TBAS 1.3 – Additional guidance: Reporting requirements for fiscal year 2013-2014

Date sent:

To: Deputy Chief Financial Officers

Message from Sylvain Michaud, Executive Director, Government Accounting Policy and Reporting, Office of the Comptroller General

The purpose of this communication is to provide additional guidance on the preparation of the 2013-2014 quarterly financial reports. It includes guidance with respect to measures announced in the Canada's Economic Action Plan 2012 as well as a technical change required to standardize presentation of data in the Statement of Authorities.

Budget 2012

As was done in fiscal year 2012-2013, departments and agencies should continue to include a separate section called Budget 2012 Implementation in their 2013-2014 quarterly financial reports that addresses the expected impact of initiatives and savings measures announced in Canada's Economic Action Plan 2012. This section will continue to include a description of the new or renewed initiatives and savings measures that will have a significant influence on departmental authorities and expenditures in 2013-2014. In preparing this description, departments and agencies should maximize the use of internal and external communications products approved for Budget 2012. In addition, the Budget 2012 Implementation section of the quarterly financial reports should be reviewed according to departmental communications and protocols for public release.

As Budget 2012 initiatives and savings measures are being implemented, departments and agencies should highlight any significant variances in expenditures. Information should also be provided regarding the expected impact of these initiatives and saving measures on the departmental financial plan for the reporting period and the remainder of the year.

Departments and agencies also must include in their quarterly financial reports additional text as provided in the attached guidance, explaining that the savings measures announced in Canada's Economic Action Plan 2012 were not reflected in the 2012-2013 Main Estimates.

The effect of initiatives and savings measures from previous budgets and Budget 2013 should be reflected in the appropriate section of the quarterly financial reports (i.e. Highlights of Fiscal Quarter and Fiscal Year-to-Date Results, Risks and Uncertainties and Significant Changes in Relation to Operations, Personnel and Programs).

Materiality should be considered in determining the level of detail provided in all of these sections.

The quarterly financial report package attached as Annex A provides additional guidance as well as an illustrative example of reporting on the implementation of Budget 2012. This example does not consider all unique circumstances and particularities. Departments and agencies should follow existing communications protocols and use approved internal and external materials as well as professional judgement in preparing their financial reports.

Standardized presentation of data in the Statement of Authorities

On , the Standing Committee on Government Operations and Estimates (OGGO) recommended that the government develop a searchable online database containing information on departmental spending by type of expense and program. In response, the government launched the Expenditure Database, which currently presents financial information for the past three fiscal years (2009-2010 to 2011-2012). As a further step toward fulfilling this recommendation, the Expenditure Database will consolidate in-year financial information from the quarterly financial reports, starting in 2013-2014.

To facilitate the use of quarterly financial report information in the Expenditure Database, departments and agencies should report statutory authorities in detail in their quarterly financial reports for budgetary authorities only, with each individual statutory authority reported in a separate row in the Statement of Authorities.

Departments and agencies are also asked to provide authority codes for each line item in the Total Budgetary Authorities section of the Statement of Authorities using the template attached as Annex B. Annex B provides additional guidance as well as an illustrative example of how to complete the template. Note that the authority codes are not to be published as part of the quarterly financial reports. Completed Annex B templates should be returned to the Expenditure Analysis mailbox by . Should new line items appear in future quarterly financial reports, departments are asked to send a consolidated list of any additions, using the template in Annex B, one month in advance of the publication of their report.

If you have any questions on the quarterly financial reports and Annex A guidance, please do not hesitate to contact either Andrée Pelchat or 613-957-9853, or Claire Osborne or 613- 946-4365.

If you have any questions on Annex B guidance, please do not hesitate to contact Derek Armstrong or 613-957-8290, or Mike Muirhead or 613-952-3059.

Annex A

Introduction

This section should indicate that the quarterly financial report is to be read in conjunction with the Main Estimates (and as applicable – Supplementary Estimates A and previous interim reports for the current year) as well as Canada's Economic Action Plan 2012 (Budget 2012).

Basis of Presentation

The following should be included in this section in order to explain why the measures as announced in Budget 2012 have not been reflected in the current year's 2012-2013 Main Estimates.

"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 . As a result the measures announced in the 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."

As part of the Parliamentary business of supply, requests for additional funding sought through the Estimates were offset against planned savings and other amounts transferred by Treasury Board to frozen allotments. As a result, the department or agency received additional authority net of these amounts. Additional wording may be required for Q3 reports if new funding was requested in the 2012-2013 Supplementary Estimates B:

"Additional funding was sought by (Department or Agency name) through the 2012-2013 Supplementary Estimates B. The department received this additional authority net of the planned savings or other amounts transferred by Treasury Board authority to a frozen allotment."

Highlights of fiscal quarter and fiscal year to date (YTD) results

Any significant variance in authorities available for use or expenditures due to the implementation of incremental and savings measures announced in Budget 2012 should be identified and explained in the Budget 2012 Implementation section, whereas any significant variance in authorities available for use or expenditures due to the implementation of measures announced in previous budgets or in Budget 2013 should be identified and explained in this section.

Risks and Uncertainties

Any financial risks or uncertainties resulting from the implementation of Budget 2012 measures should be discussed in the Budget 2012 Implementation section, whereas any financial risks or uncertainties resulting from the implementation of measures from previous budgets or Budget 2013 should be discussed in this section.

Significant changes in relation to operations, personnel and programs

Any significant changes that have occurred in the department during the current quarter resulting from the implementation of Budget 2012 measures should be discussed in the Budget 2012 Implementation section, whereas any significant changes that have occurred in the department during the current quarter resulting from the implementation of measures from previous budgets or Budget 2013 should be discussed in this section.

Budget 2012 Implementation

This section of the report should identify and explain the impacts related to the implementation of new or renewed initiatives and savings measures as announced in Budget 2012 as implementation has an effect on departmental authorities (i.e. Main and Supplementary Estimates) and expenditures. Departments and agencies should use existing communications protocols and approved materials as well as professional judgment in preparing this section.

The following should be included:

  • The overall impact of the new or renewed initiatives and savings measures as announced in Budget 2012 on the departmental financial plan. Departments and agencies may wish to use the text in the Illustrative Example of Budget 2012 Implementation in preparing this section. The following paragraph should be added as an introduction.
    "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."
  • Information regarding the new or renewed initiatives and savings measures as announced in Budget 2012 that affect fiscal year 2013-2014. An explanation of any significant variance in current fiscal year authorities available for use due to the implementation of new or renewed initiatives and savings measures announced in Budget 2012. This would include details regarding the changes that have occurred in order to realize the expected spending reduction results.
  • An explanation of any significant variance in current fiscal year expenditures due to the implementation of new or renewed initiatives and savings measures announced in Budget 2012. Such variances would include decreases in actual expenditures and in relation to planned expenditures, compared to the same periods of the preceding fiscal year (quarter and YTD). Significant variances that are not readily apparent from the quantitative analysis should also be explained, for example when the impact of the savings measures may be offset by the impact of new initiatives.
  • Information on significant financial risks and uncertainties related to the implementation of new or renewed initiatives and savings measures from Budget 2012 including the expected impact on the department's financial plan for the current quarter. It should also briefly outline the strategies adopted to manage these risks and uncertainties. Possible mitigating strategies to mention could include rigorous planning and monitoring activities and the application of sound project management techniques.
  • Information regarding significant changes that have occurred in the department during the current quarter, as a result of the implementation of new or renewed initiatives and savings measures announced in Budget 2012. This should include information regarding the impact on expenditures to date.

The following tables are illustrative examples of format required.

Statement of Authorities (unaudited)

DEPARTMENT'S NAME:
Quarterly Financial Report
For the quarter ended Month DD, YYYY

Fiscal year 2013-2014 (in thousands of dollars)
Authority Description Total available for use for the year ending table 1 note 1 Used during the quarter ended Month DD, YYYY Year to date used at quarter end

Suggested footnote. Wording can be modified as applicable.

Table 1 Notes
Table Note 1

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

Return to table 1 note 1 referrer

Table Note 2

Departments should substitute the vote numbers and title by the appropriations ones.

Return to table 1 note 2 referrer

Vote X table 1 note 2 – Net Operating expenditures      
Vote Y – Capital expenditures      
Vote Z – Grants and contributions      
Statutory authority 1      
Statutory authority 2      
Total Budgetary authorities      
Non-budgetary authorities      
Total authorities      

Fiscal year 2012-2013 (in thousands of dollars)
Authority Description Total available for use for the year ending table 2 note 1 table 2 note 2 Used during the quarter ended Month DD, YYYY Year to date used at quarter end

Suggested footnote. Wording can be modified as applicable.

Table 2 Notes
Table Note 1

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

Return to table 2 note 1 referrer

Table Note 2

Total available for use does not reflect measures announced in Budget 2012.

Return to table 2 note 2 referrer

Table Note 3

Departments should substitute the vote numbers and title by the appropriations ones.

Return to table 2 note 3 referrer

Vote X table 2 note 3 – Net Operating expenditures      
Vote Y – Capital expenditures      
Vote Z – Grants and contributions      
Statutory authority 1      
Statutory authority 2      
Total Budgetary authorities      
Non-budgetary authorities      
Total authorities      

Departmental budgetary expenditures by Standard Object (unaudited)

DEPARTMENT'S NAME
Quarterly Financial Report
For the quarter ended Month DD, YYYY

Fiscal year 2013-2014 (in thousands of dollars)
Standard Object Planned expenditures for the year ending Expended during the quarter ended Month DD, YYYY Year to date used at quarter end
Expenditures:
Personnel      
Transportation and communications      
Information      
Professional and special services      
Rentals      
Repair and maintenance      
Utilities, materials and supplies      
Acquisition of land, buildings and works      
Acquisition of machinery and equipment      
Transfer payments      
Public debt charges      
Other subsidies and payments      
Total gross budgetary expenditures      
Less Revenues netted against expenditures:
Revenues type 1      
Revenues type 2      
Total Revenues netted against expenditures      
Total net budgetary expenditures      

Fiscal year 2013-2014 (in thousands of dollars)
Standard Object Planned expenditures for the year ending table 3 note 1 Expended during the quarter ended Month DD, YYYY Year to date used at quarter end

Suggested footnote. Wording can be modified as applicable.

Table 3 Notes
Table Note 1

Planned expenditures do not reflect measures announced in Budget 2012.

Return to table 3 note 1 referrer

Expenditures:
Personnel      
Transportation and communications      
Information      
Professional and special services      
Rentals      
Repair and maintenance      
Utilities, materials and supplies      
Acquisition of land, buildings and works      
Acquisition of machinery and equipment      
Transfer payments      
Public debt charges      
Other subsidies and payments      
Total gross budgetary expenditures      
Less Revenues netted against expenditures:
Revenues type 1      
Revenues type 2      
Total Revenues netted against expenditures      
Total net budgetary expenditures      

Illustrative Example: Budget 2012 Implementation Section for the Quarter Ended Month DD, YYYY

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.

Treasury Board Secretariat (Secretariat) will achieve Budget 2012 savings of [$ Amount] million by fiscal year 2014-15 through efficiency measures and program reductions that align resources to its core mandate, scaling back where the need is reduced; transforming how it works internally; and by consolidating and streamlining. With these changes the Secretariat will focus on supporting management excellence and accountability across government.

In the first year of implementation, the Secretariat achieved savings of [$ Amount] million. Savings will increase to [$ Amount] million in 2013-14 and will result in ongoing saving of [$ Amount] million by 2014-15.

There is a variance of [$ Amount] million in the Secretariat's authorities between fiscal year 2012-2013 and 2013-2014 related to two Budget 2012 initiatives. In its role as management board, TBS provides funding to support departments and agencies in meeting government-wide management priorities. When new approaches have been well entrenched, central funding can be reduced or eliminated. Specifically savings are achieved in 2013-2014 by eliminating funding to the following initiatives as the objectives of these projects have been met:

  • The Financial Interoperability and Stewardship Initiative (FISI) assisted departments and agencies in expediting and completing projects to improve interoperability and integration of financial data and systems. The proposal would eliminate [$ Amount] million in funding for FISI but would allow departments to capitalize on the guidance and tools already developed.
  • The Internal Audit Human Resource Management Framework provided HR guidance and tools for recruitment, training and retention of internal auditors to support increased capacity of the federal internal audit function. Given this work is significantly completed; [$ Amount] million in savings will be achieved.

Expenditures in the current quarter of 2013-2014 are only slightly less than the same period from last fiscal year. The YTD expenditures are [$ Amount] million less than the previous fiscal year which is mainly due to the elimination of the Financial Interoperability and Stewardship initiative.

There are no financial risks or uncertainties related to these savings.

Other measures referenced in Budget 2012 include:

  • The development of an action plan by the President of the Treasury Board to address the Red Tape Reduction Commission's Recommendations Report in the coming months, and the adoption of measures to implement the Canada-U.S. Border and Regulatory Action Plan commitments over the next two years;
  • The pursuit of additional standardization and consolidation opportunities as part of the ongoing implementation of the Administrative Services Review.

There was no incremental funding provided to TBS to complete the above work which is well under way.

Annex B – Guidance on the Standardized presentation of data in the Statement of Authorities

Treasury Board Secretariat will be integrating in-year financial information into the Expenditure Database using Quarterly Financial Reports (QFRs). To facilitate the integration of this data for all departments and agencies into a single database, organizations should submit Authority code information that will allow automated matching of line items appearing in the Budgetary Authorities section of the Statement of Authorities in both official languages.

Specific requirements for departments to correctly complete the template:

  • Completion of all fields is mandatory.
  • English and French labels for line items in the Statement of Authorities are to contain the exact text that will be published in the QFR found on departmental websites.
  • Include the corresponding Authority Code for each budgetary line item in the Statement of Authorities such that the Authority Code corresponds to the same line item submitted with that department's trial balance to the Receiver General (and found in the Chart of Accounts). If changes or corrections have been made in the QFR to line items submitted to the Receiver General, use the same Authority Code as was used when submitted to the Receiver General.
  • Include the corresponding vote number where applicable.

Template

Matching Table between Authority Codes, English Label and French Label
Authority Vote/Statutory Authority Code English Label French Label
Insert Vote # Insert Authority Code Insert English label Insert French label
Insert Vote # Insert Authority Code Insert English label Insert French label
S Insert Authority Code Insert English label Insert French label
S Insert Authority Code Insert English label Insert French label

Example (Environment Canada)

Matching Table between Authority Codes, English Label and French Label
Authority Vote/Statutory Authority Code English Label French Label
1 B120 Operating expenditures Dépenses de fonctionnement
1 B130 Revenue Credited to the Vote Revenus à valoir sur le crédit
5 B140 Capital expenditures Dépenses en capital
10 B150 Grants and contributions Subventions et contributions
S A140 Contributions to employee benefit plans Contributions aux régimes d'avantages sociaux des employés
S A111 Minister of the Environment—Salary and motor car allowance Ministre de l'Environnement—Traitement et allocation pour automobile
S A131 Spending of proceeds from the disposal of surplus Crown assets Dépenses des produits de la vente de biens excédentaires de l'État
S A293 Nature conservancy of Canada La société canadienne pour la conservation de la nature
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: