Quarterly Financial Report for the Quarter ended December 31, 2020

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)

Statement outlining results, risks and significant changes in operations, personnel and program for the quarter ended December 31, 2020

1. Introduction

This quarterly financial report was prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board. It should be read in conjunction with the 2020-2021 Main Estimates and the 2019-2020 Quarterly Financial Report for the quarter ended December 31, 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.

Basis of Presentation:

This quarterly financial report was 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

The Committee received its full supply for the 2020-2021 Main Estimates in December 2020.

In 2019-2020 and 2020-2021, the Committee's total authorities included the Main Estimates and the Operating Budget Carry Forward from the previous year.

The Statement of Authorities shows that 67% of authorities available for use were used as of December 31, 2020, compared to 60% during the same period of the preceding fiscal year.

Statement of Departmental Budgetary Expenditures by Standard Object

During the third quarter of 2020-2021, expenses increased by $125,114 compared to the third quarter of the previous year and Year-to-Date (YTD) expenses increased by $482,228 compared to the YTD of the previous year. Both variances are mainly explained by an increase in personnel expenses and by an increase in acquisition of office equipment.

This equipment was necessary in order to provide adequate remote office equipment to our employees and to ensure the Committee properly supported their health, safety and wellness. 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 produce its Findings and Recommendation (F&R) reports in a timely manner nor deal with 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 F&Rs 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 three first quarters of 2020-2021, the Committee's caseload in 2020-2021 will likely remain elevated, although somewhat less than the previous year. To mitigate this risk, the Committee will seize the opportunity to optimize its grievance review process, the core of its operations. This optimization will also make it possible to update and improve the performance objectives of its employees.

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 priority is to hire more resources in the grievance review team. This will ensure the Committee has a sufficient number of grievance officers to produce F&Rs to the required standard and ensure succession planning for those positions likely to experience turnover. The Committee will also closely monitor the vacancy rate 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 the end of the pandemic. To this end, a workplace analysis will be conducted to determine the vision for the future of the Committee's 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
February 17, 2021

Original signed by

_________________________________________
Jean-François Poirier, CPA, CGA
Chief Financial Officer
Gatineau, Canada
February 17, 2021