Quarterly financial report for the quarter ended December 31, 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 2019-2020 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 compares this fiscal year with the previous fiscal year and 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 

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

Significant changes to budgetary authorities

As of December 31, 2020, Accessibility Standards Canada’s total available authorities for fiscal year 2020 to 2021 amounted to $17.1 million. Available authorities increased by $5.0 million in the third quarter due to receiving full supply of the Main Estimates and obtaining approval of the reprofile request for the relocation of its workspace. This reprofile is a mechanism to bring funding from future years to the current year to cover one-time projects. In our case, the relocation was scheduled for the fiscal year 2021 to 2022 but was started earlier due to Government priorities.

Significant changes to authorities used

As of December 31, 2020, Accessibility Standards Canada spent $8.5 million. This consists of $2.5 million in operating expenditures, $5.5 million in grants and contributions, and $0.5 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 third quarter of fiscal year 2020 to 2021 ($2.8 million) represent 17% of total available authorities ($17.1 million). Employment and Social Development Canada supports the organization’s delivery of its grants and contributions program. Half of the expenses (the remaining amount of grants and contributions obtained through Main Estimates, $1.4 million) represents a transfer to Employment and Social Development Canada to issue the payments to the recipients on the organization’s behalf. 

The expenditures as of the third quarter related to operations and statutory authorities ($3.0 million) represent 26% of the available authorities ($11.6 million). This is lower than the expected expenditure rate of 75% at this 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 third quarter, reimbursements were completed for the second quarter and are underway for the third quarter (excluded from this report as they were not completed before December 31).

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 Enterprise-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. The financial pressure has been resolved in collaboration with Central Agencies. The focus now shifts to finalizing the construction project before the end of the fiscal year.

Approval by Senior Officials

Original signed by CEO Philip Rizcallah
Original signed by CFO Philipe Sarrazin

Table 1: Statement of authorities (unaudited)

Fiscal year:	2020 - 21	2020 - 21	2020 - 21	2019 - 20	2019 - 20	2019 - 20
(in thousands of dollars)	Total available for use for the year ending March 31, 2021*	Used during the quarter ended December 31, 2020	Year to date used at quarter-end	Total available for use for the year ending March 31, 2020*	Used during the quarter ended December 31, 2019	Year to date used at quarter-end
Vote 1 – Operating Expenditures	10,878	1,209	2,443	-	-	-
Vote 5 – Grants and Contributions	5,500	1,375	5,500	-	-	-
Statutory authorities: Contributions to the employee benefit plan	697	174	523	-	-	-
Total Budgetary authorities	17,075	2,758	8,466	-	-	-

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

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

Fiscal year:	2020-21	2020-21	2020-21	2019-20	2019-20	2019-20
(in thousands of dollars)	Total available for use for the year ending March 31, 2021*	Used during the quarter ended December 31, 2020	Year to date used at quarter-end	Total available for use for the year ending March 31, 2020*	Used during the quarter ended December 31, 2019	Year to date used at quarter-end
Personnel	5,405	1,055	2,278	-	-	-
Transportation and communications	776	9	18	-	-	-
Information	371	28	63	-	-	-
Professional and special services	1,275	280	593	-	-	-
Rentals	338	5	5	-	-	-
Repair and maintenance	-	-	-	-	-	-
Utilities, materials and supplies	-	-	-	-	-	-
Acquisition of land, building and works	3,166	-	-	-	-	-
Acquisition of machinery and equipment	244	6	9	-	-	-
Other subsidies and payments	-	-	-	-	-	-
Transfer Payments	5,500	1,375	5,500	-	-	-
Total Budgetary Authorities	17,075	2,758	8,466	-	-	-

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