Quarterly Financial Report for the period ended September 30, 2023
Table of contents
- Statement outlining results, risks and significant changes in operations, personnel and programs
- Highlights of Fiscal Quarter and Fiscal Year to Date Results
- Significant Changes to Authorities
- Significant Changes to Cumulative Budgetary Expenditures by Standard Object and by Authorities
- Significant Changes to Quarterly Budgetary Expenditures by Standard Object and by Authorities
- Risks and Uncertainties
- Significant Changes in Operations, Personnel and Programs
Statement outlining results, risks and significant changes in operations, personnel and programs
Introduction
This report for the quarter ended September 30, 2023 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 抖淫视频's (GAC) programs can be found in Part II of 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 GAC's spending authorities granted by Parliament, and those used by GAC, consistent with the Main Estimates and Supplementary Estimates (as applicable) for the fiscal year 2023-2024. 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.
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 are on an expenditure basis.
Highlights of Fiscal Quarter and Fiscal Year to Date Results
1. Significant Changes to Authorities
The following table shows the total budget available for use by GAC, which includes authorities available for use and granted by Parliament as at September 30.
(in thousands of dollars) | Total available for use for the year ending | Total available for use for the year ending | Variance | |
|---|---|---|---|---|
$ | % | |||
Authorities | ||||
Vote 1 - Operating expenditures | 2,004,370 | 1,977,987 | 26,383 | 1% |
Vote 5 - Capital expenditures | 212,348 | 230,464 | (18,116) | (8%) |
Vote 10 - Grants and contributions | 4,946,750 | 4,904,814 | 41,936 | 1% |
Vote 15 - Payments of pension, insurance and social | 102,536 | 91,817 | 10,719 | 12% |
Statutory authorities | ||||
Payments to international financial institutions | 241,075 | 257,362 | (16,287) | (6%) |
Contributions to employee benefit plans | 126,899 | 122,728 | 4,171 | 3% |
Debt forgiveness to Pakistan | 22,187 | 22,187 | - | 0% |
Other statutory authorities | 3,980 | 3,612 | 368 | 10% |
Total budgetary authorities | 7,660,145 | 7,610,971 | 49,174 | 1% |
i. Authorities for Operating, Capital and Grants and Contributions
The variances for these three types of expenditures are consistent to the variances reported in the first quarter ended June 30, 2023, with addition of the following:
- Decrease of $44 million in the operating budget carry forward amount received in 2023-24 compared to prior year; and
- Decrease of $15 million in the capital budget carry forward amount received in 2023-24 compared to prior year.
ii. Total Budgetary Authorities
The overall variance for total budgetary authorities is not significant, as it represents a small increase of 1% compared to the same quarter in previous year. This small increase for this quarter is consistent to the variances observed for quarters ending September 30th, before the COVID-19 pandemic.
2. Significant Changes to Cumulative Budgetary Expenditures by Standard Object and by Authorities
The following table shows the net budgetary expenditures and authorities used for the first six months of the fiscal year and their comparison for the same period last year.
(in thousands of dollars) | April to September | April to September | Variance | |
|---|---|---|---|---|
$ | % | |||
Expenditures | ||||
Salaries and employee benefits | 746,267 | 696,114 | 50,153 | 7% |
Professional and special services | 136,385 | 116,575 | 19,810 | 17% |
Rentals | 126,795 | 118,643 | 8,152 | 7% |
Transportation and communications | 59,284 | 50,501 | 8,783 | 17% |
Information | 8,223 | 7,015 | 1,208 | 17% |
Repair and maintenance | 11,760 | 10,133 | 1,627 | 16% |
Utilities, materials and supplies | 18,635 | 16,727 | 1,908 | 11% |
Acquisition of land, buildings and works | 3,512 | 3,013 | 499 | 17% |
Acquisition of machinery and equipment | 12,915 | 12,132 | 783 | 6% |
Other | 1,940 | 1,997 | (57) | (3%) |
Total Operating and Acquisition | 1,125,716 | 1,032,850 | 92,866 | 9% |
Transfer payments | 1,693,193 | 1,798,760 | (105,567) | (6%) |
Total Gross Budgetary Expenditures | 2,818,909 | 2,831,610 | (12,701) | (0%) |
Less revenues netted against expenditures | ||||
Revenue credited to the vote | 53,800 | 46,037 | 7,763 | 17% |
Total net budgetary expenditures | 2,765,109 | 2,785,573 | (20,464) | (1%) |
Authorities | ||||
Vote 1 - Operating expenditures | 939,643 | 863,002 | 76,641 | 9% |
Vote 5 - Capital expenditures | 31,500 | 23,687 | 7,813 | 33% |
Vote 10 - Grants and contributions | 1,498,053 | 1,606,817 | (108,764) | (7%) |
Vote 15 - Payments of pension, insurance and social | 36,207 | 37,833 | (1,626) | (4%) |
Statutory authorities | ||||
Payments to international financial institutions | 194,850 | 191,726 | 3,124 | 2% |
Contributions to employee benefit plans | 64,431 | 62,152 | 2,279 | 4% |
Other statutory authorities | 425 | 356 | 69 | 19% |
Total budgetary authorities | 2,765,109 | 2,785,573 | (20,464) | (1%) |
i. Operating and Acquisition Expenditures
Operating and acquisition expenditures increased by $93 million, which is mainly explained by:
- Increase of $50 million in salaries and employee benefits due to:
- Renewal of multiple collective agreements, which resulted in increases to Canadian based staff (CBS) regular pay and retroactive salary payments;
- Regular increase in locally engaged staff (LES) salaries and related benefits paid at missions abroad; and
- Increase of the contributions to pension plans for CBS and LES who work in missions abroad;
- Increase of $20 million in professional and special services due to:
- Increase in engineering and architectural services due to renovations completed in certain missions abroad;
- Increase in expenditures related to computer systems management and office systems management; and
- Increase in expenditures for protection services at missions abroad;
- Increase of $9 million in transportation and communications due to:
- Increase in relocation expenses during cross-postings and other admissible fees related to the Foreign Service Directives; and
- Increase of travel expenses related to Public Servants travelling outside Canada in support of the direct delivery of the core mandate of GAC.
- Remaining increase of $14 million is due to multiple smaller increases and decreases.
ii. Transfer Payments
Transfer payments decreased by $106 million, which is mainly explained by:
- Decrease of payments to Canadian non-governmental organizations for international development assistance, more particularly, payments of grants related to partnership programming; and
- Decrease in payments to the United Nations and related organizations for international development assistance.
3. Significant Changes to Quarterly Budgetary Expenditures by Standard Object and by Authorities
The following table shows the net budgetary expenditures and authorities used for the quarter ended September 30, 2023, and the comparison for the same period last year.
(in thousands of dollars) | July to September | July to September | Variance | |
|---|---|---|---|---|
$ | % | |||
Expenditures | ||||
Salaries and employee benefits | 413,200 | 349,289 | 63,911 | 18% |
Professional and special services | 83,654 | 69,794 | 13,860 | 20% |
Rentals | 59,441 | 58,345 | 1,096 | 2% |
Transportation and communications | 31,758 | 30,226 | 1,532 | 5% |
Information | 5,285 | 4,481 | 804 | 18% |
Repair and maintenance | 8,542 | 7,456 | 1,086 | 15% |
Utilities, materials and supplies | 10,847 | 9,507 | 1,340 | 14% |
Acquisition of land, buildings and works | 3,244 | 2,264 | 980 | 43% |
Acquisition of machinery and equipment | 9,157 | 8,622 | 535 | 6% |
Other | 1,672 | 1,182 | 490 | 41% |
Total Operating and Acquisition | 626,800 | 541,166 | 85,634 | 16% |
Transfer payments | 985,347 | 1,010,631 | (25,284) | (3%) |
Total Gross Budgetary Expenditures | 1,612,147 | 1,551,797 | 60,350 | 4% |
Less revenues netted against expenditures | ||||
Revenue credited to the vote | 32,804 | 31,269 | 1,535 | 5% |
Total net budgetary expenditures | 1,579,343 | 1,520,528 | 58,815 | 4% |
Authorities | ||||
Vote 1 - Operating expenditures | 522,274 | 448,107 | 74,167 | 17% |
Vote 5 - Capital expenditures | 23,141 | 16,062 | 7,079 | 44% |
Vote 10 - Grants and contributions | 862,024 | 989,984 | (127,960) | (13%) |
Vote 15 - Payments of pension, insurance and social | 16,332 | 14,631 | 1,701 | 12% |
Statutory authorities | ||||
Payments to international financial institutions | 123,169 | 20,580 | 102,589 | 498% |
Contributions to employee benefit plans | 32,139 | 31,026 | 1,113 | 4% |
Other statutory authorities | 264 | 138 | 126 | 91% |
Total budgetary authorities | 1,579,343 | 1,520,528 | 58,815 | 4% |
i. Operating and Acquisition Expenditures
Operating and acquisition expenditures increased by $86 million, which is mainly explained by:
- Increase of $64 million in salaries and employee benefits due to:
- Renewal of multiple collective agreements, which resulted in increases to CBS regular pay and retroactive salary payments;
- Regular increase in LES salaries and related benefits paid at missions abroad;
- Increase of $14 million in professional and special services due to:
- Increase in engineering and architectural services due to renovations completed in certain missions abroad;
- Increase in expenditures related to computer systems management and office systems management; and
- Increase in expenditures for protection services at missions abroad;
- Increase of $1 million in acquisition of lands, buildings and works due to an increase in expenditures for purchase of works through Public Works and Government Services Canada (PWGSC) and increase in expenditures related to residential building construction work; and
- Remaining increase of $7 million is due to multiple smaller increases and decreases.
ii. Transfer Payments
Transfer payments decreased by $25 million, which is mainly explained by:
- Decrease of payments to Canadian non-governmental organizations for international development assistance, more particularly, payments of grants related to partnership programming; and
- Decrease in payments to the United Nations and related organizations for international development assistance.
iii. Payments to International Financial Institutions
Payments to international financial institutions increased by $103 million, which is mainly explained by the fact, that a significant initial payment was made in the current quarter compared to the first quarter in the previous year.
4. Risks and Uncertainties
As a federal department delivering a complex mandate in a rapidly changing international environment, GAC is influenced by many factors. These factors include the political conditions, economic controls, global inflation, social contexts and shifting global trends, including geopolitical dynamics and climate risks.
At any time, each of the aforementioned factors, or a combination thereof, could expose GAC, whether domestically, abroad, or both. As such, effective risk management is critical to GAC’s ability to deliver results for Canadians. For such reasons, GAC undertakes reviews, either annually or every two years, to validate key operational risks and to assess the progress and effectiveness of their proposed responses. Risks are managed diligently, and an agile approach is undertaken to avoid undue risk to program integrity.
The GAC Enterprise Risk Management Strategy guides departmental officials in managing risks that affect strategic plans and priorities. With this approach, GAC’s Strategic Risk Landscape and the Enterprise Risk Profile serve to identify unique pressures associated with resource management and fiduciary oversight associated with geographically dispersed operations. Key strategic risks that are being tracked are mitigated by allocating more resources are related to: health, safety and well-being of the workforce, IT Infrastructure, cyber/digital security and resilience and the management and security of real property and assets. These risks have also been reflected in GAC’s Corporate Management Agenda, an internal process put in place to ensure senior-level and department-wide engagement on key corporate priorities in support of a more agile and responsive department.
GAC continues to be pragmatic and versatile in its management of risks and uncertainties associated with resources. GAC is in the process of implementing certain strategies to identify investment opportunities while working to improve grants and contributions project costing analytics, by strengthening financial data capabilities. GAC is also implementing strategies to manage the financial pressures related to non-discretionary activities and absorb the recent budget reductions announced in the budget 2023 which have an impact on the current year and the coming years.
GAC has applied a range of measures to manage risks associated with fraud, such as training on awareness and detection. The risk of fraud is considered in audit and advisory engagements and two audits of missions are planned during this fiscal year. Further, an Audit of Procurement of Consulting Services will be presented to the Departmental Audit Committee in December. GAC continues to assess, on a risk basis, its internal controls over financial reporting at headquarters and at missions, and will be reporting on its internal controls over financial management, as per the requirements of the Treasury Board Policy on financial management. On the transfer payment programming side, GAC considers fraud risk as part of its recipient audit and continues to strengthen the fraud management capacity of recipient organizations via dedicated team.
5. Significant Changes in Operations, Personnel and Programs
During the quarter, changes occurred in relation to the following positions:
- Appointment of a new Minister of International Development;
- Appointment of a new Assistant Deputy Minister of Europe, Arctic, Middle East and Maghreb branch; and
- Appointment of a new Assistant Deputy Minister of the Corporate Planning, Finance and Information Technology branch.
Approval by Senior Officials
Approved, as required by the TB Policy on Financial Management:
David Morrison
Deputy Minister of Foreign Affairs
Shirley Carruthers
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology
Ottawa, Ontario
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