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Quarterly Financial Report -For the quarter ended June 30, 2011

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

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 abroad.

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;
    • 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 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

As at June 30th, 2011, total authorities available for the year have decreased by $310.2 million or 10%, compared to the same quarter of the previous year, from $3,200.3 million to $2,890.1 million.  This net decrease is a combination of a decrease in Vote 45 – Net Operating Expenditures of $336.7 million and in Vote 50 – Capital Expenditures of $26.0 million which is offset by a slight increase in Vote 55 – Grants and Contributions of $18.1 million and Budgetary Statutory authorities of $34.2 million.

As reflected in the charts below, the decrease is mainly attributed to 2010-2011 Supplementary Estimates (A) being appropriated by June 30th whereas only the 2011-12 Main Estimates have been appropriated in 2011-12. $321.5 million of the funding received in Supplementary Estimates (A) last year was one-time funding for the planning and operations related to policing and security at the G8/G20 Summits.  This decrease is offset by an increase of $105.4 million provided in the 2011-12 Main Estimates.

Pie Chart of 2010-11 Supplementary Estimates (A)

Long description

The RCMP has Net Vote authority within Vote 45 Operating Expenditures, which entitles the department to spend revenues collected primarily from Contract Policing Services. In the first quarter of 2011-12, the RCMP’s Net Vote authority increased by $78.9 million or 5% over the previous fiscal year primarily in response to increased demand for RCMP policing services by provinces, territories, municipalities and First Nations communities.

The Vote 50 – Capital Expenditure decrease of $26 million or 9% is mainly attributable to the capital funding received for the 2010 G8/G20 Summits in 2010-11 Supplementary Estimates (A).  The increase of $18.1 million or 18% in Vote 55 – Grants and Contributions is for the increased costs related to the grant for compensation of members injured or disabled while on duty.  The increase of $32.7 million or 7% in Budgetary Statutory authorities is mainly related to the change in the rate used to calculate the Employee Benefit Plan costs.

Proceeds from the disposal of crown assets under the Surplus Crown Assets Act includes the amount of proceeds collected from the sale of surplus crown assets in the current fiscal year ($1.2 million) plus a carry forward amount available for use from the previous fiscal year ($5.8 million). Proceeds of disposal are normally recorded and spent later in the fiscal year.

Statement of Departmental Budgetary Expenditures by Standard Object

Changes in expenditures by standard object are largely related to the Summits as is evident by the decrease in transportation and communications ($23.9 million) and acquisition of machinery and equipment ($6.8 million).

Changes in expenditures in other standard objects, such as the decrease in professional and special services ($25.2 million) and transfer payments ($15.6 million), as well as the increase in acquisition of land, buildings and works ($4.3 million) are mainly related to timing of expenditures.

The decrease in vote netted revenues ($62.5 million) is related to the timing of payments received. Overall revenue collected by year-end is expected to be consistent between years.

Risks and Uncertainties

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 27, 2011.

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.  Since departments are legally obligated to pay the salary increases to employees, the RCMP is expected to find efficiencies within its operating vote to fund the increased salary expenditures. Salary expenditures are the most significant expenditure for the RCMP, representing approximately 67% of operating expenditures. The RCMP began taking steps in mid fiscal year 2009-10 to address a rapidly changing economic climate. Recruitment of cadets at the RCMP Training Facility was substantially curtailed in anticipation of budgetary restraint federally, and softening demand for increased police services from our contract partners due to economic considerations. This measure, along with other budgetary restrictions, has been put in place to mitigate the impact of the operating freeze.

Significant changes in relation to operations, personnel and programs

Changes in Key Senior Personnel

In February of 2011, the Commissioner announced that he will be departing the RCMP. Currently, a process to select the next Commissioner is underway and is planned to be completed early in the fall.

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.

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:

William J.S. Elliott
Commissioner
Alain P. Séguin
Chief Financial and Administrative Officer

Ottawa, Canada
August 18, 2011


Statement of Authorities (Unaudited)

For the quarter ended June 30, 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 June 30, 2011 Year to date used at quarter-end
Gross Operating expenditures 3,726,316 822,591 822,591
Less: Vote Netted Revenues 1,716,932 219,916 219,916
Vote 45 - Net Operating expenditures 2,009,384 602,675 602,675
Vote 50 - Capital expenditures 279,359 19,132 19,132
Vote 55 - Grants and contributions 120,363 25,735 25,735
Contributions to employee benefit plans (members and public servants) 456,384 119,862 119,862
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 7,075 3 3
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 17,500 3,938 3,938
Statutory Authorities 480,960 123,803 123,803
Total budgetary authorities 2,890,066 771,345 771,345

* 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

Fiscal Year 2010-2011
  Total available for use for the year ending March 31, 2011 * Used during the quarter ended June 30, 2010 Year to date used at quarter-end
Gross Operating expenditures 3,984,085 859,565 859,565
Less: Vote Netted Revenues 1,638,042 282,442 282,442
Vote 45 - Net Operating expenditures 2,346,043 577,122 577,122
Vote 50 - Capital expenditures 305,312 21,020 21,020
Vote 55 - Grants and contributions 102,220 46,792 46,792
Contributions to employee benefit plans (members and public servants) 422,137 107,256 107,256
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 5,550 0 0
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 19,000 4,244 4,244
Statutory Authorities 446,687 111,500 111,500
Total budgetary authorities 3,200,261 756,434 756,434

* 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

Departmental budgetary expenditures by Standard Object (unaudited)

For the quarter ended June 30, 2011
 (in thousands of dollars)

Fiscal Year 2011-2012
  Planned expenditures for the year ending March 31, 2012 * Expended during the quarter ended June 30, 2011 Year to date used at quarter-end
Expenditures:      
Personnel 2,991,854 754,448 754,448
Transportation and communications 259,084 49,630 49,630
Information 7,349 398 398
Professional and special services 393,783 55,210 55,210
Rentals 95,947 17,206 17,206
Repair and maintenance 115,060 13,643 13,643
Utilities, materials and supplies 143,399 25,386 25,386
Acquisition of land, buildings and works 81,614 5,299 5,299
Acquisition of machinery and equipment 292,968 22,417 22,417
Transfer payments 137,863 35,473 35,473
Other subsidies and payments 88,078 12,151 12,151
Total gross budgetary expenditures 4,606,998 991,261 991,261
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,716,932 219,916 219,916
Total Revenues netted against expenditures: 1,716,932 219,916 219,916
Total net budgetary expenditures 2,890,066 771,345 771,345

 

Fiscal Year 2010-2011
  Planned expenditures for the year ending March 31, 2011 * Expended during the quarter ended June 30, 2010 Year to date used at quarter-end
Expenditures:      
Personnel 3,026,751 731,974 731,974
Transportation and communications 309,675 73,560 73,560
Information 8,281 554 554
Professional and special services 456,799 80,440 80,440
Rentals 110,875 18,223 18,223
Repair and maintenance 134,349 18,504 18,504
Utilities, materials and supplies 162,483 23,749 23,749
Acquisition of land, buildings and works 79,211 1,009 1,009
Acquisition of machinery and equipment 311,714 29,194 29,194
Transfer payments 121,220 51,055 51,055
Other subsidies and payments 116,944 10,614 10,614
Total gross budgetary expenditures 4,838,303 1,038,876 1,038,876
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,638,042 282,442 282,442
Total Revenues netted against expenditures: 1,638,042 282,442 282,442
Total net budgetary expenditures 3,200,261 756,434 756,434