Quarterly financial report for the quarter ended September 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 and Supplementary 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 and Supplementary Estimates for the 2015-16 fiscal year and any respendable revenue 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

The TSB received $29,730,000 in funding through the Main Estimates ($26,290,000 for operating expenditures and $3,440,000 for employee benefit plans). During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2014-15 which represents an increase in authorities of $789,000. The TSB has additional statutory authorities totaling $19,000 at the end of the second quarter generated by proceeds from the disposal of surplus Crown assets and its authority to respend revenues as a departmental corporation.

TSB’s total authorities available for use increased by $815,000 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. The remaining difference is due to an increase in OBCF of $132,000 and a slight incremental increase in respendable revenues earned between quarters.

Statement of departmental budgetary expenditures

The department’s year-to-date spending is lower by $2,017,000 or 13% in the current year compared to 2014-15.  This can be largely explained by exceptional expenditures which occurred in the first and second quarters of previous year:

  • a charge of $723,000 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 $622,000 for the receipt and installation of an X-Ray Computed Tomography System; and
  • payments for severance totaling $425,000 attributable to the liquidating of accumulated severance benefits as per collective agreements.

The remaining decrease in year-over-year expenses can be mainly attributed to the decrease in professional services of $276,000, which is explained by a timing difference in system development costs. In 2014-15, the modernization of the Aviation Safety Information System (ASIS) was completed, while no comparable investments in system development have occurred to date in 2015-16.

As illustrated in Figure 1, the TSB has spent approximately 46% of its authorities at the end of the second 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 8% when compared to previous year can be explained by the significant transactions which increased 2014-15 expenditures as described above.

Figure 1. Second 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 operations, 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 2015-11-23
Date
Gatineau, Canada

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

Source document dated 2015-11-20
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
September 30, 2015
Year to date
used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 27,079 6,546 12,373
Main Estimates: Statutory authorities - Employee Benefit Plans 3,440 860 1,720
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 5 0 1
Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act 14 10 10
Total authorities available for use 30,538 7,416 14,104
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 September 30, 2014 Year to date used at quarter-end
Main Estimates: Vote 1 - Net operating expenditures 26,414 7,120 14,477
Main Estimates: Statutory authorities - Employee Benefit Plans 3,285 822 1,643
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 16 1 1
Statutory authorities - Expenditures Re: Paragraph 29.1(1) of the Financial Administration Act 8 - -
Total authorities available for use 29,723 7,943 16,121

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 September 30, 2015 Year to date used at quarter-end
Personnel 24,863 6,381 12,326
Transportation and communications 1,700 308 565
Information 160 44 70
Professional and special services 2,220 429 670
Rentals 339 47 204
Repair and maintenance 466 94 102
Utilities, materials and supplies 275 24 74
Acquisition of land, building and works 115 18 18
Acquisition of machinery and equipment 400 71 75
Other subsidies and payments - - -
Total net budgetary expenditures 30,538 7,416 14,104
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 September 30, 2014 Year to date used at quarter-end
Personnel 23,194 6,610 12,729
Transportation and communications 1,699 395 558
Information 150 17 46
Professional and special services 2,219 678 946
Rentals 260 65 233
Repair and maintenance 495 82 132
Utilities, materials and supplies 301 73 103
Acquisition of land, building and works 0 0 0
Acquisition of machinery and equipment 675 20 650
Other subsidies and payments 730 3 724
Total net budgetary expenditures 29,723 7,943 16,121

Footnotes

Footnote 1

Includes only authorities granted by Parliament at quarter end.

Return to footnote 1 referrer