Quarterly financial report for the quarter ended December 31, 2019

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 and Supplementary 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 2019-20 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 $33,233,170 in funding through the Main Estimates. During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2018-19 which represents an increase in authorities of $1,123,400, as well as a new funding of $38,257 to assist TSB in the classification renewal modernization initiative.  In the third quarter, the TSB received $244,360 in compensation adjustments from Treasury Board Secretariat. Furthermore, the TSB has additional statutory authorities totaling $84,777 at the end of the third quarter generated by proceeds from the disposal of surplus Crown assets and its authority to respend revenues as a departmental corporation.

Statement of Departmental Budgetary Expenditures

The department’s year-to-date spending is higher by $2,771,000 or 13% in the current year compared to 2018-19. This significant difference can be directly attributed to increased salary expenditures as the TSB has staffed a number of vacant positions for which staffing had been delayed in previous years and for higher annual salary rates as a result of signed and ratified collective agreements. The increase in professional and special services is due to the TSB’s need for non-discretionary legal service contracts as well as IT project consultant contracts. There were also increased expenses in rentals costs compared to previous year due to the purchase of new IT software licenses which is inline with the TSB’s priority for modernization.

As illustrated in Figure 1, the TSB has spent approximately 71% of its authorities at the end of the third 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.

Statement of Authorities (unaudited)

Figure 1. Third quarter expenditures compared to annual authorities
Graph of Third quarter expenditures compared to annual authorities

Risks and Uncertainties:

Outstanding liabilities for the TSB include mandatory compensatory and vacation leave payouts that will continue to be deferred beyond the current fiscal year. Due to the nature of these future costs, it is difficult to know the exact amounts to be paid, however, the TSB is risk managing this uncertainty by carefully calculating estimates and incorporating these amounts as part of its monthly forecasting and budget review. Furthermore, the TSB has unused frozen funds from 2018-19, which it plans to carry forward and use to alleviate this funding pressure when it materializes.

A continuous risk to the 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 additional resource pressures that could require the department to seek further funding from Parliament.

As a departmental corporation, the TSB 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.

Significant Changes in Relation to Operations, Personnel and Programs

Clifford Harvey was appointed Director of Investigations for the Marine Branch at the Transportation Safety Board of Canada effective November 4, 2019.

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

Approval by Senior Officials

Source document signed by

Kathleen Fox

Chair

Source document dated 2020-04-17

Date

Gatineau, Canada

Source document signed by

Luc Casault, CPA, CGA

Chief Financial Officer

Source document dated 2020-04-17

Date

Gatineau, Canada

Statement of Authorities (unaudited)

Fiscal year 2019-20 (in thousands of dollars)Footnote 1
  Total available for use for the year ending
March 31, 2020
Expended during the quarter ended
December 31, 2019
Year to date used at quarter-end
Vote 1 - Net operating expenditures 30,989 7,723 21,928
Statutory authorities - Employee Benefit Plans 3,650 912 2,737
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 75 4 5
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 10 - -
Total authorities available for use 34,724 8,639 24,670
Fiscal year 2018-19 (in thousands of dollars)Footnote 1
  Total available for use for the year ending March 31, 2019 Expended during the quarter ended December 31, 2018 Year to date used at quarter-end
Vote 1 - Net operating expenditures 30,053 7,257 19,472
Statutory authorities - Employee Benefit Plans 3,724 807 2,421
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 26 - 2
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 9 - 4
Total authorities available for use 33,812 8,064 21,899

Statement of Expenditures by Standard Object (unaudited)

Fiscal year 2019-20 (in thousands of dollars)Footnote 1
  Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date used at quarter-end
Expenditures:
Personnel 28,909 6,994 20,624
Transportation and communications 1,748 383 1,195
Information 194 37 106
Professional and special services 2,249 796 1,648
Rentals 451 128 338
Repair and maintenance 150 21 109
Utilities, materials and supplies 284 79 234
Acquisition of land, building and works 39 - -
Acquisition of machinery and equipment 700 201 416
Other subsidies and payments - - -
Total net budgetary expenditures 34,724 8,639 24,670
Fiscal year 2018-19 (in thousands of dollars)Footnote 1
  Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended December 31, 2018 Year to date used at quarter-end
Expenditures:
Personnel 27,489 6,530 18,673
Transportation and communications 1,770 432 1,041
Information 177 22 106
Professional and special services 1,985 525 975
Rentals 422 69 189
Repair and maintenance 421 59 191
Utilities, materials and supplies 424 108 233
Acquisition of land, building and works 4 - -
Acquisition of machinery and equipment 1,116 319 487
Other subsidies and payments 4 - 4
Total net budgetary expenditures 33,812 8,064 21,899
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