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Elections Canada Quarterly Financial Report 2012–2013 – For the quarter ended December 31, 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). This quarterly report has not been subject to an external audit or review.

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 2012–2013 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.

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, 2012, 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 2012–2013, frozen allotments have been 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 third quarter of 2012–2013, Elections Canada continued its post-event activities for the 41st general election held in 2011. It also conducted three by-elections held November 26, 2012, in Calgary Centre (Alberta), Durham (Ontario) and Victoria (British Columbia), and provided administrative and technical support to the 10 independent commissions in charge of adjusting the boundaries of federal electoral districts.

First three quarters year-over-year variance:

In the first three quarters of 2012–2013, total budgetary expenditures totalled $73.9 million, compared to $292.6 million in the same period of 2011–2012. The decrease of $218.7 million is mainly a result of non-recurring expenditures directly related to the conduct of the 41st general election. (Election day was May 2, 2011.)

Third quarter year-over-year variance:

Budgetary expenditures in the third quarter totalled $29.3 million, compared to $68.4 million in the same quarter of 2011–2012. The $39.1 million decrease is mainly a result of non-recurring expenditures for the 41st general election incurred in the third quarter of 2011–2012.

2012–2013 second and third quarter variance:

The 2012–2013 third quarter expenditures of $29.3 million were $3.7 million higher than the $25.6 million in the second quarter. This increase is mainly a result of the expenditures for the November 2012 by-elections and a timing difference in an accounting entry related to the reimbursements of election expenses to candidates from the 41st general election.

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

Figure 1 – First, Second and Third Quarter Expenditures Compared to Annual Authorities

*Annual authorities for statutory funds reflect expenditures for the first three 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 2010–2011 levels for the fiscal years 2011–2012 and 2012–2013. 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 these pressures, the Agency completed a Zero-based Budgeting review in 2012–2013. The review confirmed that Elections Canada lacks the funds required to continue to finance a number of indeterminate positions going forward. As a result, national bargaining agents have been informed that the Agency will need to implement workforce adjustment measures beginning in the fourth quarter of this fiscal year.

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 and conducted three by-elections during the first three quarters of 2012–2013.

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 three quarters of 2012–2013 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 three 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
March 1, 2013



Table A.1
Elections Canada
Quarterly financial report
For the quarter ended December 31, 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 December 31, 2011 Year to date used at quarter-end
Vote 15 – Program expenditures 32,875 7,853 22,463
Budgetary statutory authorities * 270,124 60,855 270,124
Total Budgetary authorities 302,999 68,437 292,587
Non-budgetary authorities -   -   -  
Total authorities 302,999 68,437 292,587

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 December 31, 2012 Year to date used at quarter-end
Vote 15 – Program expenditures 31,174 7,140 21,146
Budgetary statutory authorities * 52,178 22,117 52,718
Total Budgetary authorities 83,892 29,257 73,863
Non-budgetary authorities    -      -      -  
Total authorities 83,892 29,257 73,863

More information is available in Table A.2
Due to rounding, figures may not add to the totals shown

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



Table A.2
Elections Canada
Quarterly financial report
For the quarter ended December 31, 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 December 31, 2011 Year to date used at quarter-end
Expenditures:
Personnel ** 142,043 11,731 131,632
Transportation and communications 27,713 1,127 27,713
Information 16,698 991 16,698
Professional and special services 23,607 6,487 23,607
Rentals 20,488 1,209 20,488
Repair and maintenance 3,373 755 3,373
Utilities, materials and supplies 1,521 (419) 1,521
Acquisition of land, buildings and works 297 4 297
Acquisition of machinery and equipment 1,022 423 1,022
Transfer payments 66,207 46,125 66,207
Public debt charges -   -   -  
Other subsidies and payments 28 5 28
Total gross budgetary expenditures 302,999 68,437 292,587
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 302,999 68,437 292,587


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 December 31, 2012 Year to date used at quarter-end
Expenditures:
Personnel ** 44,770 12,615 34,741
Transportation and communications 2,688 1,184 2,688
Information 2,518 1,170 2,518
Professional and special services 15,144 6,373 15,144
Rentals 3,204 1,454 3,204
Repair and maintenance 2,569 271 2,569
Utilities, materials and supplies 288 160 288
Acquisition of land, buildings and works -   -   -  
Acquisition of machinery and equipment 459 268 459
Transfer payments 12,252 5,762 12,252
Public debt charges   -   -   -  
Other subsidies and payments -   -   -  
Total gross budgetary expenditures 83,892 29,257 73,863
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 83,892 29,257 73,863

Due to rounding, figures may not add to totals shown

* Statutory expenditures in the "Planned expenditures for the year ended March 31" columns reflect expenditures for the first three 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.