Quarterly Financial Report - For the quarter ended June 30, 2017

Table of Contents

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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the Main Estimates and previous Quarterly Financial Reports.

A summary description of the Security Intelligence Review Committee (SIRC) program activities can be found in Part II of the Main Estimates. For information on the mandate of SIRC, please visit its website at http://www.sirc-csars.gc.ca.

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

Mandate

The Security Intelligence Review Committee (SIRC) is an independent review body which reports to Parliament of Canada on the operations of the Canadian Security Intelligence Service (CSIS). The Prime Minister is responsible for SIRC.

Parliament has given CSIS powers to enhance the security of Canadians. SIRC reports on whether these powers are used appropriately and in accordance with the rule of law in order to protect Canadians' rights and freedoms. To do this, SIRC examines past operations of CSIS and conducts investigations. It has absolute authority to examine all information concerning CSIS activities, no matter how sensitive and highly classified that information may be. The result of this work, edited to protect national security and personal privacy, are summarized in its Annual Report to Parliament.

SIRC’s work is designed first and foremost to inform Canadians on whether CSIS investigates threats to national security in a manner that respects Canada’s core democratic values. It also serves to provide expert advice to policymakers and lawmakers on CSIS’s performance. The Canadian Security Intelligence Service Act (CSIS Act) continues to guide SIRC’s work in assessing CSIS’s performance against the mandate and authorities conferred upon it by Parliament.

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 2017-18 Main Estimates and Supplementary Estimates (A) for the same year. This quarterly report has been prepared using a special purpose financial reporting framework (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 appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

SIRC 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.

Highlights of Fiscal Quarter and Fiscal Year to Date Results

This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended June 30, 2017.

SIRC spent approximately 13% of its authorities by the end of the first quarter, compared to 10% in the same quarter of 2016-17 (see graph 1 below).

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q1 2017-2018 and 2016-2017 (in millions of dollars)
2017-18 2016-17
Total Authorities 7.0 7.1
Total Net Budgetary Expenditures 0.9 0.7

Significant changes to authorities

As per graph 2 below as at June 30, 2017 and Table 1, presented at the end of this document, SIRC has authorities available for use of $7,021,646 in 2017-18 compared to $7,146,808 as of June 30, 2016, for a net decrease of $125,162 or 1%.

Graph 2: Variance in Authorities as at June 30, 2017 (in millions of dollars)
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2016-17 total available for use for the year ended 31-Mar-17 6.5 0.6 7.1
Fiscal year 2017-18 total available for use for the year ended 31-Mar-18 6.5 0.5 7.0

SIRC's authorities as at June 30, 2017 is very similar to that of same quarter in the previous fiscal year. The decrease of $125,162, or 1% is mainly related to spending for SIRC's relocation and modernization project.

Significant changes to expenditures

Year-to-date expenditures recorded to the end of the first quarter increased by $256,465, or 37%, from previous year at the same time (from $686,617 for 2016-17 to $943,082 for 2017-18). Table 1 below presents budgetary expenditures by standard object.

Budgetary expenditures by standard object
Material Variances to Expenditures by Standard Object
(in thousands of dollars)		 Fiscal year 2017-18 Expended during the quarter ended
30-June-2017		 Fiscal year 2016-17 Expended during the quarter ended
30-June-2016		 Variance $ Variance %
Personnel 722 579 143 25%
Transportation and communications 55 41 14 34%
Information 1 3 (2) (67%)
Professional and special services 143 23 120 522%
Rentals 14 8 6 75%
Utilities, materials and supplies 6 8 (2) (25%)
Acquisition of machinery and equipment 5 21 (16) (76%)
Other subsidies and payments (4) 4 (8) (200%)
Total gross budgetary expenditures 943 687 256 37%

Personnel

The increase of $143,092 is mainly related to activities to support the increase in the complexity and volume of workload related to SIRC's review of the expanded operations of CSIS and employee benefit plans in accordance with Treasury Board Secretariat guidelines.

Professional and special services

The increase of $119,447 is for professional and special services related to SIRC's implementation of the case management project.

Other subsidies and payments

The decrease of $7,760 is mainly related to the recovery of a salary overpayment.

Risks and Uncertainties

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the 2017-18 Main Estimates and 2017-18 Supplementary Estimates (A) (full supply for these Estimates were released on June 23, 2017).

SIRC continues to adapt its operations to the rapid pace of change in the security intelligence environment.

Significant Changes in Relation to Operations, Personnel and Programs

SIRC's activities have increased in volume and complexity due to the Canadian Security Intelligence Services (CSIS) expanded mandate. SIRC accessed funds through the 2017-18 Main Estimates and reprofiled funds through 2017-18 Supplementary Estimates (A). These funds are being used for the Relocation and IM/IT modernization project and to further enhance on a short basis SIRC's coverage of CSIS activities.

Approval by Senior Officials


Original signed by
_________________________
Hon. Pierre Blais, P.C.
Chair
Ottawa, Canada
Date: August 29, 2017


Original signed by
_________________________
Michael E. Doucet
Executive Director
Chief Financial Officer

Statement of Authorities (unaudited) (note 2)

Statement of Authorities (unaudited) (note 2)
(In thousands of dollars) Fiscal year 2017–2018 Fiscal year 2016–2017
Total available for use for the year ending
March 31, 2018 (note 1)		 Used during the quarter ended
June 30, 2017		 Year to date used at quarter end Total available for the year ending
March 31, 2017
(note 1)		 Used during the quarter ended
June 30, 2016		 Year to date used at quarter end
Vote 1 - Net operating expenditures 6,477 807 807 6,522 633 633
Contributions to employee benefit plans 545 136 136 625 54 54
Total budgetary authorities 7,022 943 943 7,147 687 687
Total Authorities 7,022 943 943 7,147 687 687

Table 1: Departmental budgetary expenditures by Standard Object (unaudited) (note 2)

Table 1: Departmental budgetary expenditures by Standard Object (unaudited) (note 2)
(In thousands of dollars) Fiscal year 2017–2018 Fiscal year 2016–2017
Planned expenditures for the year ending March 31, 2018
(note 1)		 Used during the quarter ended June 30, 2017 Year to date used at quarter end Planned expenditures for the year ending March 31, 2017
(note 1)		 Used during the quarter ended June 30, 2016 Year to date used at quarter end
Expenditures
Personnel 4,015 722 722 4,012 579 579
Transportation and communications 213 55 55 236 41 41
Information 47 1 1 47 3 3
Professional and special services 820 143 143 630 23 23
Rentals 100 14 14 42 8 8
Repair and maintenance 4 - - 2 - -
Utilities, materials and supplies 26 6 6 78 8 8
Acquisition of land, buildings and works 97 - - - - -
Acquisition of machinery and equipment 1,700 5 5 2,100 21 21
Other subsidies and payments - (4) (4) - 4 4
Total gross budgetary expenditures 7,022 943 943 7,147 687 687
Total Authorities 7,022 943 943 7,147 687 687
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