Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs
1. Introduction
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 portfolio organization of the Department of Canadian Heritage. 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 co-operation 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 the institution, consistent with the Main Estimates and Supplementary Estimates (A) and (B) for the 2012–2013 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 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 2012–2013 Main Estimates.
In fiscal year 2012–2013, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds identified as savings in Budget 2012. 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 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 $123.1 million in 2012–2013, and $124 million in 2011–2012. The following graph outlines the detailed breakdown of authorities by fiscal year:
Detailed Breakdown of Authorities
(in dollars)
The following table indicates the detailed breakdown of authorities. Displayed are the numbers, in dollars, for detailed authorities for the quarters ending December 31, 2012, and December 31, 2011.
Detailed breakdown of Authorities |
For the quarter ended December 31, 2012 |
For the quarter ended December 31, 2011 |
Main Estimates |
117,743,529 |
112,959,833 |
Supplementary Estimates (A) |
222,903 |
0 |
| Supplementary Estimates (B) |
0 |
445,805 |
Proceeds from the disposal of surplus Crown assets |
308,582 |
201,183 |
| Paylist Requirements Vote |
3,421,767 |
6,787,798 |
Vote 25–Operating Budget Carry Forward |
1,438,721 |
3,637,980 |
| Compensation Adjustments Vote |
0 |
25,582 |
Total authorities |
123,135,502 |
124,058,181 |
The overall net decrease of $0.9 million in total available authorities for use between the two fiscal years is mainly due to the following:
- an increase of $8.7 million for the conversion of a facility in Gatineau, Quebec, as a collection storage facility with a high-density shelving system;
- a decrease of $3.6 million for the permanent transfer of resources to Shared Services Canada (SSC) for the Administrative Services Review (ASR);
- a decrease of $3.3 million for the reimbursement of paylist expenditures;
- a decrease of $2.2 million received as Operating Budget Carry Forward;
- a net decrease of $0.5 million in employee benefits plans (statutory) and funding received for compensation adjustments to fund the increased personnel costs of collective agreements;
- 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 increase of $0.1 million for the permanent transfer of resources from Public Works and Government Services Canada related to the custodianship of the Nitrate Film Preservation Facility; and
- an increase of $0.1 million from the disposal of surplus Crown assets.
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
The year-to-date expenditures for the quarter ended December 31, 2012 are comparable to those of the same quarter in 2011–2012, except for the following variances:
There is a significant difference in Personnel expenditures. The decrease of $5.3 million ($62.7 million in 2012–2013 and $68 million in 2011–2012) is mainly explained by:
- a decrease of $4.9 million paid out in severance pay to LAC employees following the ratification of new collective agreements; and
- a net decrease of $0.4 million in salary expenditures related to workforce adjustment such as transition support measures as well as savings resulting from employee departures.
A significant increase of $13.6 million ($13.7 million in 2012–2013 and $0.1 million in 2011–2012) in expenditures for Acquisition of Land, Buildings and Works is mainly explained by capital expenditures related to construction work carried out to convert a facility in Gatineau, Quebec, to a collection storage facility with a high-density shelving system. This construction work started in late December 2011, which explains why there were very little capital expenditures reported at this date last fiscal year.
A significant decrease of $2.2 million ($3.1 million in 2012–2013 and $5.3 million in 2011–2012) in Professional and Special Services is due primarily to the awarding of fewer contracts for management and information technology consulting services and temporary help services. Furthermore, LAC's new multi-tenant building situation enables it to share a portion of its commissionaire costs with other tenants.
A significant decrease of $1.1 million ($25 thousand in 2012–2013 and $1.2 million in 2011–2012) in Transfer Payments resulting from Economic Action Plan 2012 (Budget 2012) Implementation is related to the elimination of the National Archival Development Program (NADP).
As a result of the creation of SSC on August 4, 2011, and the subsequent passing of Order-in-Council P.C. 2011–1297 on November 15, 2011, certain responsibilities across 43 departments and agencies were transferred to SSC. Consequently, LAC had no expenditures related to these responsibilities in 2012–2013 (although it did for this quarter in 2011–2012). These mainly relate to Personnel; Transportation and Communications; Rentals; Repair and Maintenance; and Acquisition of Machinery and Equipment.
3. Risks and Uncertainties
LAC faces four strategic risks in achieving its mandate:
- That essential documentary heritage not be acquired;
- That documentary heritage not be preserved for future generations;
- That documentary heritage not be accessible to Canadians; and
- That Government of Canada information resources not be managed properly.
Since 2009, LAC is reviewing its activities and processes 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 modernization initiative in itself exposes the institution to various operational and horizontal risks that could affect its success. The principal areas of operational risk include innovation management, integrated resource management, information technologies, service delivery, and future skills development. LAC’s strategy to mitigate these risks is made up a number of innovative initiatives specific to each risk.
As announced in Budget 2012, LAC's annual departmental budget will be reduced by $9.6 million by 2014–2015, a decrease of approximately 10% of its total budget. Personnel represents the single largest category of expenditures for LAC. Considering that departments no longer receive funding for compensation adjustments related to negotiated collective agreements, this has an important effect on the use of LAC's operating vote. LAC estimates the impact of this government-wide initiative to be about $1 million per year and aggregating cumulatively over the next few years. LAC is managing the implementation of these measures through continuing realignment of its resources. This is achieved through reallocations of budget within LAC, supported by rigorous monitoring of staffing and expenditures in line with effective business, human resources and financial strategic planning.
4. Significant Changes in Relation to Operations, Personnel and Programs
In short, over the past three years, while LAC has continued to acquire and preserve documents and to serve Canadians, it has also rethought internal governance and collaboration with its external partners. LAC has developed an institution whose work processes have been renewed to allow for the best possible use of the resources it is allocated. The institution has clarified its mandate and the manner in which it will fulfill it. LAC has established the outline of the research that must be carried out to enable it to better function as an institution in the digital environment and initiated discussions on its needs in relation to the skills that will be necessary to support LAC’s work in the future. LAC’s business model has been enriched and enhanced by refocusing on its mandate and reinforcing stewardship.
The 2013–2015 time frame represents for Library and Archives Canada an intense period of implementation and production, in addition to the ongoing work that must be pursued. While recent years were dedicated to deliberations, research and development to modernize LAC into a 21st century memory institution, the years ahead will see the ongoing implementation of new practices. In the process, LAC will focus on the following priorities:
- LAC will use a Whole-of-Society Approach to acquire Canada’s documentary heritage;
- LAC will continue to strengthen its ability to preserve digital and analogue holdings;
- LAC will implement its new digital business model to improve access to its holdings;
- LAC will advance a collaborative approach to meet the challenges of managing Canada’s documentary heritage; and
- 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 are $3.5 million in 2012–2013; $6.6 million in 2013–2014; $9.6 million in 2014–2015 and ongoing. These measures will be implemented in order to 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 regular investment decision process based on available resources.
National Archival Development Program (NADP): The NADP was terminated in Budget 2012 and certain wind-down costs were incurred in 2012–2013.
Reduced spending related to the five other LAC programs affected by Budget 2012 impacts salaries due to workforce reduction.
Workforce adjustment comes with financial uncertainty due to options offered to employees under the relevant policies and collective agreements. LAC continues to monitor these situations carefully to adjust its budgetary plans accordingly.
Approval by Senior Officials
Approved by:
__________________________________________
Daniel J. Caron, Ph.D.
Deputy Head and Librarian and Archivist of Canada
and Chair, Heads of Federal Agencies
February 26, 2013
__________________________________________
Mark C. Melanson, CGA
Chief Financial Officer
February 22, 2013
Statement of Authorities (unaudited)
(in dollars)
This table indicates authorities. Displayed are the numbers, in dollars, 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. Displayed are the numbers, in dollars, for fiscal year 2011–2012, including the total available for use for the year ending March 31, 2012; the total used during the quarter ended December 31, 2011; and the total year to date used at quarter-end.
Authorities |
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 |
Fiscal year 2011–2012:
Total available for use for the year ending March 31, 2012 * |
Fiscal year 2011–2012:
Used during the quarter ended December 31, 2011 |
Fiscal year 2011–2012:
Year to date used at quarter-end |
Vote 55 (2012–2013) and Vote 50 (2011–2012) - Net Operating Expenditures |
92,198,577 |
21,021,381 |
60,287,847 |
101,752,332 |
22,453,118 |
71,492,646 |
Vote 60 (2012–2013) and Vote 55 (2011–2012) - Capital expenditures |
19,352,500 |
5,536,915 |
13,735,475 |
10,350,000 |
97,452 |
97,452 |
Budgetary statutory authorities - Contributions to employee benefit plans and spending of proceeds from the disposal of surplus Crown assets |
11,584,425 |
2,818,893 |
8,456,680 |
11,955,849 |
3,060,362 |
8,937,695 |
Total budgetary authorities |
123,135,502 |
29,377,189 |
82,480,002 |
124,058,181 |
25,610,932 |
80,527,793 |
Non-budgetary authorities |
0 |
0 |
0 |
0 |
0 |
0 |
Total authorities |
123,135,502 |
29,377,189 |
82,480,002 |
124,058,181 |
25,610,932 |
80,527,793 |
* 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 numbers, in dollars, 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. Displayed are the numbers, in dollars, 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 2011–2012; numbers are arranged by total planned expenditures for the year ending March 31, 2012; the total expended during the quarter ended December 31, 2011; and the total 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 |
Fiscal year 2011–2012: Planned expenditures for the year ending March 31, 2012 * |
Fiscal year 2011–2012: Expended during the quarter ended December 31, 2011 |
Fiscal year 2011–2012: Year to date used at quarter-end |
Expenditures: |
Personnel |
78,763,095 |
21,542,676 |
62,698,754 |
83,871,744 |
22,074,829 |
68,064,071 |
Transportation and communications |
2,546,662
|
256,935
|
626,874
|
2,772,701 |
464,094
|
1,399,796
|
Information |
377,523 |
30,146
|
107,850 |
888,017 |
72,052
|
113,778
|
Professional and special services |
11,325,346
|
1,404,493
|
3,059,788
|
13,314,007
|
1,931,934
|
5,274,462
|
Rentals |
2,655,354
|
81,918
|
745,854
|
2,135,206
|
156,698
|
1,474,867
|
Repair and maintenance |
1,835,924
|
304,760
|
393,606 |
2,420,109
|
329,336
|
771,372
|
Utilities, materials and supplies |
2,012,293
|
175,475 |
419,626 |
3,937,638
|
315,806
|
914,114
|
Acquisition of land, buildings and works |
19,352,500 |
5,503,036
|
13,701,595 |
10,350,000 |
97,452 |
97,452 |
Acquisition of machinery and equipment |
3,030,584 |
53,334
|
155,210
|
3,172,759 |
|
982,533
|
Transfer payments |
1,746,000 |
0
|
25,035 |
1,746,000 |
27,523
|
1,195,651
|
Other subsidies and payments |
40,221 |
94,912
|
719,473
|
0 |
-176,276
|
477,199
|
Total gross budgetary expenditures |
123,685,502 |
29,447,685 |
82,653,665 |
124,608,181 |
25,675,034 |
80,765,295 |
Less Revenues netted against expenditures: |
Respendable revenue |
550,000 |
70,496
|
173,663
|
550,000 |
64,102
|
237,502
|
Total Revenues netted against expenditures: |
550,000 |
70,496
|
173,663
|
550,000 |
64,102
|
237,502
|
Total net budgetary expenditures |
123,135,502 |
29,377,189 |
82,480,002 |
124,058,181 |
25,610,932
|
80,527 793 |
* Includes only Authorities available for use and granted by Parliament at quarter-end.
** Planned expenditures do not reflect measures announced in Budget 2012.