Quarterly Financial Reports December 31 2011

This quarterly financial report should be read in conjunction with the Main Estimates (and as applicable - Supplementary Estimates and previous interim reports for the current year). It 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. It has not been subject to an external audit or review.

Under the Royal Canadian Mounted Police (RCMP) Act, the RCMP Commissioner refers all appeals of formal discipline and all discharge and demotion appeals to the RCMP External Review Committee (ERC) unless the member of the RCMP requests that the matter not be referred. In addition, pursuant to section 33 of the RCMP Act, the RCMP Commissioner refers certain types of grievances to the ERC in accordance with regulations made by the Governor in Council. Section 36 of the RCMP Regulations specifies the grievances which the RCMP Commissioner is obliged to refer to the ERC, namely grievances respecting:

• the Force's interpretation and application of government policies that apply to government departments and that have been made to apply to members;
• the stoppage of pay and allowances of members made pursuant to subsection 22(3) of the RCMP Act;
• the Force's interpretation and application of the Isolated Posts Directive;
• the Force's interpretation and application of the RCMP Relocation Directive; and
• administrative discharge on the grounds of physical or mental disability, abandonment of post, or irregular appointment.

The ERC is also responsible for outreach and information dissemination. The ERC ensures that its findings and recommendations in each case are clearly explained for the parties and the RCMP Commissioner. Summaries of the findings and recommendations in each case, as well as articles of interest on the role of the ERC, relevant legal principles and information on related issues are distributed widely.

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ERC’s spending authorities granted by Parliament and those used by the ERC consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2011-12 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.

The ERC uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

This section highlights the significant items that contributed to amounts available for uses and expenditures used for the quarter ended December 31st.

As reflected in the Statement of Authorities, the net budget authorities have decreased from from $2,370,673 (fiscal 2010-11) to $2,029,175 to date in this fiscal year (fiscal 2011-12) for a variance decrease of ($341,498). The fiscal 2011-12 budget authority includes a vote transfer received in the 3rd quarter in the amount of $480,000, plus another central vote in the amount of $79,708.

This decrease is a result of the ERC’s base budget being augmented by a series of temporary funding in previous years, specifically from the Treasury Board’s Management Reserve to allow the ERC to meet the obligations of its mandate and to ensure the accountability of its operations. The terms of all of these temporary appropriations will expire at the end of fiscal year 2011-12 and thus will also reflect any future decreases.

As reflected in the Statement of Authorities, expenditures used during the quarter ended December 31st have increased from $440,025 (fiscal 2010-11) to $461,487 (fiscal 2011-12) for a total variance increase of of $21,462 from the previous year. An explanation of this increase is discussed under 2.3 Budgetary Expenditures by Standard Object.

As reflected in the Statement of Authorities, expenditures used for the year to date at quarter end December 31st have decreased from $676,389 (fiscal 2010-11) to $648,958 (fiscal 2011-12) for a total variance decrease of ($27,431) from the previous year. This decrease is not material and as a result will not affect the analysis of the financial statements.

As reflected in the ERC budgetary expenditures by Standard Object, expenditures used during the quarter ended December 31st have increased from $440,025 (fiscal 2010-11) to $461,487 (fiscal 2011-12) for a total variance increase of $21,462 from the previous year.

The majority of the expenditure increase was due to the use of professional and special services which amounts to $92,752 and is related to translation services provided by Public Works and Government Services Canada (PWGSC). The remainder of the increase is due to acquisitions of machinery and equipment related to the purchasing of computer equipment and software, and a slight increase in utilities, materials and supplies which is not material.

These increases were offset by a decrease in Rental and Personnel expenses for the quarter ended December 31st (fiscal 2011-12). Rental expense had decreased by ($24,407), this was due to nonrecurring payments of IT services through an MOU agreement with Public Safety Canada in the previous 3rd quarter (2010-2011 fiscal year). Furthermore, there was a decrease in the Personnel expenses of ($57,237) due to the decision to not replace departed staff at the same rate in the 2011-12 fiscal year. The net result of these expenditures is an increase of $21,462 from the previous year.

[ Comparison of Net Budget Authority and Expenditures as of December 31 - Text Version ]

The ERC Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates (and Supplementary Estimates A and B as applicable) for which full supply was released on June 27, 2011.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. The ERC's frozen portion of the budget ($5,240) was managed through the following action and mitigation strategy: the non-extension of an Interchange Agreement for a portion of the year.

Starting in 2006, the ERC received operational funding for five-years, which closes in 2011-12. The ERC received new temporary short-term funding in the fall of 2009 for three years to meet the program needs of the ERC. The reduction in budget authorities is a reflection of the winding down of this short term funding. The reduction in expenditures in the first quarter is commensurate with the reduction in the authorities.

Budget 2011 announced that departmental budgets would be examined through a Strategic and Operating Review. However, the ERC is not currently among the departments identified in the Strategic and Operating Review.

Catherine Ebbs
Chair
Ottawa, Canada
November 17, 2011

David Paradiso
Executive Director and Senior Counsel
Ottawa, Canada
November 17, 2011