Quarterly Financial Report: Quarter ended September 30, 2020
Table of contents
1. Introduction
This Quarterly Financial Report should be read in conjunction with the Main Estimates for fiscal year 2020-21. 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 Policy on Financial Management.
This report has not been subject to an external audit or review.
1.1 Authority, Mandate and Departmental Results
On July 15, 2019, the Department of Crown-Indigenous Relations and Northern Affairs Act officially established the new department Crown-Indigenous Relations and Northern Affairs Canada. The new department is responsible for the federal public administration formerly under the Department of Indian Affairs and Northern Development.
Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) continues to renew the nation-to-nation, Inuit-Crown, government-to-government relationship between Canada and First Nations, Inuit and Métis; modernize Government of Canada structures to enable Indigenous peoples to build capacity and support their vision of self-determination; and lead the Government of Canada's work in the North.
The responsibility for CIRNAC is shared between the Minister of Crown-Indigenous Relations and the Minister of Northern Affairs.
Further details on CIRNAC's authority, mandate and departmental 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 2020-21 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 accounting method 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 represent the authorities granted to date for fiscal year 2020-21. The 2020-21 Main Estimates are the first Main Estimates for Crown-Indigenous Relations and Northern Affairs Canada, therefore no comparison from previous fiscal year is available. The department's Main Estimates were established at $4,911 million including voted and statutory expenditures.
Appropriation Act No. 3, 2020–21 provides supply for Supplementary Estimates (A) and was approved through a Warrant of the Governor General pursuant to Order in Council P.C. 2020-510, dated June 26, 2020. These Supplementary Estimates (A) granted the department a total of $879.5 million which is comprised of:
- $741.2 million in Vote 1 Operating expenditures for funding for the Federal Indian Day Schools and Sixties Scoop;
- $23.4 million in Vote 10 Grants and contributions for funding measures to support a better future for Canada's North, funding to respond to the National Inquiry into Missing and Murdered Indigenous Women and Girls' Final report and to continue Indigenous Consultation and Capacity Support Activities; and
- $114.9 million in Statutory funding under the Public Health Events of National Concern Payments Act for urgent health care and social support needs in the territories in response to COVID-19, to support temporary enhancements to Nutrition North Canada and to enable the continuation of northern air services supporting essential resupply and medical services in the North.
Since the last quarter, the department's overall authorities increased by $21.0 million. During this quarter, $19.5 million was received in Vote 1 and $1.5 million in Vote 5 from the Department Operating and Capital budget carry forward. The Operating and Capital Budget Carry Forward comes from a Treasury Board centrally managed vote that permits departments to bring forward eligible lapsed funding from a previous fiscal year to the next.
The total authorities to date of the department are $4,851 million which represent the interim supply, compared to the full authority of $5,812 million. The interim supply represents 83% of the department's full authority. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the fall. The department is expected to receive full supply for the 2020-21 Main Estimates in December 2020.
Departmental Budgetary Expenditures were $2,069 million for the quarter ended September 30, 2020, which represent 43% of the total authorities to date.
3. Risks and Uncertainties
The department has in place risk management processes to identify, assess and address strategic and operational risks. Risk mitigation activities are in place or in development to protect the department from exposure to these risks and the associated financial impacts.
The rapid pace of change being pursued by the department, capacity challenges in internal services and ensuring oversight during a pandemic puts pressure on the department's system of internal control. Important controls such as due diligence may therefore be weakened, leading to increased risk of fraud, malfeasance or inappropriate decision-making. This risk is currently being managed by some corporate frameworks (e.g., Public Sector and Crown-Indigenous Relations and Northern Affairs Canada [CIRNAC] codes for values and ethics, departmental fraud risk assessment process), program-specific management control frameworks and program oversight mechanisms and governance.
In addition, there is a risk that there are insufficient controls and coordination in place in the management of common funding agreements between CIRNAC and the Department of Indigenous Services Canada. To mitigate this risk, budget and expenditure trends, particularly for programs with common funding, are monitored closely on a regular basis including formal quarterly reviews that are presented to and discussed by senior management.
4. Significant changes in relation to Operations, Personnel and Programs
Since the last quarter, there were no significant changes in relation to Operations, Personnel and Programs.
5. Approval by Senior Officials
Approved, as required by the Treasury Board Policy on Financial Management:
_________________________
Jean-François Talbot
A/Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs
Date: _______________
City: Gatineau (Canada)
_________________________
Daniel Quan-Watson
Deputy Minister, Crown-Indigenous Relations and Northern Affairs
Date: _______________
City: Gatineau (Canada)
| Total available for use for the year ending March 31, 2021 | Used during the quarter ended September 30, 2020 | Year to date used at quarter-end | |
|---|---|---|---|
| Vote 1 – Operating expenditures | 2,161,646 | 216,461 | 271,175 |
| Vote 5 – Capital expenditures | 1,738 | 1,285 | 1,285 |
| Vote 10 – Grants and contributions | 2,505,140 | 576,276 | 1,654,920 |
| S – Budgetary statutory authorities – Operating Expenditures: | |||
Contributions to employee benefit plans |
26,099 | 6,525 | 13,050 |
Minister of Crown-Indigenous Relations – Salary and motor car allowance |
89 | 22 | 44 |
Minister of Northern Affairs – Salary and motor car allowance |
89 | 0 | 0 |
Payments to comprehensive claim beneficiaries in compensation for resource royalties |
1,866 | 0 | 0 |
Grassy Narrows and Islington Bands Mercury Disability Board |
15 | 0 | 0 |
Other |
0 | 240 | 240 |
| S – Budgetary statutory authorities – Transfer Payments: | |||
Grants to Aboriginal organizations designated to receive claim settlement payments pursuant to Comprehensive Land Claim Settlement Acts |
19,688 | 0 | 13,633 |
Payments related to Public Health Events of National Concern Payments Act |
114,900 | 25,000 | 114,900 |
| Total Budgetary Authorities | 4,831,270 | 825,809 | 2,069,247 |
| Non-Budgetary Authorities: | |||
Loans to Indigenous claimants |
19,427 | 0 | 0 |
| Total Non-Budgetary Authorities | 19,427 | 0 | 0 |
| Total Authorities | 4,850,697 | 825,809 | 2,069,247 |
| Planned expenditures for the year ending March 31, 2021 | Expended during the quarter ended September 30, 2020 | Year to date used at quarter-end | |
|---|---|---|---|
| Expenditures: | |||
1 Personnel |
188,093 | 48,506 | 98,098 |
2 Transportation and communications |
18,167 | 324 | 529 |
3 Information |
5,593 | 670 | 1,145 |
4 Professional and special services |
253,890 | 59,681 | 63,118 |
5 Rentals |
11,260 | 97 | 133 |
6 Purchased repair and maintenance |
3,662 | 75 | 94 |
7 Utilities, materials and supplies |
3,756 | 119 | 209 |
8 Acquisition of land, buildings and works |
1,537 | 1,235 | 1,235 |
9 Acquisition of machinery and equipment |
201 | 181 | 227 |
10 Transfer payments |
2,639,728 | 601,277 | 1,783,453 |
11 Public debt charges |
0 | 0 | 0 |
12 Other subsidies and payments |
1,737,582 | 113,644 | 121,011 |
| Total gross budgetary expenditures | 4,863,469 | 825,809 | 2,069,252 |
| Less Revenues netted against expenditures: | |||
Internal Services |
(32,199) | 0 | (5) |
| Total Revenues netted against expenditures | (32,199) | 0 | (5) |
| Total net budgetary expenditures | 4,831,270 | 825,809 | 2,069,247 |