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Quarterly Financial Report

Library and Archives Canada: Quarterly Financial Report for the Quarter ended June 30th, 2011

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

1. Introduction

This quarterly report has been prepared by Library and Archives Canada (LAC) as required by section 65.1 of the Financial Administration Act, and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the 2011-12 Main Estimates and Supplementary Estimates (A).

The quarterly report has not been subject to an external audit or review.

• 1.1 Library and Archives Canada’s Mandate

  Library and Archives Canada is a departmental organization within the Department of Canadian Heritage. The Library and Archives of Canada Act came into force in 2004 and created LAC with a mandate to:

  • preserve the documentary heritage of Canada for the benefit of present and future generations;
  • serve as a source of enduring knowledge accessible to all, contributing to the cultural, social, and economic advancement of Canada as a free and democratic society;
  • facilitate in Canada cooperation among the communities involved in the acquisition, preservation, and diffusion of knowledge; and
  • serve as the continuing memory of the Government of Canada and its institutions.

• 1.2 Basis of Presentation

  This quarterly report has been prepared by LAC using an expenditure basis of accounting. The accompanying Statement of Authorities includes LAC’s spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates (A)for the 2011-2012 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.

  LAC 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.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

• 2.1 Statement of Authorities

  The permanent funding of Library and Archives Canada has remained constant at approximately $100 million per fiscal year over the past four years. While we have experienced growth in our permanent funding for items such as, supporting our increased workload resulting from the implementation of the Federal Accountability Act and collective bargaining funding, we have equally contributed on a permanent basis to government-wide initiatives such as the strategic review exercise to relocate spending to higher priorities of government, which is why our permanent funding has remained the same. In addition to its permanent funding, LAC has received in recent fiscal years, funding for temporary projects which explains that its total authorities available for use as at June 30th, were $120.975 million in 2010-2011 and $113,059 million in 2011-2012.

  The overall decrease of $7.9 million of total authorities between the two fiscal years, as reflected in the attached Statement of Authorities, is mainly due to the following:

  • An increase of $1.2 million for the conversion of the asset in Gatineau, Quebec as a Collection Storage Facility with a high density shelving system;
  • an increase of $539 thousand for Employee Benefits Plan (statutory);
  • a decrease of $6.4 million for the construction of a preservation facility to safeguard Canada's cellulose nitrate-based documentary heritage;
  • a decrease of $1.6 million to support the modernization of federal laboratories (horizontal item) (Budget 2009);
  • a decrease of $901.8 thousand for Cost Containment Measures (Budget 2010); and
  • a decrease of $445.8 thousand for a transfer from Canadian Heritage for film acquisition and preservation activities under the Preservation and Access Component of the Canadian Feature Film Policy which was granted in Supplementary Estimates (A) for 2010-11 fiscal year but will be submitted for approval in the Supplementary Estimates (B) for 2011-12 fiscal year.

3. Risks and Uncertainties

There are four strategic risks associated with LAC’s mandate and strategic outcomes: the risk that essential documentary heritage is not acquired; the risk that documentary heritage is not preserved for future generations; the risk that documentary heritage is not accessible to Canadians; and the risk that Government of Canada information resources are not managed properly. Another operational risk is that following the emergence of new technologies, LAC faces an overabundance of documentary heritage. Modernization initiated by LAC in 2009 is a response to these strategic risks, through which LAC will review all aspects of its business to establish clear policy direction, effective governance, and deliberative decision-making.

LAC is financed mainly through parliamentary authority for its operating expenditures, capital expenditures and grants and contributions expenditures. LAC is also partially funded through specified types of respendable revenue.However, the amount of such revenue is negligible.

This Departmental Quarterly Financial Report (QFR) 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 27, 2011.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-2011 levels for the fiscal years 2011-2012 and 2012-2013. Considering that LAC’s most significant expenditures are for its personnel, which represents 83% of its entire total operating budget, the announcement to the effect that departments would not receive funding for wage and salary increases resulting from collective agreements, has an important impact on the use of LAC’s operating vote. Therefore, because LAC must pay the salary increases to its employees, the organization must use part of its operating vote to fund these increases.  LAC has estimated the impact of this government-wide initiative to be approximately $1 million per year and cumulatively over the next few years.

The modernization initiative will enable LAC to review and implement innovative and realistic processes to achieve its mandate, assess and acquire the documentary heritage regardless of the format, to preserve and toensure access.  In conjunction with this initiative, LAC has implemented a strategic planning initiative to realign resources to meet its mandate and the challenges posed by the emergence of digital technology meaning that LAC is working to establishinnovative ways to allocated strategically its resources by planning its investments in order to achieve its modernization objectives. The strategy that LAC intends to adopt will take into account the demographic and economic context of the organization and will take advantage of new innovative ways of doing business, such as partnership agreements.

4. Significant changes in relation to operations, personnel and programs

The institution in its modernization initiative, promotes more and more digital and virtual programs to serve all Canadians.  Thus, LAC is currently updating its organizational structure to better respond to the digital environment of the twenty-first century and support the achievement of its strategic priorities.

5. Approval by Senior Officials

Statement of Authorities (unaudited)
(in dollars)

	Fiscal year 2011-2012			Fiscal year 2010-2011
	Total available for use for the year ending March 31, 2012 *	Used during the quarter ended June 30, 2011	Year to date used at quarter-end	Total available for use for the year ending March 31, 2011 *	Used during the quarter ended June 30, 2010	Year to date used at quarter-end
Vote 50 - Net Operating Expenditures	90,855,167	21,444,287	21,444,287	97,516,848	19,235,906	19,235,906
Vote 55 - Capital expenditures	10,350,000	0	0	11,997,971	22,198	22,198
Budgetary statutory authorities - Contributions to the Employee benefit plans and spending of proceeds from the disposal of surplus Crown Assets	11,854,015	2,938,667	2,938,667	11,461,140	2,804,034	2,804,034
Total Budgetary authorities	113,059,182	24,382,954	24,382,954	120,975,959	22,062,138	22,062,138
Non-budgetary authorities	0	0	0	0	0	0
Total authorities	113,059,182	24,382,954	24,382,954	120,975,959	22,062,138	22,062,138

* Includes only Authorities available for use and granted by Parliament at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)
(in dollars)

	Fiscal year 2011-2012			Fiscal year 2010-2011
	Planned expenditures for the year ending March 31, 2012 *	Expended during the quarter ended  June 30, 2011	Year to date used at quarter-end	Planned expenditures for the year ending March 31, 2011 *	Expended during the quarter ended  June 30, 2010	Year to date used at quarter-end
Expenditures:
Personnel	77,058,364	21,719,741	21,719,741	77,193,397	18,931,610	18,931,610
Transportation and communications	2,408,903	342,910	342,910	2,786,331	444,847	444,847
Information	778,878	6,179	6,179	1,034,295	17,212	17,212
Professional and special services	11,558,661	1,085,811	1,085,811	13,313,622	1,339,002	1,339,002
Rentals	1,829,630	668,594	668,594	1,754,462	644,956	644,956
Repair and maintenance	2,092,691	170,749	170,749	3,188,567	174,097	174,097
Utilities, materials and supplies	3,013,474	215,316	215,316	4,011,189	174,827	174,827
Acquisition of land, buildings and works	10,350,000	0	0	11,997,971	0	0
Acquisition of machinery and equipment	2,772,581	87,233	87,233	4,500,125	177,572	177,572
Transfer payments	1,746,000	0	0	1,746,000	0	0
Other subsidies and payments	0	181,948	181,948	0	237,854	237,854
Total gross budgetary expenditures	113,609,182	24,478,481	24,478,481	121,525,959	22,141,977	22,141,977
Less Revenues netted against expenditures:
Respendable revenue	550,000	95,527	95,527	550,000	79,839	79,839
Total Revenues netted against expenditures:	550,000	95,527	95,527	550,000	79,839	79,839
Total net budgetary expenditures	113,059,182	24,382,954	24,382,954	120,975,959	22,062,138	22,062,138

* Includes only Authorities available for use and granted by Parliament at quarter-end.

Quarterly Financial Report