Quarterly Financial Report - For the quarter ended June 30, 2015 Revised
Statement outlining results, risks and significant changes in operations, personnel and programs
Date: November 27, 2015
Location: Significant Changes to Authorities Available for Use for the Year
Revision: “$593 thousand decrease in funding for the implementation of Bill C-11” replaces “$662 thousand decrease in funding for the implementation of Bill C-11” and as a result of this change, “other minor changes resulted in a $36 thousand net increase in authorities” replaces “other minor changes resulted in a $105 thousand net increase in authorities”
Rationale for the revision: Original amount for the decrease in funding for the implementation of Bill C-11 included the amount for contributions to employee benefit plans (EBP). A revision is being made to exclude the EBP amount because the adjustments to the Courts Administration Service’s contributions to EBP are explained separately in the following paragraph.
This quarterly report should be read in conjunction with the Main Estimates. 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 Treasury Board. This quarterly report has not been subject to an external audit or review.
The role of the Courts Administration Service (CAS) is to provide effective and efficient registry, judicial and corporate services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court of Canada and the Tax Court of Canada. Further details on CAS’ programs can be found in the 2015-16 Main Estimates .
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes CAS’ spending authorities granted by Parliament and those used by the organization consistent with the 2015-16 Main Estimates. This quarterly report has been prepared using a prescribed 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.
CAS 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.
Highlights of fiscal quarter and fiscal year to date (YTD) results
Significant Changes to Authorities available for use for the year
As at June 30, 2015, authorities available for use for the year decreased by $4,104 thousand (-6%) compared to the same quarter in 2014-15, from $68,058 thousand to $63,954 thousand. As a result of the Government expenditure management cycle and certain conditions imposed by Central Agencies, there are often significant fluctuations by quarter between authorities received and the timing of expenditures realized.
This decrease in authorities is partly due to a $3,395 thousand decrease in funding related to the Division 9 proceedings under the Immigration and Refugee Protection Act (Balanced Refugee Reform Act) that sunset in March 2015. Renewed funding has not yet been received as of the end of the first quarter. There was also a $593 thousand decrease in funding for the implementation of Bill C-11, An Act to amend the Immigration and Refugee Protection Act and the Federal Courts Act. Related funding is included within the Main Estimates, however expenditures are contingent upon the appointment of judges. There have been four judicial appointments to date, including two appointments made in May 2015.
Furthermore, a $152 thousand decrease in authorities is attributable to adjustments to CAS’ contributions to employee benefit plans as per central agency direction.
Other minor changes resulted in a $36 thousand net increase in authorities.
Significant Changes to Expenditures
Figure 1 presents current and prior fiscal year expenditures compared to annual authorities, as of the end of the first quarter. These results are discussed in the following section.
Figure 1 –First-quarter Expenditures Compared to Annual Authorities
Description of the image
Figure 1 – First-quarter Expenditures Compared to Annual Authorities
At the end of the first quarter of 2015-16, authorities totalled $63,954 thousand compared to $68,058 thousand at the end of the same quarter of 2014-15.
At the end of the first quarter of 2015-16, expenditures totalled $14,839 thousand compared to $16,608 thousand at the end of the same quarter of 2014-15.
As illustrated in Figure 1, first-quarter expenditures decreased by $1,769 thousand (-11%) compared to the same quarter in 2014-15, from $16,608 thousand to $14,839 thousand. As a result, 23% of the authorities available for use for the year were expended during the first quarter of 2015-16, compared to 24% in the same quarter of 2014-15.
The decrease in first-quarter expenditures is primarily due to a one-time transition payment of $1,484 thousand in the first quarter of 2014-15 for implementing salary payment in arrears by the Government of Canada. This one-time payment was classified under “Other subsidies and payments” expenditure as per central agency direction. As compensation, CAS received additional appropriations from central sources at the end of fiscal year 2014-15.
Also, there was a decrease in first-quarter professional and special services expenditures of $262 thousand (-17%) compared to the same quarter in 2014-15, from $1,592 thousand to $1,330 thousand. This decrease is mainly related to the timing of translation and information technology (IT) and telecommunications services, and was partly offset by an increase in commissionaire services.
Minor variations in the timing of the delivery of goods and services account for the remaining $23 thousand decrease in first-quarter expenditures in the current year compared to the same quarter in the prior year.
Risks and Uncertainties
Judicial functions of the courts are a responsibility of the judiciary and impose requirements that are beyond CAS’ control. A majority of the non-personnel expenses incurred by CAS are contracted costs for services supporting the judicial process and court hearings. They include translation, court reporters, transcripts, and security services, and they are mostly driven by the number, type and duration of hearings conducted in any given year. These are essentially non-discretionary and limit the organization's financial flexibility.
For some years, CAS has lacked the permanent funding necessary to enable the organization to fully meet its commitments and address major program integrity issues. Budget 2011 partially addressed this need, providing CAS with approximately $3 million per year for some program integrity measures. However, Budget 2014 announced that the operating budget of departments would be frozen at their 2013-14 level for the years 2014-15 and 2015-16 and as a result, CAS would not receive additional funding for salary increases resulting from newly signed collective bargaining agreements.
Historically, such funding restraints have severely limited the resources available for strategic initiatives needed to address critical risk areas and allow the organization to become more effective and efficient in its delivery of services to the judiciary and Canadians.
Budget 2015 addressed the program integrity issues related to physical and IT security through the provision of $19 million over five years. This includes $4.5 million in 2015-16, which will be sought through Supplementary Estimates later this fiscal year. This additional funding is for investment in physical security enhancements such as additional cameras, security personnel and screening tools that will help ensure federal courts remain secure and function properly. In addition, it will also enable IT security enhancements to further protect judicial confidentiality, personal privacy and sensitive information. CAS has also made progress in developing new approaches to risk in the provision of security services for the Courts and their users.
Likewise, maintaining an efficient and reliable information management and IT infrastructure is essential to protect the integrity of court information and to support the operations of the Courts and CAS. Some tangible progress was made in addressing IT related rust-out, risks and performance. Further work in this area remains to be completed to address related issues and support the growing needs of the Courts and the Registries. CAS will continue to closely manage expenditures in order to invest to the extent possible in this area.
Significant changes in relation to operations, personnel and programs
With the coming into force of Bill C-43 Economic Action Plan 2014 Act, No. 2, effective December 14, 2014, the jurisdiction for payment of prothonotaries’ salaries, pensions, benefits and other administrative arrangements has been transferred to the Office of the Commissioner for Federal Judicial Affairs (FJA). As a result of this transfer, associated funding has been frozen and expenditures have been reduced.
Approval by Senior Officials
Original signed by
Acting Chief Administrator
Acting Deputy Head
Original signed by
Francine Côté, CPA, CA, CISA
Deputy Chief Administrator, Corporate Services
Chief Financial Officer
(August 27, 2015)
|Fiscal year 2015-16||Fiscal year 2014-15|
|Total available for use for the year ending March 31, 2016 1||Used during the quarter ended June 30, 2015||Year to date used at quarter-end||Total available for use for the year ending March 31, 2015 1||Used during the quarter ended June 30, 2014||Year to date used at quarter-end|
|Vote 1 – Operating expenditures||57,320||13,179||13,179||61,260||14,910||14,910|
|Contributions to employee benefit plans||6,632||1,658||1,658||6,784||1,696||1,696|
|Spending of proceeds from the disposal of surplus Crown assets||-||-||-||12||-||-|
|Refunds of amounts credited to revenues in previous years||2||2||2||2||2||2|
|Total budgetary authorities||63,954||14,839||14,839||68,058||16,608||16,608|
1 - Includes only Authorities available for use and granted by Parliament at quarter-end.
|Expenditures:||Fiscal year 2015-16||Fiscal year 2014-15|
|Planned expenditures for the year ending March 31, 2016||Expended during the quarter ended June 30, 2015||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2015||Expended during the quarter ended June 30, 2014||Year to date used at quarter-end|
|Transportation and communications||2,586||462||462||2,906||408||408|
|Professional and special services||9,323||1,330||1,330||10,444||1,592||1,592|
|Repair and maintenance||385||22||22||433||37||37|
|Utilities, materials and supplies||1,979||535||535||2,237||548||548|
|Acquisition of land, building and works||252||-||-||396||-||-|
|Acquisition of machinery and equipment||1,415||115||115||1,591||111||111|
|Other subsidies and payments||7||25||25||18||1,469||1,469|
|Total budgetary expenditures||63,954||14,839||14,839||68,058||16,608||16,608|
- Date modified: