Quarterly Financial Report for the Quarter ended June 30, 2020

Statement of Authorities (unaudited)

Statement of Authorities (unaudited) (in dollars)

	Fiscal year 2020–2021			Fiscal year 2019–2020
	Total available for use for the year ending March 31, 2021Table note *	Used during the quarter ended June 30, 2020	Year to date used at quarter-end	Total available for use for the year ending March 31, 2020Table note *	Used during the quarter ended June 30, 2019	Year to date used at quarter-end
Vote 1 - Operating expenditures	4,702,578	1,270,186	1,270,186	6,181,230	1,210,797	1,210,797
Budgetary statutory authority - Contributions to employee benefit plans	460,125	153,375	153,375	620,694	155,174	155,174
Total authorities	5,162,703	1,423,561	1,423,561	6,801,924	1,365,971	1,365,971

Departmental budgetary expenditures by Standard Object (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited) (in dollars)

	Fiscal year 2020–2021			Fiscal year 2019–2020
Expenditures	Planned expenditures for the year ending March 31, 2021	Expended during the quarter ended June 30, 2020	Year to date used at quarter-end	Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended June 30, 2019	Year to date used at quarter-end
Personnel	3,569,128	1,350,123	1,350,123	4,677,515	1,195,766	1,195,766
Transportation and communications	67,050	3,409	3,409	66,300	7,157	7,157
Information	43,950	-	-	58,400	-	-
Professional and special services	685,175	16,592	16,592	1,211,400	56,126	56,126
Rentals	552,750	28,491	28,491	550,000	94,850	94,850
Repair and maintenance	10,800	-	-	14,400	-	-
Utilities, materials and supplies	26,625	15	15	13,900	1,232	1,232
Acquisition of land, buildings and works	37,500	-	-	-	-	-
Acquisition of machinery and equipment	150,975	24,914	24,914	200,000	1,980	1,980
Other subsidies and payments	18,750	17	17	10,009	8,860	8,860
Total net budgetary expenditures	5,162,703	1,423,561	1,423,561	6,801,924	1,365,971	1,365,971

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 2020-2021 Main Estimates and the 2019-2020 Quarterly Financial Report for the quarter ended June 30, 2019. 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/2020-21/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 2020-2021 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

A decrease of $1,639 million in the authorities available for use is due to the reduced supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The Committee is expected to receive full supply for the 2020-21 Main Estimates in December 2020.

Statement of Departmental Budgetary Expenditures by Standard Object

During the first quarter of 2020-2021, expenses increased by $57,590 compared to the first quarter of the previous year. This variance is mainly due to an increase in personnel expenses, and to an increase in acquisition of machinery and equipment to provide safe equipment for our employees who are working from home. This increase is partially offset by a decrease in professional and special services due to fewer projects requiring professional resources.

3. Risks and Uncertainties

In March 2020, the COVID-19 pandemic amplified the Committee's existing risks of not being able to fulfill its mandate in a timely manner and staff shortages or lack of skills needed to carry out its operations. The pandemic also gave rise to a new and unexpected operational risk related to the health and safety of its employees.

With respect to the review of its grievances, there is a possibility that the Committee may not be able to provide findings and recommendations (F&R) within its self-imposed four-month service standard. The Committee is a 'demand-driven' organization and cannot predict the number of grievances that will be referred to it by the Chief of the Defence Staff (CDS). In 2019-2020, the Committee received more than 300 grievance referrals from the Canadian Armed Forces (CAF), well above the historical average. Based on data from the first quarter of 2020-2021, the Committee's caseload in 2020-2021 will likely be similar to the previous year. To mitigate this risk, the Committee will seize the opportunity to optimize its grievance review process, the core of its operations. In addition, following a review of its organizational structure and capacity, the Operations Branch will implement a new, more efficient organizational structure as well as the Committee's new performance objectives.

With respect to its human resources, the Committee could potentially be faced with staff shortages and a lack of expertise, which in turn could prevent it from fulfilling its mandate in a timely manner. To mitigate this risk, the Committee's priority is to fill the grievance review team. Not only will this ensure the Committee has a sufficient number of grievance officers to produce F&Rs to the required standard, but also ensure succession planning for those positions likely to experience turnover. The Committee will also closely monitor the vacancy rate, utilize innovative staffing techniques and invest in digital skills training.

Finally, due to the extended 'work from home' reality, there is a risk that employees may not be working in ideal conditions or with the appropriate tools. In order to address this, the Committee has made an additional investment in computer hardware and office equipment. An investment was also made in telecommunications, secure messaging platform tools and internal communications to help staff transition to an enhanced digital workplace and digital tools.

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

The Committee does not anticipate a return to the workplace until April 2021 and until then, all employees will continue to work from home. To this end, a workplace analysis will be conducted to determine the vision for the future of the workplace. This will also help the organization to direct its resources towards achieving this vision.

Approved by:

Original signed by

_________________________________________
Christine Guérette, CPA, CGA
Chairperson and Chief Executive Officer
Notre-Dame-du-Laus, Canada
August 10, 2020

Original signed by

_________________________________________
Jean-François Poirier, CPA, CGA
Chief Financial Officer
Gatineau, Canada
August 10, 2020