Quarterly Financial Report for the Quarter ended September 30, 2012

1. Introduction

This quarterly financial report has been prepared by the management of the Transportation Appeal Tribunal of Canada "TATC" and Transport Canada as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board Accounting Standard 1.3.  This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates (A) as well as Canada's Economic Action Plan 2012 (Budget 2012).

1.1 Authority, Mandate and Program Activities

A summary description of TATC's program activities can be found in Part II of the Main Estimates.

1.2 Basis of Presentation

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 February 28, 2012.  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 will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

This quarterly report has been prepared by management using an expenditure basis of accounting.  The accompanying Statement of Authorities includes TATC's spending authorities granted by Parliament and those used by TATC consistent with the Main Estimates and Supplementary Estimates (A) for the 2012-2013 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 monies 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.

TATC 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 and published in the Departmental Performance Report.  However, the spending authorities voted by Parliament remain on an expenditure basis.

This quarterly report has not been subject to an external audit or review.

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

2.1 Statement of Authorities

The statement attached at the end illustrates authorities used for the quarter as well as authorities used to date for both the current and previous fiscal year. TATC's authorities available for use at the end of the second quarter of 2012-2013 decreased by approximately $3,000 when compared to the same quarter of the previous fiscal year. This is explained by a decrease of the statutory authorities available for use for employee pay benefits by approximately $3,000.

The authorities used during the second quarter of 2012-2013 for program expenditures and statutory items were approximately $110,000 less than in the same quarter of 2011-2012. This decrease in expenditures is explained under section 2.2 Statement of Departmental Budgetary Expenditures by Standard Object.

This statement also illustrates that the authorities used in the second quarter of 2012-2013, expressed as a percentage of authorities available for the whole year, were lower than in the second quarter of 2011-2012. Approximately 26% of authorities available for use were expended during the second quarter of 2012-2013, whereas 33% were expended in the second quarter of 2011-2012.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

As at September 30, 2012, total year-to-date expenditures of TATC decreased by approximately $107,000 when compared with the same period of 2011-2012. This is primarily the result of:

  • Decrease of Transportation and communication expenditures by $ 35,600:

This variance is mainly explained by efficiencies attained in revising the Hearing scheduling process;

  • Decrease of Professional services expenditures by $60,700:  

The variance is mainly explained by the decreased use of temporary help and translation services;

  • Decrease of Rentals expenditures by $11,600:

This variance is mainly explained by the decreased use of non-government facilities for the purpose of conducting a Hearing.        

3. Risks and Uncertainties

Transportation Appeal Tribunal of Canada's Report on Plans and Priorities (RPP) identifies the current risk environment and TATC's key risk areas to the achievement of its strategic outcomes.  Within this context, specific financial risks relative to the first quarter include the following: 

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-2011 levels for fiscal years 2011-2012 and 2012-2013.  There is a risk that Transportation Appeal Tribunal of Canada's capacity to address emerging financial pressures will decrease as a result of these cost containment measures.  The Transportation Appeal Tribunal of Canada has implemented strategies to manage the operating budget freeze within TATC, including expenditure restraint in discretionary spending and re-allocation of planned spending from lower to higher priorities.

4. Significant Changes in Relation to Operations, Personnel and Programs

In 2012-2013 the TATC's activities remained substantially the same as in the previous year.  However, there is an increase in the number of Review and Appeal Hearings, which can be attributed to the Marine sector.

5. Budget 2012 Implementation

TATC was not affected by any savings measures announced in Budget 2012.

However, in line with the Government's agenda to generate savings, TATC has implemented efficiency measures to reduce operating costs, while, at the same time, being challenged with a significant increase in the number of Marine Review and Appeal Hearings.

Approved by:

Richard Hall,
Chairperson, TATC
Ottawa, Canada
November 29, 2012

André Morency,
Chief Financial Officer, Transport Canada
Ottawa, Canada
November 29, 2012

Statement of Authorities (unaudited) (in dollars)

*Includes only Authorities available for use and granted by Parliament at quarter end.
**Total available for use does not reflect measures announced in Budget 2012
  Fiscal year 2012-2013Fiscal year 2011-2012
Total available for use for the year ending March 31, 2013Used during the quarter ended September 30, 2012Year to date (YTD) used at quarter-endTotal available for use for the year ending March 31, 2012Used during the quarter ended September 30, 2011Year to date (YTD) used at quarter-end
Vote 55 - Operating expenditures 1,284,898 330,909 643,606 1,284,898 439,814 749,035
Budgetary statutory authorities            
Employee Benefit Plan 126,878 31,720 63,440 129,762 32,440 64,881
Total authorities 1,411,776 362,629 707,046 1,414,660 472,254 813,916

Departmental Budgetary Expenditures by Standard Object (unaudited) (In dollars)

*Planned expenditures do not reflect measures announced in Budget 2012
**
Comparative figures have been reclassified to conform to the current year's presentation.
ExpendituresFiscal year 2012-2013Fiscal year 2011-2012
Planned expenditures for the year ending March 31, 2013*Expended during the quarter ended September 30, 2012Year to date used  at quarter-endPlanned expenditures for the year ending March 31, 2012Expended during the quarter              ended September 30, 2011**Year to date used  at quarter-end**
Personnel 847,776 202,129 419,616 850,660 210,822 416,030
Transportation and communications 200,000 29,282 51,587 122,000 38,221 87,197
Information 25,000 - 238 27,000 7,910 8,105
Professional and special services 309,000 119,838 217,517 357,000 197,372 278,172
Rentals 25,000 3,641 7,242 24,000 13,901 18,870
Repair and maintenance 5,000 6,127 6,127 6,000 105 105
Utilities, materials and supplies - 611 2,443 28,000 3,923 4,917
Acquisition of machinery and equipment - 1,001 2,276 - - 520
Other subsidies and payments - - - - - -
Total gross budgetary expenditures 1,411,776 362,629 707,046  1,414,660 472,254 813,916