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Elections Canada Quarterly Financial Report 2013–2014 – For the quarter ended June 30, 2013

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 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 programs can be found at www.elections.ca/content.aspx?section=res&dir=rep/rpp/rpp2013&document=p2&lang=e.

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 2013–2014 fiscal year as well as Canada's Economic Action Plan 2012 (Budget 2012). 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. Budgetary statutory authorities amounts presented in the tables below reflect year-to-date expenditures only since statutory authorities are granted as expenditures are incurred.

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 the Budget 2012 could not be reflected in the 2012–13 Main Estimates.

In fiscal year 2012–2013, 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 2013–2014, the changes to departmental authorities were reflected in the 2013–2014 Main Estimates tabled in Parliament.

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

During the first quarter of 2013–2014, Elections Canada conducted a by-election in the electoral district of Labrador, and it continued to provide administrative and technical support to the commissions in charge of readjusting federal electoral boundaries.

First quarter year-over-year variance

In the first quarter of 2013–2014, budgetary expenditures totalled $24.2 million, compared to $19.0 million in the same period of 2012–2013. (See Figure 1.) The increase of $5.2 million is mainly a result of the timing of the disbursements of the quarterly allowances to political parties (first quarter payment recorded in the second quarter of 2012–2013).

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

Figure 1

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

Click here for a textual description of Figure 1.

Risks and uncertainties

Risks resulting from the cost-containment measures flowing from the March 2010 federal budget added budgetary pressures to Elections Canada's appropriation. To address these pressures, the agency completed a zero-based budgeting review in 2012–2013 and, as a result, reallocated resources to its highest priorities. It also implemented workforce adjustment measures to eliminate 32 encumbered indeterminate positions. These measures aimed to ensure that Elections Canada can manage within its annual appropriation for the foreseeable future.

Elections Canada's overall statutory expenditures are guided by the preparations required for the 2015 general election. The work flowing from the two recently published reports to strengthen the integrity of the electoral system and its administration will lead to additional expenditures. In this regard, an important driver will be the introduction of electoral reform by the government, which we expect will require the agency to review its operating budget, including its appropriation, in future years.

Elections Canada's expenditures are influenced by the frequency and number of electoral events (general elections, by-elections) and by infrequent exercises such as referendums and the electoral district boundaries readjustment process. 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 mentioned above, Elections Canada implemented workforce adjustment measures to eliminate 32 indeterminate positions. Throughout this process, the agency's top priority was to limit the impact of these measures by maximizing continued employment opportunities for affected employees.

Effective April 1, 2013, the position of the Chief Audit Executive and the Internal Audit function were transferred from the CFO Sector to the Chief of Staff of the Chief Electoral Officer, Ms. Vivian Cousineau.

Effective June 27, 2013, Mr. Hughes St-Pierre was appointed acting Chief Financial Officer following the departure of Ms. Helen Bélanger to another government department.

Elections Canada conducted a by-election in Labrador (Newfoundland and Labrador). The writ of election was issued on April 7, 2013, and Election Day was May 13, 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 governmen's deficit reduction action plan. The agency has reduced its annual operating budget by $7.5 million, or 8 percent, starting in 2012–2013. In making these reductions, the agency has not included expenditures that fall outside its 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 this fiscal year. As the reductions are applied only to the agency's operating budget, reductions in authorities and expenditures are not readily apparent when comparing year over year for these reasons: fluctuations of non-operating expenditures (as mentioned above), timing differences and expenditure trends related to the general election cycle (Year 1 versus Year 3).

Elections Canada has applied the budget reductions as follows:

The agency has reduced the budget available to programs for time-limited initiatives. This has reduced the financial resources available for renewing infrastructure and carrying out initiatives aimed at improving election administration and programs. Some examples of initiatives that have been delayed or postponed include the modernization of nomination processes for candidates, the advertising program aimed at youth and readiness activities for referendums.

The agency has also extended the time frame for the development and delivery of various other programs and corporate initiatives.

In addition, the agency has required programs to take a variety of measures to achieve efficiencies and absorb maintenance costs for recently delivered information technology (IT) applications. This has 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.

Approval by senior officials

Marc Mayrand
Chief Electoral Officer of Canada

Hughes St-Pierre, MA, CMA
Acting Chief Financial Officer


Ottawa, Canada
August 29, 2013

Table A.1
Elections Canada
Quarterly financial report
For the quarter ended June 30, 2013

Statement of Authorities (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Total available for use for the year ending March 31, 2013 1, 2 Used during the quarter ended June 30, 2012 Year to date used at quarter-end
Vote 15 – Program expenditures 3 29,501 6,917 6,917
Statutory authorities      
Electoral expenditures 4 9,487 9,487 9,487
Contributions to employee benefit plans 1,298 1,298 1,298
Expenses under Electoral Boundaries Reajustment Act 1,199 1,199 1,199
Salary of Chief Electoral Officer 72 72 72
Total Statutory authorities 12,056 12,056 12,056
Total authorities 41,557 18,973 18,973

Statement of Authorities (unaudited) (continued)

Fiscal year 2013-2014 (in thousands of dollars)
  Total available for use for the year ending March 31, 2014 1 Used during the quarter ended June 30, 2013 Year to date used at quarter-end
Vote 15 – Program expenditures 3 30,081 7,242 7,242
Statutory authorities      
Electoral expenditures 4 15,355 15,355 15,355
Contributions to employee benefit plans 1,104 1,104 1,104
Expenses under Electoral Boundaries Reajustment Act 384 384 384
Salary of Chief Electoral Officer 74 74 74
Total Statutory authorities 16,917 16,917 16,917
Total authorities 46,998 24,159 24,159

More information is available in Table A.2

1 Budgetary statutory authorities amounts in the "Total available for use for the year ending March 31, 201x" columns reflect first quarter expenditures only since statutory authorities are granted as expenditures are incurred.

2 Total available for use does not reflect measures announced in Budget 2012.

3 Program expenditures is an annual appropriation that funds the salaries of Elections Canada's permanent staff.

4 Electoral expenditures under the statutory authority funds the operating expenditures of the agency and the additional expenditures incurred in preparing and conducting elections, reimbursing election expenses to eligible candidates and parties, and enforcing the Canada Elections Act.



Table A.2
Elections Canada
Quarterly financial report
For the quarter ended June 30, 2013

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2013 1, 2 Expended during the quarter ended June 30, 2012 Year to date used at quarter-end
Expenditures:
Personnel 3 33,598 11,014 11,014
Transportation and communications 427 427 427
Information 296 296 296
Professional and special services 2,600 2,600 2,600
Rentals 712 712 712
Repair and maintenance 1,803 1,803 1,803
Utilities, materials and supplies 70 70 70
Acquisition of land, buildings and works 6 6 6
Acquisition of machinery and equipment 86 86 86
Transfer payments 1,959 1,959 1,959
Public debt charges -   -   -  
Other subsidies and payments -   -   -  
Total gross budgetary expenditures 41,557 18,973 18,973
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 41,557 18,973 18,973


Departmental budgetary expenditures by Standard Object (unaudited) (continued)

Fiscal year 2013-2014 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2014 1 Expended during the quarter ended June 30, 2013 Year to date used at quarter-end
Expenditures:
Personnel 3 33,814 10,975 10,975
Transportation and communications 452 452 452
Information 181 181 181
Professional and special services 3,326 3,326 3,326
Rentals 279 279 279
Repair and maintenance 2,403 2,403 2,403
Utilities, materials and supplies 92 92 92
Acquisition of land, buildings and works -   -   -  
Acquisition of machinery and equipment 80 80 80
Transfer payments 6,368 6,368 6,368
Public debt charges   -   -   -  
Other subsidies and payments 3 3 3
Total gross budgetary expenditures 46,998 24,159 24,159
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 46,998 24,159 24,159

1 Statutory expenditures in the "Planned expenditures for the year ending March 31, 201x" columns reflect first quarter expenditures only since statutory authorities are granted as expenditures are incurred.

2 Planned expenditures do not reflect measures announced in Budget 2012.

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