ARCHIVED - Quarterly Financial Report - For the quarter ended 31 December 2014

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Quarterly Financial Report - For the quarter ended 31 December 2014 [PDF 72 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 years. 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

  • Year to date personnel spending at the end of the second quarter is $7.3M greater than the same period in the previous year. Approximately $4.6M of this variance is related to the elimination of the employee severance pay program for represented employees in 2013-14.  These amounts are recoverable as part of the eligible pay list and this variance is expected to be eliminated at or prior to fiscal year end. The remaining $2.7M increase in personnel costs is related to the signing of a new collective agreement in the third quarter of 2013-14, and filling vacancies resulting in an increase of FTEs over last year.
  • The increase of $1.6M in other subsidies and payments is mostly due to a one-time transition payment in Quarter 1 for implementing salary payment in arrears by the Government of Canada.
  • The NEB office relocation has also affected various expenditures.  Rentals have increased by $2.4M for swing space, acquisition of machinery and equipment has increased by $1.1M, acquisition of land, buildings and works has increased by $0.9M, and professional and special services expenditures have decreased by $2.4M at the end of the second quarter over the same period in the previous year, primarily due to this office relocation. 

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, a decrease of $4.1M received for the move in 2013-14.
  • Funding for the NEB’s Participant Funding Program has increased by $1.5M in 2014-15 over the previous year as a result of special purpose funding for projects that were expected to occur in 2014-15. An allocation of $2.25M was frozen for this program in Quarter 3, resulting in a net YTD decrease of $0.8M.
  • Other significant planned expenditure changes are: $5.8M was received in Q3 of 2014-15 for Mega Hearing Funding, the Operating Budget Carry Forward (OBCF) received in 2014-15 was $1.6M higher than the OBCF received in 2013-14, and the Government of the Northwest Territories (GNWT) Devolution decreased our authorities by $1.6M.

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. FCAE
Chair and CEO

(Calgary, Canada)
(27 February 2015)

The original version was signed by
_________________________________
John Pinsent, CGA
Chief Financial Officer

STATEMENT OF AUTHORITIES (unaudited)

Fiscal year 2014-2015
(in thousands of dollars) Planned expenditures for the year ending March 31, 2015[a] Expended during the quarter ended December 31, 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 .

Operating expenditures 74,219 17,762 58,187
Contributions to employee benefit plans 7,578 1,690 5,071
Total Budgetary authorities 81,797 19,452 63,258
Non-budgetary authorities - - -
Total authorities 81,797 19,452 63,258
Fiscal year 2013-2014
(in thousands of dollars) Planned expenditures for the year ending March 31, 2014[b] Expended during the quarter ended December 31, 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.

Operating expenditures 74,026 15,160 46,189
Contributions to employee benefit plans 7,195 1,799 5,396
Total Budgetary authorities 81,221 16,959 51,585
Non-budgetary authorities - - -
Total authorities 81,221 16,959 51,585

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 December 31, 2014 Year to date used at quarter-end

[c] Includes only Authorities available for use and granted by Parliament at quarter-end.

Expenditures:      
Personnel 56,064 15,149 48,381
Transportation and communications 4,463 948 2,054
Information 994 96 239
Professional and special services 13,633 1,902 4,451
Rentals 862 211 2,839
Repair and maintenance 1,299 187 876
Utilities, materials and supplies 399 139 307
Acquisition of land, buildings and works - 412 841
Acquisition of machinery and equipment 2,719 303 1,553
Transfer payments 1,364 55 111
Public debt charges - - -
Other subsidies and payments - 50 1,606
Total gross budgetary expenditures 81,797 19,452 63,258
Fiscal year 2013-2014
(in thousands of dollars) Planned expenditures for the year ending March 31, 2014[d] Expended during the quarter ended December 31, 2013 Year to date used at quarter-end

[d] Includes only Authorities available for use and granted by Parliament at quarter-end.

Expenditures:      
Personnel 53,917 13,727 41,060
Transportation and communications 3,524 851 2,168
Information 574 65 207
Professional and special services 6,575 2,004 6,674
Rentals 3,931 78 412
Repair and maintenance 471 35 533
Utilities, materials and supplies 471 86 229
Acquisition of land, buildings and works 7,822 - -
Acquisition of machinery and equipment 1,750 39 187
Transfer payments 2,114 91 102
Public debt charges - - -
Other subsidies and payments 72 (17) 13
Total gross budgetary expenditures 81,221 16,959 51,585
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