Archived - Quarterly Financial Report - for the quarter ended December 31, 2012

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Canadian Northern Economic Development Agency’s spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and the Supplementary Estimates "A" and "B" for the 2012-2013 fiscal year. The authority of Parliament is required before moneys 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.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, 2012 after tabling of the Main Estimates on February 28, 2012. As a result the measures announced in the Budget 2012 could not be reflected in the 2012-2013 Main Estimates.

In fiscal year 2012-2013, planned reductions that were not included in Main Estimates were included in Supplementary Estimates "B" to reflect the decrease in spending of funds already identified as savings measures in Budget 2012. In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

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.

As part of the departmental performance reporting process, the Canadian Northern Economic Development Agency prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

Statement of Authorities

As at December 31, 2012, total authorities available for fiscal year 2012-2013 amounted to $54.8M which is an overall increase of $7.1M from the last fiscal year available amount of $47.7M.

The $7.1M increase relates to increased contributions funding of $4.9M for the Northern Adult Basic Education Program (NABEP) and new funding of $3.2M for the Community Infrastructure Improvement Fund (CIIF). The total increase indicated above of $8.1M is offset by $1M reduction related to in year operating adjustments (i.e. carry-forward, paylist adjustments).

The operating authorities used during the 2012-2013 third quarter decreased by $321K over the same period of 2011-2012, and the year-to-date figures as at December 31 have decreased by $515K. Transfer payments for 2012-2013 have increased on a year-to-date basis by approximately $5.4M over the previous year.

Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the quarter ending December 31, 2012 increased by approximately $3.57M, from $7.42M to $10.99M.

Transfer payments expenditures increased by $3.79M in the quarter, mainly due to payments for the Northern Adult Basic Education Program ($1.9M) which only started in the fourth quarter of 2011-2012, though earlier payments for existing programs also occurred.

With respect to the other non-transfer payment reporting objects, there is a decrease in salaries of $296K compared to the same quarter for the previous year, due to a stabilization of salary costs for the Agency. There were only minor differences for the other reporting objects.

The changes in spending in transfer payments since the start of the fiscal year are broken down as follows between program activities:

The increase in spending in the Business Development activity from $0.1M in 2011-2012 to $7.8M in 2012-2013 is explained by the following items:

1. As explained in the 2011-2012 Departmental Performance Report, the Strategic Investments in Northern Economic Development (SINED) program was transferred from Community Development to Business Development. In 2011-2012, SINED spending of $4.2M to the end of the third quarter was included in Community Development. The transfer of spending occurred in the fourth quarter of 2011-2012. In 2012-2013, spending on SINED is included in Business Development.
2. Most of the remaining increase of $3.5M is due to earlier payments of contributions ($2M for SINED) and because of a reallocation of operating costs between program activities as also explained in the 2011-2012 Departmental Performance Report.

The decrease in spending in the Community Development activity from $6.7M in 2011-2012 to $5.7M in 2012-2013 is explained by the following items:

1. As mentioned previously, SINED spending of $4.2M was included in Community Development in the third quarter 2011-2012 expenses.
2. The Northern Basic Adult Education Program which started in the fourth quarter of 2011-2012 incurred $2.6M of spending to the third quarter of 2012-2013.
3. Earlier payments for contributions were also noted in 2012-2013 and caused the balance of the increase.