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Quarterly Financial Report - For the period ended December 31, 2020
Table of contents
- Statement outlining results, risks and significant changes in operations, personnel and programs
- Approval by Senior Officials
Statement outlining results, risks and significant changes in operations, personnel and programs
1. Introduction
This quarterly report for the period ending December 31, 2020 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. The report has not been subject to an external audit or review, and should be read in conjunction with the Main Estimates and the Supplementary Estimates for the current year.
A summary description of the Department's programs can be found in the .
Basis of Presentation
This quarterly report has been prepared using an expenditure basis of accounting. 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.
The accompanying Statement of Authorities 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 2020-2021 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.
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.
抖淫视频 (GAC) 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
A. Significant changes to Authorities
The following table shows the total budget available for use by the Department. Only authorities available for use and granted by Parliament as at December 31, 2020 are included.
| Authorities (in thousands of dollars) | Fiscal year 2020-2021 | Fiscal year 2019-2020 | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Total available for use for the year ending March 31, 2021* | Total available for use for the year ending March 31, 2020* | |||
| * Includes only authorities available for use and granted by Parliament at quarter-end. | ||||
| Operating Expenditures | 1,948,993 | 1,892,898 | 56,095 | 3% |
| Capital Expenditures | 166,077 | 128,968 | 37,109 | 29% |
| Grants and Contributions | 5,233,809 | 4,966,027 | 267,782 | 5% |
| Locally engaged staff pensions, insurance and social security | 71,024 | 68,874 | 2,150 | 3% |
| Budgetary statutory authorities | ||||
| Contributions to employee benefit plans | 115,275 | 114,420 | 855 | 1% |
| Ministers' salary and motor car allowance | 268 | 263 | 5 | 2% |
| Payments under the Diplomatic Service (Special) Superannuation Act | 900 | 500 | 400 | 80% |
| Debt forgiveness to Pakistan | 22,188 | 22,188 | - | 0% |
| Spending of proceeds from the disposal of surplus Crown assets | 1,073 | 1,552 | (479) | (31%) |
| Payments to International Financial Institutions - Direct Payments | 260,554 | 232,492 | 28,062 | 12% |
| Payments for consular assistance pursuant to the Public Health Events of National Concern Payments Act | 59,050 | - | 59,050 | 100% |
| Total budgetary authorities | 7,879,211 | 7,428,182 | 451,029 | 6% |
| Non-budgetary authorities | 146,281 | 37,441 | 108,840 | 291% |
| Total authorities | 8,025,492 | 7,465,623 | 559,869 | 7% |
i. Budgetary Authorities
Authorities for Operating Expenditures authorities have have increased by $56.1 million. Items contributing to changes in operating expenditures authorities include:
- Transfers from other government departments to provide support to departmental staff located at missions abroad;
- A transfer from Shared Services Canada for the cost of providing core information technology services to missions abroad;
- An increase in the Operating Budget Carry-Forward amount received in 2020-21 compared to 2019-20;
- Adjustments to account for Locally Engaged Staff salaries and related benefits incurred at missions abroad;
- Funding received for the new Export Diversification Strategy;
- Adjustments to account for the effects of inflation on overseas operations;
- Funding received to implement the Feminist International Assistance Agenda;
- Funding received for the International Education Strategy; and
- Funding received for the consular assistance pursuant to the Public Health Events of National Concern Payments Act.
These increases were partly offset by:
- A decrease related to the internal reallocation of resources for capital costs associated with the renovation of 125 Sussex Drive and the development of the Export Import Control System;
- A net decrease in funding received for Ensuring Rules-Based and Responsible Trade (softwood lumber); and
- A net decrease in funding received for Canada’s participation in Expo 2020 Dubai, United Arab Emirates.
Capital Expenditures authorities have increased by $37.1 million. This is mostly attributable to the following items:
- An increase related to the internal reallocation of resources for capital costs associated with the renovation of 125 Sussex Drive and the development of the Export Import Control System;
- An increase in the capital portion of the Duty of Care Special Purpose Allotment to support mission security abroad; and
- A decrease in the Capital Budget Carry-Forward amount received in 2020-21 compared to 2019-20.
Grants and Contributions authorities have increased by $267.8 million. Items contributing to changes in grants and contributions expenditures authorities include:
- Funding received to implement the Feminist International Assistance Agenda; and
- Funding to meet Canada始s 2019 G7 commitment to support wildfire response and preparedness in the Amazon Basin.
These increases were partly offset by:
- A decrease related to the 2015-2020 Strategy for Maternal, Newborn and Child Health;
- A technical adjustment to the spending authorities for International Financial Institutions – Direct payments;
- A decrease related to the cost of assessed contributions due to changes in the international organizations’ budgets and the impact of currency fluctuations. Payments are made in the prescribed currency of the assessed contributions; and
- A decrease related to the reprofile to support Operation IMPACT through the Middle East Strategy.
ii. Budgetary Statutory Authorities
Payments to International Financial Institutions for Direct Payments have increased by $28.1 million in the anticipated payments to International Financial Institutions.
Payments for consular assistance pursuant to the Public Health Events of National Concern Payments Acthave increased by $59.1 million to support consular assistance for Canadians abroad affected by the COVID-19 pandemic.
iii. Non-budgetary Authorities
The Department’s non-budgetary authorities have increased by $108.8 million. Items contributing to changes in non-budgetary authorities include:
- Funding received for Loans under the International Financial Assistance Act;
- A net increase in the payments to International Financial Institutions for capital subscriptions; and
- A net increase in Working Capital Advances.
B. Significant changes to budgetary expenditures by standard object
The following table shows the budgetary expenditures and revenues netted against expenditures of the Department for the period and their comparison with the same period last year.
| Standard object (in thousands of dollars) | April to December 2020-21 | April to December 2019-20 | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Expenditures | ||||
| Salaries and employee benefits | 988,236 | 953,799 | 34,437 | 4% |
| Transportation and communications | 56,362 | 89,029 | (32,667) | (37%) |
| Information | 9,419 | 13,939 | (4,520) | (32%) |
| Professional and special services | 199,264 | 201,070 | (1,806) | (1%) |
| Rentals | 149,319 | 151,651 | (2,332) | (2%) |
| Repair and maintenance | 15,006 | 16,748 | (1,742) | (10%) |
| Utilities, materials and supplies | 23,231 | 27,192 | (3,961) | (15%) |
| Other | 20,838 | 18,280 | 2,558 | 14% |
| Total Operating | 1,461,675 | 1,471,708 | (10,033) | (1%) |
| Acquisition of land, buildings and works | 12,737 | 10,409 | 2,328 | 22% |
| Acquisition of machinery and equipment | 38,633 | 31,847 | 6,786 | 21% |
| Total Acquisition | 51,370 | 42,256 | 9,114 | 22% |
| Transfer payments | 3,079,207 | 2,721,578 | 357,629 | 13% |
| Total gross budgetary expenditures | 4,592,252 | 4,235,542 | 356,710 | 8% |
| Less revenues netted against expenditures | ||||
| Revenue Credited to the Vote | 42,559 | 36,394 | 6,165 | 17% |
| TOTAL NET BUDGETARY EXPENDITURES | 4,549,693 | 4,199,148 | 350,545 | 8% |
i. Operating Expenditures
Salaries and employee benefits – The increase of $34.4 million is explained by:
- The regular increase in locally engaged staff salaries and related benefits paid at missions abroad;
- The renewal of collective agreements which resulted in increases to Canada based staff regular pay and retroactive salary payments;
- Increases in Foreign Service Directives’ allowances due to repatriation of Canada based staff;
- Overtime required due to COVID-19 initiatives in place by the Government of Canada (consular inquiries, repatriation of rotational staff, loans and general inquiries);
- Creation of new positions at HQ and missions; and
- Creation of new positions in the security program and the common service support.
Transportation and communications – The decrease of $32.7 million is explained by a significant decrease in travel costs due to the COVID-19 pandemic. These expenditures were partly offset by financial agreements made with airlines in order to repatriate Canadian citizens and permanent residents.
Information – The decrease of $4.5 million is explained by the ongoing global COVID-19 pandemic. A lot of event initiatives have been postponed to the next fiscal year 2021-2022 or have been delivered virtually, which considerably reduced costs.
Repair and maintenance – The decrease of $1.7 million is explained by a timing difference in the purchases for repair and maintenance at missions.
Utilities, materials and supplies – The decrease of $4 million is explained by a timing difference in the purchases for utilities, materials and supplies at missions.
Other – The increase of $2.6 million is mainly explained by payments made in 2020-2021 under a special financial assistance program: the COVID-19 Emergency Loan Program for Canadians Abroad. The increase was partly offset by a court settlement payment occurred in fiscal year 2019-2020 and currency adjustments made to foreign bank accounts also in 2019-2020.
ii. Capital Expenditures
Acquisition of land, buildings and works – The increase of $2.3 million is attributable to a major renovation project at Head Quarters. The renovation expenditures were partly offset by a delay in a project due to the COVID-19 pandemic and GAC Mail Distribution Centre Relocation.
Acquisition of machinery and equipment – The increase of $6.8 million is due to the acquisition of equipment and software to accommodate teleworking. These expenditures were partly offset by capital projects being cancelled because of the COVID-19 pandemic.
iii. Transfer Payments
The increase of $357.6 million is mainly explained by a payment made for the Partnership for Gender Equality that is part of the Feminist International Assistance Policy. This payment was partly offset by a timing difference in the payment cycle, delays in numerous projects resulting from the COVID-19 pandemic and projects completed last year.
iv. Revenues
The increase of $6.2 million originates from a timing difference in the recovery of costs from other organizations that share the department’s space and services at missions abroad (Co-locators).
3. Risks and Uncertainties
COVID-19
The coronavirus (COVID-19) is impacting organizations globally, including 抖淫视频, and it is unknown how long the pandemic will last. Numerous activities and available resources have been impacted by the pandemic (e.g. the repatriation effort, management of a new Emergency Loan Program, additional overtime required, additional consular inquiries, decrease in travel costs, delays in numerous projects, change in work practices, decrease in hospitality costs and bilateral visits, etc.). The overall effect of these events on the Department and its operations is too uncertain to be estimated at this time, however, the impacts will be accounted for when they are known and may be assessed.
For the year ended March 31, 2020, and for a new initiative in support of Canada's COVID-19 pandemic response, the Department received the approval and funding of $33.2 million for the Repatriation of Canadians stranded abroad. The funding was increased by an additional $59 million during the first three quarters of fiscal year 2020-2021.
In response to the unprecedented needs in developing countries related to the pandemic, programs have repurposed $390.8 million in operational projects (Vote 10). The department also secured an additional $1.225 billion in grants and contributions funding to help these countries in their response to the pandemic.
In October 2020, the Department launched the 2021-2022 corporate scenario planning process endorsed by the Corporate Management Committee. The process gave staff the skills to increase flexible and adaptive thinking during the pandemic. This year’s approach will:
- Allow staff to plan effectively and reduce risk given the uncertainties introduced by the COVID-19 crisis;
- Allow bureaus to reflect on what was learned over the past months, and to think innovatively on how to adapt our priorities, commitments and how we work; and
- Feed valuable information to corporate enablers (such as information management and information technology, human resources, finance) to help them better support the department under rapidly changing circumstances.
Some internal controls over financial reporting (ICFR) risks related to the COVID-19 pandemic response by the Department, have been identified and reflected in the ICFR monitoring plan in the 2019-2020 Annex to the Statement of Management Responsibility including Internal Control Over Financial Reporting. These risks include those related to IT general controls (Business continuity and System access) and business process controls such as year-end close, Foreign Service Directives and COVID-19 loan recovery. The Department will continue to monitor the changes to GAC’s Internal Control Over Financial Reporting that may occur due to the pandemic response.
As the Department navigates through this new reality, risk management is conducted to offer continuous support to optimize timely risk identification, assessment and mitigation strategies, while ensuring robust financial planning and oversight.
Other risks and uncertainties
As a federal department delivering a complex mandate in a rapidly changing international environment, GAC’s ability to deliver on its mandate is influenced by many factors. These factors include the political conditions, economic controls, social contexts and shifting global trends that expose the department to a broad range of risks, both domestically and abroad. Effective risk management is critical to the department’s ability to deliver results for Canadians. The Department undertakes formal risk exercises annually at headquarters, missions abroad and regional offices to review and validate the key risks in their operating environment and to assess the progress and effectiveness of their proposed risk responses.
The Enterprise Risk Management Strategy guides the Department in managing risks that affect strategic plans and priorities. The Department’s Strategic Risk Landscape and the Enterprise Risk Profile identify unique pressures associated with resource management and fiduciary oversight associated with geographically dispersed operations.
The Department continues to be more pragmatic and versatile in its management of risks and uncertainties associated with resources. Across the Department, branches and program areas have grown more attentive to the Department’s financial limitations as they are identifying their pressures earlier, reviewing their activities and available funds more frequently, and are increasingly utilizing forward planning. The current pandemic context, however, adds uncertainty to the level of expenditure forecasts and potential surpluses. The Department is in the process of implementing certain strategies to identify investment opportunities and reduce the risk of exceeding the maximum budget carry forward. The Department also continues to closely monitor salary expenditures since the federal government’s transition to centralized pay services. The Department is continually looking for opportunities to improve financial management practices, including those related to financial forecasting, and ensuring resources are available to implement priority activities.
The majority of funding to support the COVID-19 pandemic response will be available to the Department in the last week of the fiscal year through Supplementary Estimates C approvals. In order to respond to the pandemic in an effective and timely manner , the Department must balance risks and flexibilities, while ensuring authorities and procedures are followed.
The Department has applied a range of measures to manage the risks associated with fraud, such as increased training on fraud awareness and detection. The risk of fraud is considered in audit and advisory engagements, and more directly in mission audits. This fiscal year, a sample of missions will be selected to assess procurement activities through data analytics, in a remote manner, and the inspections of management executives in a sample of missions is planned in order to identify practices and controls of the highest risk factors.
Additional measures are being implemented, including: a Case Study to raise awareness; an updated procurement and contracting framework that includes the establishment of regional contract review boards for missions; and improved coordination on investigations and administrative measures.
The Department has fully implemented the recommendations from the Office of the Auditor General audit on Fraud Risk Management. These actions include improvements in the areas of training, communications, data analytics and client tools; the development of a comprehensive fraud risk management framework (including for grants and contributions); addressing system vulnerabilities and gaps in oversight; and updating the departmental Fraud Risk Assessment. A Grants and Contributions Fraud Protocol Framework was approved and procedures are currently being developed on how to deal with potential cases of fraud. In addition, a new grants and contributions Fraud Management Unit has been established to manage all allegations of fraud and mismanagement, as well as to build capacity to prevent and identify fraud.
4. Significant changes in relation to operations, personnel and programs
During the quarter, changes occured in relation to the following positions:
- Appointment of a new Assistant Deputy Minister, Consular, Security and Emergency Management;
- Appointment of a new Assistant Deputy Minister, sub-Saharan Africa;
- Appointment of a new Chief Trade Commissioner and Assistant Deputy Minister, International Business, Investment and Innovation; and
- Appointment of a new Assistant Deputy Minister, Europe, Arctic, Middle East and Maghreb branch.
Approval by Senior Officials
Approved, as required by the TB Policy on Financial Management:
Marta Morgan
Deputy Minister of Foreign Affairs
Anick Ouellette
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology
Ottawa, Ontario
Date: February 26, 2021
Statement of Authorities (Unaudited)
This table includes authorities available for use and granted by Parliament as at December 31, 2020
| Authorities (in thousands of dollars) | Fiscal year 2020-2021 | Fiscal year 2019-2020 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2021* | Used during the quarter ended December 31, 2020 | Year-to-date used at quarter-end | Total available for use for the year ending March 31, 2020* | Used during the quarter ended December 31, 2019 | Year-to-date used at quarter-end | |
| * Includes only authorities available for use and granted by Parliament at quarter-end. | ||||||
| Operating Expenditures | 1,948,993 | 437,622 | 1,220,820 | 1,892,898 | 473,924 | 1,305,638 |
| Capital Expenditures | 166,077 | 28,727 | 58,142 | 128,968 | 19,312 | 43,843 |
| Grants and Contributions | 5,233,809 | 1,027,114 | 2,846,942 | 4,966,027 | 828,716 | 2,499,190 |
| Locally engaged staff pensions, insurance and social security | 71,024 | 17,074 | 49,041 | 68,874 | 16,007 | 44,734 |
| Budgetary statutory authorities | ||||||
| Contributions to employee benefit plans | 115,275 | 28,958 | 87,419 | 114,420 | 27,608 | 83,238 |
| Ministers' salary and motor car allowance | 268 | 75 | 201 | 263 | 29 | 117 |
| Payments under the Diplomatic Service (Special) Superannuation Act | 900 | 157 | 443 | 500 | 74 | 432 |
| Debt forgiveness to Pakistan | 22,188 | - | - | 22,188 | - | - |
| Spending of proceeds from the disposal of surplus Crown assets | 1,073 | - | - | 1,552 | - | - |
| Payments to International Financial Institutions - Direct Payments | 260,554 | 276 | 231,822 | 232,492 | - | 221,956 |
| Payments for consular assistance pursuant to the Public Health Events of National Concern Payments Act | 59,050 | 54,863 | 54,863 | - | - | - |
| Total budgetary authorities | 7,879,211 | 1,594,866 | 4,549,693 | 7,428,182 | 1,365,670 | 4,199,148 |
| Non-budgetary authorities | 146,281 | (48,226) | (4,236) | 37,441 | (7,274) | (2,528) |
| Total authorities | 8,025,492 | 1,546,640 | 4,545,457 | 7,465,623 | 1,358,396 | 4,196,620 |
Departmental budgetary expenditures by standard object (Unaudited)
This table includes authorities available for use and granted by Parliament as at December 31, 2020.
| Standard object (in thousands of dollars) | Fiscal year 2020-2021 | Fiscal year 2019-2020 | ||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2021 | Expended during the quarter ended December 31, 2020 | Year-to-date used at quarter-end | Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended December 31, 2019 | Year-to-date used at quarter-end | |
| Expenditures | ||||||
| Salaries and employee benefits | 1,282,148 | 333,545 | 988,236 | 1,247,737 | 336,226 | 953,799 |
| Transportation and communications | 181,457 | 36,522 | 56,362 | 154,230 | 32,487 | 89,029 |
| Information | 30,751 | 4,341 | 9,419 | 28,293 | 6,410 | 13,939 |
| Professional and special services | 358,385 | 96,741 | 199,264 | 362,439 | 84,849 | 201,070 |
| Rentals | 260,274 | 47,909 | 149,319 | 230,511 | 44,053 | 151,651 |
| Repair and maintenance | 39,576 | 7,594 | 15,006 | 33,712 | 6,901 | 16,748 |
| Utilities, materials and supplies | 57,279 | 9,006 | 23,231 | 57,057 | 10,514 | 27,192 |
| Acquisition of land, buildings and works | 48,633 | 10,654 | 12,737 | 62,408 | 3,943 | 10,409 |
| Acquisition of machinery and equipment | 140,362 | 17,630 | 38,633 | 68,248 | 16,793 | 31,847 |
| Transfer payments | 5,495,263 | 1,027,548 | 3,079,207 | 5,199,018 | 828,789 | 2,721,578 |
| Other | 34,108 | 7,061 | 20,838 | 31,864 | 1,627 | 18,280 |
| Total gross budgetary expenditures | 7,928,236 | 1,598,551 | 4,592,252 | 7,475,517 | 1,372,592 | 4,235,542 |
| Less revenues netted against expenditures | ||||||
| Revenue Credited to the Vote | 49,025 | 3,685 | 42,559 | 47,335 | 6,922 | 36,394 |
| Total revenues netted against expenditures | 49,025 | 3,685 | 42,559 | 47,335 | 6,922 | 36,394 |
| Total net budgetary expenditures | 7,879,211 | 1,594,866 | 4,549,693 | 7,428,182 | 1,365,670 | 4,199,148 |
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