Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Quarterly Financial Report for the Quarter Ended September 30, 2013
Statement outlining results, risks and significant changes in operations, personnel and program
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:
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.
View the text equivalent for Comparison of Authorities by Fiscal Year
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:
- An increase of funding of $0.5M due to economic increases related to salaries;
- A decrease of $0.7M due to Budget 2012 and Budget 2013 saving measures;
- A decrease of $0.5M ($10.0M in 2013–14 versus $10.5M in 2012–13) due to the profile of funding approved in Budget 2010;
- A decrease of $1.9M as there was a reprofile in 2012–13 (for the fit-up of FINTRAC's headquarters);
- A decrease of $0.4M due to having not yet sought reimbursement for eligible paylist expenditures. (These will be sought in Q3.); and
- A decrease of $1.7M due to delayed receipt of FINTRAC's Operating Budget Carry-Forward (OBCF). (This year's OBCF of $2.0M was received at the beginning of Q3.).
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.
View the text equivalent for Comparison of Year-to-Date Expenditures by Standard Object
|Other subsidies and payments||-5||3|
|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|
|Professional and special services||1,358||1,459|
|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:
- Managers have been asked to identify and implement opportunities for efficiencies to offset higher costs of operations;
- FINTRAC is currently doing a cost review for the next two fiscal years in order to ensure resources and priorities are aligned; and
- FINTRAC management has developed rigorous control and reporting mechanisms to monitor spending, including for example, additional oversight to ensure that spending for travel, conferences and hospitality remain within sustainable levels.
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:
- FINTRAC did not seek renewal of its National Anti-Drug Strategy funding ($0.6M) when it sunset in 2011–12.
- FINTRAC will make use of attrition and non-renewal of term contracts for savings of $0.3 million in 2013–14.
- FINTRAC will reduce travel and training costs by $0.2 million.
- FINTRAC will reduce its use of professional services contracts such as management consultant services, classification services and temporary help by $0.2 million.
There are no financial risks or uncertainties related to these savings.
6. Approval by Senior Officials
Date: November 21, 2013
Chief Financial Officer
Date: November 21, 2013
|Fiscal Year 2013–14||Fiscal Year 2012–13|
|Total available for use for the year ending March 31, 2014 Footnote1||Used during the quarter ended September 30, 2013||Year to date used at quarter-end||Total available for use for the year ending March 31, 2013 Footnote1||Used during the quarter ended September 30, 2012||Year to date used at quarter-end|
|Vote 30 - Program expenditures||45,684||9,921||20,775||50,432||12,163||21,719|
|Budgetary statutory authorities
(S) Contributions to employee benefit plans
|Total budgetary authorities||$ 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.
|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|
|Transportation and communications||983||240||495||1,668||236||479|
|Professional and special services||3,166||744||1,358||4,596||849||1,459|
|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|
|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: