Quarterly financial report for the quarter ended June 30, 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.

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 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’s total authorities available for use increased by $3,072,000 between fiscal years 2019-20 and 2018-19. The majority of this difference is due to an increase in permanent funding of $2,978,000 allocated to the TSB in the third quarter of 2018-19. This amount was obtained through a Treasury Board Submission in response to the TSB’s program integrity funding pressures. The remaining increase is attributed to compensation adjustments for signed collective agreements, which is offset by adjustments to the Employee Benefit Plan (EBP) percentage. This EBP percentage fluctuates from year to year and 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 $471,000 or 7% in the current year compared to 2018-19. This difference is significant for the TSB, and represents the department addressing the many funding pressures that had been accruing over the years, namely its inability to support a full staff due to salary shortages, as well as its ageing laboratory and IT equipment. Through the first quarter of 2019-20, the TSB has staffed a number of vacant positions for which staffing had been delayed in previous years, as well as replaced and upgraded some of its laboratory and IT equipment. This explains the relative increases in the expenditure categories of personnel and acquisition of machinery and equipment when compared to 2018-19.

As illustrated in Figure 1, the TSB has spent approximately 22% of its authorities at the end of the first quarter. This is slightly lower than expected due to delays with a number of procurements with Public Services Procurement Canada. The TSB expects to have this resolved in the second and third quarters of 2019-20.

Figure 1. First quarter expenditures compared to annual authorities
Graph of first quarter expenditures compared to annual authorities

Risks and uncertainties

Outstanding liabilities for the TSB include mandatory compensatory and vacation leave payouts that were deferred in past years as well as retroactive payments and salary increases for one remaining collective agreement that has yet to be signed. 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 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

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 2019-09-04
Date
Gatineau, Canada

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

Source document dated 2019-09-04
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 June 30, 2019 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 29,583 6,501 6,501
Main Estimates: Statutory authorities - Employee Benefit Plans 3,650 912 912
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 50 1 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 2 - -
Total authorities available for use 33,285 7,414 7,414
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

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 June 30, 2019 Year to date used at quarter-end
Expenditures:      
Personnel 27,555 6,519 6,519
Transportation and communications 1,748 357 357
Information 194 19 19
Professional and special services 1,844 238 238
Rentals 451 101 101
Repair and maintenance 440 5 5
Utilities, materials and supplies 229 78 78
Acquisition of land, building and works 39 - -
Acquisition of machinery and equipment 785 97 97
Total net budgetary expenditures 33,285 7,414 7,414
Fiscal year 2018-19 (in thousands of dollars)Footnote 1
  Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended June 30, 2018 Year to date used at quarter-end
Expenditures:      
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
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