Canadian Heritage's Quarterly Financial Report For the Quarter Ended September 30, 2011
Table of contents
- 1. Introduction
- 1.1 Authority, Mandate and Program Activities
- 1.2 Basis of Presentation
- 2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
- 2.1 Statement of Authorities
- 2.2 Statement of Departmental Budgetary Expenditures by Standard Object
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
- Statement of Authorities (unaudited)
- Departmental budgetary expenditures by Standard Object (unaudited)
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 - Quarterly financial reports of the Financial Administration Act and in the form and manner prescribed by the Treasury Board Accounting Standard 1.3 - Departmental and Agency Quarterly Financial Report. The quarterly report has not been subject to an external audit or review.
1.1 Authority, Mandate and Program Activities
Canadian Heritage promotes an environment in which all Canadians take full advantage of dynamic cultural experiences, celebrating our history and heritage, and participating in building stronger communities.
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 the department's spending authorities granted by Parliament to those used by the department consistent with the 2011-2012 Main Estimates. 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 funds can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation granting statutory spending authority for specific purposes.
When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.
PCH uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
2.1 Statement of Authorities
PCH's 2011-12 authorities available for use have decreased by approximately $148.4M when compared to the same quarter of 2010-2011. However, funding for the Canada Media Fund ($107.6M), the Cultural Connections for Aboriginal Youth ($24.6M) and the Canada Periodical Fund ($15.0M) will be sought through the 2011-12 Supplementary Estimates (B).
In 2010-11, the authorities presented in the quarterly financial report for the quarter ended September 30, 2010 included funding received in the 2010-11 Supplementary Estimates (A). However, for 2011-12, only items with specific authority urgently required through appropriation act (items that cannot be managed through interim supply) have been selected to be included in the 2011-12 Supplementary Estimates (A).
This following table summarizes the major changes in authorities from 2010-11 to 2011-12.
|Vote 1||Vote 5||Total|
|Increase in funding for the Sport Support Program to support high-performance sport and to increase sport participation by all Canadians, including persons with a disability||$0.7||$30.3||$31.0|
|Decrease in funding to support the creation of the Canada Media Fund||($0.5)||($107.1)||($107.6)|
|Decrease in funding for Cultural Connections for Aboriginal Youth||($1.9)||($22.7)||($24.6)|
|Decrease in funding for the Canadian Periodical Fund||$0||($15.0)||($15.0)|
|Decrease in funding due to past Government-wide resource re-allocation measures||($37.0)||$0||($37.0)|
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Total expenditures, for the quarter ended September 30, have increased by $63.8M in 2011-12 when compared to the same quarter of 2010-11.
As noted in the table below, PCH has spent 34% ($391.5M) of its authorities in the second quarter of 2011-12, which is significantly higher than the 25% ($327.7M) that was spent during the same period in 2010-11.
This variation is mainly explained by an increase of $66.4M in transfer payment expenditures. This increase is mostly due to the Canada Periodical Fund ($54.0M) and the Sport Support Program ($11.7M) for which expenditures have increased in the second quarter of 2011-12 when compared to the same quarter of 2010-11.
A portion of the increase can also be attributed to the personnel expenditures which include immediate payment of civilian severance and termination benefits due to the revision of specified collective agreements. Treasury Board Secretariat will transfer funds to cover these expenditures.
The Year-to-date used in 2011-12 is 52% ($602.6M) compared to 45% ($586.1M) in 2010-11; this is mainly due to transfer payment expenditures, which have increased by $30.1M from 2010-11 to 2011-12. Part of the $30,1M can be attributed to programs such as the Official Languages programs ($9.1M) and the Canada Media Fund ($23.8M) which have spent more in 2011-12 than in 2010-11 at September 30th. Please note that the 2011-12 Year-to-date used would be more comparable to the 2010-11 Year-to-date used if authorities for items sought in the 2011-12 Supplementary Estimates (B) would have been received in the 2011-12 Supplementary (A). This would reduce the percentage of the Year-to-date used in 2011-12 to 46%.
3. Risks and Uncertainties
In 2010-11, the Department embarked on an important Transformation Initiative exercise. This exercise will continue over the course of fiscal year 2011-12. Its aim is to modernize the Department of Canadian Heritage's operations and seek innovative solutions to better serve Canadians and address departmental financial challenges. The following are key initiatives addressed through the Transformation Initiative to mitigate the risks related to previously planned departmental budget reductions:
- An Internal Services Review initiative designed to streamline and simplify internal corporate processes to effectively support the Department's mandate while meeting central agency and legislative requirements.
- A Grants and Contributions Modernization initiative designed to simplify processes for repeat, reliable clients, implement affordable technological improvements, and standardize our business processes to significantly reduce costs while improving services.
In addition to these planned reductions, Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for fiscal years 2011-12 and 2012-13. This freeze will also be addressed through efficiencies found in the Transformation Initiative.
4. Significant Changes in Relation to Operations, Personnel and Programs
There have been changes to senior level departmental personnel during the quarter. The Chief Financial Officer left the department in August 2011 and a new Assistant Deputy Minister for the Cultural Affairs Sector was appointed in September 2011.
- Daniel Jean, Deputy Minister
- Jérôme Moisan, A/ Chief Financial Officer
Statement of Authorities (unaudited)
|Fiscal year 2011-12||Fiscal year 2010-11|
|Total available for use for the year ending March 31, 2012 *||Used during the quarter ended|
September 30, 2011
|Year to date used at quarter-end||Total available for use for the year ended March 31, 2011*||Used during the quarter ended|
September 30, 2010
|Year to date used at quarter-end|
|Vote 1 - Net Operating expenditures||198,688||54,234||95,824||235,539||55,640||107,280|
|Vote 5 - Grants and contributions||932,804||331,553||495,429||1,039,349||265,297||465,324|
|Budgetary statutory authorities||22,885||5,709||11,352||27,858||6,772||13,544|
|Total Budgetary authorities||1,154,377||391,496||602,605||1,302,746||327,709||586,148|
More information is available in the attached table.
*Includes only Authorities available for use and granted by Parliament at quarter-end. For fiscal year 2011-12, funding that was announced in the 2011 Federal Budget for Canada Media Fund, Cultural Connections for Aboriginal Youth and Canada Periodical Fund is being sought through the 2011-12 Supplementary Estimates (B) (third quarter).
Departmental budgetary expenditures by Standard Object (unaudited)
|Expenditures||Fiscal year 2011-12||Fiscal year 2010-11|
|Planned expenditures for the year ending March 31, 2012||Expended during the quarter ended September 30, 2011||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2011||Expended during the quarter ended September 30, 2010||Year to date used at quarter-end|
|Transportation and communications||9,573||899||1,782||13,456||953||3,254|
|Professional and special services||38,676||4,392||5,854||36,139||6,252||10,332|
|Repair and maintenance||2,541||371||559||2,496||424||546|
|Utilities, materials and supplies||3,745||476||872||3,543||790||2,157|
|Acquisition of machinery and equipment||4,175||485||701||7,146||161||341|
|Other subsidies and payments*||708||-2,991||-2,053||10,311||3,141||4,007|
|Total gross budgetary expenditures||1,158,777||392,458||604,395||1,307,446||328,320||587,177|
|Less Revenues netted against expenditures:|
|Revenue credited to the Vote||-4,400||-962||-1,790||-4,700||-611||-1,029|
|Total Revenues netted against expenditures:||-4,400||-962||-1,790||-4,700||-611||-1,029|
|Total net budgetary expenditures||1,154,377||391,496||602,605||1,302,746||327,708||586,148|
* Expenditures temporarily include credits which will be reallocated to other standard objects before the fiscal year-end.