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Elections Canada Quarterly Financial Report 2013–2014 – For the quarter ended September 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 2012–2013 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 second quarter of 2013–2014, Elections Canada continued to provide administrative and technical support to the commissions in charge of readjusting federal electoral boundaries, which have since completed their work. The agency also implemented the Canada's Democracy Week, a civic education initiative, and the Commissioner of Canada Elections released his first annual report. Finally, Elections Canada was preparing its office move to its new headquarters in Gatineau, Quebec.

First two quarters year-over-year variance

In the first two quarters of 2013–2014, budgetary expenditures totalled $43.4 million, compared to $44.6 million in the same period of 2012–2013. (See Figure 1.) The net decrease of $1.2 million is explained as follows:

Second quarter year-over-year variance

Budgetary expenditures in the second quarter of 2013–2014 totalled $19.3 million, compared to $25.6 million in the same quarter of 2012–2013. The $6.4 million net reduction is explained as follows:

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

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 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 August 6, 2013, Ms. Vivian Cousineau was appointed Acting Chief Human Resources Officer following the departure of Mr. Daniel Richer to another government department.

Budget 2012 implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being 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 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 offices 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 four year election cycle.

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 and Planning Officer


Ottawa, Canada
November 29, 2013

Table A.1
Elections Canada
Quarterly financial report
For the quarter ended September 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 September 30, 2012 Year to date used at quarter-end
Vote 15 Program expenditures 3 31,174 7,088 14,005
Statutory authorities      
Electoral expenditures 4 24,668 15,181 24,668
Contributions to employee benefit plans 2,596 1,298 2,596
Expenditures under Electoral Boundaries Reajustment Act 3,187 1,988 3,187
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 5 5 5
Salary of Chief Electoral Officer 144 72 144
Total Statutory authorities 30,600 18,544 30,600
Total authorities 61,774 25,632 44,605

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, 2 Used during the quarter ended September 30, 2013 Year to date used at quarter-end
Vote 15 Program expenditures 3 30,081 8,002 15,244
Statutory authorities      
Electoral expenditures 4 23,982 8,627 23,982
Contributions to employee benefit plans 3,313 2,208 3,313
Expenses under Electoral Boundaries Reajustment Act 742 358 742
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 2 2 2
Salary of Chief Electoral Officer 148 75 148
Total Statutory authorities 28,187 11,270 28,187
Total authorities 58,268 19,272 43,431

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" columns reflect the first two 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 addittional 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 September 30, 2013

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Planned expenditures for the year ended March 31, 2013 1 Expended during the quarter ended Sept. 30, 2012 Year to date used at quarter-end
Expenditures:
Personnel 2 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


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

Fiscal year 2013-2014 (in thousands of dollars)
  Planned expenditures for the year ended March 31, 2014 1 Expended during the quarter ended Sept. 30, 2013 Year to date used at quarter-end
Expenditures:
Personnel 2 38,519 12,707 23,682
Transportation and communications 982 530 982
Information 611 430 611
Professional and special services 9,175 5,849 9,175
Rentals 1,451 1,172 1,451
Repair and maintenance 2,668 264 2,668
Utilities, materials and supplies 119 27 119
Acquisition of land, buildings and works -   -   -  
Acquisition of machinery and equipment 311 231 311
Transfer payments 4,428 (1,939) 4,428
Public debt charges -   -   -  
Other subsidies and payments 4 1 4
Total gross budgetary expenditures 58,268 19,272 43,431
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 58,268 19,272 43,431

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

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