Quarterly Financial Report for FCAC for the quarter ended September 30, 2022

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Financial Consumer Agency of Canada

427 Laurier Ave. West

Ottawa, ON K1R 1B9

www.canada.ca/en/financial-consumer-agency

ISSN 2816-7821

©His Majesty the King in Right of Canada, as represented by the Minister of Finance Canada, November  2022.

Aussi disponible en français sous le titre : Rapport financier trimestriel de l'ACFC pour le trimestre terminé le 30 septembre 2022

Introduction

The Quarterly Financial Report (QFR) for the Financial Consumer Agency of Canada (FCAC, or the Agency) 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.

The Financial Consumer Agency of Canada Act (the Act) outlines FCAC’s functions and administration and enforcement powers, and lists the sections of federal laws and regulations under its supervision. A description of its program activities can be found in FCAC’s Business Plan 2022-2023.

The QFR has not been subjected 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 Agency’s spending authorities as set out in section 13 of the Act. 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 Agency uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental results reporting process. However, spending authorities included in this report remain on an expenditure basis.

Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results

Quarterly results

FCAC’s total expenditures for the three months ended September 30, 2022, totalled $13,166,619, or 80.0% of its budgeted expenditures of $16,473,650 for the period, compared to 80.7% for the same period last year. The variance to budget as at September 30, 2022 of $3,307,031 is primarily due to lower than planned personnel costs as a result of delays in staffing vacant positions ($1,324,216). In addition, there were timing delays related to the acquisition of land, buildings and works related to the office modernization project ($680,198), professional services costs ($636,462), and the acquisition of machinery and equipment related to the office modernization project ($559,598).

When compared to the previous year, FCAC’s total expenditures for the three months ended September 30, 2022 of $13,166,619, were $4,379,153 or 49.8% higher than the same period last year. This variance is primarily due to higher spending in acquisition of land, buildings and works costs ($1,954,802) due to the office modernization project. In addition, professional services costs increased by $1,146,731 due to various initiatives across the agency such as the enhancement of research, policy and education services, the investment in information technology, and the creation of a data and analytics capacity. Lastly, there were increases in personnel costs ($690,902) due to the growth of the Agency, as well as economic and merit increases.

Year-to-date results

FCAC’s total expenditures for the six months ended September 30, 2022, totalled $24,631,887, or 86.1% of its budgeted expenditures of $28,619,713 for the period, compared to 80.2% for the same period last year. The variance to budget as at September 30, 2022 of $3,987,826 is primarily due to lower than planned personnel costs as a result of delays in staffing vacant positions ($2,702,419). There were also timing delays related to professional services ($1,139,474) and the acquisition of machinery and equipment ($741,725). This underspending was primarily offset by earlier than planned expenditures associated with the office modernization project ($886,947).

When compared to the previous year, FCAC’s total expenditures for the six months ended September 30, 2022 of $24,631,887, were $7,099,382 or 40.5% higher than the same period last year. This variance is primarily due to higher spending in acquisition of land, buildings and works costs ($3,566,947). In addition, professional services costs increased by $1,815,049 due to various initiatives across the agency such as the enhancement of research, policy and education services, the investment in information technology, and the creation of a data and analytics capacity. Lastly, there were increases in personnel costs ($1,223,481) due to the growth of the Agency, as well as economic and merit increases.

Risks and uncertainties

Enterprise risk management

The environment in which FCAC operates carries an array of risks to the achievement of its mandate and objectives. While many of these challenges are always present, the extent to which they pose a financial risk to FCAC’s objectives varies, depending on economic and financial conditions, and the financial industry environment and its impact on financial consumers. FCAC’s ability to achieve its mandate depends on the timeliness and effectiveness with which it identifies, evaluates, prioritizes and develops initiatives to address areas where it is most at risk.

Economic, industry and supervisory environment

FCAC operates in a rapidly evolving financial marketplace, including increasingly complex financial products and new technology developed to suit the needs and demands of today’s consumers. This may impede FCAC’s ability to keep pace with this rapid rate of change.

FCAC must continue to assess the impact of these changes and be prepared to re-allocate funding while remaining flexible. FCAC must also stay abreast of new developments and discussions, both domestically and internationally, and leverage resulting opportunities, while managing risks to ensure the continued achievement of its mandate.

Financial risks

Financial risks, primarily liquidity and credit risks, are closely managed and continue to be rated low.

Significant changes in operations, personnel and programs

There were no significant changes in Operations, Personnel and Programs during the quarter ended September 30, 2022.

Approved by:

Judith Robertson
Commissioner
Financial Consumer Agency of Canada

Werner Liedtke, CPA, CMA
Chief Financial Officer
Financial Consumer Agency of Canada

November 3, 2022

Statement of authorities (unaudited)

Fiscal year 2022–2023
Authority Total available for use for the year ending March 31, 2023* Used during the quarter ended September 30, 2022 Year-to-date used at quarter end
Payments under Section 13 of the Financial Consumer Agency of Canada Act $60,776,347 $13,166,509 $24,631,776
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 110 110 110
Total authorities $60,776,457 $13,166,619 $24,631,887
Fiscal year 2021–2022
Authority Total available for use for the year ending March 31, 2022* Used during the quarter ended September 30, 2021 Year-to-date used at quarter end
Payments under Section 13 of the Financial Consumer Agency of Canada Act $48,530,754 $8,787,076 $17,530,436
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 2,068 389 2,068
Total authorities $48,532,823 $8,787,465 $17,532,504

Note: Totals may not add due to rounding.

*Includes only authorities available for use at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2022–2023
Expenditures Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended September 30, 2022 Year-to-date used at quarter end
Personnel $34,205,760 $7,134,091 $13,927,920
Transportation and communications 706,871 57,869 99,734
Information 1,451,738 205,959 332,660
Professional and special services 12,194,547 2,438,138 4,539,412
Rentals 3,355,397 719,140 1,458,740
Repair and maintenance 6,039 903 1,805
Utilities, materials and supplies 71,753 22,032 27,713
Acquisition of land, buildings and works 5,690,000 1,954,802 3,566,947
Acquisition of machinery and equipment 2,838,746 517,120 536,711
Other subsidies and payments 255,606 116,566 140,245
Total gross budgetary expenditures $60,776,457 $13,166,619 $24,631,887

Note: Totals may not add due to rounding.

Fiscal year 2021–2022
Expenditures Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended September 30, 2021 Year-to-date used at quarter end
Personnel $29,966,604 $6,443,189 $12,704,439
Transportation and communications 808,281 39,206 82,837
Information 1,493,025 132,511 302,170
Professional and special services 9,236,948 1,291,407 2,724,362
Rentals 3,173,490 772,748 1,439,905
Repair and maintenance 1,905,921 4,449 5,352
Utilities, materials and supplies 72,934 12,991 22,927
Acquisition of land, buildings and works 750,000 - -
Acquisition of machinery and equipment 895,819 74,000 241,421
Other subsidies and payments 229,800 16,965 9,092
Total gross budgetary expenditures $48,532,823 $8,787,465 $17,532,504

Note: Totals may not add due to rounding.

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