ARCHIVED – Quarterly Financial Report for the quarter ended December 31, 2011

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1. Introduction

This quarterly 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 Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, Supplementary Estimates as well as the Quarterly Financial Reports (QFR) for the quarter ended June 30, 2011 and September 30, 2011.

A summary description of the Citizenship and Immigration Canada (CIC) program activities may be found in Part II of the Main Estimates (PDF, 1.88 Mb).

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department’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.

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.

Citizenship and Immigration Canada prepares its annual departmental financial statements that are part of the departmental performance reporting process, on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

This quarterly report has not been subject to an external audit or review.

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

CIC’s 2010-11 authorities represent the total Main Estimates, the Operating Budget Carry Forward, the Supplementary Estimates (A) and (B), whereas 2011-12 includes the amounts in the Main Estimates, the Supplementary Estimates (B) and the Operating Budget Carry Forward. CIC did not request authorities through Supplementary Estimates (A) in 2011-12.

CIC’s net budgetary expenditures for the quarter ending December 31, 2011 were $345 million compared to $376 million as of December 31, 2010, representing 21% of the total budgetary authorities available for use for year ending March 31, 2012; approximately the same percentage (23%) used at quarter-end last year.  The Department has therefore been consistent in its spending this quarter versus its authorities provided, compared to the third quarter of the previous fiscal year.

Statement of Authorities: Significant changes

As reflected in the Statement of Authorities, Citizenship and Immigration Canada’s total budgetary authorities available for use in fiscal year 2011-12 at December 31, 2011 are $1,613 million, compared to $1,624 million at December 31, 2010. CIC’s budgetary authorities available for use decreased by approximately $11 million, when compared to the same quarter in 2010-11.

This net decrease is a combination of increases in Vote 1 – Operating Expenditures ($12 million), Vote 7 – Debt Write-off ($2 million) and Budgetary Statutory Authorities  ($1 million), offset by a decrease in Vote 5 – Grants and Contribution ($26 million).

Vote 1 – Operating Expenditures

The Department’s Vote 1 net increase of $12 million or 2.1% is explained as follows:

  • Funding for the cash out of severance entitlements ($35 million)
  • Increases of $29 million to reflect funding approvals:
    • Investment in the reform of Canada’s Refugee system ($27 million)
    • Funding to Modernize the Immigration System and Manage Backlogs ($2 million)
  • Decreases of $49 million to reflect a reduction or the end of funding (sunsetting or one-time):
    • One-time internal transfer from Vote 5 to Vote 1 in 2010-11 ($10 million)
    • Temporary Resident Visa for Mexico ($6 million)
    • Interim Federal Health Program ($6 million)
    • Global Case Management System ($6 million)
    • Reduction due to foregone revenue for Visa lifting ($4 million)
    • Implementation of Biometrics to facilitate entry to Canada ($1 million)
    • Advertising campaigns ($1 million)
    • Transfer to Foreign Affairs and International Trade (DFAIT) for the International Experience Canada Program and for operations at missions abroad ($1 million)
    • Canada’s response to the Haiti earthquake funding received in 2010-11 ($14 million)
  • Decrease related to the ongoing Strategic Review of departmental spending ($3 million)

Vote 5 – Grants and Contributions (G&C)

The Department’s Vote 5 net decrease of $26 million or 2.7% is explained as follows:

  • Increases of $12 million to reflect new funding approvals:
    • Investment in the reform of Canada’s Refugee system ($7 million)
    • Funding for the Canada-Quebec Accord ($5 million)
  • Increases of $11 million due to sunsetting of previous transfers:
    • Transfers to other government departments related to specific projects/programs ($1 million)
    • One-time internal transfer from Vote 5 to Vote 1 in 2010-11 ($10 million)
  • Decrease related to the ongoing Strategic Review of departmental spending ($49 million)

Vote 7 – Debt Write-off

The 2011-12 authorities include funding of $2 million for the write-off of uncollectable loans which was not included in 2010-11 authorities due to the cancellation of Supplementary Estimates (C).

Budgetary Statutory Authorities

The 2011-12 statutory authorities level in the third quarter reports no considerable changes compared to 2010-11.  The increase of $1 million is mainly related to the Employee Benefits Plan costs associated with the change in the Department budgetary requirements for salary.

Departmental Budgetary Expenditures by Standard Object: Significant Changes

Compared to the previous year, the total of budgetary expenditures in the third quarter, ending December 31, 2011, have decreased by $32 million or 8%, from $376 million to $344 million as per the Table of Departmental Budgetary Expenditures by Standard Object.  This difference is for the most part explained by an increase of $7 million in Personnel expenditures with offset reductions of $27 million under Transfer Payments and $12 million under the remaining expenditures by standard object.

The increase of $7 million or 7%, in Personnel expenditures, from $95 million in the third quarter of 2010-11 to $102 million as of December 31, 2011 is mainly due to cash out of severance entitlements paid in the third quarter and salary increase resulting from collective bargaining, as mentioned in the Risks and Uncertainties section of this Quarterly Financial Report. Personnel expenditures represent 81% of planned personnel at the end of Q3 as opposed to 79% last year at this time. 

The reduction of $27 million or 12%, in Transfer Payments (Vote 5) is attributable to earlier spending in the Settlement Program ($33 million) compared to the same quarter of 2010‑11. It is offset by an increase in grant payments to Quebec under the Canada‑Quebec Accord ($6 million). Transfer Payments expenditures represent 71% of planned transfer payments at the end of Q3 as opposed to 70% last year at this time.  

The decrease of $12 million under the remaining expenditures by standard object is mainly in Transportation and Communications ($2 million), Professional and Special Services ($9 million), and Acquisition of Machinery and Equipment ($2 million).  These reductions are offset by a number of other budgetary expenditures ($1 million) which support CIC’s activities.

With respect to the variance in Professional and Special Services expenditures, this can be explained by reduced requirements for informatics support contracts as well as timing differences in recording transactions under the Interim Federal Health Program. The decrease is partially offset by an increase in legal services related to Refugee Reform.

3. Risks and Uncertainties

CIC consistently receives more immigration and citizenship applications than can be processed in a year. This situation gives rise to significant backlogs of applications awaiting processing and an inventory which must be managed within the immigration levels plan submitted annually to Parliament and within the resources available. As previously mentioned in the section “Statement of Authorities: Significant Changes”, the Department has received funding to embark on an ambitious modernization agenda which aims to provide simpler and more accessible services; continuous, innovative and adaptable operational improvements, as well as robust program integrity and the delivery of quality service at lower costs.

Budget 2010 announced that the operating budgets for departments would be frozen at their 2010-11 levels for fiscal years 2011-12 and 2012-13. The area most impacted by this freeze had been personnel costs as they amount to 59% of planned expenditures, excluding transfer payments. The recent wage increases as a result of collective bargaining, must be absorbed within existing budgets. CIC has estimated the impact of this government- initiative to be approximately $4 million in 2011-12.  CIC has taken steps to closely manage costs in this area by establishing staffing and salary budgets in addition to implementing rigorous monthly monitoring to ensure that annual budgets are respected. 

4. Significant changes in relation to operations, personnel and programs

Strategic Review

The bulk of CIC’s reduction, about $59 million in 2011-12, came from the national settlement funding.  Settlement allocations have more than tripled since 2005-06, and more services are being provided.  Realigning settlement funding based mainly on immigrant intake will allow us to advance fairness across the country.

Other savings were found through operating efficiencies including the use of a global technology network to process medical records, web-based applications forms, and other services that reduce the use of expensive paper and mail, and that better track applicants as they move through the immigration system. 

Shared Services Canada

Effective August 4, 2011, Shared Services Canada (SSC) was created by an Order in Council (OIC) under the Financial Administration Act, to standardize and consolidate information technology services in the federal government in order to reduce costs, improve services, and leverage capacity in the public and private sector through pooled resources and greater buying power.

On November 15, 2011, a second set of Orders-in-Council were signed. The Department is required to identify the amounts, by vote, of authorities related to functions transferred to Shared Services Canada.  Amounts for future years will be addressed in the 2012-13 Annual Reference Level Updates.

The appropriations to be transferred from CIC to SSC pursuant to Section 31.1 of the Financial Administrative Act will include amounts in connection with corporate, administrative and other support for e-mail, networks and data centre services.  To facilitate a smooth transition, a delegation of authorities instrument related to SSC has been put in place.

During this transition period, the CIC’s Quarterly Financial Report continues to reflect financial information related to the transferred services.

Deficit Reduction Action Plan

All departments including CIC have been tasked with completing a comprehensive strategic and operating review as part of the deficit reduction action plan announced in the federal budget tabled on June 6, 2011. This review will inform the government’s annual budget planning process. For this reason, the final results, for all participating departments and agencies, will only be known when the government releases Budget 2012.

Our objective is to emerge as a stronger, higher-performing institution that is nimble, connected, engaged and ready to face new challenges.

Program Activity Architecture

A revised Program Activity Architecture was introduced in 2011-12 to better reflect the Department’s mandate and sharpen its focus on outcomes. To that end, a fourth strategic outcome and four new program activities were added to highlight CIC’s work in the areas of health, security, family reunification and multiculturalism for a total of four strategic outcomes and ten program activities (plus internal services).

Key Senior Personnel

Effective November 28th, 2011, Amipal Manchanda became the Assistant Deputy Minister and the Chief Financial Officer of the Department.

Approved by:

Neal Yeates, Deputy Minister, Ottawa, Canada Amipal Manchanda, Assistant Deputy Minister, Cheif Financial Officer, Ottawa, Canada

February 16, 2012

* Includes only authorities available for use and granted by Parliament at quarter-end
** Represents the net of loans collected and loans issued

Statement of Authorities
(in thousands of dollars) Fiscal Year 2011-2012 Fiscal Year 2010-2011
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 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
Vote 1 – Operating Expenditures 609,066 132,277 389,398 596,792 139,574 355,664
Vote 5 – Grants and Contributions 944,971 196,680 672,422 971,492 223,748 676,073
Vote 7 – Debt Write-off 1,709 0 0 0 0 0
Budgetary Statutory Authorities 57,322 15,591 43,985 55,989 13,107 43,908
Total Budgetary Authorities 1,613,068 344,548 1,105,805 1,624,273 376,429 1,075,645
Non-Budgetary Authorities 72,608 ** 1,039 (1,695) 73,992 ** 38 (1,980)
TOTAL AUTHORITIES 1,685,676 345,587 1,104,110 1,698,265 376,467 1,073,665

Pursuant to s. 31.1 of the Financial Administrative Act and Order-in-Council P.C. 2011-0877 effective August 4, 2011, $8,293,103 is deemed to have been appropriated to Shared Services Canada (Operating Expenditures), which results in a reduction for the same amount in Citizenship and Immigration Canada, Vote 1, Appropriation Act No. 1, 2011-2012.  To date $1,033,972 expenditures have been incurred on behalf of SSC by CIC against Shared Services Canada (Operating Expenditures).

Departmental Budgetary Expenditures by Standard Object
(in thousands of dollars) Fiscal Year 2011-2012 Fiscal Year 2010-2011
Planned expenditures for the year ending March 31, 2012 Expended during the quarter ended December 31, 2011 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2011 Expended during the quarter ended December 31, 2010 Year to date used at quarter-end
Personnel 394,535 101,910 319,729 352,197 95,375 278,225
Transportation and Communications 33,540 5,401 14,900 41,526 7,376 17,549
Information 17,637 1,122 2,009 17,164 1,030 2,640
Professional and Special Services 166,385 33,678 78,440 186,081 42,553 76,423
Rentals 4,363 785 6,769 3,822 990 7,585
Repair and maintenance 7,765 1,412 2,218 10,060 999 3,218
Utilities, Materials and Supplies 11,231 1,114 2,859 11,624 1,000 2,357
Acquisition of Machinery and Equipment 26,879 709 1,828 22,626 2,292 3,777
Transfer Payments 944,971 196,680 672,422 971,492 223,748 676,073
Other Subsidies and Payments 5,762 1,737 4,631 7,681 1,066 7,798
TOTAL NET BUDGETARY EXPENDITURES 1,613,068 344,548 1,105,805 1,624,273 376,429 1,075,645
Date Modified: