Quarterly Financial Report for the Quarter Ended September 30, 2012

Management Statement for the Quarter Ended September 30, 2012

Introduction

The Canada Industrial Relations Board (the CIRB or the Board) is an independent, representational, quasi-judicial tribunal responsible for the interpretation and application of Part I (Industrial Relations) and certain provisions of Part II (Occupational Health and Safety) of the Canada Labour Code (the Code). It was established in January 1999 through amendments to Part I of the Code. The mandate of the Board is to contribute to and promote effective industrial relations in the federally regulated private sector.

Further information on the mandate, role, responsibilities and programs of the Board can be found in the Board 2012-13 Main Estimates, available on the following Website: http://www.tbs-sct.gc.ca/est-pre/20122013/p2-eng.asp.

This quarterly financial report should be read in conjunction with the 2012–13 Main Estimates as well as with Canada’s Economic Action Plan 2012 (Budget 2012). 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 the Treasury Board. It has not been audited or reviewed externally.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012–13 Main Estimates.

In fiscal year 2012–13, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Board’s spending authorities granted by Parliament and those used by the department consistent with the Main Estimates for the 2012–13 fiscal year. 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Department 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 continue to be reported on an expenditure basis.

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

The Board defines a significant variance as a variance of greater than $100,000 that also represents a variance of more than 5% over the previous year’s actual expenditures.

Significant Changes to Statement of Authorities
The Board’s voted authorities as of September 30, 2012, show a significant variance in net operating expenditures compared to the quarter ending September 30, 2011. This variance is due in large part to the cash out of severance entitlements in 2011–12 to several CIRB employees, pursuant to a new government policy regarding severance pay. The variance is also due to a reduction in spending on travel and professional services in 2012–13 compared to 2011–12 following a reduction in the number of cases requiring a hearing during the first quarter of this fiscal year.

Significant Changes to Budgetary Expenditures
Based on the Board’s definition, two variances are observed in the Board’s expenditures.

There is a decrease in cumulative salary expenditures caused by the cash out of severance entitlements in 2011–12 pursuant to a new government policy regarding severance pay.

There is a decrease in expenditures related to professional services caused mainly by a return to the normal volume of Board decisions sent to PWGSC for translation following a special effort that was made in 2011–12 to reduce the back-log of cases.

Risks and Uncertainties

The CIRB is a low risk agency. Approximately three quarters (77%) of the Board’s $13.6 million operating budget is allocated to salaries and benefits. The remaining $3.1 million is Operations and Maintenance (O&M) funding of which 77% is expended on travel and professional services largely related to the hearing and determination of cases. The Board adheres to Treasury Board policies for the expenditure of its budget and an audit conducted by the Office of the Comptroller General in the Spring of 2011 has confirmed that the Board’s core controls over financial management are effective and executed in compliance with TBS policies and directives.

The CIRB, like all the other Government departments and agencies, is subject to a salary budget freeze until 2013–14 and will not receive supplementary transfers to cover salary increases prescribed by collective agreements and Treasury Board policies. As a result, the Board has to absorb an annual increase in salary expenditures of approximately 1.5% for three consecutive fiscal years. The CIRB is managing this budgetary pressure by finding internal efficiencies through reorganization of work in its corporate services. These efforts will be sufficient to allow the CIRB to continue to operate with its current budget until 2013–14.

Operating Environment
The Board has an ongoing planning challenge in that the CIRB’s sole function is to respond to the matters referred to it by unions, employers, employees and the Minister of Labour. As such, the CIRB’s operational activities are driven by external demands that it can only react to rather than plan for.

The state of the economy can affect the nature of the demand for Board services. A significant increase in the incoming number of complex matters would severely affect the Board’s ability to meet its strategic outcomes.

Processing Time
The Board’s largest operational risk is associated with the number of applications and complaints it receives in a given year, which affect its ability to continue to remain effective and efficient. To mitigate this risk, priority is given to the processing and consideration of matters in which it appears that delay will pose a significant potential for adverse industrial relations consequences, or where other identifiable factors require a matter to be given priority. The CIRB will proceed with amendments to its Regulations to ensure effective and efficient handling of applications and complaints.  It will also continue to monitor and fine-tune the processing of applications and it is expected that these mitigating strategies will further reduce the time it takes to process matters.

Corporate Management
The Board, like other small departments and micro-agencies, continually faces pressure to respond to, or implement various government-wide corporate management initiatives. However, the CIRB’s limited resources are first and foremost dedicated to its core mandate of delivering fair and timely dispute resolution services to its client community. It is often a challenge to build and retain specialized skills and knowledge in areas that are not central to the Board’s mandate but critical to meeting the expectations of central agencies in various areas of corporate services.

The CIRB continues to seek horizontal opportunities and interdepartmental partnerships in order to achieve efficiencies and ensure it delivers on its mandate on a fiscally sound and sustainable basis. The CIRB will also participate in the TBS-led initiatives aimed at identifying and contracting for a common case management system. The CIRB believes this approach will build on synergies between similar organizations and mitigate the pressures associated with an aging system and its costly renewal.

Significant Changes in Relation to Operations, Personnel and Programs

In the last quarter, the CIRB conducted an administrative review in order to improve its efficiencies. The implementation of this review will generate recurring savings of more than $200,000.

Budget 2012 Implementation
This section provides an overview of the savings measures announced in Budget 2012 that will be implemented in order to refocus government and programs; make it easier for Canadians and businesses to deal with their government; and, modernize and reduce the back office.

In Budget 2012, the CIRB was assigned the responsibility of administering the Status of the Artist Act, which is the current responsibility of the Canadian Artists and Producers Professional Relations Tribunal (CAPPRT). The CIRB is currently working towards this transition, which is expected to result in recurring savings for the Government of more than $1.5 million.

Approval by Senior Officials

Elizabeth MacPherson, Chairperson

Ginette Brazeau, Chief Financial Officer
Ottawa, Canada
November 30, 2012

CANADA INDUSTRIAL RELATIONS BOARD
Quarterly Financial Report
For the quarter ended September 30, 2012

Statement of Authorities (unaudited)

Fiscal year 2012-2013 (in dollars)
Total available for use for the year ending March 31, 2013 * Expended during the quarter ended September 30, 2012 Year to date used at quarter-end
Vote 10 - Net operating expenditures 11,987.675 2,707,862 5,138,953
Statutory authorities - Employee Benefit Plans 1,569,617 392,404 784,809
Total authorities 13,557,292 3,100,267 5,923,762


Fiscal year 2011-2012 (in dollars)
Total available for use for the year ending March 31, 2012 * Expended during the quarter ended September 30, 2011 Year to date used at quarter-end
Vote 10 - Net operating expenditures 12,283,300 3,530,264 6,138,591
Statutory authorities - Employee Benefit Plans 1,604,867 401,217 802,434
Total authorities 13,888,167 3,931,481 6,941,024
* Includes only Authorities available for use and granted by Parliament at quarter-end.

CANADA INDUSTRIAL RELATIONS BOARD
Quarterly Financial Report
For the quarter ended September 30, 2012

Statement of Expenditures by Standard Object (unaudited)

Fiscal year 2012-2013 (in dollars)
Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended September 30, 2012 Year to date used at quarter-end
Expenditures:
Personnel 10,487,986 2,549,988 5,042,453
Transportation and communications 1,298,196 199,050 355,049
Information 26,254 4,079 16,815
Professional and special services 1,067,505 187,965 289,524
Rentals 200,464 51,558 63,315
Repair and maintenance 139,342 11,226 41,778
Utilities, materials and supplies 215,456 37,931 57,051
Acquisition of machinery and equipment 49,788 4,793 18,500
Other subsidies and payments 72,391 53,677 59,277
Total net budgetary expenditures 13,557,292 3,100,267 5,923,762


Fiscal year 2011-2012 (in dollars)
Planned expenditures for the year ending March 31, 2012 Expended during the quarter ended September 30, 2011 Year to date used at quarter-end
Expenditures:
Personnel 11,109,415 3,389,385 5,944,752
Transportation and communications 1,192,902 204,263 392,305
Information 24,125 3,709 6,831
Professional and special services 980,922 243,835 398,230
Rentals 184,205 50,188 57,474
Repair and maintenance 128,040 3,552 65,972
Utilities, materials and supplies 197,982 36,243 58,383
Acquisition of machinery and equipment 45,750 (104) 4,324
Other subsidies and payments 24,828 412 12,754
Total net budgetary expenditures 13,888,167 3,931,481 6,941,024
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