Quarterly Financial Report for the Quarter Ended September 30, 2011
The Office of the Registrar of the Supreme Court of Canada
This quarterly financial report 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 (TB). This quarterly report should be read in conjunction with the Main Estimates and approved allotment transfers from Treasury Board Central Votes. It has not been subject to an external audit or review.
1.1 Authority, Mandate and Program Activities
Created by an Act of Parliament in 1875, the Supreme Court of Canada is Canada's final court of appeal. It serves Canadians by deciding legal issues of public importance, thereby contributing to the development of all branches of law applicable within Canada. The independence of the Court, the quality of its work and the esteem in which it is held both in Canada and abroad contribute significantly as foundations for a secure, strong and democratic country founded on the Rule of Law. In accordance with the Supreme Court Act, the Supreme Court of Canada consists of the Chief Justice and the eight puisne judges. The Supreme Court of Canada is an important national institution, positioned at the pinnacle of the judicial branch of government in Canada.
The Office of the Registrar of the Supreme Court of Canada (Office) provides all necessary services and support for the Court to process, hear and decide cases. It also serves as the interface between litigants and the Court.
Further details on the Office's authority, mandate and program activities may be found in its Report on Plans and Priorities 2011-2012.
1.2 Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Office's spending authorities granted by Parliament and those used by the Office, consistent with the Main Estimates and approved allotment transfers from Treasury Board Central Votes 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.
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.
The Office 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 Results
This section highlights the changes in authorities provided and expenditures incurred as at September 30, 2011 compared to the same quarter of the prior year. Overall, the Office's authorities increased by 4% while the quarterly spending decreased by 3% over the same quarter ending September 30, 2010. The overall proportion of authorities used on a year-to-date basis (43%), is in line with that of the previous year (45%).
Changes to Granted Authorities
As at September 30, 2011, the total authorities provided to the Office of the Registrar of the Supreme Court of Canada increased by $1,178,219, compared to the same quarter of the prior year. This net increase consists of an increase in:
- Vote 50 – Net Operating Expenditures ($84,146);
- Budgetary Statutory authorities ($229,639).
- Vote 50 – Net Operating Expenditures ($864,434).
As indicated in the Statement of Authorities, the increase in Vote 50 – Net Operating Expenditures ($864,434) in the second quarter of 2011-12 consists of:
- Permanent allocation from TB Vote 30 (Paylist Requirements) in 2011-12 ($834,712); and
- Permanent allocation from TB Vote 25 (Operating Budget Carry forward) in 2011-12 ($1,081,598). The operating carry forward for 2010-11 amounted to $1,051,876, which represents a net increase in authorities of $29,722 for 2011-12.
It is to be noted that for the 2010-11 fiscal year, the paylist requirements (TB Vote 30) were granted to the Office in the third quarter of the fiscal year, thus causing a timing difference in the receipt of these funds when comparing both quarters for the purposes of this financial report.
Changes to Planned Expenditures
The process for allocating planned expenditures in the Main Estimates is based on proportioning prior year actual expenditures against the total authorities available for use for the given year. For instance, if professional services represented 20% of the total operating expenditures of 2009-10, then the same ratio of 20% is used to determine the planned expenditures for 2011-12.
A significant variance between planned expenditures in 2010-11 and 2011-12 was noted in "Other Subsidies and Payments" (total variance of $1,917,452). This is due to the fact that depreciation, which is part of "Other Subsidies and Payments", was included in the total allocation of planned expenditures for 2010-11. Given that the Main Estimates are based on an expenditure basis of accounting, as opposed to an accrual basis, the depreciation expense was removed in the allocation of the 2011-12 planned expenditures. The funding that was previously allocated to depreciation was reallocated to other standard objects of expenditures for 2011-12, which explains the variances noted in the other categories of planned expenditures.
The operating carry forward, which was received in the second quarter for both fiscal years, was allocated in proportion to the allocation used for the Main Estimates. Other than the variance arising from the allocation of depreciation for 2010-11 (as noted above), there were no other significant variances to be noted in planned expenditures.
Significant Changes to Budgetary Expenditures
As at September 30, 2011, the total net budgetary expenditures increased by 1% ($134,109) compared to the same quarter of the previous year. This variance is comprised of:
- An increase of 6% ($366,571) in net budgetary expenditures;
- A decrease of 3% ($232,462) in net budgetary expenditures explained by:
- An increase (17%) in Vote 50 – Net Operating Expenditures; and
- A decrease (64%) in Budgetary Statutory spending.
The increase of 17% ($929,216) was noted in the total operating expenditures (Vote 50) in comparison to the same quarter of the previous year. The variance between both quarters is attributed to:
- A $734,643 salary increase resulting from:
- The immediate settlement of the severance pay and termination benefits ($619,388 or 67%) arising from the revision to specified collective agreements; and
- Other miscellaneous salary increases amounting to $115,255 (12%).
- A $194,573 non-salary increase resulting from:
- Timing differences in informatics acquisitions and services between both quarters, among which the laptop replacement program represents 9% ($84,726), and other computer services, 3% ($26,366) of the total variance;
- Newly-acquired IT contracts representing an increase of $41,866 (5%); and
- Timing differences on the settlement of acquired goods and services for the remaining variance ($41,615 or 4%).
The decrease of 64% ($1,161,678) was noted in the total Budgetary Statutory expenditures:
- As previously disclosed, system generated salary accruals ($756,764) were accrued in error in the first quarter of 2011-12. These accruals generated erroneously in June 2011 were subsequently reversed in July 2011, thus causing a large decrease in total statutory expenditures.
- There was a delay in processing the quarterly statutory pension expenses ($460,949) in the second quarter of 2011-12, causing a variance when comparing with the same quarter of 2010-11. This should be resolved in the third quarter of 2011-12.
- These expense reductions were offset by general operating increases in other statutory expenditures, for a net decrease of $1.1M.
Other expenditure categories (for both operating and statutory) have remained fairly stable in comparison to the same quarter of the previous year.
Figure 1: Comparison of Authorities Granted and Used
Description of image
Comparison of Authorities Granted and Used – The diagram illustrates the variation in thousands of dollars between 2010-11 and 2011-12 for Annual Net Budgetary Authorities granted, year to date used, authorities used – Vote 50 – Net Operating Expenditures and authorities used – Budgetary Statutory Authorities as at September 30, 2010 and 2011.
Annual Net Budgetary Authorities Granted – Figures showing the amounts the Office planned to spend as at September 30, 2010 and 2011 respectively: $30,453,106 and $31,631,325.
Year to Date Used – Figures present the cumulative amounts the Office received as at September 30, 2010 and 2011 respectively: $13,602,239 and $13,736,348.
Authorities Used – Vote 50 – Net Operating Expenditures – Figures showing the amounts the Office received for the second quarter of 2010-11 and 2011-12 respectively: $5,364,092 and $6,293,308.
Authorities Used – Budgetary Statutory Authorities – Figures showing the amounts the Office received for the second quarter of 2010-11 and 2011-12 respectively: $1,814,122 and $652,444.
3. Risks and Uncertainties
This Departmental Quarterly Financial Report 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 Office of the Registrar of the Supreme Court of Canada is funded through voted parliamentary spending authorities (75%) and statutory authorities (25%) for operating and personnel expenditures. The authorities have remained fairly stable over time, with slight variations due to the settlement of collective agreements and other mandatory paylist requirements.
Although stable funding has enabled the Office to predict future resources, the Office has also had to absorb increased operational costs and investments in strategic priorities within the existing reference levels.
For instance, significant investments were made over the last four years in modernizing the Courtroom and enhancing electronic access to the public and litigants. Notwithstanding these changes, paper-based processes continue to be required and will continue as such for the foreseeable future, with attendant costs. Although the Office has mitigated this risk by establishing renewed governance, and by grouping four core branches into one Court Operations Sector, efficiencies will take time to harness and the increased costs are for the moment absorbed within existing reference levels.
The Office mitigates its overall risks by integrating risk management strategies with annual and long term business planning. A Corporate Risk Profile is also developed and updated annually. Funding priorities are carefully assessed and a risk based approach is used in determining a funding allocation formula that optimizes the available resources. Future investments are also identified and prioritized using a risk-based formula and form part of the Office's investment plan.
Budget 2010 announced that departments and agencies would not be funded for the 2010-2011 to 2012-2013 wage and salary increases resulting from collective agreements. Since departments and agencies must pay the resulting salary increases to employees, organizations are expected to find efficiencies within their operating vote to fund these increases. The financial impact on the Office of this government-wide initiative was $104,289 in 2010-2011 and is estimated at $130,000 for 2011-12. The Office has accommodated this reduction in funding for 2010-11 and 2011-12 without significantly impacting its operations. In addition to these budgetary measures, the Office has also had to absorb a permanent reference level reduction of $132,667 for collective agreements effective 2011-12. Management is reviewing various options to address the planned funding reductions for fiscal year 2012-2013.
The Office's most significant expenditure is for personnel, representing 70% of its planned expenditures. Over the last few years, the Office has faced a higher level of attrition that is expected to continue for the next couple years, especially due to retirement. An ongoing challenge for the Office is to maintain staffing at a level sufficient to compensate for departures. Given the Office's small size, the departure or hiring of a few employees in one quarter can have a significant impact on the quarter's expenditures and resource management. Despite the level of attrition, the Office has maintained fairly stable personnel costs between both quarters.
4. Significant Changes to Operations, Personnel and Programs
The Supreme Court of Canada has experienced changes in the second quarter of the current fiscal year with the departure of two of its Justices. The financial impact of these changes, although insignificant in the second quarter, will be assessed in the next quarterly financial report.
A new Deputy Registrar was appointed on June 29, 2011 and officially started working for the Office in July 2011. The financial impact of this appointment is limited to the salary being disbursed as opposed to the first quarter when the position was vacant.
There were no changes in the Office's program over this reporting period.
Approval by Senior Officials
Roger Bilodeau, Q.C., Registrar
November 25, 2011
Catherine Laforce, Chief Financial Officer
Statement of Authorities (unaudited)
|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|
|Vote 50 - Net Operating expenditures||23,632,411||6,293,308||10,895,376|
|Budgetary statutory authorities||7,998,914||652,444||2,840,972|
|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|
|Vote 50 - Net Operating expenditures||22,683,831||5,364,092||10,422,388|
|Budgetary statutory authorities||7,769,275||1,814,122||3,179,851|
* Includes only Authorities available for use and granted by Parliament at quarter-end.
Departmental Budgetary Expenditures by Standard Object (unaudited)
|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|
|Transportation and communications||1,791,843||346,307||538,786|
|Professional and special services||3,483,852||509,763||860,166|
|Repair and maintenance||424,792||28,394||40,483|
|Utilities, materials and supplies||2,104,939||282,000||533,755|
|Acquisition of machinery and equipment||1,130,590||171,248||206,500|
|Other subsidies and payments||-||5,441||4,696|
|Total net budgetary expenditures||31,631,325||6,945,752||13,736,348|
|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|
|Transportation and communications||1,236,267||405,219||599,102|
|Professional and special services||2,564,966||426,200||815,545|
|Repair and maintenance||754,903||10,950||24,021|
|Utilities, materials and supplies||1,392,727||279,282||548,483|
|Acquisition of machinery and equipment||1,300,944||28,273||43,282|
|Other subsidies and payments||1,917,452||(15,632)||(47)|
|Total net budgetary expenditures||30,453,106||7,178,214||13,602,239|
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