Quarterly Financial Report - For the quarter ended December 31, 2012

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 Accounting Standard 1.3. This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates and with the previous Quartely Financial Reports.

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

Authority, Mandate and Program Authorities

The Security Intelligence Review Committee (SIRC or the Committee) is a small, independent, external review body that reports to the Parliament of Canada on the operations of the Canadian Security Intelligence Service (CSIS or the Service). SIRC was established in 1984, at the same time as CSIS, and derives its powers from the Canadian Security Intelligence Service Act (CSIS Act).

Parliament has authorized CSIS to gather intelligence in the interests of protecting national security. SIRC ensures that these powers are used appropriately and in accordance with the law, in order to protect Canadians' rights and freedoms. To do this, SIRC examines past operations of the Service and investigates complaints. It has the authority to examine all information concerning CSIS activities, no matter how sensitive and highly classified that information may be. The results of this work, redacted to protect national security and personal privacy, are summarized in its Annual Report to Parliament.

Further information on SIRC's programs can be located in Part II of the Main Estimates on the Treasury Bord of Canada Secretariat's website http://www.tbs.gc.ca.

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 2012-13 the fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework (using a cash basis) 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 appropriations acts or through legislation in the form of statutory spending authority for specific purposes.

The Department uses the full accrual method of accounting to prepare and present its departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

Statement of Authorities

As of December 31, 2012, the total authorities available for the year have decreased by $267 thousand when compared to the same quarter of 2011-12.

As per the Statement of Authorities, the net decrease of $267 thousand, from $3. 3 million for 2011-12 to $3.033 million for 2012-13 is mainly related to the following:

A reduction of $480 thousand in the cost of professional services related to undertakings before the Federal Court in 2011-12 which are not required in 2012-13. The reduction in expenditures for professional services is due to the cost for retaining outside lawyers being less than expected and a reduction in travel and per diem costs for the committee.

Partially offset by the following:

An increase of $69 thousand from 2011-12 to 2012-13 to compensate for expenditures related to vacation credits payable upon termination of employment with the Public Service, parental benefits and severance pay due to the changes in conditions following the ratification of new collective agreements which resulted in the cash-out of severance benefits.

An increase of $144 thousand in funding transferred in the 2012-13 Supplementary Estimates (B) from Public Safety and Emergency Preparedness to consolidate Canadian Security Intelligence Service review functions into a single organization.

The variances in the authorities by standard object of expenditure are mostly in professional and special services, personnel, and transportation and communications which can be explained by the items included above.

Statement of Departmental Budgetary Expenditures by Standard Object

As of December 31, 2012, the expenditure has increased by $174 thousand compared to the same quarter of fiscal year 2011-12. Furthermore, the year-to-date used at quarter end as of December 31, 2012, has decreased by $21 thousand compared to the same period of 2011-12 which can mainly be explained by the following item:.

Personnel

Partially offset by the following:

Transportation and communications

Professional and special services

Risks and Uncertainties

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 29, 2012 and also includes $144 thousand received in the 2012–2013 Supplementary Estimates A and B.

Although the Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13, SIRC has experienced a 6% reduction in its 2011-12 budget and absorbed an additional reduction of 10% in its 2012-13 budget. Options for implementing the reduction are limited due to the nature of the organization's budget - i.e. approximately 70% of SIRC's budget is attributed to salary and salary related costs.

Significant Changes in Relation to Operations, Personnel and Programs

On June 14, 2012, the Honourable Charles Strahl, P.C. was appointed as Chairman of SIRC.

Bill C-38, the Jobs, Growth and Long-term Prosperity Act, received Royal Assent on June 29, 2012. The Act transferred specific responsibilities, formerly assigned to the Inspector General of CSIS, to SIRC.

SIRC is reviewing this expansion of its mandate in order to determine the most effective means of meeting these new obligations. To allow SIRC to fulfill its new responsibilities, Public Safety and Emergency Preparedness Canada has transferred funding which will be used to fund two additional positions at SIRC.

On December 28, 2012, Michael E. Doucet was appointed to the position of Executive Director of the Security Intelligence Review Committee.

Approved by:

_________________________
Hon. Charles Strahl, P.C.
Chair

_________________________
Michael E. Doucet
Executive Director,
Senior Financial Officer

Ottawa, Canada
March 1st, 2013

Statement of Authorities (unaudited)

Fiscal year 2012–2013
(In thousands of dollars)
  Planned expenditures
for the year ending
March 31, 2013**
Used during the
quarter ended
December 31, 2012
Year to date
used at
quarter end
Vote 1 - Net operating expenditures 2,740 754 1,697
Budgetary statutory authorities 293 73 220
Total budgetary authorities 3,033 827 1,917
Total Authorities 3,033 827 1,917

Fiscal year 2011–2012
(In thousands of dollars)
  Planned expenditures
for the year ending
March 31, 2012**
Used during the
quarter ended
December 31, 2011
Year to date
used at
quarter end
Vote 1 - Net operating expenditures 2,995 577 1,709
Budgetary statutory authorities 305 76 229
Total budgetary authorities 3,300 653 1,938
Total Authorities 3,300 653 1,938
**includes only Authorities available for use and granted by Parliament at quarter-end

Note: Details may not add to totals due to rounding

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2012–2013
(In thousands of dollars)
  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
Expenditures
Personnel 2,301 632 1,474
Transportation and communications 196 63 147
Information 41 23 31
Professional and special services 375 84 221
Rentals 20 5 16
Repair and Maintenance 10 1 2
Utilities, Materials and Supplies 20 8 14
Acquisition of Machinery and Equipment 70 11 12
Other subsidies and payments - - -
Total gross budgetary expenditures 3,033 827 1,917
Total Authorities 3,033 827 1,917

Fiscal year 2011–2012
(In thousands of dollars)
  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
Expenditures
Personnel 2,152 505 1,570
Transportation and communications 177 54 110
Information 29 18 37
Professional and special services 813 65 188
Rentals 19 1 11
Repair and Maintenance 5 3 6
Utilities, Materials and Supplies 24 7 11
Acquisition of Machinery and Equipment 70 1 5
Other subsidies and payments 11 (1) -
Total gross budgetary expenditures 3,300 653 1,938
Total Authorities 3,300 653 1,938
**includes only Authorities available for use and granted by Parliament at quarter-end

Note: Details may not add to totals due to rounding
Date modified: