Date: December 19, 2016
Location: Statement of Authorities (unaudited)
Vote 1 Operating expenditures; Authority; (483,498) replaced by (483,499), Qtr; (238,651) replaced by (238,652), YTD; (350,490) replaced by (350,489)
Vote 5 Capital expenditures; YTD; (4,112) replaced by (4,111)
(S) Minister of Indigenous and Northern Affairs –Salary and motor car allowance; Authority; 1 replaced by 2
(S) Indian Annuities Treaty payments; Qtr; 96 replaced by 95, YTD; 384 replaced by 385
(S) Contributions in connection with First Nations infrastructure; Authority; 1,337 replaced by 1,336
Total Budgetary Authorities; Year to date used at quarter-end 2016-2017; 3,867,663 replaced by 3,867,665, Year to date used at quarter-end 2015-2016; 3,803,090 replaced by 3,803,088, YTD; 64,573 replaced by 64,577
Total Non-budgetary Authorities; Qtr; 5,183 replaced by 5,182
Total Authorities; Year to date used at quarter-end 2016-2017; 3,884,487 replaced by 3,884,489, Used during the quarter ended September 30, 2015; 1,944,788 replaced by 1,944,789, Year to date used at quarter-end 2015-2016; 3,817,064 replaced by 3,817,062, Qtr; 2,219 replaced by 2,218, YTD; 67,423 replaced by 67,427
Location: Departmental budgetary Expenditures by Standard Object (unaudited)
1 Personnel; Planned; (15,410) replaced by (15,409)
2 Transportation and communications; Planned; 28,155 replaced by 28,156
5 Rentals; Planned; 17,251 replaced by 17,250, YTD; 1,752 replaced by 1,751
7 Utilities, materials and supplies; Qtr; (4) replaced by (3)
9 Acquisition of machinery and equipment; Qtr; 322 replaced by 321
10 Transfer payments; Year to date used at quarter-end 2015-2016; 3,012,025 replaced by 3,012,024, Planned; 602,765 replaced by 602,764, YTD; 425,407 replaced by 425,408
12 Other subsidies and payments; Expended during the quarter ended September 30, 2015; 354,471 replaced by 354,470, Year to date used at quarter-end 2015-2016; 488,960 replaced by 488,958, Qtr; (294,449) replaced by (294,448), YTD; (403,001) replaced by (402,999)
Total gross budgetary expenditures; Year to date used at quarter-end 2016-2017; 3,868,180 replaced by 3,868,181, Year to date used at quarter-end 2015-2016; 3,803,090 replaced by 3,803,088, Qtr; (2,447) replaced by (2,448), YTD; 65,089 replaced by 65,093
Total net budgetary expenditures; Year to date used at quarter-end 2016-2017; 3,867,663 replaced by 3,867,665, Year to date used at quarter-end 2015-2016; 3,803,090 replaced by 3,803,088, YTD; 64,573 replaced by 64,577
Rationale for the revisions: Rounding error
This quarterly financial 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. It should be read in conjunction with the Main Estimates and Supplementary Estimates (A) for fiscal year 2016-2017. For purposes of the Main Estimates and Supplementary Estimates, the Department is referred to as Indian Affairs and Northern Development.
The quarterly financial report has not been subject to an external audit or review.
1.1 Authority, Mandate and Program Activities
Indigenous and Northern Affairs Canada (INAC) supports Indigenous people (First Nations, Inuit and Métis) and Northerners in their efforts to:
- Improve social well-being and economic prosperity;
- Develop healthier, more sustainable communities; and
- Participate more fully in Canada's political, social and economic development – to the benefit of all Canadians.
Further details on INAC's authority, mandate and program activities can be found in Part II of the Main Estimates and the Report on Plan and Priorities.
1.2 Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting and 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 includes INAC's spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates and Supplementary Estimates (A) for fiscal year 2016-2017.
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.
The Department 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.
1.3 INAC's (Indigenous and Northern Affairs Canada) Financial Structure
The parliamentary vote structure of INAC is made up of $8.7 billion in budgetary authorities of which $8.6 billion requires approval by Parliament; referred to as voted amounts. The remaining $159.6 million represents statutory authorities that do not require additional approval and are provided for information purposes.
Voted amounts totaling $8.6 billion are split between Operating Expenditures, Capital Expenditures and Grants and Contributions as follows:
- Operating Expenditures represents approximately $892.4 million (10%), this includes $165.5 million (19% of Operating Expenditures) for the Settlement Allotment (Independent Assessment Process and Alternative Dispute Resolution), $140.8 million (16% of Operating Expenditures) for the assessment, management and remediation of federal contaminated sites, $67.2 million of Infrastructure funds (8%) and $57.1 million of comprehensive and specific claims (7%)
- Capital represents approximately $55.0 million (1%)
- Grants and Contributions represent approximately $7.6 billion (89%)
More detailed information about INAC's financial structure, including information about the fiscal cycle, cost drivers, expenditure trends, etc. can be found online on the Financial information web page.
3. Risks and Uncertainties
3.1 Risks and Uncertainties
Risk management and risk-based decision-making have become a critical component in the way the Department prioritizes and conducts its business. Resource allocation decisions are informed by risk and the Department's key corporate risks are discussed systematically by the senior management committee, which contributes to the better allocation of resources and ultimately better results.
The Department continues to monitor its risk exposure and take action as needed to mitigate the risk of not achieving anticipated outcomes or to deal with emerging pressures. Achievement of INAC's strategic outcomes and delivery of programs is dependent on timely access to appropriate authorities and funding levels.
In terms of transfer payment program and transfer payment recipient risk, the Department transfers in excess of $7 billion dollars to recipients each year, while balancing program and recipient risks to deliver on its mandate. The Department undertakes risk assessments on new, existing and reformed programs as well as an annual General Assessment of each recipient to identify certain areas at risk as history has substantiated a link between risk level and default prevention.
3.2 Risk Mitigating Strategies
Corporate and financial risk mitigation activities, reflected in the Department's Corporate Risk Profile, are monitored by senior management on a semi-annual basis and modified as required. A number of practices and internal controls help to manage risk departmentally, including senior management governance and oversight as established through committees, existing policies and procedures that ensure an appropriate level of monitoring, review and reporting.
The Department is managing its budget by aligning resources to needs and through rigorous monitoring against both financial and human resource targets. Management proactively and systematically manages and responds to risks to minimize adverse impacts and capitalize on opportunities. Budget and expenditure trends are monitored regularly, including a review and challenge function, through the Financial Status Report.
Budget 2016 announced $8.4 billion over five years to improve the socio-economic conditions of Indigenous peoples and their communities. In 2016-17 INAC will receive $1.2 billion, and a large portion of these funds, $706 million, are for infrastructure programming and represents a 62 % percent increase in the infrastructure budget. In order to strengthen controls in this area, a review of the management control framework for the Capital Facilities and Maintenance Program (CFMP) was conducted and improvements made such as the introduction of a new due diligence checklist which focuses management's attention on key management controls and the development of an infrastructure-focused project audit regime. Findings resulting from ongoing departmental audits, evaluations and reviews, are being identified as actions within the infrastructure compliance framework.
Following an assessment of fraud risk conducted in 2014, the Department is implementing a fraud risk mitigation plan to address the identified risks.
In order to ensure effective controls, transparency and accountability, a risk-based approach is used to confirm that recipients have met planned program outcomes and results; that they are in compliance with funding agreements; and, that the funds were used to the intended purposes. In addition, the ability to conduct audits of recipients, under the terms of their funding agreements; provide a further opportunity to ensure that First Nations have appropriate management, financial and administrative controls in place.