Thank you, Mr. Speaker.
I am pleased to be here today to present the audited financial statements of the House of Commons for the fiscal year that ended on March 31, 2018.
I've provided an overview of the various financial reports we bring to the board to help members of the board in their oversight role for the House of Commons' financial activities. During this cycle, we cover the various financial results from prior years, the in-year activities, and some of the future planning activities for which we need resources.
As part of this financial cycle, you will recall that last June, I provided you with the year-end financial report for the fiscal year ending 2017-18. The purpose of that report was to present the comparatives between the spending authorities of 2017-18 and those of 2016-17.
Today I'm here to present to you the 2017-18 audited financial statements. They represent one of the many formal records of the House of Commons' financial activities and financial position, as of March 31, 2018. They are prepared by the House administration and present only one of the financial disclosures that we do for the public with regard to our House resources.
With respect to the financial resources, some of the disclosures we do are the Report to Canadians, which we'll be discussing later at this meeting; the Public Accounts of Canada; our quarterly financial reports; the members' expenditure reports; and the House officer expenditure reports.
The audited financial statements are prepared using the accrual basis of accounting rather than the expenditure basis of accounting. That means they reflect the activities of transactions and events in the period in which they occur, rather than in the period in which we've used the appropriations. The main difference to note is that the net cost of operations in these financial statements includes the services provided without charge, such as the operating costs for the various buildings we occupy.
We also have a statement of financial position, which includes our inventory, the capital asset less our amortization, the liabilities for employee benefits and sick leave, and the liabilities for vacation pay and compensatory leave.
These House of Commons financial statements were prepared in accordance with Canadian public sector accounting standards.
As you will hear in the following presentation, every year, these financial statements are audited by an independent external auditor. This year, it was KPMG, and some members of that firm are here today.
This year, and for as long as we've had audited financial statements, we have received an unqualified opinion. To me, this is a testament to the efforts made by my team to ensure that systems and practices are in place to ensure that reliable financial information is available for decision-making in all of our financial reports.
I would like to take a few minutes to present some highlights of the financial statements.
The financial statements provide an overview of the assets and liabilities of the House of Commons. As of March 31, 2018, the $79 million in assets consisted primarily of funds provided to the House of Commons to support its activities. Receivables are mostly amounts to be collected from federal departments and agencies and other parliamentary institutions. Capital assets are assets with a purchase price over $10,000.
On the other hand, as of March 31, 2018, the House of Commons' liabilities were in the amount of $80 million. They are mainly composed of amounts payable to suppliers and employee benefits.
Our cost of operations for 2017-18 has increased by approximately $60 million. Our net cost of operations fluctuates from year to year depending on various factors, such as the various initiatives presented in the House administration's strategic plan.
I'll mention a few that we had reported previously. They include the investments we've made into the renewal of our HR financial systems, our food service modernization, the digital strategy for modernizing the delivery of parliamentary information and our LTVP.
There are significant variances between the net cost of operations in fiscal years 2016-17 and 2017-18 for salaries and benefits, transportation, communications, publication, printing, repairs and maintenance. There was also variance in our revenues.
For the category of salaries and benefits, we have seen an increase of $61 million, which can mostly be explained by the one-time actuarial adjustments, as directed in the actuarial report on the pension plan for members of Parliament. There were also the economic increases for the House administration employees and the annual increases for members' sessional allowances and additional salaries. There were also some increases in our capacity to deliver on the various initiatives that had been presented in the strategic plan for 2016 to 2019.
For the category of transportation and telecommunications, we have seen a decrease of $2 million as a result of the one-time investment in 2016-17 for the Internet-based connectivity to deliver the constituency communication network for members.
There is also the category of advertising and printing, where we've had an increase of $2.1 million, mainly due to the promotions of the 150th anniversary of Confederation by the members, and there was also the increase in the House administrative printing cost as a result of the productions of the House of Commons Procedure and Practice book.
The repairs and maintenance costs were also increased by $3.7 million as a result of the security enhancements to the West Block and the activities related to our long-term vision and plan.
Our revenues increased by $10 million owing to the increase in services provided to other parliamentary institutions and the increase in revenues generated by our catering services, cafeteria and restaurant.
As of March 31, 2018, the total budget for the House of Commons, adjusted to conform to the basis of accounting for these financial statements, was $598 million. When we subtract the House of Commons expenses and add our revenues, it provides us with a surplus last year of $22.7 million, which was also indicated when I presented our year-end financial report for 2017-18 last June.
Finally, I want to inform you that we will be posting these financial statements to the House of Commons public website after this meeting.
I will now give the representatives from KPMG the opportunity to present their audit results of these financial statements, and we will be open for any questions that you may have after the auditor's presentation.