Quarterly Financial Report – For the quarter ended 31 December 2017

Quarterly Financial Report – For the quarter ended 31 December 2017 [PDF 187 KB]

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

Introduction

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

The NEB has five Core Responsibilities, Energy Adjudication, Safety and Environment Oversight, Energy Information, Engagement, and Internal Services. A summary description of the NEB’s core responsibilities can be found in the  Main Estimates (Part II).

The NEB receives its funding through annual Parliamentary authorities.  The majority of 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

The quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the NEB’s spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates for the 2017-18 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 NEB uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

This section highlights any significant items that affected the year-to-date results and/or contributed to the net change in resources available for the year and actual expenditures. It should be read in conjunction with the Statement of Authorities and the Departmental Budgetary Expenditures by Standard Object, which can be found at the end of this report.

Planned expenditures analysis

As reflected in the Statement of Authorities, the department’s planned expenditures in the fiscal year as at March 31, 2018 is $90.91 million, as compared to $93.53 million as at March 31, 2017. A net decrease of $2.62 million is primarily due to:

Decreases:

  • $4.78 million related to Budget 2014 for Imperial Oil funding sun setting;
  • $2.25 million related to Budget 2014 for Participant Funding Program (Energy East);
  • $4.01 million related to Budget 2015 for Energy Transportation Infrastructure;
  • $0.65 million related to Participation Funding Program for Trans Mountain Expansion Project (TMX); and
  • $1.12 million primarily related to Employee Benefit Plans (EBP) due to a decrease in the rate applied by Treasury Board Secretariat to allocate EBP costs.

Increases:

  • $4.67 million related to Budget 2016 for Interim Strategy for Pipeline & Other NEB Reviews;
  • $0.69 million related to Budget 2014 for Imperial Oil;
  • $3.29 million related to Energy East reprofiled from Budget 2014; and
  • $1.54 million related to Indigenous Advisory and Monitoring Committees for Energy Infrastructure Projects.

Please note that both planned expenditures for both fiscal years have included operating budget carry forward of $3.80 million and $3.28 million in 2017-18 and 2016-17, respectively.

Actual expenditures analysis

As reflected in the Departmental Budgetary Expenditures by Standard Object, the department’s total authority used in the fiscal year to December 31, 2017 is $60.79 million, as compared to $58.05 million for the same period last year. The increase of $2.74 million in total authority used is primarily due to:

Decreases:

  • $0.23 million mainly due to a reduction in spending on relocation and travel expenses; and
  • $0.15 million in information technology mainly due to a reduction in audio installation and support for the hearing room.

Increases:

  • $0.95 million in personnel expenditures mainly due to increased sunset funding;
  • $1.22 million in professional services mainly due to the costs associated with application development, conditional management for improving process efficiency and effectiveness in condition compliance and management, data visualization research and design as well as consulting services for change management and project management;
  • $0.40 million in transfer payments primarily due to funding opportunity as a result of termination of Energy East Pipeline and Eastern Mainline Project. The payments are expected to be made in quarter 4; and
  • $0.55 million in other expenditures mainly due to the costs related to acquisition of a server.

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 expenditure 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.

Significant Changes in Relation to Operations, Personnel and Programs

For 2017-18 the NEB was an early adopter of the Departmental Results Framework under the Treasury Board Secretariat Directive on Results, which will change the way we assess our performance. The NEB has developed more clearly defined programs, activities and initiatives which will facilitate improved performance measurement.

Approval by Senior Officials

Approved by,

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

(Calgary, Canada)
(22 February 2018)


The original version was signed by
_________________________________
Mark Power, CPA, CGA, CIA, MBA
Chief Financial Officer

STATEMENT OF AUTHORITIES
(unaudited)

Fiscal year 2017-2018 and Fiscal year 2016-2017
(in thousands
of dollars)
Fiscal year 2017-2018 Fiscal year 2016-2017
  Planned expenditures for the year ending March 31, 2018Table Note a Expended during the quarter ended December 31, 2017 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2017Table Note a Expended during the quarter ended December 31, 2016 Year to date used at quarter-end
Operating expenditures 82,492 15,732 55,274 84,550 17,692 51,417
Contributions to employee benefit plans 8,420 1,840 5,520 8,982 2,211 6,633
Total Budgetary authorities 90,912 17,572 60,794 93,532 19,903 58,050
Non-budgetary authorities            
Total authorities 90,912 17,572 60,794 93,532 19,903 58,050

DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT (unaudited)

Fiscal year 2017-2018 and Fiscal year 2016-2017
  Fiscal year 2017-2018 Fiscal year 2016-2017
(in thousands of dollars) Planned expenditures for the year ending March 31, 2018 Expened during the quarter ended December 31, 2017 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended December 31, 2016 Year to date used at quarter-end
Expenditures:
Personnel 60,597 12,943 48,833 61,091 16,420 47,888
Transportation and communications 5,071 899 2,087 5,228 879 2,262
Information 506 40 121 498 51 272
Professional and special services 16,036 2,319 6,621 18,965 1,859 5,399
Rentals 809 234 339 1,494 89 321
Repair and maintenance 607 108 646 996 153 707
Utilities, materials and supplies 506 91 236 498 109 233
Acquisition of land, buildings and works 27 77 28
Acquisition of machinery and equipment 1,416 71 756 498 105 271
Transfer payments 5,364 841 1,068 4,264 240 665
Public debt charges
Other subsidies and payments (1) 10 (2) 4
Total gross budgetary expenditures 90,912 17,572 60,794 93,532 19,903 58,050
Less          
Total Revenues netted against expenditures
Total net budgetary expenditures 90,912 17,572 60,794 93,532 19,903 58,050
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