Quarterly financial report for the quarter ended September 30, 2019

ISSN 2369-7938

Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main and Supplementary Estimates.

The Transportation Safety Board’s (TSB) sole objective is to advance transportation safety.  This mandate is fulfilled by conducting independent investigations into selected transportation occurrences.  The purpose of these investigations is to identify the causes and contributing factors and the safety deficiencies evidenced by an occurrence.  The TSB then reports publicly and makes recommendations to improve safety and reduce or eliminate risks to people, property and the environment.

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

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Transportation Safety Board’s spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main and Supplementary Estimates for the 2019-20 fiscal year and any respendable revenue earned and available for use to quarter end. 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 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.

As part of the departmental performance reporting process, the TSB prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date Results

Statement of Authorities

The TSB received $33,233,170 in funding through the Main Estimates. During the second quarter, the TSB received its operating budget carry forward (OBCF) from 2018-19 which represents an increase in authorities of $1,123,400, as well as a new funding of $38,257 to assist TSB in the classification renewal modernization initiative.  The TSB has additional statutory authorities totaling $54,971 at the end of the second quarter generated by proceeds from the disposal of surplus Crown assets and its authority to respend revenues as a departmental corporation.

The TSB’s total authorities available for use increased by $3,869,643 between fiscal years 2018-19 and 2019-20.  The majority of this difference is due to an increase in permanent funding of $2,977,444 allocated to the TSB in the third quarter of 2018-19. This amount was obtained through a Treasury Board Submission in response to the TSB’s program integrity funding pressures. In addition, the TSB had a higher OBCF of $762,197 compared to previous year. The remaining increase is attributed to compensation adjustments for signed collective agreements, which is offset by a lower Employee Benefit Plan (EBP) percentage. This EBP percentage fluctuates from year to year and is a rate set annually by the Treasury Board Secretariat.

Statement of Departmental Budgetary Expenditures

The department’s year-to-date spending is higher by $2,196,000 or 16% in the current year compared to 2018-19.  This significant difference is mainly due to increased salary expenditures as the TSB has staffed a number of vacant positions for which staffing had been delayed in previous years and for higher annual salary rates as a result of signed and ratified collective agreements. The increase in professional and special services is due to the TSB’s need for non-discretionary legal service contracts as well as IT project consultant contracts. There were also increased expenses in travel and relocation costs compared to previous year.

As illustrated in Figure 1, the TSB has spent approximately 46% of its authorities at the end of the second quarter. This is consistent with expectations given that the department's most significant expense is salaries. The TSB's spending is generally distributed equally throughout the year.

Figure 1. Second quarter expenditures compared to annual authorities
Graph of second quarter expenditures compared to annual authorities

Risks and Uncertainties

Outstanding liabilities for the TSB include mandatory compensatory and vacation leave payouts that were deferred in past years as well as retroactive payments and salary increases for one remaining collective agreement that has yet to be signed. Due to the nature of these future costs, it is difficult to know the exact amounts to be paid, however, the TSB is risk managing this uncertainty by carefully calculating estimates and incorporating these amounts as part of its monthly forecasting and budget review. Furthermore, the TSB has unused frozen funds from 2018-19, which it plans to carry forward and use to alleviate this funding pressure when it materializes.

A continuous risk to the TSB’s financial situation is that expenditures are greatly influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in additional resource pressures that could require the department to seek further funding from Parliament.

As a departmental corporation, the TSB has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department’s funding requirements.

Significant Changes in Relation to Operations, Personnel and Programs

André Lapointe was appointed Chief Operating Officer of the Transportation Safety Board of Canada effective August 26, 2019.

There have been no significant changes in relation to operations and programs in the current year.

Approval by senior officials

Approved by,

Source document signed by
Kathleen Fox
Chair

Source document dated 2020-01-30
Date
Gatineau, Canada

Source document signed by
Luc Casault, CPA, CGA
Chief Financial Officer

Source document dated 2020-01-29
Date
Gatineau, Canada

Statement of Authorities (unaudited)

Fiscal year 2019-20 (in thousands of dollars)Footnote 1
  Total available for use
for the year ending
March 31, 2020
Expended during
the quarter ended
September 30, 2019
Year to date used
at quarter-end
Vote 1 - Net operating expenditures 30,745 7,704 14,205
Statutory authorities - Employee Benefit Plans 3,650 913 1,825
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 50 - 1
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 5 - -
Total authorities available for use 34,450 8,617 16,031
Fiscal year 2018-19 (in thousands of dollars)Footnote 1
  Total available for use
for the year ending
March 31, 2019
Expended during
the quarter ended
September 30, 2018
Year to date used
at quarter-end
Vote 1 - Net operating expenditures 27,323 6,079 12,215
Statutory authorities - Employee Benefit Plans 3,227 807 1,614
Statutory authorities - Spending of proceeds from the disposal of surplus Crown assets 26 2 2
Statutory authorities - Expenditures Paragraph 29.1(1) of the Financial Administration Act 4 4 4
Total authorities available for use 30,580 6,892 13,835

Statement of Expenditures by Standard Object (unaudited)

Fiscal year 2019-20 (in thousands of dollars)Footnote 1
  Planned expenditures
for the year ending
March 31, 2020
Expended during
the quarter ended
September 30, 2019
Year to date used
at quarter-end
Expenditures:      
Personnel 28,665 7,111 13,630
Transportation and communications 1,748 455 812
Information 194 50 69
Professional and special services 1,844 614 852
Rentals 451 109 210
Repair and maintenance 440 83 88
Utilities, materials and supplies 284 77 155
Acquisition of land, building and works 39 - -
Acquisition of machinery and equipment 785 118 215
Other subsidies and payments - - -
Total net budgetary expenditures 34,450 8,617 16,031
Fiscal year 2018-19 (in thousands of dollars)Footnote 1
  Planned expenditures
for the year ending
March 31, 2019
Expended during the
quarter ended
September 30, 2018
Year to date used
at quarter-end
Expenditures:      
Personnel 24,462 5,990 12,143
Transportation and communications 1,770 292 609
Information 177 36 84
Professional and special services 1,985 194 450
Rentals 422 40 120
Repair and maintenance 421 120 132
Utilities, materials and supplies 219 92 125
Acquisition of land, building and works 4 - -
Acquisition of machinery and equipment 1,116 124 168
Other subsidies and payments 4 4 4
Total net budgetary expenditures 30,580 6,892 13,835
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