Future-Oriented Statement of Operations for the years ending March 31, 2017 and March 31, 2018

Future-oriented Statement of Operations (Unaudited)
For the Year Ending March 31
(in thousands of dollars)

Estimated Results
2016–2017

Planned Results
2017–2018

Expenses

     
 

Development of disposition authorizations

 

 $       3,006

 

 $       3,835

 

Collaboration in the management of government records

 

5,658

 

4,080

 

Acquisition and processing of documentary heritage

 

17,467

 

13,631

 

Preservation of documentary heritage

 

40,730

 

38,812

 

Access to documentary heritage

 

32,655

 

37,253

 

Internal services

 

37,012

 

31,727

Total expenses

 

136,528

 

129,338

     

 

 

 

Revenues

 

 

 

 

 

Sales of goods and information products

 

170

 

190

 

Gain on disposal of non-capital assets

 

20

 

20

 

Miscellaneous revenues

 

115

 

120

 

Revenues earned on behalf of the Government

 

(105)

 

(115)

Total revenues

 

200

 

215

     

 

 

 

Net cost of operations

 

 $   136,328

 

 $   129,123

 

The accompanying notes form an integral part of the future-oriented statement of operations.

 

___________________________________
  ___________________________________ 

Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
February 9, 2017

 

Hervé Déry
Chief Financial Officer
Gatineau, QC
February 9, 2017

1. Mandate and Objectives

Library and Archives Canada (LAC) is a government institution that was established on May 21, 2004, as a result of the amalgamation of the former National Library of Canada and the National Archives of Canada. LAC's role was confirmed in the 2004 Library and Archives of Canada Act, which assigns discretionary power to the Librarian and Archivist of Canada in attaining LAC's objectives. Pursuant to the act, no government or ministerial institution may destroy records under its control prior to receiving consent from the Librarian and Archivist of Canada; records considered to be of historical or archival importance to the Librarian and Archivist of Canada shall be transferred to his or her care and control.

LAC is considered to be a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage. LAC’s mandate is as follows:

  • to preserve the documentary heritage of Canada for the benefit of current and future generations;
  • to serve as a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
  • to facilitate in Canada co-operation among communities involved in the acquisition, preservation and diffusion of knowledge; and
  • to serve as the continuing memory of the Government of Canada and its institutions.

2. Methodology and significant assumptions

The future-oriented statement of operations has been prepared based on government priorities and the plans of LAC as described in the Departmental Plan.

The information in the estimated results for fiscal year 2016-2017 is based on actual results as of November 30, 2016 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2017-2018 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The main activities for LAC will remain substantially the same as for the previous year;
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.

These assumptions have been adopted in December 2016.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2016-2017 and for 2017-2018, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing the future-oriented statement of operations, LAC 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:

  1. The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expenses.
  2. Implementation of new collective agreements.
  3. Economic conditions may affect both the amount of revenue earned and the collectability of accounts receivable.
  4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Departmental Plan is presented, LAC 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.

4. 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 2016-2017 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) Parliamentary authorities

LAC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to LAC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

(b) Expenses

Expenses are recorded on an accrual basis. Government operating expenses are recorded when goods are received or services are rendered including services provided without charges for accommodation, employer contributions to health and dental insurance plans, legal services and workers’ 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.

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 of transfer payment expenses 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 contingent liabilities and environmental liabilities to the extent that 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.

(c) Revenues

Revenues are recorded on an accrual basis: 

  1. Sales of goods and information products are revenues from regulatory fees and are recognized in the accounts based on the services provided in the year.
  2. Funds received from external parties for specified purposes are recorded upon receipt asred revenues. These revenues are recognized in the period in which the related expenses are incurred.
  3. Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
  4. Revenues that are non-respendable are not available to discharge LAC'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 as a reduction of the entity's gross revenues.

(d) Collections

Items purchased for the collections are recorded as an expense in the year of acquisition.

5. Parliamentary Appropriations

LAC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to LAC 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, LAC has different net cost of operations for the year depending on whether they are calculated on a government funding basis or on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to forecast authorities used

Estimated
Results
2016-2017

 

Planned
Results
2017-2018

 
     

(in thousands of dollars)

 

Net cost of operations

 $       136,328

 

$     129,123

 

Adjustments for items affecting net cost of operations but not affecting authorities:

       
 

Services provided without charge by other government departments

 (20,398)

 

 (20,814)

 
 

Amortization of tangible capital assets

 (4,643)

 

 (4,673)

 
 

Decrease (increase) in vacation pay and compensatory leave

(150)

 

(100)

 
 

Decrease (increase) in employee future benefits

 

(150)

 
 

Refunds of previous years’ expenditures

130

 

125

 
 

Revenue not available for spending

30

 

25

 
 

Total items affecting net cost of operations but not affecting authorities

(25,031)

 

(25,587)

 

Adjustments for items not affecting net cost of operations but affecting authorities:

 
 

Acquisitions of tangible capital assets

13,092

 

13,253

 
 

Total items not affecting net cost of operations but affecting authorities

13,092

 

13,253

 

Forecast authorities used

 $       124,389

 

$     116,789

 

 

The $116.8 million in forecast authorities used for 2017–2018 differs from the $115.2 million in planned authorities presented in the Departmental Plan 2017–2018. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.6 million for eligible paylist expenditures.

(b) Forecast authorities requested and used

Estimated
Results
2016-2017

 

Planned
Results
2017-2018

 

 

Authorities requested

(in thousands of dollars)

 

Vote 1 — Operating expenditures

$       101,951

 

$       94,317

 

Vote 2 — Capital expenditures

12,393

 

12,153

 

Statutory amounts

10,045

 

10,319

 

Forecast authorities available

124,389

 

116,789

 

Forecast authorities used

 $        124,389

 

$     116,789

 

 

The $116.8 million in forecast authorities used for 2017–2018 differs from the $115.2 million in planned authorities presented in the Departmental Plan 2017–2018. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.6 million for eligible paylist expenditures.

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