Quarterly financial report for the quarter ended September 30, 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 and Supplementary Estimates.

The Transportation Safety Board'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 Transportation Safety Board's spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main 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. The TSB has additional statutory authorities totaling $19,000 at the end of the second 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 decreased by $231,000 between fiscal years 2016-17 and 2017-18. This is explained by a $307,000 decrease due to a lower Employee Benefit Plan percentage (set annually by Treasury Board Secretariat), a $65,000 government-wide budget reduction of professional services, advertising and travel and a $13,000 decrease in respendable revenues earned. These decreases are offset by a higher OBCF of $122,000 compared to previous year. The remaining difference of $32,000 is due to a government-wide budget reduction for the Treasury Board Secretariat Back Office Transformation Initiative which was imposed last year, but for which the TSB was not subject to this year.

Statement of departmental budgetary expenditures

The department's year-to-date spending is higher by $800,000 or 6% 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 quarter. 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 than normal 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 almost every other spending category.

As illustrated in Figure 1, the TSB has spent approximately 50% of its authorities at the end of the second quarter. Although the TSB's spending is generally distributed equally throughout the year, this percentage is slightly higher than previous fiscal years at the end of the second quarter.

Figure 1. Second quarter expenditures compared to annual authorities

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 the payouts are being compensated by reduced expenditures in other spending categories as well as earmarked funds in the form of carry forward funding from previous years, the settlements are ultimately higher than expected. The TSB is seeking funding through Supplementary Estimatesto address this funding shortfall.

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 2017-11-30
Date
Gatineau, Canada

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

Source document dated 2017-11-29
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
September 30, 2017
Year to date
used at quarter-end
Vote 1 - Net operating expenditures 27,511 7,685 13,648
Statutory authorities - Employee Benefit Plans 3,214 803 1,607
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 8 - -
Total authorities available for use 30,744 8,488 15,255
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 September 30, 2016 Year to date used at quarter-end
Vote 1 - Net operating expenditures 27,454 6,552 12,693
Statutory authorities - Employee Benefit Plans 3,521 881 1,761
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 13 1 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 19 - -
Total authorities 31,007 7,434 14,455
Budget 2016 Frozen allotment –
Back Office Transformation
-32 - -
Total authorities available for use 30,975 7,434 14,455

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 September 30, 2017 Year to date used at quarter-end
Personnel 24,999 7,539 13,606
Transportation and communications 1,630 326 560
Information 148 21 66
Professional and special services 2,519 374 569
Rentals 453 50 179
Repair and maintenance 413 96 102
Utilities, materials and supplies 209 29 94
Acquisition of land, building and works 63 - -
Acquisition of machinery and equipment 310 53 79
Total net budgetary expenditures 30,744 8,488 15,255
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 September 30, 2016 Year to date used at quarter-end
Personnel 25,188 6,094 12,351
Transportation and communications 1,521 291 568
Information 138 50 70
Professional and special services 2,362 439 688
Rentals 394 62 173
Repair and maintenance 412 77 132
Utilities, materials and supplies 230 88 121
Acquisition of land, building and works 120 - 4
Acquisition of machinery and equipment 642 333 348
Sub-total net budgetary expenditures 31,007 7,434 14,455
Budget 2016 Frozen allotment –
Back Office Transformation
-32 - -
Total net budgetary expenditures 30,975 7,434 14,455

Footnotes

Footnote 1

Includes only authorities granted by Parliament at quarter end.

Return to footnote 1 referrer