Canadian Heritage’s Quarterly Financial Report
For the quarter ended June 30, 2011
- 1. Introduction
- 2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
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 $146.7 M when compared to the same quarter of 2010-2011. However, the funding expected for the Canada Media Fund ($107.6 M), Cultural Connections for Aboriginal Youth ($24.6 M) and Canada Periodical Fund ($15.0 M) has been postponed and 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 June 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 2010-11 Supplementary Estimates (A).
|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 in the quarter ended June 30, have decreased by approximately $47.3 M in 2011-12 when compared to the same quarter of 2010-11.
There is a decrease of $36.1 M in Transfer payments expenditures in the first quarter in 2011-12 as compared to the first quarter of 2010-11. This is mainly due to the reduction in authorities as items were postponed to Supplementary Estimates (B). The $5.7 M decrease in Personnel expenditures is due to reduction in funding due to past government-wide resource re-allocation measures and the Department’s Internal Services Review. The recommendations from this review, which are currently being implemented, will result in more streamlined, focused internal services. The $2.6 M decrease in Professional and special services expenditures is mainly due to the decrease in spending for the 2010 International Expositions in Shanghai.
As noted in the table below, PCH has spent 18.5% of its authorities in the first quarter of 2011-12, which is slightly lower than the 20.0% that was spent during the same period in 2010-11.
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 no significant changes in relation to operations, personnel and programs.
Daniel Jean, Deputy Minister
August 23, 2011
Pablo Sobrino, Chief Financial Officer
|Fiscal year 2011-12||Fiscal year 2010-11|
|(in thousands of dollars)||Total available for use for the year ending March 31, 2012 *||Used during the quarter ended|
June 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 |
June 30, 2010
|Year to date used at quarter-end|
|Vote 1 – Net Operating expenditures||187,612||41,590||41,590||222,815||51,640||51,640|
|Vote 5 - Grants and contributions||932,804||163,876||163,876||1,039,349||200,027||200,027|
|Budgetary statutory authorities||22,885||5,643||5,643||27,858||6,772||6,772|
|Total Budgetary authorities||1,143,301||211,109||211,109||1,290,022||258,440||258,440|
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 will be sought through the 2011-12 Supplementary Estimates (B) (third quarter).
|Total available for use||1,143||1,290||-146.7|
|Used during the quarter||211||258||-47.3|
|Year to date used||211||258||-47.3|
|Fiscal year 2011-12||Fiscal year 2010-11|
|(In thousand of dollars)||Planned expenditures for the year ending March 31, 2012||Expended during the quarter ended June 30, 2011||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2011||Expended during the quarter ended June 30, 2010||Year to date used at quarter-end|
|Transportation and communications||9,573||883||883||11,864||2,301||2,301|
|Professional and special services||38,676||1,462||1,462||29,707||4,080||4,080|
|Repair and maintenance||2,541||188||188||2,073||121||121|
|Utilities, materials and supplies||3,745||395||395||2,920||1,367||1,367|
|Acquisition of machinery and equipment||4,175||216||216||6,452||181||181|
|Other subsidies and payments||708||938||938||10,193||866||866|
|Total gross budgetary expenditures||1,147,701||211,937||211,937||1,294,722||258,857||258,857|
|Less Revenues netted against expenditures:|
|Revenue credited to the Vote||-4,400||-828||-828||-4,700||-417||-417|
|Total Revenues netted against expenditures:||-4,400||-828||-828||-4,700||-417||-417|
|Total net budgetary expenditures||1,143,301||211,109||211,109||1,290,022||258,440||258,440|