Future-Oriented Statement of Operations for the years ending March 31, 2016 and March 31, 2017

Table of Contents

 

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

This table indicates Library and Archive Canada’s Future-Oriented Statement of Operations for the years ending March 31, 2016 and March 31, 2017. Displayed are the expenses by program, revenues by type and net cost of operations Numbers are displayed in thousands of dollars and totals for 2015–2016 and 2016–2017 are included.

Estimated Results
2015–2016

Planned Results
2016–2017

Expenses

     
 

Development of regulatory instruments and recordkeeping tools

 

 $       3,598

 

 $       3,230

 

Collaboration in the management of government records

 

8,548

 

6,021

 

Documentation of Canadian society

 

15,703

 

17,382

 

Stewardship of documentary heritage

 

43,726

 

52,074

 

Access to documentary heritage

 

37,037

 

32,972

 

Internal services

 

34,120

 

31,251

Total expenses

 

142,732

 

142,930

           

Revenues

       
 

Sales of goods and information products

 

190

 

205

 

Gain on disposal of non-capital assets

 

30

 

20

 

Miscellaneous revenues

 

1,367

 

120

 

Revenues earned on behalf of Government

 

(56)

 

(107)

Total revenues

 

1,531

 

238

           

Net cost of operations

 

 $   141,201

 

 $   142,692

 

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

 

___________________________________
  ___________________________________ 

Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, QC
February 15, 2016

 

Hervé Déry
Chief Financial Officer
Gatineau, QC
February 15, 2016

1. Mandate and Objectives

Library and Archives Canada (LAC) is a government institution and was established on May 21, 2004, as a result of the amalgamation of the former National Library of Canada and 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 objects. 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 a Schedule I.1 organization within the Financial Administration Act and reports to Parliament through the Minister of Canadian Heritage; its 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 on the basis of government priorities and the plans of Library and Archives Canada as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2015-2016 is based on actual results as at November 30, 2015 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016-2017 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • (a) The main activities will remain substantially the same as for the previous year;
  • (b) 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 January 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 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 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:

  • (a) The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expenses. 
  • (b) Implementation of new collective agreements.
  • (c) Economic conditions may affect both the amount of revenue earned and the collectability of accounts receivable.
  • (d) 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, 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 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) 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, 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 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 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 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.

(c) Revenues

Revenues are recorded on an accrual basis:

  • (i) 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.
  • (ii) 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.
  • (iii) Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
  • (iv) Revenues that are non-respendable are not available to discharge the 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 in 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 on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

This table reconciles Library and Archive Canada’s forecasted net cost of operations to current year forecasted appropriations used for the years ended March 31, 2016 and 2017. Totals for 2015–2016 and 2016–2017 are included and displayed in thousands of dollars.

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

Estimated
Results
2015–2016

 

Planned
Results
2016–2017

 
     

(in thousands of dollars)

 

Net cost of operations

 $       141,201

 

$     142,692

 

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

       
 

Services provided without charge by other government departments

  (40,592)

 

 (20,076)

 
 

Amortization of tangible capital assets

 (3,422)

 

 (5,140)

 
 

Decrease (increase) in vacation pay and compensatory leave

(100)

 

(50)

 
 

Decrease (increase) in employee future benefits

 

(150)

 
 

Refunds of previous years’ expenditures

70

 

70

 
 

Revenue not available for spending

235

 

33

 
 

Total items affecting net cost of operations but not affecting authorities

(43,809)

 

(25,313)

 

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

 
 

Acquisitions of tangible capital assets

700

 

900

 
 

Total items not affecting net cost of operations but affecting authorities

700

 

900

 

Forecast authorities used

 $       98,092

 

$     118,279

 

 

The $118.3 million in forecast authorities used for 2016–2017 differs from the $116.9 million in planned authorities presented in the Report on Plans and Priorities 2016–2017. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.4 million for eligible paylist expenditures.

This table indicates Library and Archive Canada’s details of the current year forecasted authorities used for the years ended March 31, 2016 and 2017. Totals for 2015–2016 and 2016–2017 are included and displayed in thousands of dollars.

(b) Forecast authorities requested and used

Estimated
Results
2015–2016

 

Planned
Results
2016–2017

 

Authorities requested

(in thousands of dollars)

 

Vote 1 – Operating expenditures

 $         95,157

 

$       96,326

 

Vote 2 – Capital expenditures

 

12,087

 

Statutory amounts

11,425

 

9,866

 

Forecast authorities available

106,582

 

118,279

 

Forecast estimated lapse (eg. Operating, Frozen allotments)

 (8,490)

 

 

Forecast authorities used

 $      98,092

 

$    118,279

 

 

The $118.3 million in forecast authorities used for 2016–2017 differs from the $116.9 million in planned authorities presented in the Report on Plans and Priorities 2016–2017. The difference is explained by the fact that the total authorities provided in the future-oriented statement of operations include a forecast of $1.4 million for eligible paylist expenditures.

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