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Western Economic Diversification Canada’s Quarterly Financial Report for the quarter ended June 30, 2019

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Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs

Introduction

This quarterly financial report should be read in conjunction with the Main Estimates. It has been prepared by management as required by section 65.1 of the Financial Administration Act (FAA) and in the form and manner prescribed by the Treasury Board. This quarterly report has not been subject to an external audit or review.

Authority, Mandate and Program Activities

Western Economic Diversification Canada (WD) is mandated to "promote the development and diversification of the economy of Western Canada and to advance the interests of the West in national economic policy, program and project development and implementation."

The Departmental Plan and Main Estimates provide further information on WD's authority, mandate and program activities.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates for the 2019-2020 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.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Financial Structure

WD manages its expenditures under two votes:

Budgetary statutory authorities represent payments made under legislation approved by Parliament, and include items such as the Government of Canada's share of employee benefit plans and other minor items.

Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following section highlights significant changes to fiscal quarter results as of of June 30, 2019.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2019-2020 are $42.1 million, a net increase of $6.1 million, or 17%, compared to the $36.0 million for 2018-2019.  The net increase is explained by:

Total authorities used has increased to $9.6 million for the quarter ended June 30, 2019, compared to $8.5 million June 30, 2018.  Salaries increased in 2019 to deliver WD's transfer payment programs. Timing differences in ongoing expenses account for the remainder of increase.

Graph 1 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Vote 1 (in thousands of dollars)
Total Available for Use and Used for Vote 1 (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-20 and the authorities used at quarter end and then compares them to fiscal year 2018-19.

2019-2020

  • $42,103 represents total available for use for the year ending March 31
  • $9,610 represents total authorities used for the quarter ending June 30

2018-2019

  • $35,965 represents total available for use for the year ending March 31
  • $8,479 represents total authorities used for the quarter ending June 30

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2019-2020 are $258.1 million, a net increase of $148.3 million, or 135%, compared to the $109.8 million for 2018-2019. The net increase is explained by:

Total authorities used for the quarter-ended June 30, 2019 increased to $27.2 million, compared to $20.0 million at June 30, 2018. The $7.2 million increase, or 36%, is explained by:

Graph 2 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Vote 5 (in thousands of dollars)
Total Available for Use and Used for Vote 5 (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-20 and the authorities used at quarter end and then compares them to fiscal year 2018-19.

2019-2020

  • $258,049 represents total available for use for the year ending March 31
  • $27,167 represents total authorities used for the quarter ending June 30

2018-2019

  • $109,773 represents total available for use for the year ending March 31
  • $19,990 represents total authorities used for the quarter ending June 30

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for fiscal year 2019-2020 changed to $4.8 million, an increase of $1.0 million when compared to the $3.8 million in 2018-2019. The increase is a result of additional salary funding provided through Budget 2018 and Budget 2019 announcements and to incorporate additional funding as the employee benefit plan rate increased to 27%.

There is a slight increase in budgetary statutory authorities used for this reporting period when compared to the previous fiscal year.

Graph 3 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Budgetary Statutory Authorities (in thousands of dollars)
Total Available for Use and Used for Budgetary Statutory Authorities (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-20 and the authorities used at quarter end and then compares them to fiscal year 2018-19.

2019-2020

  • $4,806 represents total available for use for the year ending March 31
  • $1,024 represents total authorities used for the quarter ending June 30

2018-2019

  • $3,825 represents total available for use for the year ending March 31
  • $957 represents total authorities used for the quarter ending June 30

Statement of the Departmental Budgetary Expenditures by Standard Object

Expenditures by standard object for the quarter ended June 30, 2019, were $37.8 million, which reflects an increase of $8.4 million, or 29%, from the $29.4 million at June 30, 2018. The variance is due to investing in a diverse and growing Western economy by increases in salary payments, increases for payments under the Western Diversification Program and to maintain rail service to Churchill, Manitoba, and timing differences in the processing of claims for reimbursement under various other transfer payment programs. Additional information can be found in the Statement of Authorities, Vote 1 and Vote 5 sections above.

Graphs 4 and 5 illustrate actual expenditures for the quarter-end.

(in thousands of dollars)

Actual Expenditures Quarter Ended December 31, 2018 (in thousands of dollars)
Actual Expenditures Quarter Ended june 30, 2019 (in thousands of dollars)

This pie chart breaks down actual expenditures for quarter ended June 30, 2019.

  • $27,167 represents actual spending on Transfer Payments, which accounts for 72% of Actual Expenditures quarter ended June 30, 2019
  • $8,159 represents actual spending on Personnel, which accounts for 22% of Actual Expenditures quarter ended June 30, 2019
  • $2,475 represents actual spending on Other operating costs, which accounts for 6% of Actual Expenditures quarter ended June 30, 2019
Actual Expenditures Quarter Ended December 31, 2017 (in thousands of dollars)
Actual Expenditures Quarter Ended June 30, 2018 (in thousands of dollars)

This pie chart breaks down actual expenditures for the quarter ended June 30, 2018.

  • $19,990 represents actual spending on Transfer Payments, which accounts for 68% of Actual Expenditures quarter ended June 30, 2018
  • $7,660 represents actual spending on Personnel, which accounts for 26% of Actual Expenditures quarter ended June 30, 2018
  • $1,776 represents actual spending on Other operating costs, which accounts for 6% of Actual Expenditures quarter ended June 30, 2018

Risks and Uncertainties

The department is managing the allocation of resources within a well-defined framework of accountabilities, policies and procedures including a system of budgets, reporting and other internal controls to manage within available resources and Parliamentary authorities. WD also conducts an annual risk assessment exercise as part of its overall risk management approach. WD has not identified any significant financial risks from their annual risk assessment.

The department maintains financial management processes to ensure effective budget management.  Processes are in place to assess the impact of project timing fluctuations and the process for forecasting multi-year funding requirements. The decision-making process facilitates the re-allocation of financial resources to priority initiatives.

Significant Changes in Relation to Operations, Personnel and Programs

There are no significant changes in relation to operations, personnel and programs for this reporting period.

Approval by Senior Officials

Approved by:

Original signed by:

________________________
Dylan Jones
Deputy Minister

Edmonton, Canada
Date: August 12, 2019

Original signed by:

________________________
Cathy McLean
Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2019-2020 (in thousands of dollars)

Fiscal year 2018-2019 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2020* Used during the quarter ended June 30, 2019 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 42,103 $ 9,610 $ 9,610
Vote 5 - Grants and contributions 258,049 27,167 27,167
Budgetary statutory authorities 4,806 1,024 1,024
Total authorities $ 304,958 $ 37,801 $ 37,801

 

Fiscal year 2018-2019 (in thousands of dollars)

Fiscal year 2018-2019 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2019* Used during the quarter ended June 30, 2018 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 35,965 $ 8,479 $ 8,479
Vote 5 - Grants and contributions 109,773 19,990 19,990
Budgetary statutory authorities 3,825 957 957
Total authorities $ 149,563 $ 29,426 $ 29,426

*Includes only Authorities available for use and granted by Parliament at quarter-end.

 

Departmental Budgetary Expenditures by Standard Object (unaudited)
Fiscal year 2019-2020
(in thousands of dollars)

Fiscal Year 2018-2019 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2020* Expended during the quarter ended June 30, 2019 Year-to-date used at quarter-end
Personnel $34,207 $8,159 $8,159
Transportation and communications 2,630 276 276
Information 351 48 48
Professional and special services 6,761 1,884 1,884
Rentals 1,010 185 185
Repair and maintenance 822 0 0
Utilities, materials and supplies 160 23 23

Acquisition of machinery and equipment

968 12 12
Transfer payments 258,049 27,167 27,167
Other subsidies and payments 0 47 47
Total net budgetary expenditures $304,958 37,801 37,801

 

Departmental Budgetary Expenditures by Standard Object (unaudited)
Fiscal year 2018-2019
(in thousands of dollars)

Fiscal year 2019-2020 (in thousands of dollars}
Expenditures Planned expenditures for the year ending March 31, 2019* Expended during the quarter ended June 30, 2018 Year-to-date used at quarter-end
Personnel $28,990 $7,660 $7,660
Transportation and communications 1,611 249 249
Information 301 37 37
Professional and special services 6,772 1,098 1,098
Rentals 893 156 156
Repair and maintenance 430 - -
Utilities, materials and supplies 121 10 10
Acquisition of machinery and equipment 672 30 30
Transfer payments 109,773 19,990 19,990
Other subsidies and payments - 196 196
Total net budgetary expenditures $149,563 $29,426 $29,426

*Includes only Authorities available for use and granted by Parliament at quarter-end.

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