Quarterly financial report for the quarter ended September 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 of Canada'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 TSB's spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates and Supplementary 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

The TSB received $29,788,000 in funding through the Main Estimates ($26,267,000 for operating expenditures and $3,521,000 for employee benefit plans). During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2015-16 which represents an increase in authorities of $1,187,000. The TSB has additional statutory authorities totaling $32,000 at the end of the second quarter generated by proceeds from the disposal of surplus Crown assets and its authority to respend revenues as a departmental corporation. These authorities are reduced in the second quarter by a government-wide budget reduction for the Budget 2016 Back Office Transformation of $32,000.

TSB's total authorities available for use increased by $437,000 between fiscal years 2015-16 and 2016-17. This increase is explained mainly by a higher OBCF of $398,000 and an $81,000 increase in Employee Benefit Plan percentage, which is set annually by Treasury Board Secretariat. There was also an increase of $13,000 due to higher respendable revenues earned, which is offset by two government-wide budget reductions: Treasury Board Secretariat Back Office Transformation ($32,000 in second quarter) and Canada School of Public Service Initiative ($23,000 reduced from Main Estimates at beginning of the year).

Statement of departmental budgetary expenditures

The department's year-to-date spending is higher by $351,000 or 2% in the current year compared to 2015-16. This increase is mainly due to TSB's replacement of servers and laptops in the second quarter, as part of the departmental IT equipment useful life replacement schedule.

As illustrated in Figure 1, the TSB has spent approximately 47% of its authorities at the end of the second 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. Second 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

There have been no significant changes in relation to operations, personnel and programs in the current year.

Approval by senior officials

Approved by,

Source document signed by
Kathleen Fox
Chair

Source document dated 2016-11-25
Date
Gatineau, Canada

Source document signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer

Source document dated 2016-11-23
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
September 30, 2016
Year to date
used at quarter-end
Vote 1 - Net operating expenditures 27,454 6,552 12,693
Statutory authorities - Employee Benefit Plans 3,521 881 1,761
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 13 1 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 19 - -
Total authorities 31,007 7,434 14,455
Budget 2016 Frozen allotment –
Back Office Transformation
-32 - -
Total authorities available for use 30,975 7,434 14,455
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 September 30, 2015 Year to date used at quarter-end
Vote 1 - Net operating expenditures 27,079 6,546 12,373
Statutory authorities - Employee Benefit Plans 3,440 860 1,720
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 5 - 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 14 10 10
Total authorities available for use 30,538 7,416 14,104

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 September 30, 2016 Year to date used at quarter-end
Personnel 25,188 6,094 12,351
Transportation and communications 1,521 291 568
Information 138 50 70
Professional and special services 2,362 439 688
Rentals 394 62 173
Repair and maintenance 412 77 132
Utilities, materials and supplies 230 88 121
Acquisition of land, building and works 120 - 4
Acquisition of machinery and equipment 642 333 348
Sub-total net budgetary expenditures 31,007 7,434 14,455
Budget 2016 Frozen allotment –
Back Office Transformation
-32 - -
Total net budgetary expenditures 30,975 7,434 14,455
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 September 30, 2015 Year to date used at quarter-end
Personnel 24,863 6,381 12,326
Transportation and communications 1,700 308 565
Information 160 44 70
Professional and special services 2,220 429 670
Rentals 339 47 204
Repair and maintenance 466 94 102
Utilities, materials and supplies 275 24 74
Acquisition of land, building and works 115 18 18
Acquisition of machinery and equipment 400 71 75
Total net budgetary expenditures 30,538 7,416 14,104

Footnotes

Footnote 1

Includes only authorities granted by Parliament at quarter end.

Return to footnote 1 referrer