Quarterly financial report for the quarter ended June 30, 2018

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.

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 for the 2018-19 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’s total authorities available for use increased by $780,000 between fiscal years 2018-19 and 2017-18. This variance is primarily explained by increased funding of $760,000 provided by the Treasury Board Secretariat to cover a portion of the negotiated salary increases resulting from the last round of collective bargaining. The remaining difference is mainly due to fluctuations in the Employee Benefit Plan (EBP) percentage, which is a rate set annually by the Treasury Board Secretariat.

Statement of departmental budgetary expenditures

The department’s quarterly and year-to-date spending are higher by $176,000 or 3% in the current year compared to 2017-18. This difference is mainly due to higher expenditures in three spending categories: personnel, transportation and communications, and professional and special services. Higher expenditures in personnel expenditures were anticipated due to the negotiated salary increases resulting from the last round of collective bargaining. In the transportation and communications category, the increased expenditures were mainly due to the following factors: higher travel costs, the relocation costs of one employee and a timing difference in the payment of telephone landlines invoices. Lastly, the increase in professional and special services can be attributed to a timing difference in the payment of the annual invoice for the Commissionaires protective services, which was paid in an earlier quarter compared to previous fiscal years.

As illustrated in Figure 1, the TSB has spent approximately 23% of its authorities at the end of the first 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. First quarter expenditures compared to annual authorities
Graph of first quarter expenditures compared to annual authorities

Risks and uncertainties

Over the past fifteen years, the TSB has faced increasing funding pressures due to a number of factors such as: general price increases, cost recovery and/or sharing by other government departments, salary increases due to changes in the type of workers hired, the impact of collective bargaining, requirements to keep up-to-date with changes in the transportation industry, etc. The TSB has managed these incremental costs internally through prioritization, efficiency improvements, deferral of expenditures, and reallocation of funds. However, despite all its efforts, the TSB has reached a point where the cumulative funding pressures are becoming too significant. As a result, the TSB is currently working with the Treasury Board Secretariat in order to find a solution to this funding shortfall.

Furthermore, 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 2018-09-19
Date
Gatineau, Canada

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

Source document dated 2018-09-19
Date
Gatineau, Canada

Statement of authorities (unaudited)

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 June 30, 2018 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,962 6,136 6,136
Main Estimates: Statutory authorities - Employee Benefit Plans 3,227 807 807
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 23 - -
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 1 - -
Total authorities available for use 30,213 6,943 6,943
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 June 30, 2017 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,202 5,963 5,963
Main Estimates: Statutory authorities - Employee Benefit Plans 3,241 804 804
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 11 - -
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 6 - -
Total authorities available for use 29,433 6,767 6,767

Statement of expenditures by standard object (unaudited)

Fiscal year 2018-19 (in thousands of dollars)Footnote 1
Expenditures Planned expenditures
for the year ending
March 31, 2019
Expended during the
quarter ended June 30, 2018
Year to date used at
at quarter-end
Personnel 24,460 6,153 6,153
Transportation and communications 1,770 317 317
Information 177 48 48
Professional and special services 1,985 256 256
Rentals 422 80 80
Repair and maintenance 421 12 12
Utilities, materials and supplies 219 33 33
Acquisition of land, building and works 4 - -
Acquisition of machinery and equipment 755 44 44
Total net budgetary expenditures 30,213 6,943 6,943
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 June 30, 2017
Year to date used at
at quarter-end
Personnel 23,688 6,067 6,067
Transportation and communications 1,630 234 234
Information 148 45 45
Professional and special services 2,519 195 195
Rentals 453 129 129
Repair and maintenance 413 6 6
Utilities, materials and supplies 209 65 65
Acquisition of land, building and works 63 - -
Acquisition of machinery and equipment 310 26 26
Total net budgetary expenditures 29,433 6,767 6,767
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