Quarterly financial report for the quarter ended December 31, 2017

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 2017-18 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 $29,417,000 in funding through the Main Estimates. During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2016-17 which represents an increase in authorities of $1,309,000. In the third quarter, the TSB received $1,121,000 in compensation adjustments from Treasury Board Secretariat, as well as one-time salary funding of $1,538,000 (excluding amounts for Employee Benefit Plans) for the current year through a Treasury Board Submission as a result of the TSB's A-base review. Furthermore, the TSB has additional statutory authorities totaling $42,000 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.

The TSB's total authorities available for use increased by $2,820,000 between fiscal years 2016-17 and 2017-18 mainly due to increases to the 2017-18 authorities above as well as a higher OBCF of $122,000 compared to the previous year.

Statement of departmental budgetary expenditures

The department's year-to-date spending is higher by $1,147,000 or 5% in the current year compared to 2016-17. This significant difference can be directly attributed to increased salary expenditures for retroactive payments, which were paid out to the majority of the TSB's employees during the second and third quarters of 2017-18. These retroactive payments were for previous years' economic increases resulting from recently signed and ratified collective agreements. In addition, current year annual salaries have also been increased to reflect these economic increases, further contributing to the higher spending in this category. It should be noted that the TSB did anticipate these additional costs and took action to mitigate the risk, resulting in lower expenditures in the majority of other spending categories.

As illustrated in Figure 1, the TSB has spent approximately 69% of its authorities at the end of the third quarter. This is inline with previous year expenditures at third quarter and is reasonable as the majority of retroactive payments have been settled by the end of the third quarter and the TSB's biggest expense is salaries which are generally distributed equally throughout the year.

Figure 1. Third quarter expenditures compared to annual authorities
Graph of third quarter expenditures compared to annual authorities
Table - Third quarter expenditures compared to annual authorities
  Authorities Expenditures
2016-17 30,914,000.00 21,939,000.00
2017-18 33,734,000.00 23,086,000.00

Risks and uncertainties

The TSB is experiencing a number of resource pressures in 2017-18, most notably the retroactive payouts for newly signed and ratified collective agreements, the majority of which the TSB is expected to cover using its existing appropriations. Although mitigating actions were taken including generating a carry forward from the previous year and reducing current year expenditures in other categories, the settlements were ultimately higher than expected. The TSB performed an A-base review of its operating requirements in early 2017 and upon presentation of a Treasury Board Submission, was successful in obtaining one-time salary funding for the current year shortfall through Supplementary Estimates B. By the end of the third quarter, most retroactive payouts were settled, although due to continuing issues with the government pay system, amounts are being continuously reviewed and adjusted. The TSB is working diligently with the compensation offices to review and resolve any pay issues in a timely manner.

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

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 2018-03-07
Date
Gatineau, Canada

Source document signed by
Luc Casault, CPA, CGA
Chief Financial Officer

Source document dated 2018-03-06
Date
Gatineau, Canada

Statement of authorities (unaudited)

Fiscal year 2017-18 (in thousands of dollars)Footnote 1
  Total available
for use for the
year ending March 31, 2018
Expended during the quarter ended December 31, 2017 Year to date used at quarter-end
Vote 1 - Net operating expenditures 30,170 7,024 20,672
Statutory authorities - Employee Benefit Plans 3,522 804 2,411
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 27 3 3
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 15 - -
Total authorities available for use 33,734 7,831 23,086
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 available for use 30,914 7,484 21,939

Statement of expenditures by standard object (unaudited)

Fiscal year 2017-18 (in thousands of dollars)Footnote 1
Expenditures Planned expenditures
for the year ending
March 31, 2018
Expended during the
quarter ended December 31, 2017
Year to date used at
at quarter-end
Personnel 27,689 6,787 20,393
Transportation and communications 1,630 336 896
Information 148 35 101
Professional and special services 2,519 321 890
Rentals 453 57 236
Repair and maintenance 413 130 232
Utilities, materials and supplies 309 121 215
Acquisition of land, building and works 63 - -
Acquisition of machinery and equipment 510 44 123
Total net budgetary expenditures 33,734 7,831 23,086
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
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
Total net budgetary expenditures 30,914 7,484 21,939
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