Public Safety Canada Quarterly Financial Report
For the quarter ended June 30, 2019

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending June 30, 2019 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 Investing in the Middle Class (Budget 2019).

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 2019-20 Departmental Plan and the 2019-20 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 2019 for the 2019-20 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 June 30, 2019 and June 30, 2018 for the Department’s combined:

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of June 30, 2019 and June 30, 2018

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of June 30, 2019 and June 30, 2018

Image description

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $912.5 million for fiscal year 2019-20. The year-to-date expenditures of $92.0 million reported at the end of the first quarter of the 2019-20 fiscal year are shown under the “second” column. The “third” column in the graph depicts the 2018-19 authorities which were at $1,164.9 million at the end of June 2018. The 2018-19 first quarter expenditures of $84.8 million are shown under the “fourth” column.

Note: Public Safety Canada’s appropriations have decreased to $912,506K as of June 30, 2019. The Treasury Board (TB) Vote 5 allotment to the Canadian Red Cross is in support of the 2019 flood recovery efforts across Canada. Main Estimates exclude non-approved Budget Implementation Vote (BIV) items as of June 30, 2019 (Protecting Canada’s Critical Infrastructure from Cyber Threats and Protecting Community Gathering Places from Hate Motivated Crimes).

2.1 Significant Changes to Authorities

For the period ending June 30, 2019, the authorities provided to the Department include the 2019-20 Main Estimates and Budget 2019 approved items. The 2018-19 authorities for the same period included the Main Estimates and Budget 2018 approved items. The Statement of Authorities table presents a net decrease of $252.4 million (21.7 percent) compared to those of the same period of the previous year (from $1,164.9 million to $912.5 million).

Operating Expenditures authorities have decreased by $3.8 million (2.7 percent) (from $141.1 million to $137.3 million) mainly due to:

These decreases are offset by the following increases:

Grants and Contributions (G&C) authorities have decreased by $248.7 million (24.7 percent) (from $1,007.9 million to $759.2 million) mainly due to:

These decreases are offset by the following increases:

Budgetary Statutory authorities have increased by $89.4K (0.6 percent) in 2019-20 mostly due to the new Minister of Border Security and Organized Crime Reduction salary and car allowance.

2.2 Significant Variances from Previous Year Expenditures

First Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended June 30, 2019 have increased by $7.3 million (8.6 percent) (from $84.8 million to $92.0 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

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 66 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 66 events is $2.5 billion as of June 30, 2019, 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:

Updates to the DFAA liability are completed twice a year. Since the last update presented in the December 30th, 2018 Quarterly Financial Report, the DFAA liability has increased by $100 million from $2.4 billion in the third quarter of 2018-19 to $2.5 billion in the first quarter of 2019-20. Variations in the DFAA liability are mainly attributable to:

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 pay issues in a timely manner, continues to apply mitigation measures which were implemented in 2016, and is currently assessing the design and operating effectiveness of key payroll controls.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

5.0 Approval by Senior Officials

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

Gina Wilson
Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: August 19, 2019

Patrick Amyot, CPA, CMA
Chief Financial Officer Public Safety Canada
Ottawa (Canada)
Date: August 19, 2019

6.0 Statement of Authorities (unaudited)

Fiscal year 2019-20 (in dollars)
Total available for use for the year ending March 31, 2020(1) Used during the quarter ended June 30, 2019 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 137,337,483 32,148,999 32,148,999
Vote 5 - Grants and Contributions 759,205,353 56,081,861 56,081,861
Employee Benefit Plans (EBP) 15,787,393 3,757,718 3,757,718
Minister's Salary and Motor Car Allowance 175,400 43,750 43,750
TOTAL AUTHORITIES 912,505,629 92,032,328 92,032,328

(1) Includes only authorities available for use and granted by Parliament at quarter end.

Fiscal year 2018-19 (in dollars)
Total available for use for the year ended March 31, 2019(1) Used during the quarter ended June 30, 2018 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 141,137,237 29,453,681 29,453,681
Vote 5 - Grants and Contributions 1,007,864,906 51,407,626 51,407,626
Employee Benefit Plans (EBP) 15,787,374 3,871,411 3,871,411
Minister's Salary and Motor Car Allowance 86,000 21,500 21,500
TOTAL AUTHORITIES 1,164,875,517 84,754,218 84,754,218

(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 2019-20 (in dollars)
Planned expenditures for the year ending March 31, 2020(1) Expended during the quarter ended June 30, 2019 Year to date used at quarter-end
Expenditures:
Personnel 117,005,722 32,451,363 32,451,363
Transportation and communications 3,167,178 660,779 660,779
Information 4,987,276 434,840 434,840
Professional and special services 18,403,693 2,213,213 2,213,213
Rentals 4,804,781 581,927 581,927
Repair and maintenance 928,815 7,644 7,644
Utilities, material and supplies 1,388,679 118,521 118,521
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 2,986,192 220,055 220,055
Transfer payments 759,205,353 56,081,861 56,081,861
Public debt charges - - -
Other subsidies and payments 2,327,940 494,925 494,925
Total gross budgetary expenditures 915,205,629 93,265,128 93,265,128
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 1,232,800 1,232,800
Total net budgetary expenditures 912,505,629 92,032,328 92,032,328

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

Fiscal year 2018-19 (in dollars)
Planned expenditures for the year ended March 31, 2019(1) Expended during the quarter ended June 30, 2018 Year to date used at quarter-end
Expenditures:
Personnel 119,261,262 30,008,946 30,008,946
Transportation and communications 4,255,650 580,820 580,820
Information 3,504,606 356,950 356,950
Professional and special services 21,676,020 1,996,555 1,996,555
Rentals 5,684,112 742,183 742,183
Repair and maintenance 1,045,102 34,199 34,199
Utilities, material and supplies 1,147,220 70,168 70,168
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 2,947,966 231,343 231,343
Transfer payments 1,007,864,906 51,407,626 51,407,626
Public debt charges - - -
Other subsidies and payments 188,672 568,690 568,690
Total gross budgetary expenditures 1,167,575,516 85,997,480 85,997,480
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 1,243,262 1,243,262
Total net budgetary expenditures 1,164,875,516 84,754,218 84,754,218

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

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