Quarterly financial report for the quarter ended December 31, 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 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 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 $36,000 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. These authorities are reduced by two government-wide budget reductions: the Budget 2016 Back Office Transformation ($32,000) and the Professional Services, Advertising and Travel budget reduction ($65,000).

TSB's total authorities available for use increased by $348,000 between fiscal years 2015-16 and 2016-17. This difference is due to a higher OBCF of $398,000 and an $81,000 increase in Employee Benefit Plan percentage, which is set annually by Treasury Board Secretariat. These increases are offset by the two government-wide budget reductions described above totaling $97,000 as well as an additional reduction for the Canada School of Public Service Initiative ($23,000 reduced from Main Estimates at beginning of the year). There were also lower respendable revenues earned this year, representing a further decrease in authorities of $11,000.

Statement of departmental budgetary expenditures

The department's year-to-date spending is higher by $444,000 or 2% in the current year compared to 2015-16. This increase is mainly due to the timing of TSB's replacement of servers and laptops, as part of the departmental IT equipment useful life replacement schedule.

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.

Figure 1. Third quarter expenditures compared to annual authorities
Graph of third 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, in 2016-17, the TSB is expecting to incur expenditures for retroactive salary increments as certain collective agreements are expected to be ratified by year-end. 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. In order to mitigate this risk and fulfill its anticipated spending obigation, the TSB has implemented departmental spending restraint measures for the last quarter of 2016-17.

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 dated 2017-02-28
Date
Gatineau, Canada

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

Source document dated dated 2017-02-28
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
December 31, 2016
Year to date
used at quarter-end
Vote 1 - Net operating expenditures 27,357 6,589 19,282
Statutory authorities - Employee Benefit Plans 3,521 880 2,641
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 13 1 2
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 23 14 14
Total authorities 30,914 7,484 21,939
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 December 31, 2015 Year to date used at quarter-end
Vote 1 - Net operating expenditures 27,079 6,531 18,904
Statutory authorities - Employee Benefit Plans 3,440 859 2,579
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 6 - 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 41 1 11
Total authorities available for use 30,566 7,391 21,495

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 December 31, 2016 Year to date used at quarter-end
Personnel 25,188 6,083 18,434
Transportation and communications 1,521 488 1,056
Information 138 29 99
Professional and special services 2,269 445 1,133
Rentals 394 81 254
Repair and maintenance 412 103 235
Utilities, materials and supplies 230 37 158
Acquisition of land, building and works 120 - 4
Acquisition of machinery and equipment 642 218 566
Other subsidies and payments - - -
Sub-total net budgetary expenditures 30,914 7,484 21,939
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 December 31, 2015 Year to date used at quarter-end
Personnel 24,863 6,107 18,433
Transportation and communications 1,700 326 891
Information 160 39 109
Professional and special services 2,260 522 1,192
Rentals 339 95 299
Repair and maintenance 451 148 250
Utilities, materials and supplies 275 58 132
Acquisition of land, building and works 115 2 20
Acquisition of machinery and equipment 400 91 166
Other subsidies and payments 3 3 3
Total net budgetary expenditures 30,566 7,391 21,495
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