2019-2020 Future-Oriented Statement of Operations

Future-Oriented Statement of Operations (unaudited)
For the year ended March 31
(in dollars)

	Forecast results 2018–19	Planned results 2019–20
Expenses
Commissioner's Review Program	$1,736,795	$1,707,333
Internal Services	664,270	648,049
Total Expenses	2,401,065	2,355,382
Net cost of operations	$2,401,065	$2,355,382

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

Notes to the Future-Oriented Statement of Operations (unaudited)

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 (the office) as described in the Departmental Plan.

The information in the forecast results for the fiscal year 2018–19 is based on the actual results as at December 31, 2018 and forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for the 2019–20 fiscal year.

The main assumptions underlying the forecasts are as follows:

• Expenses, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.
• The office's activities will remain the same as for the previous year.

These assumptions are made as at December 31, 2018.

It should be noted, however, that these activities could and most likely will change significantly as a result of Bill C-59, An Act respecting national security matters (currently referred to the Standing Senate Committee on National Security and Defence for further study). If passed as is, Part 2 of Bill C-59 would abolish the position of the Commissioner of the Communications Security Establishment, provide for the Commissioner to become the Intelligence Commissioner, transfer the employees of the former Commissioner to the office of the new Commissioner and on the day on which this section comes into force, deem any unexpended appropriation to be the amount appropriated to defray any expenditure of the office of the new Commissioner.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018–19 and for 2019–20, actual results achieved for both years are likely to differ 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 about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

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 tangible capital assets may affect gains/losses and amortization expense;
• implementation of new collective agreements which impact indirectly on salary costs within the office;
• other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, the office will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

3. Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared using Government of Canada accounting policies that 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 when goods are received or services are rendered. These expenses include the following:

• vacation pay and compensatory leave when earned by employees under their respective terms of employment ; and
• amortization of tangible capital assets, which is recorded on a straight-line basis over the estimated useful life of each asset. Tangible capital assets are capitalized at their acquisition cost.

4. Parliamentary Authorities

The office is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly 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

	Forecast Results 2018–19 (in dollars)	Planned Results 2019–20 (in dollars)
Net cost of operations	$2,401,065	$2,355,382
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments	(107,017)	(102,311)
Amortization of tangible capital assets	(122,333)	(102,487)
Change in vacation pay and compensatory leave	(3,345)	(5,649)
Total items affecting net cost of operations but not affecting authorities	(232,695)	(210,447)
Adjustments for items not affecting net cost of operations but affecting authorities:
Forecast current year lapse	101,476	-
Total items affecting net cost of operations but not affecting authorities	101,476	-
Requested authorities	$2,269,846	$2,144,935

b) Authorities Requested

	Forecast results 2018–19 (in dollars)	Planned Results 2019–20 (in dollars)
Authorities requested
Vote 1 - Operating expenditures	$2,103,870	$1,974,788
Statutory amounts	165,976	170,147
Total authorities requested	$2,269,846	$2,144,935