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Quarterly Financial Report - For the quarter ended December 31, 2011

Statement outlining results, risks and significant changes in operations, personnel and program

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Introduction

Mandate:

The Minister of Public Safety is the minister responsible for the RCMP.  The responsibilities of the RCMP are set out in section 18 of the Royal Canadian Mounted Police Act.  The RCMP’s mandate is multi-faceted, it includes preventing and investigating crime; maintaining peace and order; enforcing laws; contributing to national security; ensuring safety of state officials, visiting dignitaries and foreign missions; and providing vital operational support services to other police and law enforcement agencies within Canada and aboard.

Further information on the mandate, roles, responsibilities and programs of the RCMP can be found in the Royal Canadian Mounted Police 2011-12 Main Estimates, available on the following website: http://www.tbs-sct.gc.ca/est-pre/20112012/me-bpd/docs/me-bpd-eng.pdf

  • This quarterly financial report:
    • Should be read in conjunction with the 2011-12 Main Estimates and the 2011-12 Supplementary Estimates (B);
    • 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 Accounting Standard 1.3; and
    • Has not been subject to external audit or review.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Royal Canadian Mounted Police’s spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and Supplementary Estimates (B) for the 2011-12 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.

The Royal Canadian Mounted Police 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 a cash expenditure basis.

Highlights of fiscal quarter and fiscal year to date (YTD) results

Statement of Authorities

Authorities increased during the third quarter of 2011-12 to $3,239.1 million due to allocations from Treasury Board Central Votes for compensation adjustments ($0.2 million), paylist requirements ($91.5 million) and from the introduction in Supply of the 2011-12 Supplementary Estimates (B) which totaled $100.1 million.

Major initiatives included in 2011-12 Supplementary Estimates (B) include a $35 million transfer from Public Safety and Emergency Preparedness for First Nations Community Policing Services, $10 million to continue work on the inclusion of biometrics in the temporary visa stream, $9.3 million to extend the deployment of police in Haiti for post-earthquake stabilization and reconstruction efforts and $8.1 million in grant funding to increase the grant to compensate members for injuries received in the performance of duty.

The Treasury Board Central Vote transfer for paylist requirements included reimbursements of $91.5 million for expenditures incurred up to November 30, 2011 to meet legal requirements of the employer. These expenditures include parental and maternity leave, entitlements upon cessation of service or employment and adjustments made to terms and conditions of service and employment in the public service. Of this amount, $41.9 million is related to liquidation of severance pay as a result of revisions to specified collective agreements.

Long description

Statement of Departmental Budgetary Expenditures by Standard Object

The Royal Canadian Mounted Police has spent approximately 76% of its authorities at the end of the third quarter, compared with 68% in the previous year (as demonstrated in the chart below), when vote netted revenues are taken into consideration. However, vote netted revenues collected during the third quarter of 2011-12 compared to the same quarter last fiscal year are down $239 million, which is related to the timing of payments recorded. Overall revenue collected by year-end is expected to be consistent with revenue authorities. When comparing year-over-year expenditures, excluding revenues received, the RCMP has spent 66% of its authorities at the end of the third quarter compared to 67% for the same period last year. Therefore, overall trending in expenditures as a proportion of authorities is in line with last year’s spend.

Long description

The increase in year to date expenditures in personnel is largely related to paylist requirements. Of the $65.8 million increase, $43.3 million incurred up to December 31, 2011 is related to liquidation of severance pay as a result to revisions to specified collective agreements.  The balance of the increase can be attributed to a 1.5% increase in salary expenditures related to collective bargaining agreements.

Reductions in expenditures by standard object during the third quarter of 2011-12 compared to the same quarter of 2010-11 are largely related to the G8/G20 Summits, held in June 2010, as is evident by the decrease in transportation and communications ($ 4.4 million) and in professional and special services ($13.1 million). Year to date expenditures at the end of the third quarter in 2011-12 compared to the same period of the previous year shows a decrease of $7.5M in rentals which is also largely related to the G8/G20 Summits.

The decrease in year to date expenditures in transfer payments is largely related to timing of expenditures made through the grant to compensate members of the Royal Canadian Mounted Police for injuries received in the performance of duty. Total expenditures for this grant are expected to be in line with authorities received in 2011-12 which is higher than authorities for the same grant last fiscal year due to increases in the number of benefit recipients as well as indexation of benefits.

Risks and Uncertainties

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates and Supplementary Estimates (B) for which supply was released in December 2011 in addition to central vote transfers for the capital and operating budget carry forwards as well as for paylist requirements and compensation adjustments.

The RCMP is funded through annual appropriations, as a result, operations are impacted by any changes in funding approved through Parliament. The RCMP also receives a significant amount of funding through respendable revenues from the provision of policing services to provinces, territories, municipalities and first nations communities.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. Departments would not be funded for 2010-11 to 2012-13 wage and salary increases resulting from collective agreements. The RCMP had already begun taking measures in fiscal year 2009-10 to address a rapidly changing economic climate in order to mitigate the impact of potential funding restrictions.

Significant changes in relation to operations, personnel and programs

Changes in Key Senior Personnel

Prime Minister Stephen Harper announced on November 16, 2011 the appointment of Bob Paulson as the new Commissioner of the Royal Canadian Mounted Police, effective November 21, 2011.

Changes in Operations

A significant change in operations from 2010-11 to 2011-12 is attributed to the activities surrounding the 2010 G8/G20 Summits, which is highlighted when comparing the financials between fiscal years.   2010-11 included one-time funding for these events.

Changes in Programs

On August 4, 2011, the Government of Canada announced the creation of Shared Services Canada to consolidate and streamline the delivery of email, data centre, and network services for 43 departments and agencies.  The RCMP has been identified as one of the 43 organizations that will transfer some IT services and associated staff to the new agency.  Further, effective November 15, 2011, by Order in Council P.C. 2011-1297, all unexpended money relating to the new Shared Services Canada (Operating and Capital expenditures) has been deemed to be appropriated. However, at this time those funds are still reflected in the RCMP’s authorities, as well as in the expenditures.

Approval by Senior Officials

This section is to provide the approval of Senior Officials, as required by the Policy on Financial Resource Management, Information and Reporting as follows:

Approved by:

Bob Paulson,
Commissioner
Alain P. Séguin
Chief Financial and Administrative Officer

Ottawa, Canada
February 13, 2012


Statement of Authorities (Unaudited)

For the quarter ended December 31, 2011
 (in thousands of dollars)

Fiscal Year 2011-2012
  Total available for use for the year ending March 31, 2012 * Used during the quarter ended December 31, 2011 Year to date used at quarter-end
Gross Operating expenditures 3,988,587 953,922 2,740,300
Less: Vote Netted Revenues 1,716,932 396,115 819,730
Vote 45 - Net Operating expenditures 2,271,654 557,807 1,920,570
Vote 50 - Capital expenditures 354,309 37,066 103,300
Vote 55 - Grants and contributions 128,437 25,862 77,324
Contributions to employee benefit plans (members and public servants) 456,384 112,769 333,241
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 10,834 2,937 4,287
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 17,500 3,717 11,420
Statutory Authorities 484,718 119,423 348,948
Total budgetary authorities 3,239,118 740,158 2,450,142

Note: Pursuant to s. 31.1 of the Financial Administration Act and Order in Council P.C. 2011-1297 effective November 15, 2011, all unexpended money relating to the new Shared Services Canada (Operating and Capital expenditures) has been deemed to be appropriated. However those funds are still reflected in the above reference levels, as well as in the expenditures.

* Includes only Authorities available for use and granted by Parliament at quarter-end as well as a statutory authority for Proceeds from the Disposal of Crown Assets

Note: Details may not add to totals due to rounding

Fiscal Year 2010-2011
  Total available for use for the year ending March 31, 2011 * Used during the quarter ended December 31, 2010 Year to date used at quarter-end
Gross Operating expenditures 4,056,521 943,209 2,792,040
Less: Vote Netted Revenues 1,638,042 635,200 1,060,600
Vote 45 - Net Operating expenditures 2,418,479 308,009 1,731,440
Vote 50 - Capital expenditures 316,478 43,452 100,717
Vote 55 - Grants and contributions 116,065 40,785 88,282
Contributions to employee benefit plans (members and public servants) 422,137 117,532 319,433
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 8,878 1,112 2,393
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 19,000 4,064 12,469
Statutory Authorities 450,015 122,708 334,295
Total budgetary authorities 3,301,036 514,954 2,254,734

Note: Pursuant to s. 31.1 of the Financial Administration Act and Order in Council P.C. 2011-1297 effective November 15, 2011, all unexpended money relating to the new Shared Services Canada (Operating and Capital expenditures) has been deemed to be appropriated. However those funds are still reflected in the above reference levels, as well as in the expenditures.

* Includes only Authorities available for use and granted by Parliament at quarter-end as well as a statutory authority for Proceeds from the Disposal of Crown Assets

Note: Details may not add to totals due to rounding

Departmental budgetary expenditures by Standard Object (unaudited)

For the quarter ended December 31, 2011
 (in thousands of dollars)

Fiscal Year 2011-2012
  Planned expenditures for the year ending March 31, 2012 * Expended during the quarter ended December 31, 2011 Year to date used at quarter-end
Expenditures:      
Personnel 3,097,975 787,913 2,344,743
Transportation and communications 294,688 61,823 174,078
Information 8,359 1,297 2,918
Professional and special services 447,898 112,088 263,662
Rentals 109,132 23,592 63,795
Repair and maintenance 130,872 20,532 48,927
Utilities, materials and supplies 163,105 31,015 84,024
Acquisition of land, buildings and works 106,610 15,632 34,893
Acquisition of machinery and equipment 351,292 39,725 109,062
Transfer payments 145,937 27,580 93,045
Other subsidies and payments 100,182 15,076 50,726
Total gross budgetary expenditures 4,956,050 1,136,273 3,269,873
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,716,932 396,115 819,731
Total Revenues netted against expenditures: 1,716,932 396,115 819,731
Total net budgetary expenditures 3,239,118 740,158 2,450,142

 

Fiscal Year 2010-2011
  Planned expenditures for the year ending March 31, 2011 * Expended during the quarter ended December 31, 2010 Year to date used at quarter-end
Expenditures:      
Personnel 3,033,271 783,503 2,278,989
Transportation and communications 325,755 66,198 238,090
Information 8,700 888 2,113
Professional and special services 479,249 125,177 320,320
Rentals 116,475 20,427 71,247
Repair and maintenance 141,135 18,951 51,797
Utilities, materials and supplies 170,690 28,186 78,789
Acquisition of land, buildings and works 82,135 22,873 39,579
Acquisition of machinery and equipment 323,753 31,891 94,967
Transfer payments 135,065 44,919 100,820
Other subsidies and payments 122,851 7,141 38,623
Total gross budgetary expenditures 4,939,078 1,150,154 3,315,334
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,638,042 635,200 1,060,600
Total Revenues netted against expenditures: 1,638,042 635,200 1,060,600
Total net budgetary expenditures 3,301,036 514,954 2,254,734

Note: Details may not add to totals due to rounding

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