Quarterly Financial Report for the Quarter Ended September 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 2012-2013 Main Estimates and Supplementary Estimates (A), 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 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 September 30 are $98.6 million in 2013–2014 and $119.7 million in 2012–2013. The following table presents the detailed list 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 September 30, 2013, and September 30, 2012.
 

Authority Vote/Statutory

Authority Code

Description

For the Quarter ended September 30, 2013

For the Quarter ended September 30, 2012

55

B110

Operating expenditures

85,762,191

89,327,080

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

204,953

281,127

S

A140

Contributions to employee benefit plans

10,177,677

11,275,573

Total Authorities

 

 

98,551,648

119,686,280


 
The overall net decrease of $21.1 million in total available authorities for use between the two fiscal years is mainly due to the following:
  • An overall decrease of $24.6 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 $1.4 million received as an operating budget carry forward;
    • 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 $3.5 million resulting from:
    • 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 $1.1 million for employee benefit plans (statutory) and funding received for compensation adjustments to fund increased personnel costs of collective agreements.

2.2 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 $39.7 million as of September 30, 2013, and $53.1 million as of September 30, 2012. The total decrease of $13.4 million is explained mainly by: 
 
A decrease in Personnel expenditures. The net decrease of $5.8 million ($35.4 million in 2013–2014 versus $41.2 million in 2012–2013) is mainly due to:
    • 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 in salary expenditures paid out in severance pay to LAC employees following the ratification of new collective agreements.

A decrease of $8.2 million ($0 million in 2013–2014 versus $8.2 million in 2012–2013) in expenditures for Acquisition of Land, Buildings and Works, which is explained mainly 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.

In 2012–2013, to ensure compliance with new requirements from the Receiver General for Canada, LAC carried out a realignment of expenditures. This realignment resulted in negative expenditures for the quarter ended September 30, 2012, under the standard objects of 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 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 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 poses various operational and horizontal risks that could affect its success. The principal areas of organizational 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

Over the past three years, while LAC has continued to acquire and preserve documents 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 necessary skills to support LAC’s future work. LAC’s business model has been enhanced by refocusing on its 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 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. 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 were $3.5 million in 2012–2013, $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: 

Signed by H. Déry
__________________________________________
Hervé Déry
Acting Librarian and Archivist of Canada
November 28, 2013
 

Signed by M. Melanson
__________________________________________
Mark C. Melanson, CGA
Chief Financial Officer
November 27, 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 September 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 September 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 September 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 September 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

85,212,192

16,439,877

34,547,347

88,777,080

22,147,217

39,266,472

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

2,956,827

45,045

45,045

19,352,500

6,513,901

8,198,560

Contributions to the employee benefit plans

10,177,677

2,542,939

5,087,358

11,275,573

2,818,893

5,637,786

Spending of proceeds from the disposal of surplus Crown assets

204,953

0

0

281,127

0

0

Total Budgetary authorities

98,551,649

19,027,861

39,679,750

119,686,280

31,480,011

53,102,818

Non-budgetary authorities

0

0

0

0

0

0

Total authorities

98,551,649

19,027,861

39,679,750

119,686,280

31,480,011

53,102,818

* 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 September 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 September 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 September 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 September 30, 2012

 

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

Expenditures

Personnel

68,670,075

15,975,436

35,358,382

75,341,328

22,409,091

41,156,078

Transportation and communications

1,480,017

149,859

221,169

2,546,662

174,467

369,940

Information

369,038

12,543

20,953

377,523

39,363

77,704

Professional and special services

13,498,422

1,727,441

2,297,938

11,325,346

1,245,906

1,655,295

Rentals

3,618,396

495,232

742,424

2,641,627

621,812

663,937

Repair and maintenance

2,282,114

99,572

138,178

1,835,924

-102,133

88,846

Utilities, materials and supplies

2,169,597

320,043

399,148

1,998,565

159,535

244,152

Acquisition of land, buildings and works

2,956,827

0

0

19,352,500

6,513,901

8,198,560

Acquisition of machinery and equipment

3,854,578

346,052

382,239

3,030,584

-56,473

101,876

Transfer payments

36,000

26,116

1,746,000

25,035

25,035

Other subsidies and payments

166,585

-55,162

205,077

40,221

492,411

624,562

Total gross budgetary expenditures

99,101,649 

19,071,016

39,791,624

120,236,280

31,522,915

53,205,985

Less Revenues
netted against expenditures

Revenue credited to the vote 

550,000

43,155

111,874

550,000

42,904

103,167

Total Revenues netted against expenditures

550,000 

43,155

111,874

550,000

42,904

103,167

Total net budgetary expenditures

98,551,649

19,027,861

39,679,750

119,686,280

31,480,011

53,102,818

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