Quarterly Financial Report for the Quarter Ended December 31, 2013

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs

1. Introduction

This quarterly report has been prepared by Library and Archives Canada (LAC) 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 2012–2013 Main Estimates and Supplementary Estimates (A) and (B), as well as with Canada's Economic Action Plan 2012 (Budget 2012).

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

1.1 Library and Archives Canada's Mandate

Library and Archives Canada is a departmental agency within the Canadian Heritage Portfolio. Created in 2004 under the Library and Archives of Canada Act, its mandate is as follows:

  • to preserve the documentary heritage of Canada for the benefit of present and future generations;
  • to be a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
  • to facilitate in Canada cooperation among communities involved in the acquisition, preservation, and diffusion of knowledge; and
  • to serve as the continuing memory of the Government of Canada and its institutions.

1.2 Basis of Presentation

This quarterly report has been prepared by LAC using an expenditure basis of accounting. The accompanying Statement of Authorities includes LAC's spending authorities granted by Parliament and those used by LAC, consistent with the Main Estimates and Supplementary Estimates (A) and (B) for the 2013–2014 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 monies 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 purposes 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.

LAC 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 are still prepared 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 Budget 2012 could not be reflected in the
2012–2013 Main Estimates.

In fiscal year 2012–2013, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds identified as savings in Budget 2012. In 2013–2014, changes to departmental authorities were implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the
2013–2014 Main Estimates tabled in Parliament.

2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

2.1 Statement of Authorities

As reflected in the attached Statement of Authorities, total authorities available for use as of December 31 are $104.4 million in 2013–2014, and $123.1 million in 2012–2013. The following table presents the detailed list of authorities by fiscal year:


Statement of Authorities (unaudited)
(in dollars)

For each Authority Vote/Statutory, this table indicates the Authority Code, description of vote or authority, and the dollar figure, for the quarters ended December 31, 2013, and December 31, 2012.

Authority Vote/Statutory
 
Authority Code
 
Description
 
For the quarter ended
December 31, 2013
 
For the quarter ended
December 31, 2012
 
55
 
B110
 
Operating expenditures
 
90,632,056
 
92,748,847
 
55
 
B130
 
Revenue credited to the vote
 
-550,000
 
-550,000
 
60
 
B140
 
Capital expenditures
 
3,943,615
 
19,352,500
 
S
 
A131
 
Spending of proceeds from the disposal of surplus Crown assets
 
229,274
 
308,582
 
S
 
A140
 
Contributions to employee benefit plans
 
10,177,677
 
11,275,573
 
Total authorities
104,432,622
 
123,135,502
 

The overall net decrease of $18.7 million in total available authorities for use between the two fiscal years is mainly due to the following:

  • An overall decrease of $26.6 million resulting from:
    • a decrease of $16.4 million for the conversion of a facility in Gatineau, Quebec, to a collection storage facility with a high-density shelving system;
    • a decrease of $6.6 million following reductions in Budget 2012;
    • a decrease of $3.4 million for the reimbursement of paylist expenditures;
    • a decrease of $0.2 million for the transfer of resources from Canadian Heritage for film acquisition and preservation activities under the preservation and access component of the Canadian Feature Film Policy.
  • An overall increase of $7.9 million resulting from:
    • an increase of $3.8 million from an operating budget carry-forward;
    • an increase of $2.4 million for the permanent transfer from Public Works and Government Services Canada for savings resulting from the consolidation and streamlining of document storage spaces;
    • a net increase of $1.7 million for employee benefit plans (statutory) and funding received for compensation adjustments to fund increased personnel costs of collective agreements.

Statement of Departmental Budgetary Expenditures by Standard Object

As presented in the attached Statement of Departmental Budgetary Expenditures by Standard Object, the year-to-date expenditures total $62.7 million as of December 31, 2013, and $82.5 million as of December 31, 2012. The total decrease of $19.8 million is explained mainly by:

  • A decrease of $13.6 million ($58,000 in 2013–2014 and $13.7 million in 2012–2013) in expenditures for Acquisition of Land, Buildings and Works, resulting mainly from capital expenditures related to the conversion of a facility in Gatineau, Quebec, to a collection storage facility with a high-density shelving system, for which the majority of the construction work was carried out in the 2012–2013 fiscal year.

  • A decrease of $7.8 million ($54.9 million in 2013–2014 and $62.7 million in 2012–2013) in Personnel expenditures, resulting mainly from a decrease in salary expenditures as a result of employee departures and expenditures related to workforce adjustment measures following the savings measures announced in Budget 2012.

  • An increase of $0.9 million ($4.0 million in 2013–2014 and $3.1 million in 2012–2013) in expenditures for Professional and Special Services, resulting mainly from an increase in temporary help expenditures for the following projects:

    • To ensure compliance with the Treasury Board's Standard on Web Accessibility, resulting from a Federal Court decision (Jodhan), LAC had to make use of temporary help to increase the number of resources needed to review the entirety of the institution's Web content and migrate that content to a new platform. This project will end on March 31, 2014.

    • To speed up the implementation of its disposition and recordkeeping program and the issuance of disposition authorizations to government institutions, LAC made use of temporary help. With these new authorizations, federal institutions have the tools they need to properly manage their resources, thereby strengthening government accountability to Canadians.

Risks and Uncertainties

LAC faces four strategic risks in achieving its mandate:

  • That essential documentary heritage will not be acquired;
  • That documentary heritage will not be preserved for future generations;
  • That documentary heritage will not be accessible to Canadians; and
  • That Government of Canada information resources will not be managed properly.

Since 2009, LAC has been reviewing its operations to make the most of the opportunities brought about by the digital information age. The implementation of these new ways of doing business is also aimed at mitigating the four strategic risks.

The implementation of the modernization initiative poses various operational and horizontal risks that could affect its success. The principal areas of corporate risk include innovation management, integrated resource management, information technologies, service delivery and future skills development. LAC's strategy to mitigate these risks includes a number of innovative initiatives specific to each risk.

4. Significant Changes in Relation to Operations, Personnel and Programs

Over the past three years, while LAC has continued to acquire and preserve information resources and to serve Canadians, it has also re-thought internal governance and collaboration with its external partners. LAC has renewed its work processes for best possible use of resources. The institution has clarified its mandate and how to fulfill it. LAC has outlined the research needed to better function in the digital environment, and initiated discussions on the skills needed to support LAC's future work. LAC's business model has been enhanced by refocusing on the institution's mandate and reinforcing stewardship.

For Library and Archives Canada, the 2013–2015 time frame represents an intense period of implementation and production, above and beyond the ongoing work that must be pursued. While recent years have been dedicated to deliberation, research and development to modernize LAC in a 21st century environment, the years ahead will see the ongoing implementation of new practices. LAC will focus on the following priorities:

  1. LAC will use a whole-of-society approach to acquire Canada's documentary heritage;

  2. LAC will continue to strengthen its ability to preserve digital and analogue holdings;

  3. LAC will implement its new digital business model to improve access to its holdings;

  4. LAC will continue to take a collaborative approach to meet the challenges of managing Canada's documentary heritage; and

  5. LAC will acquire the infrastructure and the new skills it needs to manage documentary heritage in the 21st century.

5. Budget 2012 Implementation

This section provides an overview of the cost-saving measures announced in Budget 2012. The total cost-saving measures for LAC were $3.5 million in 2012–2013, and total $6.6 million in 2013–2014, and $9.6 million in 2014–2015 and subsequent years. These measures will refocus government and programs; make it easier for Canadians and businesses to deal with their government; and modernize and reduce the back office.

Budget for acquisitions: The $0.4 million dedicated budget to purchase documents and special collections was eliminated. In future, these purchases will be made within LAC's usual acquisition process using available resources.

National Archival Development Program (NADP): The NADP was terminated under Budget 2012 and some wind-down costs were incurred in 2012–2013.

Reduced spending related to the five other LAC programs affected by Budget 2012 impacts salaries as a result of workforce reduction.

Approval by Senior Officials


Approved by:


________________________________________
Hervé Déry
Acting Librarian and Archivist of Canada
February 21, 2014


_________________________________________
Isabelle Niquette, CPA, CGA
Acting Chief Financial Officer
February 21, 2014


Statement of Authorities (unaudited)
(in dollars)

This table indicates dollar figures for authorities for the fiscal year 2013–2014, including the total available for use for the year ending March 31, 2014; the total used during the quarter ended December 31, 2013; and the total year to date used at quarter-end. Displayed are the dollar figures for fiscal year 2012–2013, including the total available for use for the year ending March 31, 2013; the total used during the quarter ended December 31, 2012; and the total year to date used at quarter-end.

Authorities
Fiscal year
2013–2014:

Total available for
use for the
year ending
March 31, 2014 *
Fiscal year
2013–2014:

Used during the
quarter ended
December 31, 2013
Fiscal year
2013–2014:

Year to date used
at quarter-end
Fiscal year
2012–2013:

Total available for
use for the
year ending
March 31, 2013
* , **
Fiscal year
2012–2013:

Used during the
quarter ended
December 31, 2012
Fiscal year
2012–2013:

Year to date used
at quarter-end
Vote 55—Net Operating Expenditures
90,082,056
20,075,426
54,622,773
92,198,847
21,021,381
60,287,847
Vote 60—Capital expenditures
3,943,615
369,858
414,903
19,352,500
5,536,915
13,735,475
Contributions to the employee benefit plans
10,177,677
2,545,900
7,633,258
11,275,573
2,818,893
8,456,680
Spending of proceeds from the disposal of surplus Crown assets
229,274
0
0
308,582
0
0
Total Budgetary authorities
104,432,622
22,991,184
62,670,934
123,135,502
29,377,189
82,480,002
Non-budgetary authorities
0
0
0
0
0
0
Total authorities
104,432,622
22,991,184
62,670,934
123,135,502
29,377,189
82,480,002

* Includes only Authorities available for use and granted by Parliament at quarter-end.

** Total available for use does not reflect measures announced in Budget 2012


Departmental Budgetary Expenditures by Standard Object (unaudited)
(in dollars)

This table indicates departmental budgetary expenditures. Displayed are the dollar figures for expenditures by standard object; total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2013–2014; numbers are arranged by total planned expenditures for the year ending March 31, 2014; the total expended during the quarter ended December 31, 2013; and the total year to date used at quarter-end.

Displayed are the dollar figures for expenditures by standard object; total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2012–2013; numbers are arranged by total planned expenditures for the year ending March 31, 2013; the total expended during the quarter ended December 31, 2012; and the total year to date used at quarter-end.

Fiscal year
2013–2014:

Planned
expenditures for the
year ending
March 31, 2014
Fiscal year
2013–2014:

Expended during
the quarter ended
December 31, 2013
Fiscal year
2013–2014:

Year to date used
at quarter-end
Fiscal year
2012–2013:

Planned
expenditures for the
year ending
March 31, 2013 *
Fiscal year
2012–2013:

Expended during
the quarter ended
December 31, 2012
Fiscal year
2012–2013:

Year to date used
at quarter-end
Expenditures:
Personnel
69,243,967
19,570,168
54,928,550
78,763,095
21,542,676
62,698,754
Transportation and communications
1,713,481
189,294
410,463
2,546,662
256,935
626,874
Information
427,252
20,721
41,674
377,523
30,146
107,850
Professional and special services
15,627,720
1,722,788
4,020,726
11,325,346
1,404,493
3,059,788
Rentals
4,185,172
69,892
812,316
2,655,354
81,918
745,854
Repair and maintenance
2,642,104
149,399
287,577
1,835,924
304,760
393,606
Utilities, materials and supplies
2,507,833
327,647
726,795
2,012,293
175,475
419,626
Acquisition of land, buildings and works
3,943,615
58,292
58,292
19,352,500
5,503,036
13,701,595
Acquisition of machinery and equipment
4,462,615
406,435
788,674
3,030,584
53,334
155,210
Transfer payments
36,000
10,650
36,766
1,746,000
0
25,035
Other subsidies and payments
192,863
521,509
726,586
40,221
94,912
719,473
Total gross budgetary expenditures
104,982,622
23,046,795
62,838,419
123,685,502
29,447,685
82,653,665
 
Revenue credited to the vote
550,000
55,611
167,485
550,000
70,496
173,663
Total Revenues netted against expenditures:
550,000
55,611
167,485
550,000
70,496
173,663
Total net budgetary expenditures
104,432,622
22,991,184
62,670,934
123,135,502
29,377,189
82,480,002

[text version]

* Planned expenditures do not reflect measures announced in Budget 2012.

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