2011-2012 Quarterly Financial Report for the Quarter Ended December 31, 2011

Management Statement for the Quarter Ended December 31, 2011

1. Introduction

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. This quarterly financial report should be read in conjunction with the Main Estimates.

1.2 Mandate and Program Activities

The mandate of the Canadian Space Agency (CSA) is to promote the peaceful use and development of space, to advance the knowledge of space through science and to ensure that space science and technology provide social and economic benefits for Canadians.

It is possible to learn more about the CSA's mandate and Program Activities by consulting the Report on Plans and Priorities.

1.3 Basis of Presentation

This quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the CSA's spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates for the 2011-2012 fiscal year. This quarterly financial 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 CSA uses the full accrual method of accounting to prepare and present its annual financial statements, which are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis, that is, a partial accrual method of accounting. Expenditure basis accounting thus includes disbursements, but also some expenditures incurred for salaries and salary allowances.

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

2. Highlights of Fiscal Quarter and Fiscal Year to Date Results

This section highlights the significant factors that contributed to the changes to the authorities available for the year as well as to the actual expenditures for the quarter ended December 31, 2011 and for the fiscal year to date.

The following graph provides an overview of variations in available authorities and expenditures. Additional detail on these variations is provided in the appended tables.

Variations in available authorities and expenditures ($ Million)
2010-2011 2011-2012
Authorities 404.2 M$ 442.3 M$
Year to date expenditures April to December 2011 209.7 M$ 224.8 M$
Expended during the quarter ended December 31, 2011 94.9 M$ 92.2 M$

2.1 Significant Changes in Authorities (Total Vote Available for Use) between fiscal 2010-2011 and 2011-2012

The total vote available for use to the CSA for the year ending March 31, 2012 is $442.3 M, an increase of $38.1 M (9.4%) over the same period for the previous year.

This increase is mainly attributable to announcements in the 2009 and 2010 Budgets related to the Economic Action Plan and development of the RADARSAT Constellation Mission (RCM) as well as to the cumulative impact of the reprofiling of funds.

The following factors explain the main variations in the total vote shown in Appendix 1.

The following factors are key in explaining the decrease of $9.4 M in Vote 25 - Operating Expenditures :

The following factors are key in explaining the increase of $35.5 M in Vote 30 - Capital Expenditures :

The following factors are key in explaining the increase of $11.3 M in Vote 35 - Grants and Contributions :

2.2 Significant Changes in Expenditures (Votes Used)

The vote used for the quarter ended December 31, 2011 totaled $92.2 M, a decrease of $2.7 M (-2.8%) compared to the same period for the previous year.

The year to date vote used at the end of the quarter ending December 31, 2011 totaled $224.8 M, representing an increase of $15.1 M (7.2%) compared to the same period for the previous year.

Expenditures by Vote

The following factors are key in explaining the variations in the vote used presented in Appendix 1 :

A $4.9 M decrease in the use of Vote 35 - Grants and Contributions for this quarter, compared with the same quarter in the previous year, is mainly due to a decrease in Canada's contributions payments towards the ESA programs resulting from variations in the payment schedules and from savings from the increase in the exchange rate for the Canadian dollar.

An $11.2 M increase in the year to date vote used of Vote 25 - Operating Expenses is mainly due to the implementation of the Economic Action Plan announced in the 2009 Budget, normal increases in compensation and inherent characteristics of implementation of the Canadian Space Plan, including variations in billing and payment schedules and in the procurement methods.

Expenditures by Standard Object

The following factors are key in explaining the variations in the expenditures presented in Appendix 2 :

A $4.6 M increase in year to date expenditures in the Personnel standard object is mainly due to an increase in the number of full-time equivalents and to collective agreements, including the requirement to make immediate sever ance pay payments following changes made to the referred collective agreements.

A $4.4 M increase in quarterly expenditures and a $14.3 M increase in year to date expenditures in the Professional and Special Services standard object is mainly due to varying cash flow requirements associated with the implementation of initiatives announced in the 2009 and 2010 Budgets, that is, the Economic Action Plan and continued development of the RADARSAT Constellation Mission (RCM).

A $3.7 M decrease in year to date expenditures in the Acquisition of Machinery and Equipment standard object is mainly due to lower payments for the James Webb Space Telescope (JWST) project based on cash flow fluctuations for the project.

The reasons for a $4.9 M decrease in quarterly expenditures for the Transfer Payments standard object are provided in the preceding section under Vote 35 - Grants and Contributions.

3. Risks and Uncertainties

4. Significant Changes in Relation to Operations, Personnel and Programs

During the second quarter, the Canadian government set up a new organization, Shared Services Canada (SSC), to combine the IT resources of 44 departments and agencies. The SSC mission is to transform IT services across the public service and make optimum use of resources by achieving significant economies of scale. During the third quarter, 26 affected positions in the CSA's email services, data centres and network services were transferred to SSC. Temporary measures have been introduced to ensure the continuity of operations. The CSA is collaborating with SSC by providing general support services, particularly human resource, finance and communications related services, to SSC employees who work and are stationed in the CSA until SSC establishes its own internal services infrastructure.

Approval by Senior Officials

Approved by,

The original version was signed by
Steve MacLean, President, Longueuil, Quebec, February 23, 2012

The original version was signed by
Marie-Claude Guérard, CGA, Chief Financial Officer, Longueuil, Quebec, February 23, 2012

Appendix 1

CSA
Quarterly Financial Report
For the quarter ended December 31, 2011
Statement of Authorities (unaudited)
Fiscal year 2011-2012 (in thousands of 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 December 31, 2011
$
Year to date used at quarter-end
$
Total available for use for the year ending March 31, 2011*
$
Used during the quarter ended December 31, 2010
$
Year to date used at quarter-end
$
Vote 25: Operating expenditures 442 292 92 194 224 781 404 188 94 886 209 651
Vote 30: Capital expenditures 253 204 55 974 144 651 262 600 53 092 133 485
Vote 35: Grants and contributions 119 409 19 169 40 603 83 894 20 016 39 025
Budgetary statutory authorities 58 159 14 166 30 891 46 884 19 072 29 034
Total authorities 11 520 2 885 8 636 10 810 2 706 8 107

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

Pursuant to section 31.1 of the Financial Administration Act and Order in Council P.C. 2011-1297, effective November 15, 2011, all unexpended money relating to the new Shared Services Canada organization (Operating Expenditures and Capital Expenditures) has been deemed to be appropriated resulting in a reduction for the same amount in the CSA's Votes 25 and 30.

Appendix 2

CSA
Quarterly Financial Report
For the quarter ended December 31, 2011
Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal year 2011-2012 (in thousands of dollars)
Fiscal year 2011-2012 Fiscal year 2010-2011
Planned expenditures for the year ending March 31, 2012
$
Expended during the quarter ended December 31, 2011
$
Year to date expended at quarter-end
$
Planned expenditures for the year ending March 31, 2011
$
Expended during the quarter ended December 31, 2010
$
Year to date expended at quarter-end
$
Personnel 78 243 20 577 63 276 74 070 19 779 58 714
Transportation and communications 9 693 1 881 4 950 9 691 1 925 5 083
Information 2 495 225 1 030 3 668 242 940
Professional and special services 234 280 50 133 110 761 234 468 45 698 96 489
Rentals 2 208 671 1 585 781 569 1 054
Repair and maintenance 3 646 600 1 566 1 918 2 028 4 012
Utilities, materials and supplies 3 169 919 2 802 3 181 1 044 2 922
Acquisition of land, buildings and works 1 004 0 0 2 086 0 0
Acquisition of machinery and equipment 45 332 2 561 4 778 23 231 4 466 8 477
Transfer payments 58 159 14 166 30 891 46 884 19 072 29 034
Other subsidies and payments 4 063 461 3 142 4 210 63 2 926
Total budgetary expenditures 442 292 92 194 224 781 404 188 94 886 209 651
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