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Quarterly Financial Report - For the quarter ended September 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

Authorities increased during the second quarter of 2011-12 to $3,045.3M due to allocations from Treasury Board Central Votes for the operating budget carry forward ($93.9 million) and for the capital budget carry forward ($59.6 million).

Treasury Board approved changes to the existing Capital Budget Carry Forward (CBCF) procedures, including an increased carry forward allowance (20% of year-end capital budgets) and the creation of a new central vote to administer the new CBCF.  Prior to this new process, the RCMP participated in the pilot project on Non-Lapsing Appropriations for Capital Asset Management.

As reflected in the chart below, total authorities at the end of the second quarter remain higher in 2010-11 compared to the same period in 2011-12 due to tabling of 2010-11 Supplementary Estimates (A) which included significant funding for the G8/G20 Summits, as was presented in the first Quarterly Financial Report.  

Chart showing the Comparison of total Budgetary Authories

Long description

Statement of Departmental Budgetary Expenditures by Standard Object

The Royal Canadian Mounted Police has spent approximately 56% of its authorities at the end of the second quarter, compared with 53% in the previous year (as demonstrated in the chart below). Overall trending in expenditures as a proportion of authorities is in line with last year’s spend with the exception of an extraordinary $35 million payment in personnel. This is related to liquidation of severance pay as a result of revisions to specified collective agreements, for which funding is to be provided through a Treasury Board Central Vote transfer.

Chart showing the Comparison of Total Budgetary Authorities and Net Expenditures

Long description

Reductions in expenditures by standard object during the second 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 ($35.7 million), in professional and special services ($18.3 million) and in rentals ($9.6 million).

Increases in expenditures in other standard objects in 2011-12 compared to 2010-11 are mainly related to timing of expenditures and are primarily under acquisition of machinery and equipment ($13 million) and transfer payments ($25.1 million). Overall, expenditures made through the grant to compensate members of the Royal Canadian Mounted Police for injuries received in the performance of duty is expected to be higher this year due to increases in the number of benefit recipients as well as the indexation of benefits.

The increase in vote netted revenues ($60.7 million) collected during the second quarter of 2011-12 compared to the same quarter last fiscal year is related to the timing of payments received. Overall revenue collected by quarter-end in both fiscal years remains consistent while overall revenue collected by year-end is also 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 as well as central vote transfers for the capital and operating budget carry forwards.

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

In August of 2011, INTERPOL announced the appointment of William J.S. Elliot as Special Representative of INTERPOL to the United Nations. He will begin his three year-post in November 2011. As at September 30, 2011, a process to select the next Commissioner is underway.*

*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 which is the date of signing of this quarterly financial report. 

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:

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

Ottawa, Canada
November 21, 2011


Statement of Authorities (Unaudited)

For the quarter ended September 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 September 30, 2011 Year to date used at quarter-end
Gross Operating expenditures 3,820,177 963,788 1,786,379
Less: Vote Netted Revenues 1,716,932 203,700 423,616
Vote 45 - Net Operating expenditures 2,103,245 760,087 1,362,763
Vote 50 - Capital expenditures 338,995 47,101 66,234
Vote 55 - Grants and contributions 120,363 25,727 51,462
Contributions to employee benefit plans (members and public servants) 456,384 100,611 220,473
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 8,847 1,347 1,350
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 17,500 3,765 7,703
Statutory Authorities 482,731 105,723 229,526
Total budgetary authorities 3,045,334 938,639 1,709,984

* 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 September 30, 2010 Year to date used at quarter-end
Gross Operating expenditures 4,043,044 989,266 1,848,831
Less: Vote Netted Revenues 1,638,042 142,957 425,400
Vote 45 - Net Operating expenditures 2,405,001 846,309 1,423,431
Vote 50 - Capital expenditures 305,312 36,245 57,265
Vote 55 - Grants and contributions 102,220 705 47,497
Contributions to employee benefit plans (members and public servants) 422,137 94,645 201,901
Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act 7,155 1,281 1,281
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 19,000 4,161 8,405
Statutory Authorities 448,292 100,087 211,587
Total budgetary authorities 3,260,825 983,346 1,739,780

* 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 September 30, 2011
 (in thousands of dollars)

Fiscal Year 2011-2012
  Planned expenditures for the year ending March 31, 2012 * Expended during the quarter ended September 30, 2011 Year to date used at quarter-end
Expenditures:      
Personnel 2,991,854 802,382 1,556,830
Transportation and communications 281,137 62,624 112,255
Information 7,975 1,224 1,622
Professional and special services 427,301 96,364 151,574
Rentals 104,114 22,996 40,203
Repair and maintenance 124,854 14,751 28,394
Utilities, materials and supplies 155,605 27,624 53,009
Acquisition of land, buildings and works 99,039 13,962 19,261
Acquisition of machinery and equipment 336,950 46,920 69,337
Transfer payments 137,863 29,992 65,465
Other subsidies and payments 95,575 23,499 35,651
Total gross budgetary expenditures 4,762,266 1,142,339 2,133,600
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,716,932 203,700 423,616
Total Revenues netted against expenditures: 1,716,932 203,700 423,616
Total net budgetary expenditures 3,045,334 938,639 1,709,984

 

Fiscal Year 2010-2011
  Planned expenditures for the year ending March 31, 2011 * Expended during the quarter ended September 30, 2010 Year to date used at quarter-end
Expenditures:      
Personnel 3,026,751 763,512 1,495,486
Transportation and communications 323,726 98,331 171,891
Information 8,657 670 1,225
Professional and special services 477,526 114,703 195,143
Rentals 115,906 32,598 50,820
Repair and maintenance 140,445 14,342 32,845
Utilities, materials and supplies 169,856 26,854 50,603
Acquisition of land, buildings and works 79,211 15,697 16,706
Acquisition of machinery and equipment 313,320 33,883 63,077
Transfer payments 121,220 4,847 55,902
Other subsidies and payments 122,250 20,868 31,482
Total gross budgetary expenditures 4,898,868 1,126,303 2,165,179
Less Revenues netted against expenditures:      
Vote Netted Revenues 1,638,042 142,957 425,400
Total Revenues netted against expenditures: 1,638,042 142,957 425,400
Total net budgetary expenditures 3,260,826 983,346 1,739,780