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Global Affairs Canada
Quarterly Financial Report
For the period ended December 31, 2015
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, 2015 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 Part II of the Main Estimates.
Basis of Presentation
This quarterly report has been prepared using an expenditure basis of accounting. 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 for the fiscal year 2015-16. 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 special 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.
Global Affairs Canada uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance 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, 2015 are included.
| Authorities (In thousands of dollars) | Fiscal Year 2015-2016 | Fiscal Year 2014-2015 | Variance | |
|---|---|---|---|---|
| Total available for use for the year ending March 31, 2016 | Total available for use for the year ending March 31, 2015 | $ | % | |
| Operating expenditures | 1,504,107 | 1,482,643 | 21,464 | 1% |
| Capital Expenditures | 155,070 | 320,929 | (165,859) | -52% |
| Grants and Contributions | 3,573,410 | 3,431,565 | 141,845 | 4% |
| Locally engaged staff pensions, insurance and social security | 60,802 | 50,779 | 10,023 | 20% |
| Budgetary statutory authorities | ||||
| Contributions to employee benefit plans | 102,249 | 97,838 | 4,411 | 5% |
| Ministers' salary and motor car allowance | 248 | 243 | 5 | 2% |
| Payments under the Diplomatic Service (Special) Superannuation Act | 250 | 250 | - | 0% |
| Debt forgiveness to Pakistan | 124,640 | 172,252 | (47,612) | -28% |
| Spending of proceeds from the disposal of surplus Crown assets | 1,713 | 2,908 | (1,195) | -41% |
| Refunds of amounts credited to revenues in previous years | 18 | 16 | 2 | 13% |
| Payment to the World Bank for the Advance Market Commitment for Pneumococcal Vaccines | - | 10,916 | (10,916) | -100% |
| Payments to International Financial Institutions Encashment of notes | - | 211,800 | (211,800) | -100% |
| Payments to International Financial Institutions Direct Payments | 245,000 | 33,200 | 211,800 | 638% |
| Total Budgetary authorities | 5,767,507 | 5,815,339 | (47,832) | -1% |
| Non-budgetary authorities | 68,119 | 79,632 | (11,513) | -14% |
| Total Authorities | 5,835,626 | 5,894,971 | (59,345) | -1% |
i. Budgetary Authorities
Operating Expenditures authorities haveincreased by $21.5 million. This is mainly due to currency exchange fluctuations on operating expenditures and locally engaged staff salaries, inflation on overseas operating costs and funding received for the operations of the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund.
Capital Expenditures authorities have decreased by $165.9 million. This is attributable to the funding for the consolidation of the Canadian High Commission at Trafalgar Square, London, received in 2014-15. Changes in the funding profile related to the Moscow Chancery Relocation Project also contributed to this decrease which was offset by an increase of the capital budget carry-forward.
Grants and Contributions authorities have increased by $141.8 million. This is mainly due to the funding received for the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund. New funding to support the Global Fund to Fight AIDS, Tuberculosis and Malaria also contributed to this increase.
Locally engaged staff pension, insurance and social security authorities have increased by $10.0 million. As part of the management of the Locally Engaged Staff (LES) pension, insurance and social security program, Global Affairs Canada annual funding requests reflect the requirements that payments in respect of such employee benefits are met.
ii. Budgetary Statutory Authorities
Contributions to employee benefits plans (EBP) statutory have increased by $4.4 million. This is mainly due to the salary components of the funding received for the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund, currency exchange fluctuations on Locally Engaged Staff salaries and compensation for collective bargaining agreements. This was partially offset by funding received through Supplementary Estimates B in the third quarter for 2014-15 for Locally Engaged Staff salary revisions not provided in the first quarter and second quarter.
Debt forgiveness to Pakistan of $124.6 million represents the available balance from previous years. For 2014-15, the opening balance was $172.2 million of which $47.6 million was used during the year. In 2006-2007, the Government of Canada, as represented by the Department, entered into an agreement with the Government of Pakistan to forgive its outstanding $447.5 million loan. In order to expire its debt obligation, the Government of Pakistan is required to make corresponding investments in their education sector.
Payments to International Financial Institutions (IFI) authorities were the same compared to last year. The authorities available in 2014-15 reflected the former payment method through the encashment of notes by IFI, whereas this year’s amounts reflect the more administratively efficient method to make payments to IFI through direct payments.
iii. Non-budgetary Authorities
The Department’s non-budgetary authorities have decreased by $11.5 million. This is largely caused by a reduction in the Working Capital Advances for loans and advances to personnel and posts abroad. In addition, there was a decrease in the anticipated payments to International Financial Institutions for capital subscriptions.
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 first three quarters and their comparison with the same period last year.
| (in thousands of dollars) | April to December 2015-16 | April to December 2014-15 | Variance | |
|---|---|---|---|---|
| $ | % | |||
| Expenditures | ||||
| Salaries and employee benefits | 800,580 | 796,662 | 3,918 | 0% |
| Transportation and communications | 71,394 | 74,613 | (3,219) | (4%) |
| Information | 5,613 | 6,075 | (462) | (8%) |
| Professional and special services | 153,421 | 140,467 | 12,954 | 9% |
| Rentals | 156,709 | 150,359 | 6,350 | 4% |
| Repair and maintenance | 15,734 | 17,362 | (1,628) | (9%) |
| Utilities, materials and supplies | 27,323 | 27,911 | (588) | (2%) |
| Other | 7,715 | 22,245 | (14,530) | (65%) |
| Total Operating | 1,238,489 | 1,235,694 | 2,795 | 0% |
| Acquisition of land, buildings and works | 27,744 | 95,363 | (67,619) | (71%) |
| Acquisition of machinery and equipment | 20,592 | 19,469 | 1,123 | 6% |
| Total Acquisition | 48,336 | 114,832 | (66,496) | (58%) |
| Transfer payments | 1,989,200 | 1,613,422 | 375,778 | 23% |
| Total gross budgetary expenditures | 3,276,025 | 2,963,948 | 312,077 | 11% |
| Less revenues netted against expenditures | ||||
| Revenue Credited to the Vote | 25,480 | 31,200 | (5,720) | (18%) |
| Total Net Budgetary Expenditures | 3,250,545 | 2,932,748 | 317,797 | 11% |
i. Operating Expenditures
Transportation and communications – The decrease of $3.2 million is caused by a timing difference from the recovery of mission mobile device costs from Shared Services Canada as well as a reduction in shipment costs for personnel abroad.
Professional and special services – The increase of $13.0 million is primarily explained by higher costs this fiscal year related to security at missions abroad, the IM/IT consulting services, the timing of security invoices from another government department and fees paid for the management of new trade offices abroad.
Rentals – The increase of $6.4 million is due in part to regular increases in rent of office and residential leases abroad as well as fluctuations in foreign and domestic currencies.
Repair and maintenance – The decrease of $1.6 million is mostly attributable to decreased expenditures on the repair and maintenance of residential buildings (staff quarters) abroad this fiscal year.
Other – The decrease of $14.5 million is mostly due to the implementation of the salary payment in arrears by the Government of Canada in 2014-2015. This process required a one-time transition payment which caused this variance. This difference was offset by the impact of foreign exchange due to a lower Canadian dollar.
ii. Capital Expenditures
Acquisition of land, building and works –The decrease of $67.6 million is attributed to the renovation costs incurred in 2014-15 for the Canada House revitalization project in London. Acquisitions made in 2015-2016 that relate to the “Official Residences right sizing” program also contributed to this variance.
iii. Transfer Payments
The increase of $375.8 million in transfer payments is, for the most part, a result of disbursements made to the World Bank for the Global Fund to fight AIDS, Tuberculosis and Malaria as well as a grant to the United Nations Development Program to provide long term institutional support to this organization. A payment to the United Nations Population Fund for the Child, Early and Forced Marriage initiative and humanitarian assistance related to the Syrian crisis have also contributed to this increase.
iv. Revenues
The decrease of $5.7 million in revenues originates from a timing difference in the recovery by Global Affairs Canada of shared costs from other organizations co-located at missions.
3. Risks and Uncertainties
Given Global Affairs Canada’s mandate, the department must operate in a constantly changing environment that is influenced by many external factors (political, global economic, export and import controls, social contexts) including shifting of global trends. In addition, the department must operate in a time of fiscal restraint as a result of the operating budget freeze that was announced for all government departments and agencies in Budget 2014.
In recognition of this environment, a new integrated business planning process was implemented to support risk management through enhanced monitoring of risk and mitigation strategies. The department has also improved financial forecasting and continues to find ways to absorb or fund activities within existing spending authorities without compromising program results.
4. Significant changes in relation to operations, personnel and programs
The following senior appointments took place during the quarter:
- Senior Associate Deputy Minister of Foreign Affairs, Peter Boehm is supporting the Minister of International Development until a Deputy Minister of International Development is confirmed.
- Hugh Adsett was appointed to act as Assistant Deputy Minister Consular, Security, and Legal (legal adviser).
- Brahim Achtoutal was appointed to the position of Chief Audit Executive.
- Mark Gwozdecky was appointed to act as Assistant Deputy Minister of International Security and Political Affairs.
- Alex Bugailiskis was appointed to the position of Assistant Deputy Minister, Europe, Middle East and Maghreb.
The Government has announced that the name of the Department will be changed to Global Affairs Canada.
Approval by Senior Officials
Approved, as required by the TB Policy on Financial Resource Management, Information and Reporting:
Daniel Jean
Deputy Minister of Foreign Affairs
T. Christine Hogan
Deputy Minister of International Trade
Peter M. Boehm
A/Deputy Minister of International Development
Arun Thangaraj
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology
Ottawa, Ontario
Date: February 29, 2016
| (In thousands of dollars) | Fiscal Year 2015-2016 | Fiscal Year 2014-2015 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2016 | Expended during the quarter ended December 31, 2015 | Year to date used at quarter end | Total available for use for the year ending March 31, 2015 | Expended during the quarter ended December 31, 2014 | Year to date used at quarter end | |
| Operating Expenditures | 1,504,107 | 350,125 | 1,080,291 | 1,482,643 | 365,270 | 1,075,693 |
| Capital Expenditures | 155,070 | 25,952 | 66,177 | 320,929 | 58,236 | 135,853 |
| Grants and Contributions | 3,573,410 | 745,978 | 1,748,955 | 3,431,565 | 662,728 | 1,390,646 |
| Locally engaged staff pensions, insurance and social security | 60,802 | 13,206 | 36,023 | 50,779 | 12,163 | 34,533 |
| Budgetary statutory authorities | ||||||
| Contributions to employee benefit plans | 102,249 | 25,750 | 77,436 | 97,838 | 24,241 | 73,048 |
| Ministers' salary and motor car allowance | 248 | 42 | 167 | 243 | 61 | 182 |
| Payments under the Diplomatic Service (Special) Superannuation Act | 250 | 18 | 205 | 250 | 50 | 118 |
| Debt forgiveness to Pakistan | 124,640 | - | - | 172,252 | - | - |
| Spending of proceeds from the disposal of surplus Crown assets | 1,713 | 1,233 | 1,233 | 2,908 | - | - |
| Refunds of amounts credited to revenues in previous years | 18 | (0) | 18 | 16 | 16 | 16 |
| Payment to the World Bank for the Advance Market Commitment for Pneumococcal Vaccines | - | - | - | 10,916 | - | 10,916 |
| Payments to International Financial Institutions Encashment of notes | - | - | - | 211,800 | 12,500 | 211,743 |
| Payments to International Financial Institutions Direct Payments | 245,000 | 12,500 | 240,040 | 33,200 | - | - |
| Total Budgetary authorities | 5,767,507 | 1,174,804 | 3,250,545 | 5,815,339 | 1,135,265 | 2,932,748 |
| Non-budgetary authorities | 68,119 | 30,383 | 29,902 | 79,632 | (3,690) | 4,398 |
| Total Authorities | 5,835,626 | 1,205,187 | 3,280,447 | 5,894,971 | 1,131,575 | 2,937,146 |
| (In thousands of dollars) | Fiscal Year 2015-2016 | Fiscal Year 2014-2015 | ||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2016 | Expended during the quarter ended December 31, 2015 | Year to date used at quarter end | Planned expenditures for the year ending March 31, 2015 | Expended during the quarter ended December 31, 2014 | Year to date used at quarter end | |
| Expenditures | ||||||
| Salaries and employee benefits | 1,018,166 | 264,556 | 800,580 | 962,831 | 264,833 | 796,662 |
| Transportation and communications | 80,840 | 25,362 | 71,394 | 98,839 | 27,081 | 74,613 |
| Information | 11,323 | 2,323 | 5,613 | 13,580 | 2,583 | 6,075 |
| Professional and special services | 294,470 | 62,710 | 153,421 | 286,510 | 56,406 | 140,467 |
| Rentals | 209,933 | 41,813 | 156,709 | 226,781 | 43,584 | 150,359 |
| Repair and maintenance | 39,521 | 4,126 | 15,734 | 35,338 | 7,041 | 17,362 |
| Utilities, materials and supplies | 55,840 | 9,756 | 27,323 | 56,972 | 10,839 | 27,911 |
| Acquisition of land, buildings and works | 90,090 | 11,620 | 27,744 | 209,725 | 40,041 | 95,363 |
| Acquisition of machinery and equipment | 66,711 | 9,955 | 20,592 | 112,083 | 9,683 | 19,469 |
| Transfer payments | 3,818,660 | 758,496 | 1,989,200 | 3,687,730 | 675,279 | 1,613,422 |
| Other | 129,178 | 1,179 | 7,715 | 174,287 | (114) | 22,245 |
| Total gross budgetary expenditures | 5,814,732 | 1,191,896 | 3,276,025 | 5,864,676 | 1,137,256 | 2,963,948 |
| Less revenues netted against expenditures | ||||||
| Revenue Credited to the Vote | 47,225 | 17,092 | 25,480 | 49,337 | 1,991 | 31,200 |
| Total revenues netted against expenditures | 47,225 | 17,092 | 25,480 | 49,337 | 1,991 | 31,200 |
| Total Net Budgetary Expenditures | 5,767,507 | 1,174,804 | 3,250,545 | 5,815,339 | 1,135,265 | 2,932,748 |
- Date Modified:
