Quarterly financial report - for the quarter ended September 30, 2020

Statement outlining results, risks and significant changes in operations, personnel and programs

Introduction

This Quarterly Financial Report (QFR) is prepared by management as required by section 65.1 of the Financial Administration Act. It should be read in conjunction with the 2020-21 Main Estimates.

Authority, mandate and programs

When the Accessible Canada Act became law in July 2019, it created the Canadian Accessibility Standards Development Organization. In January 2020, the organization adopted the title Accessibility Standards Canada because it is easier to remember and also follows Treasury Board requirements. The legal title of the organization is still the Canadian Accessibility Standards Development Organization, as per the Accessible Canada Act.

Accessibility Standards Canada will help to achieve a Canada without barriers, on or before January 1, 2040. It will do this by:

  • developing new, and changing existing, accessibility standards
  • supporting innovative research
  • sharing information about identifying, removing and preventing accessibility barriers

The December 2019 Mandate Letter to the Minister of Employment, Workforce Development and Disability Inclusion from the Prime Minister highlighted the importance of Accessibility Standards Canada’s work. The letter asked the Minister to:

  • continue her efforts in leading the Government’s work to promote disability inclusion
  • support the operationalization of Accessibility Standards Canada, in consultation with the disability community

Accessibility Standards Canada’s priorities for the 2020 to 2021 year are in line with the directives in the Mandate Letter:

  • Accessibility Standards Canada will focus on hiring new people, particularly persons with disabilities
  • The organization will continue to build organizational capacity.

The Board will work with persons with disabilities and partners across the country to guide the work.

Further information on Accessibility Standards Canada’s mandate and program activities are found in Part II of the Main Estimates and in the Departmental Plan.

Basis of presentation

This quarterly report was prepared by management using:

  • an expenditure basis of accounting
  • a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities

The accompanying Statement of Authorities (Table 1) includes Accessibility Standards Canada’s spending authorities granted by Parliament. It is consistent with the Main Estimates and the budgetary authorities used by the Department for the 2020 to 2021 fiscal year.

Parliament must approve spendings by the Government. Approvals are provided annually in allocated limits through appropriation acts or through legislation.

As part of the departmental performance reporting process, Accessibility Standards Canada prepares its annual financial statements on a full accrual basis. It follows Treasury Board accounting policies, which are based on Canadian 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 or review.

Highlights of fiscal quarter and fiscal year-to-date results

This section highlights the significant items that contributed to:

  • the net increase in resources available for the year
  • the net increase in actual expenditures for the quarter ending September 30, 2019

Since Accessibility Standards Canada received its funding in the third quarter of 2019 to 2020, no budgetary authorities or spending occurred in the first or second quarter of the 2019 to 2020 fiscal year.

Significant changes to budgetary authorities

As of September 30, 2020, Accessibility Standards Canada’s total available authorities for fiscal year 2020 to 2021 amounted to $12.1 million. Available authorities increased by $0.4 million in the second quarter due to the allocation of the operating budget carry forward.

Significant changes to authorities used

As of September 30, 2020, Accessibility Standards Canada spent $5.7 million. This consists of $1.2 million in operating expenditures, $4.1 million in grants and contributions, and $0.4 million in contributions to the employee benefit plan. As previously stated, there are no expenditures for the comparable period of the previous year.

Total authorities used during the second quarter of fiscal year 2020 to 2021 ($5.5 million) represent 45% of total available authorities ($12.1 million). Employment and Social Development Canada supports the organization’s delivery of its grants and contributions program. The majority of the expenses (the entirety of grants and contributions available funding, $4.1 million) represents a transfer to Employment and Social Development Canada to issue the payments to the recipients on the organization’s behalf.

The expenditures for the second quarter related to operations and statutory authorities ($1.4 million) represent 17% of the available authorities ($8 million). This is lower than the expected expenditure rate of 50% at the midway point of the fiscal year. Operations continue to ramp up, but the organization is still experiencing delays related to the payments to other government departments. At this time, the priority is payment to external vendors.

The main component for delays in payments is staff salaries. As a new corporation, Accessibility Standards Canada has several agreements with Employment and Social Development Canada. One of these is to support the compensation of employees through Phoenix. This is because an entity within the system does not yet exist for the organization. Presently, employees are paid by Employment and Social Development Canada and a quarterly process is in place reimburse them for staff expenditures. During the second quarter, reimbursements were completed for the first quarter and are underway for the second quarter (excluded from this report as they were not completed before September 30).

Risks and uncertainties

To ensure that corporate objectives are met, key risks were highlighted in the organization’s first Departmental Plan. In addition to these risks, an Entreprise-wide Risk Management Framework is expected soon to better highlight the risks that the organization faces, and how to mitigate them. The organization is also working on including COVID-19 risks. How the pandemic will shape its present and future risks remains to be seen.

The primary financial risk is the ramp-up of operations. With all new organizations come a steep learning curve. This uncertainty manifests itself when defining the optimal workforce and financial requirements to achieve its mandate. The agility exhibited by senior management and its Board of Directors is a key mitigation factor that allows Accessibility Standards Canada to build its operations. Decisions are done in a timely manner which has made the organization run efficiently and minimize the impact COVID-19 could have had on the ramp-up of its operations.

Significant changes related to operations, personnel and programs

Accessibility Standards Canada’s establishment in December 2019 has created unique challenges, including:

  • how to establish an optimal workforce
  • how to operationally meet its mandate

Integrated and multi-year planning has created a baseline for what the organization’s operations will look like in the future. At this time, the only temporary pressure that faces the organization is the relocation of its workspace.

Originally planned for the 2021-2022 fiscal year, this relocation was deemed a priority by the Government and moved to fiscal year 2020-2021. Accessibility Standards Canada is currently working with Central Agencies (Treasury Board Secretariat and Department of Finance) to mitigate this pressure with mechanisms already in place to address these. The expectation is that this pressure will be resolved by the third quarter of this fiscal year.

Approval by Senior Officials

Original signed by CEO Philip Rizcallah

Original signed by CFO Philipe Sarrazin

 

Table 1: Statement of authorities (unaudited)

Expenditures by credit (in thousands of dollars) Fiscal year 2020 to 2021 Fiscal year 2019 to 2020
Total available for use for the year ending March 31, 2021 Used during the quarter ended September 30, 2020 Year to date used at quarter-end Total available for use for the year ending March 31, 2020* Used during the quarter ended September 30, 2019 Year to date used at quarter-end
Vote 1 – Operating Expenditures 7,297 1,197 1,234 0 0 0
Vote 5 – Grants and Contributions 4,125 4,125 4,125 0 0 0
Statutory authorities: Contributions to the employee benefit plan 697 174 349 0 0 0
Total Budgetary authorities 12,119 5,496 5,708 0 0 0

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

Table 2: Departmental budgetary expenditures by standard object (unaudited)

Expenditures (in thousands of dollars) Fiscal year 2020 to 2021 Fiscal year 2019 to 2020
Total available for use for the year ending March 31, 2021* Used during the quarter ended June 30, 2020 Year to date used at quarter-end Total available for use for the year ending March 31, 2020* Used during the quarter ended June 30, 2019 Year to date used at quarter-end
Personnel 4,228 1,048 1,223 0 0 0
Transportation and communications 776 9 9 0 0 0
Information 300 28 35 0 0 0
Professional and special services 884 285 314 0 0 0
Rentals 611 0 0 0 0 0
Repair and maintenance 0 0 0 0 0 0
Utilities, materials and supplies 0 0 0 0 0 0
Acquisition of land, building and works 951 0   0   0 0 0
Acquisition of machinery and equipment 244 1 2 0 0 0
Other subsidies and payments 0 0 0 0 0 0
Transfer payments 4,125 4,125 4,125 0 0 0
Total budgetary authorities 12,119 5,496 5,708 0 0 0

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