Quarterly Financial Report for the Quarter Ended September 30, 2015

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 2015–2016 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 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 the spending authorities granted by Parliament and those used by LAC, consistent with the Main Estimates and Supplementary Estimates (A) for the 2015–2016 fiscal year. It 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 Statement of Authorities below, total authorities available for use as of September 30 are $96.7 million in 2015–2016, and $100.6 million in 2014–2015. 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 September 30, 2015 and September 30, 2014.

Authority
Vote/Statutory

Authority code

Description

For the quarter ended September  30, 2015

For the quarter ended September  30, 2014

Vote 1

B110

Program expenditures

88,645,379 

91,565,281 

Vote 1

B130

Revenue credited to the vote

-1,779,000

-550,000

S

A131

Spending of proceeds from the disposal of surplus Crown assets

54,617 

144,209 

S

A140

Contributions to employee benefit plans

9,828,389

9,433,379

Total authorities

 

 

96,749,385

100,592,869

 

The overall net decrease of $3.9 million in total available authorities for use between the two fiscal years is mainly due to the following:

  • a decrease of $3.1 million for the costs related to the conversion of a facility in Gatineau, Quebec to a collection storage facility with a high-density shelving system; 
  • a decrease of $0.9 million in operating budget carry forward and capital budget carry forward;
  • a decrease of $0.4 million related to the transfer from Canadian Heritage to LAC for the Canada Music Fund, the Canadian Music Memories Component, which supports the acquisition, accessibility and preservation of Canadian sound recordings. For the 2015–2016 fiscal year, the transfer will be carried out through the supplementary estimates.
  • An overall increase of $0.7 million mainly resulting from a compensation adjustment to fund increased salary expenditures related to collective agreements and employee benefit plans (statutory).

In addition, revenue credited to the vote increased by $1.2 million following the signature of the interdepartmental memorandum of understanding between LAC and Aboriginal Affairs and Northern Development Canada aimed at providing the Truth and Reconciliation Commission of Canada with all government records related to the residential schools under the custody and control of LAC. This revenue credited to the vote authority was granted to LAC in the third-quarter of 2014–2015, whereas in 2015–2016, the votes were received at the start of the year.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

As presented in the Statement of Departmental Budgetary Expenditures by Standard Object, the year-to-date expenditures total $42.9 million as of September 30, 2015, and $48 million as of September 30, 2014. The total decrease of $5.1 million is mainly explained by:

  • A decrease of $3 million ($0.3 million in 2015–2016 and $3.3 million in 2014–2015) in “Other Subsidies and Payments” expenditures, due to the one-time transition payment for implementing salary payment in arrears by the Government of Canada.
  • A decrease of $0.8 million ($2 million in 2015–2016 and $2.8 million in 2014–2015) in “Professional and Special Services” expenditures, mainly resulting from the fact that in the 2014–2015 fiscal year, LAC used professional and temporary help services to digitize and relocate First World War records and to relocate the post-1945 service records of military personnel.
  • A decrease of $0.7 million in 2015–2016 in “Acquisition of Land, Buildings and Works” expenditures, mainly resulting from expenditures in 2014–2015 related to the development of digital spaces in a collection storage facility with a high-density shelving system.
  • A decrease of $0.5 million ($0.1 million in 2015–2016 and $0.6 million in 2014–2015) in “Repair and Maintenance” expenditures, mainly resulting from expenditures in 2014–2015 related to the development of digital spaces in a collection storage facility with a high-density shelving system. 
  • A decrease of $0.5 million ($0.2 million in 2015–2016 and $0.7 million in 2014–2015) in “Utilities, Materials and Supplies” expenditures, mainly resulting from a decrease in acquisitions related to documentary heritage in 2015–2016 compared to 2014-2015.  
  • A decrease in “Total Net Budgetary” expenditures due to an increase of $0.5 million in “Vote Netted Revenues” ($0.6 million in 2015–2016 and $0.1 million in 2014–2015) following cost recoveries that occurred in the first two quarters of 2015–2016, whereas they occurred later in 2014–2015.
  • An increase of $0.8 million ($1.6 million in 2015–2016 and $0.8 million in 2014–2015) in “Rentals” expenditures, mainly resulting from certain software costs and higher maintenance costs for LAC’s workstation and server platforms that were incurred in the first two quarters of 2015–2016, whereas they were incurred in the last two of 2014–2015.

3. Risks and Uncertainties

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

  • the risk that Canadian documentary heritage of national interest is not acquired;
  • the risk that documentary heritage is not preserved for future generations;
  • the risk that documentary heritage is not available to current and future generations;
  • the risk that Government of Canada institutions do not use regulatory instruments and recordkeeping tools developed by LAC.

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

The principal areas of operational risk identified 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

In recent years, LAC has pursued innovative efforts to better fulfill its mandate in the context of the digital environment. In the coming years, LAC will work to maximize the visibility and accessibility of its collection by offering services that meet the needs of its clients. The organizational priorities that form the basis of this report directly support the objectives in LAC's legislated mandate:

  1. acquire information resources that are representative of Canadian society;
  2. preserve documentary heritage in analogue and digital formats;
  3. offer quality services and programs to Canadians and provide access to as much content as possible using digital technologies;
  4. adopt a more collaborative approach to fulfill the mandate and support documentary heritage communities;
  5. develop the infrastructure and the skills needed to manage documentary heritage in the 21st century.

Approval by Senior Officials

Original signed by H. Déry for

___________________________________
Guy Berthiaume
Librarian and Archivist of Canada
Gatineau, Canada
November 24, 2015

Original signed by I. Niquette for

___________________________________
Hervé Déry
Chief Financial Officer
Gatineau, Canada
November 24, 2015

 

Statement of Authorities (unaudited)

(in dollars)

Authorities

Fiscal year 2015–2016:
Total available for use for the year ending March 31, 2016 *

Fiscal year 2015–2016:
Used during the quarter ended September
30, 2015

Fiscal year 2015–2016:
Year to date used at quarter-end

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

Vote 1 Program expenditures

86,866,379

19,137,080

37,959,279

91,015,281

21,307,963

43,248,726

Contributions to the employee benefit plans

9,828,389

2,457,097

4,914,194

9,433,379

2,358,345

4,716,690

Spending of proceeds from the disposal of surplus Crown assets

54,617

0

0

144,209

0

0

Total Budgetary authorities

96,749,385

21,594,178

42,873,473

100,592,869

23,666,308

47,965,416

Non-budgetary authorities

0

0

0

0

0

0

Total authorities

96,749,385

21,594,178

42,873,473

100,592,869

23,666,308

47,965,416

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

Departmental Budgetary Expenditures by Standard Object (unaudited)

(in dollars)

Fiscal year 2015–2016:
Planned expenditures for the year ending March 31, 2016

Fiscal year 2015–2016:
Expended during the quarter ended September
30, 2015

Fiscal year 2015–2016:
Year to date used at quarter-end

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

Expenditures:

Personnel

68,330,703

19,151,046 

38,137,877 

66,605,374

18,719,417 

37,838,994 

Transportation and communications

1,756,624 

221,398 

398,720 

2,240,399 

293,357 

423,232 

Information

292,771 

29,575 

55,571 

346,132 

24,784 

29,443 

Professional and special services

15,516,845 

1,459,295 

2,013,857 

17,334,299 

1,665,642 

2,819,939 

Rentals

2,955,015 

600,761 

1,613,936 

5,063,715 

388,405 

772,139 

Repair and maintenance

1,756,624 

106,541 

120,977 

2,105,834 

600,862 

637,706 

Utilities, materials and supplies

3,247,785 

73,411 

214,963 

2,986,509 

303,443 

654,727 

Acquisition of land, buildings and works

830,000

0

0

997,562 

312,702 

656,700 

Acquisition of machinery and equipment

3,513,247 

371,451 

565,748 

2,999,415 

743,780 

845,573 

Transfer payments

36,000

11,478 

11,478 

36,000

0

0

Other subsidies and payments

292,771 

80,302 

291,063 

427,630 

644,308 

3,353,835 

Total gross Budgetary expenditures

98,528,385 

22,105,258 

43,424,189 

101,142,869 

23,696,700 

48,032,288 

Less Revenues netted against expenditures:

Respendable revenue

1,779,000

511,080 

550,715 

550,000

30,392 

66,872 

Total Revenues netted against expenditures:

1,779,000

511,080 

550,715 

550,000

30,392 

66,872 

Total net budgetary expenditures

96,749,385 

21,594,178 

42,873,473 

100,592,869 

23,666,308 

47,965,416 

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