Public Safety Canada Quarterly Financial Report for the quarter ended September 30, 2018

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending September 30, 2018 has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by Treasury Board. The report should be read in conjunction with the Main Estimates as well as Equality and Growth a Strong Middle Class (Budget 2018). 

This quarterly financial report has not been subject to an external audit or review. However, it has been reviewed by the Departmental Audit Committee prior to approval by senior officials.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2018-19 Departmental Plan and the 2018-19 Main Estimates.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities table includes the Department's spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Department consistent with the Main Estimates and the Budget 2018 for the 2018-19 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet the information needs concerning the use of spending authorities.

The authority of Parliament is required before funds 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.

Public Safety Canada 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, as do the expenditures presented in this report.

2.0 Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following graph provides a comparison of the net budgetary authorities and expenditures as of September 30, 2018 and September 30, 2017 for the Department's combined:

Budgetary Authorities and Expenditures Comparison

Note: The 2018-19 TB Central Votes include $3,127K for Budget 2018 authorities and $6,173K for the Operating Budget Carry Forward.

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Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $1,171.0 million for fiscal year 2018-19. The year-to-date expenditures of $195.9 million reported at the end of the second quarter of the 2018-19 fiscal year are shown under the “second” column. The expenditures of $111.1 for the period ended September 30, 2018 (i.e. second quarter) are presented under the “third” column. The “fourth” column in the graph depicts the 2017-18 authorities which were at $1,062.0 million at the end of September 2017. The 2017-18 year-to-date expenditures of $191.8 million are shown under the “fifth” column. The Departments’ actual expenditures incurred in the second quarter of 2017-18 were $95.8 million and are shown under the “sixth” column of the graph.

2.1 Significant Changes to Authorities

For the period ending September 30, 2018, the authorities provided to the Department include Main Estimates, Budget 2018 authorities, and TB Central Vote transfers. The 2017-18 authorities for the same period included Main Estimates, Supplementary Estimates (A), and TB Central Vote transfers. The Statement of Authorities table presents a net increase of $109.0 million (10.3 percent) compared to those of the same period of the previous year (from $1,062.0 million to $1,171.0 million).

Operating Expenditures authorities have increased by $15.9 million (12.1 percent) (from $131.4 million to $147.3 million) mainly due to:

These increases are offset by the following decreases:

Grants and Contributions (G&C) authorities have increased by $92.3 million (10.1 percent) (from $915.5 million to $1,007.9 million) mainly due to:

These increases are offset by the following decreases:

Budgetary Statutory authorities have increased by $0.8 million (5.2 percent) in 2018-19 mostly as a result of the Employee Benefit Plan (EBP) costs associated with the change in the Department budgetary requirements for salary and EBP.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending September 30, 2018, the Departmental Budgetary Expenditures by Standard Object table presents a net increase of $4.1 million (2.1 percent) in Public Safety's year-to-date (YTD) expenditures compared to the previous year (from $191.8 million to $195.9 million). This increase is mostly due to:

These increases are offset by:

Second Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended September 30, 2018 have increased by $15.3 million (16.0 percent) (from $95.8 million to $111.1 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

Offset by the following decrease:

3.0 Risks and Uncertainty

The Department's mandate spans from public safety and security, intelligence and national security functions, social interventions for youth-at-risk, to readiness for all manner of emergencies. The Department is called, on behalf of the Government of Canada, to rapidly respond to emerging threats and ensure the safety and security of Canadians. The Department's ability to deliver its programs and services is subject to several risk sources, such as the rapidly changing asymmetrical threat environment, its ability to respond to natural or man-made disasters, government priorities, and government-wide or central agency initiatives. To deliver this mandate effectively, the collaboration of many departments and agencies, provincial and territorial governments, international partners, private sector and first responders is required.

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other Public Safety Canada (PS) grants and contributions programs given that it represents a significant portion of the PS budget and that it is subject to unforeseen events. The DFAA contribution program was established in 1970 to provide a consistent and equitable mechanism for federal sharing of provincial and territorial costs for natural disaster response and recovery where such costs would place an undue burden on a provincial or territorial economy.

There are currently 76 natural disasters for which Orders-in-Council have been approved, authorizing the provision of federal financial assistance under the DFAA, and for which final payments have not yet been made.

Public Safety's total outstanding share of liability under the DFAA in regards to these 76 events is $2.06 billion as of September 30, 2018, the majority of which is expected to be paid out over the next five years.

The following are the most significant events within Public Safety Canada's DFAA liability:

Phoenix Pay Modernization Project

In April 2016, PS moved to the new Phoenix federal public service pay system. In transitioning to the new pay system, large backlogs and delays at the centralized Pay Centre have led to a significant increase in pay-related issues reported by employees.

To support employees at highest risk, the Department continues to work on a range of issues that falls within the department's scope of control to support employees who are experiencing difficulties with their pay, including: providing emergency salary advances, analyzing and resolving integration issues between the department's Human Resource Management System and the Phoenix pay system. Issues affecting PS employees and the measures the Department is able to take to help mitigate them have been discussed with the unions at local and national level management consultation committees. At these meetings, union representatives have been engaged to ensure that employees' perspectives are shared with Management.

The Department is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls which were implemented in 2016.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On August 28, 2018 the Honourable Bill Blair was appointed by the Prime Minister as the Minister of Border Security and Organized Crime Reduction within the Public Safety Canada portfolio.

Budget 2018 announced funding for the Communications Security Establishment (CSE) to create the new Canadian Centre for Cyber Security. On the recommendation of the Prime Minister and in compliance with the Order in Council signed and published on August 23, 2018, Public Safety Canada is to transfer the control and supervision of the Canadian Cyber Incident Response Centre (CCIRC) to the CSE effective on October 1, 2018. The financial impacts of the transfer will be reflected in future quarterly financial reports.

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

Malcolm Brown
Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: November 19, 2018

Caroline Weber
Chief Financial Officer and Assistant Deputy Minister
Corporate Management Branch
Public Safety Canada
Ottawa (Canada)
Date: November 19, 2018

6.0 Statement of Authorities (unaudited)

Fiscal year 2018-19 (in dollars)
Total available for use for the year ending March 31, 2019 (1) Used during the quarter ended September 30, 2018 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 147,309,901 32,748,870 62,202,551
Vote 5 - Grants and Contributions 1,007,864,906 74,504,638 125,912,264
Employee Benefit Plans (EBP) 15,787,374 3,871,411 7,742,822
Minister's Salary and Motor Car Allowance 86,000 21,500 43,000
Total Authorities 1,171,048,181 111,146,419 195,900,636
(1) Includes only authorities available for use and granted by Parliament at quarter end.
Fiscal year 2017-18 (in dollars)
Total available for use for the year ended March 31, 2018 (1) Used during the quarter ended September 30, 2017 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 131,400,054 36,819,362 63,860,908
Vote 5 - Grants and Contributions 915,540,358 55,300,489 120,544,318
Employee Benefit Plans (EBP) 14,999,364 3,684,485 7,368,970
Minister's Salary and Motor Car Allowance 84,400 21,150 42,300
Total Authorities 1,062,024,176 95,825,486 191,816,496
(1) Includes only authorities available for use and granted by Parliament at quarter end.

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2018-19 (in dollars)
Planned expenditures for the year ending March 31, 2019 (1) Expended during the quarter ended September 30, 2018 Year to date used at quarter-end
Expenditures:
Personnel 119,261,262 28,505,566 58,514,512
Transportation and communications 4,907,300 713,719 1,294,539
Information 4,055,129 711,323 1,068,273
Professional and special services 25,063,959 5,520,655 7,517,210
Rentals 6,575,983 440,010 1,182,193
Repair and maintenance 1,161,310 72,805 107,004
Utilities, material and supplies 1,256,686 115,346 185,514
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 3,412,974 361,420 592,763
Transfer payments 1,007,864,906 74,504,638 125,912,264
Public debt charges - - -
Other subsidies and payments 188,672 264,937 833,627
Total gross budgetary expenditures 1,173,748,181 111,210,419 197,207,899
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 64,000 1,307,262
Total net budgetary expenditures 1,171,048,181 111,146,419 195,900,637
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.
Fiscal year 2017-18 (in dollars)
Planned expenditures for the year ended March 31, 2018 (1) Expended during the quarter ended September 30, 2017 Year to date used at quarter-end
Expenditures:
Personnel 110,263,117 33,647,357 61,274,599
Transportation and communications 4,057,918 655,160 1,136,896
Information 2,060,052 573,508 799,726
Professional and special services 21,489,046 3,710,122 5,556,220
Rentals 4,875,420 1,705,852 2,227,532
Repair and maintenance 777,775 250,188 282,439
Utilities, material and supplies 1,444,130 97,762 173,623
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 4,103,509 154,743 672,003
Transfer payments 915,540,358 55,300,489 120,544,318
Public debt charges - - -
Other subsidies and payments 112,850 182,490 622,575
Total gross budgetary expenditures 1,064,724,176 96,277,671 193,289,931
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 452,185 1,473,435
Total net budgetary expenditures 1,062,024,176 95,825,486 191,816,496
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end. 
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