Quarterly financial report for the quarter ended June 30, 2015

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 Treasury Board. This quarterly report should be read in conjunction with the Main Estimates.

The Transportation Safety Board's (TSB) sole objective is to advance transportation safety. This mandate is fulfilled by conducting independent investigations into selected transportation occurrences. The purpose of these investigations is to identify the causes and contributing factors and the safety deficiencies evidenced by an occurrence. The TSB then reports publicly and makes recommendations to improve safety and reduce or eliminate risks to people, property and the environment.

The 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 Transportation Safety Board's spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates for the 2015-16 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.

As part of the departmental performance reporting process, the TSB prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year to date results

Statement of authorities

TSB’s total authorities available for use increased by $679,000 between fiscal years 2014-15 and 2015-16. This increase is explained mainly by $677,000 of additional funding for compensation adjustments which is included in the department's reference levels at the beginning of the year as of 2015-16. Fiscal year 2014-15 also received funding for this purpose, however, due to the timing of the expenditure management process, the increase in funding was only received in the third quarter of 2014-15.

Statement of departmental budgetary expenditures

The department's quarterly and year-to-date spending are lower by $1,490,000 or 18% in the current year compared to 2014-15. Fiscal year 2014-15 had exceptional expenditures which increased its first quarter spending, specifically:

  • a charge of $721,000 to implement the payment of salaries in arrears by the Government of Canada, without impacting employees on salary at the date of implementation;
  • the expenditure of $612,000 for the receipt and installation of an X-Ray Computed Tomography System; and
  • an increase in personnel expenditures of $189,000 due to an increase in severance payments attributable to the liquidating of accumulated severance benefits as per collective agreements.

In 2015-16, first quarter expenditures returned to expected levels.

As illustrated in Figure 1, the TSB has spent approximately 23% of its authorities at the end of the first quarter. This is consistent with expectations given that the department's most significant expense is salaries. The TSB's spending is generally distributed equally throughout the year. The difference of 5% when compared to previous year can be explained by the significant transactions which increased 2014-15 expenditures in the first quarter as described above.

Figure 1. First quarter expenditures compared to annual authorities

Risks and uncertainties

The TSB is funded through annual appropriations. As a result, its operations are impacted by any changes in funding approved through Parliament. As a departmental corporation, it has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department's funding requirements.

A continuous risk to TSB's financial situation is that expenditures are greatly influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in resource pressures that could require the department to seek additional funding from Parliament.

Furthermore, as announced in Budget 2014, departmental operating budgets are frozen for 2014-15 and 2015-16. This presents a risk to the TSB since it will not be allocated any funding for wage and salary increases that take effect during that period, or for the ongoing impact of those adjustments. As a result, the department will need to cover these amounts within its existing appropriations. The TSB is implementing additional spending restraints to ensure this risk is mitigated.

Significant changes in relation to ooperations, personnel and programs

Over the past two years, there has been an increased number of significant rail accidents investigated by TSB under its mandate. The number of open rail occurrence investigations in the previous year was among the highest in recent years. It is important to note that many of these investigations are ongoing into 2015-16 and future years. With heightened public expectations of railway safety, there has been a significant increase in activities within the rail occurrence investigations program. In addition to incremental workload for investigation deployments and follow-ups, this program has experienced increased public and stakeholder interest in the form of media communications and access to information requests. In fiscal years 2013-14 and 2014-15, additional funding was received through Supplementary Estimates in order for the TSB to meet its mandate regarding this program.

Approval by senior officials

Approved by,

Source document signed by
Kathleen Fox
Chair

Source document dated 2015-08-20
Date
Gatineau, Canada

Source document signed by
Chantal Lemyre, CPA, CGA
Chief Financial Officer

Source document dated 2015-08-19
Date
Gatineau, Canada

Statement of authorities (unaudited)

Fiscal year 2015-16 (in thousands of dollars)Footnote 1
  Total available for use for the year ending
March 31, 2016
Expended during the quarter ended
June 30, 2015
Year to date
used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,290 5,827 5,827
Main Estimates: Statutory authorities - Employee Benefit Plans 3,440 860 860
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 4 1 1
Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act 5 - -
Total authorities available for use 29,739 6,688 6,688
Fiscal year 2014-15 (in thousands of dollars)Footnote 1
  Total available for use for the year ending March 31, 2015 Expended during the quarter ended June 30, 2014 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 25,757 7,357 7,357
Main Estimates: Statutory authorities - Employee Benefit Plans 3,285 821 821
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 14 - -
Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act 4 - -
Total authorities available for use 29,060 8,178 8,178

Statement of expenditures by standard object (unaudited)

Fiscal year 2015-16 (in thousands of dollars)Footnote 1
Expenditures: Planned expenditures for the year ending March 31, 2016 Expended during the quarter ended June 30, 2015 Year to date used at quarter-end
Personnel 23,913 5,945 5,945
Transportation and communications 1,620 257 257
Information 121 26 26
Professional and special services 2,490 241 241
Rentals 339 157 157
Repair and maintenance 466 8 8
Utilities, materials and supplies 275 50 50
Acquisition of land, building and works 115 - -
Acquisition of machinery and equipment 400 4 4
Other subsidies and payments - - -
Total net budgetary expenditures 29,739 6,688 6,688
Fiscal year 2014-15 (in thousands of dollars)Footnote 1
Expenditures: Planned expenditures for the year ending March 31, 2015 Expended during the quarter ended June 30, 2014 Year to date used at quarter-end
Personnel 23,194 6,119 6,119
Transportation and communications 1,526 164 164
Information 135 29 29
Professional and special services 1,956 267 267
Rentals 200 168 168
Repair and maintenance 404 50 50
Utilities, materials and supplies 270 30 30
Acquisition of land, building and works - - -
Acquisition of machinery and equipment 645 630 630
Other subsidies and payments 730 721 721
Total net budgetary expenditures 29,060 8,178 8,178

Footnotes

Footnote 1

Includes only authorities granted by Parliament at quarter end.

Return to footnote 1 referrer