Quarterly Financial Report for the Quarter Ended June 30, 2011

Management Statement for the Quarter Ending June 30, 2011

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 quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates.

The Transportation Safety Board's (TSB) sole objective is to advance transportation safety. This mandate is fulfilled by conducting independent investigations into selected transportation occurrences. The purpose of these investigations is to identify the causes and contributing factors and the safety deficiencies evidenced by an occurrence. The TSB then reports publicly and makes recommendations to improve safety and reduce or eliminate risks to people, property and the environment.

Basis of Presentation:

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Transportation Safety Board's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the 2011-12 fiscal year. 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 TSB 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.

The quarterly report has not been subject to an external audit or review.

Highlights of Fiscal Quarter and Fiscal Year to Date Results:

The department's quarterly and year-to-date spending are in line with that of the previous year with only a minor increase of $85,000 or 1% in total expenditures. Certain individual categories of expenditures have large variances between years that offset each other. The significant increases between years are in transportation and communications expenditures (increase of $104,000 or 46%) and in utilities, materials and supplies (increase of $93,000 or 305%). These increases are generally explained by differences in the timing of spending between quarters of the year; overall spending on these expenses by year-end is expected to be consistent between years. Spending on professional and special services decreased by $147,000 (46%), which is explained by decreased spending on consultants and is in line with a planned annual reduction in this category of expense.

As can be seen in Figure 1, the TSB has spent approximately 23% (near one quarter) of its authorities in the first quarter. This is consistent with expectations given that the department's most significant expense is salaries. The TSB's spending is generally distributed equally throughout the year.

Figure 1 - First Quarter Expenditures Compared to Annual Authorities

Figure 1. First Quarter Expenditures Compared to Annual Authorities

Risks and Uncertainties:

The TSB is funded through annual appropriations. As a result, its operations are impacted by any changes in funding approved through Parliament. As a departmental corporation, it has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department's funding requirements.

This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 27, 2011. Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13 and that departments would not be funded for salary increases resulting from collective agreements in those years. As departments must pay the salary increases to employees, they are expected to find efficiencies within their operating vote to fund these increases. The TSB is not yet able to estimate the full impact of this government-wide initiative because many of the collective agreements are not yet signed. However, the TSB anticipates at this point in time being able to accommodate the reduction in funding without significantly impacting its ongoing operations.

Budget 2011 announced that departmental budgets would be examined through a Strategic and Operating Review. At this time, the nature and extent of any reductions for the TSB are not known.

TSB's expenditures are influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in resource pressures that could require the department to seek additional funding from Parliament.

The TSB's most significant expenditure is personnel representing 80% of its planned expenditures. Over the last few years, the department has faced a high level of attrition that is expected to continue for the next couple of years. An ongoing challenge for the TSB is to maintain staffing at a level sufficient to compensate for departures. Given the department's small size, the departure or hiring of a handful of employees in one quarter can have a significant impact on the quarter's expenditures.

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:


The original version was Approved by
____________________________

Wendy A. Tadros
Chair

The original version was Approved by
____________________________

Chantal Lemyre, CGA
Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2011-12 (in thousands of dollars)
  Total available for use for the year ending March 31, 2012 Expended during the quarter ended June 30, 2011 Year to date used at quarter-end
Vote 10 - Net operating expenditures 26,683 6,065 6,065
Statutory authorities - Employee Benefit Plans 3,693 964 964
Total authorities 30,376 7,029 7,029


Fiscal year 2010-11 (in thousands of dollars)
  Total available for use for the year ending March 31, 2011 Expended during the quarter ended June 30, 2010 Year to date used at quarter-end
Vote 10 - Net operating expenditures 26,354 6,061 6,061
Statutory authorities - Employee Benefit Plans 3,432 883 883
Total authorities 29,786 6,944 6,944


Statement of  Expenditures by Standard Object (unaudited)

Fiscal year 2011-12 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2012 Expended during the quarter ended June 30, 2011 Year to date used at quarter-end
Expenditures:
Personnel 24,210 5,988 5,988
Transportation and communications 1,799 333 333
Information 133 4 4
Professional and special services 2,297 174 174
Rentals 207 145 145
Repair and maintenance 509 84 84
Utilities, materials and supplies 446 123 123
Acquisition of machinery and equipment 775 178 178
Total net budgetary expenditures 30,376 7,029 7,029


Fiscal year 2010-11 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2011 Expended during the quarter ended June 30, 2010 Year to date used at quarter-end
Expenditures:
Personnel 23,619 5,932 5,932
Transportation and communications 1,788 228 228
Information 138 16 16
Professional and special services 2,471 321 321
Rentals 105 111 111
Repair and maintenance 526 106 106
Utilities, materials and supplies 410 30 30
Acquisition of machinery and equipment 729 199 199
Total net budgetary expenditures 29,786 6,944 6,944