This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2024–2025 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
The NSIRA Secretariat supports the Agency in the delivery of its mandate. Independent scrutiny contributes to strengthening the accountability framework for national security and intelligence activities and to enhancing public confidence. Ministers and Canadians are informed whether national security and intelligence activities undertaken by Government of Canada institutions are lawful, reasonable, and necessary
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2024–2025 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended June 30, 2024.
NSIRA Secretariat spent approximately 19% of its authorities by the end of the first quarter, compared with 19% in the same quarter of 2023–2024 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q1 2024–25 and Q1 2023–24
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q1 2024–25 and Q1 2023–24
2024-25
2023-24
Total Authorities
$18.4
$23.0
Q1 Expenditures
$3.5
$4.3
Significant changes to authorities
As of June 30, 2024, Parliament had approved $18.4 million in total authorities for use by NSIRA Secretariat for 2024–2025 compared with $23.0 million as of June 30, 2023, for a net decrease of $4.6 million or 20.0% (see graph 2).
Graph 2: Variance in authorities as at June 30, 2024
Text version of Figure 2
Variance in authorities as at June 30, 2024 (in millions)
Fiscal year 2023-24 total available for use for the year ended March 31, 2024
Fiscal year 2024-25 total available for use for the year ended March 31, 2025
Vote 1 – Operating
21.3
16.8.3
Statutory
1.8
1.6
Total budgetary authorities
23.0
18.4
*Details may not sum to totals due to rounding*
The decrease of $4.6 million in authorities is mostly explained by a reduction in capital funding for infrastructure projects.
Significant changes to quarter expenditures
The first quarter expenditures totalled $3.5 million for a decrease of $0.8 million when compared with $4.3 million spent during the same period in 2023–2024. Table 1 presents budgetary expenditures by standard object.
Table 1
Variances in expenditures by standard object (in thousands of dollars)
Fiscal year 2024–25: expended during the quarter ended June 30, 2024
Fiscal year 2023–24: expended during the quarter ended June 30, 2023
Variance $
Variance %
Personnel
3,008
2,886
122
4%
Transportation and communications
58
130
(72)
(55%)
Information
6
0
6
100%
Professional and special services
269
1,165
(896)
(77%)
Rentals
25
48
(23)
(48%)
Repair and maintenance
3
24
(21)
(88%)
Utilities, materials, and supplies
28
7
21
300%
Acquisition of machinery and equipment
12
48
(36)
(75%)
Other subsidies and payments
79
4
75
1875%
Total gross budgetary expenditures
3,488
4,312
(824)
(19%)
Transportation and communications
The decrease of $72,000 is explained by a change in the timing of invoicing for the internet connection.
Professional and special services
The decrease of $896,000 is mainly explained by a change in the timing of the billing for maintenance and services in support of our classified IT network infrastructure.
Rentals
The decrease of $23,000 is explained by a decrease in cost for the rent for temporary office space.
Repair and maintenance
The decrease of $21,000 is explained by a one-time maintenance contract purchased in fiscal year 2023-2024.
Utilities, materials, and supplies
The increase of $21,000 is explained by unreconciled acquisition card purchases.
Acquisition of machinery and equipment
The decrease of $36,000 is explained by a one-time purchase of a specialized laptop along with a wall mounted charging station and warranty in 2023-2024.
Other subsidies and payments
The increase of $75,000 is explained by an increase in salary overpayments.
Risks and uncertainties
There is a risk that the funding received to offset pay increases anticipated over the coming year will be insufficient to cover the costs of such increases and the year-over-year cost of services provided by other government departments/agencies is increasing significantly.
NSIRA Secretariat is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA Secretariat’s approach and timelines for the execution of its mandated activities.
Significant changes in relation to operations, personnel and programs
Mr. Charles Fugère was appointed by the Governor-in-Council to be Executive Director of the NSIRA Secretariat on an interim basis on June 3, 2024.
Mr. Marc-André Cloutier, NSIRA Secretariat’s Director General, Corporate Services and CFO since 2023, retired in Q4 of 2023-2024. He has been replaced by Mr. Martyn Turcotte.
Approved by senior officials:
Charles Fugère Executive Director
Amanda Wark A/Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2024–25
Fiscal year 2023–24
Total available for use for the year ending March 31, 2025 (note 1)
Used during the quarter ended June 30, 2024
Year to date used at quarter-end
Total available for use for the year ending March 31, 2024 (note 1)
Used during the quarter ended June 30, 2023
Year to date used at quarter-end
Vote 1 – Net operating expenditures
16,810
3,088
3,088
21,254
3,873
3,873
Budgetary statutory authorities
Contributions to employee benefit plans
1,601
400
400
1,755
439
439
Total budgetary authorities (note 2)
18,411
3,488
3,488
23,009
4,312
4,312
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2024–25
Fiscal year 2023–24
Planned expenditures for the year ending March 31, 2025 (note 1)
Expended during the quarter ended June 30, 2024
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2024
Expended during the quarter ended June 30, 2023
Year to date used at quarter-end
Expenditures
Personnel
13,205
3,088
3,088
13,303
2,886
2,886
Transportation and communications
685
58
58
650
130
130
Information
76
6
6
372
0
0
Professional and special services
3,577
269
269
3,596
1,165
1,165
Rentals
309
25
25
271
48
48
Repair and maintenance
436
3
3
4,580
24
24
Utilities, materials, and supplies
58
28
28
73
7
7
Acquisition of machinery and equipment
65
12
12
132
48
48
Other subsidies and payments
0
79
79
33
4
4
Total gross budgetary expenditures
(note 2)
18,411
3,488
3,488
23,009
4,312
4,312
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Statement of Management Responsibility Including Internal Control over Financial Reporting
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2023, and all information contained in these financial statements rests with the management of the National Security and Intelligence Review Agency (NSIRA) Secretariat. These financial statements have been prepared by management using the Government of Canada’s accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the NSIRA Secretariat’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the NSIRA Secretariat’s Departmental Results Report, is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities, and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the NSIRA Secretariat and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.
The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
The financial statements of the National Security and Intelligence Agency Secretariat have not been audited.
The accompanying notes form an integral part of these financial statements.
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31(in thousands of dollars)
2023
2022
Net cost of operations after government funding and transfers
75
(2,361)
Change due to tangible capital assets
Acquisition of tangible capital assets
755
3,114
Amortization of tangible capital assets
(664)
(528)
Total change due to tangible capital assets
91
2,586
Change due to prepaid expenses
(65)
(22)
Net increase (decrease) in departmental net debt
101
203
Departmental net debt – Beginning of year
675
472
Departmental net debt – End of year
776
675
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flows (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
2023
2022
Operating activities
Net cost of operations before government funding and transfers
19,586
16,165
Non-cash items:
–
–
Amortization of tangible capital assets
(664)
(528)
Services provided without charge by other government departments (Note 9a)
(1,265)
(1,242)
Transfer of overpayments
(9)
(15)
Variations in Statement of Financial Position:
–
–
Increase (decrease) in accounts receivable and advances
(119)
5
Increase (decrease) in prepaid expenses
(65)
(22)
Decrease (increase) in accounts payable and accrued liabilities
(213)
299
Decrease (increase) in vacation pay and compensatory leave
(76)
(341)
Decrease (increase) in future employee benefits
(1)
88
Cash used in operating activities
17,174
14,439
Capital investing activities
–
–
Acquisitions of tangible capital assets (Note 7)
755
3,114
Cash used in capital investing activities
755
3,114
Net cash provided by Government of Canada
17,929
17,553
Notes to the Financial Statements (Unaudited)
1. Authority and objectives
The agency was established, effective July 12, 2019 under the National Security and Intelligence Review Agency Act (NSIRA Act).
The agency is a division of the federal public administration as set out in column 1 of Schedule I.1 of the Financial Administration Act and reports to Parliament through the Prime Minister.
The mandate of the agency is to review all Government of Canada national security and intelligence activities to ensure that they are lawful, reasonable and necessary. The agency also investigates public complaints regarding key national security agencies and activities.
To achieve its strategic outcome and deliver results for Canadians, NSIRA articulates its plans and priorities based on the core responsibility and program inventory included below:
National Security and Intelligence Reviews and Complaints Investigations
The National Security and Intelligence Review Agency reviews Government of Canada national security and intelligence activities to assess whether they are lawful, reasonable and necessary. It investigates complaints from members of the public regarding activities of CSIS, CSE or the national security activities of the RCMP, as well as certain other national security-related complaints. This independent scrutiny contributes to the strengthening of the framework of accountability for national security and intelligence activities undertaken by Government of Canada institutions and supports public confidence in this regard.
Internal Services
Internal support services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.
2. Summary of significant accounting policies
These financial statements are prepared using NSIRA’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
(a) Parliamentary authorities
NSIRA is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to NSIRA do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the ”Expenses” and ”Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the 2022-2023 Departmental Plan. The planned results amounts in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt were prepared for internal management purposes and have not been previously published.
(b) Net cash provided by Government of Canada
NSIRA operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by NSIRA is deposited to the CRF, and all cash disbursements made by NSIRA are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
(c) Amounts due from or to the CRF
Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that NSIRA is entitled to draw from the CRF without further authorities to discharge its liabilities.
(d) Expenses
Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans and workers’ compensation are recorded as operating expenses at their carrying value.
(e) Employee future benefits
Pension benefits: Eligible employees participate in the Public Service Pension Plan, a pension plan administered by the Government. NSIRA’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. NSIRA’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
(f) Non-financial assets
All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.
Inventories are valued at cost and are comprised of spare parts and supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.
(g) Measurement uncertainty
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government’s best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
(h) Related party transactions
Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.
Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:
Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.
3. Parliamentary authorities
NSIRA receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, NSIRA has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
(a) Reconciliation of net cost of operations to current year authorities used
(in thousands of dollars)
2023
2022
Net cost of operations before government funding and transfers
19,586
16,165
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets
(664)
(528)
Services provided without charge by other government departments
(1,265)
(1,242)
Increase / (decrease) in vacation pay and compensatory leave
(76)
(341)
Increase / (decrease) in employee future benefits
(1)
88
Refund of prior years’ expenditures
6
41
Total items affecting net cost of operations but not affecting authorities
(2,000)
(1,982)
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets
755
3,114
Increase / (decrease) in prepaid expenses
(65)
(22)
Accounts receivable and advances
13
15
Total items not affecting net cost of operations but affecting authorities
703
3,107
Current year authorities used
18,289
17,290
(b) Authorities provided and used
(in thousands of dollars)
2023
2022
Authorities provided:
Vote 1 – Operating expenditures
28,074
30,851
Statutory amounts
1,300
1,176
Less:
Lapsed: Operating
(11,085)
(14,737)
Current year authorities used
18,289
17,290
4. Accounts payable and accrued liabilities
The following table presents details of NSIRA’s accounts payable and accrued liabilities.
(in thousands of dollars)
2023
2022
Accounts payable – Other government departments and agencies
425
436
Accounts payable – External parties
1,008
784
Total accounts payable
1,433
1,220
Total accounts payable and accrued liabilities
1,433
1,220
5. Employee future benefits
(a) Pension benefits
NSIRA’s employees participate in the Public Service Pension Plan (the ”Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.
Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 related to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.
The 2022-23 expense amounts to $1,178,731 ($1,072,922 in 2021-22). For Group 1 members, the expense represents approximately 1.02 times (1.01 times in 2021-22) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2021-22) the employee contributions.
NSIRA’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.
(b) Severance benefits
Severance benefits provided to NSIRA’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2018, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.
The changes in the obligations during the year were as follows:
(in thousands of dollars)
2023
2022
Accrued benefit obligation – Beginning of year
228
316
Expense for the year
1
(7)
Benefits paid during the year
–
(81)
Accrued benefit obligation – End of year
229
228
6. Accounts receivable and advances
The following table presents details of NSIRA’s accounts receivable and advances balances:
2023
2022
Receivables – Other government departments and agencies
454
546
Receivables – External parties
40
60
Employee advances
24
31
Net accounts receivable
518
637
7. Tangible capital assets
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset Class
Amortization Period
Informatics hardware
3 to 10 years
Other equipment
3 to 30 years
Leasehold improvements
Over the useful life of the improvement or the lease term, whichever is shorter
Assets under construction
once in service, in accordance with asset type
(in thousands of dollars)
Cost
Accumulated Amortization
Net Book Value
(1) Adjustments include assets under construction that were transferred to the other categories upon completion of the assets.
Capital Asset Class
Opening Balance
Acquisitions
Adjustments (1)
Disposal and Write- Offs
Closing Balance
Opening Balance
Amortization
Adjustments (1)
Disposals and Write- Offs
Closing Balance
2022
2021
Restated (Note 11)
Informatics hardware
335
–
–
–
335
267
40
–
–
307
28
68
Other equipment
1,124
–
–
–
1,124
422
121
–
–
543
581
703
Leasehold improvements
1,005
–
–
–
1,005
335
503
–
–
838
167
670
Assets under construction
3,293
755
–
–
4,048
–
–
–
–
–
4,048
3,293
Total
5,757
755
–
–
6,512
1,024
664
–
–
1,688
4,824
4,734
8. Contractual obligations
The nature of the NSIRA’s activities may result in some large multi-year contracts and obligations whereby NSRIA will be obligated to make future payments in order to carry out its programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
2024
2025
2026
2027
2028
2029 and subsequent
Total
Acquisition of goods and services
4,725
45
45
45
45
–
4,905
Total
4,725
45
45
45
45
–
4,905
9. Difference between planned and actual spending
The difference between planned and actual spending is mostly due to the lingering impacts of the pandemic on the Secretariat’s ability to progress with its facilities fit-up and expansion plans, as well as on its planned spending on internal services infrastructure and systems. The project has, due to its complexity, supply chain challenges, and compliancy requirements, seen the delivery date pushed back to summer of 2024.
10. Related party transactions
NSIRA is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.
NSIRA enters into transactions with these entities in the normal course of business and on normal trade terms.
During the year, NSIRA received common services which were obtained without charge for other government departments as disclosed below.
(a) Common services provided without charge by other government departments
During the year, the NSIRA received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in NSIRA’s Statement of Operations and Departmental Net Financial Position as follows:
(in thousands of dollars)
2023
2022
Accommodation
500
486
Employer’s contribution to the health and dental insurance plans
765
756
Total
1,265
1,242
The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in the Department’s Statement of Operations and Departmental Net Financial Position.
(b) Other transactions with other government departments and agencies
2023
2022
Expenses
7,324
6,844
11. Segmented information
Presentation by segment is based on the Department’s core responsibility. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major object of expense and by major type of revenue. The segment results for the period are as follows:
National Security and Intelligence Reviews and Complaints Investigations
Internal Services
2023
2022
Expenses
Salaries and employee benefits
7,817
3,200
11,017
10,282
Professional and special services
250
3,422
3,672
3,470
Accommodation
–
519
519
505
Transportation and communications
226
138
364
213
Information
4
13
17
69
Acquisition of machinery and equipment
–
47
47
354
Repair and maintenance
–
3,643
3,643
3,091
Amortization of tangible capital assets
–
664
664
528
Rental
–
215
215
130
Utilities, materials and supplies
2
37
39
30
Other
60
(671)
(611)
(2,507)
Total expenses
8,359
11,227
19,586
16,165
Net cost from continuing operations
8,359
11,227
19,586
16,165
Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting for Fiscal Year 2021-22 (unaudited)
1. Introduction
This document provides summary information on measures taken by the National Security Intelligence Review Agency (NSIRA) to maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management, assessment results and related action plans.
Detailed information on NSIRA authority, mandate, and programs can be found in our Departmental Plan for the 2022 to 2023 fiscal year and our Departmental Results Report for the 2022 to 2023 fiscal year.
2. Departmental system of internal control over financial reporting
In support of an effective system of internal control, NSIRA conducted self-assessments of key control areas that were identified to be assessed in the 2022 to 2023 fiscal year. A summary of the assessment results and action plan is provided in subsection B.2.
NSIRA completed the assessment of key control areas as indicated in the following table. A summary of the results, action plans, and additional details are also provided.
2.1 Service Arrangements relevant to financial statements
NSIRA relies on other organizations for the processing of certain transactions that are recorded in its financial statements, and relies on these service providers to ensure an adequate system of ICFR is maintained over services provided to NSIRA.
Common Arrangements:
Public Services and Procurement Canada, which administers the payment of salaries and the procurement of goods and services, and provides accommodation services
Shared Services Canada, which provides IT infrastructure services
Treasury Board of Canada Secretariat, which provides information on public service insurance and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans
Readers of this annex may refer to the annexes of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.
Specific Arrangements:
Prior to fiscal 2021-22, in accordance to a Memorandum of Understanding (MOU) between the two organizations, NSIRA relied on the Privy Council Office (PCO) for the performance of financial services, including relevant control measures. Effective, April 1, 2021, NSIRA entered into a new MOU with PCO, which reflected a shift whereby NSIRA would work towards financial services self-sufficiency, by fiscal 2022-23 (including a transition period over fiscal 2021-22).
Treasury Board of Canada Secretariat provides the agency with a SAP financial system platform to capture and report all financial transactions and a PeopleSoft human resources system platform to manage pay and leave transactions
2.2 Assessment results for the 2022 to 2023 fiscal year
NSIRA completed the assessment of key control areas as indicated in the following table. A summary of the results, action plans, and additional details are also provided.
Key Control Areas
Remediation required
Summary results and action plan
Delegation
Yes
Internal controls are functioning as intended, no action plan required.
Transfer Payments
N/A
Not applicable
With respect to the key control areas of the delegation of spending and financial authorities, controls related to spending and financial authorities were functioning well and form an adequate basis for the department’s system of internal control.
3. Departmental action plan
Assessment Plan
NSIRA will assess the performance of its system of internal control by focusing on key control areas over a cycle of years as shown in the following table.
Future-Oriented Statement of Operations (Unaudited)
For the Year Ended March 31(in thousands of dollars)
Forecast results 2023–24
Planned results 2024–25
Expenses
National Security and Intelligence Reviews and Complaints Investigations
10,078
8,361
Internal Services
8,709
12,039
Total expenses
18,787
20,400
Revenues
Miscellaneous revenues
–
–
Total revenues
–
–
Net cost of operations after government funding and transfers
18,787
20,400
The accompanying notes form an integral part of these financial statements.
Notes to the Future-Oriented Statement of Operations (Unaudited)
1. Methodology and significant assumptions
The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.
The information in the forecast results for fiscal year 2023-24 is based on actual results as at November 30, 2023 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2024-25.
The main assumptions underlying the forecasts are as follows:
The National Security and Intelligence Review Agency Secretariat (NSIRA) will continue to experience important growth in the upcoming year.
Significant recruitment efforts will be made across all business lines to reach 100 full-time equivalents (FTEs).
The accommodation, infrastructure and systems investments projects will continue in order to support NSIRA’s new expanded mandate and workforce.
These assumptions are made as at December 8, 2024.
2. Variations and changes to the forecast financial information
Although every attempt has been made to forecast final results for the remainder of 2023-24 and for 2024-25, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.
In preparing the Future-Oriented Statement of Operations, NSIRA has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.
Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:
the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
the implementation of new collective agreements; and
other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.
After the Departmental Plan is tabled in Parliament, NSIRA will not be updating forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.
3. Summary of significant accounting policies
The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2023-24, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
(a) Expenses
Expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.
(b) Revenues
Other Revenues are recognized in the period the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the department’s liabilities. Although the deputy head is expected to maintain accounting control, he or she has no authority over the disposition of non-respendable revenues. As a result, non-respendable revenues are earned on behalf of the Government of Canada and are therefore presented as a reduction of the department’s gross revenues.
4. Parliamentary authorities
The department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the department has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
(a) Reconciliation of net cost of operations to requested authorities
(in thousands of dollars)
Forecast results 2023–24
Planned results 2024–25
Net cost of operations before government funding and transfers
18,787
20,401
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets
(315)
(287)
Services provided without charge by other government departments
(1,242)
(1,483)
Increase in vacation pay and compensatory leave
166
(2)
Increase in employee future benefits
0
(4)
Refund of prior years’ expenditures
(82)
Total items affecting net cost of operations but not affecting authorities
(1,407)
(1,776)
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets
2,970
–
Increase in inventory
–
–
Increase in prepaid expenses
(34)
(50)
Total items not affecting net cost of operations but affecting authorities
2,936
(5)
Requested authorities forecasted to be used
20,316
18,575
(b) Authorities provided/requested
(in thousands of dollars)
Forecast results 2023–24
Planned results 2024–25
Authorities provided/requested:
Vote 1: Operating Expenditures
21,254
16,810
Statutory amounts
1,755
1,765
Total authorities provided/requested
23,009
18,575
Less: Estimated unused authorities and other adjustments
This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2023–24 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2023–24 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended September 30, 2023.
NSIRA Secretariat spent approximately 52% of its authorities by the end of the third quarter, compared with 39% in the same quarter of 2022–23 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q3 2023–2024 and Q3 2022–2023
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q3 2023–24 and Q3 2022–23
2023-24
2022-23
Total Authorities
$24.4
$29.8
Q2 Expenditures
$4.8
$4.7
Year-to-Date Expenditures
$12.8
$11.6
Significant changes to authorities
As at December 31, 2023, Parliament had approved $24.4 million in total authorities for use by NSIRA Secretariat for 2023–24 compared with $29.8 million as of December 31, 2022, for a net decrease of $5.3 million or 18% (see graph 2).
Graph 2: Variance in authorities as at December 31, 2023
Text version of Figure 2
Variance in authorities as at June 30, 2023 (in millions)
Fiscal year 2022-23 total available for use for the year ended March 31, 2023
Fiscal year 2023-24 total available for use for the year ended March 31, 2024
Vote 1 – Operating
28.1
22.6
Statutory
1.6
1.8
Total budgetary authorities
29.7
24.4
The decrease of $5.3 million in authorities is mostly explained by a gradual reduction in NSIRA Secretariat’s ongoing operating funding due to an ongoing construction project nearing completion.
Significant changes to quarter expenditures
The third quarter expenditures totalled $4.8 million for an increase of $0.1 million when compared with $4.7 million spent during the same period in 2022–2023. Table 1 presents budgetary expenditures by standard object.
Table 1
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2023–24: expended during the quarter ended December 31, 2023
Fiscal year 2022–23: expended during the quarter ended December 31, 2022
Variance $
Variance %
Personnel
2,866
2,503
363
15%
Transportation and communications
110
82
28
34%
Information
1
4
(3)
(75%)
Professional and special services
486
1,271
(785)
(62%)
Rentals
78
83
(5)
(6%)
Repair and maintenance
1,161
685
476
69%
Utilities, materials and supplies
(1)
21
(22)
(105%)
Acquisition of machinery and equipment
83
2
81
4050%
Other subsidies and payment
(33)
17
(50)
(294%)
Total gross budgetary expenditures
4,751
4,668
83
2%
*Details may not sum to totals due to rounding*
Professional and special services
The decrease of $785,000 is due to the timing of invoicing for our Internal Support Services agreement.
Repair and maintenance
The increase of $476,000 is due to the timing of invoicing for an ongoing capital project.
Utilities, materials and supplies
The decrease of $22,000 is due to a temporarily unreconciled acquisition card suspense account.
Acquisition of machinery and equipment
The increase of $81,000 is due to the purchase of software licenses and the corresponding support and maintenance.
Other subsidies and payments
The decrease of $50,000 is explained by a prior year refund that was deposited to NSIRA’s account in error.
Significant changes to year-to-date expenditures
The year-to-date expenditures totalled $12.8 million for an increase of $1.2 million (11%) when compared with $11.6 million spent during the same period in 2022–23. Table 2 presents budgetary expenditures by standard object.
Table 2
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2023–24: year-to-date expenditures as of December 31, 2023
Fiscal year 2022–23: year-to-date expenditures as of December 31, 2022
Variance $
Variance %
Personnel
8,766
7,751
1,015
13%
Transportation and communications
302
196
106
54%
Information
5
9
(4)
(44%)
Professional and special services
2,155
2,695
(540)
(20%)
Rentals
151
132
19
14%
Repair and maintenance
1,188
749
439
(59%)
Utilities, materials and supplies
56
49
7
14%
Acquisition of machinery and equipment
135
15
120
800%
Other subsidies and payment
89
18
71
394%
Total gross budgetary expenditures
12,847
11,614
1,233
11%
*Details may not sum to totals due to rounding*
Personnel
The increase of $1,015,000 relates to an increase in average salary, an increase in full time equivalent (FTE) positions, and back-pay from the new collective agreement for the EC and AS occupational groups.
Transportation and communications
The increase in $106,000 is due to the timing of the invoicing for our internet connections.
Professional and special services
The decrease of $540,000 is mainly explained by the conclusion of guard services contracts associated to a capital construction project and the timing of invoicing for internal support services.
Repair and maintenance
The increase of $439,000 is due to the timing of invoicing for an ongoing capital project.
Acquisition of machinery and equipment
The increase of $120,000 is mainly explained by the one-time purchase of a specialized laptop and licenses.
Other subsidies and payments
The increase of $71,000 is due to an increase in salary overpayments.
Risks and uncertainties
The NSIRA Secretariat has made progress on accessing the information required to conduct reviews; however, there continues to be risks associated with reviewees’ ability to respond to, and prioritize, information requests, hindering NSIRA’s ability to deliver its review plan in a timely way. The NSIRA Secretariat will continue to mitigate this risk by providing clear communication related to information requests, tracking their timely completion within communicated timelines, and escalating issues when appropriate.
There is a risk that the funding received to offset pay increases anticipated over the coming year will be insufficient to cover the costs of such increases and the year-over-year cost of services provided by other government departments/agencies is increasing significantly.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA Secretariat’s approach and timelines for the execution of its mandated activities
Significant changes in relation to operations, personnel and programs
There have been no changes to the NSIRA Secretariat Program.
Approved by senior officials:
John Davies Executive Director
Martyn Turcotte Director General, Corporate Services, Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Total available for use for the year ending March 31, 2024 (note 1)
Used during the quarter ended December 31, 2023
Year to date used at quarter-end
Total available for use for the year ending March 31, 2023 (note 1)
Used during the quarter ended December 31, 2022
Year to date used at quarter-end
Vote 1 – Net operating expenditures
22,633
4,313
11,531
28.063
4,236
10,318
Budgetary statutory authorities
Contributions to employee benefit plans
1,755
438
1,316
1,728
432
1,296
Total budgetary authorities (note 2)
24,388
4,751
12,847
29,791
4,668
11,614
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Planned expenditures for the year ending March 31, 2024 (note 1)
Expended during the quarter ended December 31, 2023
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2023
Expended during the quarter ended December 31, 2022
Year to date used at quarter-end
Expenditures
Personnel
13,372
2,866
8,766
13,389
2,503
7,751
Transportation and communications
650
110
302
597
82
196
Information
371
1
5
372
4
9
Professional and special services
4,906
486
2,155
4,902
1,271
2,695
Rentals
271
78
151
271
83
132
Repair and maintenance
4,580
1,161
1,188
9,722
685
749
Utilities, materials and supplies
73
(1)
56
173
21
49
Acquisition of machinery and equipment
132
83
135
232
2
15
Other subsidies and payments
33
(33)
89
133
17
18
Total gross budgetary expenditures (note 2)
24,388
4,751
12,847
29,791
4,668
11,614
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2023–24 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2023–24 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended September 30, 2023.
NSIRA Secretariat spent approximately 33% of its authorities by the end of the second quarter, compared with 23% in the same quarter of 2022–23 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q2 2023–24 and Q2 2022–23
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q2 2023–24 and Q2 2022–23
2023-24
2022-23
Total Authorities
$24.3
$29.7
Q2 Expenditures
$3.8
$3.6
Year-to-Date Expenditures
$8.1
$6.9
Significant changes to authorities
As at September 30, 2023, Parliament had approved $24.3 million in total authorities for use by NSIRA Secretariat for 2023–24 compared with $29.7 million as of September 30th, 2022, for a net decrease of $5.4 million or 18.2% (see graph 2).
Graph 2: Variance in authorities as at September 30, 2023
Text version of Figure 2
Variance in authorities as at June 30, 2023 (in millions)
Fiscal year 2022-23 total available for use for the year ended March 31, 2023
Fiscal year 2023-24 total available for use for the year ended March 31, 2024
Vote 1 – Operating
28.0
22.6
Statutory
1.7
1.7
Total budgetary authorities
29.7
24.3
*Details may not sum to totals due to rounding*
The decrease of $5.4 million in authorities is mostly explained by a gradual reduction in NSIRA Secretariat’s ongoing operating funding due to an ongoing construction project nearing completion.
Significant changes to quarter expenditures
The second quarter expenditures totalled $3.8 million for an increase of $0.2 million when compared with $3.6 million spent during the same period in 2022–2023. Table 1 presents budgetary expenditures by standard object.
Table 1
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2023–24: expended during the quarter ended September 30, 2023
Fiscal year 2022–23: expended during the quarter ended September 30, 2022
Variance $
Variance %
Personnel
3,014
2,903
111
4%
Transportation and communications
62
70
(8)
(11%)
Information
4
0
4
100%
Professional and special services
504
578
(74)
(13%)
Rentals
25
39
(14)
(36%)
Repair and maintenance
3
33
(30)
(91%)
Utilities, materials and supplies
50
12
38
317%
Acquisition of machinery and equipment
4
4
0
0%
Other subsidies and payment
118
3
115
3833%
Total gross budgetary expenditures
3,784
3,642
142
4%
Repair and maintenance
The decrease of $30,000 is due to the timing of invoicing for an ongoing capital project.
Utilities, materials and supplies
The increase of $38,000 is due to a temporarily unreconciled suspense account.
Other subsidies and payments
The increase of $115,000 is explained by an increase in payroll system overpayments which were subsequently resolved.
Significant changes to year-to-date expenditures
The year-to-date expenditures totalled $8.1 million for an increase of $1.1 million (17%) when compared with $6.9 million spent during the same period in 2022–23. Table 2 presents budgetary expenditures by standard object.
Table 2
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2023–24: year-to-date expenditures as of September 30, 2023
Fiscal year 2022–23: year-to-date expenditures as of September 30, 2022
Variance $
Variance %
Personnel
5,900
5,248
652
12%
Transportation and communications
192
114
78
68%
Information
4
5
(1)
(20%)
Professional and special services
1,669
1,424
245
17%
Rentals
73
49
24
49%
Repair and maintenance
27
64
(37)
(58%)
Utilities, materials and supplies
57
28
29
104%
Acquisition of machinery and equipment
52
13
39
300%
Other subsidies and payment
122
1
121
12100%
Total gross budgetary expenditures
8,096
6,946
1,150
17%
Personnel
The increase of $652,000 relates to an increase in average salary and an increase in full time equivalent (FTE) positions.
Transportation and communications
The increase of $78,000 is due to the timing of invoicing for the organization’s internet connections.
Professional and special services
The increase of $245,000 is explained by an increase in IT support costs and guard services associated to a capital construction project.
Repair and maintenance
The decrease of $37,000 is due to the timing of invoicing for an ongoing capital project.
Utilities, materials and supplies
The increase of $29,000 is due to a temporarily unreconciled suspense account.
Acquisition of machinery and equipment
The increase of $39,000 is mainly explained by the one-time purchase of a specialized laptop.
Other subsidies and payments
The increase of $121,000 is explained by an increase in payroll system overpayments which were subsequently resolved.
Risks and uncertainties
The Secretariat assisted NSIRA in its work with the departments and agencies subjected to reviews to ensure a timely and unfettered access to all the information necessary for the conduct of reviews. While work remains to be done on this front, we acknowledge the improvements in cooperation and support to the independent review process demonstrated by some reviewees.
There is a risk that the funding received to offset pay increases anticipated over the coming year will be insufficient to cover the costs of such increases and the year-over-year cost of services provided by other government departments/agencies is increasing significantly.
NSIRA Secretariat is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA Secretariat’s approach and timelines for the execution of its mandated activities.
Significant changes in relation to operations, personnel and programs
There have been two new Governor-in-Council appointments during the Second quarter, Ms. Colleen Swords and Mr. Jim Chu.
There have been no changes to the NSIRA Secretariat Program.
Approved by senior officials:
John Davies Deputy Head
Marc-André Cloutier Director General, Corporate Services, Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Total available for use for the year ending March 31, 2024 (note 1)
Used during the quarter ended September 30, 2023
Year to date used at quarter-end
Total available for use for the year ending March 31, 2023 (note 1)
Used during the quarter ended September 30, 2022
Year to date used at quarter-end
Vote 1 – Net operating expenditures
22,564
3,345
7,218
27,931
3,210
6,082
Budgetary statutory authorities
Contributions to employee benefit plans
1,755
439
878
1,728
432
864
Total budgetary authorities (note 2)
24,319
3,784
8,096
29,659
3,642
6,946
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Planned expenditures for the year ending March 31, 2024 (note 1)
Expended during the quarter ended September 30, 2023
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2023
Expended during the quarter ended September 30, 2022
Year to date used at quarter-end
Expenditures
Personnel
13,303
3,014
5,900
13,245
2,903
5,248
Transportation and communications
650
62
192
597
70
114
Information
371
4
4
372
0
5
Professional and special services
4,906
504
1,669
4,914
578
1,424
Rentals
271
25
73
271
39
49
Repair and maintenance
4,580
24
27
9,722
33
64
Utilities, materials and supplies
73
50
57
173
12
28
Acquisition of machinery and equipment
132
4
52
232
4
13
Other subsidies and payments
33
118
122
133
3
1
Total gross budgetary expenditures
(note 2)
24,319
3,784
8,096
29,659
3,642
6,946
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2023–24 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2023–24 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended June 30, 2023.
NSIRA spent approximately 19% of its authorities by the end of the first quarter, compared with 12% in the same quarter of 2022–23 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q1 2023–24 and Q1 2022–23
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q1 2023–24 and Q1 2022–23
2023-24
2022-23
Total Authorities
$23.0
$28.3
Q1 Expenditures
$4.3
$3.3
Significant changes to authorities
As of June 30, 2023, Parliament had approved $23.0 million in total authorities for use by NSIRA for 2023–24 compared with $28.3 million as of June 30th, 2022, for a net decrease of $5.3 million or 8.1% (see graph 2).
Graph 2: Variance in authorities as at June 30, 2023
Text version of Figure 2
Variance in authorities as at June 30, 2023 (in millions)
Fiscal year 2022-23 total available for use for the year ended March 31, 2023
Fiscal year 2023-24 total available for use for the year ended March 31, 2024
Vote 1 – Operating
26.5
21.3
Statutory
1.7
1.8
Total budgetary authorities
28.2
23.0
*Details may not sum to totals due to rounding*
The decrease of $5.3 million in authorities is mostly explained by a reduction in capital funding for infrastructure projects.
Significant changes to quarter expenditures
The first quarter expenditures totalled $4.3 million for an increase of $1 million when compared with $3.3 million spent during the same period in 2022–23. Table 1 presents budgetary expenditures by standard object.
Table 1
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2023–24: expended during the quarter ended June 30, 2023
Fiscal year 2022–23: expended during the quarter ended June 30, 2022
Variance $
Variance %
Personnel
2,886
2,345
541
23%
Transportation and communications
130
44
86
195%
Information
0
5
(5)
100%
Professional and special services
1,165
846
319
38%
Rentals
48
10
38
380%
Repair and maintenance
24
31
(7)
(23%)
Utilities, materials and supplies
7
16
(9)
(56%)%
Acquisition of machinery and equipment
48
9
39
433%
Other subsidies and payment
4
(2)
(6)
(300%)
Total gross budgetary expenditures
4,312
3,304
1,008
31%
Personnel
The increase of $541,000 is largely caused by an increase in cost per FTE and change in the timing of Member’s pay.
Transportation and communications
The increase of $86,000 is explained by a change in the timing of invoicing for the internet connection.
Professional and special services
The increase of $319,000 is mainly explained by an increase in the cost of the maintenance and services in support of our classified IT network infrastructure. It also relates to the use of guard services for office accommodation fit-up.
Rentals
The increase of $38,000 is explained by a change in the timing of invoicing for the rent for temporary office space.
Acquisition of machinery and equipment
The increase of $39,000 is explained by a one-time purchase of a specialized laptop along with a wall mounted charging station and warranty.
Risks and uncertainties
The Secretariat assisted NSIRA in its work with the departments and agencies subjected to reviews to ensure a timely and unfettered access to all the information necessary for the conduct of reviews. While work remains to be done on this front, we acknowledge the improvements in cooperation and support to the independent review process demonstrated by some reviewees.
There is a risk that the funding received to offset pay increases anticipated over the coming year will be insufficient to cover the costs of such increases and the year-over-year cost of services provided by other government departments/agencies is increasing significantly.
NSIRA is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA’s approach and timelines for the execution of its mandated activities.
Significant changes in relation to operations, personnel and programs
There have been no new Governor-in-Council appointments during the first quarter.
Mr. Pierre Souligny, NSIRA’s Senior Director, Corporate Services and CFO since 2020, has retired. He has been replaced by Mr. Marc-André Cloutier.
Approved by senior officials:
John Davies Deputy Head
Pierre Souligny Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Total available for use for the year ending March 31, 2024 (note 1)
Used during the quarter ended June 30, 2023
Year to date used at quarter-end
Total available for use for the year ending March 31, 2023 (note 1)
Used during the quarter ended June 30, 2022
Year to date used at quarter-end
Vote 1 – Net operating expenditures
21,254
3,873
3,873
26,523
2,872
2,872
Budgetary statutory authorities
Contributions to employee benefit plans
1,728
439
439
1,728
432
432
Total budgetary authorities (note 2)
23,009
4,312
4,312
28,251
3,304
3,304
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2023–24
Fiscal year 2022–23
Planned expenditures for the year ending March 31, 2024 (note 1)
Expended during the quarter ended June 30, 2023
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2023
Expended during the quarter ended June 30, 2022
Year to date used at quarter-end
Expenditures
Personnel
13,303
2,886
2,886
13,245
2,345
2,345
Transportation and communications
650
130
130
597
44
44
Information
372
0
0
372
5
5
Professional and special services
3,596
1,165
1,165
3,506
846
846
Rentals
271
48
48
271
10
10
Repair and maintenance
4,580
24
24
9,722
31
31
Utilities, materials and supplies
73
7
7
103
3
3
Acquisition of machinery and equipment
132
48
48
232
9
9
Other subsidies and payments
33
4
4
133
(2)
(2)
Total gross budgetary expenditures
(note 2)
23,009
4,312
4,312
28,251
3,304
3,304
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2022–23 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2022–23 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended December 31st, 2022.
NSIRA spent approximately 39% of its authorities by the end of the third quarter, compared with 33% in the same quarter of 2021–22 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q3 2022–23 and Q3 2021–22
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q3 2022–23 and Q3 2021–22
2022-23
2021-22
Total Authorities
$29.8
$31.3
Q3 Expenditures
$4.7
$3.7
Year-to-Date Expenditures
$11.6
$10.2
Significant changes to authorities
As at December 31, 2022, Parliament had approved $29.8 million in total authorities for use by NSIRA for 2022–23 compared with $31.3 million as of December 31st, 2021, for a net decrease of $1.5 million or 4.8% (see graph 2).
Graph 2: Variance in authorities as at December 31, 2022
Text version of Figure 2
Variance in authorities as at December 31, 2022 (in millions)
Fiscal year 2021-22 total available for use for the year ended March 31, 2022
Fiscal year 2022-23 total available for use for the year ended March 31, 2023
Vote 1 – Operating
29.6
28.1
Statutory
1.7
1.7
Total budgetary authorities
31.3
29.8
*Details may not sum to totals due to rounding*
The decrease of $1.5 million in authorities is mostly explained by a gradual reduction in NSIRA’s ongoing operating funding.
Significant changes to quarter expenditures
The third quarter expenditures totalled $4.7 million for an increase of $1.0 million (26%) when compared with $3.7 million spent during the same period in 2021–2022. Table 1 presents budgetary expenditures by standard object
Table 1
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2022-23: expended during the quarter ended December 31, 2022
Fiscal year 2021-22: expended during the quarter ended December 31, 2021
Variance $
Variance %
Personnel
2,503
2,654
(151)
(6%)
Transportation and communications
82
93
(11)
(12%)
Information
4
24
(20)
(83%)
Professional and special services
1,271
404
867
215%
Rentals
83
64
19
30%
Repair and maintenance
685
398
287
72%
Utilities, materials and supplies
21
13
8
62%
Acquisition of machinery and equipment
2
72
(70)
(97%)
Other subsidies and payment
17
(21)
38
(181%)
Total gross budgetary expenditures
4,668
3,701
967
26%
Information
The decrease of $20,000 is explained by a decrease in the use of communications consultants.
Professional and special services
The increase of $867,000 is explained by the timing of payment for NSIRA’s internal support services agreement with the Privy Council Office. In fiscal year 2021-2022 most of the payments went through in the fourth quarter however in fiscal year 2022-2023, most of the payments went through in the third quarter.
Repair and maintenance
The increase of $287,000 is due to fit-up costs for one large infrastructure project that ramped up in 2022-2023.
Acquisition of machinery and equipment
The decrease of $70,000 is explained by several one-time computer equipment and storage solution purchases in fiscal year 2021-2022.
Other subsidies and payments
The increase of $38,000 is explained by an increase in payroll system overpayments.
Significant changes to year-to-date expenditures
The year-to-date expenditures totalled $11.6 million for an increase of $1.4 million (14%) when compared with $10.2 million spent during the same period in 2021–22. Table 2 presents budgetary expenditures by standard object.
Table 2
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2022-23: expended during the quarter ended December 31, 2022
Fiscal year 2021-22: expended during the quarter ended December 31, 2021
Variance $
Variance %
Personnel
2,503
2,654
(151)
(6%)
Transportation and communications
82
93
(11)
(12%)
Information
4
24
(20)
(83%)
Professional and special services
1,271
404
867
215%
Rentals
83
64
19
30%
Repair and maintenance
685
398
287
72%
Utilities, materials and supplies
21
13
8
62%
Acquisition of machinery and equipment
2
72
(70)
(97%)
Other subsidies and payment
17
(21)
38
(181%)
Total gross budgetary expenditures
4,668
3,701
967
26%
Transportation and communications
The increase of $66,000 is due to increased travel, as travel restrictions due to COVID-19 are no longer in place in Canada.
Information
The decrease of $32,000 is explained by a decrease in the use of communications consultants and electronic subscriptions.
Professional and special services
The increase of $1,255,000 is mainly due to increases in information technology support services by the Communications Security Establishment ($173K), and more advanced billing for Internal Support Services by the Privy Council Office ($722K).
Rentals
The increase of $51,000 is mainly explained by the purchase of Visio Pro, Project Pro, and FoxIT software licenses in 2022-2023.
Repair and maintenance
The increase of $138,000 is due to fit-up costs for one large infrastructure project that ramped up in 2022-2023.
Acquisition of machinery and equipment
The decrease of $431,000 is mainly explained by several one-time computer equipment purchases made in the first and second quarter of 2021-2022.
Risks and uncertainties
The ability of NSIRA to access the information it needs to conduct its reviews and complaints investigations is closely tied to the capacity of the reviewed or investigated departments and agencies to respond to NSIRA’s demands. While most pandemic constraints have subsided, there continues to be recruitment challenges in a tight labour market. To address this challenge, NSIRA is experimenting with hybrid workplace approaches, launching internal career development programs and focusing on onboarding practices to attract and retain talent.
NSIRA is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA’s approach and timelines for the execution of its mandated activities.
Significant changes in relation to operations, personnel and programs
There have been no new Governor-in-Council appointments during the third quarter.
There have been no changes to the NSIRA Program.
Approved by senior officials:
John Davies Deputy Head
Pierre Souligny Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2022–23
Fiscal year 2021–22
Total available for use for the year ending March 31, 2023 (note 1)
Used during the quarter ended December 30, 2022
Year to date used at quarter-end
Total available for use for the year ending March 31, 2022 (note 1)
Used during the quarter ended December 30, 2021
Year to date used at quarter-end
Vote 1 – Net operating expenditures
28,063
4,236
10,318
29,615
3,275
8,922
Budgetary statutory authorities
Contributions to employee benefit plans
1,728
432
1,296
1,705
426
1,278
Total budgetary authorities (note 2)
29,791
4,668
11,614
31,319
3,701
10,200
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2022–23
Fiscal year 2021–22
Planned expenditures for the year ending March 31, 2022 (note 1)
Expended during the quarter ended December 30, 2021
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2021
Expended during the quarter ended December 30, 2020
Year to date used at quarter-end
Expenditures
Personnel
13,389
2,503
7,751
13,222
2,654
7,407
Transportation and communications
597
82
196
673
93
130
Information
372
4
9
375
24
41
Professional and special services
4,902
1,271
2,695
7,029
404
1,440
Rentals
271
83
132
188
64
81
Repair and maintenance
9,722
685
749
8,737
398
611
Utilities, materials and supplies
173
21
49
103
13
25
Acquisition of machinery and equipment
232
2
15
991
72
446
Other subsidies and payments
133
17
18
0
(21)
19
Total gross budgetary expenditures
(note 2)
29,791
4,668
11,614
31,319
3,701
10,200
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Future-Oriented Statement of Operations (Unaudited)
For the Year Ended March 31(in thousands of dollars)
Forecast results 2022–23
Planned results 2023–24
Expenses
National Security and Intelligence Reviews and Complaints Investigations
8,967
11,540
Internal Services
9,583
12,060
Total expenses
18,550
23,600
Revenues
Miscellaneous revenues
–
–
Total revenues
–
–
Net cost of operations after government funding and transfers
18,550
23,600
The accompanying notes form an integral part of these financial statements.
Notes to the Future-Oriented Statement of Operations (Unaudited)
1. Methodology and significant assumptions
The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.
The information in the forecast results for fiscal year 2022-23 is based on actual results as at November 30, 2022 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2023-24.
The main assumptions underlying the forecasts are as follows:
The National Security and Intelligence Review Agency (NSIRA) will continue to experience important growth in the upcoming year.
Significant recruitment efforts will be made across all business lines to reach 100 full-time equivalents (FTEs).
The accommodation, infrastructure and systems investments projects will continue in order to support NSIRA’s new expanded mandate and workforce.
These assumptions are made as at December 8, 2022.
2. Variations and changes to the forecast financial information
Although every attempt has been made to forecast final results for the remainder of 2022-23 and for 2023-24, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.
In preparing the Future-Oriented Statement of Operations, NSIRA has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.
Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include:
the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
the implementation of new collective agreements; and
other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.
After the Departmental Plan is tabled in Parliament, NSIRA will not be updating forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.
3. Summary of significant accounting policies
The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2022-23, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
(a) Expenses
Expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.
(b) Revenues
Other Revenues are recognized in the period the event giving rise to the revenues occurred. Revenues that are non-respendable are not available to discharge the department’s liabilities. Although the deputy head is expected to maintain accounting control, he or she has no authority over the disposition of non-respendable revenues. As a result, non-respendable revenues are earned on behalf of the Government of Canada and are therefore presented as a reduction of the department’s gross revenues.
4. Parliamentary authorities
The department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the department has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
(a) Reconciliation of net cost of operations to requested authorities
(in thousands of dollars)
Forecast results 2022–23
Planned results 2023–24
Net cost of operations before government funding and transfers
18,550
23,600
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets
(668)
(431)
Services provided without charge by other government departments
(1,245)
(1,486)
Increase in vacation pay and compensatory leave
82
(4)
Increase in employee future benefits
34
(4)
Refund of prior years’ expenditures
(22)
(49)
Total items affecting net cost of operations but not affecting authorities
(1,819)
(1,974)
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets
3,988
1,399
Increase in inventory
–
–
Increase in prepaid expenses
(10)
(16)
Total items not affecting net cost of operations but affecting authorities
3,978
1,383
Requested authorities forecasted to be used
20,709
23,009
(b) Authorities provided/requested
(in thousands of dollars)
Forecast results 2022–23
Planned results 2023–24
Authorities provided/requested:
Vote 1: Operating Expenditures
26,523
21,254
Statutory amounts
1,728
1,755
Total authorities provided/requested
28,251
23,009
Less: Estimated unused authorities and other adjustments
Statement of Management Responsibility Including Internal Control over Financial Reporting
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2022, and all information contained in these financial statements rests with the management of the National Security and Intelligence Review Agency (NSIRA). These financial statements have been prepared by management using the Government of Canada’s accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the NSIRA’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the NSIRA’s Departmental Results Report, is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the NSIRA and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.
The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
A risk-based assessment of the system of ICFR for the year ended March 31, 2022 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.
The financial statements of the National Security and Intelligence Agency have not been audited.
The accompanying notes form an integral part of these financial statements.
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31(in thousands of dollars)
2022
2021
(Restated Note 11)
Net cost of operations after government funding and transfers
(2,361)
(1,095)
Change due to tangible capital assets
Acquisition of tangible capital assets
3,114
1,352
Amortization of tangible capital assets
(528)
(171)
Total change due to tangible capital assets
2,586
1,181
Change due to prepaid expenses
(22)
(17)
Net increase (decrease) in departmental net debt
203
69
Departmental net debt – Beginning of year
472
403
Departmental net debt – End of year
675
472
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flows (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
2022
2021
(Restated Note 11)
Operating activities
Net cost of operations before government funding and transfers
16,165
11,663
Non-cash items:
–
–
Amortization of tangible capital assets
(528)
(171)
Services provided without charge by other government departments (Note 9a)
(1,242)
(1,007)
Transfer of overpayments
15
60
Variations in Statement of Financial Position:
–
–
Increase (decrease) in accounts receivable and advances
5
542
Increase (decrease) in prepaid expenses
(22)
(17)
Decrease (increase) in accounts payable and accrued liabilities
299
41
Decrease (increase) in vacation pay and compensatory leave
(341)
108
Decrease (increase) in future employee benefits
88
(170)
Cash used in operating activities
14,439
11,049
Capital investing activities
–
–
Acquisitions of tangible capital assets (Note 7)
3,114
1,352
Cash used in capital investing activities
3,114
1,353
Net cash provided by Government of Canada
17,553
12,401
Notes to the Financial Statements (Unaudited)
1. Authority and objectives
The agency was established, effective July 12, 2019 under the National Security and Intelligence Review Agency Act (NSIRA Act).
The agency is a division of the federal public administration as set out in column 1 of Schedule I.1 of the Financial Administration Act and reports to Parliament through the Prime Minister.
The mandate of the agency is to review all Government of Canada national security and intelligence activities to ensure that they are lawful, reasonable and necessary. The agency also investigates public complaints regarding key national security agencies and activities.
To achieve its strategic outcome and deliver results for Canadians, NSIRA articulates its plans and priorities based on the core responsibility and program inventory included below:
National Security and Intelligence Reviews and Complaints Investigations
The National Security and Intelligence Review Agency reviews Government of Canada national security and intelligence activities to assess whether they are lawful, reasonable and necessary. It investigates complaints from members of the public regarding activities of CSIS, CSE or the national security activities of the RCMP, as well as certain other national security-related complaints. This independent scrutiny contributes to the strengthening of the framework of accountability for national security and intelligence activities undertaken by Government of Canada institutions and supports public confidence in this regard.
Internal Services
Internal support services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.
2. Summary of significant accounting policies
These financial statements are prepared using NSIRA’s accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
(a) Parliamentary authorities
NSIRA is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to NSIRA do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the ”Expenses” and ”Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the 2021-2022 Departmental Plan. The planned results amounts in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt were prepared for internal management purposes and have not been previously published.
(b) Net cash provided by Government of Canada
NSIRA operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by NSIRA is deposited to the CRF, and all cash disbursements made by NSIRA are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
(c) Amounts due from or to the CRF
Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that NSIRA is entitled to draw from the CRF without further authorities to discharge its liabilities.
(d) Expenses
Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans and workers’ compensation are recorded as operating expenses at their carrying value.
(e) Employee future benefits
Pension benefits: Eligible employees participate in the Public Service Pension Plan, a pension plan administered by the Government. NSIRA’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. NSIRA’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
(f) Accounts receivable
Accounts receivable are initially recorded at cost and when necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.
(g) Non-financial assets
All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.
Inventories are valued at cost and are comprised of spare parts and supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.
(h) Measurement uncertainty
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government’s best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
(i) Related party transactions
Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.
Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:
Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.
3. Parliamentary authorities
NSIRA receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, NSIRA has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
(a) Reconciliation of net cost of operations to current year authorities used
(in thousands of dollars)
2022
2021
(Restated Note 11)
Net cost of operations before government funding and transfers
16,165
11,663
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets
(528)
(171)
Services provided without charge by other government departments
(1,242)
(1,007)
Increase / (decrease) in vacation pay and compensatory leave
(341)
109
Increase / (decrease) in employee future benefits
88
(170)
Refund of prior years’ expenditures
41
481
Total items affecting net cost of operations but not affecting authorities
(1,982)
759
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisition of tangible capital assets
3,114
1,352
Amortization of tangible capital assets
(22)
(17)
Accounts receivable and advances
15
12
Total items not affecting net cost of operations but affecting authorities
3,107
1,347
Current year authorities used
17,290
12,251
(b) Authorities provided and used
(in thousands of dollars)
2022
2021
Authorities provided:
Vote 1 – Operating expenditures
30,851
22,592
Statutory amounts
1,176
962
Less:
Lapsed: Operating
(14,737)
(11,303)
Current year authorities used
17,290
12,251
4. Accounts payable and accrued liabilities
The following table presents details of NSIRA’s accounts payable and accrued liabilities.
(in thousands of dollars)
2022
2021
Accounts payable – Other government departments and agencies
436
444
Accounts payable – External parties
784
1,075
Total accounts payable
1,220
1,519
Total accounts payable and accrued liabilities
1,220
1,519
5. Employee future benefits
(a) Pension benefits
NSIRA’s employees participate in the Public Service Pension Plan (the ”Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.
Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 related to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.
The 2021-22 expense amounts to $1,072,922 ($877,610 in 2020-21). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2020-21) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2020-21) the employee contributions.
NSIRA’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.
(b) Severance benefits
Severance benefits provided to NSIRA’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2018, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.
The changes in the obligations during the year were as follows:
(in thousands of dollars)
2022
2021
Accrued benefit obligation – Beginning of year
316
146
Expense for the year
(7)
170
Benefits paid during the year
(81)
–
Accrued benefit obligation – End of year
228
316
6. Accounts receivable and advances
The following table presents details of NSIRA’s accounts receivable and advances balances:
2022
2021
Receivables – Other government departments and agencies
546
581
Receivables – External parties
60
51
Employee advances
31
–
Net accounts receivable
637
632
7. Tangible capital assets
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset Class
Amortization Period
Informatics hardware
3 to 10 years
Other equipment
3 to 30 years
Leasehold improvements
Over the useful life of the improvement or the lease term, whichever is shorter
Assets under construction
once in service, in accordance with asset type
(in thousands of dollars)
Cost
Accumulated Amortization
Net Book Value
(1) Adjustments include assets under construction that were transferred to the other categories upon completion of the assets.
Capital Asset Class
Opening Balance
Acquisitions
Adjustments (1)
Disposal and Write- Offs
Closing Balance
Opening Balance
Amortization
Adjustments (1)
Disposals and Write- Offs
Closing Balance
2022
2021
Restated (Note 11)
Informatics hardware
279
56
–
–
335
189
78
–
–
267
68
90
Other equipment
1,095
29
–
–
1,124
306
115
–
–
421
703
789
Leasehold improvements
–
136
869
–
1,005
–
335
–
–
335
670
–
Assets under construction
1,269
2,893
(869)
–
3,293
–
–
–
–
–
3,293
1,129
Total
2,643
3,114
–
–
5,757
495
528
–
–
1,023
4,734
2,148
8. Contractual obligations
The nature of the NSIRA’s activities may result in some large multi-year contracts and obligations whereby NSRIA will be obligated to make future payments in order to carry out its programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
2023
2024
2025
2026
2027
2028 and subsequent
Total
Professional and special services
2,257
418
–
–
–
–
2,615
Repair and maintenance
3,886
–
–
–
–
–
3,886
Rental
117
–
–
–
–
–
117
Transportation and communications
89
–
–
–
–
–
89
Total
6,349
418
–
–
–
–
6,767
9. Related party transactions
NSIRA is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.
NSIRA enters into transactions with these entities in the normal course of business and on normal trade terms.
During the year, NSIRA received common services which were obtained without charge for other government departments as disclosed below.
(a) Common services provided without charge by other government departments
During the year, the NSIRA received services without charge from certain common service organizations, related to accommodation and the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in NSIRA’s Statement of Operations and Departmental Net Financial Position as follows:
(in thousands of dollars)
2022
2021
Accommodation
486
451
Employer’s contribution to the health and dental insurance plans
756
556
Total
1,242
1,007
The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in the Department’s Statement of Operations and Departmental Net Financial Position.
(b) Other transactions with other government departments and agencies
2022
2021
Expenses
6,844
5,595
10. Segmented information
Presentation by segment is based on the Department’s core responsibility. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 2. The following table presents the expenses incurred and revenues generated for the main core responsibilities, by major object of expense and by major type of revenue. The segment results for the period are as follows:
National Security and Intelligence Reviews and Complaints Investigations
Internal Services
2022
2021
Expenses
Salaries and employee benefits
7,638
2,644
10,282
7,995
Professional and special services
231
3,239
3,470
1,845
Accommodation
–
505
505
451
Transportation and communications
30
183
213
88
Information
23
46
69
192
Acquisition of machinery and equipment
4
350
354
864
Repair and maintenance
–
3,091
3,091
1,258
Amortization of tangible capital assets
–
528
528
171
Rental
–
130
130
152
Utilities, materials and supplies
4
26
30
8
Other
430
(2,937)
(2,507)
(1,361)
Total expenses
8,360
7,805
16,165
11,663
Net cost from continuing operations
8,360
7,805
16,165
11,663
11. Adjustments to prior year’s results
As a result of a review, NSIRA identified minor rounding discrepancies. These changes have been applied retroactively and comparative information for 2020-21 has been restated. The effect of these adjustments is presented in the table below.
2021
(As previously stated)
Effect of the adjustment
2021
(Restated)
Statement of Financial Position
Tangible capital assets
7,638
2,644
10,282
Total non-financial assets
231
3,239
3,470
Departmental net financial position
–
505
505
Statement of Operations and Departmental Net Financial Position
Internal Services
30
183
213
Total Expenses
23
46
69
Net cost of operations after government funding and transfers
4
350
354
Departmental net financial position – End of year
–
3,091
3,091
Statement of Change in Departmental Net Debt
Net cost of operations after government funding and transfers
–
528
528
Acquisition of tangible capital assets
–
130
130
Total change due to tangible capital assets
4
26
30
Statement of Cash Flow
Net cost of operations before government funding and transfers
430
(2,937)
(2,507)
Cash used in operating activities
8,360
7,805
16,165
Acquisitions of tangible capital assets
8,360
7,805
16,165
Note 3(a) – Parliamentary authorities
Net cost of operations before government funding and transfers
11,662
1
11,663
Acquisition of tangible capital assets
1,353
(1)
1,352
Total items not affecting net cost of operations but affecting authorities
1,348
(1)
1,347
Note 7 – Tangible capital assets
Assets under construction – Net Book Value
430
(1)
(2,507)
Total – Net Book Value
8,360
(1)
16,165
Note 10 – Segmented Information
Salaries and employee benefits
7,994
1
7,995
Acquisition of machinery and equipment
694
170
864
Other
(1,191)
(170)
(1,361)
Total Expenses
11,662
1
11,663
Net cost from continuing operations
11,662
1
11,663
Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting for Fiscal Year 2021-22 (unaudited)
1. Introduction
This document provides summary information on measures taken by the National Security Intelligence Review Agency (NSIRA) to maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management, assessment results and related action plans.
Detailed information on NSIRA authority, mandate, and programs can be found in our Departmental Plan for the 2021 to 2022 fiscal year and our Departmental Results Report for the 2021 to 2022 fiscal year.
2. Departmental system of internal control over financial reporting
2.1 Internal Control Management
NSIRA has implemented a rigourous governance and accountability structure to support the oversight of its system of internal control, which includes:
organizational accountability structures as they relate to internal control management to support sound financial management, including the roles and responsibilities of senior departmental managers for control management in their areas of responsibility
values and ethics
ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control
monitoring of, and regular updates to, internal control management, as well as the provision of related assessment results and action plans to the deputy head and senior departmental management
NSIRA recognizes the importance of setting the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective financial systems of ICFR and are well equipped to exercise these responsibilities effectively
2.2 Service Arrangements relevant to financial statements
NSIRA relies on other organizations for the processing of certain transactions that are recorded in its financial statements, and relies on these service providers to ensure an adequate system of ICFR is maintained over services provided to NSIRA.
Common Arrangements:
Public Services and Procurement Canada, which administers the payment of salaries and the procurement of goods and services, and provides accommodation services
Shared Services Canada, which provides IT infrastructure services
Treasury Board of Canada Secretariat, which provides information on public service insurance and centrally administers payment of the employer’s share of contributions toward statutory employee benefit plans
Readers of this annex may refer to the annexes of the above-noted departments for a greater understanding of the systems of internal control over financial reporting related to these specific services.
Specific Arrangements:
Prior to fiscal 2021-22, in accordance to a Memorandum of Understanding (MOU) between the two organizations, NSIRA relied on the Privy Council Office (PCO) for the performance of financial services, including relevant control measures. Effective, April 1, 2021, NSIRA entered into a new MOU with PCO, which reflected a shift whereby NSIRA would work towards financial services self-sufficiency, by fiscal 2022-23 (including a transition period over fiscal 2021-22).
Treasury Board of Canada Secretariat provides the agency with a SAP financial system platform to capture and report all financial transactions and a PeopleSoft human resources system platform to manage pay and leave transactions
3. Departmental assessments results during fiscal year 2021-22
Progress during the 2021-22 fiscal year
NSIRA’s management team has maintained a system of internal control that ensures that financial information is understandable, relevant, reliable and comparable in concert with the PCO’s support as per the MOU. Progress is disclosed in the Annex of PCO’s Statement of Management Responsibility.
New or significantly amended key controls
In the current fiscal year, there were no new or significantly amended key controls in existing processes that required reassessment. No significant adjustments were required.
On-going monitoring program
In the current fiscal year, NSIRA’s leveraged PCO’s rotational on-going monitoring plan disclosed in the Annex of PCO’s statement of management responsibility. Starting in fiscal 2022-23 NSIRA will establish its own rotational monitoring plan. See Departmental action plan below for additional information.
4. Departmental action plan
NSIRA’s risk-based monitoring plan over the next 3 fiscal years is shown in the following table.
This quarterly 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the 2022–23 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Mandate
The National Security and Intelligence Review Agency (NSIRA) is an independent external review body that reports to Parliament. Established in July 2019, NSIRA is responsible for conducting reviews of the Government of Canada’s national security and intelligence activities to ensure that they are lawful, reasonable and necessary. NSIRA also hears public complaints regarding key national security agencies and their activities.
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency, consistent with the 2022–23 Main Estimates. This quarterly report has been prepared using a special-purpose financial reporting framework (cash basis) designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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 authorities for specific purposes.
Highlights of the fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended September 30, 2022.
NSIRA spent approximately 23% of its authorities by the end of the second quarter, compared with 21% in the same quarter of 2021–22 (see graph 1).
Graph 1: Comparison of total authorities and total net budgetary expenditures, Q2 2022–23 and Q2 2021–22
Text version of Figure 1
Comparison of total authorities and total net budgetary expenditures, Q2 2022–23 and Q2 2021–22
2022-23
2021-22
Total Authorities
$29.7
$31.3
Q2 Expenditures
$3.6
$3.7
Year-to-Date Expenditures
$6.9
$6.5
Significant changes to authorities
As at September 30, 2022, Parliament had approved $29.7 million in total authorities for use by NSIRA for 2022–23 compared with $31.3 million as of September 30th, 2021, for a net decrease of $1.6 million or 5.1% (see graph 2).
Graph 2: Variance in authorities as at September 30, 2022
Text version of Figure 2
Variance in authorities as at September 30, 2022 (in millions)
Fiscal year 2021-22 total available for use for the year ended March 31, 2022
Fiscal year 2022-23 total available for use for the year ended March 31, 2023
Vote 1 – Operating
29.6
28.0
Statutory
1.7
1.7
Total budgetary authorities
31.3
29.7
*Details may not sum to totals due to rounding*
The decrease of $1.6 million in authorities is mostly explained by a gradual reduction in NSIRA’s ongoing operating funding.
Significant changes to quarter expenditures
The second quarter expenditures totalled $3.6 million for a decrease of $0.1 million when compared with $3.7 million spent during the same period in 2021–2022. Table 1 presents budgetary expenditures by standard object.
Table 1
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2022-23: expended during the quarter ended September 30, 2022
Fiscal year 2021-22: expended during the quarter ended September 30, 2021
Variance $
Variance %
Personnel
2,903
2,441
462
19%
Transportation and communications
70
24
46
192%
Information
0
15
(15)
(100%)
Professional and special services
578
840
(262)
(31%)
Rentals
39
17
22
129%
Repair and maintenance
33
205
(172)
(84%)
Utilities, materials and supplies
12
9
3
33%
Acquisition of machinery and equipment
4
158
(154)
(97%)
Other subsidies and payment
3
28
(25)
(90%)
Total gross budgetary expenditures
3,642
3,737
(95)
(3%)
Personnel
The increase of $462,000 in personnel is due to an increase in average salary and an increase of 2 full time equivalent (FTE) positions.
Transportation and communications
The increase of $46,000 relates to increased travel, as travel restrictions due to COVID-19 are no longer in place in Canada.
Information
The decrease of $15,000 is explained by a decrease in the use of communications consultants.
Professional and special services
The decrease of $262,000 is explained by the timing of payment for NSIRA’s IT support services. In fiscal year 2021-2022 most of the payments went through in the second quarter however in fiscal year 2022-2023, the majority of the payments went through in the first quarter.
Rentals
The increase of $22,000 is explained by an increase in the second quarter invoice for NSIRA’s Memorandum of Understanding with Treasury Board for support costs of our financial system.
Repair and maintenance
The decrease of $172,000 is due to fit-up costs for two projects that were completed in fiscal year 2021-2022.
Acquisition of machinery and equipment
The decrease of $154,000 is explained by a one-time computer equipment purchase in regard to a network extension in fiscal year 2021-2022.
Other subsidies and payments
The decrease of $25,000 is explained by a reduction in payroll system overpayments.
Significant changes to year-to-date expenditures
The year-to-date expenditures totalled $6.9 million for an increase of $0.4 million (7%) when compared with $6.5 million spent during the same period in 2021–22. Table 2 presents budgetary expenditures by standard object.
Table 2
Variances in expenditures by standard object(in thousands of dollars)
Fiscal year 2022-23: expended during the quarter ended September 30, 2022
Fiscal year 2021-22: expended during the quarter ended September 30, 2021
Variance $
Variance %
Personnel
5,249
4,753
495
10%
Transportation and communications
114
37
77
208%
Information
5
17
(12)
(71%)
Professional and special services
1,424
1,036
388
37%
Rentals
49
17
32
188%
Repair and maintenance
64
213
(149)
(70%)
Utilities, materials and supplies
28
12
16
133%
Acquisition of machinery and equipment
13
374
(361)
(97%)
Other subsidies and payment
1
40
(39)
(98%)
Total gross budgetary expenditures
6,946
6,499
447
7%
Personnel
The increase of $495,000 relates to an increase in average salary and an increase of 2 full time equivalent (FTE) positions.
Transportation and communications
The increase of $77,000 is due to increased travel, as travel restrictions due to COVID-19 are no longer in place in Canada.
Information
The decrease of $12,000 is explained by a decrease in the use of communications consultants and electronic subscriptions.
Professional and special services
The increase of $388,000 is mainly due to increases in information technology support services by the Communications Security Establishment ($173K), IT/Telecom consultants ($126K) and translations services ($91K).
Rentals
The increase of $32,000 is mainly explained by an increase in the second quarter invoice for NSIRA’s Memorandum of Understanding with Treasury Board for support costs of our financial system, and the billing for the rent of our temporary office swing space.
Repair and maintenance
The decrease of $149,000 is explained by a decrease in the fit-up costs as a result of the completion of two projects in fiscal year 2021-2022.
Utilities, materials and supplies
The increase of $16,000 is due to an increase in the purchasing of office supplies and unreconciled MasterCard payments.
Acquisition of machinery and equipment
The decrease of $361,000 is mainly explained by several one-time computer equipment purchases made in the first and second quarter of 2021-2022.
Other subsidies and payments
The decrease of $39,000 is explained by a reduction in payroll system overpayments and no salary advances issued over the last year.
Risks and uncertainties
The ability of NSIRA to access the information it needs to conduct its reviews and complaints investigations is closely tied to the capacity of the reviewed or investigated departments and agencies to respond to NSIRA’s demands. While most pandemic constraints have subsided, there continues to be recruitment challenges in a tight labour market. To address this challenge, NSIRA is experimenting with hybrid workplace approaches, launching internal career development programs and focusing on onboarding practices to attract and retain talent.
NSIRA is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls.
Mitigation measures for the risks outlined above have been identified and are factored into NSIRA’s approach and timelines for the execution of its mandated activities.
Significant changes in relation to operations, personnel and programs
There have been no new Governor-in-Council appointments during the second quarter.
There have been no changes to the NSIRA Program.
Approved by senior officials:
John Davies Deputy Head
Pierre Souligny Chief Financial Officer
Appendix
Statement of authorities (Unaudited)
(in thousands of dollars)
Fiscal year 2022–23
Fiscal year 2021–22
Total available for use for the year ending March 31, 2023 (note 1)
Used during the quarter ended September 30, 2022
Year to date used at quarter-end
Total available for use for the year ending March 31, 2022 (note 1)
Used during the quarter ended September 30, 2021
Year to date used at quarter-end
Vote 1 – Net operating expenditures
27,931
3,210
6,082
29,615
3,311
5,647
Budgetary statutory authorities
Contributions to employee benefit plans
1,728
432
864
1,705
426
852
Total budgetary authorities (note 2)
29,659
3,642
6,946
31,319
3,737
6,499
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
Departmental budgetary expenditures by standard object (unaudited)
(in thousands of dollars)
Fiscal year 2022–23
Fiscal year 2021–22
Planned expenditures for the year ending March 31, 2022 (note 1)
Expended during the quarter ended September 30, 2021
Year to date used at quarter-end
Planned expenditures for the year ending March 31, 2021
Expended during the quarter ended September 30, 2020
Year to date used at quarter-end
Expenditures
Personnel
13,245
2,903
5,248
13,222
2,441
4,753
Transportation and communications
597
70
144
673
24
37
Information
372
0
5
375
15
17
Professional and special services
4,914
578
1,424
7,029
840
1,036
Rentals
271
39
49
188
17
17
Repair and maintenance
9,722
33
64
8,737
205
213
Utilities, materials and supplies
173
12
28
103
9
12
Acquisition of machinery and equipment
232
4
13
991
158
12
Other subsidies and payments
133
3
1
0
28
40
Total gross budgetary expenditures
(note 2)
29,659
3,642
6,946
31,319
3,737
6,499
Note 1: Includes only authorities available for use and granted by Parliament as at quarter-end.
Note 2: Details may not sum to totals due to rounding.
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