Quarterly Financial Report for the Quarter ended December 31, 2017
Statement of Authorities (unaudited)
Fiscal year 2017–18 | Fiscal year 2016–17 | |||||
---|---|---|---|---|---|---|
Total available for use for the year ending March 31, 2018Table note * | Used during the quarter ended December 31, 2017 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2017Table note * | Used during the quarter ended December 31, 2016 | Year to date used at quarter-end | |
Vote 1 - Operating expenditures | 7,183,457 | 1,510,296 | 4,026,661 | 6,467,559 | 1,396,513 | 3,823,701 |
Budgetary statutory authority - Contributions to employee benefit plans | 562,442 | 140,611 | 421,832 | 612,859 | 153,215 | 459,645 |
Budgetary statutory authority - Spending of proceeds from the disposal of surplus Crown assets | 588 | - | - | - | - | - |
Total authorities | 7,746,487 | 1,650,907 | 4,448,493 | 7,080,418 | 1,549,728 | 4,283,346 |
Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal year 2017–18 | Fiscal year 2016–17 | |||||
---|---|---|---|---|---|---|
Expenditures | Planned expenditures for the year ending March 31, 2018 | Expended during the quarter ended December 31, 2017 | Year to date used at quarter end | Planned expenditures for the year ending March 31, 2017 | Expended during the quarter ended December 31, 2016 | Year to date used at quarter end |
Personnel | 4,929,871 | 1,075,873 | 3,328,014 | 4,897,607 | 1,176,026 | 3,401,011 |
Transportation and communications | 68,200 | 11,004 | 25,620 | 80,490 | 12,485 | 29,696 |
Information | 28,800 | 1,448 | 4,058 | 60,290 | 26,988 | 29,491 |
Professional and special services | 1,162,428 | 152,381 | 317,839 | 1,306,731 | 160,254 | 363,262 |
Rentals | 710,000 | 151,221 | 495,671 | 712,400 | 167,757 | 438,164 |
Repair and maintenance | 5,200 | 5,043 | 6,354 | 4,200 | 293 | 9,371 |
Utilities, materials and supplies | 10,600 | 962 | 3,002 | 11,300 | 2,433 | 4,620 |
Acquisition of land, buildings and works | 594,400 | - | - | - | - | - |
Acquisition of machinery and equipment | 231,988 | 252,975 | 266,452 | 2,400 | 3,050 | 4,563 |
Other subsidies and payments | 5,000 | - | 1,483 | 5,000 | 442 | 3,168 |
Total net budgetary expenditures | 7,746,487 | 1,650,907 | 4,448,493 | 7,080,418 | 1,549,728 | 4,283,346 |
Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Program
1. Introduction
The 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 Treasury Board. This quarterly report should be read in conjunction with the 2017-18 Main Estimates, the 2017-18 Supplementary Estimates (B) and the 2016-17 Quarterly Financial Report for the quarter ended December 31, 2016. It has not been subject to an external audit or review.
A summary description of the Military Grievances External Review Committee (Committee) program activities can be found in Part II of the Main Estimates.
Basis of Presentation:
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Committee’s spending authorities granted by Parliament, and those used by the Committee consistent with the Main Estimates and the Supplementary Estimates (B) for the 2017-18 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 money 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.
The Committee uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of the fiscal quarter and fiscal year-to-date (YTD) results
Statement of Authorities
In 2016-17 and 2017-18, the Committee’s total authorities included the Main Estimates and the Operating Budget Carry Forward from the previous year. In 2017-18, the total authorities also included the Supplementary Estimates (B).
The total authorities available for use by the Committee have increased by $666,069 (9.41%) compared to last fiscal year. This is mainly due to the Supplementary Estimates (B) granted by Parliament in the third quarter of 2017-18 for the Committee’s Space Optimization Project (retrofit), in line with the government-wide Workplace 2.0 strategy.
The Statement of Authorities shows that 57.43% of authorities available for use were expended as of December 31, 2017, compared to 60.50% during the same period of the preceding fiscal year. This lower percentage is explained by the fact that expenses related to the retrofit project will be processed in the last quarter of fiscal 2017-18.
Departmental budgetary expenditures by Standard Object
During the third quarter of 2017-18, expenditures have increased by $101,179 (6.53%) compared to the third quarter of the last fiscal year, while the year-to-date expenditures have increased by $165,147 (3.86%) compared to the same period of the preceding fiscal year. This is mainly due to the retrofit project, which included purchases of information technology equipment, in support of the project and of the Committee’s asset management lifecycle assessed during the second quarter. That increase was, however, partially offset by a reduction in salaries, due to vacancies in the Committee’s membership.
3. Risks and Uncertainties
Under subsection 29.16(1) of the National Defence Act (NDA), the Governor in Council (GIC) must appoint a Chairperson, at least two Vice-Chairpersons (one full-time and one part-time), and any number of members required by the Committee to carry out its mandate. This statutory requirement is fundamental to the Committee’s operations. Without a sufficient number of members, the Committee’s ability to fulfill its mandate (to review military grievances and issue findings and recommendations (F&R)) is at risk of being disrupted. In addition, the Committee will not likely to be able to fulfill its “duty to act expeditiously,”
as stated in subsection 29.20(2) of the NDA.
Since February 2016, the Committee has been short of the two Vice-Chairpersons, which is the minimum necessary complement of members established by 29.16(1) of the NDA. In addition, the term of the only remaining Committee member ended in June 2017. The Committee has a unique mandate that requires specific knowledge and experience. Due to the delays in appointments, there will be no knowledge transfer from previous members. This absence of knowledge transfer and a steep learning curve for new members may create the conditions for a challenging transition that may impact the timeliness of the Committee’s F&R.
It should be noted that the position of Chairperson and Chief Executive Officer (CEO), which has been vacant since January 2017, is currently occupied on an interim basis by the Committee’s Director General of Operations and General Counsel. This interim assignment has been extended until April 3, 2018. The selection process for the nomination of a new Chairperson and CEO was posted on the Privy Council Office website in November 2017. The appointments of one full-time Vice-Chairperson and two Members (one full-time and one part-time) were announced in the third quarter of 2017-18, and these new committee members will assume their functions during the last quarter of 2017-18.
The construction related to the Committee’s initiative to retrofit the office and reduce its footprint began in December 2017. Planning for the initiative commenced in February 2017, but construction start date was considerably delayed. As per requirement, Public Services and Procurement Canada manages the project on behalf of the Committee and determines timeframes according to priorities that do not always align with those of the Committee. This limits the Committee’s control over timetables and increases the risk of a delay in completing the project beyond March 31, 2018. The Committee is under significant pressure to complete this project on time, given that for the purpose of this project Parliament had authorized additional funding for the 2017-18, and that the Committee had committed to complete this initiative by the end of the current fiscal year.
4. Significant changes in relation to operations, personnel and programs
As noted above, there has been a number of new Governor in Council appointments, which will significantly improve the Committee’s efficiency, even though it will still be short of its complement of statutory-required members.
Approved by:
Original signed by
_________________________________________
Caroline Maynard
Interim Chairperson and Chief Executive Officer
Ottawa, Canada
February 2, 2018
Original signed by
_________________________________________
Christine Guérette, CPA, CGA,
Chief Financial Officer
Ottawa, Canada
February 2, 2018
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