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Elections Canada Quarterly Financial Report 2013–2014 – For the quarter ended December 31, 2013

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

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:

Summary description of the agency's programs

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 third quarter of 20132014, Elections Canada initiated the implementation of the new federal electoral district boundaries and completed its office move to its new location in Gatineau, Quebec. The agency also continued its projects to improve services to electors, such as modernizing the field voter registration system and re-engineering voting operations.

First three quarters year-over-year variance

In the first three quarters of 20132014, budgetary expenditures totalled $77.2 million, compared to $73.9 million in the same period of 20122013. (See Figure 1.) The net increase of $3.3 million is explained as follows:

Third quarter year-over-year variance

Budgetary expenditures in the third quarter of 20132014 totalled $33.8 million, compared to $29.3 million in the same quarter of 20122013. The $4.5 million net increase is explained as follows:

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

Figure 1

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

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 is the introduction of electoral reform by the government, which requires 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 previously, Elections Canada consolidated its offices in Gatineau, Quebec.

Effective October 21, 2013, Mr. Jacques Mailloux was appointed Chief Information Officer.

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. 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
February 19, 2014




Table A.1
Elections Canada
Quarterly financial report
For the quarter ended December 31, 2013

Statement of Authorities (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Total available for use for the year ending March 31, 2013
Footnote 1, Footnote 2
Used during the quarter ended December 31, 2012 Year to date used at quarter-end
Vote 15 Program expenditures Footnote 3 31,174 7,140 21,146
Statutory authorities      
Electoral expenditures Footnote 4 43,088 18,418 43,088
Contributions to employee benefit plans 3,894 1,298 3,894
Expenditures under Electoral Boundaries Reajustment Act 5,515 2,328 5,515
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 5 - 5
Salary of Chief Electoral Officer 216 73 216
Total statutory authorities 52,718 22,117 52,718
Total authorities 83,892 29,257 73,864

Statement of Authorities (unaudited) (continued)

Fiscal year 2013-2014 (in thousands of dollars)
  Total available for use for the year ending
March 31, 2014
Footnote 1, Footnote 2
Used during the quarter ended
December 31, 2013
Year to date used at quarter-end
Vote 15 Program expenditures Footnote 3 31,556 7,491 22,735
Statutory authorities      
Electoral expenditures Footnote 4 48,290 24,306 48,290
Contributions to employee benefit plans 4,969 1,656 4,969
Expenses under Electoral Boundaries Reajustment Act 981 239 981
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 4 2 4
Salary of Chief Electoral Officer 224 76 224
Total statutory authorities 54,468 26,279 54,468
Total authorities 86,024 33,770 77,203

More information is available in Table A.2

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

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

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

Footnote 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.1
Elections Canada
Quarterly financial report
For the quarter ended December 31, 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 Footnote 1
Expended during the quarter ended December 31, 2012 Year to date used at quarter-end
Expenditures
Personnel Footnote 2 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 Footnote 3 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


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 Footnote 1
Expended during the quarter ended December 30, 2013 Year to date used at quarter-end
Expenditures
Personnel Footnote 2 45,995 13,493 37,174
Transportation and communications 2,037 1,054 2,037
Information 1,846 1,234 1,846
Professional and special services 15,563 6,388 15,563
Rentals 4,649 3,198 4,649
Repair and maintenance Footnote 3 5,838 3,171 5,838
Utilities, materials and supplies 271 152 271
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 701 390 701
Transfer payments 8,369 3,940 8,369
Public debt charges - - -
Other subsidies and payments 755 750 755
Total gross budgetary expenditures 86,024 33,770 77,203
Less Revenues netted against expenditures
Revenues -   -   -  
Total Revenues netted against expenditures -   -   -  
Total net budgetary expenditures 86,024 33,770 77,203

Due to rounding, figures may not add to the totals shown

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

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

Footnote 3 The significant increase in expenditures is due to the office consoliation project.