Canada Border Services Agency Quarterly Financial Report
For the quarter ended December 31, 2018
Table of contents
- 1. Introduction
- 2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
- 5. Approval by Senior Officials
- 6. Table 1: Statement of Authorities (Unaudited)
- 7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)
1. Introduction
This Quarterly Financial Report (QFR) has been prepared 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, Supplementary Estimates A, Canada’s Economic Action Plan 2017 (Budget 2017) and Canada’s Economic Action Plan 2018 (Budget 2018).
A summary description of the Canada Border Services Agency (CBSA) program activities can be found in Part II of the Main Estimates, and a detailed description in Part III Departmental Plan.
The QFR has not been subjected to an external audit or review.
1.1 Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities (Table 1) includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2017-2018 and 2018-2019 fiscal years. 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 money 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.
The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results
This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended .
Graph 1: Comparison of Net Budgetary Authorities and Expenditures as of and (in thousands $)
2.1 Significant Changes to Authorities
For the period ending , the authorities provided to the CBSA comprise of the Main Estimates, Treasury Board (TB) approved Budget 2018 measures, Supplementary Estimates A and any unused spending authorities carried forward from the previous fiscal year. For the period ending , the authorities provided to the CBSA comprise of the Main Estimates, Supplementary Estimates A & B and any unused spending authorities carried forward from the previous fiscal year.
The Statement of Authorities (Table 1) presents a net increase of $273.7 million or 12.3% of the Agency’s total authorities of $2,501.1 million at compared to $2,227.4 million total authorities at the same quarter last year.
This net increase in the authorities available for use is the result of an increase in Vote 1 – Operating Expenditures of $296.8 million, a decrease in Vote 5 – Capital of $30.5 million and an increase in Budgetary Statutory Authorities of $7.4 million, as detailed below:
Vote 1 – Operating
The Agency’s Vote 1 Operating increased by $296.8 million or 17.0%, which is attributed to the net effect of the following significant items (excluding the statutory authorities):
Increases are mainly attributed to:
- $196.6 million increase in funding for Treasury Board 30 Compensation Adjustment, most related to the FB classification;
- $161.6 million in increases as described in the CBSA Quarterly Financial Report for the quarter ended ;
- $73.2 million increase is described in the CBSA Supplementary Estimates (A) for 2018-19.
- $37.1 million in increases as described in the CBSA Quarterly Financial Report for the quarter ended ;
- $5.3 million for the Budget 2018 funding of the Opioids Crisis; and
- $4.4 million increase in funding for Treasury Board 30 Paylist Requirements related to parental and maternity allowances, entitlements on cessation of service or employment.
Decreases totaling $181.4 million as described in the CBSA Quarterly Financial Report for the quarter ended .
Vote 5 - Capital
The Agency’s Vote 5 Capital decreased by $30.5 million or 10.3%, which is attributed to the net effect of the following significant items:
Increases are mainly attributed to:
- $52.3 million as described in the CBSA Quarterly Financial Report for the quarter ended ;
- $3.2 million for the Budget 2018 funding of the Opioids Crisis; and
- $2.4 million increase is described in the CBSA Supplementary Estimates (A) for 2018-19.
Decreases are mainly attributed to:
- Decreases totaling $61.4 million as described in the CBSA Quarterly Financial Report for the quarter ended ; and
- Decreases totaling $27.0 million as described in the CBSA Quarterly Financial Report for the quarter ended .
Budgetary Statutory Authorities
The Agency’s Statutory Authority related to the employee benefit plan increased by $7.4 million, or 4.0% from the previous year.
2.2 Explanations of Significant Variances in Expenditures from Previous Year
As indicated in the Statement of Authorities (Table 1), the Agency’s expenditures used during the quarter ended were $448.9 million, as compared to $439.0 million for the same quarter last year. The Agency’s year-to-date expenditures total $1,504.8 million as compared to $1,231.5 million at the same time last year. The net increase of $273.3 million or 22.2% in expenditures is mainly due to the following item:
Increase of $296.8 million or 17.0% in Vote 1 operating expenditures year-to-date used at quarter end ($1,308.8 million versus $1,049.4 million same time last year). The vast majority of spending increase is due to economic increases including retroactive payments for the signed collective bargaining agreements of the Border Services staff (FB). These retroactive payments are also apparent in the Departmental Budgetary Expenditures by Standard Object (Table 2), large increase in personnel expenditures for 2018-19 compared against 2017-18. Vote 5 capital and statutory expenditures have remained consistent compared to the same period last year.
The planned revenue from the sales of services reflects the Agency's revenue respending authority. The year-to-date revenue from the charge of services has increased by $2.2 million or 15.9% due to increases in the NEXUS program.
Graph 2: Comparison of Vote Netted Revenue and Revenue collected as of and (in thousands $)
3. Risks and Uncertainties
The CBSA’s dynamic operating environment makes the Agency particularly susceptible to external drivers that are largely beyond its control. Together, these drivers have the potential to affect the organization’s ability to adhere to its annual financial plan.
The Agency is pursuing several large information technology (IT) and physical infrastructure projects. Most are multi-year in nature and represent substantial investment costs. As such, the Agency needs to continue maturing its long-term financial planning. External stakeholders, who have their own priorities, may limit transformation opportunities, require unanticipated investments, or delay implementation of modernization initiatives. Public policy issues or the need for legislative requirements can also affect the speed with which the Agency is able to implement its major projects.
Specific to IT, the Agency continues to support services it is expecting to phase out while waiting for the delivery of government-wide corporate solutions (e.g. cloud computing, data storage).
Delays can add additional challenges as project costing does not adequately allow for fluctuating interest rates and materials costs. Inflation also drives up costs on deferred or delayed projects.
The Agency strives to mitigate financial risks by risk-rating its projects for confirmation of funding sources and human resources capacity, conducting periodic project reviews to adjust existing scopes after announcements of new funding, and by holding regular budget discussions. External stakeholder engagement is also pursued on an ongoing basis.
The Agency will continue to examine its resource base in an effort to fully align its operations to the priorities of the Government and Canadians.
4. Significant Changes in Relation to Operations, Personnel and Programs
4.1 Key Senior Personnel
There have been no changes to key senior personnel in the third quarter of 2018-2019.
4.2 Operations
The CBSA is in the process of updating and changing its organizational structure, including new roles and responsibilities for some of its senior executives.
The Strategic Policy branch (SPB) was created on as part of the CBSA’s Renewal initiatives towards a more sustainable future for the CBSA. The CBSA continues with transitioning to an enhanced functional management model which involves changes to the organizational structure. CBSA has announced these changes that will occur in waves:
Wave 1 - marked the finalization of wave 1 with respect to the changes to our organizational structure.
As part of establishing a strategic policy function, functions under the former Corporate Affairs branch (CAB) have been integrated into the Strategic Policy branch and the Comptrollership branch, which has been renamed the Finance and Corporate Management branch (FCMB). This name change reflects the expansion of roles within the branch. In addition to the FCMB’s existing responsibilities, the following directorates joined the FCMB:
- Corporate Planning and Reporting;
- Enterprise Project Management Office (to serve as a centre of expertise on project management for the Agency),
- Executive Governance; and
- Recourse.
Also, the following functions formerly under CAB have transferred to the Strategic Policy branch:
- External Review, responsible for functions such as the Agency’s dealings with National Security and Intelligence Committee of Parliamentarians and the proposed National Security and Intelligence Review Agency;
- Litigation Oversight (excluding the Litigation Business Management Unit and other litigation management units housed in other branches);
- Domestic Partnership unit and the Public Safety liaison function; and
- Correspondence and Briefings Unit.
Efforts continue at the same time to build a new Strategic Policy unit within the branch, as well as a new Chief Data Officer function.
Wave 2 – Combine the functions of Programs and Operations branches by establishing three new branches: Travellers, Commercial Trade, and Intelligence and Enforcement. Each branch will be led by a Vice-President who will be accountable for program development, design and delivery with the direct support of all regions. These Vice-Presidents will establish program priorities and provide national direction to the regions on delivery. This will keep regions better connected, unify service standards nationwide and make it easier to adopt best practices and innovations for the benefit of all Canadians.
The Agency continues to enhance border security and ensures the facilitation of legitimate travellers and goods with modernization of and enhancements to security screening procedures, trusted traveller initiatives, immigration detentions, and infrastructure at Ports of Entry across the country as per the Departmental Plan for 2018-19.
4.3 New Programs
The CBSA will adapt and expand operations in order to support Canada’s commitment to process new immigrants this fiscal year in collaboration with partner organizations.
In addition, the Agency has innovated and evolved constantly, adopting new technologies and benefitting from greater international collaboration to keep Canada competitive, open to new immigrants and to keep Canadians safe.
Looking forward, our Agency is committed to the vision of CBSA Renewal, which is designed to maximize the potential of technology and further implement innovation to enable our officers to stand strong and provide effective service amidst rising volumes and ever evolving security threats.
5. Approval by Senior Officials
Approved by:
John Ossowski
President
Ottawa, Canada
Date: March 1, 2019
Jonathan Moor
Chief Financial Officer
Ottawa, Canada
Date: March 1, 2019
6. Table 1: Statement of Authorities (Unaudited)
Total available for use for the year ending * | Used during the quarter ended | Year-to-date used at quarter end | |
---|---|---|---|
Vote 1 - Operating Expenditures | 2,044,266 | 369,134 | 1,308,833 |
Vote 5 - Capital Expenditures | 264,389 | 37,116 | 68,176 |
Statutory Authority - Contributions to employee benefit plans | 192,441 | 42,587 | 127,759 |
Statutory Authority - Refunds of amounts credited to revenues in previous years | 0 | 0 | 5 |
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets | 0 | 29 | 49 |
Total budgetary authorities | 2,501,096 | 448,866 | 1,504,822 |
Non-budgetary authorities | 0 | 0 | 0 |
Total authorities | 2,501,096 | 448,866 | 1,504,822 |
Note: Numbers may not add due to rounding. * Includes only Authorities available for use and granted by Parliament at quarter end. |
Total available for use for the year ending * | Used during the quarter ended | Year-to-date used at quarter end | |
---|---|---|---|
Vote 1 - Operating Expenditures | 1,747,488 | 373,774 | 1,049,425 |
Vote 5 - Capital Expenditures | 294,862 | 22,561 | 53,960 |
Statutory Authority - Contributions to employee benefit plans | 185,080 | 42,669 | 128,006 |
Statutory Authority - Refunds of amounts credited to revenues in previous years | 0 | 0 | 44 |
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets | 0 | 3 | 65 |
Total budgetary authorities | 2,227,430 | 439,007 | 1,231,500 |
Non-budgetary authorities | 0 | 0 | 0 |
Total authorities | 2,227,430 | 439,007 | 1,231,500 |
Note: Numbers may not add due to rounding. * Includes only Authorities available for use and granted by Parliament at quarter end. |
7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)
Planned expenditures for the year ending * | Expended during the quarter ended | Year-to-date used at quarter end | |
---|---|---|---|
Expenditures | |||
Personnel | 1,785,250 | 348,083 | 1,245,127 |
Transportation and communications | 55,242 | 11,835 | 32,270 |
Information** | 9,637 | 887 | 1,170 |
Professional and special services** | 314,839 | 55,373 | 165,827 |
Rentals | 8,601 | 5,295 | 8,613 |
Repair and maintenance | 36,757 | 5,672 | 13,705 |
Utilities, materials and supplies | 25,496 | 2,716 | 7,673 |
Acquisition of land, buildings and works | 116,057 | 14,722 | 26,504 |
Acquisition of machinery and equipment | 143,124 | 8,593 | 14,248 |
Transfer payments | 0 | 0 | 0 |
Other subsidies and payments | 24,523 | 1,916 | 5,524 |
Total gross budgetary | 2,519,526 | 455,092 | 1,520,661 |
Less revenues netted against expenditures | |||
Sales of Services | 18,430 | 6,226 | 15,844 |
Other Revenue | 0 | 0 | (5) |
Total revenues netted against expenditures | 18,430 | 6,226 | 15,839 |
Total net budgetary expenditures | 2,501,096 | 448,866 | 1,504,822 |
Note: Numbers may not add due to rounding. * Includes only Authorities available for use and granted by parliament at quarter-end. ** Standard Object - Professional Services decreased by $698K and Standard Object - Information Services increased by $689K due to realignment of expenditures to the appropriate Standard Object. |
Planned expenditures for the year ending * | Expended during the quarter ended | Year-to-date used at quarter end | |
Expenditures | |||
---|---|---|---|
Personnel | 1,369,248 | 319,407 | 978,151 |
Transportation and communications | 78,692 | 12,038 | 28,450 |
Information | 5,250 | 112 | 329 |
Professional and special services | 392,484 | 83,247 | 165,814 |
Rentals | 12,792 | 2,412 | 4,959 |
Repair and maintenance | 35,384 | 4,076 | 11,593 |
Utilities, materials and supplies | 23,361 | 2,462 | 7,650 |
Acquisition of land, buildings and works | 127,964 | 11,293 | 25,310 |
Acquisition of machinery and equipment | 165,348 | 9,161 | 17,834 |
Transfer payments | 0 | 0 | 0 |
Other subsidies and payments | 35,337 | 267 | 5,031 |
Total gross budgetary expenditures | 2,245,860 | 444,475 | 1,245,121 |
Less revenues netted against expenditures | |||
Sales of Services | 18,430 | 5,468 | 13,665 |
Other Revenue | 0 | 0 | (44) |
Total revenues netted against expenditures | 18,430 | 5,468 | 13,621 |
Total net budgetary expenditures | 2,227,430 | 439,007 | 1,231,500 |
Note: Numbers may not add due to rounding. * Includes only Authorities available for use and granted by Parliament at quarter-end. |
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