Canadian Food Inspection Agency - Quarterly Financial Report for the quarter ended September 30, 2011
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 quarterly report should be read in conjunction with the Main Estimates and the Supplementary Estimates.
A summary description of the CFIA's program activities can be found in Part II of the Main Estimates at the following website: http://www.tbs-sct.gc.ca/est-pre/20112012/p2-eng.asp. The Agency implemented a new Program Activity Architecture which became effective on April 1, 2011.
The quarterly report has not been subject to an external audit or review.
CFIA Mandate
The Minister of Agriculture and Agri-Food is responsible for and has the overall direction of the Agency. The CFIA is headed by a President, who has the rank and all the powers of a Deputy Head of a Department. The President is also the Chief Executive Officer. The responsibilities of these roles are outlined in the Canadian Food Inspection Act 1997, c.6. - http://laws-lois.justice.gc.ca/eng/acts/C-16.5/
The CFIA, with responsibilities originating in 13 federal statutes and 38 sets of regulations, is responsible for regulating the safety and nutritional quality of food sold in Canada, as well as supporting a sustainable plant and animal resource base. The CFIA shares many areas of responsibility with other federal departments and agencies, with provincial, territorial and municipal authorities and with other stakeholders.
In a complex operating environment, the Agency works with its partners to implement food safety measures; manage food, animal and plant risks and emergencies; and promote the development of food safety and disease control systems to maintain the safety of Canada's high-quality agriculture, agri-food, aquaculture and fisheries products. The Agency's activities include verifying the compliance of imported products; registering and inspecting establishments; testing food, animals, plants and their related products; and approving the use of many agricultural inputs. The Agency also provides scientific advice, develops new technologies, provides testing services and conducts research.
At the CFIA, informed decision making is based on high quality, timely and relevant science. Science informs policy development as well as program design and delivery through foresight, advice, risk assessment, the influencing of international standards, research and development, and testing.
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency's spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2011-12 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 purpose 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 Agency 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 (YTD)
This section highlights the significant items that contributed to the net increase in the resources available for use from 2010-11 to 2011-12 and actual expenditures from September 30, 2010 to September 30, 2011.
Significant Changes on the Statement of Authorities table
In line with previously reported variances in the Departmental Performance Report, the CFIA determined that the greater of $5.0 M and 10% change in budget and expenditures from one year to the next is deemed to be significant. In these situations, further analysis is provided.
Under the "Total available for use for the years ending March 31, 2012 and March 31, 2011", the CFIA's authorities increased by $46.9 million, when compared to the previous year. This change includes an increase of $6.9 million in Vote 20 - Operating Expenditures and Contributions, a decrease of 20.3 million in Vote 25 - Capital Expenditures, an increase of 8.1 million in statutory employee benefit plans and an increase of $52.2 in statutory spending of revenues.
The primary reasons for the increase in Vote 20 - Operating Expenditures and Contributions are: $12.6 million received to increase the frequency of food inspections in meat processing establishments as well as $11.3 million received to continue the implementation of the Invasive Alien Species Strategy for Canada. The latter was initially approved in 2005-06 for five years and was renewed in 2010-11 but the resources were not received until after September 30, 2010. These amounts are offset by the sunsetting of resources for the Plum Pox Virus of $5.8 million; the reduction of $6.1 million in pay related to the Budget 2010 Cost Containment Measures and resources of $5.0 million received in 2010-11 (but not yet received in 2011-12) for Growing Forward Program Suite.
The primary reasons for the decrease in Vote 25 - Capital Expenditures are the sunsetting of resources under Canadas Economic Action Plan to support the modernization of federal laboratories ($14.2 million); and the reduction of capital resources related to the Food Safety Action Plan ($1.5 million). These same reasons explain the decrease in spending under the "Year to date used at quarter end" column. Expenditures for Vote 25 - Capital Expenditure decreased from $8.3 million in 2010-11 to $2.2 million in 2011-12.
The increase in statutory employee benefit plans (EBP) relates to an increase in the Government-wide rate as well as additional EBP for new resources received.
As of April 1, 2011, there has been a change in the way revenue and the associated expenditures for the CFIA are accounted for in the Government of Canada. Up to and including fiscal year 2010-11, the CFIA had the authority to re-spend the revenue that it collected. Therefore, for 2010-11, all totals are net of revenue. Beginning in 2011-12, revenue is considered to be a statutory item and as such, is now deposited directly to the Consolidated Revenue Fund and related expenditures are funded from the same source. Therefore, the 2011-12 totals include spending of revenues. This change accounts for the increase in statutory spending of revenues, for both "Total available for Use for the year ending March 31, 2012", as well as the "Year to date used at quarter end".
Significant Changes on the Departmental budgetary expenditures by Standard Object table
Under "Planned expenditures for the year ending March 31, 2012 and March 31, 2011", planned spending on Professional and Special Services decreased by 13% from $96.9 million in 2010-11 to 84.2 million in 2011-12. Expenditures incurred during the quarter ending September 30th decreased by 36% from $20.2 million in 2010-11 to $12.9 million in 2011-12 and year-to-date expenditures decreased by 30% from $26.4 million in 2010-11 to $18.6 million in 2011-12. These reductions can be linked to a reduction in the hiring of consulting services as a result of delays in capital projects approvals.
Planned spending on the acquisition of machinery and equipment decreased by 21%, from $27.6 million in 2010-11 to $21.8 million in 2011-12. This reduction is related to the sunsetting of resources of under Canadas Economic Action Plan to support the modernization of federal laboratories as well as the sunsetting of capital resources related to the Food Safety Action Plan. As indicated in the previous report, the Agency plans to reduce spending in 2011-12 on computer equipment, scientific and technical equipment and fleet.
The CFIA spends approximately 75% of its resources on personnel. Therefore, the percentage spent in the first half of the fiscal year is an important indicator to confirm that the Agency is on track to meet its budgetary target. The actual year to date expenditures as of September 30, 2011 were 53.9% of the Total Planned Expenditures for Personnel for the year ending March 31, 2012. The actual year to date expenditures as of September 30, 2010 was 54.3% of the Total Planned Expenditures for Personnel for the year ending March 31, 2011. These percentages confirm that the Agency is on track to meet its budgetary target for 2011-12.
Risks and Uncertainties
This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to Main Estimates (and Supplementary Estimates A as applicable) for which full supply was released on June 27, 2011.
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. Management is reviewing various options to adjust to this constraint in funding. The Agency is carefully monitoring expenditures and is currently on track to meet its budgetary target. As well, the Agency is working to identify opportunities to reduce duplication, standardize management and oversight, streamline and realign business processes, and develop better strategies for the acquisition of goods and services. Given the importance of our food safety mandate and investments the Government has made in the last few years, it's important to note that a full compliment of inspection staff will be maintained, so there will be no reduction in front-line inspection capacity.
Significant Changes in relation to Operations, Personnel and Programs
The President of the CFIA, Carole Swan, retired in June 2011. The former Executive Vice President, George Da Pont was appointed to the position of President in July 2011. A new Executive Vice President, Mary Komarynsky was also appointed in July. Ms. Komarynsky was formerly the Assistant Deputy Minister at Transport Canada.
A new Chief Financial Officer, Peter Everson was appointed in June 2011. Mr. Everson was formerly the Chief Audit Executive.
The Agency has implemented a new Governance structure whereby all branch heads have specific accountabilities that contribute to the CFIA's Program Activities.
There have been no significant changes to programs to-date during the current fiscal year.
Approved by
Annex A
Statement of authorities (unaudited)
for the quarter ended September 30, 2011
Fiscal Year 2011-2012
| (in thousands of dollars) | Total available for use for the year ending March 31, 2012 * | Used during the quarter ended September 30, 2011 | Year to date used at quarter-end |
|---|---|---|---|
| Vote 20 - Operating Expenditures and Contributions | $585,378.00 | $144,961.00 | $278,097.00 |
| Vote 25 - Capital expenditures | $23,796.00 | $1,729.00 | $2,170.00 |
| Budgetary Statutory Authorities | |||
| Employee benefit plans | $81,395.00 | $20,349.00 | $40,697.00 |
| Compensation payments | $1,500.00 | $472.00 | $721.00 |
| Spending of revenues | $52,158.00 | $12,338.00 | $15,694.00 |
| Other | $0.00 | $3.00 | $3.00 |
| Total Budgetary authorities | $744,227.00 | $179,852.00 | $337,383.00 |
| Non-budgetary authorities | $0.00 | $0.00 | $0.00 |
| Total authorities | $744,227.00 | $179,852.00 | $337,383.00 |
* Includes only authorities available for use and granted by Parliament at quarter-end.
Numbers may not add due to rounding.
Fiscal Year 2010-2011
| (in thousands of dollars) | Total available for use for the year ending March 31, 2011 * | Used during the quarter ended September 30, 2010 | Year to date used at quarter-end |
|---|---|---|---|
| Vote 20 - Operating Expenditures and Contributions | $578,483.00 | $145,865.00 | $265,703.00 |
| Vote 25 - Capital expenditures | $44,080.00 | $5,633.00 | $8,251.00 |
| Budgetary Statutory Authorities | |||
| Employee benefit plans | $73,287.00 | $18,322.00 | $36,644.00 |
| Compensation payments | $1,500.00 | $675.00 | $1,069.00 |
| Spending of revenues | $0.00 | $0.00 | $0.00 |
| Other | $0.00 | $27.00 | $29.00 |
| Total Budgetary authorities | $697,350.00 | $170,522.00 | $311,696.00 |
| Total authorities | $697,350.00 | $170,522.00 | $311,696.00 |
* Includes only authorities available for use and granted by Parliament at quarter-end.
Annex B
Departmental budgetary expenditures by Standard Object (unaudited)
for the quarter ended September 30, 2011
Fiscal Year 2011-2012
| (in thousands of dollars) | Total available for use for the year ending March 31, 2012 | Used during the quarter ended September 30, 2011 | Year to date used at quarter-end |
|---|---|---|---|
| Expenditures : | |||
| Personnel | $533,589.00 | $145,949.00 | $287,628.00 |
| Transportation and communications | $48,065.00 | $6,455.00 | $10,966.00 |
| Information | $4,062.00 | $299.00 | $412.00 |
| Professional and special services | $84,167.00 | $12,901.00 | $18,633.00 |
| Rentals | $6,576.00 | $480.00 | $774.00 |
| Repair and maintenance | $16,465.00 | $7,237.00 | $8,946.00 |
| Utilities, materials and supplies | $23,355.00 | $3,928.00 | $6,483.00 |
| Acquisition of machinery and equipment | $21,842.00 | $1,408.00 | $2,106.00 |
| Transfer payments | $1,744.00 | $1,067.00 | $1,297.00 |
| Other subsidies and payments | $4,362.00 | $129.00 | $139.00 |
| Total gross budgetary expenditures | $744,227.00 | $179,852.00 | $337,383.00 |
| Less Revenues netted against expenditures | $0.00 | $0.00 | $0.00 |
| Total net budgetary expenditures | $744,227.00 | $179,852.00 | $337,383.00 |
* Includes only authorities available for use and granted by Parliament at quarter-end. Numbers may not add due to rounding.
Fiscal Year 2010-2011
| (in thousands of dollars) | Total available for use for the year ending March 31, 2011 | Used during the quarter ended September 30, 2010 | Year to date used at quarter-end |
|---|---|---|---|
| Expenditures : | |||
| Personnel | $512,535.00 | $142,896.00 | $278,212.00 |
| Transportation and communications | $49,824.00 | $7,263.00 | $12,604.00 |
| Information | $5,694.00 | $177.00 | $256.00 |
| Professional and special services | $96,930.00 | $20,178.00 | $26,446.00 |
| Rentals | $4,987.00 | $640.00 | $959.00 |
| Repair and maintenance | $15,805.00 | $3,840.00 | $5,810.00 |
| Utilities, materials and supplies | $26,469.00 | $4,036.00 | $6,984.00 |
| Acquisition of machinery and equipment | $27,556.00 | $3,773.00 | $4,721.00 |
| Transfer payments | $1,996.00 | $1,427.00 | $1,821.00 |
| Other subsidies and payments | $6,709.00 | $243.00 | $282.00 |
| Total gross budgetary expenditures | $748,505.00 | $184,473.00 | $338,095.00 |
| Less Revenues netted against expenditures | $-51,155.00 | $-13,951.00 | $-26,399.00 |
| Total net budgetary expenditures | $697,350.00 | $170,522.00 | $311,696.00 |
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