Canadian Food Inspection Agency - Quarterly Financial Report for the quarter ended September 30, 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. This quarterly report should be read in conjunction with the 2012-13 Main Estimates, the 2012-13 Supplementary Estimates (A), as well as the Canadas Economic Action Plan (Budget 2012).
A summary description of the CFIAs 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 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-16.5
The CFIA is responsible for administering and enforcing 13 federal statutes and 38 sets of regulations, for regulating the safety and quality of food sold in Canada, and for supporting a sustainable plant and animal resource base. The CFIA shares many of its core responsibilities with other federal departments and agencies, with provincial, territorial and municipal authorities and with other stakeholders.
In a complex operating environment, the CFIA 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 Canadas high-quality agriculture, agri-food, aquaculture and fisheries products. The Agencys 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, and conducts regulatory research.
At the CFIA, informed decision making is based on high quality, timely, relevant science. Science informs policy development and program design and delivery through foresight, advice, risk assessment, the influence 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 Agencys spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates (A) for the 2012-13 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.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012. As a result, the measures announced in the Budget 2012 could not be reflected in the 2012-13 Main Estimates.
In fiscal year 2012-13, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. This frozen allotment will be offset against new funding. In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled by parliament.
For further information on the Budget 2012 Implementation, please see the Budget 2012 Implementation section below.
Highlights of fiscal quarter and fiscal year to date (YTD)
The section below highlights the significant items that contributed to the increase in the "Total Available for use for the year ending March 31, 2013 and March 31, 2012", the decrease in the "Used during the quarter ended September 30, 2011 and September 30, 2012" and the increase in "Year to date used at quarter-end" for September 30, 2011 and September 30, 2012.
Significant Changes on the Statement of Authorities table (Annex A)
In line with previously reported variances in the Departmental Performance Report, the CFIA determined that the greater of $5.0 million and 10% change in budget and expenditures from one year to the next are deemed to be significant. In these situations, further analysis is provided.
Under the "Total available for use for the years ending March 31, 2013 and March 31, 2012" columns, the CFIA's authorities increased by $13.2 million, when compared to the previous year. This change includes a decrease of $3.6 million in Vote 20 - Operating expenditures and contributions, an increase of $17.7 million in Vote 25 - Capital expenditures, a decrease of $1.9 million in statutory employee benefit plans and an increase of $1.0 million in statutory spending of revenues.
The primary reasons for the overall decrease in Vote 20 - Operating Expenditures and Contributions include:
Decreases:
- Transfer to Shared Services
- Sunsetting of resources for Listeriosis and to support increased frequency of food inspection in meat processing plants. Funding for these two items was extended as part of Budget 2012 and will be added to the Agencys budget later in the year, subject to Parliamentary approval, through Supplementary Estimates.
Increases:
- Incremental resources for the Food Safety Action Plan
- Food Safety Modernization
- Plum Pox Monitoring and Management Program
- Transfer from Agriculture and Agri-Food Canada to support programs that address food safety, biosecurity and traceability (Canadian Integrated Food Safety Initiative).
- Increase in 2010-11 carry forward as compared to the 2009-10 carry forward.
The primary reasons for the increase in Vote 25 - Capital Expenditures include:
- Transfer from Agriculture and Agri-Food Canada for the development of a Traceability National Information Portal
- Increase in 2010-11 carry forward as compared to the 2009-10 carry forward.
Under the "Used during the quarter ended September 30, 2012 and September 30, 2011" columns, the CFIA's expenditures decreased by $3.4 million, when compared to the previous year. This change is primarily due to a decrease of $5.8 million in Vote 20 - Operating expenditures and contributions, an increase of $2.4 million in Vote 25 - Capital expenditures, an increase of $5.3 million in Statutory compensation payments and a decrease of $4.8 million in statutory spending of revenues.
The primary reason for the increase in statutory compensation payments is the increase in payments made to owners of salmon that were ordered destroyed under the Health of Animals Act due to Infectious Salmon Anaemia. It is anticipated that this amount will increase before the end of the fiscal year. Statutory payments do not require parliamentary approval as they are not funded from the Agencys voted appropriations. They are funded directly from the consolidated revenue fund, in accordance with the applicable legislation (in this case the Health of Animals Act). The Agencys authorities will be adjusted at the end of the fiscal year to reflect these draws against the consolidated revenue fund.
Under the "Year to date used at quarter-end" column, expenditures increased by $5.8 million when compared to the previous year. This change includes a decrease of $7.0 million in Vote 20 - Operating expenditures and contributions, an increase of $3.5 million in Vote 25 - Capital expenditures, a decrease of $1.0 million in statutory employee benefit plans, an increase of $15.4 million in statutory compensation payments and an decrease of $5.1 million statutory spending of revenues.
The primary reason for the increase in statutory compensation payments, as indicated above, is as a result of compensation payments made to owners of salmon that were ordered destroyed under the Health of Animals Act due to Infectious Salmon Anaemia. The decrease in statutory spending of revenue is related to the timing of payments to Other Government Departments for such things as occupancy costs.
Significant Changes on the Departmental budgetary expenditures by Standard Object table (Annex B)
Under "Planned expenditures for the year ending March 31, 2013 and March 31, 2012", the CFIA's authorities for Transportation and Communication decreased by $2.4 million; for Professional and Special Services decreased by $2.5 million and for Acquisition of Machinery and Equipment increased by $19.7 million, when compared to the previous year.
The primary reasons for the overall increase/decrease in planned expenditures for these standard objects is:
- Decrease under Transportation and Communication can be explained by the sunsetting of resources for Listeriosis and for resources that support increased frequency of food inspection in meat processing plants. Funding for the two sunsetting items was extended as part of Budget 2012 and will be added to the Agencys budget later in the year, subject to Parliamentary approval, through Supplementary Estimates; the transfer to Shared Services Canada (see section on Shared Services Canada below) as well as resources from the 2010-11 carry forward.
- Decrease under Professional and Special Services can be explained by the sunsetting of the two initiatives mentioned above, the transfer to Shared Service Canada as well as resources from the 2010-11 carry forward.
- Increase under Acquisition of Machinery and Equipment includes a transfer of $4.8 million from Agriculture and Agri-Food Canada in 2012-13 for the development of a Traceability National Information Portal as well as resources from the 2010-11 carry forward.
Under the "Expended during the quarter ended September 30, 2012 and September 30, 2011" column, expenditures on Repair and Maintenance decreased by $6.5 million and on Transfer payments increased by $4.9 million. The decrease in Repair and Maintenance is partially as a result of a payment made to PHAC (MOU between CFIA and PHAC relating to the provision of key common services at the Canadian Science Centre for Human/Animal Health), which was paid earlier last fiscal year than the current fiscal year. As indicated above, the increase in Transfer payments is as a result of compensation payments made to owners of salmon that were ordered destroyed under the Health of Animals Act due to Infectious Salmon Anaemia.
Under the "Year to date used at quarter-end" column, expenditures on Repair and Maintenance decreased by $6.8 million and on Transfer payments increased by $15.2 million. Explanations are the same as listed in the above paragraph.
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 for which full supply was released on June 29, 2012.
The Agency has adopted an integrated approach to corporate risk management. Integrated Risk Management (IRM) is a continuous, proactive and systematic process for assessing, managing and communicating risk from an organization-wide perspective. The CFIA Corporate Risk Profile (CRP), resulting from the IRM approach, supports strategic decision-making by ensuring that risk information is integrated within existing business processes such as planning and priority-setting. This, in turn, supports the achievement of the CFIAs strategic outcome - a safe and accessible food and plant and animal resource base.
Cost Containment Measures:
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. Again this year, 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.
Significant Changes in relation to Operations, Personnel and Programs
Shared Services Canada:
As a result of the creation of Shared Services Canada (SSC) on August 4, 2011 and the subsequent passing of the Order-in-Council (OIC) on November 15, 2011, certain responsibilities across 43 departments and agencies, including the CFIA, were transferred to SSC. All unexpended authorities relating to responsibilities transferred to SSC were deemed to have been appropriated as of the OIC date resulting in reductions to transferring out organizations authorities available for use in 2011-12.
As per TBAS 1.3, Departmental and Agency Quarterly Financial Reports must present comparative financial information for the preceding fiscal year. For the Q1 and Q2 Quarterly Financial Reports, the comparative figures reported in 2011-12 remain the same as were reported in the 2011-12 Quarterly Financial Report. However, the transfer of resources to Shared Services Canada has already been removed from the 2012-13 budget via the 2012-13 Annual Reference Level Update.
For the Q3 report, the Agency will exclude the amount deemed to have been transferred to SSC from the 2011-12 comparative information.
Changes to Senior Management Personnel
There were no changes to Senior Management Personnel during this second quarter.
Budget 2012 Implementation
This section provides an overview of the savings measures announced in Budget 2012 that will be 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.
To support the Governments efforts on spending reductions, the CFIA's budget will be reduced by $2.1 million in 2012-13, $10.0 million in 2013-14 and $55.8 million in 2014-15 and ongoing. Savings in 2012-13 are focused on internal administrative activities and as of September 30, Budget 2012s impacts on the CFIA financial situation were minimal. These administrative activities are performed in various parts of the Agency rather than in one particular program.
The changes the Agency is making as a result of the Budget will reflect its goal of focusing on activities that deliver on its core mandate of food safety and consumer protection, while building on recent investments made in Canadas food safety program.
Budget 2012 also renewed funding for key food safety initiatives. Funding for two of the Agencys sunsetting programs, one for Listeriosis and the other to support increased frequency of food inspections at meat processing plants was extended as part of Budget 2012 and will be added to the Agencys budget later in the year, subject to Treasury Board and Parliamentary approval, through the Supplementary Estimates process. Food Safety will not be adversely affected by Budget 2012. None of the measures identified in this Budget affect front-line food inspection staff.
Approved by
Annex A
Statement of authorities (unaudited)
for the quarter ended September 30, 2012
Fiscal Year 2012-2013
| (in thousands of dollars) | Total available for use for the year ending March 31, 2013 * | Used during the quarter ended September 30, 2012 | Year to date used at quarter-end |
|---|---|---|---|
| Vote 20 - Operating Expenditures and Contributions | $581,757.00 | $139,114.00 | $271,076.00 |
| Vote 25 - Capital expenditures | $41,583.00 | $4,107.00 | $5,683.00 |
| Budgetary Statutory Authorities | |||
| Employee benefit plans | $79,425.00 | $19,856.00 | $39,712.00 |
| Compensation payments | $1,500.00 | $5,726.00 | $16,151.00 |
| Spending of revenues | $53,161.00 | $7,543.00 | $10,496.00 |
| Other | $0.00 | $31.00 | $31.00 |
| Total Budgetary authorities | $757,425.00 | $176,397.00 | $343,149.00 |
| Non-budgetary authorities | $0.00 | $0.00 | $0.00 |
| Total authorities | $757,425.00 | $176,397.00 | $343,149.00 |
* Includes only authorities available for use and granted by Parliament at quarter-end.
Does not reflect measures announced in Budget 2012. Numbers may not add due to rounding.
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.
Annex B
Departmental budgetary expenditures by Standard Object (unaudited)
for the quarter ended September 30, 2012
Fiscal Year 2012-2013
| (in thousands of dollars) | Total available for use for the year ending March 31, 2013 * | Used during the quarter ended September 30, 2012 | Year to date used at quarter-end |
|---|---|---|---|
| Expenditures : | |||
| Personnel | $536,599.00 | $142,523.00 | $284,215.00 |
| Transportation and communications | $45,717.00 | $4,164.00 | $7,141.00 |
| Information | $1,948.00 | $103.00 | $216.00 |
| Professional and special services | $81,645.00 | $14,170.00 | $20,138.00 |
| Rentals | $4,753.00 | $3,221.00 | $4,439.00 |
| Repair and maintenance | $20,471.00 | $735.00 | $2,092.00 |
| Utilities, materials and supplies | $20,815.00 | $3,551.00 | $5,881.00 |
| Acquisition of land, buildings and works | $0.00 | $0.00 | $0.00 |
| Acquisition of machinery and equipment | $41,583.00 | $1,949.00 | $2,490.00 |
| Transfer payments | $1,744.00 | $5,996.00 | $16,531.00 |
| Public debt charges | $0.00 | $0.00 | $0.00 |
| Other subsidies and payments | $2,151.00 | $-15.00 | $5.00 |
| Total gross budgetary expenditures | $757,425.00 | $176,397.00 | $343,149.00 |
| Less Revenues netted against expenditures | $0.00 | $0.00 | $0.00 |
| Total net budgetary expenditures | $757,425.00 | $176,397.00 | $343,149.00 |
* Includes only authorities available for use and granted by Parliament at quarter-end. Does not reflect measures announced in Budget 2012. Numbers may not add due to rounding.
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 land, buildings and works | $0.00 | $0.00 | $0.00 |
| 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 |
| Public debt charges | $0.00 | $0.00 | $0.00 |
| 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.
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