Quarterly Financial Report for the Quarter ended June 30, 2017

Introduction 

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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates.  

A summary description of the Parole Board of Canada (PBC) Raison d’être and core responsibilities can be found in Part II of the Main Estimates

This Quarterly Report has not been subject to an external audit or review. 

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the PBC’s spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates and Supplementary Estimates for the 2017-18 fiscal year and any respendable revenue earned and available for use to quarter end. 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.

The PBC 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 June 30, 2017, total authorities available for the year have decreased by $0.5M compared to the same quarter of the previous year, from $46.8M to $46.3M. The changes are attributable to a decrease of $0.5 million related to the Employee Benefit Plan (EBP).

As illustrated in Figure 1, the PBC has spent approximately 23% of its authorities at the end of the first quarter, which is lower than last year’s rate of 26%. As PBC's most significant expense is salaries, it’s spending should generally be distributed equally throughout the year. The decrease in overall spending is primarily explained by lower personnel expenditures. 

Figure 1 - First Quarter Expenditures Compared to Annual Authorities

A chart depicting three columns of values in the thousands of dollars, for the fiscal years 2017-18 and 2016-17 for:                               Authorities: 2017-18 = 46,264 and 2016-17 = 46,790; Expenditures to date: 2017-18 and 10,921; 2016-17 = 12,856; and Expenditures Q1: 2017-18 = 10,921 and 2016-17 = 12,856
Alternative text - Figure 1

A chart depicting three columns of values in the thousands of dollars, for the fiscal years 2017-18 and 2016-17 for:                              

  • Authorities: 2017-18 = 46,264 and 2016-17 = 46,790;
  • Expenditures to date: 2017-18 and 10,921; 2016-17 = 12,856; and
  • Expenditures Q1: 2017-18 = 10,921 and 2016-17 = 12,856 

Significant Changes to Gross Budgetary Expenditures

Gross budgetary expenditures decreased by $1,607K or 12% in 2017-18 compared to 2016-17, and revenue increased in 2017-18 by $328K, or 47%, compared to 2016-17. Quarterly and year-to-date spending, net of revenue, decreased by $1,935K or 15% in 2017-18, compared with the same quarter in 2016-17. The following paragraphs provide detail of significant changes.

  • Personnel expenditures decreased by $1,200K, or 10%, in the first quarter of 2017-18.  The decrease is explained by a variety of factors: increased vacancies in full time Board member positions in the first quarter of 2017-18, a reduction in the rate charged for employee benefit plans, work on eliminating the Pardons backlog was completed in 2016-17, and work on the E-file project has also reduced compared to the prior year. A portion of the variance may also be explained by overpayments recorded in the first quarter of 2016-17 following the implementation of Phoenix.  
  • Professional and special services expenditures decreased by $389K, or 65%, compared with the first quarter last year. This is largely a result of translation costs resulting from a lower volume of translation requests; a decreased in development cost for the Integrated Decision System; as well as a revised process from Department of Justice for invoicing legal costs. In 2016-17, the annual estimated legal costs were paid at the beginning of the year and will now be paid on a monthly basis for 2017-18.
  • Expenditures for loans, investments and advances are attributed to overpayments and advances provided to employees due to transitioning to the Phoenix pay system. This amount increased by $48k or 123% comparing the first quarter of both years. This increase may be explained by overpayments not being fully quantified and recorded in the first quarter of 2016-17, rather than an increase in overpayments in the first quarter of 2017-18.

Significant Changes to Revenues

Revenues recorded increased by $328K, or 47%, compared with the first quarter of 2016-17, which is explained by an equivalent increase in the volume of record suspension applications accepted in the first quarter of 2017-18. This variance is likely attributed to legislation change dating back to 2012 which imposed an additional five year waiting period for the eligibility criteria for certain applicants. The waiting period has now expired and affected applicants are now eligible to apply. 

Risks and Uncertainties 

The PBC receives the majority of its funding through annual Parliamentary authorities. As a result, its operations are affected by any changes in funding approved through Parliament. The PBC also collects user fees for processing record suspension applications, and has the authority to spend revenues received during the year on related activities. The volume of applications generally remains consistent from year to year but significant variances may occur in response to legislative or policy changes affecting record suspensions. 

Significant Changes in Relation to Operations, Personnel, and Programs 

On April 18, 2017, Chantal Lemyre was named as the Chief Financial Officer.

Approval by Senior Officials 

Approved by, 

 

Harvey Cenaiko

Chairperson 

 

Chantal Lemyre, CPA, CGA

Chief Financial Officer

 

Ottawa, Canada

August 23, 2017 

 

 

Statement of Authorities (unaudited)

Fiscal year 2017-2018

(in thousands of dollars)

Total available for use for the year ending
March 31, 2018*

Used during the quarter ended
June 30, 2017

Year-to-date used at quarter-end

Vote 1 – Program expenditures

46,323

10,544

10,544

Less revenues netted against expenditures

**5,645

1,019

1,019

Total net Program expenditures

40,678

9,525

9,525

Budgetary statutory authorities – EBP

5,586

1,396

1,396

Total authorities

46,264

10,921

10,921

Fiscal year 2016-2017

(in thousands of dollars)

Total available for use for the year ending
March 31, 2017*

Used during the quarter ended
June 30, 2016

Year-to-date used at quarter-end

Vote 1 – Program expenditures

46,316

12,017

12,017

Less revenues netted against expenditures

**5,645

691

691

Total net Program expenditures

40,671

11,236

11,236

Budgetary statutory authorities – EBP

6,119

1,530

1,530

Total authorities

46,790

12,856

12,856

*Includes only Authorities available for use and granted by Parliament at quarter end.

**The amount of revenues netted against expenditures reported in the Main Estimates, is based on an estimated amount  of 12,000 accepted applications multiplied by the portion of the $631 user fee that is respendable by PBC ($470). 

Departmental budgetary expenditures by Standard Object (unaudited)

 

Fiscal year 2017-2018

(in thousands of dollars)

Planned expenditures for the year ending March 31, 2018*

Expended during the quarter ended June 30, 2017

Year-to-date used at quarter-end

Expenditures

 

 

 

  Personnel

41,167

11,109

11,109

  Transportation and communications

3,960

407

407

  Information

374

-

-

  Professional and special services

5,362

212

212

  Rentals

198

21

21

  Repair and maintenance

142

50

50

  Utilities, materials and supplies

424

26

26

  Acquisition of machinery and equipment

265

5

5

  Other subsidies and payments

17

23

23

  Loans Investments and Advances

-

87

87

Total gross budgetary expenditures

51,909

11,940

11,940

Less Revenues netted against expenditures:

User fee revenues netted against expenditures

5,645

1,019

1,019

Total net budgetary expenditures

46,264

10,921

10,921

 

Fiscal year 2016-2017

(in thousands of dollars)

Planned expenditures for the year ending March 31, 2017*

Expended during the quarter ended June 30, 2016

Year-to-date used at quarter-end

Expenditures

 

 

 

  Personnel

41,694

12,309

12,309

  Transportation and communications

3,960

476

476

  Information

374

14

14

  Professional and special services

5,362

601

601

  Rentals

198

40

40

  Repair and maintenance

142

16

16

  Utilities, materials and supplies

424

16

16

  Acquisition of machinery and equipment

265

5

5

  Other subsidies and payments**

16

31

31

  Loans Investments and Advances**

-

39

39

Total gross budgetary expenditures

52,435

13,547

13,547

Less Revenues netted against expenditures:

User fee revenues netted against expenditures

5,645

691

691

Total net budgetary expenditures

46,790

12,856

12,856

*Includes only Authorities available for use and granted by Parliament at quarter end.

** Comparative figures have been reclassified to conform to the current year’s presentation.

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