ESTIMATES ACCOUNTING POLICIES AND PRESENTATION CHANGES

 

  

 

  

Estimates Accounting Policies

 

  

1

 The Estimates fully consolidates the Consolidated Revenue Fund, which consists of the General Fund (voted appropriations and all Special Accounts), with the individual assets, liabilities, revenues and expenses of taxpayer-supported Crown corporations/agencies and regional authorities on a line-by-line basis. Self-supported Crown corporation/agency results are consolidated using the modified equity basis, which includes the profit/loss of each Crown corporation/agency rather than the individual assets, liabilities, revenues and expenses.

 

 

2

 The accounting policies followed in the Estimates comply, in all material respects, with Generally Accepted Accounting Principles (GAAP) for senior governments as modified by the Public Sector Accounting Board (PSAB), with the following exceptions:

 

 

 
a. Reporting Entity – PSAB currently defines the government reporting entity to include organizations that are accountable for the administration of their financial affairs and resources either to a minister of the government or directly to the legislature, and are owned or controlled by government.  Guidance relating to determining the government reporting entity is currently undergoing a major review.  It is anticipated that the criteria for inclusion will be changed from organizations that are accountable to government to organizations that are controlled by government.  The guidelines will include indicators of control that will assist in the determination of whether or not an entity is controlled by government.  The indicators clearly show that school districts, colleges and health authorities should be included in the government reporting entity.  However, the indicators make a strong case for the exclusion of universities from the government reporting entity.  Discussions with the Auditor General regarding the status of universities are ongoing.

The Budget Transparency and Accountability Act, 2001 requires government to fully implement GAAP by April 1, 2004. School districts, colleges, universities and health authorities are not currently included in the government’s Summary Financial Statements. Inclusion of these entities in the 2001/02 Public Accounts would have decreased the Statement of Operations surplus by $225 million. In the previous four years, inclusion of these entities would have slightly reduced the Statement of Operations deficit in each year except one when it would have slightly increased the deficit. The Auditor General has qualified his opinion on the government’s Summary Financial Statements as a result of the exclusion of school districts, colleges, universities and health authorities from the government reporting entity.
b. Prepaid Capital Advances – Prepaid Capital Advances are provided to school districts, post secondary institutions, health organizations and other specified government organizations to fund capital asset acquisitions.  The province has an ongoing claim to these assets and, accordingly, capitalizes the advances and amortizes them over the useful life of the underlying capital assets.  PSAB recommends that governments fully expense these advances in the year they are disbursed.

 

 

Significant Presentation Changes in the2002/03 Estimates
The 2003/04 Estimates presentation has been changed in order to achieve direct linkage between inputs ($/FTEs) and outputs/outcomes, as indicated by performance measures and targets included in ministry service plans. This change provides alignment between sub-votes in the Estimates and core business areas in ministry service plans. The following significant presentation changes have been incorporated into the 2003/04 Estimates:

 
1. Restatement of 2002/03 Estimates – The 2002/03 Estimates and Forecast have been restated to be consistent with the 2003/04 Estimates presentation.  Schedule A presents a detailed reconciliation of Consolidated Revenue Fund operating expense, capital expenditures and FTEs to restate the 2002/03 Estimates to be consistent with the 2003/04 Estimates presentation.
2. Regional Authorities - During fiscal years 2003/04 to 2005/06, the Ministry of Children and Family Development will transfer authority for services in its Community Living Services and Child and Family Development programs to new governance structures.  While these bodies will be responsible for directing operating and managing funds and services, the government will retain responsibility for funding, performance agreements, and monitoring and assessing accountabilities of the authorities. Therefore, these authorities are included in the government reporting entity.  Details on the estimated revenues and expenses of these regional authorities can be found in Schedule L of the 2003/04 Estimates.
3. Summary Information - In prior years, the Estimates consolidated taxpayer-supported Crown corporation/agency results using the modified equity basis which included the profits/losses of Crown corporations/agencies rather than the individual assets, liabilities, revenues and expenses.  Commencing with the 2003/04 Estimates, the assets, liabilities, revenues and expenses of taxpayer-supported entities have been consolidated with the assets, liabilities, revenues and expenses of the Consolidated Revenue Fund on a line-by-line basis.  This presentation is consistent with GAAP consolidation policies.  A number of tables in the Summary Information section of the Estimates have also been changed to conform with the new method of consolidation.

The presentation format of the Estimated Statement of Financial Position (formerly known as the Balance Sheet) has changed to comply with GAAP presentation requirements for government organizations. The Estimated Statement of Operations fully consolidates the revenues and expenses of the government.  In prior years' Estimates, this table was located in the Schedules section for information purposes only.   The Estimated Deficit Overview provides a high level presentation of the Statement of Operations and separates out taxpayer-supported programs and agencies from self-supported operations.  Taxpayer-supported programs and agencies include the Consolidated Revenue Fund, taxpayer-supported Crown corporation/agency and regional authorities. The Estimated Revenue by Source table combines the revenues of taxpayer-supported programs and agencies with the net earnings of self-supported Crown corporations/agencies to arrive at the total revenue.  The Estimated Expense by Organization combines the operating expenses of taxpayer-supported programs and agencies to arrive at the total expense.
4. Estimates of Special Offices, Ministries and Other Appropriations - The 2003/04 Estimates presentation format of this section has been changed to better align with ministry service plans.  Each ministry section begins with a summary page which includes the ministry's mission statement as well as a summary of the total voted and statutory (Special Accounts) expense, capital and other financing transactions and fulltime equivalent (FTE) employment for the fiscal year.  The following pages disclose the operating expenses, capital expenditures and other financing transactions by core business on both a summary and detailed level. The Special Offices and Other Appropriations sections of the Estimates have also changed to correspond with the new format.  However, as Special Offices and Other Appropriations are not required to disclose activities by core business, the operating expense, capital expenditures and other financing transactions for these sections are disclosed by vote.  The group account classification for voted expenses is reported at the ministry level in the Estimates; details on group account classification at the individual sub-vote level can be found in the Supplement to the Estimates.
5. Schedules - The 2003/04 Estimates includes five new schedules.  The first schedule, Regional Authorities - Estimated Revenues and Expenses (Schedule L) provides details on the estimated revenues and expenses of the Ministry of Children and Family Development governance authorities.  The second and third schedules, Reconciliation of Deficit to Change in Taxpayer-Supported Debt and Statement of Total Debt (Schedule H) and Estimated Consolidated Revenue Fund Operating Result (Schedule J) are schedules that in previous years' Estimates have been included in the Summary Information section.  The fourth schedule, Estimated Revenue by Source (Schedule M) provides a detailed reconciliation of revenue by both source and organization.  The purpose of this schedule is to show the revenue attributable to the Consolidated Revenue Fund, Crown corporation/agencies and regional authorities on a source basis. The fifth schedule, Estimated Expense by Function (Schedule N) provides a detailed reconciliation of expenses by both function and organization.  The purpose of this schedule is to show the operating expenses attributable to the Consolidated Revenue Fund, Crown corporation/agencies and regional authorities on a functional basis.