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Statement outlining results, risks and significant changes in operations, personnel and programs
This quarterly 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.
A summary description of the Canada Border Services Agency (CBSA) program activities can be found in Part II of the Main Estimates.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the CBSA's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the 2011-2012 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.
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.
As part of the departmental performance reporting process, the CBSA prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian Generally Accepted Accounting Principles (GAAP) for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.
The quarterly report has not been subject to an external audit or review.
This section highlights the significant items that contributed to the net increase in resources available for the year and actual expenditures for the quarter ended September 30, 2011.
Graph 1:
The CBSA is funded through voted parliamentary spending authorities appropriated over a two-year period for program expenditures, including capital expenditures, and is partially funded through respendable revenue.
As at September 30, 2011, the total authorities available for the year have increased by $247 million from $1,789 million in 2010–2011 to $2,036 million, compared to the same quarter of the previous year. This net increase is mainly attributable to an increase in Vote 10 – Operating Expenditures of $190.9 million.
The increase in Vote 10 consisted primarily of a $130 million Economic and fiscal statement realignment between fiscal years; the remaining changes are due to improvements in the CBSA’s program integrity, and the implementation of Bill C-51 – the Refugee Protection Act. These increases were offset by Strategic Review and cost containment measure cuts.
Additionally, the dissolution of parliament resulted in the omission of Supplementary Estimates “A” funding for CBSA in 2011–2012, compared to the $12.7 million received in fiscal year 2010–2011.
Finally, the CBSA received carry-forward funding from the previous year of $178.5 million in 2011–2012 compared to $157.9 million in 2010–2011.
Compared to the previous year, total gross expenditures in the second quarter, ending September 30, 2011, have increased by $33.1 million, from $376.3 million to $409.4 million. This represents an increase of 8.8% against expenditures recorded for the same period in 2010–2011. The increase in expenditures is mainly due to an increase in spending in Personnel, Professional and special services, and Acquisition of land, buildings and works.
Personnel expenditures have increased by $8.3 million from $316.7 million to $325 million compared to the same period in the previous fiscal year. This increase of 2.6% is mainly composed of salary increases from collective agreement renegotiations and annual salary increases as prescribed by collective agreements.
Professional and special services expenditures increased by $8.5 million from $33.8 million to $42.3 million for expenditures in the second quarter compared to the same quarter in the last fiscal year. This 25% increase is predominantly comprised of $10.4 million spent for the eManifest initiative.
Acquisition of land, buildings and works has increased by $10.1 million from $5.5 million to $15.6 million compared to the same quarter in fiscal year 2010–2011. This 183.6% increase primarily consists of $6.3 million spent on arming, $3.6 million dollars due to the construction of a new port of entry, and a reduction of $1.2 million in expenditures incurred for the Doubling-up initiative.
The CBSA is currently facing a number of pressures against its authorities irrespective of future savings implications likely to result from the Deficit Reduction Action Plan (DRAP) exercise. Pursuant to the review, it is expected that future years’ budgets will be reduced for fiscal years commencing 2012–2013. However, at this time, the nature and extent of any reductions are not known. The Budget 2010 Cost Containments Measures will require the CBSA to finance, on a permanent basis, the costs of wage increases resulting from current and future collective agreements negotiated between 2010–2011 and 2012–2013. The ongoing impact of Budget 2010 Cost Containment Measures is a reduction of base funding which limits the ability to deliver on programs and expected results.
In recognition of this tightening fiscal environment, the CBSA has taken a more rigorous approach to the management of revenues, expenditures, forecasting and commitment monitoring. The Agency has also been ensuring that integration exists between investment plans, business plans and that risks and complexities be considered when new business initiatives are proposed within the context of these plans.
The CBSA began to take steps in mid fiscal year 2009–2010 to address a rapidly changing economic climate. The Agency has introduced more comprehensive monthly analysis of trends and forecasting in employee headcount, salary and non-salary expenditures at both the agency and regional levels to ensure affordability and sustainability. These measures, along with other budgetary restrictions have been put in place to mitigate the impact of the operating freeze.
Other than pressures from its authorities, the fact that the movement of people and goods across the border is driven by factors beyond the CBSA’s control, including economic and social factors both in Canada and globally, it is difficult for the Agency to predict with certainty the type and volume of its workload from year to year or the types of risks to be encountered. The following are risks that the CBSA has determined that may have significant potential financial impacts.
Internal risks and uncertainties:
External risks and uncertainties:
At this time, the CBSA has completed the identification of risks by evaluating the Agency’s exposure based on likelihood and impact; the CBSA is currently working on strategies to mitigate these risks. Mitigation strategies will be provided in future quarterly financial statements once they have been approved by the appropriate authorities.
There have also been significant internal changes in relation to operations, personnel and programs over the last year, all in an effort to build a more robust and adaptive Agency that can better react to any program and/or service delivery situations. Key examples of these changes include the Agency’s Change Agenda and Strategic Review implementations.
Approval by Senior Officials
Approved by:
Fiscal Year 2011-2012 | Fiscal Year 2010-2011 | ||||||
---|---|---|---|---|---|---|---|
(in thousands of dollars) | Total available for use for the year ending March 31, 2012* | Used during the quarter ended September 30, 2011 | Year-to-date used at quarter end | Total available for use for the year ending March 31, 2011* | Used during the quarter ended September 30, 2010 | Year-to-date used at quarter end | |
Vote 10 - Net Operating Expenditures | 1,619,958 | 338,133 | 696,672 | 1,452,326 | 328,188 | 669,217 | |
Vote 15 - Capital Expenditures | 235,396 | 25,998 | 34,282 | 173,966 | 7,103 | 9,258 | |
Budgetory statutory authorities | 0 | 0 | 0 | 0 | 0 | 0 | |
Employee benefit plans | 180,893 | 45,223 | 90,447 | 163,702 | 40,926 | 81,851 | |
Other | 72 | 119 | 63 | 138 | |||
Total Budgetary authorities | 2,036,247 | 409,426 | 821,520 |
1,789,994 | 376,280 | 760,464 |
* Includes authorities available for use and granted by Parliament at quarter-end
Fiscal Year 2011-2012 | Fiscal Year 2010-2011 | ||||||
---|---|---|---|---|---|---|---|
(in thousands of dollars) | Planned expenditures for the year ending March 31, 2012* | Expended during the quarter ended September 30, 2011 | Year-to-date used at quarter end | Planned expenditures for the year ending March 31, 2011* | Expended during the quarter ended September 30, 2010 | Year-to-date used at quarter end | |
Expenditures: | |||||||
Personnel | 1,311,168 | 325,037 | 625,144 | 1,238,317 | 316,719 | 598,712 | |
Transportation and communications | 84,506 | 14,396 | 24,562 | 84,212 | 11,873 | 21,994 | |
Information | 3,107 | 313 | 499 | 2,462 | 155 | 288 | |
Professional and special services | 427,346 | 42,282 | 129,939 | 310,859 | 33,779 | 110,930 | |
Rentals | 11,455 | 2,426 | 3,674 | 6,396 | 1,796 | 3,112 | |
Repair and maintenance | 34,621 | 2,976 | 5,413 | 23,309 | 2,503 | 5,821 | |
Utilities, materials and supplies | 37,578 | 4,577 | 6,862 | 24,773 | 3,895 | 6,047 | |
Acquisition of land, buildings and works | 92,171 | 15,590 | 21,977 | 94,368 | 5,532 | 8,595 | |
Acquisition of machinery and equipment** | 28,242 | 2,736 | 3,877 | 20,037 | 2,957 | 6,349 | |
Transfer payments | 0 | 0 | 0 | 0 | 0 | 0 | |
Other subsidies and payments | 15,764 | 417 | 864 | 2,971 | 848 | 2,393 | |
Total gross budgetary expenditures | 2,045,957 | 410,750 | 822,811 | 1,807,704 | 380,057 | 764,241 | |
Less Revenues netted against expenditures: | |||||||
Sales of Services | 9,710 | 1,349 | 1,349 | 17,710 | 3,777 | 3,777 | |
Other Revenue | 0 | -25 | -58 | 0 | 0 | 0 | |
Total Revenues netted against expenditures: | 9,710 | 1,324 | 1,291 | 17,710 | 3,777 | 3,777 | |
Total net budgetary expenditures | 2,036,247 | 409,426 | 821,520 | 1,789,994 | 376,280 | 760,464 |
* Includes authorities available for use and granted by Parliament at quarter-end
** Planned expenditures (2011–2012) have been restated to reflect the transposition between Acquisition of land, building and works and Acquisition of machinery and equipment objects in the Main Estimates (2011–2012)