Quarterly Financial Report for the Quarter Ended September 30, 2012

For the quarter ended September 30^th, 2012

This quarterly financial report should be read in conjunction with the Main Estimates (and as applicable - Supplementary Estimates and previous interim reports for the current year). It 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. It has not been subject to an external audit or review.

Under the Royal Canadian Mounted Police (RCMP) Act, the RCMP Commissioner refers all appeals of formal discipline and all discharge and demotion appeals to the RCMP External Review Committee (ERC) unless the member of the RCMP requests that the matter not be referred. In addition, pursuant to section 33 of the RCMP Act, the RCMP Commissioner refers certain types of grievances to the ERC in accordance with regulations made by the Governor in Council. Section 36 of the RCMP Regulations specifies the grievances which the RCMP Commissioner is obliged to refer to the ERC, namely grievances respecting:

• the Force's interpretation and application of government policies that apply to government departments and that have been made to apply to members;
• the stoppage of pay and allowances of members made pursuant to subsection 22(3) of the RCMP Act;
• the Force's interpretation and application of the Isolated Posts Directive;
• the Force's interpretation and application of the RCMP Relocation Directive; and
• administrative discharge on the grounds of physical or mental disability, abandonment of post, or irregular appointment.

The ERC is also responsible for outreach and information dissemination. The ERC ensures that its findings and recommendations in each case are clearly explained for the parties and the RCMP Commissioner. Summaries of the findings and recommendations in each case, as well as articles of interest on the role of the ERC, relevant legal principles and information on related issues are distributed widely.

This quarterly report has been prepared by the ERC using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ERC spending authorities granted by Parliament and those used by the ERC consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2012-13 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 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.

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.

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

This section highlights the significant items that contributed to amounts available for use and expenditure used for the quarter ended September 30th, 2012.

As reflected in the Statement of Authorities, the net budget authorities have increased from $1,469,469 (fiscal 2011-12) to $1,645,676 to date in this fiscal year (fiscal 2012-13) for a variance increase of $176,207 or 12%. The fiscal year 2012-13 budget authority includes a transfer ($710,000) from RCMP appropriations in support of Public Safety Canada's transitional measures to support the ERC's operations following the signing of the new RCMP policing service agreements. The ERC is tranferring $3,432 from its appropriations to Public Works and Government Services Canada (PWGSCto consolidate all federal government pay administration services into one center of expertise in Miramichi, New Brunswick. The ERC anticipates a budget carry forward transfer from central vote in the amount of $64,395. Taking into account this additional amount, the total variance expected by the end of the year will be $240,602 or 16%.

As reflected in the Statement of Authorities and Budgetary Expenditures by Standard Object, expenditures used at quarter end September 30th have increased from $375,727 (fiscal 2011-12) to $379,850 (fiscal 2012-13) for a total variance increase of $4,123 or 1% from the previous year. Since this increase in expenditures is considered to be not material, it will not affect the decisions of the financial statement users.

Image of a Bar Chart displaying comparison by dollar value of years 2012-13 versus 2011-12.

The dollar value is in increments of $200,000, with horizontal line at $200,000 to $1,800,000.

The year 2012-13 Total Budget Authorities Bar displays the dollar value $1,645,676 and the Expenditures as of September 30 Bar for the year 2012-13 displays the dollar value $379,850.

The year 2011-12 Total Budget Authorities Bar displays the dollar value $1,469,467 and the Expenditures as of September 30 Bar for the year 2011-12 displays the dollar value $375,727.

This ERC Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates (and Supplementary Estimates A) for which full supply was released on June 29, 2012.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. The ERC's frozen portion of the budget ($5,240) was managed through the following action and mitigation strategy: the non-extension of an Interchange Agreement for a portion of the year.

The ERC was not included in the Budget 2012 saving measures and therefore there have not been any significant changes in relation to operations, personnel and programs over the last year.

In previous years, the ERC's base budget was augmented by a series of temporary short-term funding, specifically from the Treasury Board's Management Reserve to allow the ERC to meet the obligations of its mandate and to ensure the accountability of its operations. The terms of these temporary appropriations expired at the end of fiscal year 2011-12. However, to offset this decrease to its base budget, the RCMP tranferred $710,000 from its appropriations in support of Public Safety Canada's transitional measures to support the ERC's operations following the signing of the new RCMP policing service agreements. The ERC also tranferred $3,432 from its appropriations to Public Works and Government Services Canada to consolidate all federal government pay administration services into one center of expertise in Miramichi, New Brunswick.

Aditionally, the ERC awaits the decision of PWGSC as it nears the end of its occupancy instrument and will be subject to new accommodation standards, as well as the TB's decision to provide for collective agreement adjustments.

Catherine Ebbs
Chair
Ottawa, Canada
November 15, 2012

David Paradiso
Executive Director and Senior Counsel
Ottawa, Canada
November 15, 2012