Quarterly financial report for the quarter ended September 30, 2023

ISSN 2369-7938

Introduction

This quarterly report has been prepared by management 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.

The Transportation Safety Board of Canada’s (TSB’s) sole objective is to advance air, marine, pipeline and rail transportation safety. This mandate is fulfilled by conducting independent investigations into selected transportation occurrences to identify the causes and contributing factors, and the safety deficiencies evidenced by these occurrences. The TSB makes recommendations to reduce or eliminate any such safety deficiencies and reports publicly on its investigations. The TSB then follows up with stakeholders to ensure that safety actions are taken to reduce risks and improve safety.

The quarterly report has not been subject to an external audit or review.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the TSB’s spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates and Supplementary Estimates (as applicable) for the 2023-24 fiscal year and any respendable revenue earned and available for use to quarter end. 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 moneys 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.

TSB uses the full accrual method of accounting to prepare and present its annual departmental financial statements, which are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year to date results

Statement of authorities

The TSB’s total authorities available for use decreased by $674,000 between fiscal years 2023-24 and 2022-23. This variance is primarily explained by the Laboratories Canada program funding of $615,000 that was received in 2022-23 but was not received for the current fiscal year.  For 2023-24, a new funding structure was agreed upon whereby the TSB would not receive upfront authorities for the Laboratories Canada program, but rather a reimbursement of expenditures. The remaining difference is mainly due to fluctuations in the Employee Benefit Plan (EBP) percentage, which is a rate set annually by the Treasury Board Secretariat. 

Compared to the first quarter, 2023-24 appropriations increased by $1,204,000 mainly due to the TSB's operating budget carry forward (OBCF) from previous year.

Statement of departmental budgetary expenditures

The department’s year-to-date expenditures have increased by $1,079,000 or 6% in the current year compared to 2022-23. The variance in expenditures is primarily attributable to increased spending in three categories: personnel, professional and special services, and rentals. The discrepancy in the personnel category is linked to higher salary expenditures as a result of signed and ratified collective agreements. The increase in professional and special services compared to the preceding fiscal year is due to the TSB's need for IT project consultants. This requirement arises in the context of facilitating the migration of the server-based SharePoint platform to SharePoint Online aligning with the organization’s strategic digital transformation objectives. The variance in rental expenditures is correlated with the purchase of licenses predominantly associated with cloud-based information storage. This aligns with the TSB's priority to be digital-by-default.

As illustrated in Figure 1, the TSB has spent approximately 49% of its available authorities at the end of the second quarter. This is inline with what is expected, given that the department's most significant expense is salaries. The TSB's spending is generally distributed equally throughout the year.

Risks and uncertainties

A continuous risk to the TSB’s financial situation is that expenditures are greatly influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in additional resource pressures that could require the department to seek further funding from Parliament.

As a departmental corporation, the TSB has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department’s funding requirements. 

Significant changes in relation to operations, personnel and programs

In relation to operations, TSB employees are currently working in a hybrid work environment in line with the Direction on Prescribed Presence in the Workplace.

There has been no change to the TSB’s programs.

Approval by senior officials

Approved by,

Statement of authorities (unaudited)

Statement of expenditures by standard object (unaudited)