Quarterly Financial Report for the quarter ended June 30, 2016

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs

Introduction

This quarterly financial 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 report should be read in conjunction with the 2016-17 Main Estimates and Supplementary Estimates (A). This quarterly report has not been subject to an external audit or review.

The Administrative Tribunals Support Service of Canada (ATSSC) is responsible for providing support services and facilities to 11 federal administrative tribunals by way of a single, integrated organization.

These services include the specialized services required by each tribunal (e.g. registry, research and analysis, legal and other mandate or case activities specific to each tribunal), as well as internal services (e.g. human resources, financial services, information management and technology, accommodations, security, planning and communications).

Further information on the mandate, roles, responsibilities and programs of the ATSSC can be found by accessing the 2016-17 Main Estimates.

Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ATSSC's spending authorities granted by Parliament and those used by the ATSSC, consistent with the Main Estimates and the Supplementary Estimates (A) for the 2016-17 fiscal year. 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The ATSSC uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

The ATSSC’s financial structure is mainly composed of voted budgetary authorities namely, Vote 1—Program expenditures and vote-netted revenue authority, as well as statutory authorities for contributions to employee benefit plans.

For the period ending June 30, 2016, total authorities provided to the ATSSC include the Main Estimates and Supplementary Estimates (A) and totalled $60.9 million. The department also had $17.7 million of vote-netted revenue (VNR) authority for a total spending authority of $78.6 million. The VNR gives the department the authority to make recoverable expenditures on behalf of the Canada Pension Plan and the Employment Insurance Operating Account.

Table 1 below compares the gross and net budgetary authorities and expenditures for the first quarter of 2016-17 and 2015-16.

Table 1: Comparison of budgetary authorities and expenditures for the quarter ended June 30, 2016, and June 30, 2015.

Significant Changes to Authorities

As of June 30, 2016, the total authorities available for use for the year increased by $51 thousand compared to the same quarter last year. The increase is primarily due to a permanent transfer of authorities from personnel to non-salary which resulted in a decrease of $763 thousand in Vote 1—Program expenditures authorities and an increase of $814 thousand in budgetary statutory authorities. For both respective quarters ended June 30 of 2015-16 and 2016-17, the ATSSC’s VNR authority remained unchanged at $17.7 million.

Significant Changes to Expenditures

As illustrated in Table 1, first quarter expenditures increased by $2.1 million (13%), from $16.3 million to $18.4 million, compared to the same quarter in 2015-16. As a result, 23% of the authorities available for use were expended during the first quarter of 2016-17, compared to 21% in the same quarter of 2015-16.

The total increase of expenditures in the first quarter is mainly due to additional personnel expenditures related to the staffing of vacant positions. Compared to the same period last year, personnel expenditures increased by $1.6 million (12%), from $14.2 million to $15.8 million. At the end of the first quarter, rental expenditures, consisting mainly of software licences purchases and network maintenance costs, increased by $263 thousand (204%), from $129 thousand to $392 thousand, compared to the same quarter in 2015-16.

There was an increase of $206 thousand (45%), from $461 thousand to $667 thousand, in other subsidies and payments expenditures, compared to the same quarter last year. This change is due to an increase in the advance payment made to Employment and Social Development Canada (ESDC) for the administration of the Social Security Tribunal.

There was also an increase of $121 thousand (17%), from $698 thousand to $819 thousand, in professional and special services expenditures, compared to the same quarter last year. This increase is mainly due to an increase in tuition fees and other professional services costs.

Risks and Uncertainties

The ATSSC has identified three key risks and responses for 2016-17.

As the caseload depends on external factors, it is often challenging for tribunals to predict their operational demands from year to year. There is a risk that caseload surges or other unexpected tribunal-specific operational demands could challenge the ATSSC’s ability to provide the support services the tribunals require to fulfill their mandates. While the caseload is beyond the tribunals’ control, strategies will be developed to address circumstances where tribunals face higher than expected demands. Emerging trends are being monitored to determine the potential impact on caseloads, legislative changes are being monitored to assess the impact on ATSSC resources, and budgets and allocations are monitored closely to appropriately reallocate resources if and where required.

There is also a risk that the ongoing change agenda both within the ATSSC and across government will challenge the organization’s resiliency. Senior management will champion change, foster a culture of leadership at all levels and promote employee well-being. As well, the ATSSC will work closely with its partners, including tribunals, central agencies and departments, to synchronize the changes ahead so that resources are well positioned to implement and support change initiatives.

Lastly, the ATSSC must maintain appropriate delivery capacity to meet the mandates and the evolving needs and priorities of the tribunals it serves. The ATSSC is in the process of developing a comprehensive workforce management strategy as well as a corporate policy framework and a multi-year implementation strategy taking into account identified gaps, risks and priorities.

The ATSSC supports 11 tribunals with different mandates, each operating under different statutes, regulations and policies. The risks identified are in keeping with those of a recently formed organization that is tasked with delivering existing support services while also seeking to improve its service delivery model. As the ATSSC continues to evolve and build organizational capacity, it will strive to meet its goal of being recognized as a centre of excellence for service delivery; innovative, efficient and effective operations; and improved access to justice.

Significant Changes in Relation to Operations, Personnel and Programs

There has been no significant change to the programs or structure since the ATSSC was established on November 1, 2014. The Social Security Tribunal continues to be partially supported by ESDC as its transition to the ATSSC is still ongoing.

Approval by Senior Officials

Approved by:

Original signed by

_________________________________
Marie-France Pelletier, Chief Administrator
Ottawa, Canada
August 26, 2016


Original signed by

_________________________________
Luc Robitaille, Director General, Corporate Services and Chief Financial Officer


Statement of Authorities (unaudited)

(in dollars)

  Fiscal year 2016-17   Fiscal year 2015-16
  Total available for use for the year ending
March 31, 2017 *
Used during the quarter ended
June 30, 2016
Year to date used
at quarter-end
  Total available for use for the year ending
March 31, 2016 *
Used during the quarter ended
June 30, 2015
Year to date used
at quarter-end
Vote 1 - Program expenditures 69,224,384 16,145,948 16,145,948   69,987,637 14,119,063 14,119,063
Less: Revenues netted against expenditures (17,690,600)       (17,690,600)    
Net Program expenditures 51,533,784 16,145,948 16,145,948   52,297,037 14,119,063 14,119,063
Budgetary statutory authorities 9,413,110 2,286,293 2,286,293   8,598,993 2,149,748 2,149,748
Total Budgetary authorities 60,946,894 18,432,241 18,432,241   60,896,030 16,268,811 16,268,811

*Includes only Authorities available for use and granted by Parliament at quarter-end


Departmental Budgetary Expenditures by Standard Object (unaudited)

(in dollars

  Fiscal year 2016-17   Fiscal year 2015-16
  Planned expenditures for the year ending
March 31, 2017 *
Expended during the quarter ended
June 30, 2016
Year to date used
at quarter-end
  Planned expenditures for the year ending
March 31, 2016 *
Expended during the quarter ended
June 30, 2015
Year to date used
at quarter-end
Expenditures:
Personnel 63,922,400 15,889,623 15,889,623   60,021,569 14,243,251 14,243,251
Transportation and communications 3,019,068 478,003 478,003   4,341,522 446,394 446,394
Information 504,948 46,039 46,039   463,413 140,664 140,664
Professional and special services 7,190,216 819,326 819,326   9,138,876 697,617 697,617
Rentals 1,692,358 392,643 392,643   1,954,045 129,165 129,165
Purchased repair and maintenance 468,223 583 583   350,286 17,825 17,825
Utilities, materials and supplies 427,784 93,311 93,311   688,301 68,691 68,691
Acquisition of machinery and equipment 1,412,497 45,699 45,699   1,289,562 64,212 64,212
Other subsidies and payments   667,014 667,014   339,056 460,992 460,992
Total gross budgetary expenditures 78,637,494 18,432,241 18,432,241   78,586,630 16,268,811 16,268,811
Less Revenues netted against expenditures:
Revenues (17,690,600)       (17,690,600)    
Total Revenues netted against expenditures: (17,690,600)       (17,690,600)    
Total net budgetary expenditures 60,946,894 18,432,241 18,432,241   60,896,030 16,268,811 16,268,811
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