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Departmental Quarterly Financial Reports
April - June 2015

I. Statement outlining results, risks and significant changes in operations, personnel and program for the quarter ended June 30, 2015

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 and Supplementary Estimates as well as Economic Action Plan 2014 and 2015 (Budget 2014 and Budget 2015).

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 and Supplementary Estimates for the 2015-16 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.

The quarterly report has not been subject to an external audit but has been reviewed by the Departmental Audit Committee.

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

Statement of Authorities

As at June 30, 2015, total authorities available for the year have decreased by $31.1 million (approximately 0.9%) compared to the same quarter of the previous year, from $3,577.0 million to $3,545.9 million. This decrease is the result of a $30.8 million decrease in Vote 5, Grants and Contributions, and a $2.0 million decrease in Vote 1, Operating Expenditures. This is offset by a $1.7 million increase 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 and survivors (forecast to increase from 92,748 in 2014-15 to 98,393 in 2015-16) accessing programs under the New Veterans Charter and a decrease in the number of War Service Veterans and survivors (forecast to decrease from 94,585 in 2014-15 to 87,231 in 2015-16) accessing the Department's traditional programs.

As at June 30, 2015, total authorities used during the first quarter of 2015-16 are $16.2 million (1.9%) less when compared to the same three-month period of 2014-15, from $857.2 million to $841.0 million. A breakdown in the spending for the first quarter of 2015-16 indicates that Grants and Contributions spending decreased by $15.8 million, Operating expenditures increased by $1.7M and the statutory expenditures decreased by $2.1 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 four largest variances include:

  • An increase of $3.5 million in the Personnel category mainly attributed to July 1 pay posted at the end of June due to the statutory holiday.
  • An increase of $3.2 million in Professional and Special Services mainly related to increased costs for purchased health services.
  • A $6.9 million decrease in “Other Subsidies and Payments” attributed to the one-time transition payment for implementing salary payments in arrears by the Government of Canada in 2014-15.
  • A decrease of $15.8 million in transfer payments (i.e. Grants and Contributions) related to a decrease in the number of War Service Veterans and individuals accessing the Department's traditional programs, offset by an increase in the number of modern-day Veterans and individuals accessing programs under the New Veterans Charter.

3. Risks and Uncertainties

At VAC, integrated risk management is a key component of modern management. It ensures that risks are understood, managed, communicated and integrated into informed decision making and priority setting. Effective risk management enables decision makers to address challenges and uncertainties pro-actively.

The corporate risks in VAC's Corporate Risk Profile, which consider impacts to the Department’s financial plan, are identified and assessed quarterly with senior management and key staff from across the Department. Risks and supporting information from various departmental resources such as the Departmental Project Management Committee and Privacy Impact Assessments are collected and monitored. The review of the Department's risks also aligns with the quarterly financial reporting cycle.

Regular and detailed monitoring of the Department’s finances by senior management and the Chief Financial Officer attestation role help to ensure that corporate risks are being managed and mitigated. This integrated risk management process ultimately supports the Department in meeting its financial objectives.

Further information regarding the Department’s Risk Analysis can be found in the 2015-16 Report on Plans and Priorities.

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

There were no changes at the senior management level during the first Quarter of this fiscal year.

Service Excellence for Veterans:

  • As of April 1, 2015, VAC has broadened the eligibility criteria for the Permanent Impairment Allowance (PIA) which, together with the PIA Supplement, provides approximately $600 to $2,800 a month in lifelong monthly financial support to Veterans whose employment potential and career advancement opportunities have been limited by a permanent service-related injury or illness.
  • The Department also enhanced benefits for injured part-time Reserve Force Veterans, who effective this same date, are now entitled the same minimum income support payment through the Earnings Loss Program as full-time Reserve Force and Regular Force Veterans.
  • The Minister made a number of announcements on VAC’s new Service Excellence Plan which is designed to enhance programs and services available to Veterans. This includes hiring more than 100 new disability benefits staff, both temporary and permanent, to help ensure Veterans receive faster decisions on disability benefit applications.
  • In addition, VAC will hire more than 100 full time permanent new case workers across Canada to provide one on one direct care to Veterans who need it the most.
  • The Minister also announced that VAC will continue to work with the Department of National Defence (DND) to access medical records as quickly as possible in order to reduce the amount of time Veterans wait for decisions on disability benefits applications.

Mental Health Announcement:

  • On June 1, 2015, the Minister of Veterans Affairs announced that national standards would be set for service dogs which assist Veterans with mental health conditions such as post-traumatic stress disorder (PTSD). These national standards will help to ensure consistency across the country for psychiatric service dogs. The Canadian General Standards Board (CGSB) will lead the development of the standards in consultation with Veterans’ groups and psychiatric service dog training providers. This work is in addition to the ground-breaking research into the effect of psychiatric service dogs on Veterans with PTSD; VAC’s extensive network of mental health clinics and service points which assist Veterans from coast to coast; and the 24-hour hotline which provides immediate psychiatric assistance for all Veterans and their families.

Remembrance Activities:

  • In early May 2015, the Minister of Veterans Affairs, along with a delegation of Veterans, travelled to the Netherlands to participate in events marking the 70th anniversary of the Liberation of the Netherlands - one of Canada’s most recognized efforts during the Second World War, helping lead to Victory in Europe (V-E) Day.
  • On May 12, 2015, the Minister of Veterans Affairs announced that two new memorials would be created and unveiled in the nation’s capital in 2017. The first will be a National Memorial to Canada’s Mission in Afghanistan. This memorial, initially announced May 8, 2014, will serve as a testament to Canadians’ deep gratitude for the strength, courage and valour of the more than 40,000 Canadian Armed Forces members who were deployed to Afghanistan – the largest number since the Second World War. It will also pay tribute to the service, sacrifices and accomplishments of many Canadians, both military and civilian, who helped begin to rebuild Afghanistan. The Government will also construct a National Victoria Cross Memorial, to honour and list the names of all those who earned Canada’s highest award for valour, the Victoria Cross. These memorials will be part of the new Memorial Route, a 2.8-kilometre route linking existing and future commemorative landmarks in Ottawa having particular significance to Canada’s military traditions and history. These memorials and the Memorial Route will be officially unveiled in 2017, to help mark Canada’s 150th year since Confederation.

Funding associated with these initiatives is sought through the Estimates process or absorbed by the Department.

Original signed by:

________________________________________
W.J. Natynczyk, General (Retired), Deputy Minister
Ottawa, ON
August 11, 2015

________________________________________
Maureen Sinnott, Acting Chief Financial Officer
Charlottetown, PE
August 11, 2015

II. Financial Statements

Statement of Authorities (unaudited)

Veterans Affairs Canada
Statement of Authorities
Quarterly Financial Report for the Quarter Ended June 30, 2014
Fiscal year 2014-2015
(in thousands of dollars) Total available for use for the year ending
 March 31, 2015*
Used during the quarter ended
June 30, 2014
Year to date used at
quarter-end
Vote 1  - Net Operating expenditures 855,454 183,011 183,011
Vote 5 - Grants and Contributions 2,685,987 665,340 665,340
Statutory Authority - Minister's Salary and Motor Car Allowance 80 20 20
Statutory Authority – Court Award – Crown Liability and Proceeding Act 0 0 0
Statutory Authority – Refunds of Previous Years Revenue 0 29 29
Statutory Authority – Contributions to Employee Benefit Plans – Program 35,261 8,815 8,815
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 3,576,979 857,215 857,215
Non-budgetary Authorities 0 0 0
Total Authorities 3,576,979 857,215 857,215

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

Veterans Affairs Canada
Statement of Authorities
Quarterly Financial Report for the Quarter Ended June 30, 2015
Fiscal year 2015-2016
(in thousands of dollars) Total available for use for the year ended
March 31, 2016*
Used during the quarter ended
June 30, 2015
Year to date used at
quarter-end
Vote 1  - Net Operating expenditures 853,489 184,666 184,666
Vote 5 - Grants and Contributions 2,655,148 649,515 649,515
Statutory Authority - Minister's Salary and Motor Car Allowance 82 20 20
Statutory Authority – Court Award – Crown Liability and Proceeding Act 0 0 0
Statutory Authority – Refunds of Previous Years Revenue 0 17 17
Statutory Authority – Contributions to Employee Benefit Plans – Program 36,942 6,762 6,762
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 3,545,858 840,980 840,980
Non-Budgetary Authorities 0 0 0
Total Authorities 3,545,858 840,980 840,980

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

Departmental Budgetary Expenditures by Standard Object (unaudited)

Veterans Affairs Canada
Departmental budgetary expenditures by Standard Object
Quarterly Financial Report for the Quarter Ended June 30, 2014

Fiscal year 2014-2015
Expenditures
(in thousands of dollars)
Planned expenditures for the year ending
March 31, 2015
Expended during the quarter ended
June 30, 2014
Year to date used at
quarter-end
01 Personnel 249,040 63,400 63,400
02 Transportation and communications 28,879 4,911 4,911
03 Information 6,418 358 358
04 Professional and special services 378,635 77,042 77,042
05 Rentals 8,343 559 559
06 Repair and maintenance 9,626 706 706
07 Utilities, materials and supplies 192,526 35,452 35,452
08 Acquisition of land, buildings and works 4,492 1 1
09 Acquisition of machinery and equipment 6,418 189 189
10 Transfer payments 2,686,184 665,340 665,340
11 Public debt charges 0 0 0
12 Other subsidies and payments 6,418 9,257 9,257
Total gross budgetary expenditures 3,576,979 857,215 857,215
Less Revenues netted against expenditures 0 0 0
Total Revenues netted against expenditures 0 0 0
Total net budgetary expenditures 3,576,979 857,215 857,215
Veterans Affairs Canada
Departmental budgetary expenditures by Standard Object (unaudited)
Quarterly Financial Report for the Quarter Ended June 30, 2015
Fiscal year 2015-2016
Expenditures
(in thousands of dollars)
Planned expenditures for the year ending
 March 31, 2016
Expended during the quarter ended
June 30, 2015
Year to date used at
quarter-end
01 Personnel 238,016 66,876 66,876
02 Transportation and communications 28,557 4,727 4,727
03 Information 5,495 61 61
04 Professional and special services 405,724 80,232 80,232
05 Rentals 7,112 1,008 1,008
06 Repair and maintenance 7,758 724 724
07 Utilities, materials and supplies 187,507 35,393 35,393
08 Acquisition of land, buildings and works 1,939 0 0
09 Acquisition of machinery and equipment 3,233 37 37
10 Transfer payments 2,655,345 649,515 649,515
11 Public debt charges 0 0 0
12 Other subsidies and payments 5,172 2,407 2,407
Total gross budgetary expenditures 3,545,858 840,980 840,980
Less Revenues netted against expenditures 0 0 0
Total Revenues netted against expenditures 0 0 0
Total net budgetary expenditures 3,545,858 840,980 840,980
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