Quarterly Financial Report - For the quarter ended June 30, 2020
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 2020-21 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 9/12 Interim Estimates of its expected 2020-21 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 monies can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or 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, 2020, authorities available for use for the year decreased by $21,240 thousand (-23%) compared to the same quarter in 2019-20, from $92,852 thousand to $71,612 thousand. The decrease of $21,241 thousand in the Authorities available for use is due to the approval of Interim Estimates versus the normal Main Estimates process. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the fall. In the interim, CAS has received 9/12 of its expected 2020-21 Main Estimates, with its full Statutory amounts. CAS is expected to receive full supply for the 2020-21 Main Estimates in December 2020.
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.
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 2020-21, authorities totalled $71,612 thousand compared to $92,852 thousand at the end of the same quarter of 2019-20.
At the end of the first quarter of 2020-21, expenditures totalled $19,781 thousand compared to $18,182 thousand at the end of the same quarter of 2019-20.
As illustrated in Figure 1, first-quarter expenditures increased by $1,599 thousand (9%) compared to the same quarter in 2019-20, from $18,182 thousand to $19,781 thousand. As a result, 31% of the authorities available for use for the fiscal year were expended during the first quarter of 2020-21, this increase is mainly due to the reception of 9/12 of CAS expected 2020-21 Main Estimates, with its full Statutory amounts.
Significant variances1 are explained as follows:
The year-to-date expenditures related to personnel has increased by $3,165 thousand (24%) compared to the same quarter in 2019-20, from $12,966 thousand to $16,131 thousand. This increase is explained by additional salary funding obtain in Budget 2019 through the specific initiatives detailed in the ‘’Significant Changes to Authorities’’ section and timing variations due to Phoenix.
Transportation and telecommunications
The year-to-date expenditures related to transportation and telecommunications decreased by $168 thousand (-39%) compared to the same period of the previous fiscal year, from $426 thousand to $258 thousand. The decrease was mainly driven by the COVID-19 pandemic and measures in place to combat the spread of the virus, including travel bans.
Professional and special services
The year-to-date expenditures related to professional and special services decreased by $1,155 thousand (-43%) compared to the same period of the previous fiscal year, from $2,656 thousand to $1,501 thousand. This decrease was mainly driven by the COVID-19 pandemic and measures to combat the spread of the virus. Due to telework and the operations reduced to critical services, the impact was mainly on protection services.
Repair and maintenance
The year-to-date expenditures related to repair and maintenance increase by $54 thousand (225 %) compared to the same period of the previous fiscal year, from $24 thousand to $78 thousand. The increase in expenditures was mainly attributable to an increase in repairs of security equipment.
Utilities, materials and supplies
The year-to-date expenditures related to utilities, materials and supplies decreased by $200 thousand (-26%) compared to the same period of the previous fiscal year, from $776 thousand to $576 thousand. The decrease was mainly due to the COVID-19 pandemic and measures put in place resulting in a decrease in office and stationers supplies.
Remaining expenditures (Information, rental, etc.)
Immaterial variances compared to the same period of the previous fiscal year are the results of the COVID-19 pandemic and the timing of the delivery of goods and services.
Risks and Uncertainties
Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the fall. During the first quarter of the fiscal year 2020-21, CAS has received 9/12 of its expected 2020-21 Main Estimates, with its full Statutory amounts. CAS is expected to receive full supply for the 2020-21 Main Estimates in December 2020.
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 facility rental. These costs are mostly driven by the number, type and duration of hearings conducted in any given year, which are non-discretionary and limit the organization's financial flexibility.
In addition, CAS obtained off-cycle funding to implement a modern Courts and Registry Management System, funding received to date cover the definition phase. As explained in the Risk Management Mitigation Strategies, CAS has received on-going funding to address many other areas of concerns.
The outbreak of the Coronavirus disease “COVID-19” pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, During the quarter, CAS supported the courts in providing critical services. The duration and impact of the COVID-19 outbreak are unknown at this time. As a result, it is not possible to reliably estimate the full length and severity of the impact on CAS financial position and financial results in future periods.
CAS has implemented various strategies to address the risks arising from its program integrity issues and COVID-19, including reorganizing and realigning services, reallocating resources, establishing priorities and regularly reassessment while seeking efficiencies wherever possible. CAS has developed an efficient Enterprise Risk Management (ERM) process which includes management participation at the organization’s highest levels. 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 have 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 the realignment of security and e-courts resources.
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, 2020)
|Fiscal year 2020-21||Fiscal year 2019-20|
|Total available for use for the year ending March 31, 20211||Used during the quarter ended June 30, 2020||Year-to-date used at quarter-end||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|
|Vote 1 – Operating expenditures||63,772||17,821||17,821||84,882||16,219||16,219|
|Contributions to employee benefit plans||7,840||1,960||1,960||7,970/td>||1,963||1,963|
|Spending of proceeds from the disposal of surplus Crown assets||-||-||-||-||-||-|
|Refunds of amounts credited to revenues in previous years||-||-||-||-||-||-|
|Total budgetary authorities||71,612||19,781||19,781||92,852||18,182||18,182|
1- Includes only Authorities available for use and granted by Parliament at quarter-end.
|Expenditures:||Fiscal year 2020-21||Fiscal year 2019-20|
|Planned expenditures for the year ending March 31, 2021||Expended during the quarter ended June 30, 2020||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended June 30, 2019||Year-to-date used at quarter-end|
|Transportation and communications||2,789||258||258||2,703||426||426|
|Professional and special services||10,821||1,501||1,501||13,950||2,656||2,656|
|Repair and maintenance||943||78||78||895||24||24|
|Utilities, materials and supplies||2,232||576||576||2,220||776||776|
|Acquisition of land, building and works||1,515||0||0||6,738||0||0|
|Acquisition of machinery and equipment||3,303||252||252||4,664||275||275|
|Other subsidies and payments||2||0||0||7||50||50|
|Total budgetary expenditures||71,612||19,781||19,781||92,852||18,182||18,182|
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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