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Elections Canada Quarterly Financial Report 2014–2015 – For the quarter ended September 30, 2014

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. 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/rpp2014&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 2014–2015 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. 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 financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

During the second quarter of 2014–2015, Elections Canada continued its readiness activities for 2015, implementing changes required by Bill C-23 (Fair Elections Act), and continued its efforts to improve services to electors, such as modernizing the voter registration system, renewing the Electoral Reminder Program and improving accessibility for electors with disabilities.

First two quarters year-over-year variance

In the first two quarters of 2014–2015, budgetary expenditures totalled $52.9 million compared to $43.4 million in the same period of 2013–2014 (see Figure 1). The net increase of $9.5 million is explained as follows:

2014–2015 first and second quarter variance

The 2014–2015 second quarter expenditures of $29.7 million were $6.5 million higher than the $23.2 million in the first quarter. The increase is explained as follows:

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

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

Text version

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

Risks and uncertainties

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 recent enactment of the electoral reform by the government, which requires the agency to review its operating budget, including its appropriation, in future years, as well as the budget for the next general election.

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

Bill C-23, which received royal assent on June 19, 2014, will bring significant changes to Elections Canada's mandate and operations. Notably, effective October 1, 2014, the Commissioner of Canada Elections, the independent officer whose duty is to ensure that the Canada Elections Act and the Referendum Act are complied with and enforced, has been transferred to the Office of the Director of Public Prosecutions.

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 as a result of fluctuations in non-operating expenditures, 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. 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.

Approval by senior officials

Marc Mayrand
Chief Electoral Officer of Canada

Hughes St-Pierre, CPA, CMA
Chief Financial and Planning Officer


Gatineau, Canada
November 28, 2014

Table A.1
Elections Canada
Quarterly financial report
For the quarter ended September 30, 2014

Statement of Authorities (unaudited)

Fiscal year 2013-2014 (in thousands of dollars)
  Total available for use for the year ending March 31, 20141 Used during the quarter ended September 30, 2013 Year to date used at quarter-end
Vote 15 Program expenditures2 30,081 8,002 15,244
Statutory authorities      
Electoral expenditures3 23,982 8,627 23,982
Contributions to employee benefit plans 3,313 2,208 3,313
Expenditures under Electoral Boundaries Readjustment 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


Statement of Authorities (unaudited) (continued)

Fiscal year 2014-2015 (in thousands of dollars)
  Total available for use for the year ending March 31, 2015 1 Used during the quarter ended September 30, 2014 Year to date used at quarter-end
Vote 15 Program expenditures 2 30,538 6,446 14,985
Statutory authorities      
Electoral expenditures 3 34,496 21,583 34,496
Contributions to employee benefit plans 3,209 1,604 3,209
Expenses under Electoral Boundaries Readjustment Act
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 1 1 1
Salary of Chief Electoral Officer 160 60 160
Total Statutory authorities 37,866 23,248 37,866
Total authorities 68,404 29,694 52,851

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

3 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 September 30, 2014

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2013-2014 (in thousands of dollars)
  Planned expenditures for the year ended March 31, 20141 Expended during the quarter ended September 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


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

Fiscal year 2014-2015 (in thousands of dollars)
  Planned expenditures for the year ended March 31, 20151 Expended during the quarter ended September 30, 2014 Year to date used at quarter-end
Expenditures:
Personnel 2 42,323 13,531 26,770
Transportation and communications 2,201 1,592 2,201
Information 1,439 887 1,439
Professional and special services 12,221 8,640 12,221
Rentals 4,738 1,679 4,738
Repair and maintenance 224 170 224
Utilities, materials and supplies 376 182 376
Acquisition of land, buildings and works
Acquisition of machinery and equipment 849 607 849
Transfer payments 2,704 2,395 2,704
Public debt charges
Other subsidies and payments 1,329 11 1,329
Total gross budgetary expenditures 68,404 29,694 52,851
Less Revenues netted against expenditures:
Revenues
Total Revenues netted against expenditures:
Total net budgetary expenditures 68,404 29,694 52,851

1 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.

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