Quarterly Financial Report for the Quarter ended September 30, 2013
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This quarterly 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 the Treasury Board Accounting Standard 1.3. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates. It has not been subject to an external audit or review.
Authority and Objectives
The Parole Board of Canada (PBC or the Board) is an independent administrative tribunal responsible for making decisions about the timing and conditions of release of offenders to the community on various forms of conditional release. The Board also makes record suspension decisions and recommendations for the exercise of clemency through the Royal Prerogative of Mercy (RPM).
Legislation governing the Board includes the Corrections and Conditional Release Act (CCRA), the Criminal Records Act (CRA), and the Criminal Code. The CCRA empowers the Board to make conditional release decisions for federal offenders and offenders in provinces and territories without their own parole boards. Provincial Boards currently exist in Quebec and Ontario. The CRA entitles the Board to order, deny and revoke record suspensions for convictions under federal acts or regulations. The Governor General or the Governor in Council approves the use of the RPM for those convicted of a federal offence, in all jurisdictions, based on investigations by the Board and recommendations from the Minister of Public Safety.
The Board has one strategic outcome: Conditional release and record suspension decisions and decision processes that safeguard Canadian communities. This strategic outcome is the cornerstone of the Board's public accountability and reporting of results.
Further details on the Board's authority, mandate and program activities may be found in the PBC's Report on Plans and Priorities.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Board's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the 2013-2014 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 moneys 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.
When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012. As a result, the measures announced in Budget 2012 could not be reflected in the 2012-13 Main Estimates.
In fiscal year 2012-2013, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In 2013-2014, the changes to departmental authorities were reflected in the 2013-2014 Main Estimates tabled in Parliament.
The Board uses the full accrual method of accounting to prepare and present its annual departmental financial statements which are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
Highlights of Fiscal Quarter and Fiscal Year to Date Results
Significant Changes to Authorities
As at September 30, 2013, total authorities available for the year have decreased by $4.9M compared to the same quarter of the previous year, from $53.5M to $48.6M. The major changes are as follows:
- A decrease of $2.7M due to savings identified as part of the Budget 2012 Spending Review;
- A decrease of $1.4M due to net results of reprofiling funds between various fiscal years for the Board's Medium to Long Term Accommodation Plan for Program Delivery;
- A decrease of $0.1M related to the transfer to Public Works and Government Services to consolidate all federal government pay administration services into one centre of expertise in Miramichi, New Brunswick;
- A decrease of $0.1M due to savings identified as part of the Budget 2013 Travel Review;
- An increase of $0.4M due to the compensation for collective agreement;
- An increase of $0.5M which is the fifth of six annual increases related to the Government's Truth in Sentencing Act;
- An increase of $0.5M related to the Employee Benefit Plan.
- A decrease of $2.0M compared to 2012-13 related to approval of the annual amount of operating budget carry-forward from the previous fiscal year, which was in October 2013-14 and September 2012-13.
Figure 1 - Second Quarter Expenditures Compared to Annual Authorities
Source: PBC. The graph is in the form of a bar chart showing authorities and annual expenditures for the second quarter of 2012-13 and 2013-14.
Year 2012-13: $53.5M.
Year 2013-14: $48.6M.
Year 2012-13: $10.5M.
Year 2013-14: $12.7M.
Significant Changes to Gross Budgetary Expenditures
Year-to-date (YTD) net spending, increased by $3,359K or 16% in 2013-14, compared with the same quarter in 2012-13. Gross budgetary expenditures increased by $2,739K or 12% and the revenue decreased by $620K or 22% in 2013-14 compared to 2012-13. As a percentage of planned expenditures, year-to-date gross spending in the second quarter of 2013-14 increased with that of 2012-13 to 49% compared to 40% ($26.4M in 2013-14 and $23.7M in 2012-13).
The following paragraphs provide detail of significant changes.
- Personnel expenditures increased by $1,293K or 12% in the second quarter of 2013-14 ($2,296K or 11% year-to-date). The majority of this increase is related to the additional human resources required to work on clearing the Pardons backlog which accumulated prior to the application fee increase. Other contributing factors include temporary staff to work on digitization of offender files to support the Board member tele-work initiative, additional resources to support the Offender Management System upgrade and higher severance and termination payments.
- Transport and Communications decreased by $76K or 12% from $639K in the second quarter of 2012-13 to $563K in the corresponding period in 2013-14. These savings are the continued results of operational changes made following Budget 2012. On a year-to-date basis, the decrease is $37K or 3%. The operational savings are offset by travel related to the Board's Annual Training on Risk Assessment (ATRA), which was held in the first quarter this fiscal year and was not held in the previous fiscal year (ATRA is a training session with plenary sessions and workshops that focus on the continuous training needs of Board members and staff).
- Information expenditures were $59K higher in the second quarter of 2013-14 than in the previous year ($68K on a year-to-date basis). The majority of this increase is due to the timing of the bulk purchase of special file folders for offenders and related required printing services. These items are purchased regularly, however, they were purchased in the second quarter of this fiscal year.
- Professional and Special Services increased by $194K or 33% from $581K in the second quarter of 2012-13 to $775K in the corresponding period in 2013-14. This increase is largely due to the engagement of training consultants and simultaneous translation services for ATRA which was held in the first quarter. Payments to suppliers were made in the second quarter of 2013-14.
- Rentals increased by $116K from $58K in the second quarter of 2012-13 to $174K in the corresponding period in 2013-14. This increase is primarily related to the rental of office space for the Pardons backlog group, rental of meeting rooms for ATRA and the lease of an inserter machine for the Board's mail room.
- Repair and maintenance increased by $32K from $6K in the second quarter of 2012-13 to $38K in the corresponding period in 2013-14. This increase is related to the initial expenditures for the Board's Medium to Long Term Accommodation Plan and to fit-up costs related to the rental of office space for the Pardons backlog group.
Significant Changes to Revenues Collected
The number of record suspension applications accepted in the second quarter of 2013-14 was 2,417, which is 33% less than the same quarter in 2012-13. This resulted in a corresponding 33% or $561K decrease in revenues collected in the second quarter of 2013-14 compared to 2012-13.
Risks and Uncertainties
The PBC receives its funding through annual Parliamentary authorities. As a result, its operations are affected by any changes in funding approved through Parliament. The Board collects user fees for processing record suspension applications, and has the authority to spend revenues received during the year on activities related to processing applications for record suspensions. If lower than expected volume persists, this will have an impact on the Board's net financial situation.
As a small agency, the Board at times faces difficulties in recruiting and retaining staff. Small agencies offer fewer opportunities for advancement, which leads some applicants to choose to work elsewhere, while current employees often leave to secure promotions. As well, the Board faces the same demographic changes as the rest of government, with retirement of personnel affecting operations. Over the next few months/years, the Board expects to see increased activity as a result of recently approved, and potential, legislative changes. While the increase in workload will be most obvious in the number of conditional release reviews conducted, the entire organization will be affected. This could exacerbate recruiting and retention issues, should employees seek opportunities outside the Board.
Significant Changes in Relation to Operations, Personnel and Programs
On September 30, 2013, Gisèle Smith was named Regional Director General, Atlantic Region.
Budget 2012 Implementation
This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government, and modernize and reduce the back office.
The PBC will achieve Budget 2012 savings of $4.8M by 2014-15 through internal efficiency measures and through operational changes to conditional release reviews processes. The Board will maintain its focus on public safety, through quality decision-making on conditional release and record suspensions to safeguard Canadian communities.
In the first year of implementation, the Board achieved savings of $1.6M. Savings have increased to $2.7M in 2013-14 and will result in ongoing saving of $4.8M by 2014-15. To date, cost savings have been achieved through a change from a hearing to an office review and reduction in quorum for certain types of post release decisions, reduced travel due to tele-work by Board members, and increased use of video-conferencing in hearings and internal meetings and other various efficiency measures.
The balance of Budget 2012 savings will be reflected later in the fiscal year and in future fiscal years.
There are no financial risks or uncertainties related to these savings. Work on all remaining initiatives is underway, and in accordance with plans.
Approval by Senior Officials
Cathy Gaudet, CPA, CA
Chief Financial Officer
Statement of Authorities (unaudited)
|Fiscal year 2013-14||Fiscal year 2012-2013|
|Total available for uses for the year ending
March 31, 2014
|Used during the quarter ended
September 30, 2013
|Year to date used at quarter-end||Total available for uses for the year ending
March 31, 2013*,**
|Used during the quarter ended
September 30, 2012
|Year to date used at quarter-end|
|Vote 35 – Program expenditures||48,001||12,292||23,272||53,252||10,714||20,694|
|Less revenues netted against expenditures||5,645||1,138||2,141||5,645||1,699||2,761|
|Total net Program expenditures||42,356||11,154||21,131||47,607||9,015||17,933|
|Budgetary statutory authorities - EBP||6,241||1,560||3,120||5,938||1,485||2,959|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures||Fiscal year 2013-2014||Fiscal year 2012-2013|
|Planned expenditures for the year ending March 31, 2014**||Expended during the quarter ended
|Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2013||Expended during the quarter ended
September 30, 2012
|Year to date used at quarter-end|
|Transportation and communications||3,930||563||1,025||4,477||639||1,062|
|Professional and special services||4,491||775||1,128||4,121||581||875|
|Repair and maintenance||1,420||38||43||2,052||6||12|
|Utilities, materials and supplies||509||48||71||595||37||64|
|Acquisition of machinery and equipment||1,334||89||107||2,072||72||94|
|Other subsidies and payments||11||7||8||32||0||4|
|Total gross budgetary expenditures||54,242||13,852||26,392||59,190||12,199||23,653|
|Total revenues netted against expenditures||5,645||1,138||2,141||5,645||1,699||2,761|
|Total net budgetary expenditures||48,597||12,714||24,251||53,545||10,500||20,892|
*Includes only Authorities available for use and granted by Parliament at quarter end.
**Total available for use does not reflect measures announced in Budget 2012.
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