Quarterly Financial Report for the quarter ended December 31, 2011

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Management Statement for the Quarter Ending September 30, 2011

1. Introduction

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:

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

Graph 1 – Second quarter net budgetary authorities and expenditures per fiscal year.

Graph 1 – Second quarter net budgetary authorities and expenditures per fiscal year.

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

Approved by

Geoffrey C. Hare
Chair and Chief Executive Officer
Gatineau, Canada
November 18, 2011

Linda Harrison
Chief Financial Office
Gatineau, Canada
November 18, 2011

Statement of Authorities (unaudited)

Fiscal year 2011-2012 (in thousands of dollars)
Total available for use for the year ending March 31, 2012*Note 1Used during the quarter ended September 30, 2011Year to date used at quarter-end
Total authorities 29,842 7,894 12,333
Vote 25 – Program expenditures 25,842 7,002 12,333
Budgetary statutory authorities − Employee Benefit Plans 3,566 892 1,783
Fiscal year 2010-2011(in thousands of dollars)
Total available for use for the year ended March 31, 2011 *Note 2Used during the quarter ended September 30, 2010Year to date used at quarter-end
Total authorities 28,456 7,015 13,697
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)

Fiscal year 2011-2012 (in thousands of dollars)
Expenditures:Planned expenditures for the year ending March 31, 2012Expended during the quarter ended September 30, 2011Year to date used at quarter-end
Total net budgetary expenditures 29,408 7,894 14,116
Personnel 24,594 7,013 12,744
Transportation and communications 595 147 244
Information 274 62 71
Professional and special services 2,819 311 487
Rentals 140 58 93
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
Exercice 2010-2011 (en milliers de dollars)
Expenditures:Planned expenditures for the year ending March 31, 2011Expended during the quarter ended September 30, 2010Year to date used at quarter-end
Total net budgetary expenditures 28,456 7,015 13,697
Personnel 23,313 6,089 12,083
Transportation and communications 704, 145 325
Information 203 39 96
Professional and special services 3,045 383 653
Rentals 168 78 122
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
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