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This quarterly report has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, the Supplementary Estimates, previous Canada Border Services Agency (CBSA) Quarterly Financial Reports, as well as Canada’s Economic Action Plan 2012 (Budget 2012) and Canada’s Economic Action Plan 2013 (Budget 2013).
A summary description of the Canada Border Services Agency program activities can be found in Part II of the Main Estimates.
This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities (Table 1) includes the CBSA’s spending authorities granted by Parliament and those used by the Agency, consistent with the 2012-2013 and 2013-2014 Main Estimates and Supplementary Estimates.
Parliamentary spending authority is required before monies can be spent by the Government. Approvals are given in the form of approved limits through appropriation acts or through other legislation providing statutory spending authority for specific purposes.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012. As a result, the savings measures announced in the Budget 2012 could not be reflected in the 2012-2013 Main Estimates.
In fiscal year 2012-2013, funding was set aside to prohibit the spending of the funds already identified as savings measures in Budget 2012. The resulting 2013-2014 reductions to the Agency’s authorities were reflected in the 2013-2014 Main Estimates tabled in Parliament.
The CBSA 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.
The quarterly financial report has not been subjected to an external audit or review.
The CBSA has a financial structure composed of voted budgetary authorities that include Vote 10 – Operating Expenditures and Vote 15 – Capital Expenditures, while the statutory authorities consist mainly of contributions to the employee benefit plans.
In addition, the Agency has an authority to respend certain revenues. Only the revenues associated with costs incurred within the respending authority activities are applied towards these costs. The revenues which are not associated with costs incurred are recorded as non-tax revenue. Revenue respending authority is appropriate as some of the CBSA programs are partially funded through User Fees (e.g. Nexus).
The CBSA also operates on the basis of a two-year appropriation, whereby any unused spending authority at the end of a fiscal year is available to be used the following year. However, any portion of the spending authority not used at the end of the second year is lapsed.
This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended Sept 30, 2013.
Graphic 1:
For the period ending Sept 30, 2013, the authorities provided to the CBSA are comprised of the Main Estimates, Supplementary Estimates (A) and the 2012-2013 unused spending authority, while authorities at the same time last year consisted of the Main Estimates, Supplementary Estimates (A), the 2011-2012 unused spending authority and Treasury Board Vote 30-Paylist Expenditures.
As at Sept 30, 2013, the Statement of Authorities (Table 1) reflects total authorities available of $2,059.3 million, compared to $2,047.9 million at the same quarter last year. The result is a net increase of $11.4 million or 0.6% in authorities.
The Agency’s Vote 10 and contributions to employee benefit plans decreased by $7.5 million (0.4%), which is mainly attributed to the net effect of the following significant items:The Agency’s Vote 15 increased by $18.9 million or (9.3%), which is mainly attributed to the net effect of the following significant items:
The Statement of Authorities (Table 1) indicates a decrease of $3.8 million or 1% in Vote 10 Net Operating Expenditures used during the quarter ended Sept 30, 2013 –$343.7 million as compared to $347.5 million last year. The Vote 15 Capital Expenditures increased by $19.5 million or 122% - $35.5 million this quarter as compared to $16.0 million in the 2nd quarter last year. The increase is mainly due to the CBSA’s early adoption of the new Treasury Board of Canada Secretariat’s common definition of a capital expenditures vote. As per this new definition, any expenditure related to the creation of or purchase of capital assets must be charged to a capital vote. In the past, capital assets could be created using Vote 10 – Operating expenditures, as long as the Treasury Board Accounting Standard 3.1 and CBSA’s Accounting Policy for Capital Assets were applied.
The Departmental Budgetary Expenditures by Standard Object (Table 2) indicates an increase in expenses incurred during the 2nd quarter of $15.0 million or 3.7%, $409.1 million in 2012-2013 compared to $424.1 million in 2013-2014. Expenses during the quarter represent 20.6% of planned expenditures as compared to 20.0% in 2012-2013.
The most notable variance by standard object from the 2nd quarter last year to this year are as follows:
The complexity of the operating environment of the CBSA can be seen in the broad scope of external drivers. Developments in the global economy cascade down into Canada’s trade, immigration, tourism and refugee patterns, affecting volumes and introducing security and facilitation challenges. The shift to corporate globalization and a growing virtual economy has benefitted legitimate business and criminal enterprises alike, and presents more complexity in managing Canada’s supply chain and physical borders. Similarly, the rapid evolution of technology can advance the fortification of border controls and identity verification or can be used to circumvent border controls, if in the wrong hands.
In considering these factors, the CBSA has embarked on various initiatives, including those identified in the Beyond the Border Action Plan, that will allow the organization to be even more efficient and effective in the way it does business through increased efforts to address threats early and facilitate trade.
To improve its ability to successfully deliver on its initiatives, the Agency regularly examines its enterprise risk landscape, the results of which are published in the CBSA Enterprise Risk Profile (ERP). The ERP identifies and ranks the top risks to the Agency’s strategic outcome and underwent a full revision in spring 2013, with risk response strategies developed over the summer of 2013 for the risks deemed unacceptable. The top two risks (Information Technology (IT) Systems and Information Security), as evaluated by senior management, are IT related which illustrates the high level of dependency the Agency has on technology. The two risks that have decreased most significantly are Immigration Enforcement and Irregular Migration, due to considerable progress in mitigation activities and in strengthening controls.
There have been changes in senior level personnel, most notably the appointment of new Vice Presidents for Operations and Programs Branches.
Prime Minister Stephen Harper and President Barack Obama announced the Beyond the Border Action Plan (Action Plan) in December 2011. The Action Plan provides a practical road map for speeding up legitimate trade and travel. At the same time, the Prime Minister and the President also announced the Joint Action Plan for the Canada- United States Regulatory Cooperation Council to increase regulatory transparency and co-ordination between our two countries.
The CBSA will play an instrumental role in implementing the Beyond the Border Action Plan. The Agency will lead ten initiatives, play a key supporting role in nine initiatives, and has an interest in another nine initiatives.
This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs: make it easier for Canadians and business to deal with their government and to modernize and reduce the back office operations.
The CBSA will achieve Budget 2012 savings of $143.4 million by fiscal year 2014-2015 through efficiency measures by restructuring, modernizing programs and transforming business practices in select areas. With these changes the CBSA will focus on supporting management excellence and accountability across government. In the first year of implementation, the CBSA generated $31.3 million in savings. Those savings increase to $72.8 million in 2013-2014 and will result in ongoing saving of $143.4 million by 2014-2015.
As a result of Budget 2012, the CBSA is implementing its plan to:
The CBSA achieved its target for 2012-2013 and is on track to fully achieve its savings for 2013‑2014, 2014-2015 and ongoing. The CBSA is actively managing the implementation of all initiatives through regular and sustained monitoring, ensuring that the delivery is proceeding on time.
The initiatives under Budget 2012 will further enable the CBSA to focus and align resources to its key priorities and core mandate; meeting current and future security and service requirements to serve Canadians and provide them with a modern, dynamic border.
The impacts of Budget 2012 have been reflected in the financial information for the year to date and for the 2nd quarter in that the budgets and expenditures have been reduced accordingly.
Supplementary data on Budget 2012 savings by program activity is included in Table 3.
Approved by:
Ottawa, Canada
Date: September 29, 2013
Fiscal Year 2013–2014 | Fiscal Year 2012–2013 | ||||||
---|---|---|---|---|---|---|---|
(in thousands of dollars) | Total available for use for the year ending March 31, 2014* | Used during the quarter ended Sept 30, 2013 | Year-to-date used at quarter end | Total available for use for the year ending March 31, 2013*,** | Used during the quarter ended Sept 30, 2012 | Year-to-date used at quarter end | |
Vote 10 – Net Operating Expenditures** | 1,657,843 | 343,666 | 652,027 | 1,663,019 | 347,477 | 656,488 | |
Vote 15 – Capital Expenditures | 222,331 | 35,520 | 39,866 | 203,386 | 16,044 | 23,850 | |
Statutory Authority - Contributions to employee benefit plans | 179,164 | 44,791 | 89,582 | 181,491 | 45,373 | 90,745 | |
Statutory Authority - Court Awards - Crown Liability Act | 0 | 14 | 14 | 0 | 15 | 65 | |
Statutory Authority - Refunds of amounts credited to revenues in previous years | 0 | 9 | 24 | 0 | 33 | 60 | |
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets | 0 | 118 | 263 | 0 | 135 | 220 | |
Total budgetary authorities | 2,059,338 | 424,118 | 781,776 | 2,047,896 | 409,077 | 771,428 | |
Non-budgetary authorities | 0 | 0 | 0 | 0 | 0 | 0 | |
Total authorities | 2,059,338 | 424,118 | 781,776 | 2,047,896 | 409,077 | 771,428 |
Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only Authorities available for use and granted by Parliament at quarter end.
** Total available for use does not reflect measures announced in Budget 2012.
Fiscal Year 2013–2014 | Fiscal Year 2012–2013 | ||||||
---|---|---|---|---|---|---|---|
(in thousands of dollars) | Planned expenditures for the year ending March 31, 2014 * | Expended during the quarter ended Sept 30, 2013 | Year-to-date used at quarter end | Planned expenditures for the year ending March 31, 2013*,** | Expended during the quarter ended Sept 30, 2012 | Year-to-date used at quarter end | |
Expenditures | |||||||
Personnel | 1,219,391 | 335,995 | 637,005 | 1,242,085 | 332,951 | 634,126 | |
Transportation and communications | 107,370 | 10,764 | 18,534 | 98,613 | 13,587 | 23,167 | |
Information | 2,406 | 219 | 695 | 2,415 | 398 | 602 | |
Professional and special services | 474,340 | 54,514 | 93,970 | 484,501 | 38,104 | 74,004 | |
Rentals | 15,926 | 2,047 | 3,775 | 13,476 | 2,371 | 4,695 | |
Repair and maintenance | 42,794 | 2,561 | 7,010 | 36,668 | 4,983 | 8,785 | |
Utilities, materials and supplies | 35,635 | 4,088 | 6,299 | 30,151 | 3,826 | 7,471 | |
Acquisition of land, buildings and works | 73,735 | 5,238 | 5,575 | 62,413 | 9,647 | 15,574 | |
Acquisition of machinery and equipment | 82,898 | 4,630 | 7,104 | 46,215 | 3,484 | 4,906 | |
Transfer payments | 0 | 0 | 0 | 0 | 0 | 0 | |
Other subsidies and payments | 16,973 | 7,409 | 6,867 | 41,068 | 3,121 | 3,547 | |
Total gross budgetary expenditures | 2,071,468 | 427,465 | 786,834 | 2,057,605 | 412,472 | 776,877 | |
Less revenues netted against expenditures | |||||||
Sales of Services | 12,130 | 3,356 | 5,082 | 9,710 | 3,428 | 5,509 | |
Other Revenue | 0 | -9 | -24 | 0 | -33 | -60 | |
Total revenues netted against expenditures | 12,130 | 3,347 | 5,058 | 9,710 | 3,395 | 5,449 | |
Total net budgetary expenditures | 2,059,338 | 424,118 | 781,776 | 2,047,895 | 409,077 | 771,428 |
Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only planned expenditures against authorities available for use and granted by parliament at quarter-end.
** Planned expenditures do not reflect measures announced in Budget 2012.
Table 3: Departmental Budget 2012 Planned Savings by Program (Unaudited)
Planned Savings | |||
---|---|---|---|
Program | 2012-13 | 2013-14 | 2014-15 & ongoing |
(in thousands of dollars) | |||
Risk Assessment | 5,452 | 10,168 | 11,209 |
Admissibility Determination | 7,254 | 20,469 | 30,494 |
Criminal Investigations | 15 | 73 | 118 |
Immigration Enforcement | 103 | 1,152 | 3,432 |
Secure and Trusted Partnerships | 158 | 327 | 7,706 |
Revenue and Trade Management | 1,753 | 3,994 | 9,816 |
Recourse | 129 | 302 | 609 |
Internal Services | 16,415 | 36,295 | 80,024 |
Total for CBSA | 31,279 | 72,780 | 143,408 |
Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.