Revised quarterly financial report for the quarter ended June 30, 2014
Date: February 27, 2015
Location: Statement of Expenditures by Standard Object, Expended during the quarter ended June 30, 2014, Vote 1 – Personnel expenditures and affected totals. Statement of Authorities, Main Estimates: Vote 1- Net operating expenditures, Expended during the quarter ended June 30, 2014 and affected totals.
Revision: Statement of Expenditures “Personnel $6,119 thousand” replaces “Personnel $5,399 thousand”. Statement of Authorities “Net operating expenditures $7,357 thousand” replaces “Net operating expenditures $6,637 thousand”.
Rationale for the revision: Original amount reported for personnel expenditures was not correct because it was missing a quarter-end accrual.
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 as well as Canada's Economic Action Plan 2012 (Budget 2012).
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 2014-15 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 decreased by $484,000 between fiscal years 2014-15 and 2013-14. This decrease is explained mainly by a reduction of $437,000 for savings measures announced in Budget 2012 (a reduction of $1,283,000 implemented for fiscal year 2014-15 compared to a reduction of $846,000 implemented for fiscal year 2013-14). The remaining difference is due to a decrease in the rate set by Treasury Board Secretariat for Employee Benefit Plans (16.5% of salaries in 2014-15 compared to 17.4% in 2013-14), and is offset by additional funding received for salary increments awarded under collective agreements signed for certain employee groups in the last quarters of 2013-14.
Statement of departmental budgetary expenditures
The department's quarterly and year-to-date spending are higher by $1,522,000 or 23% in the current year compared to 2013-14. The increase in expenditures can be attributed to the following factors:
- a one-time transition charge of $721,000 to implement the payment of salaries in arrears by the Government of Canada, without impacting employees on salary at the date of implementation;
- the expenditure of $612,000 for the receipt and installation of an X-Ray Computed Tomography System, which had been planned for the last quarter of 2013-14 but delivery was delayed by the supplier to the first quarter of 2014-15; and
- an increase in personnel expenditures of $189,000 due to an increase in severance payments attributable to the liquidating of accumulated severance benefits as per collective agreements.
At the end of the first quarter the TSB has spent 84% of planned spending for rentals. This is normal for the first quarter as it is due mainly to expenditures for annual software licenses which are payable at the beginning of the year. There should only be minor increases in the quarters that follow for this expenditure category.
As illustrated in Figure 1, the TSB has spent approximately 28% of its authorities at the end of the first quarter. This is approximately 5% greater than the previous year which can be explained by the significant transactions which increased expenditures in the first quarter as described above.
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.
Furthermore, as announced in Budget 2014, departmental operating budgets are frozen for 2014-15 and 2015-16. This presents a risk to the TSB since it will not be allocated any funding for wage and salary increases that take 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. The TSB is implementing additional spending restraints to ensure this risk is mitigated.
Significant changes in relation to operations, personnel and programs
During 2013-14, the TSB initiated a major occurrence investigation following the July 6, 2013 derailment of a train carrying petroleum crude oil in the center of the town of Lac-Mégantic, Quebec. In 2013-14, the TSB received additional funding in Supplementary Estimates B to cover incremental investigation costs for the field phase and the analysis phase of up to $965,000 for this significant investigation. The Lac-Mégantic investigation continues to represent significant workload for the TSB in 2014-15, most significantly in the areas of overtime, short-term staff, contractors and travel.
Budget 2012 implementation
This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.
Budget 2012 called upon the TSB to reduce its expenditures by $1,283,000 by 2014-15, a net reduction of approximately 4.3% of its 2012-13 budget. For fiscal year 2014-15, the reduction of $1,283,000 consists of a reduction in the TSB's operating vote of $1,118,000 and a reduction in the statutory authorities for employee benefit plans of $165,000. The TSB has eliminated positions and reduced spending on professional services and special services as well as transportation and communications in order to achieve the reductions in funding.
During 2014-15, the TSB is continuing to review its operations to identify efficiencies to ensure that it meets the 2014-15 funding reductions and maintain the reduced budget levels for future fiscal years. To date, the TSB has implemented the funding reductions without impacting the number or quality of investigations or the timeliness of its safety communications.
Approval by senior officials
Source document signed by
Source document dated 2015-03-04
Source document signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer
Source document dated 2015-03-03
Statement of authorities (unaudited)
|Total available for use for the year ending
March 31, 2015
|Expended during the quarter ended
June 30, 2014
|Year to date used at quarter-end|
|Main Estimates: Vote 1 - Net operating expenditures||25,757||7,357||7,357|
|Main Estimates: Statutory authorities - Employee Benefit Plans||3,285||821||821|
|Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets||14||-||-|
|Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act||4||-||-|
|Total authorities available for use||29,060||8,178||8,178|
|Total available for use for the year ending March 31, 2014 (restated)||Expended during the quarter ended
June 30, 2013
|Year to date used at quarter-end|
|Main Estimates: Vote 10 - Net operating expenditures||26,063||5,760||5,760|
|Frozen Travel Funding - Budget 2013||-24||-||-|
|Total Vote 10 – Available for Use||26,039||-||-|
|Statutory authorities - Spending of proceeds from the disposal of surplus Crown assetsFootnote 2||28||-||-|
|Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration ActFootnote 2||4||-||-|
|Main Estimates: Statutory authorities - Employee Benefit Plans||3,505||896||896|
|Total authorities available for use||29,576||6,656||6,656|
Statement of expenditures by standard object (unaudited)
|Expenditures||Planned expenditures for the year ending March 31, 2015||Expended during the quarter ended June 30, 2014||Year to date used at at quarter-end|
|Transportation and communications||1,526||164||164|
|Professional and special services||1,956||267||267|
|Repair and maintenance||404||50||50|
|Utilities, materials and supplies||270||30||30|
|Acquisition of land, building and works||0||0||0|
|Acquisition of machinery and equipment||645||630||630|
|Other subsidies and payments||730||721||721|
|Total net budgetary expenditures||29,060||8,178||8,178|
for the year ending
March 31, 2014 (restated)Footnote 2
|Expended during the quarter ended June 30, 2013||Year to date used at at quarter-end|
|Transportation and communications||1,776||247||247|
|Professional and special services||2,382||285||285|
|Repair and maintenance||479||61||61|
|Utilities, materials and supplies||331||44||44|
|Acquisition of land, building and works||-||-||-|
|Acquisition of machinery and equipment||604||8||8|
|Total net budgetary expenditures||29,576||6,656||6,656|