ARCHIVED - Quarterly Financial Report - For the quarter ended 30 June 2014

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Quarterly Financial Report - For the quarter ended 30 June 2014 [PDF 296 KB]

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

Introduction

The quarterly financial report for the National Energy Board (NEB or Board):

  • should be read in conjunction with the Main Estimates;
  • 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; and
  • has not been subject to an external audit or review.

The Board's top priorities are the continual improvement of safety and environmental protection, a robust regulatory framework for the North, and a flexible and efficient organization able to meet new and ongoing priorities.

A summary description of the NEB’s program activities can be found in Part II of the Main Estimates.

The NEB receives its funding through annual Parliamentary authorities. The majority of these expenditures are subsequently recovered from the companies regulated by the NEB and the funds are deposited in the Consolidated Revenue Fund of the Government of Canada.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the National Energy Board’s spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the 2014-15 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.

The National Energy Board 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.

Highlights of Fiscal Quarter and Fiscal Year to Date Results

Actual Expenditures

Personnel expenditures are $4.5M greater in Q1 2014-2015 over the same period in the previous year. This increase is primarily the result of the elimination of the employee severance pay program for represented employees in 2013-14 which resulted in payments of $3.6M in the first quarter of 2014-15. These amounts are recoverable as part of the eligible paylist and this variance is expected to be eliminated at or prior to fiscal year end. The remaining increase in personnel is related to the signing of a new collective agreement in the third quarter of 2013-14.

The increase of 1.5M in other subsidies and payments is due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada.

The NEB office relocation in the first quarter of 2014-15 has also affected various expenditures. Professional and special services expenditures have increased by $0.9M, and acquisition of machinery and equipment has increased by $0.4M over the previous year primarily due to this office relocation. Additional funding of $8.3M has been received in 2014-15 to offset relocation expenditures.

Planned Expenditures

The variances in planned expenditures for 2014-2015 over the previous year are as follows:

  • The office relocation accounts for approximately $8.3M in additional funding for 2014-15. Most of this has been allocated to professional and special services though there are expected increases in other expenditure areas.
  • Transfer payments relate to the NEB’s Participant Funding Program. Funding for this program has increased by $1.5M in 2014-15 over the previous year as a result of special purpose funding for projects that are expected to occur in 2014-15.

Risks and Uncertainties

Due to the nature of its mandate, the NEB’s expenditures are influenced by planned and unplanned events (internal and external) that create uncertainty in expenditures and resource pressures. The NEB’s responsibilities are not only shaped by emerging energy trends, but also by the proactive consideration of safety, environmental, societal and economic trends that may influence the NEB’s ability to carry out its responsibilities in the Canadian public interest.

The NEB employs a risk-informed compliance verification program, which considers resource requirements to perform compliance activities and ensure those activities are completed in accordance with the plan. Corrective actions are monitored and regulated companies’ operating environments observed for emerging risks and trends. In addition to increasing the number of inspections and audits conducted, the NEB’s Administrative Monetary Penalties (AMPs) framework provides the NEB with additional enforcement mechanisms.

The skills and experience needed by the NEB continue to be in high demand due to private sector demand in Calgary and increased workloads at the NEB. The NEB regularly reviews its People Strategy and measures employee engagement and work-life balance on a quarterly basis, which informs leadership decisions on areas of focus and assists in responding to staff concerns and interests. Staff development is supported with access to training and new career opportunities in a challenging work environment.

Significant Changes in Relation to Operations, Personnel and Programs

The National Energy Board office relocation that occurred in the first quarter of 2014-15 resulted in an increase to NEB authorities.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that will be implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

The NEB was unaffected by the savings measure announced in Budget 2012. Conversely the department received additional funding to strengthen pipeline safety.

Approval by Senior Officials

Approved by,

The original version was signed by
_________________________________
C. Peter Watson, P.Eng.
Chair and CEO

(Calgary, Canada)
(29 August 2014)

The original version was signed by
_________________________________
Ed Jansen, CA
Chief Financial Officer

STATEMENT OF AUTHORITIES (unaudited)

Fiscal year 2014-2015
  Planned expenditures for the year ending March 31, 2015[a] Expended during the quarter ended June 30, 2014 Year to date used at quarter-end

More information is available in the attached table.

[a] Includes only Authorities available for use and granted by Parliament at quarter-end (does not include Supplementary Estimates).

Operating expenditures 64,555 21,748 21,748
Contributions to employee benefit plans 6,761 1,690 1,690
Total Budgetary authorities 71,316 23,438 23,438
Non-budgetary authorities - - -
Total authorities 71,316 23,438 23,438
Fiscal year 2013-2014
  Planned expenditures for the year ending March 31, 2014[b] Expended during the quarter ended June 30, 2013 Year to date used at quarter-end

More information is available in the attached table.

[b] Includes only Authorities available for use and granted by Parliament at quarter-end (does not include Supplementary Estimates).

Operating expenditures 55,241 14,562 14,562
Contributions to employee benefit plans 7,195 1,799 1,799
Total Budgetary authorities 62,436 16,361 16,361
Non-budgetary authorities - - -
Total authorities 62,436 16,361 16,361

DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT (unaudited)

Fiscal year 2014-2015
(in thousands of dollars) Planned expenditures for the year ending March 31, 2015[c] Expended during the quarter ended June 30, 2014 Year to date used at quarter-end

[c] Includes only Authorities available for use and granted by Parliament at quarter-end (does not include Supplementary Estimates).

Expenditures:      
Personnel 47,735 17,974 17,974
Transportation and communications 4,193 472 472
Information 799 39 39
Professional and special services 11,580 2,322 2,322
Rentals 799 74 74
Repair and maintenance 799 508 508
Utilities, materials and supplies 399 64 64
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 1,398 434 434
Transfer payments 3,614 - -
Public debt charges - - -
Other subsidies and payments - 1,551 1,551
Total gross budgetary expenditures 71,316 23,438 23,438
Fiscal year 2013-2014
(in thousands of dollars) Planned expenditures for the year ending March 31, 2014[d] Expended during the quarter ended June 30, 2013 Year to date used at quarter-end

[d] Includes only Authorities available for use and granted by Parliament at quarter-end (does not include Supplementary Estimates).

Expenditures:      
Personnel 48,546 13,481 13,481
Transportation and communications 3,415 788 788
Information 589 92 92
Professional and special services 5,417 1,430 1,430
Rentals 589 119 119
Repair and maintenance 471 338 338
Utilities, materials and supplies 471 49 49
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 824 23 23
Transfer payments 2,114 - -
Public debt charges - - -
Other subsidies and payments - 41 41
Total gross budgetary expenditures 62,436 16,361 16,361
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