Quarterly Financial Report - For the quarter ended December 31, 2022
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 administrative services to four superior courts of law: 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 2022-23 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 2022-23 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, yearly authorities available for use as at December 31, 2022 increased by $10,208 thousand (10%) compared to the same quarter in 2021 22, from $97,844 thousand to $108,052 thousand.
The increase in authorities is mainly related to $4,014 thousand of funding received in Supplementary Estimates B to fund the courts’ critical operating requirements impacted by the pandemic, $2,180 thousand of funding received to enhance the capacity of Superior Courts and includes support staff for judges, $1,800 thousand in funding for leasehold improvements in Toronto, and $962 thousand in funding to support the delivery of justice for facilities related projects. Other increase includes $1,322 thousand in the operating budget carry-forward offset by a net decrease of $70 thousand for other various smaller initiatives.
Significant Changes to Expenditures
Figure 1 presents current and prior fiscal year expenditures compared to annual authorities at the end of the third quarter. These results are discussed in the section below.
Description of the image
At the end of the third quarter of 2022-23, authorities totalled $108,052 thousand compared to $97,844 thousand at the end of the same quarter of 2021-22.
At the end of the third quarter of 2022-23, expenditures totalled $69,458 thousand compared to $65,351 thousand at the end of the same quarter of 2021-22.
As illustrated in Figure 1, third-quarter expenditures increased by $1,887 thousand (8%) compared to the same period of the previous fiscal year, from $22,425 thousand to $24,312 thousand. As a result, 23% of the yearly authorities available for use were expended during the third quarter of 2022 23, which is consistent to the same quarter of 2021-22.
Significant variances1 in expenditures are explained as follows:
The year-to-date expenditures related to personnel increased by $1,218 thousand (2%) compared to the same period of the previous fiscal year, from $51,500 thousand to $52,718 thousand. This increase, considered immaterial in percentage, was largely driven by increases in full time equivalents to enhance the capacity of the Superior Courts.
Transportation and communications
The year-to-date expenditures related to transportation and communications increased by $637 thousand (45%) compared to the same period of the previous fiscal year, from $1,408 thousand to $2,045 thousand. This increase was mainly due to the increase in travel in line with the COVID-19 pandemic travel restrictions being lifted. The travel represents a return to regular travel required for registry and judicial activities.
Professional and special services
The year-to-date expenditures related to professional and special services increased by $1,821 thousand (29%) compared to the same period of the previous fiscal year, from $6,198 thousand to $8,019 thousand. This increase was mainly due to timing variations related to the processing of invoices for translation and protection services between quarters in the prior year.
The year-to-date expenditures related to rentals increased by $1,038 thousand (57%) compared to the same period of the previous fiscal year, from $1,828 thousand to $2,866 thousand. This increase was partly due to an increase in renewal fees of annual software license and maintenance fees and to timing of office buildings rental invoices between quarters in the prior year.
Utilities, materials and supplies
The year-to-date expenditures related to utilities, materials and supplies decreased by $472 thousand (-19%) compared to the same period of the previous fiscal year, from $2,456 thousand to $1,984 thousand. The COVID-19 pandemic required the implementation of measures for the safe return to in-person court operations, such as personal protection equipment and acrylic shields. The amounts spent on these measures in 2022-23 decreased compared to 2021-22.
Acquisition of land, building and works
The year-to-date expenditures related to acquisition of land building and works decreased by $459 thousand (-85%) compared to the same period of the previous fiscal year, from $539 thousand to $80 thousand. This decrease is due to the timing of leasehold improvements for reconfiguration of office buildings for which costs will be incurred later in the fiscal year.
Acquisition of machinery and equipment
The year-to-date expenditures related to acquisition of machinery and equipment increased by $276 thousand (48%) compared to the same period of the previous fiscal year, from $577 thousand to $853 thousand. This increase is due to the acquisition of office furniture in line with the return to workplace in 2022-23.
Remaining expenditures (information, repair and maintenance, and other subsidies and payments)
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.
1 Significant variances are defined as variances by standard object that are greater than $250 thousand or 25%.
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-courts. These costs include translation services, protection services, informatics services, court reporters, transcripts, deputy judges, court ushers and court facility rentals. These costs are mostly driven by the volume, type and duration of hearings conducted in any given year, which are non-discretionary and can limit the organization's financial flexibility.
Following consultations with the industry and refinement of the Courts and Registry Management System (CRMS) project, new risks were identified regarding the feasibility to continue as planned with the initial scope and approach of the CRMS project. In order to mitigate these risks, CAS has closed the existing project to focus on strengthening the foundations. CAS will start by increasing internal capacity within the digital transformation team and confirm the approach and scope of the revised initiative. Network infrastructure enhancements were also undertaken to modernize digital services and prepare for the new initiative.
The outbreak of the COVID-19 pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. During the quarter, CAS supported the Courts in providing critical services and addressing backlogs as applicable. Given that measures to combat the spread of the virus, including hybrid/virtual proceedings and other investments to better support the Courts (e-filing, digital documents, online services), are expected to continue for the foreseeable future, CAS has identified the need for ongoing funding beyond 2022-23 to support the new ways to conduct proceedings and support the Courts. In addition, the pandemic resulted in other operational challenges such as staff shortages, longer delays within the supply chain and significant increases in costs due to inflation and or unavailability of specific equipment. The operational and financial impacts of these operational challenges are monitored closely to mitigate the risks.
CAS continues to address the risks to its program integrity, including baselining budgets, establishment of multi-year budgets, reorganizing and realigning services, reallocating resources, and regular reassessment of priorities, exploring alternate funding models 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.
Significant changes in relation to operations, personnel and programs
There hasn’t been any significant change to the executive management team since October 1, 2022.
Approval by Senior Officials
Original signed by
Darlene H. Carreau, LL.B
Original signed by
Executive Director, Corporate Services
Chief Financial Officer
(February 27, 2023)
|Fiscal year 2022-23||Fiscal year 2021-22|
|Total available for use for the year ending March 31, 20231||Used during the quarter ended December 31, 2022||Year-to-date used at quarter-end||Total available for use for the year ending March 31, 20221||Used during the quarter ended December 31, 2021||Year-to-date used at quarter-end|
|Vote 1 – Operating expenditures||99,509||22,176||63,050||89,609||21,048||59,856|
|Contributions to employee benefit plans||8,543||2,136||6,408||8,235||1,372||5,549|
|Spending of proceeds from the disposal of surplus Crown assets||-||-||-||-||-||-|
|Refunds of amounts credited to revenues in previous years||-||-||-||-||5||5|
|Total budgetary authorities||108,052||24,312||69,458||97,844||22,425||65,351|
1 - Includes only Authorities available for use and granted by Parliament at quarter-end.
|Expenditures:||Fiscal year 2022-23||Fiscal year 2021-22|
|Planned expenditures for the year ending March 31, 2023||Expended during the quarter ended December 31, 2022||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2022||Expended during the quarter ended December 31, 2021||Year-to-date used at quarter-end|
|Transportation and communications||3,118||784||2,045||2,970||636||1,408|
|Professional and special services||16,512||3,820||8,019||14,582||2,229||6,198|
|Repair and maintenance||1,082||220||437||842||214||407|
|Utilities, materials and supplies||3,153||724||1,984||2,814||728||2,456|
|Acquisition of land, building and works||4,151||3||80||2,702||353||539|
|Acquisition of machinery and equipment||4,234||257||853||3,796||151||577|
|Other subsidies and payments||-||2||2||7||6||9|
|Total budgetary expenditures||108,052||24,312||69,458||97,844||22,425||65,351|
Groupings can change between quarters due to materiality of initiatives.
Amounts may not balance with other public documents due to rounding.
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