Quarterly Financial Report for the quarter ended September 30, 2018

Table of contents

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates for fiscal year 2018-2019. It 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. For the purposes of both the Main and Supplementary Estimates, the Department is referred to as the Department of Indian Affairs and Northern Development. This document will follow the Main Estimates and refer to the Department using its applied title: Indigenous and Northern Affairs Canada (INAC).

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

1.1 Authority, Mandate and Departmental Results

Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) supports Indigenous peoples (First Nations, Inuit and Métis) and Northerners in their efforts to:

  • Improve social well-being and economic prosperity;
  • Develop healthier, more sustainable communities; and
  • Participate more fully in Canadaʼs political, social and economic development – to the benefit of all Canadians.

The Minister of Crown-Indigenous Relations and the Minister of Northern Affairs are responsible for this organization.Footnote *

Note: Until the established legislation is amended, the legal name of the department for Appropriation Acts remains Department of Indian Affairs and Northern Development (DIAND).

Further details on CIRNAC's authority, mandate and department results can be found in Part II of the Main Estimates and the Departmental Plan.

1.2 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 for the 2018-2019 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 money 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.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results 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 expenditures as of the second quarter ended September 30, 2018.

As of the second quarter, the CIRNAC has budgetary authorities of $3,143 million for 2018-2019. In the second quarter, budgetary authorities were $7,666 million lower than last fiscal year primarily due to the transfer of funding to the newly created Department of Indigenous Services Canada (ISC) (November 30, 2017) for Regional Operations and Education & Social Development Programs and Partnerships. As per the Statement of Authorities tables (1a and 1b), the decrease in total authorities is attributed to the decrease of $7,281 million in Grants and Contributions, the decrease of $328 million in Operating and Capital, and the decrease of $58 million for Budgetary Statutory Authorities.

The year over year decrease of $7,281 million in the Grants and Contributions authority is primarily due to the following changes and the variance resulting from the Supplementary Estimates A being reflected in the June 2017-2018 authorities, while the 2018-2019 Supplementary Estimates A are expected in the 3rd quarter:

The year over year decrease of $328 million in Operating authority (Operating Vote 1 and Capital Vote 5) is primarily due to the following changes:

The year over year decrease of $58 million in statutory authority (Operating and Grants & Contributions) is primarily due to the following changes:

Departmental budgetary expenditures were $1,672 million lower than the same quarter in 2017-2018. The decrease is mainly due to the transfer of $1.4 billion for Regional Operations and Education & Social Development Programs and Partnerships to ISC. As per the Departmental budgetary expenditures by Standard Object tables (2a and 2b), the decrease for the quarter is mainly due to the changes listed in Figure 1.

Figure 1: Departmental Budgetary Expenditures Changes from Q2 2017-2018 to Q2 2018-2019
(in thousands of dollars)
Standard Object Expended during the quarter ended September 30, 2018 Expended during the quarter ended September 30, 2017 Total
CIRNAC Change in Expenditures
1 Personnel
 76,690 132,667 ($55,977)
2 Transportation and communications
 3,977 4,860 ($883)
3 Information
 1,100 2,149 ($1,049)
4 Professional and special services
 44,162 41,906 $2,256
5 Rentals
 2,515 4,922 ($2,407)
6 Purchased repair and maintenance
 915 171 $744
7 Utilities, materials and supplies
 786 750 $36
8 Acquisition of land, buildings and works
 N/A 5,651 N/A
9 Acquisition of machinery and equipment
 1,369 1,713 ($344)
10 Transfer payments
 347,071 1,941,917 ($1,594,846)
11 Public debt charges
 N/A N/A N/A
12 Other subsidies and payments
 18,131 32,207 ($138,495)
Total net budgetary expenditures 496,716 2,168,913 ($1,672,197)

3. Risks and Uncertainties

As a federal department delivering a complex mandate in a geographical area that truly encompasses the whole of populated Canada, Crown-Indigenous Relations and Northern Affairs Canada is influenced by many factors. These include political situations, societal and historical contexts, as well as broader economic and environmental conditions and internal departmental factors. These factors expose the department to a variety of risks: legal, HR capacity, environmental, Indigenous relations, implementations, external relationships, information for decision making and government partnership are all areas of risk. Risk management and risk-based decision-making are a critical component in the way the Department prioritizes and conducts its business. Resource allocation decisions are informed by risk and the Department's key corporate risks are discussed systematically by the senior management committee, which contributes to the better allocation of resources and ultimately better results. Corporate and financial risk mitigation activities, reflected in the Department's Corporate Risk Profile, are monitored by senior management on a semi-annual basis and modified as required.

The Department continues to monitor its risk exposure and take action as needed to mitigate the risk of not achieving anticipated outcomes or to deal with emerging pressures. Achievement of CIRNAC's core responsibilities and delivery of programs is dependent on timely access to appropriate authorities and funding levels.

In terms of transfer payment program and transfer payment recipient risk, the Department transfers funds to recipients each year, while balancing program and recipient risks to deliver on its mandate. The Department undertakes risk assessments on new, existing and reformed programs as well as an annual general assessment of each recipient to identify areas of risk.

The Department also includes a risk section of each of its performance information profiles.

A number of practices and internal controls help to manage risk departmentally, including senior management governance and oversight as established through committees, existing policies and procedures that ensure an appropriate level of monitoring, review and reporting.

The Department is managing its budget by aligning resources to needs and through rigorous monitoring against both financial and human resource targets. Management proactively and systematically manages and responds to risks to minimize adverse impacts and capitalize on opportunities. Budget and expenditure trends are monitored regularly, including a review and challenge function, through the Financial Status Report.

The implementation of the two-year fraud risk mitigation plan is near completion. The remaining actions items will be completed in 2018-2019.

In order to ensure effective controls, transparency and accountability, a diversity of regional approaches are used to confirm that recipients have met planned program results and that the funds were used for the intended purposes. In addition, the conduct of recipient and project audits, under the terms of their funding agreements; provides a further opportunity to ensure that First Nations have appropriate management, financial and administrative controls in place.

Since the past few years, the Department has put in place practices to detect, monitor and report over/underpayments of employees affected by the Phoenix Pay system. Through the Phoenix Response Team and a pilot project with Public Service Pay Centre (PSPC), the Department is able to offer priority payments to employees who have been underpaid as a result of a Phoenix error. In addition, by working with PSPC, the Department has obtained full compensation accesses for Departmental Liaison Officers which allows assessment of accuracy and completeness of pay information by employee.

To minimize financial risk as a result of both ISC and CIRNAC operating in one financial system for 2018-2019, the Chief Financial, Results and Delivery Officer Sector is working closely with all stakeholders and continuously monitoring the financial situation to ensure that controls are in place and that authorities are being respected.

This year the Department is managing additional risks:

First, there are issues related to the Government of Canada Pay System in that there continues to be cases of salary over and underpayments to employees. The Department will continue to monitor this situation closely and resolve these issues as necessary.

Second, as a result of the creation of ISC, both ISC and CIRNAC will operate in one financial system for 2018-2019. In addition to the creation of ISC, during the transition, there is an increased need to ensure proper control and coordination in the management of common funding agreements.

4. Significant changes in relation to Operations, Personnel and Programs

Significant changes in relation to Operations, Personnel and Programs during the second quarter of fiscal year 2018-2019 include:

5. Approval by Senior Officials

Approved, as required by the Treasury Board Policy on Financial Management:

Original signed by_______________________

Daniel Watson
Deputy Minister, CIRNAC
Date: November 20, 2018
City: Gatineau (Canada)

Original signed by_______________________

Alex Lakroni
Chief Financial, Results and Delivery Officer
Date: November 20, 2018
City: Gatineau (Canada)

Table 1a: Statement of Authorities (unaudited)

Fiscal year 2018-2019 (in thousands of dollars)
Total available for use for the year ending March 31, 2019 Used during the quarter ended September 30, 2018 Year to date used at quarter-end
Vote 1 - Operating expenditures 639,228 134,218 275,701
Vote 5 - Capital expenditures 22,388 3,836 4,972
Vote 10 - Grants and contributions 2,384,855 330,101 823,789
Vote 7b - Debt forgiveness N/A N/A N/A
Vote 9b - Debt Write-off N/A N/A N/A
S - Budgetary statutory authorities - Operating Expenditures:
Contributions to employee benefit plans (EBP)
 36,479 9,110 18,220
Minister of Aboriginal Affairs and Northern Development – Salary and motor car allowance
 86 22 43
Payments to comprehensive claim beneficiaries in compensation for resource royalties
 2,952 N/A 75
Liabilities in respect of loan guarantees made to Indians for Housing and Economic Development
 N/A N/A N/A
Grassy Narrows and Islington Bands Mercury Disability Board
 15 N/A N/A
Other
 N/A 288 321
S - Budgetary statutory authorities - Transfer Payments:
Grants to Aboriginal organizations designated to receive claim settlement payments pursuant to Comprehensive Land Claim Settlement Acts
 55,154 19,306 33,879
Grant to the Nunatsiavut Government for the implementation of the Labrador Inuit Land Claims Agreement pursuant to the Labrador Inuit Land Claims Agreement Act
 N/A N/A N/A
Indian Annuities Treaty payments
 1,400 (187) 2,745
Contributions in connection with First Nations infrastructure
 N/A N/A N/A
Total Budgetary Authorities 3,142,557 496,715 1,159,766
Non-Budgetary Authorities:
Loans to native claimants
 25,903 2,986 2,986
Loans to First Nations in British Columbia for the purpose of supporting their participation in the British Columbia Treaty Commission Process
 30,400 N/A N/A
Total Non-Budgetary Authorities 56,303 N/A 2,986
Total Authorities 3,198,860 499,702 1,162,752
Note: Pursuant to Order-in-Council P.C. 2017-1464 effective November 29, 2017, ISC was created. It includes the Regional Operations Sector and the Education and Social Development Programs and Partnerships Sector, from the Department of Indian Affairs and Northern Development, and the First Nations and Inuit Health Branch from the Department of Health Canada.

Table 1b: Statement of Authorities (unaudited) (continued)

Fiscal year 2017-2018 (in thousands of dollars)
Total available for use for the year ending March 31, 2018 Used during the quarter ended September 30, 2017 Year to date used at quarter-end
Vote 1 - Operating expenditures 937,054 205,272 346,759
Vote 5 - Capital expenditures 52,290 7,128 7,723
Vote 10 - Grants and contributions 9,665,783 1,914,940 3,789,465
Vote 7b - Debt forgiveness N/A N/A N/A
Vote 9b - Debt Write-off N/A N/A N/A
S - Budgetary statutory authorities - Operating Expenditures:
Contributions to employee benefit plans (EBP)
 57,401 14,168 28,336
Minister of Aboriginal Affairs and Northern Development – Salary and motor car allowance
 84 21 42
Payments to comprehensive claim beneficiaries in compensation for resource royalties
 2,931 N/A N/A
Liabilities in respect of loan guarantees made to Indians for Housing and Economic Development
 2,000 N/A N/A
Grassy Narrows and Islington Bands Mercury Disability Board
 15 N/A N/A
Other
 N/A 407 1,025
S - Budgetary statutory authorities - Transfer Payments:
Grants to Aboriginal organizations designated to receive claim settlement payments pursuant toComprehensive Land Claim Settlement Acts
 62,089 24,718 39,282
Grant to the Nunatsiavut Government for the implementation of the Labrador Inuit Land Claims Agreement pursuant to the Labrador Inuit Land Claims Agreement Act
 N/A N/A N/A
Indian Annuities Treaty payments
 1,400 (283) 2,627
Contributions in connection with First Nations infrastructure
 28,067 2,542 2,690
Total Budgetary Authorities 10,809,115 2,168,913 4,217,950
Non-Budgetary Authorities:
Loans to native claimants
 25,903 8,752 10,396
Loans to First Nations in British Columbia for the purpose of supporting their participation in the British Columbia Treaty Commission Process
 30,400 6,573 6,573
Total Non-Budgetary Authorities 56,303 15,325 16,969
Total Authorities 10,865,418 2,184,237 4,234,919

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

Fiscal year 2018-2019 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended September 30, 2018 Year to date used at quarter-end
Expenditures:
1 Personnel
 280,117 76,690 155,578
2 Transportation and communications
 25,238 3,977 6,880
3 Information
 7,205 1,100 1,887
4 Professional and special services
 259,478 44,162 54,671
5 Rentals
 17,758 2,515 4,517
6 Purchased repair and maintenance
 1,700 915 969
7 Utilities, materials and supplies
 3,719 786 1,121
8 Acquisition of land, buildings and works
 18,559 N/A N/A
9 Acquisition of machinery and equipment
 3,829 1,369 1,654
10 Transfer payments
 2,441,408 347,071 858,264
11 Public debt charges
 N/A N/A N/A
12 Other subsidies and payments
 85,545 18,131 74,233
Total gross budgetary expenditures 3,144,557 496,715 1,159,766
Less Revenues netted against expenditures:
Internal Services
 (2,000) N/A N/A
Total Revenues netted against expenditures (2,000) N/A N/A
Total net budgetary expenditures 3,142,557 496,715 1,159,766

Table 2b: Departmental Budgetary Expenditures by Standard Object (unaudited) (continued)

Fiscal year 2017-2018 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended September 30, 2017 Year to date used at quarter-end
Expenditures:
1 Personnel
 425,696 132,667 241,374
2 Transportation and communications
 30,003 4,860 8,940
3 Information
 10,064 2,149 2,419
4 Professional and special services
 354,892 41,906 52,509
5 Rentals
 18,291 4,922 6,444
6 Purchased repair and maintenance
 1,904 171 300
7 Utilities, materials and supplies
 3,837 750 1,076
8 Acquisition of land, buildings and works
 46,288 5,651 5,675
9 Acquisition of machinery and equipment
 4,885 1,713 1,822
10 Transfer payments
 9,757,339 1,941,917 3,834,064
11 Public debt charges
 N/A N/A N/A
12 Other subsidies and payments
 156,626 32,207 63,328
Total gross budgetary expenditures 10,809,825 2,168,913 4,217,950
Less Revenues netted against expenditures:
Internal Services
 (710) N/A N/A
Total Revenues netted against expenditures (710) N/A N/A
Total net budgetary expenditures 10,809,115 2,168,913 4,217,950

Did you find what you were looking for?

What was wrong?

You will not receive a reply. Don't include personal information (telephone, email, SIN, financial, medical, or work details).
Maximum 300 characters

Thank you for your feedback

Date modified: