Future-Oriented Financial Statements 2016-17

Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31 (in thousands of dollars)
Estimated Results 2015-16 Planned Results 2016-17
Emergency Management $ 569,051 $ 476,196
Countering Crime 165,671 213,336
Internal Services 66,587 61,469
National Security 28,495 29,937
Border Strategies 4,609 4,306
Total expenses 834,413 785,244
Interdepartmental provision of internal support services 2,700 2,700
Miscellaneous revenues 166 115
Revenues earned on behalf of Government (166) (115)
Total revenues 2,700 2,700
Net cost of operations $ 831,713 $ 782,544
The accompanying notes form an integral part of the future-oriented statement of operations.

Notes to the Future-Oriented Statement of Operations

1. Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of government priorities and departmental plans as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2015–16 is based on actual results as at January 8th, 2016 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016-17 fiscal year.

The main assumptions underlying the forecasts are as follows:

These assumptions are adopted as at January 8th, 2016.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2015–16 and for

2016–17, 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 Department has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include the following:

Once the Report on Plans and Priorities is presented, the Department 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 Government's accounting policies that came into effect for the 2015–16 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 Department's operations are recorded when goods are received or services are rendered including services provided without charge for accommodation, employee 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 or, in the case of transactions which 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being 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, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental 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

Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.

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 Department 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 Department's liabilities. While the Deputy Head is expected to maintain accounting control, he or 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 Department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Department 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 Department 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 thousands of dollars)
Estimated 2015-16 Planned 2016-17
Net cost of operations $ 831,713 $ 782,544
Adjustment for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (2,780) (2,407)
Decrease (increase) in accruals for Disaster Financial Assistance Arrangements (DFAA) (393,768) 326,684
Services provided without charge by other government departments (20,317) (21,227)
Decrease (increase) in vacation pay and compensatory leave (625) 195
Decrease (increase) in employee future benefits 1,079 800
Adjustments to previous years' payables at year end 1,821 4,400
Refunds of previous years' expenditures 718 745
Total items affecting net cost of operations but not affecting authorities (413,872) 309,190
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible assets 650 5,224
Total items not affecting net cost of operations but affecting authorities 650 5,224
Requested authorities $ 418,491 $ 1,096,958
b) Authorities requested (in thousands of dollars)
Estimated 2015-16 Planned 2016-17
Authorities requested:
Vote 1 – Operating expenditures $ 121,604 $ 128,079
Vote 5 – Grants and Contributions 281,853 952,868
Salary and motor car allowance 82 84
Contribution to employee benefits plan 14,952 15,927
Requested authorities $ 418,491 $ 1,096,958
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