Directive on Accounting Standards: GC 4400 Guideline: Illustrative Quarterly Financial Report

Introduction

This section indicates that the quarterly financial report:

• should be read in conjunction with the Main Estimates (and as applicable - Supplementary Estimates and previous interim reports for the current year).
• has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board.
• has not been subject to an external audit or review.

This section also provides:

• A summary description of the department’s program activities. This can be done through a link to the appropriate section of the Main Estimates (Part II).
• A brief description of the basis of presentation as follows:

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, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 20XX-20XX fiscal year. 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 money 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.

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.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results

This section should provide a concise discussion of the significant events affecting both the quarter and the year-to-date results. Elements to be discussed include, but are not restricted to, the following:

1. Identify and explain significant variances including analysis of significant trends related to increases and/or decreases in actual expenditures and in relation to planned expenditures, compared to the same periods of the preceding fiscal year (quarter and YTD), and including the status of any new significant spending initiatives.
2. Identify and explain significant changes that have occurred, but are not readily apparent from the quantitative analysis, for the quarter ended and the YTD.

Explanations should be provided for each significant variance.

Risks and Uncertainties

This section should include information on any significant financial risks and uncertainties, as well as the potential impact of these risks and uncertainties on the department’s financial plan for the current year. A brief outline of the strategies adopted to manage those risks and uncertainties should also be included. The focus should be on newly identified risks and on any changes to previously identified risks.

The department’s corporate risk profile may be a good source of information in determining what risks may exist. Examples of factors that may increase the amount of risk include:

• Internal restructuring,
• Human resource challenges and key actions,
• Changing economic, technological, social, or political conditions,
• New or changing policies or government-wide priorities,
• Reliance or dependence on key partners, clients, or stakeholders; and,
• Changes in patterns of demand for goods and services.

Significant changes in relation to operations, personnel and programs

This section should provide information about significant changes which occurred in the department during the current quarter relating to operations, personnel and programs. The potential financial impact of the significant changes should be discussed where applicable.

Approval by Senior Officials

This section provides the approval of Senior Officials, as required by the Policy on Financial Management as follows:

Notes:

• If the report is signed by an individual who has been delegated authority in the absence of the Deputy Head or CFO, “Acting” should be indicated in the Position Title.
• The posted web version of the quarterly financial report should not display images of the actual signatures of the Deputy Head and Chief Financial Officer. Instead, the text “Original signed by” should be presented immediately above the names of the Deputy Head and Chief Financial Officer.