Quarterly Financial Report for the Quarter Ended September 30, 2013

Management Statement for the Quarter Ended September 30, 2013

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), as well as Part II of the Status of the Artist Act. The Board 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 2013–14 Main Estimates, available on the following Website:
http://www.tbs-sct.gc.ca/ems-sgd/esp-pbc/me-bpd-eng.asp.

This quarterly financial report should be read in conjunction with the 2013–14 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 Budget 2012 could not be reflected in the 2012–13 Main Estimates.

In fiscal year 2012–13, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In 2013–14, the changes to departmental authorities were reflected in the 2013–14 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 CIRB, consistent with the Main Estimates for the 2013–14 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 Board 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, 2013, show a significant variance in voted appropriation compared to the quarter ending September 30, 2012. This variance is due to a permanent transfer of $300,000 for the administration of the Status of the Artist Act and a transition allowance of $200,000 for the year 2013–14.

Significant Changes to Budgetary Expenditures

Based on the Board’s definition, two variances are observed in the Board’s expenditures.

There is an increase in quarterly salary expenditures caused by the settlement in 2013–14 of several collective agreements resulting in retroactive payments as well as earlier than last year payment to part-time Governor-in-Council Appointees.

There is an increase in other subsidies and payment expenditures related to the CIRB’s first payment towards its share of an initiative led by Treasury Board Secretariat and Public Works and Government Services Canada for the procurement of a common case management system.

Risks and Uncertainties

The CIRB is a low risk agency. Approximately four fifths (82%) of the Board’s $13.6 million operating budget is allocated to salaries and benefits. The remaining $2.5 million is Operations and Maintenance (O&M) funding of which 57% 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 has made 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 also participates in the TBS-led initiatives aimed at identifying and contracting for a common case management system. The CIRB believes this approach builds on synergies between similar organizations and mitigates the pressures associated with an aging system and its costly renewal.

Significant Changes in Relation to Operations, Personnel and Programs

Since April 1, 2013, the CIRB has been responsible for the administration and interpretation of Part II of the Status of the Artist Act (the Act). Given the broadening of its mandate, the CIRB must develop a capacity and an in-house expertise to be able to serve its new clients. With this in mind, the CIRB is currently formulating proposals to modify the Canadian Artists and Producers Professional Relations Tribunal Procedural Regulations to ensure better alignment of the policies, procedures and practices under the Act with the CIRB’s current practices, while taking into account the unique circumstances of the cultural sector. Consultations with stakeholders are now under way to receive their input.   

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 for the administration and interpretation of Part II of the Act. These duties and responsibilities were previously performed by the Canadian Artists and Producers Professional Relations Tribunal (CAPPRT). The CIRB implemented this transition one year earlier than planned, which resulted in recurring savings for the government of more than $1.5 million per year.

Approval by Senior Officials

The original version was signed by

Elizabeth MacPherson, Chairperson

Ginette Brazeau, Chief Financial Officer

Ottawa, Canada
November 29, 2013

Statement of Authorities (unaudited)

Fiscal year 2013-14 (in dollars)
Total available for use for the year ending Expended during the quarter ended Year to date used at quarter-end
March 31, 2014 * September 30, 2013
Vote 10 - Net operating expenditures 11,902,379 2,796,456 5,707,758
Statutory authorities - Employee Benefit Plans 1,637,433 409,358 818,717
Total authorities 13,539,812 3,205,814 6,526,475


Fiscal year 2012-13 (in dollars)
Total available for use for the year ending Expended during the quarter ended Year to date used at quarter-end
March 31, 2013 * September 30, 2012
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

* Includes only Authorities available for use and granted by Parliament at quarter-end.

Statement of Expenditures by Standard Object (unaudited)

Fiscal year 2013-14 (in dollars)
Expenditures Planned expenditures for the year ending Expended during the quarter ended Year to date used at quarter-end
March 31, 2014* September 30, 2013
Personnel 11,047,965 2,774,680 5,393,036
Transportation and communications 765,693 189,891 351,754
Information 13,459 4,587 12,014
Professional and special services 649,931 163,247 253,620
Rentals 129,836 30,802 113,368
Repair and maintenance 96,674 5,592 17,981
Utilities, materials and supplies 146,406 36,166 67,229
Acquisition of machinery and equipment 651,442 11,411 44,314
Other subsidies and payments 38,406 (10,560) 273,160
Total net budgetary expenditures 13,539,812 3,205,814 6,526,475


Fiscal year 2012-13 (in dollars)
Expenditures Planned expenditures for the year ending Expended during the quarter ended Year to date used at quarter-end
March 31, 2013* September 30, 2012
Personnel 10,487,986 2,549,988 5,042,453
Transportation and communications 1,298,196 199,050 335,049
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

* Includes only Authorities available for use and granted by Parliament at quarter-end.

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