Language selection


Search veterans.gc.ca

Departmental Quarterly Financial Reports
April-June 2013

I. Statement outlining results, risks and significant changes in operations, personnel and program for the quarter ended June 30, 2013

1. 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 as well as Canada's Economic Action Plan 2012 (Budget 2012) and Economic Action Plan 2013 (Budget 2013).

A summary description of Veterans Affairs Canada's (VAC) program activities can be found in Part II of the Main Estimates.

Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes Veterans Affairs Canada's spending authorities granted by Parliament and those used by the Department, consistent with the Main Estimates for the 2013-14 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.

As part of the departmental performance reporting process, Veterans Affairs Canada prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain 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, 2012 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 2012-13 Main Estimates.

In fiscal year 2012-13, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In 2013-14, the changes to departmental authorities were reflected in the 2013-2014 Main Estimates tabled in Parliament.

Additional funding was sought by Veterans Affairs Canada through the 2012-13 Supplementary Estimates B. The Department received this additional authority net of the planned savings or other amounts transferred by Treasury Board authority to a frozen allotment.

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

2. Highlights of Fiscal Quarter and Fiscal Year to-Date (YTD) Results

Statement of Authorities

As at June 30, 2013, total authorities available for the year have increased by $70 million (approximately 2%) compared to the same quarter of the previous year, from $3,568 million to $3,638 million. This net increase is the result of an $82 million increase in Vote 5, Grants and Contributions, offset by an $11 million decrease in Vote 1, Operating expenditures and a $1 million decrease in statutory authorities.

Overall, Veterans Affairs Canada's authorities reflect the changing demographic profile and changing needs of the men, women, and families the Department serves. This is evidenced by an increase in the number of modern-day Veterans accessing programs under the New Veterans Charter and a decrease in the number of War Service Veterans accessing the Department's traditional programs.

As at June 30, 2013, total authorities used during the first quarter of 2013-14 are $14 million (1.6%) more when compared to the same three-month period of 2012-13, from $850 million to $864 million. Spending for the first quarter of 2013-14 is in line with the changes to the Department's authorities in that Grants and Contributions spending increased by $15 million and Operating expenditures decreased by $1 million.

Statement of Departmental Budgetary Expenditures by Standard Object

When analyzed by Standard Object, expenditures in the first quarter were generally consistent with prior-year spending trends. The three largest variances include:

  • An increase of $3.4 million in the Personnel category attributed to an increase in Work Force Adjustment payments and Severance pay.
  • A decrease of $43.6 million in the Professional and Special Services category partially offset by an increase of $39.2 million in the Utilities, Materials and Supplies category. (Note - The variance will be reconciled after an appropriate re-allocation of expenditures.)
  • An increase of $15.6 million in transfer payments (i.e. Grants and Contributions) related to an increase in the number of modern-day Veterans and individuals accessing programs under the New Veterans Charter, offset by a decrease in the number of War Service Veterans and individuals accessing the Department's traditional programs. This is the result of the sad reality that, at an average age of 88, traditional War Service Veterans are passing away.

3. Risks and Uncertainties

At Veterans Affairs Canada, integrated risk management is a fundamental underpinning of management and overall decision-making. The identification of risks provides decision-makers an opportunity to consider the uncertainties and challenges related to their decisions, and identify how they could address those uncertainties before proceeding.

Veterans Affairs Canada's corporate risks and uncertainties, including impacts to the Department's financial plan, are identified and assessed by senior managers who consider the organization's priorities and context in which the Department operates. In turn, the existing risks inform priority setting activities. This approach occurs on a quarterly basis which aligns with the quarterly financial reporting cycle.

From a financial perspective, the demand-driven nature of Veterans Affairs Canada's programs causes the Department's funding requirements to fluctuate from year to year. The Department is able to request in-year adjustments to ensure Veterans receive the benefits to which they are entitled. The required authority for these adjustments is subject to parliamentary approval. These in-year adjustments mitigate any risk of insufficient funds to meet program demand.

Planned spending levels as shown in the Department's 2013-14 Report on Plans and Priorities, are based on reference levels established last fiscal year. These planned spending figures are updated each year to ensure benefits for Veterans, their families and other individuals are not affected.

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

One significant change in personnel occurred during the quarter. On June 14, 2013, Charlotte Stewart was appointed to the position of Assistant Deputy Minister of Human Resources and Corporate Services Branch (and Chief Financial Officer). Ms Stewart had been previously acting in this position since October 2012.

The 2013 Federal Budget announced a proposal to simplify Veterans Affairs' Funeral and Burial Program and more than double the current reimbursement rate. In line with this announcement, Veterans Affairs Canada amended the Veterans Burial Regulations effective June 1, 2013, to increase the existing funeral services reimbursement rate from $3,600 to $7,376 and to simplify the list of funeral services to make it less prescriptive. These changes have no impact on other benefits provided under the Funeral and Burial Program such as last sickness, burials, grave markers, etc.

As highlighted in previous quarterly reports, Veterans Affairs Canada's five-year Transformation Agenda or "Cutting Red Tape for Veterans" initiative continues to fundamentally change how the Department does business.

The Department is now in Year Three of this initiative. Although the majority of initiatives for Transformation are both multi-year and multi-phased, notable progress was made this quarter:

  • Veterans Affairs Canada's Client Service Delivery Network was updated to be compliant with Health Level 7 (HL7) Pan-Canadian e-Health Record messaging standards. This allows Veterans Affairs Canada's systems to inter-operate with internal and other health information systems such as:
    • other federal government departments;
    • provincial health authorities; and
    • third-party service providers.
  • Veterans Affairs Canada's programs and services were promoted through an ad campaign in newspapers close to Canadian Armed Forces bases as well as in the May-June 2013 edition of Legion Magazine.
  • Stakeholders were trained on My VAC Account, which permits Veterans more options for self-service and the ability to do business online. This quarter also marked implementation of a marketing plan for My VAC Account. The recently enhanced My VAC Account has 5,832 registered users.
  • Electronic transfer of Health Records from six Canadian Armed Forces Bases to Veterans Affairs Canada was secured, which helps reduce wait times and improves services to Veterans. This work is being completed in phases. By December 2015, 12 Canadian Armed Forces Bases will be electronically transferring files to Veterans Affairs Canada.

In addition, Veterans Affairs Canada implemented technology improvements and internal tools to support staff through the first quarter including:

  • An electronic document and records management system, known as GCDocs was implemented as a pilot. Veterans Affairs Canada is working in conjunction with Shared Services Canada and Citizenship and Immigration Canada to manage internal electronic documents and records (except for Veterans' records) to improve information management and security safeguards.
  • A web-based learning tool was launched to assist in ensuring that Veterans receive professional services from employees who are well-trained and equipped to respond to their diverse needs. This tool will help staff develop leadership potential and maintain skills through courses, readings, and formal learning programs.
  • A two-way mentoring pilot program was initiated to further support leadership development. This two-way mentoring program engages participants, both as mentor and mentee, which is different than traditional mentoring programs where participants are solely a mentor or mentee.

5. Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs: make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

Budget 2012 re-confirmed the Government of Canada's support to Veterans by maintaining the level of benefits while recognizing the need to modernize the Department and transform the way it does business. In addition to savings to be realized through its "Cutting Red Tape for Veterans" initiative (referred to in the July - September 2012 report as the Transformation Agenda), the Department will achieve Budget 2012 savings of $34.8 million on an ongoing cash basis starting in 2014-15. This will be achieved through eliminating unnecessary layers of bureaucracy and introducing new technologies to provide better and faster service to Veterans in more modern and convenient ways.

In the first year of implementation, the Department achieved savings of approximately $594 thousand. Savings will increase to $15.9 million in 2013-14 and will result in ongoing savings of $34.8 million by 2014-15.

As indicated in Section Two of this report, there is a variance of $70 million in the Department's authorities between fiscal year 2012-2013 and 2013-14. This is attributed primarily to the quasi-statutory nature of Veterans Affairs Canada's programs and in part to Budget 2012 initiatives. Although there were no cuts to benefits or services for Veterans, the demand-driven nature of Veterans Affairs Canada's programs causes the Department's funding requirements to fluctuate each year. Yearly budget adjustments ensure Veterans receive the benefits to which they are entitled. These program budget adjustments make it difficult to clearly delineate operational savings stemming from Budget 2012.

Budget 2012 initiatives were implemented and have been operational since January 2013.

The Department continues to use sound project and risk management techniques to integrate the planning, monitoring, and reporting of all projects for both its "Cutting Red Tape for Veterans" initiative and Budget 2012. This ensures that the impact of any dependencies, inter-relationships, and risks are identified, evaluated, and monitored regularly and continuously throughout the life-cycle of these projects. Veterans Affairs Canada is monitoring progress through project close-out and post-implementation reports which include performance measures and financial management information.

Approved by:

Anne Marie Smart, A/Deputy Minister
Ottawa, ON
August 23, 2013

Charlotte Stewart, Chief Financial Officer
Charlottetown, PE
August 22, 2013

II. Financial Statements

Statement of Authorities (unaudited)

Statement of Authorities
Quarterly Financial Report for the Quarter Ended June 30, 2012
Fiscal year 2012-2013
(in thousands of dollars) Total available for use for the year ending
 March 31, 2013*
Used during the quarter ended
June 30, 2012
Year to date used at
quarter-end
Vote 1  - Net Operating expenditures 882,761 191,804 191,804
Vote 5 - Grants and Contributions 2,644,593 647,930 647,930
Statutory Authority - Minister's Salary and Motor Car Allowance 77 19 19
Statutory Authority – Court Award – Crown Liability and Proceeding Act 0 0 0
Statutory Authority – Refunds of Previous Years Revenue 0 15 15
Statutory Authority – Contributions to Employee Benefit Plans – Program 40,387 10,097 10,097
Statutory Authority – Veterans Insurance Actuarial Liability Adjustment 175 0 0
Statutory Authority – Returned Soldiers Insurance Actuarial Liability Adjustment 10 0 0
Statutory Authority – Re-establishment credits under Section 8 of the War Services Grants Act 2 0 0
Statutory Authority – Repayments under Section 15 of the War Services Grants Act 10 0 0
Total Budgetary Authorities 3,568,015 849,865 849,865
Non-budgetary Authorities 0 0 0
Total Authorities 3,568,015 849,865 849,865

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

Statement of Authorities
Quarterly Financial Report for the Quarter Ended June 30, 2013
Fiscal year 2013-2014
(in thousands of dollars) Total available for use for the year ended
March 31, 2014**
Used during the quarter ended
June 30, 2013
Year to date used at
quarter-end
Vote 1  - Net Operating expenditures 871,510 190,642 190,642
Vote 5 - Grants and Contributions 2,726,718 663,544 663,544
Statutory Authority - Minister's Salary and Motor Car Allowance 79 19 19
Statutory Authority – Court Award – Crown Liability and Proceeding Act 0 9 9
Statutory Authority – Refunds of Previous Years Revenue 0 104 104
Statutory Authority – Contributions to Employee Benefit Plans – Program 39,395 9,849 9,849
Statutory Authority – Veterans Insurance Actuarial Liability Adjustment 175 0 0
Statutory Authority – Returned Soldiers Insurance Actuarial Liability Adjustment 10 0 0
Statutory Authority – Re-establishment credits under Section 8 of the War Services Grants Act 2 0 0
Statutory Authority – Repayments under Section 15 of the War Services Grants Act 10 0 0
Total Budgetary authorities 3,637,899 864,167 864,167
Non-Budgetary Authorities 0 0 0
Total Authorities 3,637,899 864,167 864,167

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

Departmental Budgetary Expenditures by Standard Object (unaudited)

Quarterly Financial Report for the Quarter Ended June 30, 2012
Departmental budgetary expenditures by Standard Object

Fiscal year 2012-2013
Expenditures
(in thousands of dollars)
Planned expenditures for the year ending
March 31, 2013*
Expended during the quarter ended
June 30, 2012
Year to date used at
quarter-end
01 Personnel 269,934 68,448 68,448
02 Transportation and communications 43,217 5,437 5,437
03 Information 5,379 68 68
04 Professional and special services 366,553 120,959 120,959
05 Rentals 8,773 121 121
06 Repair and maintenance 13,402 1,715 1,715
07 Utilities, materials and supplies 206,337 1,154 1,154
08 Acquisition of land, buildings and works 3,654 534 534
09 Acquisition of machinery and equipment 5,976 191 191
10 Transfer payments 2,644,790 647,930 647,930
11 Public debt charges - - 0
12 Other subsidies and payments 0 3,308 3,308
Total gross budgetary expenditures 3,568,015 849,865 849,865
Less Revenues netted against expenditures - - -
Total Revenues netted against expenditures: 0 0 0
Total net budgetary expenditures 3,568,015 849,865 849,865
Quarterly Financial Report for the Quarter Ended June 30, 2013
Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal year 2013-2014
Expenditures
(in thousands of dollars)
Planned expenditures for the year ending
 March 31, 2014*
Expended during the quarter ended
June 30, 2013
Year to date used at
quarter-end
01 Personnel 265,882 71,872 71,872
02 Transportation and communications 30,320 5,559 5,559
03 Information 4,516 101 101
04 Professional and special services 372,869 77,324 77,324
05 Rentals 7,741 1,254 1,254
06 Repair and maintenance 8,386 1,194 1,194
07 Utilities, materials and supplies 203,207 40,362 40,362
08 Acquisition of land, buildings and works 3,226 253 253
09 Acquisition of machinery and equipment 6,451 222 222
10 Transfer payments 2,726,915 663,544 663,544
11 Public debt charges 0 0 0
12 Other subsidies and payments 8,386 2,482 2,482
Total gross budgetary expenditures 3,637,899 864,167 864,167
Less Revenues netted against expenditures - - -
Total Revenues netted against expenditures 0 0 0
Total net budgetary expenditures 3,637,899 864,167 864,167

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

Date modified: