Quarterly Financial Report for the quarter ended December 31, 2011
Management Statement for the Quarter Ending September 30, 2011
The Canadian Transportation Agency is an independent administrative body of the Government of Canada. It performs two key functions within the national transportation system:
- As a quasi-judicial tribunal, the Agency, informally and through formal adjudication, resolves a range of commercial and consumer transportation-related disputes, including accessibility issues for persons with disabilities. It operates like a court when adjudicating disputes; and
- As an economic regulator, the Agency makes determinations and issues authorities, licences and permits to transportation carriers under federal jurisdiction.
Further information on the mandate, roles, responsibilities and programs of the Agency can be found in Part III of the Main Estimates.
This quarterly financial report:
- should be read in conjunction with the Main Estimates and the Supplementary Estimates, if applicable;
- 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; and
- has not been subject to an external audit or review.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency’s spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates for 2011-2012. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before moneys can be spent by the Government. Approvals are given in the form of annually approved limits through Appropriation Acts or through legislation in the form of statutory spending authority for specific purposes.
As part of the departmental performance reporting process, the Agency prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of fiscal quarter and fiscal year to date (YTD) results
Statement of Authorities
As of September 30, 2011, the total budgetary authorities available for use for the fiscal year increased by $952,000, from 28.46 to 29.41 million dollars, compared to the same quarter in the previous fiscal year. This is primarily due to both the increase in budgetary statutory authorities respecting the employee benefit plans and the increase in Vote 25 – Program expenditures.
As indicated in the statement of authorities, the increase in budgetary authorities available for use is primarily attributable to the reimbursement by Treasury Board Secretariat of $923,000 for the payout of severance pay and termination benefits to some employees.
Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous fiscal year, the total gross budgetary expenditures recorded in the second quarter ending on September 30, 2011 increased by $879,000, from 7.01 to 7.89 million dollars, as shown on the budgetary expenditures by standard object table. This sum represents a 2 percent increase (from 25 to 27 percent of the total authorities) in expenditures recorded for the same period in 2010-2011.
This increase can be explained primarily by the $924,000 increase in personnel expenditures, from 6.09 million dollars in the second quarter of 2010-2011 to 7.01 million dollars for the same quarter in 2011-2012. This difference is primarily attributable to the payments made in 2011-2012 for the payout of severance pay and termination benefits to some employees. The difference in the year to date expenditure variance between the two fiscal years is mainly due to these payments.
Finally, with respect to the other budgetary expenditures by standard object, we anticipated overall expenditures similar to those of the previous fiscal year. The differences are primarily attributable to the period in which the purchases were settled.
3. Risks and Uncertainties
The Agency is primarily funded through voted parliamentary spending authorities and statutory authorities for operating expenditures. Delivering departmental programs and services may depend on several risk factors such as economic fluctuations, political climate, technological and scientific development, government priorities, and central agencies or government-wide initiatives.
The Agency is a demand-driven organization with a mandate dependent upon fulfilling service expectations of Canadians with respect to transportation issues. Therefore, changes within the external environment, government policies and the legislative mandate related to transport have an impact on the Agency’s operating environment.
This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates and the Supplementary Estimates A and B. These include the reimbursement of the payout of severance pay and termination benefits for some employees for the period between April 1 and August 30 2011. The agency is anticipating additional expenditures related to these payouts until the end of the fiscal year, and consequently would be reimbursed for those funds by Treasury Board Secretariat.
Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-2011 levels for the fiscal years 2011-2012 and 2012-2013. Given that over 80 percent of the Agency’s budget is spent on its payroll, significant focus will continue to be placed on budget management and any impacting factors. Management is reviewing various options to adjust to this constraint in funding and potential impacts on Agency activities. The following actions and mitigation strategies are being pursued or are being considered:
- Proactive involvement in legislative/regulation change process;
- Active monitoring of industry-related events and communications to gather intelligence on evolving trends in transportation and relevant policy developments;
- Assessment of client satisfaction survey results to identify changes in expectations, identify areas of service delivery concerns and develop mitigative actions;
- Monitoring, gathering and sharing of intelligence on government’s policy and central agency directive changes (e.g. performance and financial reporting, shared services, human resources);
- Proactive participation in shared services reviews led by Treasury Board Secretariat and Public Works and Government Services Canada;
- Effective management of human and financial resources through implementing of the Agency’s HR Plan for the recruitment and retention of staff;
- Full implementation of the Agency’s Performance Measurement Framework clearly linking resources to Program Activity Architecture (PAA) to ensure Agency’s strategies/priorities and their alignment with the government’s policies;
- Actions to address and implement Management Accountability Framework (MAF) recommendations.
4. Significant changes in relation to operations, personnel and programs
There have been no significant changes in relation to operations, personnel and programs over the last year.
Approval by Senior Officials
Geoffrey C. Hare
Chair and Chief Executive Officer
November 18, 2011
Chief Financial Office
November 18, 2011
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2012*Note 1||Used during the quarter ended September 30, 2011||Year to date used at quarter-end|
|Vote 25 – Program expenditures||25,842||7,002||12,333|
|Budgetary statutory authorities − Employee Benefit Plans||3,566||892||1,783|
|Total available for use for the year ended March 31, 2011 *Note 2||Used during the quarter ended September 30, 2010||Year to date used at quarter-end|
|Vote 25 – Program expenditures||25,069||6,168||12,003|
|Budgetary statutory authorities − Employee Benefit Plans||3,387||847||1,694|
Departmental budgetary expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2012||Expended during the quarter ended September 30, 2011||Year to date used at quarter-end|
|Total net budgetary expenditures||29,408||7,894||14,116|
|Transportation and communications||595||147||244|
|Professional and special services||2,819||311||487|
|Repair and maintenance||252||97||232|
|Utilities, materials and supplies||216||50||84|
|Acquisition of machinery and equipment||518||15||20|
|Other subsidies and payments||0||141||141|
|Expenditures:||Planned expenditures for the year ending March 31, 2011||Expended during the quarter ended September 30, 2010||Year to date used at quarter-end|
|Total net budgetary expenditures||28,456||7,015||13,697|
|Transportation and communications||704,||145||325|
|Professional and special services||3,045||383||653|
|Repair and maintenance||376||65||148|
|Utilities, materials and supplies||215||71||105|
|Acquisition of machinery and equipment||432||145||165|
|Other subsidies and payments||0||0||0|