Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Quarterly Financial Report for the quarter ended December 31, 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 December 31, 2013. The explanation of variance considers that changes related to expenditures under 25% or amounts under $0.25M for a quarter 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 third quarter have decreased by $3.0M, or 5.3%, from $56.4M in 2012–13 to $53.4M 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
FINTRAC's total authorities available (in millions)
2013–14 2012–13
Budgetary Authorities 47.7 50.7
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:

Totals may not add due to rounding.

ii. Statutory Authorities

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

B. Statement of Departmental Budgetary Expenditures by Standard Object

Total expenditures used during the third quarter have remained stable.

i. Planned Expenditures

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

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

ii. Year-to-Date Expenditures

FINTRAC has increased its personnel spending by $1.3M or 5%. FINTRAC has grown as a result of increased funding from Budget 2010 and now, in 2013–14, has a full staffing complement.

When comparing year-to-date expenditures at Q3 of this fiscal year to last fiscal year, we note, consistent with our planned expenditures, decreased spending in the categories of Professional and Special Services (-$0.5M or -19%), in line with FINTRAC's Budget 2012 commitments, Information (-$0.07M or -54%), due to a reduction of advertising, public relations and printing services, as well as Utilities, Materials and Supplies (-$0.2M or -59%) and Repair and Maintenance ($-0.9M or -76%) primarily due to the fit-up costs for office space last fiscal year. Finally, there is decreased spending in the category of Acquisition of Machinery and Equipment (-$0.08M or -26%), due to a reduction in purchases of application software and computer equipment.

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 the graphic illustrating FINTRAC's comparison of Year-to-Date Expenditures by Standard Object.
FINTRAC's comparison of Year-to-Date Expenditures by Standard Object (in thousands)
2013–14 2012–13
Other subsidies and payments 8 3
Transfer payments 0 0
Acquisition of machinery and equipment 231 313
Acquisition of land, buildings and works 0 0
Utilities, materials and supplies 116 280
Repair and maintenance 294 1,207
Rentals 3,801 4,142
Professional and special services 2,044 2,516
Information 56 124
Transportation and communications 705 801

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

A. Key Personnel Change

Effective November 12, 2013, Stéphane Cousineau became the Chief Information Officer of FINTRAC.

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: February 12, 2014



Hélène Filion
Chief Financial Officer
FINTRAC
Ottawa, Canada

Date: February 12, 2014


STATEMENT OF AUTHORITIES (unaudited)
For the quarter ended December 31, 2013

(in thousands of dollars)
  Fiscal Year 2013–14 Fiscal Year 2012–13
  Total available for use for the year ending March 31, 2014See the note below for Total available for use for the year ending March 31, 2014* Used during the quarter ended December 31, 2013 Year to date used at quarter-end Total available for use for the year ending March 31, 2013See the note below for Total available for use for the year ending March 31, 2013* Used during the quarter ended December 31, 2012 Year to date used at quarter-end
Vote 30 - Program expenditures 47,705 10,583 31,357 50,723 10,426 32,145
Budgetary statutory authorities
(S) Contributions to employee benefit plans
5,659 1,415 4,244 5,698 1,424 4,273
Total budgetary authorities $ 53,364 $ 11,997 $ 35,601 $ 56,421 $ 11,850 $ 36,418
Non-budgetary authorities $ - $ - $ - $ - $ - $ -
Total authorities $ 53,364 $ 11,997 $ 35,601 $ 56,421 $ 11,850 $ 36,418

Return to statement of authorities (unaudited) for the quarter ended December 31, 2013 table * Includes only Authorities available for use and granted by Parliament at quarter-end.

Note: Totals may not add due to rounding.


DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT (unaudited)
For the quarter ended December 31, 2013

(in thousands of dollars)
  Fiscal Year 2013–14 Fiscal Year 2012–13
  Planned expenditures for the year ending March 31, 2014See the note below for Total available for use for the year ending March 31, 2013*  Expended during the quarter ended December 31, 2013 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2013See the note below for Total available for use for the year ending March 31, 2013* Expended during the quarter ended December 31, 2012 Year to date used at quarter-end
Expenditures:            
Personnel 38,179 9,640 28,363 38,279 8,542 27,034
Transportation and communications 1,213 210 705 1,668 322 801
Information 185 19 56 240 59 124
Professional and special services 3,599 686 2,044 4,596 1,057 2,516
RentalsSee the note below for rentals* 3,358 1,152 3,801 3,769 1,248 4,142
Repair and maintenance 3,164 144 294 3,519 326 1,207
Utilities, materials and supplies 175 54 116 361 100 280
Acquisition of land, buildings and works 13 0 0 11 0 0
Acquisition of machinery and equipment 3,474 95 231 3,969 197 313
Transfer payments 0 0 0 0 0 0
Other subsidies and payments 4 -3 -8 10 0 3
Total budgetary expenditures $ 53,364 $ 11,997 $ 35,601 $ 56,421 $ 11,851 $ 36,419

Note: Totals may not add due to rounding.

Return to departmental budgetary expenditures by standard object (unaudited) for the quarter ended September 30, 2013 table * The category of Rentals includes rental for accommodation of government offices and photocopiers. It also includes repair and maintenance of application software and IT Security software.

Date Modified: