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Global Affairs Canada
Quarterly Financial Report

For the period ended December 31, 2015

Table of Contents

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

1. Introduction

This quarterly report for the period ending December 31, 2015 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. The report has not been subject to an external audit or review, and should be read in conjunction with the Main Estimates and the Supplementary Estimates for the current year.

A summary description of the Department's programs can be found in Part II of the Main Estimates.

Basis of Presentation

This quarterly report has been prepared 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 for the fiscal year 2015-16. 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 special 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.

Global Affairs Canada 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 (YTD) results

A. Significant changes to Authorities

The following table shows the total budget available for use by the Department. Only authorities available for use and granted by Parliament as at December 31, 2015 are included.

Table 1: Significant changes to Authorities
Authorities (In thousands of dollars)Fiscal Year
2015-2016
Fiscal Year
2014-2015
Variance
Total available for use for the year ending March 31, 2016Total available for use for the year ending March 31, 2015$%
Operating expenditures1,504,1071,482,64321,4641%
Capital Expenditures155,070320,929(165,859)-52%
Grants and Contributions3,573,4103,431,565141,8454%
Locally engaged staff pensions, insurance and social security60,80250,77910,02320%
Budgetary statutory authorities
Contributions to employee benefit plans102,24997,8384,4115%
Ministers' salary and motor car allowance24824352%
Payments under the Diplomatic Service (Special) Superannuation Act250250-0%
Debt forgiveness to Pakistan124,640172,252(47,612)-28%
Spending of proceeds from the disposal of surplus Crown assets1,7132,908(1,195)-41%
Refunds of amounts credited to revenues in previous years1816213%
Payment to the World Bank for the Advance Market Commitment for Pneumococcal Vaccines-10,916(10,916)-100%
Payments to International Financial Institutions Encashment of notes-211,800(211,800)-100%
Payments to International Financial Institutions Direct Payments245,00033,200211,800638%
Total Budgetary authorities5,767,507 5,815,339 (47,832)-1%
Non-budgetary authorities68,11979,632(11,513)-14%
Total Authorities5,835,626 5,894,971 (59,345)-1%
i. Budgetary Authorities

Operating Expenditures authorities haveincreased by $21.5 million. This is mainly due to currency exchange fluctuations on operating expenditures and locally engaged staff salaries, inflation on overseas operating costs and funding received for the operations of the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund.

Capital Expenditures authorities have decreased by $165.9 million. This is attributable to the funding for the consolidation of the Canadian High Commission at Trafalgar Square, London, received in 2014-15. Changes in the funding profile related to the Moscow Chancery Relocation Project also contributed to this decrease which was offset by an increase of the capital budget carry-forward.

Grants and Contributions authorities have increased by $141.8 million. This is mainly due to the funding received for the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund. New funding to support the Global Fund to Fight AIDS, Tuberculosis and Malaria also contributed to this increase.

Locally engaged staff pension, insurance and social security authorities have increased by $10.0 million. As part of the management of the Locally Engaged Staff (LES) pension, insurance and social security program, Global Affairs Canada annual funding requests reflect the requirements that payments in respect of such employee benefits are met. 

ii. Budgetary Statutory Authorities

Contributions to employee benefits plans (EBP) statutory have increased by $4.4 million. This is mainly due to the salary components of the funding received for the Stabilization and Reconstruction Task Force and the Global Peace and Security Fund, currency exchange fluctuations on Locally Engaged Staff salaries and compensation for collective bargaining agreements. This was partially offset by funding received through Supplementary Estimates B in the third quarter for 2014-15 for Locally Engaged Staff salary revisions not provided in the first quarter and second quarter.

Debt forgiveness to Pakistan of $124.6 million represents the available balance from previous years. For 2014-15, the opening balance was $172.2 million of which $47.6 million was used during the year. In 2006-2007, the Government of Canada, as represented by the Department, entered into an agreement with the Government of Pakistan to forgive its outstanding $447.5 million loan. In order to expire its debt obligation, the Government of Pakistan is required to make corresponding investments in their education sector.

Payments to International Financial Institutions (IFI) authorities were the same compared to last year. The authorities available in 2014-15 reflected the former payment method through the encashment of notes by IFI, whereas this year’s amounts reflect the more administratively efficient method to make payments to IFI through direct payments.

iii. Non-budgetary Authorities

The Department’s non-budgetary authorities have decreased by $11.5 million. This is largely caused by a reduction in the Working Capital Advances for loans and advances to personnel and posts abroad. In addition, there was a decrease in the anticipated payments to International Financial Institutions for capital subscriptions.

B. Significant changes to budgetary expenditures by standard object

The following table shows the budgetary expenditures and revenues netted against expenditures of the Department for the first three quarters and their comparison with the same period last year.

Table 2: Significant changes to budgetary expenditures by standard object
(in thousands of dollars)April to December
2015-16
April to December
2014-15
Variance
$%
Expenditures
Salaries and employee benefits800,580796,6623,9180%
Transportation and communications71,39474,613(3,219)(4%)
Information5,6136,075(462)(8%)
Professional and special services153,421140,46712,9549%
Rentals156,709150,3596,3504%
Repair and maintenance15,73417,362(1,628)(9%)
Utilities, materials and supplies27,32327,911(588)(2%)
Other7,71522,245(14,530)(65%)
Total Operating1,238,4891,235,6942,7950%
Acquisition of land, buildings and works27,74495,363(67,619)(71%)
Acquisition of machinery and equipment20,59219,4691,1236%
Total Acquisition48,336114,832(66,496)(58%)
Transfer payments1,989,2001,613,422375,77823%
Total gross budgetary expenditures3,276,0252,963,948312,07711%
Less revenues netted against expenditures
Revenue Credited to the Vote25,48031,200(5,720)(18%)
Total Net Budgetary Expenditures3,250,5452,932,748317,79711%
i. Operating Expenditures

Transportation and communications – The decrease of $3.2 million is caused by a timing difference from the recovery of mission mobile device costs from Shared Services Canada as well as a reduction in shipment costs for personnel abroad.

Professional and special services – The increase of $13.0 million is primarily explained by higher costs this fiscal year related to security at missions abroad, the IM/IT consulting services, the timing of security invoices from another government department and fees paid for the management of new trade offices abroad.

Rentals – The increase of $6.4 million is due in part to regular increases in rent of office and residential leases abroad as well as fluctuations in foreign and domestic currencies.

Repair and maintenance – The decrease of $1.6 million is mostly attributable to decreased expenditures on the repair and maintenance of residential buildings (staff quarters) abroad this fiscal year.

Other – The decrease of $14.5 million is mostly due to the implementation of the salary payment in arrears by the Government of Canada in 2014-2015. This process required a one-time transition payment which caused this variance. This difference was offset by the impact of foreign exchange due to a lower Canadian dollar.

ii. Capital Expenditures

Acquisition of land, building and works –The decrease of $67.6 million is attributed to the renovation costs incurred in 2014-15 for the Canada House revitalization project in London. Acquisitions made in 2015-2016 that relate to the “Official Residences right sizing” program also contributed to this variance.

iii. Transfer Payments

The increase of $375.8 million in transfer payments is, for the most part, a result of disbursements made to the World Bank for the Global Fund to fight AIDS, Tuberculosis and Malaria as well as a grant to the United Nations Development Program to provide long term institutional support to this organization. A payment to the United Nations Population Fund for the Child, Early and Forced Marriage initiative and humanitarian assistance related to the Syrian crisis have also contributed to this increase.

iv. Revenues

The decrease of $5.7 million in revenues originates from a timing difference in the recovery by Global Affairs Canada of shared costs from other organizations co-located at missions.

3. Risks and Uncertainties

Given Global Affairs Canada’s mandate, the department must operate in a constantly changing environment that is influenced by many external factors (political, global economic, export and import controls, social contexts) including shifting of global trends. In addition, the department must operate in a time of fiscal restraint as a result of the operating budget freeze that was announced for all government departments and agencies in Budget 2014.

In recognition of this environment, a new integrated business planning process was implemented to support risk management through enhanced monitoring of risk and mitigation strategies. The department has also improved financial forecasting and continues to find ways to absorb or fund activities within existing spending authorities without compromising program results.

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

The following senior appointments took place during the quarter:

The Government has announced that the name of the Department will be changed to Global Affairs Canada.

Approval by Senior Officials

Approved, as required by the TB Policy on Financial Resource Management, Information and Reporting:

Daniel Jean
Deputy Minister of Foreign Affairs

T. Christine Hogan
Deputy Minister of International Trade

Peter M. Boehm
A/Deputy Minister of International Development

Arun Thangaraj
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology

Ottawa, Ontario
Date: February 29, 2016

Table 3: Statement of Authorities (Unaudited)
This table includes authorities available for use and granted by Parliament as at December 31, 2015
(In thousands of dollars)Fiscal Year
2015-2016
Fiscal Year
2014-2015
Total available for use for the year ending March 31, 2016Expended during the quarter ended December 31, 2015Year to date used at quarter endTotal available for use for the year ending March 31, 2015Expended during the quarter ended December 31, 2014Year to date used at quarter end
Operating Expenditures1,504,107350,1251,080,2911,482,643365,2701,075,693
Capital Expenditures155,07025,95266,177320,92958,236135,853
Grants and Contributions3,573,410745,9781,748,9553,431,565662,7281,390,646
Locally engaged staff pensions, insurance and social security60,80213,20636,02350,77912,16334,533
Budgetary statutory authorities
Contributions to employee benefit plans102,24925,75077,43697,83824,24173,048
Ministers' salary and motor car allowance2484216724361182
Payments under the Diplomatic Service (Special) Superannuation Act2501820525050118
Debt forgiveness to Pakistan124,640--172,252--
Spending of proceeds from the disposal of surplus Crown assets1,7131,2331,2332,908--
Refunds of amounts credited to revenues in previous years18(0)18161616
Payment to the World Bank for the Advance Market Commitment for Pneumococcal Vaccines---10,916-10,916
Payments to International Financial Institutions
Encashment of notes
---211,80012,500211,743
Payments to International Financial Institutions
Direct Payments
245,00012,500240,04033,200--
Total Budgetary authorities5,767,507 1,174,804 3,250,545 5,815,339 1,135,265 2,932,748
Non-budgetary authorities68,11930,38329,90279,632(3,690)4,398
Total Authorities5,835,626 1,205,187 3,280,447 5,894,971 1,131,575 2,937,146
Table 4: Departmental budgetary expenditures by Standard Object (unaudited)
This table includes authorities available for use and granted by Parliament as at December 31, 2015
(In thousands of dollars)Fiscal Year
2015-2016
Fiscal Year
2014-2015
Planned expenditures for the year ending March 31, 2016Expended during the quarter ended December 31, 2015Year to date used at quarter endPlanned expenditures for the year ending March 31, 2015Expended during the quarter ended December 31, 2014Year to date used at quarter end
Expenditures
Salaries and employee benefits1,018,166264,556800,580962,831264,833796,662
Transportation and communications80,84025,36271,39498,83927,08174,613
Information11,3232,3235,61313,5802,5836,075
Professional and special services294,47062,710153,421286,51056,406140,467
Rentals209,93341,813156,709226,78143,584150,359
Repair and maintenance39,5214,12615,73435,3387,04117,362
Utilities, materials and supplies55,8409,75627,32356,97210,83927,911
Acquisition of land, buildings and works90,09011,62027,744209,72540,04195,363
Acquisition of machinery and equipment66,7119,95520,592112,0839,68319,469
Transfer payments3,818,660758,4961,989,2003,687,730675,2791,613,422
Other129,1781,1797,715174,287(114)22,245
Total gross budgetary expenditures5,814,732 1,191,896 3,276,025 5,864,676 1,137,256 2,963,948
Less revenues netted against expenditures
Revenue Credited to the Vote47,22517,09225,48049,3371,99131,200
Total revenues netted against expenditures47,22517,092 25,480 49,337 1,991 31,200
Total Net Budgetary Expenditures5,767,507 1,174,804 3,250,545 5,815,339 1,135,265 2,932,748
Date Modified: