Future-Oriented Statement of Operations (Unaudited) for the year ending March 31, 2015
| Expenses | Estimated Results 2013-14 | Planned Results 2014-15 |
|---|---|---|
| Review Program | $1,668,025 | $1,736,708 |
| Internal Services | 540,764 | 621,331 |
| Total expenses | 2,208,789 | 2,358,039 |
| Net cost of operations | $2,208,789 | $2,358,039 |
The accompanying notes form an integral part of these financial statements.
Notes to the Future-Oriented Statement of Operations (unaudited) for the year ended March 31, 2015
1. Methodology and Significant Assumptions
The future-oriented statement of operations has been prepared on the basis of the government priorities and the plans of the Office of the Communications Security Establishment Commissioner (Office) as described in the Report on Plans and Priorities.
The information in the estimated results for the fiscal year 2013-14 is based on the actual results as at December 31, 2013 and forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014-15 fiscal year.
The main assumptions underlying the forecasts are as follows:
- The Office activities will remain substantially the same as for the previous year.
- Expenses including the determination of amounts internal and external to the government, are based on historical pattern. The general historical pattern is expected to continue.
These assumptions are adopted as at December 31, 2013.
2. Variations and Changes to the Forecast Financial Information
While every attempt has been made to forecast final results for the remainder of 2013-14 and for 2014-15, 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 Office 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 timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense;
- Implementation of new collective agreements;
- 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 Office will not be updating the forecasts for any changes 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 2011-12 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:
Expenses
Expenses are recorded on an accrual basis. Expenses for the Office's operations are recorded when goods are received or services are rendered including services provided without charges for employee contributions to health and dental insurance plans 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 respective terms of employment.
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.
4. Parliamentary Authorities
The Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Office do not parallel financial reporting according to generally accepted accounting principles since 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 Office 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)
| Estimated 2013-14 | Planned 2014-15 | |
|---|---|---|
| Net cost of operations | $2,208,789 | $2,358,039 |
| Adjustments for items affecting net cost of operations but not affecting authorities | ||
| Services provided without charge | (81,901) | (89,168) |
| Amortization of tangible capital assets | (239,697) | (247,346) |
| Change in employee future benefits | 73,413 | - |
| Change in vacation pay and compensatory leave | (6,456) | (9,237) |
| Total items affecting net cost of operations but not affecting authorities | (254,641) | (345,751) |
| Adjustments for items not affecting net cost of operations but affecting authorities | ||
| Acquisition of tangible capital assets | $79,642 | 12,000 |
| Requested authorities | $2,033,790 | $2,024,288 |
(b) Authorities Requested (in dollars)
| Estimated 2013-14 | Planned 2014-15 | |
|---|---|---|
| Authorities provided | ||
| Vote 30 - Operating expenditures | $2,096,664 | $1,847,027 |
| Statutory amounts | 134,008 | 177,261 |
| Total | 2,230,672 | 2,024,288 |
| Less: | ||
| Lapsed: Operating | (196,882) | - |
| Requested authorities | $2,033,790 | $2,024,288 |
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