Quarterly Financial Report for the Quarter Ended June 30, 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 Main Estimates and Supplementary Estimates (A) as well as 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 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 LAC, consistent with the Main Estimates and Supplementary Estimates (A) 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 the 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 June 30, are $98.5 million in 2013–2014 and $118.2 million in 2012–2013. The following table outlines the detailed breakdown of Authorities by fiscal year.
 
​The table indicates the Authority Vote/Statutory, Authority Code and Description. Displayed are the numbers, in dollars, for authorities for the quarters ending June 30, 2013, and June 30, 2012.
 

Authority Vote/Statutory

Authority Code

Description

For the Quarter ended June 30, 2013

For the Quarter ended June 30, 2012

55

B110

Operating expenditures

85,762,191

87,888,359

55

B130

Revenue Credited to the Vote

-550,000

-550,000

60

B140

Capital expenditures

2,956,827

19,352,500

S

A131

Spending of proceeds from the disposal of surplus Crown assets

177,665

219,606

S

A140

Contributions to employee benefit plans

10,177,677

11,275,573

Total Authorities

 

 

98,524,360

118,186,038


The overall net decrease of $19.7 million in total available authorities for use between the two fiscal years is mainly due to the following: 
  • 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;
  • an increase of $2.4 million for the permanent transfer from Public Works and Government Services Canada, which resulted in savings in light of the consolidation and streamlining of document storage spaces;
  • a net increase of $1.1 million for employee benefit plans (statutory) and funding received for compensation adjustments to fund 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.
 

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

The year-to-date expenditures for the quarter ended June 30, 2013, are comparable to those of the same quarter last year, except for the following variances:
 
There is a significant increase in Personnel expenditures. The net increase of $0.7 million ($19.4 million in 2013–2014 and $18.7 million in 2012–2013) is mainly explained by:
  • an increase in salary expenditures in light of the fact that the recovery of costs associated with interdepartmental memoranda of understanding between LAC and other government departments related to accession, reference and disposition services were not signed on June 30, 2013. These interdepartmental memoranda of understanding were signed at the same time last year;
  • an increase in salary expenditures paid out in severance pay to LAC employees following the ratification of new collective agreements; and
  • a decrease in salary expenditures as a result of employee departures following the savings measures announced in Budget 2012.

A significant decrease of $1.7 million ($0 million in 2013–2014 and $1.7 million in 2012–2013) 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, for which the majority of the construction work was carried out in the 2012–2013 fiscal year.

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 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 itself poses 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 for mitigation of these risks includes a number of innovative initiatives specific to each risk.
   

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 in a 21st century environment, the years ahead will see the ongoing implementation of new practices. In the process, 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 advance 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 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.

 
 
Approval by Senior Officials
 
Approved by: 

Signed by H. Déry
__________________________________________
Hervé Déry
Acting Librarian and Archivist of Canada
August 20th, 2013
 

Signed by M. Melanson
__________________________________________
Mark C. Melanson, CGA
Chief Financial Officer
August 16th, 2013

 

 

Statement of Authorities (unaudited)
(in dollars) 

This table indicates authorities. Displayed are the numbers, in dollars, for fiscal year 2013–2014, including the total available for use for the year ending March 31, 2014; the total used during the quarter ended June 30, 2013; and the total year to date used at quarter-end. 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 June 30, 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 June 30, 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 June 30, 2012

 

Fiscal year
2012–2013:

Year to date used at quarter-end

 

Vote 55 (2013-2014) and Vote 55 (2012-2013) - Net Operating Expenditures

85,212,191

18,107,470

18,107,470

87,338,359

17,119,255

17,119,255

Vote 60 (2013-2014) and Vote 60 (2012-2013) - Capital expenditures

2,956,827

0

0

19,352,500

1,684,659

1,684,659

Contributions to the employee benefit plans

10,177,677

2,544,419

2,544,419

11,275,573

2,818,893

2,818,893

Spending of proceeds from the disposal of surplus Crown assets

177,665

0

0

219,606

0

0

Total Budgetary authorities

98,524,360

20,651,889

20,651,889

118,186,038

21,622,807

21,622,807

Non-budgetary authorities

0

0

0

0

0

0

Total authorities

98,524,360

20,651,889

20,651,889

118,186,038

21,622,807

21,622,807

​* 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 2013–2014; numbers are arranged by total planned expenditures for the year ending March 31, 2014; the total expended during the quarter ended June 30, 2013; 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 2012–2013; numbers are arranged by total planned expenditures for the year ending March 31, 2013; the total expended during the quarter ended June 30, 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 June 30, 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 June 30, 2012

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

Expenditures:

Personnel

68,670,075

19,382,946

19,382,946

75,341,328

18,746,987

18,746,987

Transportation and communications

1,480,017

71,310

71,310

2,389,360

195,473

195,473

Information

369,038

8,411

8,411

354,204

38,341

38,341

Professional and special services

13,498,422

570,497

570,497

10,626,080

409,389

409,389

Rentals

3,604,752

247,192

247,192

2,456,381

42,125

42,125

Repair and maintenance

2,282,114

38,606

38,606

1,722,523

190,979

190,979

Utilities, materials and supplies

2,155,952

79,104

79,104

1,866,533

84,617

84,617

Acquisition of land, buildings and works

2,956,827

0

0

19,352,500

1,684,659

1,684,659

Acquisition of machinery and equipment

3,854,578

36,188

36,188

2,843,392

158,349

158,349

Transfer payments

36,000

26,116

26,116

1,746,000

0

0

Other subsidies and payments

166,585

260,238

260,238

37,737

132,151

132,151

Total gross budgetary expenditures

99,074,360

20,720,608

20,720,608

118,736,038

21,683,070

21,683,070

Less Revenues
netted against expenditures
 

Respendable revenue

550,000

68,719

68,719

550,000

60,263

60,263

Total Revenues netted against expenditures:

550,000

68,719

68,719

550,000

60,263

60,263

Total net budgetary expenditures

98,524,360

20,651,889

20,651,889

118,186,038

21,622,807

21,622,807

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