- Quarterly Financial Report for the Quarter Ended

Canadian Space Agency
-

Quarterly Financial Report
For the Quarter Ended

Management Statement
for the Quarter Ended

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 EstimatesFootnote 1.

1.1 Mandate and Program Activities

The Canadian Space Agency's (CSA) mandate 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 technologies provide social and economic benefits for Canadians.

More information is available on the CSA's mandate and on the departmental results framework in the - Departmental PlanFootnote 1.

1.2 Basis of Presentation

This quarterly financial report (QFR) has been prepared by management using an expenditure basis of accounting. The Statement of Authorities annexed to this report includes the CSA's spending authorities granted by Parliament and those used by the CSA, consistent with the Main Estimates and Supplementary estimates voted as at September 30 for fiscal year - compared to -. This QFR 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 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, which is, a partial accrual method of accounting. The partial accrual method of accounting includes disbursements as well as some accruals for salaries and salary allowances.

This QFR report has not been subject to an external audit. However, it was reviewed by the members of the CSA Audit Committee, who are satisfied with its presentation and content.

2. Highlights of the Quarterly Financial Results

This section highlights the significant elements that contributed to the changes to the authorities available for the fiscal year, as well as to the quarterly and year-to-date expenditures for the quarter ended .

The following graph provides an overview of the variations in the available authorities and the expenditures. Additional details on these variations are provided in sections 2.1 and 2.2 as well as in the appended annexes.

Authorities available for use and expenditures as at September 30 (in millions of dollars)
Authorities Quarterly
Expenditures
Year to Date
Expenditures
Fiscal Year - 370.0 57.6 116.0
Fiscal Year - 388.6 56.5 98.4

Totals may not add up due to rounding.

2.1 Significant Changes in the Authorities (Total Votes Available for Use) between fiscal years - and -.

The total votes available for use as at is $370.0 million, which represents a decrease of $18.6 million compared to the same period in the previous year.

Authorities (in thousands of dollars) - - Variance %
Vote 1 - Operating expenditures 187,346 176,829 10,517 6%
Vote 5 - Capital expenditures 113,647 145,922 (32,275) (22%)
Vote 10 - Grants and contributions 58,696 56,411 2,285 4%
Contributions to employee benefit plans 10,312 9,463 849 9%
Spending of proceeds from the disposal of surplus Crown assets 3 20 (17) (85%)
Total budgetary authorities 370,004 388,645 (18,641) (5%)

The increase of $10.5 million in Vote 1 - Operating expenditures is mainly explained by the following items:

  • An increase of $9.4 million as a result of additional funding received to extend Canada's participation in the International Space Station (ISS) mission from to .
  • An increase of $1.1 million as a result of funding received from Treasury Board for collective agreements ratification.

The decrease of $32.3 million in Vote 5 - Capital expenditures is mainly explained by the following items:

  • A decrease of $27.4 million due to different cash flow requirements for Radarsat Constellation Mission (RCM) project related activities.
  • A decrease of $3.9 million due to different cash flow requirements for Life Science Research System (LSRS) project related activities.
  • A decrease of $2.6 million due to different cash flow requirements for Surface Water & Ocean Topography (SWOT-C) project related activities.
  • An increase of $7.8 million due to additional funding obtained for Quantum Encryption and Science Satellite (QEYSSat) project.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

The increase of $2.3 million in Vote 10 - Grants and Contributions expenditures is mainly explained by the following items:

  • An increase of $2.6 million due to different anticipated cash flow requirements for the Contribution Program under the Canada-European Space Agency (ESA) Cooperation Agreement.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

2.2 Significant Changes in the Quarterly and Year-to-Date Expenditures (Votes Used) between fiscal years - and -

The quarterly and year-to-date expenditures for the quarter ended are of $57.6 and $116.0 million which represents a quarterly increase of $1.1 million and a year to date increase of $17.6 million compared to the same period in the previous year.

Expenditures by Vote as at September 30
Expenditures by Vote
(in thousands of dollars)
- - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Vote 1 - Operating expenditures 38,340 64,506 38,712 62,208 (372) 2,298
Vote 5 - Capital expenditures 8,868 30,618 10,300 12,992 (1,432) 17,626
Vote 10 - Grants and contributions 7,794 15,714 5,118 18,458 2,676 (2,744)
Contributions to employee benefit plans 2,578 5,156 2,366 4,732 212 424
Spending of proceeds from the disposal of surplus Crown assets - - 7 13 (7) (13)
Total budgetary expenditures by Vote 57,580 115,994 56,503 98,403 1,077 17,591

The increase of $2.3 million in the year to date expenditures in Vote 1 – Operating expenditures, is mainly explained by the following:

  • The variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS), for Space Technologies Development Program and for Earth Observation Government Related Initiatives as well as an increase of full time equivalent (FTEs) in place and retroactive and interdepartmental salary payments.

The decrease of $1.4 million in the quarterly expenditures and the increase of $17.6 million in the year to date expenditures in Vote 5 - Capital expenditures, are mainly explained by the following:

  • A quarterly decrease due to the variations in the payment schedules for Space Exploration activities as well as the maintenance and operations of the David Florida Laboratory (DFL) building infrastructure.
  • A year to date increase due to the variations in the payment schedules for the RADARSAT Constellation Mission (RCM).

The increase of $2.7 million in the quarterly expenditures and the decrease of $2.7 million in the year to date expenditures in Vote 10 – Grants and contributions, are mainly explained by the following:

  • The variations in the payment schedules to the European Space Agency (ESA) as well as the Class Grant and Contribution program to Support Research, Awareness and Learning in Space Science and Technology.
Expenditures by Standard Object as at September 30
Expenditures by Standard Object (in thousands of dollars) - - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Personnel 19,421 39,218 18,297 37,179 1,124 2,039
Transportation and communications 1,056 2,039 1,131 1,927 (75) 112
Information 175 607 846 1,407 (671) (800)
Professional and special services 19,556 27,938 22,006 26,310 (2,450) 1,628
Rentals 1,129 1,384 579 864 550 520
Repair and maintenance 656 878 1,047 1,656 (391) (778)
Utilities, materials and supplies 612 1,375 342 946 270 429
Acquisition of land, buildings and works - - 37 37 (37) (37)
Acquisition of machinery and equipment 5,334 24,989 7,077 7,631 (1,743) 17,358
Transfer payments 7,794 15,714 5,106 18,458 2,688 (2,744)
Other subsidies and payments 1,847 1,852 35 1,988 1,812 (136)
Total budgetary expenditures by Standard Object 57,580 115,994 56,503 98,403 1,077 17,591

The $1.1 and $2.0 million increases in quarterly and year to date expenditures for the Personnel standard object are primarily due to:

  • The expenditure variations related to the increase of full time equivalent (FTEs) in place, retroactive and interdepartmental salary payments.

The $2.5 million decrease in quarterly expenditures and the $1.6 million increase in year to date expenditures for the Professional and special services standard object are primarily due to:

  • The variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS) and Space Technologies Development Program.

The $1.7 million decrease in quarterly expenditures and the $17.4 million increase in year to date expenditures for the Acquisition of machinery and equipment standard object are primarily due to:

  • A quarterly expenditures decrease due to the variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS).
  • A year to date increase due to the variations in the payment schedules for the RADARSAT Constellation Mission (RCM).

The $2.7 million increase in quarterly expenditures and the $2.7 million decrease in year to date expenditures for the Transfer payments standard object are primarily due to:

  • The variations in the payment schedules to the European Space Agency (ESA) as well as the Class Grant and Contribution program to Support Research, Awareness and Learning in Space Science and Technology.

The $1.8 million increase in quarterly expenditures for the Other subsidies and payments standard object is primarily due to:

  • A variation in the payment schedules for the Payments in Lieu of Taxes Program (PILT).

3. Risks and Uncertainties

The year-to-date expenditures for the 2nd quarter of - represent 31% of the authorities whereas 50% of the fiscal year has passed. The level of expenditures is slightly higher than it was in the - fiscal year (25%) and is similar to the expenditure level in - (29%) which represents no concerns. The situation concerning the cumulative expenditures will be restored at year-end when the accruals are recorded, in accordance with the full accrual method of accounting, combined with the deferral of budgets to the following year.

The specific nature of the Canadian Space Program confronts the CSA with issues related to the advanced technologies used in space missions as well as the international aspect of some projects. For Canada, activities in space must be carried out in partnership with other spacefaring nations, using innovative and cost-efficient technologies. The international nature and technical challenges associated with developing and implementing disruptive technologies, in collaboration with multiple partners, generate risks in the delivery of projects, and, therefore financial risks associated with the use of funds such as the deferral of funds and costs increases.

Risks also arise from the Canada / European Space Agency (ESA) Cooperation Agreement. They include variations in amounts payable resulting from changes in the Gross National Product (GNP) statistics, the fluctuation of the Canadian dollar against the euro (exchange rate), inflation and the enforcement of the ESA's industrial policy. These risks have an impact on both costs and cash flow profiles.

To mitigate these risks, the CSA regularly reviews its project portfolio, activity plans, schedules and financial management strategies to adjust to changes brought on by the space programs of its key partners (National Aeronautics and Space Administration (NASA), ESA and other space agencies). In addition, rigorous project management practices are in place. These initiatives allow the CSA to track and report on the progress of its commitments, to assess the effectiveness of its work, and to align its resources with its priorities.

Furthermore, the CSA manages its financial risks and uncertainties related to Phoenix by adopting risk mitigating strategies. There are a number of actions that the CSA has taken to date to help stabilize the pay system, and to ensure that the employees are being paid accurately and on time. As one of the departments whose accounts have not yet been migrated to the Pay Centre, the CSA continues to offer on-site compensation services. The compensation team, who's size fluctuates to meet demand, monitors closely for payroll inaccuracies and communicates directly with employees to provide clarifications and to take, when needed, swift actions to rectify issues. The team also participates actively in various working groups and other forums led by Treasury Board Secretariat (TBS) and/or Public Services and Procurement Canada (PSPC). Beyond this, the staff in Finance regularly performs salary reconciliations to monitor and correct expense variances.

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

There were no significant changes in operations, personnel and programs, in the second quarter of -.

Approval by Senior Officials

Approved by,

The original version was signed by Sylvain Laporte, President, in Longueuil, Quebec, on .

The original version was signed by Jean-Claude Piedboeuf, B. Ing., Ph.D., Chief Financial Officer, in Longueuil, Quebec, on .

Annex 1

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Statement of Authorities
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Total available for use for the year ending

Table note 2
$
Used during the quarter ended

$
Year to date
used at
quarter-end
$
Total available for use for the year ending

Table note 2
$
Used during the quarter ended

$
Year to date
used at
quarter-end
$
Vote 1: Operating expenditures 187,346 38,340 64,506 176,829 38,712 62,208
Vote 5: Capital expenditures 113,647 8,868 30,618 145,922 10,300 12,992
Vote 10: Grants and contributions 58,696 7,794 15,714 56,411 5,118 18,458
Contributions to employee benefit plans 10,312 2,578 5,156 9,463 2,366 4,732
Spending of proceeds from the disposal of surplus Crown assets 3 - - 20 7 13
Total budgetary authorities 370,004 57,580 115,994 388,645 56,503 98,403

Annex 2

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Departmental budgetary expenditures by Standard Object
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Planned expenditures for the year ending

$
Expended
during the
quarter ended

$
Year to date
used at
quarter-end
$
Planned expenditures for the year ending

$
Expended
during the
quarter ended
$
Year to date
used at
quarter-end
$
Expenditures:
Personnel 77,801 19,421 39,218 71,722 18,297 37,179
Transportation and communications 4,281 1,056 2,039 5,180 1,131 1,927
Information 1,824 175 607 3,199 846 1,407
Professional and special services 164,464 19,556 27,938 134,207 22,006 26,310
Rentals 2,983 1,129 1,384 1,841 579 864
Repair and maintenance 3,379 656 878 1,441 1,047 1,656
Utilities, materials and supplies 1,702 612 1,375 1,742 342 946
Acquisition of land, buildings and works 650 - - 4,032 37 37
Acquisition of machinery and equipment 51,177 5,334 24,989 102,135 7,077 7,631
Transfer payments 58,696 7,794 15,714 56,411 5,106 18,458
Other subsidies and payments 3,047 1,847 1,852 6,735 35 1,988
Total budgetary expenditures 370,004 57,580 115,994 388,645 56,503 98,403
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