Quarterly financial report for the quarter ended June 30, 2016

ISSN 2369-7938

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.

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.

The quarterly report 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 Transportation Safety Board's spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates for the 2016-17 fiscal year and any respendable revenue earned and available for use to quarter end. 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.

Highlights of fiscal quarter and fiscal year to date results

Statement of authorities

TSB's total authorities available for use increased by $75,000 between fiscal years 2016-17 and 2015-16. This is primarily explained by an $81,000 increase in Employee Benefit Plan percentage, which is set annually by Treasury Board Secretariat. There was also a $17,000 increase in respendable revenue generated mainly by the delivery of the Integrated Safety Investigation Methodology course. These increases are offset by a government-wide reduction for funding transferred to the Canada School of Public Service of $23,000.

Statement of departmental budgetary expenditures

The department's quarterly and year-to-date spending are higher by $333,000 or 5% in the current year compared to 2015-16. This increase is mainly due to increased personnel costs, which is attributed to positions being staffed that had been vacant in 2015-16, and severance payments for retired employees in the first quarter of 2016-17.

As illustrated in Figure 1, the TSB has spent approximately 24% of its authorities at the end of 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

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.

A continuous risk to TSB's financial situation is that expenditures are greatly 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.

Moreover, as of 2016-17, all collective agreements are expired. As announced in Budget 2014, departmental operating budgets have been frozen for the past two fiscal years. This presents a risk to the TSB since it will not be allocated any funding for wage and salary increases that took effect during that period, or for the ongoing impact of those adjustments. As a result, the department will need to cover these amounts within its existing appropriations once the collective agreements are ratified and signed. The TSB continues to manage its funding diligently to ensure this risk is mitigated.

Significant changes in relation to operations, personnel and programs

Over the past few years, there have been an increased number of significant rail accidents investigated by TSB under its mandate. Open rail occurrence investigations have been among the highest in recent years. With heightened public expectations of railway safety, there has been a significant increase in activities within the rail occurrence investigations program. In addition to incremental workload for investigation deployments and follow-ups, this program has experienced increased public and stakeholder interest in the form of media communications and access to information requests. The situation is now returning to normal state, and the TSB's rail activities are expected to return to a more steady state in 2016-17.

Approval by senior officials

Approved by,

Original signed by
Kathleen Fox
Chair

August 22, 2016
Date
Gatineau, Canada

Original signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer

August 19, 2016
Date
Gatineau, Canada

Statement of authorities (unaudited)

Fiscal year 2016-17 (in thousands of dollars)Footnote 1
  Total available
for use for the
year ending March 31, 2017
Expended during the quarter ended June 30, 2016 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,267 6,141 6,141
Main Estimates: Statutory authorities - Employee Benefit Plans 3,521 880 880
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 10 - -
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 16 - -
Total authorities available for use 29,814 7,021 7,021
Fiscal year 2015-16 (in thousands of dollars)Footnote 1
  Total available
for use for the
year ending March 31, 2016
Expended during the quarter ended June 30, 2015 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,290 5,827 5,827
Main Estimates: Statutory authorities - Employee Benefit Plans 3,440 860 860
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 4 1 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 5 - -
Total authorities available for use 29,739 6,688 6,688

Statement of expenditures by standard object (unaudited)

Fiscal year 2016-17 (in thousands of dollars)Footnote 1
Expenditures Planned expenditures
for the year ending
March 31, 2017
Expended during the
quarter ended June 30, 2016
Year to date used at
at quarter-end
Personnel 23,995 6,257 6,257
Transportation and communications 1,521 277 277
Information 138 20 20
Professional and special services 2,362 249 249
Rentals 394 111 111
Repair and maintenance 412 55 55
Utilities, materials and supplies 230 33 33
Acquisition of land, building and works 120 4 4
Acquisition of machinery and equipment 642 15 15
Total net budgetary expenditures 29,814 7,021 7,021
Fiscal year 2015-16 (in thousands of dollars)Footnote 1
Expenditures Planned expenditures
for the year ending
March 31, 2016
Expended during the
quarter ended June 30, 2015
Year to date used at
at quarter-end
Personnel 23,913 5,945 5,945
Transportation and communications 1,620 257 257
Information 121 26 26
Professional and special services 2,490 241 241
Rentals 339 157 157
Repair and maintenance 466 8 8
Utilities, materials and supplies 275 50 50
Acquisition of land, building and works 115 - -
Acquisition of machinery and equipment 400 4 4
Total net budgetary expenditures 29,739 6,688 6,688

Footnotes

Footnote 1

Includes only authorities granted by Parliament at quarter end.

Return to footnote 1 referrer