Quarterly financial report for the quarter ended December 31, 2016
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.
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
Source document signed by
Source document dated dated 2017-02-28
Source document signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer
Source document dated dated 2017-02-28
Statement of authorities (unaudited)
|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 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)
|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|
|Transportation and communications||1,521||488||1,056|
|Professional and special services||2,269||445||1,133|
|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|
|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|
|Transportation and communications||1,700||326||891|
|Professional and special services||2,260||522||1,192|
|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|