Effective Date: April 1, 2017

Applicable FAM Policies: 310 - Supplementary Appropriations

Applicability: GNWT Departments

With the exception of special warrants under section 78 of the Financial Administration Act (FAA) and deemed appropriations under sections 75 and 77 of the FAA, all expenditures for operations or infrastructure require an appropriation that is authorized by an enactment of the Legislative Assembly.

INTERPRETATION

Supplementary funding is an adjustment to departmental appropriations for emergent or unforeseen expenditures.

Appropriations can be either positive amounts or negative amounts.  Supplementary appropriations are specific to a department, activity, vote, and fiscal year.  Unlike target adjustments to increase a department’s annual budget, supplementary appropriations by definition exist for only one fiscal year.  Every supplementary funding adjustment lapses on March 31.

Departments may request approval of supplementary funding from the Financial Management Board (FMB) for inclusion in a Supplementary Appropriation Act, which is tabled, debated, and approved in the Legislative Assembly. Only an unforeseen or emergent expenditure of $50,000 or greater, that cannot be mitigated by within the department’s current appropriation, is eligible for a request for a supplementary appropriation.

Supplementary Funding Eligibility Criteria

A supplementary appropriation is typically characterized by at least one of the following attributes:

1. The expenditure is offset by equivalent revenues from a third party – typically the Government of Canada, but it could be others – or is offset by significant own-source or self-sustaining revenues (i.e. investments in income-generating assets);

2. The expenditure is cost-shared in accordance with FAM policy 1410 – Cost Shared Arrangements;

3. It is a non-cash matter.  This includes things like changes in amortization which does not involve the disbursement of money.  Other examples include grants-in-kind, write-offs;

4. The expenditure is fully offset by an equivalent reduction to another appropriation.  This may involve any one, or a combination of, the following:

• An increase in an operations expenditure appropriation and an equivalent decrease in an infrastructure expenditure appropriation;
• A decrease in an operations expenditure appropriation and an equivalent increase in an infrastructure expenditure appropriation;
• An increase in an appropriation of one department and an equivalent decrease in an appropriation of a different department (commonly referred to as a transfer of appropriations between departments);
• An increase in an appropriation in the current fiscal year and an equivalent decrease in an appropriation in the succeeding future fiscal year;
• A decrease in an appropriation in the current fiscal year and an equivalent increase in an appropriation in the succeeding future fiscal year;

5. The expenditure is an infrastructure carryover.  It must satisfy the requirements of FAM Interpretation Bulletin, IB 310.02 – Carryover of Infrastructure Funding; or,

        6. The request was presented to the FMB during the appropriate business planning process (i.e. forced growth; new initiatives, etc.), but was deferred pending better substantiation or other requirements.

Circumstances that are NOT Eligible for Supplementary Funding

Departments are expected to collect the data necessary to build rational, evidence-based, decision-making models to predict, as accurately as possible, changes in expenditures during future fiscal years.  The inability (for various reasons) to collect the data necessary to forecast does not make an expenditure eligible for supplementary funding. 

Each of the following categories of expenditures is explicitly prohibited for consideration of supplementary funding:

• Expenditures that qualify as forced growth;
• Expenditures that qualify as new initiatives;
• Expenditures for the discretionary expansion of existing programs;
• Requests under $50,000; and
• A basket of requests with an aggregate total of above $50,000, but comprised of a series of expenditures less than $50,000 (Note: a grouping of small, unrelated expenditures cannot be bundled together in order to exceed the $50,000 threshold).

Terminology

Cannot be mitigated within the department’s current appropriation - means that the department cannot incur the expenditure without exceeding its total departmental appropriation for the applicable fiscal year (FAA, s. 71), even after reallocating amounts within its existing appropriation to attempt to address any shortfall of funding due to the unforeseen events.  Departments are expected to reallocate available resources to accommodate such events without adversely affecting its core program deliverables to the public.

Unforeseen - means “unforeseeable” rather than “presently unquantifiable.”  Supplementary funding requests for expenditures that departments know will happen, even if the exact cost and/or timing is uncertain, do not qualify under FAM policy 310 – Supplementary Appropriations.  “Unforeseen” typically refers to circumstances that could not reasonably have been predicted by the department.

Emergent means events or circumstances that arise quickly and unexpectedly, calling for immediate action.  For greater certainty, emergent includes an emergency.

Emergency means a state of emergency that is declared by the Minister responsible for the Civil Emergency Measures Act (CEMA) in accordance with subsection 12(1) of the CEMA, or a state of local emergency that is declared by the local authority of a municipality in accordance with subsection 15(1) of the CEMA.