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Elections Canada Quarterly Financial Report 2012–2013 – For the quarter ended September 30, 2012

Statement outlining results, risks and significant changes in operations, personnel and program

Introduction

This quarterly financial 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 Estimates and Supplementary Estimates as well as Canada's Economic Action Plan 2012 (Budget 2012).

The Office of the Chief Electoral Officer, commonly known as Elections Canada, is an independent, non-partisan agency that reports directly to Parliament. Its mandate is to:

A summary description of the agency's program activities can be found at www.tbs-sct.gc.ca/rpp/2012-2013/inst/ceo/ceo01-eng.asp#sec1.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency's spending authorities granted by Parliament and those used by the agency consistent with the Main Estimates for the 20122013 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. With respect to Elections Canada, the Canada Elections Act, the Electoral Boundaries Readjustment Act and the Referendum Act provide for all expenditures with the exception of salaries of indeterminate employees, which are funded through an annual appropriation.

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.

Elections Canada uses the full accrual method of accounting to prepare and present its annual audited departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

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 201213 Main Estimates.

In fiscal year 20122013, 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.

Highlights of fiscal quarter and fiscal year to date (YTD) results

During the second quarter of 20122013, Elections Canada continued with post-event activities for the 41st general election and provided administrative and technical support to the 10 independent commissions in charge of adjusting the boundaries of federal electoral districts.

First two quarters year-over-year variance

In the first two quarters of 2012-2013 total budgetary expenditures totalled $44.6 million compared to $224.1 million in the same period of 2011-2012. The $179.5 million decrease is mainly due to non-recurrent expenditures directly related to the conduct of the 41st general election (polling day of May 2, 2011).

Second quarter year-over-year variance

Budgetary expenditures in the second quarter totalled $25.6 million compared to $31.3 in the same quarter in 2011-2012. The $5.7 million decrease is mainly due to a decrease of $14.0 million resulting from non-recurring expenses related to 41st general election, and an additional $5.5 million in quarterly allowances to political parties (timing differences), a $1.1 million increase in on-going operations and an additional $1.7 million to support the commissions in charge of adjusting the electoral district boundaries.

2012-2013 first and second quarter variance

The 2012-2013 second quarter expenditures of $25.6 million were $6.6 million higher than the $19.0 million in the first quarter. This increase is due to $5.4 million in additional quarterly allowances to political parties (timing differences), $3.0 million in on-going operations and $0.8M in expenses to support the commissions and a decrease of $2.6 million resulting from non-recurring expenses related to the 41st general election.

Figure 1 First and Second Quarter Expenditures Compared to Annual Authorities (Appropriation and Statutory Authority)*

Figure 1

*Annual authorities for statutory funds reflect expenditures for the first two quarters only since statutory authorities are granted as expenditures are incurred.

Click here for a textual description of Figure 1.

Risks and uncertainties

Budget 2010 announced that the operating budgets of departments would be frozen at their 20102011 levels for the fiscal years 20112012 and 20122013. This has an impact on Elections Canada's appropriation, which covers the salaries of our indeterminate staff. For this fiscal year, we will not be funded for salary increases and are therefore taking steps to absorb increases resulting from collective agreements. To address this critical situation and in an effort to minimize the impact on the services we provide to electors and political entities, Elections Canada is completing a zero-based budgeting exercise. This exercise will allow the agency to review its operations, to identify additional cost savings, prioritize investments, and reallocate financial and human resources.

Elections Canada's expenditures are influenced by the frequency and number of electoral events (general elections, by-elections) and by infrequent exercises such as the electoral district boundaries readjustments and referendums. Any of these events could significantly change expenditures from one fiscal year to the next.

Significant changes in relation to operations, personnel and programs

As stated above, Elections Canada continued to close out the 41st general election during the first two quarters of 20122013.

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 business to deal with their government; and, modernize and reduce the back office.

Elections Canada has responded to the spirit of the federal government's deficit reduction action plan. The agency is reducing its annual operating budget by 8% starting this fiscal year. In making these reductions, the agency did not include expenditures that fall outside the annual operating budget, namely those related to transfer payments required by statute, the delivery of electoral events, the readjustment of electoral boundaries, and the relocation of Elections Canada's office to Gatineau in 2013. This left an operating budget of $94.1 million, which was then reduced by $7.5 million or 8%. Elections Canada is applying these reductions in four ways.

Programs were required to use a variety of measures to achieve efficiencies and absorb maintenance costs for recently delivered IT applications. This allowed the agency to reduce hardware and software maintenance costs for example, by reviewing service agreements, optimizing resources by restructuring IT support, and reducing support costs by establishing a new IT service model.

In addition, the agency reduced the budget available to programs for time-limited initiatives. Some examples of initiatives that will be delayed or postponed include migrating a new departmental financial system, modernizing the nomination process for candidates, developing the advertising program aimed at youth and being ready to conduct referendums. The agency is also extending the time frame for developing and delivering various programs and corporate initiatives.

Finally, Elections Canada began reviewing all programs to ensure that resources are focused on the highest priorities linked to its mandate.

Expenditures in the first two quarters of 20122013 were significantly less than for the same period from last fiscal year. This is due to the fact that a large portion of the first two quarters expenditures from last year were non-recurrent, since they were directly related to the conduct of the 41st general election. For that reason, the reduction in expenditures relating to savings measures is not readily apparent.

 

Approval by senior officials

Marc Mayrand
Chief Electoral Officer of Canada

Helen J. Bélanger, CPA, CMA
Chief Financial Officer


Ottawa, Canada
November 29, 2012



Table A.1
Elections Canada
Quarterly financial report
For the quarter ended September 30, 2012

Statement of Authorities (unaudited)

Fiscal year 2011-2012 (in thousands of dollars)
  Total available for use for the year ended March 31, 2012 * Used during the quarter ended Sept. 30, 2011 Year to date used at quarter-end
Vote 15 – Program expenditures 30,946 8,002 14,881
Budgetary statutory authorities * 209,248 23,363 209,248
Total Budgetary authorities 240,194 31,365 224,129
Non-budgetary authorities -   -   -  
Total authorities 240,194 31,365 224,129

Statement of Authorities (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Total available for use for the year ended March 31, 2013 * Used during the quarter ended Sept. 30, 2012 Year to date used at quarter-end
Vote 15 – Program expenditures 31,174 7,088 14,005
Budgetary statutory authorities * 30,600 18,544 30,600
Total Budgetary authorities 61,774 25,632 44,605
Non-budgetary authorities    -      -      -  
Total authorities 61,774 25,632 44,605

More information is available in Table A.2

* Budgetary statutory authorities amounts in the "Total available for use for the years ended March 31" columns reflect expenditures for the first two quarters only since statutory authorities are granted as expenditures are incurred.



Table A.2
Elections Canada
Quarterly financial report
For the quarter ended September 30, 2012

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2011-2012 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2012 * Expended during the quarter ended Sept. 30, 2011 Year to date used at quarter-end
Expenditures:
Personnel ** 135,966 12,952 119,901
Transportation and communications 26,587 5,898 26,587
Information 15,707 4,613 15,707
Professional and special services 17,121 10,027 17,121
Rentals 19,279 3,588 19,279
Repair and maintenance 2,618 599 2,618
Utilities, materials and supplies 1,940 (7,233) 1,940
Acquisition of land, buildings and works 294 74 294
Acquisition of machinery and equipment 578 421 578
Transfer payments 20,082 423 20,082
Public debt charges -   -   -  
Other subsidies and payments 24 3 24
Total gross budgetary expenditures 240,194 31,365 224,129
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 240,194 31,365 224,129


Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2013 * Expended during the quarter ended Sept. 30, 2012 Year to date used at quarter-end
Expenditures:
Personnel ** 39,295 11,112 22,126
Transportation and communications 1,504 1,077 1,504
Information 1,348 1,052 1,348
Professional and special services 8,771 6,171 8,771
Rentals 1,750 1,038 1,750
Repair and maintenance 2,297 495 2,297
Utilities, materials and supplies 128 58 128
Acquisition of land, buildings and works -   (6) -  
Acquisition of machinery and equipment 190 105 190
Transfer payments 6,491 4,530 6,491
Public debt charges   -   -   -  
Other subsidies and payments -   -   -  
Total gross budgetary expenditures 61,774 25,632 44,605
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 61,774 25,632 44,605

* Statutory expenditures in the "Planned expenditures for the year ended March 31" columns reflect expenditures for the first two quarters only since statutory authorities are granted as expenditures are incurred.

** Personnel expenditures include both Vote 15 – Program expenditures and Budgetary statutory authorities; all other categories of expenditures are solely Budgetary statutory.