Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Quarterly Financial Report for the Quarter Ended September 30, 2013

Unaudited


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

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 the Treasury Board. This report should be read in conjunction with the Main Estimates, Supplementary Estimates, as well as Canada's Economic Action Plan 2012 (Budget 2012).

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada's financial intelligence unit, exists to detect and deter money laundering and terrorist financing. FINTRAC reports to the Minister of Finance and operates within the ambit of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations.

Further information on the mandate, roles, responsibilities and program of FINTRAC can be found in the FINTRAC 2013–14 Main Estimates, available on the following website:
http://www.tbs-sct.gc.ca/ems-sgd/20132014/me-bpd/me-bpdtb-eng.asp.

A. 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 for the 2013–14 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 Centre 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

This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual (or used) expenditures for the quarter ended September 30, 2013. The explanation of variance considers that changes related to expenditures under 25% and amounts under $0.25M for a quarter, or under $1M for the fiscal year (FY), would have a minimal impact on the interpretation of results.

A. Significant Changes to Authorities

FINTRAC's total authorities available for use at the end of the second quarter have decreased by $4.8M, or 8.6%, from $56.1M in 2012–13 to $51.3M in 2013–14.

Comparison of Authorities by Fiscal Year
Comparison of Authorities by Fiscal Year. Details in text following the chart.
View the text equivalent for Comparison of Authorities by Fiscal Year
Comparison of Authorities by Fiscal Year
  2013–14 2012–13
Budgetary Authorities 45.7 50.4
Statutory Authorities 5.7 5.7
i. Budgetary Authorities

FINTRAC's budgetary authorities have decreased when compared to the same period last year. This is primarily due to the following changes:

ii. Statutory Authorities

Authorities for contributions to employee benefit plans (EBP) remained stable in the second quarter of 2012–13 and in the second quarter of 2013–14.

B. Statement of Departmental Budgetary Expenditures by Standard Object

Total expenditures used during the second quarter have decreased by $2.3M or 16.6%, from $13.6M in 2012–13 to $11.3M in 2013–14.

i. Planned Expenditures

FINTRAC has decreased its planned spending in the category of Information due to transfer of funding and functions to Shared Services Canada (SSC).

FINTRAC has decreased its planned spending in the categories of Professional and Special Services and Transportation and Communication in line with FINTRAC's Budget 2012 commitments.

FINTRAC has also decreased its planned spending in the category of Utilities, Materials and Supplies. Last year planned spending in this category was unusually high due to fit-up costs for FINTRAC Headquarters.

ii. Year-to-Date Expenditures

When comparing year-to-date expenditures at Q2 of this fiscal year to last fiscal year, we note, consistent with our planned expenditures, decreased spending in the categories of Information ($-0.02M or -42%), due to a reduction of advertising, audio-visual and printing services, as well as Utilities, Materials and Supplies ($-0.1M or -66%) and Repair and Maintenance ($-0.7M or -83%) primarily due to the fit-up costs for office space last fiscal year.

Comparison of Year-to-Date Expenditures by Standard Object
Comparison of Year-to-Date Expenditures by Standard Object. Details in text following the chart.
View the text equivalent for Comparison of Year-to-Date Expenditures by Standard Object
Comparison of Year-to-Date Expenditures by Standard Object
  2013–14 2012–13
Other subsidies and payments -5 3
Transfer payments 0 0
Acquisition of machinery and equipment 136 116
Acquisition of land, buildings and works 0 0
Utilities, materials and supplies 62 180
Repair and maintenance 150 881
Rentals 2,648 2,894
Professional and special services 1,358 1,459
Information 38 65
Transportation and communications 498 479

3. Risks and Uncertainties

As Canada's financial intelligence unit and a partner in Canada's Anti-Money Laundering/Anti-Terrorist Financing Regime, FINTRAC is a unique organization that will continue to face unique challenges. In seeking to be proactive in identifying risks and opportunities, FINTRAC must anticipate and assess internal and external risk factors that can affect the design and delivery of its program and the achievement of its strategic outcome. Additionally, FINTRAC must identify factors and risks that could adversely affect its ability to effectively manage its resources. FINTRAC has developed a Corporate Risk Profile (CRP) to identify and manage its key corporate risks. The CRP is reviewed regularly by senior level committees and the business planning process identifies activities to mitigate the risks. This contributes to the decision making processes for investment management and budgeting.

A. Risk Factors and Mitigation

To ensure that FINTRAC is able to attract and retain the talent needed to deliver on its mandate, the organization strives to create an engaging work environment that encourages excellence, offers competitive salaries and benefits, provides learning and development opportunities, and demonstrates a commitment to work/life balance. Employee development opportunities are an important consideration for retention and succession management. Individual learning plans support employee performance and take into account career development objectives. Personnel spending is closely monitored to ensure fiscal stewardship.

Following the allocation of additional resources in Budget 2010, FINTRAC's corresponding growth has levelled off and the organization is now set within the context of government-wide cost containment measures. Moving forward within this broader context, it is expected that there will be increasing pressures in operating budget authorities over the next fiscal years. To date, however, the impact on the Centre's activities has been managed through the following mitigation strategies:

4. Significant Changes in Relation to Operations, Personnel and Program

There have been no significant changes in relation to operations, personnel and program.

5. Budget 2012 Implementation

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, modernize and reduce the back office.

FINTRAC will achieve Budget 2012 savings of $3.4 million by fiscal year 2014–15 through efficiency measures and program reductions.

Beginning in fiscal year 2013–14, savings have increased to $1.3 million ongoing. These savings will be achieved through the following initiatives:

There are no financial risks or uncertainties related to these savings.

6. Approval by Senior Officials



Gérald Cossette
Director
FINTRAC
Ottawa, Canada

Date: November 21, 2013



Hélène Filion
Chief Financial Officer
FINTRAC
Ottawa, Canada

Date: November 21, 2013


STATEMENT OF AUTHORITIES (unaudited) Footnote1
For the quarter ended September 30, 2013

(in thousands of dollars)
  Fiscal Year 2013–14 Fiscal Year 2012–13
  Total available for use for the year ending March 31, 2014 Footnote1 Used during the quarter ended September 30, 2013 Year to date used at quarter-end Total available for use for the year ending March 31, 2013 Footnote1 Used during the quarter ended September 30, 2012 Year to date used at quarter-end
Vote 30 - Program expenditures 45,684 9,921 20,775 50,432 12,163 21,719
Budgetary statutory authorities
(S) Contributions to employee benefit plans
5,659 1,415 2,829 5,698 1,424 2,849
Total budgetary authorities $ 51,343 $ 11,336 $ 23,604 $ 56,130 $ 13,587 $ 24,568
Non-budgetary authorities $ - $ - $ - $ - $ - $ -
Total authorities $ 51,343 $ 11,336 $ 23,604 $ 56,130 $ 13,587 $ 24,568

Note: Totals may not add due to rounding.


DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT (unaudited)
For the quarter ended September 30, 2013

(in thousands of dollars)
  Fiscal Year 2013–14 Fiscal Year 2012–13
  Planned expenditures for the year ending March 31, 2014 Expended during the quarter ended September 30, 2013 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended September 30, 2012 Year to date used at quarter-end
Expenditures:            
Personnel 38,179 9,155 18,723 37,988 9,813 18,492
Transportation and communications 983 240 495 1,668 236 479
Information 146 18 38 240 33 65
Professional and special services 3,166 744 1,358 4,596 849 1,459
Rentals Footnote2 2,949 962 2,648 3,769 1,576 2,894
Repair and maintenance 2,786 131 150 3,519 875 881
Utilities, materials and supplies 89 39 62 361 105 180
Acquisition of land, buildings and works - - - 11 - -
Acquisition of machinery and equipment 3,041 48 136 3,969 96 116
Transfer payments - - - - - -
Other subsidies and payments 4 -2 -5 10 1 3
Total budgetary expenditures $ 51,343 $ 11,336 $ 23,604 $ 56,130 $ 13,584 $ 24,569

Note: Totals may not add due to rounding.

Date Modified: