
First quarter expenditures for personnel increased by $0.9 million (or 17 percent) compared to the same period in the previous fiscal year. The increase in personnel expenditures aligns with the increased operating authorities voted for 2019–20 to support the delivery of the Regional Economic Growth through Innovation Program.
Expenditures in other standard objects did not see significant fluctuations.
Vote 5 (Grants and Contributions)
Spending on transfer payments (or program spending) was $22.1 million in the first quarter of 2019–20, compared to $34.0 million in the same quarter of 2018–19. The decrease of 35 percent in year-over-year expenditures is primarily due to the early stages in the lifecycle of new programming associated with the launch of FedDev Ontario's renewed mandate as of April 1, 2019. The higher level of expenditures recorded in the first quarter of 2018–19 was associated with increased claims submissions due to the final year of programming under the Agency’s second mandate.
(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix).
(in millions of dollars)
|Operating Spending Authorities||5.3||6.1|
|Program Spending Authorities||34.0||22.1|
3. Risks and Uncertainties
FedDev Ontario maintains a governance structure for oversight of financial management and manages the allocation of resources within a well-defined framework of accountabilities, policies and procedures including a system of budgets, reporting and other internal controls including its Framework on Internal Control over Financial Reporting. The Agency mitigates financial risk by monitoring the impact of fluctuations in cash flows for multi-year projects and reallocating funding to priority initiatives as needed.
FedDev Ontario manages the risks by conducting risk assessment exercises and reviews of its internal control framework. Financial risks are mitigated by strong entity-level controls, general systems controls and key business process controls such as the contribution payments and regular operating expenses and receivables. The Agency also maintains a service level agreement with the Office of the Comptroller General for the delivery of internal audit services to provide independent advice on risk management, control and governance processes.
4. Significant Changes in Relation to Operations, Personnel and Programs
FedDev Ontario entered the first year of its renewed mandate in 2019─20 with a focus on delivering the Regional Economic Growth through Innovation Program launched in fall 2018–19. This newly designed program is supported by Innovation, Science and Economic Development Canada and the regional development agencies.
Approval by Senior Officials
A/Chief Financial Officer
|(in thousands of dollars)||Fiscal Year 2019–20||Fiscal Year 2018–19|
|Total available for use for the year ending March 31, 2020Table note 2||Used during the quarter ended June 30, 2019||Year to date used at quarter-end||Total available for use for the year ending March 31, 2019Table note 2||Used during the quarter ended June 30, 2018||Year to date used at quarter-end|
|Vote 1–Net Operating Expenditures||29,351||6,130||6,130||25,158||5,349||5,350|
|Vote 5–Grants and Contributions||228,565||22,108||22,108||159,188||34,026||34,026|
|Budgetary statutory authorities:||3,566||883||883||2,789||697||697|
|(in thousands of dollars)||Fiscal Year 2019–20||Fiscal Year 2018–19|
|Planned expenditures for the year ending March 31, 2020Table note 2||Used during the quarter ended June 30, 2019||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2019Table note 2||Used during the quarter ended June 30, 2018||Year to date used at quarter-end|
|PersonnelTable note 3||26,773||6,441||6,441||21,134||5,498||5,498|
|Transportation and communications||821||150||150||813||133||133|
|Professional and special services||4,534||310||310||5,023||322||322|
|Repair and maintenance||71||6||6||166||7||7|
|Utilities, materials and supplies||83||13||13||106||10||10|
|Acquisition of land, buildings and works||-||-||-||-||-||-|
|Acquisition of machinery and equipment||158||15||15||169||14||14|
|Other subsidies and payments||48||-||-||71||(1)||(1)|
|Total budgetary expenditures||261,482||29,121||29,121||187,134||40,072||40,072|
- Date modified: