Quarterly Financial Report - For the quarter ended June 30, 2019
Statement outlining results, risks and significant changes in operations, personnel and programs
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 administrative services for the federal courts and internal 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 2019-20 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 2019-20 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 results 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 fiscal year
As illustrated in the Statement of Authorities and the Departmental Budgetary Expenditures by Standard Object tables at the end of this report, as at June 30, 2019, authorities available for use for the year increased by $15,028 thousand (19%) compared to the same quarter in 2018-19, from $77,824 thousand to $92,852 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.
The increase in authorities is mainly related to funding received in Budget 2018 to ensure that Canada's federal Courts, including the Tax Court of Canada, receive adequate support to address a growing and increasingly complex caseload. Funding totaling $9,299 thousand in 2019-20 represents an increase in CAS’s authorities of $4,700 thousand compared to $4,599 thousand in 2018-19.
The increase is also explained by Division 9 proceedings under the Immigration and Refugee Protection Act funding of $3,903 thousand approved on an ongoing basis subsequent to Q1 2018-19.
Through Budget 2019, CAS was granted funding to enhance the integrity of Canada’s Borders and Asylum System. This funding amounts to $4,804 thousand over two years and includes support staff for judges, as well as construction of offices and chambers. $2,692 thousand was allocated in 2019-20 for this initiative.
Budget 2019 included $8,500 thousand over five years for the translation of Courts decisions to Support the Delivery of Justice. CAS has a constitutional and quasi-constitutional obligation to translate decisions rendered by the Courts. This represents funding of $1,700 thousand annually, offset by a decrease of $1,000 thousand related to sun-setting funding, for a net increase of $700 thousand.
In addition, in Budget 2019 funding was granted to relocate the Federal Courthouse in Montreal for an overall amount of $24,000 thousand over five years. In 2019-20 this represents funding of $880 thousand.
Funding was provided in Budget 2018 to implement a new comprehensive Intellectual Property (IP) Strategy to update and modernize Canada’s IP regime. Funding allocated to CAS to improve the efficiency of IP dispute resolution represents an increase of $1,184 thousand for 2019-20.
In addition, CAS accessed additional funding of $428 thousand from the fiscal framework to support efforts related to Mexico Visa Lift initiative. Other increases include $979 thousand in contributions to employee benefit plans (EBP), $182 thousand for compensation and $66 thousand related to previous Budget initiatives.
The above increases were partly offset by a $243 thousand for retroactive collective bargaining obligations, $200 thousand in a re-profile of operating sub-allotment to personnel sub-allotment, $197 thousand reduction in our Citizenship revocation funding, as well as a $45 thousand contribution to the implementation of CAS’s departmental financial system.
Significant Changes to Expenditures
Figure 1 presents current and prior fiscal year expenditures compared to annual authorities, as of at the end of the first quarter. These results are discussed in the section below.
Description of the image
At the end of the first quarter of 2019-20, authorities totalled $92,852 thousand compared to $77,824 thousand at the end of the same quarter of 2018-19.
At the end of the first quarter of 2019-20, expenditures totalled $18,182 thousand compared to $18,445 thousand at the end of the same quarter of 2018-19.
As illustrated in Figure 1, first-quarter expenditures decreased by $263 thousand (-1%) compared to the same quarter in 2018-19, from $18,445 thousand to $18,182 thousand. As a result, 21% of the authorities available for use for the fiscal year were expended during the first quarter of 2019‑20, which reflects a decrease of 3% compared to the same quarter of 2018-19.
Significant variances1 are explained as follows:
The year-to-date expenditures related to personnel has decreased by $1,603 thousand (-11%) compared to same period of the previous fiscal year, from $14,569 thousand to $12,966 thousand. This decrease is mainly due to the timing variations in expenditures offset by an increase of employee benefit plans (EBP).
Professional and special services
Year-to-date expenditures related to professional and special services increased by $1,572 thousand (145%) compared to same period of the previous fiscal year, from $1,084 thousand to $2,656 thousand. This increase was mainly driven by timing variations relating to the processing of expenditures of security officers during this quarter. The increase is also due to a volume increase in translation as well as IT and telecommunications consulting expenditures.
Remaining expenditures (Transportation and communication, Information, etc.)
For the remaining expenditures, the variances are immaterial and relate to timing of the delivery of goods and services.
Risks and Uncertainties
The majority of non-personnel expenses incurred by CAS are contracted costs for services supporting the judicial process, court hearings, court security and e-court. They include translation services, protection services, informatics services, court reporters, transcripts, deputy judges, court ushers and court facilities rental. These costs are mostly driven by the number, type and duration of hearings conducted in any given year, are non-discretionary and limit the organization's financial flexibility.
CAS has a limited budget to respond to translation requirements of the courts despite additional funding received. In addition CAS urgently requires additional funding to implement a modern Courts and Registry Management System. As explained in the Risk Management Mitigation Strategies, CAS has received on-going funding to address many other areas of concerns.
To address the risks arising from its program integrity issues, CAS has implemented various strategies, including reorganizing and realigning services, reallocating resources, establishing priorities and regularly reassessing them, as well as seeking efficiencies wherever possible. CAS has developed an efficient Enterprise Risk Management (ERM) process which includes management participation at the highest levels of the organization. The ERM process allows management to identify, evaluate and mitigate key risks to achieving its mandate and organizational priorities, and drives resource allocation accordingly.
The Chief Justices and CAS has initiated discussion with government officials regarding a potential funding model more appropriate to the context of judicial independence. In the meantime, CAS has been able to secure additional funding through the budgetary process to address a number of specific pressures, including program integrity.
Significant changes in relation to operations, personnel and programs
Since its establishment in 2003, CAS has strived to provide timely and efficient service in support of the four Courts while safeguarding judicial independence; a cornerstone of the Canadian judicial system and our democracy. However, the distinct requirements of each Court and the evolving and ongoing demands by Canadians and the legal community for increased availability of e-services and translation continue to pose considerable challenges for CAS in meeting its core responsibilities with the limited available resources.
The priority placed on technology-enabled courts, as well as the continued security of the Courts and their members warrant that they be recognized as programs in themselves. As such in 2018–19, CAS’s Departmental Results Framework brings significant changes in relation to its programs and will now include e-courts and court security, in addition to the judicial and registry programs. This will effectively respond to the current, unique needs of the Courts and allow CAS to better measure and report on results in these areas. This change will represent a reduction in internal services and a corresponding increase in administration services for the federal courts, due to realignment of security and e-courts resources.
In 2019–20, the focus will continue to be placed on enhancing court and registry technologies to allow access to court services electronically, continuing to enhance physical and information technology security, ensuring the space requirements of the Courts are met, and facilitating the timely translation and posting of court decisions on websites of the Courts.
As for personnel, subsequent to CAS’ increase in funding, our total number of FTE has increased by approximately 9% from the same quarter in 2018-19. There have been no other significant changes in CAS operations.
Approval by Senior Officials
Original signed by
Daniel Gosselin, FCPA, FCA
Original signed by
Francine Côté, CPA, CA, CISA
Deputy Chief Administrator, Corporate Services
Chief Financial Officer
(August 29, 2019)
|Fiscal year 2019-20||Fiscal year 2018-19|
|Total available for use for the year ending March 31, 20201||Used during the quarter ended June 30, 2019||Year-to-date used at quarter-end||Total available for use for the year ending March 31, 20191||Used during the quarter ended June 30, 2018||Year-to-date used at quarter-end|
|Vote 1 – Operating expenditures||84,882||16,219||16,219||70,833||16,833||16,833|
|Contributions to employee benefit plans||7,970||1,963||1,963||6,991||1,612||1,612|
|Spending of proceeds from the disposal of surplus Crown assets||-||-||-||-||-||-|
|Refunds of amounts credited to revenues in previous years||-||-||-||-||-||-|
|Total budgetary authorities||92,852||18,182||18,182||77,824||18,445||18,445|
1- Includes only Authorities available for use and granted by Parliament at quarter-end.
|Expenditures:||Fiscal year 2019-20||Fiscal year 2018-19|
|Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended June 30, 2019||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2019||Expended during the quarter ended June 30, 2018||Year-to-date used at quarter-end|
|Transportation and communications||2,703||426||426||2,634||573||573|
|Professional and special services||13,950||2,656||2,656||10,921||1,084||1,084|
|Repair and maintenance||895||24||24||1,003||39||39|
|Utilities, materials and supplies||2,220||776||776||2,191||789||789|
|Acquisition of land, building and works||6,738||0||0||2,536||0||0|
|Acquisition of machinery and equipment||4,664||275||275||4,517||218||218|
|Other subsidies and payments||7||50||50||8||28||28|
|Total budgetary expenditures||92,852||18,182||18,182||77,824||18,445||18,445|
Groupings can change between quarters due to materiality of initiatives.
Amounts may not balance with other public documents due to rounding.
1 Significant variances are defined as variances by standard object that are greater than $250 thousand or 25%.
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