Quarterly Financial Report for the Quarter Ended September 30, 2014

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 Treasury Board. This quarterly report should be read in conjunction with the 2014‑2015 Main Estimates and Supplementary Estimates (A).

This 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) for the 2014‑2015 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs regarding 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.

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 $100.6 million in 2014‑2015, and $98.5 million in 2013‑2014. The following table presents the detailed list of authorities by fiscal year:

Statement of Authorities (unaudited)
(in dollars)

Authority Vote/Statutory

Authority Code

Description

For the quarter ended September 30, 2014

For the quarter ended September 30, 2013

Vote 1 (2014–2015) and Vote 55 (2013–2014)

B110

Program Expenditures (2014–2015) and Operating Expenditures (2013–2014)

91,565,281

85,762,192

Vote 1 (2014–2015) and Vote 55 (2013–2014)

B130

Revenue Credited to the Vote

–550,000

–550,000

Vote 1 (2014–2015) and Vote 60 (2013–2014)

B140

Capital Expenditures

0

2,956,827

S

A131

Spending of proceeds from the disposal of surplus Crown assets

144,209

204,953

S

A140

Contributions to employee benefit plans

9,433,379

10,177,677

Total authorities

 

 

100,592,869

98,551,649

The overall net increase of $2.1 million in total available authorities for use between the two fiscal years is mainly due to the following:

  • An overall increase of $8.1 million resulting from:
    • an increase of $4.6 million in operating budget carry forward;
    • an increase of $1.9 million from Public Works and Government Services Canada as a result of Library and Archives Canada program space consolidation and rationalization efforts;
    • an increase of $0.9 million for compensation adjustments to fund increased personnel costs of collective agreements and employee benefit plans (statutory);
    • an increase of $0.7 million from Public Works and Government Services Canada for reimbursement as a result of a reduction in accommodation requirements.
  • An overall decrease of $6.0 million resulting from:
    • a decrease of $3.0 million due to savings identified as part of the Budget 2012 spending review;
    • a decrease of $2.6 million for the conversion of a facility in Gatineau, Quebec to a high-density shelving system Collection Storage Facility;
    • a decrease of $0.4 million to Shared Services Canada as part of the Workplace Technology Devices Initiative.

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 $48.0 million as of September 30, 2014, and $39.7 million as of September 30, 2013. The total increase of $8.3 million is explained mainly by:

  • An increase of $3.2 million ($3.4 million in 2014‑2015 and $0.2 million in 2013‑2014) in "Other Subsidies and Payments" expenditures is mainly due to a one‑time transition payment for implementing salary payment in arrears by the Government of Canada.
  •  
  • An increase of $2.4 million ($37.8 million in 2014-2015, and $35.4 million in 2013-2014) of "Personnel" expenditures, is explained mainly by:
    • an increase in salary expenditures following the hiring of temporary personnel to support organizational priorities;
    • 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 institutions related to accession, reference and disposition services are lower than those recovered during the same period last year;
    • a decrease in salary expenditures paid out in severance pay to LAC employees following the ratification of new collective agreements.
  • An increase of $0.7 million ($0.7 million in 2014‑2015 and $0 million in 2013‑2014) in expenditures for "Acquisition of Land, Buildings and Works," resulting mainly from the expenditures related to the development of digital spaces in the facility in Gatineau, Quebec, a collection storage facility with a high-density shelving system.
  • An increase of $0.5 million ($2.8 million in 2014‑2015 and $2.3 million in 2013‑2014) in expenditures for "Professional and Special Services," related mainly to increased expenditures for professional services and temporary help to support organizational priorities.
  • An increase of $0.5 million ($0.6 million in 2014‑2015 and $0.1 million in 2013‑2014) in expenditures for "Repairs and Maintenance," resulting mainly from expenditures related to the development of digital spaces in the facility in Gatineau, Quebec, a collection storage facility with a high-density shelving system.
  • An increase of $0.4 million ($0.8 million in 2014‑2015 and $0.4 million in 2013‑2014) in expenditures for "Acquisition of Machinery and Equipment," resulting mainly from the acquisition of a research engine to facilitate accessibility to LAC's documentary heritage.

3. Risks and Uncertainties

LAC has identified four strategic risks that may have an impact on achieving its legislative 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.

The strategic risks translate into corporate risks that may have an impact on LAC's operations. They are identified and assessed by LAC's senior officials and managers. They must be reviewed in‑depth every three years and validated every year for relevance.

The principal areas of operational risk identified in 2014 include digital preservation, online access, the description of the collection and technology management. LAC's strategy for mitigating these risks includes a number of concrete initiatives specific to each risk.

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

Over the past few years, LAC has taken advantage of the innovations created by the rapid growth in digital technologies to refocus its mandate, clarify how it wants to fulfill it and identify the best means and strategies for doing so.

LAC has developed policy frameworks for its operations and will continue its innovation efforts to consolidate its approach and provide even more tangible results for Canadians.

LAC is focused on the commitments set out in the 2014‑2015 Report on Plans and Priorities. Therefore LAC's activities are centred on the following priorities:

  1. acquire documentary resources representative of Canadian society;
  2. improve the preservation of documentary heritage in digital and analogue formats;
  3. provide quality service to Canadians and maximize access to LAC's holdings using digital technologies;
  4. adopt a more collaborative approach with documentary heritage communities to fulfill LAC's mandate;
  5. develop the infrastructure and the strategies needed 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 were implemented to refocus the government and its programs, make it easier for Canadians and businesses to deal with their government, and modernize and streamline administrative services.

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 five other LAC programs as a result of Budget 2012 impacts salaries as a result of workforce reduction.

Approval by Senior Officials

Approved by:


 

Signed by G. Berthiaume

____________________________________
Guy Berthiaume
Librarian and Archivist of Canada
November 25, 2014 

Signed by H. Déry

____________________________________
Hervé Déry
Assistant Deputy Minister, Corporate Services, and Chief Financial Officer
November 21, 2014
 

Statement of Authorities (unaudited)
(in dollars)

Authorities

Fiscal year 2014–2015: Total available for use for the year ending March 31, 2015 *  

Fiscal year 2014–2015: Used during the quarter ended September 30, 2014

Fiscal year 2014–2015: Year to date used at quarter-end

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

Vote 1 (2014–2015)  Program Expenditures and Vote 55 (2013–2014)  Operating Expenditures

91,015,281

21,307,963

43,248,726

85,212,192

16,439,877

34,547,347

Vote 1 (2014–2015) and Vote 60 (2013–2014)  Capital Expenditures

0

0

0

2,956,827

45,045

45,045

Contributions to the employee benefit plans

9,433,379

2,358,345

4,716,690

10,177,677

2,542,939

5,087,358

Spending of proceeds from the disposal of surplus Crown assets

144,209

0

0

204,953

0

0

Total Budgetary authorities

100,592,869

23,666,308

47,965,416

98,551,649

19,027,861

39,679,750

Non-budgetary authorities

0

0

0

0

0

0

Total authorities

100,592,869

23,666,308

47,965,416

98,551,649

19,027,861

39,679,750

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

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

Fiscal year 2014–2015: Planned expenditures for the year ending March 31, 2015  

Fiscal year 2014–2015: Expended during the quarter ended September 30, 2014

Fiscal year 2014–2015: 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

Expenditures:

Personnel

66,605,374

18,719,417

37,838,994

68,670,075

15,975,436

35,358,382

Transportation and communications

2,240,399

293,357

423,232

1,480,017

149,859

221,169

Information

346,132

24,784

29,443

369,038

12,543

20,953

Professional and special services

17,334,299

1,665,642

2,819,939

13,498,422

1,727,441

2,297,938

Rentals

5,063,715

388,405

772,139

3,618,396

495,232

742,424

Repair and maintenance

2,105,834

600,862

637,706

2,282,114

99,572

138,178

Utilities, materials and supplies

2,986,509

303,443

654,727

2,169,597

320,043

399,148

Acquisition of land, buildings and works

997,562

312,702

656,700

2,956,827

0

0

Acquisition of machinery and equipment

2,999,415

743,780

845,573

3,854,578

346,052

382,239

Transfer payments

36,000

0

0

36,000

0

26,116

Other subsidies and payments

427,630

644,308

3,353,835

166,585

–55,162

205,077

Total gross budgetary expenditures

101,142,869

23,696,700

48,032,288

99,101,649

19,071,016

39,791,624

Less Revenues netted against expenditures:

​Respendable revenue ​550,000 30,392​ 66,872​ 550,000​ 43,155​ 111,874​

Total Revenues netted against expenditures:

550,000

30,392

66,872

550,000

43,155

111,874

Total net budgetary expenditures

100,592,869

23,666,308

47,965,416

98,551,649

19,027,861

39,679,750

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