Quarterly Financial Report for the Quarter ended September 30, 2019

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)

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 2019-2020 Main Estimates and the
2018-2019 Quarterly Financial Report for the quarter ended September 30, 2018. It has not been subject to an external audit or review.

A summary description of the Military Grievances External Review Committee (Committee) core responsibilities can be found in Part II of the Main Estimates.
https://www.canada.ca/content/dam/tbs-sct/documents/planned-government-spending/main-estimates/2019-20/me-bpd-eng.pdf           

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 for the 2019-2020 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 2018-2019 and 2019-2020, the Committee's total authorities included the Main Estimates and the Operating Budget Carry Forward from the previous year.

There was no significant change in the total authorities available for use by the Committee compared to previous year, with only a slight increase of $57,365.

The Statement of Authorities shows that 39% of authorities available for use were expended as of September 30, 2019, compared to 38% during the same period of the preceding fiscal year.

Departmental budgetary expenditures by Standard Object

During the second quarter of 2019-2020, expenses decreased by $84,841 compared to the second quarter of the previous year. This is mainly due to a decrease in acquisition of land, buildings and works related to the installation of a new air conditioner for the server room as part of the office retrofit project in 2018-2019 and a decrease in professional services given our completed lean and green business processes initiative.

For all other expenditures by standard object, overall expenditures are similar to those of the previous fiscal year. The variances are mainly due to the period in which the payments were settled.

3. Risks and Uncertainties

Following the extraordinary operational challenges faced in 2018-2019, the Committee is still dealing with a significant volume of grievance files.

Throughout 2018-2019, the Committee welcomed a new complement of Governor in Council (GIC) appointed Committee Members who needed to be trained and integrated into the Committee's operations.    The Committee also had to address the loss of several senior grievance officers and other key staff within the Registry. These challenges for the Committee resulted in a considerable delay in the review of all grievance files and subsequent findings and recommendations (F&Rs). 

Also, with its implementation of an upgraded case management system, the Canadian Armed Forces (CAF) significantly delayed, for a period of roughly four months, the delivery of grievance referrals to the Committee. In Q3 of 2018, the Committee received 29 grievance referrals and in Q4 it received 119 referrals.

The combination of the Committee's temporarily diminished capacity to review files as well as the unexpected surge of grievance referrals by the CAF in Q4 created a significant challenge for the Committee in terms of addressing in a timely fashion, the significant number of grievance files with the Committee.

In addition, the Committee has established a target of four months to complete a grievance review and issue F&Rs starting from the date the Committee receives the grievance. This system works best when grievance files referred to the Committee are staggered over the fiscal year.

Due to the residual effects of circumstances and factors beyond its control that resulted in a significant volume of grievance files at the Committee, in 2019-2020 the Committee continues to face the risk of not being able to provide findings and recommendations within the four-month period established. This is despite the fact that at present, the Committee has a full complement of fully trained Committee Members.

To mitigate against this risk, the Committee is actively reviewing and making improvements to its operational processes and structure while monitoring the grievance caseload, proactively adjusting tactics, and optimizing the way grievance files are handled. The Committee is also developing new approaches to attract and retain a diverse, inclusive and highly qualified workforce, including the development of a competency profile for its key positions.

4. Significant changes in relation to operations, personnel and programs

There have been no significant changes in relation to operations, personnel and programs during the current quarter.

Approved by:

Original signed by

_________________________________________
Christine Guérette, CPA, CGA
Chairperson and Chief Executive Officer
Ottawa, Canada
November 25, 2019

Original signed by

_________________________________________
Jean-François Poirier, CPA, CGA
Chief Financial Officer
Ottawa, Canada
November 25, 2019