Quarterly financial report for the quarter ended September 30, 2015
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.
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 and Supplementary Estimates for the 2015-16 fiscal year and any respendable revenue 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 $29,730,000 in funding through the Main Estimates ($26,290,000 for operating expenditures and $3,440,000 for employee benefit plans). During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2014-15 which represents an increase in authorities of $789,000. The TSB has additional statutory authorities totaling $19,000 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.
TSB’s total authorities available for use increased by $815,000 between fiscal years 2014-15 and 2015-16. This increase is explained mainly by $677,000 of additional funding for compensation adjustments which is included in the department’s reference levels at the beginning of the year as of 2015-16. Fiscal year 2014-15 also received funding for this purpose, however, due to the timing of the expenditure management process, the increase in funding was only received in the third quarter of 2014-15. The remaining difference is due to an increase in OBCF of $132,000 and a slight incremental increase in respendable revenues earned between quarters.
Statement of departmental budgetary expenditures
The department’s year-to-date spending is lower by $2,017,000 or 13% in the current year compared to 2014-15. This can be largely explained by exceptional expenditures which occurred in the first and second quarters of previous year:
The remaining decrease in year-over-year expenses can be mainly attributed to the decrease in professional services of $276,000, which is explained by a timing difference in system development costs. In 2014-15, the modernization of the Aviation Safety Information System (ASIS) was completed, while no comparable investments in system development have occurred to date in 2015-16.
As illustrated in Figure 1, the TSB has spent approximately 46% 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. The difference of 8% when compared to previous year can be explained by the significant transactions which increased 2014-15 expenditures 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
Over the past two years, there has been an increased number of significant rail accidents investigated by TSB under its mandate. The number of open rail occurrence investigations in the previous year was among the highest in recent years. It is important to note that many of these investigations are ongoing into 2015-16 and future 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. In fiscal years 2013-14 and 2014-15, additional funding was received through Supplementary Estimates in order for the TSB to meet its mandate regarding this program.
Approval by senior officials
Source document signed by
Source document dated dated 2015-11-23
Source document signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer
Source document dated dated 2015-11-20
Statement of authorities (unaudited)
|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
|Main Estimates: Vote 1 - Net operating expenditures||27,079||6,546||12,373|
|Main Estimates: Statutory authorities - Employee Benefit Plans||3,440||860||1,720|
|Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets||5||0||1|
|Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act||14||10||10|
|Total authorities available for use||30,538||7,416||14,104|
|Total available for use for the year ending March 31, 2015||Expended during the quarter ended September 30, 2014||Year to date used at quarter-end|
|Main Estimates: Vote 1 - Net operating expenditures||26,414||7,120||14,477|
|Main Estimates: Statutory authorities - Employee Benefit Plans||3,285||822||1,643|
|Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets||16||1||1|
|Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act||8||-||-|
|Total authorities available for use||29,723||7,943||16,121|
Statement of expenditures by standard object (unaudited)
|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|
|Transportation and communications||1,700||308||565|
|Professional and special services||2,220||429||670|
|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|
|Other subsidies and payments||-||-||-|
|Total net budgetary expenditures||30,538||7,416||14,104|
|Expenditures:||Planned expenditures for the year ending March 31, 2015||Expended during the quarter ended September 30, 2014||Year to date used at quarter-end|
|Transportation and communications||1,699||395||558|
|Professional and special services||2,219||678||946|
|Repair and maintenance||495||82||132|
|Utilities, materials and supplies||301||73||103|
|Acquisition of land, building and works||0||0||0|
|Acquisition of machinery and equipment||675||20||650|
|Other subsidies and payments||730||3||724|
|Total net budgetary expenditures||29,723||7,943||16,121|