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

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2019-2020 are $43.3 million, a net increase of $5.7 million, or 15%, compared to the $37.6 million for 2018-2019. The net increase is explained by:

Total authorities used year-to-date increased to $18.3 million for the quarter ended September 30, 2019, compared to $17.2 million at September 30, 2018. The $1.1 million increase, or 6%, is mainly explained by the increased salary costs to cover various transfer payment programming offset mainly by workplace 2.0 fit-up costs.

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

  • $43,340 represents total available for use for the year ending March 31
  • $18,327 represents year-to-date authorities used for the quarter ending September 30

2018-2019

  • $37,601 represents total available for use for the year ending March 31
  • $17,236 represents year-to-date authorities used for the quarter ending September 30

 

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2019-2020 are $261.6 million, a net increase of $143.8 million, or 122%, compared to the $117.8 million for 2018-2019. The net increase is explained by:

Total authorities used year-to-date for the quarter-ended September 30, 2019 decreased to $58.1 million, compared to $92.4 million at September 30, 2018. The $34.3 million decrease, or 37%, 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

  • $261,549 represents total available for use for the year ending March 31
  • $58,061 represents year-to-date authorities used for the quarter ending September 30

2018-2019

  • $117,773 represents total available for use for the year ending March 31
  • $92,406 represents year-to-date authorities used for the quarter ending September 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 2019-2020 and the authorities used at quarter end and then compares them to fiscal year 2018-2019.

2019-2020

 

  • $4,806 represents total available for use for the year ending March 31
  • $2,048 represents year-to-date authorities used for the quarter ending September 30

2018-2019

  • $3,836 represents total available for use for the year ending March 31
  • $1,913 represents year-to-date authorities used for the quarter ending September 30

Statement of the Departmental Budgetary Expenditures by Standard Object

Expenditures by standard object for the quarter ended September 30, 2019, were $40.6 million, which reflects a decrease of $41.5 million, or 51%, from the $82.1 million at September 30, 2018. This variance is explained by:

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’s end.

(in thousands of dollars)

Actual Expenditures Quarter Ended September 30, 2019 (in thousands of dollars)
Actual Expenditures Quarter Ended September 30, 2019 (in thousands of dollars)

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

  • $30,894 represents actual spending on Transfer Payments, which accounts for 76% of Actual Expenditures quarter ended September 30, 2019
  • $8,415 represents actual spending on Personnel, which accounts for 21% of Actual Expenditures quarter ended September 30, 2019
  • $1,326 represents actual spending on Other operating costs, which accounts for 3% of Actual Expenditures quarter ended September 30, 2019
Actual Expenditures Quarter Ended September 30, 2018 (in thousands of dollars)
Actual Expenditures Quarter Ended September 30, 2018 (in thousands of dollars)

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

  • $72,416 represents actual spending on Transfer Payments, which accounts for 88% of Actual Expenditures quarter ended September 30, 2018
  • $7,367 represents actual spending on Personnel, which accounts for 9% of Actual Expenditures quarter ended September 30, 2018
  • $2,346 represents actual spending on Other operating costs, which accounts for 3% of Actual Expenditures quarter ended September 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: November 29, 2019

Original signed by:

________________________
Kathryn Mattern
A/Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2019-2020 (in thousands of dollars)

Fiscal year 2019-2020 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2020* Used during the quarter ended September 30, 2019 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 43,340 $ 8,717 $ 18,327
Vote 5 - Grants and contributions 261,549 30,894 58,061
Budgetary statutory authorities 4,806 1,024 2,048
Spending of proceeds from the disposal of surplus Crown assets 0 0 0
Total authorities $ 309,695 $ 40,635 $ 78,436

 

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 September 30, 2018 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 37,601 $ 8,757 $ 17,236
Vote 5 - Grants and contributions 117,773 72,416 92,406
Budgetary statutory authorities 3,825 956 1,913
Spending of proceeds from the disposal of surplus Crown assets 11 0 0
Total authorities $159,210 $82,129 $111,555

* 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 2019-2020 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2020* Expended during the quarter ended September 30, 2019 Year-to-date used at quarter-end
Personnel $34,548 $8,415 $16,574
Transportation and communications 2,815 260 536
Information 375 56 104
Professional and special services 7,238 603 2,487
Rentals 1,082 150 335
Repair and maintenance 880 21 21
Utilities, materials and supplies 172 54 77

Acquisition of machinery and equipment

1,036 72 84
Transfer payments 261,549 30,894 58,061
Other subsidies and payments 0 110 157
Total net budgetary expenditures $309,695 $40,635 $78,436

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2018-2019 (in thousands of dollars)

Fiscal Year 2018-2019 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2019* Expended during the quarter ended September 30, 2018 Year-to-date used at quarter-end
Personnel $28,990 $7,367 $15,027
Transportation and communications 1,855 243 492
Information 347 24 61
Professional and special services 7,798 1,445 2,543
Rentals 1,028 109 265
Repair and maintenance 495 306 306
Utilities, materials and supplies 150 26 36

Acquisition of machinery and equipment

774 26 56
Transfer payments 117,773 72,416 92,406
Other subsidies and payments 0 167 363
Total net budgetary expenditures $159,210 $82,129 $111,555

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

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