Quarterly Financial Report

Erratum

Date:

March 1, 2018

Location:

Departmental budgetary expenditures by Standard Object (unaudited)

Revision:

“Personnel, Expended during the quarter ended September 30, 2016, $1,043,468 replaces “Personnel, Expended during the quarter ended September 30, 2016, $1,403,468”.

“Utilities, materials and supplies, Expended during the quarter ended September 30, 2017, $25,551” replaces “Utilities, materials and supplies, Expended during the quarter ended September 30, 2017, $75,051”.

“Rentals, Expended during the quarter ended September 30, 2017, $380,118 replaces “Rentals, Expended during the quarter ended September 30, 2017, $330,618”.

“Utilities, materials and supplies, Year to date used at quarter-end, $33,369” replaces “Utilities, materials and supplies, Year to date used at quarter-end, $82,869”.

“Rentals, Year to date used at quarter-end, $384,863 replaces “Transportation and communications, Year to date used at quarter-end, $335,363”.

Rationale for the revision:

A typo and coding errors resulted in original amounts reported incorrectly.

Statement Outlining results, risks and significant changes in operations, personnel and programs

Introduction

Thisquarterly financial report has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This report should be read in conjunction with the 2017-18 Main Estimates. Polar Knowledge Canada had no items in the 2017-18 Supplementary Estimates (A) process. This quarterly report has not been subject to an external audit or review.

PolarKnowledge Canada (POLAR) was created pursuant to theCanadian High Arctic Research Station Actand came into force on June 1, 2015. POLAR’s mandate is to advance knowledge of the Canadian Arctic to improve economic opportunities, environmental stewardship and the quality of life of its residents and all other Canadians; promote the development and dissemination of knowledge of the other circumpolar regions, including the Antarctic; strengthen Canada’s leadership on Arctic issues, and establish a hub for scientific research in the Canadian Arctic.

Further information on the mandate, roles, responsibilities and programs of POLAR can be found by accessing the2017-18 Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes POLAR's spending authorities granted by Parliament and those used by POLAR, consistent with the Main Estimates for the 2017-18 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.

When Parliament is dissolved for the purposes of a general election, section 30 of theFinancial 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.

POLAR 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.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

POLAR’s financial structure is composed of voted program authorities and statutory authorities for contributions to employee benefit plans.

For the period ending September 30, 2017, POLAR had total annual authorities of $22.1 million. Presented in Graph 1 below are the budgetary authorities and expenditures for the first two quarters of 2017-18 and 2016-17. For more details, refer to the Statement of Authorities.

Graph 1: Comparison of budgetary authorities and expenditures for the fiscal quarter ended September 30, 2017, and September 30, 2016.

POLAR incurred a total of $7.8 million in expenditures in the first two quarters, representing approximately 35% of the total available annual authorities. The expenses were allocated mostly to personnel expenditures in the amount of $2.5 million, accounting for 32% of the total and transfer payments in the amount of $3.6 million, accounting for 47% of the total. The remaining 21% mainly consists of expenses for professional and special services, transport and communications, rentals as well as utilities, materials and supplies. Refer to the Departmental Budgetary Expenditures by Standard Object for more details.

Significant Changes to Authorities

(Please refer to the Statement of Authorities table)

As of September 30, 2017, the total budgetary authorities available for use for the year increased from $19.8 million in 2016-17 to $22.1 million in 2017-18. The net increase is mainly due to the reprofiling of $2.5 million from 2016-17 to meet the commitments related to contribution agreements.

Significant Changes to Expenditures

(Please refer to the Departmental Budgetary Expenditures by Standard Object table)

2nd Quarter

At the end of the second Quarter, budgetary expenditures had increased by $3.7 million compared to the same period last year. Significant changes result primarily from the following:

An increase of $396 thousand for salaries and benefits is due to an increase in number of staff.

A decrease of $147 thousand for transportation and communications is due to a timing difference in the invoice reception of freight expenditures.

Rentals increased by $ 166 thousand mainly due to invoice delays when the Ottawa offices moved to a new location last fiscal year.

A decrease of $244 thousand in acquisition of land, building and works is a result of leasehold improvement to the new Ottawa offices in the last fiscal year.

An increase in transfer payments of $3.4 million mainly due to the timing of the approval of contribution agreements and payments.

Year to date

Supplementary significant changes from the previous year to date result primarily from the following:

Compared to the same period last year, there was an increase of $211 thousand for professional and special services. This change is due to an increase of $387 thousand of our scientific and research services, a decrease of $216 thousand in Temporary Help Services and an increase of $40 thousand in translation and other services.

Risks and Uncertainties

As a new agency, there are a number of risks outside of POLAR’s control that can potentially impact the achievement of planned results. Efforts are underway to try to mitigate these risks through sustained engagement, capacity building, funding programs, partnership development and staffing processes.

Community buy-in is one possible risk given the upcoming opening of the CHARS campus in Cambridge Bay, which will serve as the headquarters of POLAR. The internal conditions influencing this risk include the ongoing staffing process and relocation of employees to Nunavut, the recently launched Grants and Contributions competitive funding process and ongoing community engagement. Stakeholder expectations regarding the benefits derived from the CHARS campus are extremely high in terms of employment opportunities for local people, economic development in Nunavut, and support for local businesses and organizations. POLAR is seeking to mitigate this risk through outreach and engagement, hiring of local people, and support for education programs and science camps in Cambridge Bay. There are also expectations by other jurisdictions in Canada’s North regarding the ability of POLAR’s programs to have an impact in other areas of Canada (specifically Yukon, the Northwest Territories, Nunavik and Nunatsiavut) as well as the trickledown effect from having the CHARS campus as a “hub” for national and international science activities.

Inability to deliver on objectives of the pan-northern S&T Program is a specific risk for POLAR as a science-based agency. The scope of the S&T program is very broad and has increased expectations by partner organizations for POLAR to be fulfilling a world-class science function as well as a coordination role in Canada on Arctic and Antarctic science. The breadth and complexity of this work will make delivery a challenge with current resource levels. To mitigate this risk, POLAR is developing partnerships to help address gaps in capacity and science expertise. Partnership efforts include multiple stakeholders, such as federal government departments/agencies, northern organizations, territorial governments, academia, Indigenous organizations and international players.

Recruitment and retention of highly-qualified staff will be an ongoing risk for POLAR. Many factors, including the interest, availability and preparedness of Inuit for positions within POLAR, will have implications for POLAR’s obligations under the Nunavut Agreement to work towards 85% representation of Inuit across job groups and levels. Although POLAR will continue to give preference to job applicants who self-identify as Inuit under the Nunavut Agreement, increasing Inuit representation will be especially challenging given that there are science-specific classifications and post-graduate (M.Sc., Ph.D.) education requirements for many positions related to the S&T program. This risk is compounded by the fact that the CHARS campus is in a small Northern community with a limited local labour pool for science-focused positions. As a result, POLAR will continue to support Pilimmaksaivik in the development and implementation of a whole-of-government (WoG) approach to Inuit employment and training, and develop and implement a POLAR-specific Inuit Employment and Pre-employment Training Plan that supplements and leverages WoG initiatives. This includes continuing efforts to support long-term capacity building among youth in Nunavut, including through funding science camps and workshops.

It may be challenging to attract and retain scientific and technical staff to work in Cambridge Bay, therefore, measures will be implemented to attract early and late-career researchers for employment opportunities with POLAR, and promote POLAR and the CHARS campus to the Canadian academic community.

Addressing the risks highlighted is important to the agency as successful mitigation will ultimately allow POLAR to implement its mandate and meet stakeholder expectations. The upcoming opening of the CHARS campus will be a key transition period for the organization and for the Cambridge Bay community. In addition, the potential positive impact of the science and knowledge generated by the S&T program will help Canadians better understand fundamental changes occurring in the Northern environment Employment and training opportunities offered by POLAR in Cambridge Bay should also contribute positively to the economic development of the region.

Significant Changes in Relation to Operations, Personnel and Programs

Construction of the CHARS campus is nearing completion and sections will gradually open to the public in the next few months. Relocation of employees to Cambridge Bay has started in the first two quarters and will continue throughout the year. There has been no significant change to the programs or structure since POLAR was established on June 1, 2015.

Approval by Senior Officials

Originals signed by:

 

 

________________________
David J. Scott, Ph.D., President & Chief Executive Officer 
Ottawa, Canada
November 28, 2017

 

 

 

________________________
Martin Turpin, Director and Chief Financial Officer
Finance and Facilities Management
Cambridge Bay, Canada
November 28, 2017

Polar Knowledge Canada

Quarterly Financial Report

For the quarter ended September 30, 2017

Statement of Authorities (unaudited)

(in dollars)

Fiscal year 2017-2018 Fiscal year 2016-2017
Total available for use for the year ending March 31, 2018 * Used during the quarter ended September 30, 2017 Year to date used at quarter-end Total available for use for the year ending March 31, 2017 * Used during the quarter ended September 30, 2016 Year to date used at quarter-end
Vote 1 – Program expenditures 21,419,316 5,870,805 7,432,226 19,215,842 2,175,046 4,221,882
Budgetary statutory authorities 631,025 157,757 315,513 622,077 155,519 311,039
Total Budgetary authorities 22,050,341 6,028,561 7,747,738 19,837,919 2,330,565 4,532,921

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

 

 

Departmental budgetary expenditures by Standard Object (unaudited)

(in dollars)

Fiscal year 2017-2018 Fiscal year 2016-2017
Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended September 30, 2017 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended September 30, 2016 Year to date used at quarter-end
Expenditures:
Personnel 5,106,406 1,438,910 2,456,453 4,238,802 1,403,468 1,796,670
Transportation and communications 2,273,017 397,496 524,162 1,981,970 544,741 665,448
Information 509,567 24,988 38,273 330,328 40,126 43,144
Professional and special services 1,672,362 334,627 676,358 1,651,642 258,242 465,910
Rentals 2,231,380 330,618 335,363 550,547 164,748 197,788
Repair and maintenance 7,475 671 1,247 55,055 0 119
Utilities, materials, and supplies 156,981 75,051 82,869 440,438 23,735 30,894
Acquisition of land, building, and works 0 0 0 362,645 243,998 243,998
Acquisition of machinery and equipment 109,638 15,725 20,002 495,492 11,507 12,950
Transfer payments 9,983,518 3,411,321 3,617,331 9,731,000 0 1,076,000
Other subsidies and payments 0 (845) (4,319) 0 0 0
Total net budgetary expenditures 22,050,341 6,028,561 7,747,738 19,837,919 2,330,565 4,532,921

 

 

 

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