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Quarterly Financial Report (unaudited) – For the quarter ended June 30, 2011

Statement outlining results, risks and significant changes in operations, personnel and program

1. Introduction

This quarterly report 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. This report should be read in conjunction with the Main Estimates. It was not subject to an external audit or review.

A summary description of the Canadian International Development Agency (CIDA) program activities for the current fiscal year can be found in Part II of the Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management according to the Treasury Board accounting standard, using an expenditure basis of accounting. The accompanying Statement of Authorities includes CIDA's spending authorities, as granted by Parliament, and those CIDA used consistent with the Main Estimates for the 2011-2012 fiscal year.

The Government requires the authority of Parliament to spend money. Annually approved limits are given through appropriation acts or 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 allowing 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.

As part of the departmental performance reporting process, CIDA prepares its annual departmental financial statements on a full accrual basis, according to Treasury Board accounting policies. These are based on generally accepted Canadian accounting principles for the public sector. Spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

This section presents an analysis of either significant or sensitive components of CIDA's 2011-2012 first quarter (April 1, 2011 to June 30, 2011) as compared to the same period in the previous year.

It should be noted that CIDA's 2010-2011 authorities represent the total Main Estimates and the Supplementary Estimates (A), whereas 2011-2012 includes only the amounts in the Main Estimates granted by Parliament as of June 30, 2011. CIDA did not request authorities through Supplementary Estimates (A) in 2011-2012.

CIDA's budgetary authorities available for 2011-2012 increased by $223 million compared to the same quarter in 2010-2011, as reflected in the attached Statement of Authorities. This is mainly due to a $207 million increase in Vote 30—Grants and Contributions, from allocations from the Government's International Assistance Envelope (IAE), the principal means by which Canada allocates foreign aid.

In CIDA's 2011-2012 Main Estimates, $212 million has been allocated for Canada's Maternal, Newborn and Child Health (MNCH) initiative and $50 million has been added to establish a Crisis Pool "quick release mechanism" to allow for a quick response to disasters and crises. The balance of the Crisis Pool is held in the IAE in the fiscal framework. Reductions resulting from the conclusion of the initial one-time funding to humanitarian assistance and early recovery funding for Haiti partly offset these increases in authorities.

Grants and Contributions authorities used in the first quarter of 2011-2012 decreased by $20 million compared to the same quarter for 2010-2011. For this reason, the increase of the available authorities mentioned above is not entirely reflected in the actual expenditures for this quarter. This can be explained by reduced spending in Afghanistan and because a significant portion of the assistance provided to Haiti in 2010-2011 was one-time funding at the beginning of the fiscal year whereas MNCH is funded throughout the year.

The encashment of notes (advances) issued under the International Development (Financial Institutions) Assistance Act increased by $61 million in the first quarter of 2011-2012 due to the timing of encashment stipulated in the notes schedules as well as the timing of recipient operations.

The net increase of $41 million in total budgetary authorities used, as well as transfer payments expended during the first quarter as indicated in Table 1—Departmental Budgetary Expenditure by Standard Object, is mostly due to the increase in the encashment of notes to International Financial Institutions (IFI), such as the Global Environment Facility Trust and the Caribbean Development Bank, where the issuance of notes increased by $53 million and $8 million respectively.

The use of non-budgetary authorities in 2011-2012 reflects the increase of capital shares in IFIs to respond to the global economic crisis and to the longer-term development needs in Africa, the Americas, Asia and the Caribbean.

3. Risks and Uncertainties

Because of the nature of CIDA's work, substantial risks are associated with both operating and partner activities. These risks are mitigated to the degree possible and closely managed in all cases, but are inherent to operating in very poor and/or fragile and conflict-affected countries.

Although the long-term outlook is positive, international development gains remain inherently uncertain, particularly in the short term. Significant political, economic, social, and environmental events, beyond the Agency's control, can threaten the attainment of development outcomes, and even reverse gains made.

To remain relevant in the present and future international development environment, CIDA must adapt to changes and conditions on the ground. The Agency's success is closely linked to its capacity to monitor and adapt to global and regional developments, as well as its ability to manage risk.

CIDA continually assesses risks and develops appropriate responses. CIDA's fiduciary risk exposure—the risk that funds are misappropriated or mismanaged—is mitigated by strong controls and by working with a portfolio of diverse partners, many of which are low-risk international organizations.

4. Significant changes in relation to operations, personnel and programs

At the Muskoka 2010 G-8 Summit, the initiative on Maternal, Newborn and Child Health (MNCH) was launched. Canada committed an additional $1.1 billion over 5 years to MNCH spending, beyond the $1.75 billion ongoing investment over the same period. In 2011-2012, CIDA will also continue to apply its new strategies of stimulating sustainable economic growth, securing the future of children and youth, and increasing food security.

Budget 2010 fulfilled Canada's commitment to double the International Assistance Envelope (IAE) to $5 billion in 2010-2011. With the achievement of this target, subsequent IAE commitments have been capped at this level and will be assessed alongside all other government priorities on an annual basis in the budget.

Also, as announced in the 2010 Budget, operating budgets of departments are frozen at the 2010-2011 reference levels in 2011-2012 and 2012-2013.

Approved by:

Original signed by Margaret Biggs
on August 29, 2011

Original signed by Sue Stimpson
on August 29, 2011


_______________________________
Margaret Biggs
President

Gatineau, Canada


_______________________________
Sue Stimpson
Chief Financial Officer

Gatineau, Canada

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Statement of Authorities (unaudited)

Fiscal Year 2011-2012

(in thousands of dollars) Statement of Authorities 2011-2012

 Total available for use for the year ending March 31, 2012Footnote 1Used during the quarter ended June 30, 2011Year to date used at quarter-end
Vote 25 — Net operating expenditures200,90245,71645,716
Vote 30 — Grants and contributions2,958,150230,695230,695
Budgetary statutory authorities - Encashment of notes issued to the development assistance funds of the international financial institutions248,113180,873180,873
Budgetary statutory authorities - Other27,1266,7816,781
Total budgetary authorities3,434,291464,065464,065>
Non-budgetary authorities — Payments to International Financial Institutions — Capital subscriptions84,28030,87430,874
Total authorities3,518,571494,939494,939

Fiscal Year 2010-2011

(in thousands of dollars)Statement of Authorities 2010-2011

 Total available for use for the year ending March 31, 2011Footnote 2Used during the quarter ended June 30, 2010Year to date used at quarter-end
Vote 25 — Net operating expenditures203,36345,23045,230
Vote 30 — Grants and contributions2,751,042250,400250,400
Budgetary statutory authorities - Encashment of notes issued to the development assistance funds of the international financial institutions230,691120,213120,213
Budgetary statutory authorities - Other26,1106,5296,529
Total budgetary authorities3,211,206422,372422,372
Non-budgetary authorities — Payments to International Financial Institutions — Capital subscriptions   
Total authorities3,211,206422,372422,372

Table 1: Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2011-2012

(in thousands of dollars)Budgetary expenditures by standard object 2011-2012

ExpendituresPlanned expenditures for the year ending March 31, 2012Footnote 3Expended during the quarter ended June 30, 2011Year to date used at quarter-end
Personnel177,39046,33346,333
Transportation and communications11,3011,9481,948
Information2983838
Professional and special services28,2632,9192,919
Rentals2,459378378
Repair and maintenance3,312618618
Utilities, materials and supplies1,2649999
Acquisition of machinery and equipment3,375124124
Transfer paymentsFootnote 43,206,263411,568411,568
Other subsidies and payments3664040
Total net budgetary expenditures3,434,291464,065464,065

Fiscal Year 2010-2011

(in thousands of dollars)Budgetary expenditures by standard object 2010-2011

ExpendituresPlanned expenditures for the year ending March 31, 2011Footnote 5Expended during the quarter ended June 30, 2010Year to date used at quarter-end
Personnel179,23545,66645,666
Transportation and communications11,6051,9881,988
Information3013535
Professional and special services28,5352,7152,715
Rentals2,060507507
Repair and maintenance3,315389389
Utilities, materials and supplies1,0558080
Acquisition of machinery and equipment2,3616161
Transfer paymentsFootnote 62,981,733370,613370,613
Other subsidies and payments1,306318318
Total net budgetary expenditures3,211,206422,372422,372
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