Quarterly Financial Report - For the quarter ended September 30, 2019

Table of Contents

Introduction

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 2019-20 Main Estimates.

A summary description of the National Security and Intelligence Review Agency (NSIRA) program activities can be found in Part II of the Main Estimates. For information on the mandate of NSIRA, please visit its website at http://www.nsira-ossnr.gc.ca.

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

Mandate

On June 21, 2019 the National Security and Intelligence Review Agency Act received Royal Assent as part of former Bill C-59, the National Security Act. This new legislation, which came into force on July 12, 2019, significantly alters Canada's review framework for national security in Canada, and builds on earlier decisions to create a National Security and Intelligence Committee of Parliamentarians (NSICOP). The NSIRA replaces Security Intelligence Review Committee (SIRC), which reviewed the Canadian Security Intelligence Service (CSIS) and it also replaces the Office of the CSE Commissioner (OCSEC), which reviewed the Communications Security Establishment (CSE).

The National Security and Intelligence Review Agency (NSIRA) is an independent and external review body which reports to Parliament. The NSIRA reviews all Government of Canada national security and intelligence activities to ensure that they are lawful, reasonable and necessary. The NSIRA also hears public complaints regarding key national security agencies and activities.

The NSIRA will report its findings and recommendations on an annual basis to Parliament. The NSIRA's first annual public report will be tabled in 2020. The NSIRA may also report to Parliament more frequently should urgent or important matters arise. The NSIRA is also required to produce an annual report for Parliament on the disclosure of information under the Security of Canada Information Disclosure Act.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department's spending authorities granted by Parliament and those used by the department, consistent with the 2019-20 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 moneys can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

NSIRA uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of 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, 2019.

NSIRA spent approximately 34% of its authorities by the end of the second quarter, compared to 40% in the same quarter of 2018-19 (see graph 1 below).

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q2 2019-2020 and 2018-2019 (in millions of dollars)
2019-20 2018-19
Total Authorities 5.2 5.1
Q2 Expenditures 1.0 1.1
Year-To-Date Expenditures 1.8 2.1

Significant changes to authorities

As per graph 2 below as at September 30, 2019 and Table 1, presented at the end of this document, there was no change in the total authorities available for use by NSIRA compared to previous year, at $5.3 million.

Graph 2: Variance in Authorities as at September 30, 2019 (in millions of dollars)
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2019-19 total available for use for the year ended 31-Mar-19 4.8 0.5 5.3
Fiscal year 2019-20 total available for use for the year ended 31-Mar-20 4.8 0.5 5.3

Significant changes to quarter expenditures

The second quarter expenditures totaled $1,001M for a decrease of $112K (10%) when compared to $1,113M spent during the same period in 2018-19. Table 1 below presents budgetary expenditures by standard object.

Table 1 - Budgetary expenditures by standard objectTable Note *
Material Variances to Expenditures by Standard Object
(in thousands of dollars)
Fiscal year 2019-20  Expended during  the quarter ended
30‐September‐2019
Fiscal year 2018-19  Expended during  the quarter ended
30‐September‐2018
Variance $ Variance %
Personnel 761 890 (129) (14%)
Transportation and communications 55 94 (39) (41%)
Information 0 0 0 0%
Professional and special services 91 77 14 18%
Rentals 14 5 9 180%
Repair and maintenance 6 4 2 50%
Utilities, materials and supplies 3 1 2 200%
Acquisition of machinery and equipment 23 13 10 77%
Other subsidies and payments 47 29 18 62%
Total gross budgetary expenditures 1,001 1,113 (112) (10%)

Table Notes

Table Note *

Details may not add to totals due to rounding

Return to table note *

Personnel

The decrease of $129,000 is mainly related to the timing of salary recovery invoices.

Rentals

The increase of $9,000 is mainly explained by newly acquired Software Licenses.

Acquisition of machinery and equipment

The increase of $10,000 is mainly explained by growing operations of NSIRA, which necessitated procurement of additional equipment.

Other Subsidies and payments

This increase of $18,000 is mostly due to multiple Salary Overpayments processed in the second quarter of 2019-20.

Significant changes to year-to-date expenditures

The year-to-date expenditures totaled $1,802M for a decrease of $336K (16%) when compared to $2,138M spent during the same period in 2018-19. Table 2 below presents budgetary expenditures by standard object.

Table 2 - Budgetary expenditures by standard objectTable Note *
Material Variances to Expenditures by Standard Object
(in thousands of dollars)
YTD Expenditures as of
30‐September‐2019
YTD Expenditures as of
30‐September‐2018
Variance $ Variance %
Personnel 1,310 1,583 (273) (17%)
Transportation and communications 85 141 (56) (40%)
Information 4 28 (24) (86%)
Professional and special services 178 180 (2) (1%)
Rentals 39 22 17 77%
Repair and maintenance 7 19 (12) (63%)
Utilities, materials and supplies 7 3 4 133%
Acquisition of machinery and equipment 28 113 (85) (75%)
Other subsidies and payments 144 49 95 194%
Total gross budgetary expenditures 1,802 2,138 (336) (16%)

Table Notes

Table Note *

Details may not add to totals due to rounding

Return to table note *

Personnel

The decrease of $273,000 is mainly related to multiple Salary Overpayments processed in the first two quarters of 2019-20.

Transportation and Communications

The decrease of $56,000 is mainly explained by the employee relocation costs related to an international secondment agreement in 2018.

Information

The decrease of $24,000 is mainly explained by the earlier production of the SIRC Annual Report in June 2018.

Rentals

The increase of $17,000 is mainly explained by newly acquired Software Licenses.

Repair and Maintenance

The decrease of $12,000 is due to SIRC's end of year 2017-18 relocation project, as well as minor repairs and maintenance to the new SIRC office in the beginning of 2018-19.

Utilities, materials and supplies

The increase of $4,000 is explained by increased need of supplies due to the growing operations of NSIRA.

Acquisition of machinery and equipment

The decrease of $85,000 is mainly related to the Network Infrastructure upgrade project in 2018-19.

Other Subsidies and payments

The increase of $95,000 is mainly explained by multiple Salary Overpayments processed in the first two quarters of 2019-20.

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Risks and Uncertainties

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the 2019-20 Main Estimates (full supply for these Estimates were released in June 2019).

NSIRA continues to adapt its operations to the rapid pace of change in the security intelligence environment.

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 which were implemented in 2016.

Significant Changes in Relation to Operations, Personnel and Programs

On June 21, 2019 the bill C-59 to create the National Security and Intelligence Review Agency, or NSIRA, received Royal Assent. NSIRA is responsible for reviewing intelligence and national security activities across government. This new expanded mandate is expected to bring big changes to Operations and Personnel in the years to come.

NSIRA replaces SIRC, which reviewed the Canadian Security Intelligence Service (CSIS) and it also replaces the Office of the CSE Commissioner (OCSEC), which reviewed the Communications Security Establishment (CSE). NSIRA also inherits the complaints investigation functions of SIRC, which was responsible for hearing public complaints concerning the actions of CSIS, and complaints related to the Government of Canada security clearance process, as well as specific matters and reports referred under the Citizenship Act and the Canadian Human Rights Act. NSIRA's complaint mandate has also expanded to include hearing public complaints regarding the CSE, as well as certain complaints regarding the Royal Canadian Mounted Police (RCMP) where there is a national security nexus.

As SIRC transitions to NSIRA in 2019–20, it will need to engage in aggressive hiring efforts to discharge its expanded mandate.

NSIRA accessed funds through the 2019-20 Main Estimates.

Approved by Senior Officials:


Original signed by
_________________________
John Davies,
Executive Director

Ottawa, Canada
Date: November 22, 2019


Original signed by
_________________________
Chantelle Bowers
A/Deputy Executive Director and
Senior General Counsel
A/Chief Financial Officer

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Appendix

Table 1: Statement of Authorities (unaudited) Table Note 2
(In thousands of dollars) Fiscal year 2019–2020 Fiscal year 2018–2019
Total available for use for the year ending March 31, 2020 Table Note 1 Used during the quarter ended September 30, 2019 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2019 Table Note 1 Used during the quarter ended September 30, 2018 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures 4,809 869 1,538 4,804 981 1,875
Budgetary statutory authorities -
Contributions to employee benefit plans
526 131 263 527 132 263
Total budgetary authorities 5,334 1,000 1,801 5,331 1,113 2,138
Total Authorities 5,334 1,000 1,801 5,331 1,113 2,138

Table Notes

Table Note 1

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

Return to table note 1

Table Note 2

Details may not add to totals due to rounding

Return to table note 2

Table Note 3

Pursuant to Bill C‐59 effective July 12, 2019, National Security and Intelligence Review Agency was created. It replaces the Security Intelligence Review Committee. Final expenditures for fiscal year 2019‐20 of the former Security Intelligence Review Committee will be determined at year-end.

Return to table note 3

Table 2: Departmental budgetary expenditures by Standard Object (unaudited) Table Note 2
(In thousands of dollars) Fiscal year 2019–2020 Fiscal year 2018–2019
Planned expenditures for the year ending March 31, 2020 Table Note 1 Expended during the quarter ended September 30, 2019 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2019 Table Note 1 Expended during the quarter ended September 30, 2018 Year-to-date used at quarter-end
Expenditures
Personnel 4,142 761 1,310 3,989 890 1,583
Transportation and communications 232 55 85 223 94 141
Information 76 - 4 73 - 28
Professional and special services 465 91 178 644 77 180
Rentals 70 14 39 67 5 22
Repair and maintenance 4 6 7 3 4 19
Utilities, materials and supplies 29 3 7 28 1 3
Acquisition of land, buildings and works - - - - - -
Acquisition of machinery and equipment 315 23 28 303 13 113
Other subsidies and payments 2 47 144 2 29 49
Total gross budgetary expenditures 5,334 1,000 1,801 5,331 1,113 2,138
Total Authorities 5,334 1,000 1,801 5,331 1,113 2,138

Table Notes

Table Note 1

Includes only Authorities available for use and granted by Parliament at quarter‐end

Return to table note 1

Table Note 2

Details may not add to totals due to rounding

Return to table note 2

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