Future-Oriented Statement of Operations (Unaudited)

Organization: Public Health Agency of Canada

Date published: 2016-03-07

Public Health Agency of Canada
Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31
(in dollars)
  Forecast Results 2015–2016 Planned Results 2016–2017
Expenses
Public Health Infrastructure $ 126,371,943 $ 136,896,320
Health Promotion and Disease Prevention 311,905,210 311,883,717
Health Security 62,729,651 71,046,431
Internal Services 119,343,836 100,836,694
Expenses incurred on behalf of Government (147,455) (196,607)
Total expenses 620,203,185 620,466,555
Revenues
Sales of goods and services
Rights and Privileges 2,487,598 51,910
Services of a non-regulatory nature 14,582,819 14,060,130
Lease and use of public property 13,588 13,083
Interest 6,575 6,732
Other 53,144 61,556
Revenues earned on behalf of Government (2,641,454) (210,673)
Total revenues 14,502,270 13,982,738
Net cost of operations before government funding and transfers $ 605,700,915 $ 606,483,817

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

Notes to the Future-Oriented Statement of Operations (Unaudited)

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and the plans of the Public Health Agency of Canada (Agency) as described in the Report on Plans and Priorities.

The information in the forecast results for fiscal year 2015–2016 is based on actual results as at December 31, 2015 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016–2017 (i.e., the future year) fiscal year.

The main assumptions underlying the forecasts are as follows:

  • the Agency's activities will remain substantially the same as in the previous year; and
  • the expenses and revenues, including the determination of amounts internal and external to the Government, are based on experience. The general historical pattern is expected to continue.

These assumptions are adopted as at December 31, 2015.

2. Variations and changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2015–2016 and for 2016–2017, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, the Agency has made a number of estimates and assumptions which may differ from subsequent actual results. Estimates and assumptions are based on experience and other factors (including expectations of future events that are believed to be reasonable under the circumstances) and are continually evaluated.

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical Statement of Operations include the following:

  • the timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expenses;
  • implementation of new collective agreements;
  • economic conditions may affect the amount of revenue earned; and
  • further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Agency will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

3. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government's accounting policies that came into effect for the 2015–2016 fiscal year, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Expenses

Expenses are recorded on an accrual basis. Expenses for the Agency's operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services and worker's compensation (which are recorded as expenses at their estimated cost). Vacation pay and compensatory leave, as well as severance benefits, are accrued and expenses are recorded as the benefits are earned by employees under their terms of employment.

Transfer payments are recorded as expenses when the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement. In the case of transactions that do not form part of an existing program, when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statement, the transfer payment is made. Transfer payments that become repayable as a result of conditions specified in contribution agreements that are enforced are recorded as a reduction to transfer payment expense and as a receivable.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and provision for valuation on advances or liabilities, including contingent liabilities, to the extent the future event is likely to occur and a reasonable estimate can be made.

Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

(b) Revenues

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided the Agency has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Agency's liabilities. While the deputy head is expected to maintain accounting control, she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

4. Parliamentary authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency do not parallel financial reporting according to generally accepted accounting principles because authorities are primarily based on cash flow requirements. Items recognized in the future-oriented statement of operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Agency has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to requested authorities
(in dollars)
  Forecast Results 2015–2016 Planned Results 2016–2017
Net cost of operations before government funding and transfers $ 605,700,915 $ 606,483,818
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (14,373,273) (15,219,780)
Loss on disposal of tangible capital assets (16,134) (18,798)
Services provided without charge by other government departments (23,599,216) (24,657,357)
Decrease (increase) in vacation pay and compensatory leave 654,208 (180,297)
Increase in employee future benefits (253,844) (239,530)
Refund/adjustment of prior years' expenditures 4,564,248 4,445,105
Bad debt expense (532,843) (336,829)
Decrease in Workforce adjustment measures 210,000 -
Statutory spending authority equivalent to revenues earned 13,937,794 13,412,742
Other 145,880 195,032
Total items affecting net cost of operations but not affecting authorities (19,263,180) (22,599,712)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 8,449,241 5,853,695
Proceeds from disposal of Crown assets 42,351 47,871
Total items not affecting net cost of operations but affecting authorities 8,491,592 5,901,566
Requested authorities $594,929,327 $589,785,672
(b) Authorities requested
(in dollars)
  Forecast Results 2015–2016 Planned Results 2016–2017
Authorities requested:
Vote 1 - Operating expenditures $ 337,582,146 $ 333,148,148
Vote 5 - Capital expenditures 8,449,241 5,853,695
Vote 10 - Grants and contributions 204,898,816 206,779,000
Statutory amounts 43,999,124 44,004,829
Requested authorities $ 594,929,327 $589,785,672
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