2013-2014 - 1st Quarter - Quarterly Financial Report

I. Statement outlining results, risks and significant changes in operations, personnel and program for the quarter ended June 30, 2013

1. 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 Treasury Board. This quarterly report should be read in conjunction with the Main Estimates.

The Veterans Review and Appeal Board (VRAB) is an independent, quasi-judicial tribunal that fulfills an important role within Canada's disability benefits system for Veterans, Canadian Armed Forces members, Royal Canadian Mounted Police members and their families. Throughout the year, in locations across the country, members hear and make decisions on applications for review and appeal of disability decisions rendered by Veterans Affairs Canada. As Canadians, they carry out this work with a strong sense of the responsibility inherent in the Board's mandate to those who have served – and continue to serve – their country. As adjudicators, they are often faced with difficult human situations and complex issues in making decisions.

The role of the Board is to determine whether the laws governing the disability benefits programs for Veterans and other applicants have been properly applied by Veterans Affairs Canada in individual cases. To accomplish this, they conduct hearings where they listen to applicants' testimony and/or arguments from representatives and consider new evidence; interpret and apply the legislation based on the evidence; and render written decisions with reasons for their rulings. In making these decisions, Board members are required by law to resolve any doubt in favour of applicants. While the Board is not able to rule favorably in all cases, it makes every effort to issue a fair and well-reasoned decision for each applicant. The Board's objective is to ensure that Canada's traditional Veterans, Canadian Armed Forces members and Veterans, Royal Canadian Mounted Police members, qualified civilians and their families receive the disability pensions, disability awards and other benefits to which they are entitled under the law.

A summary description of the Veterans Review and Appeal Board program activities can be found in found in Part II of the Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes VRAB's spending authorities granted by Parliament and those used by the Board, consistent with the Main Estimates for the 2013-14 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before monies 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.

As part of the departmental performance reporting process, the VRAB prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

Statement of Authorities

As at June 30, 2013, the Board's total authorities available for use have increased by $55 thousand, an increase of 0.4% when compared to the end of the same quarter of 2012-13. This increase is related to contributions to employee benefit plans. Actual YTD expenditures at the end of the first quarter showed an increase of 0.9%, from $2.69 million in 2012-13 to $2.71 million in 2013-14.

Figure 1 - First Quarter Expenditures Compared to Annual Authorities

Text Version

This image consists of a bar chart with the y axis broken down into two million dollar increments, the y axis indicating two fiscal years, 2012-13 and 2013-14, a blue rectangular bar representing net budgetary authority and the red rectangular bar representing expenditures for the quarter ending June 30th. The chart shows that VRAB's budget was 11.50 million in 2012-13 and is 11.56 million in 2013-14 and that the expenditures for the quarter ending June 30 were 2.69 million in 2012-13 and 2.71 million in 2013-14.

Statement of Departmental Budgetary Expenditures by Standard Object

In general, VRAB's expenditures are distributed equally throughout the year. This trend is consistent in this fiscal year, given that expenditures at the end of the first quarter are equivalent to 23% of authorities available for use.

Most standard object category expenditures are consistent with prior year spending trends. An exception to this includes an increase of $58 thousand in the Personnel category. This increase is mainly due to additional expenditures on personnel as a result of the requirement to make payments of severance and termination benefits.

3. Risks and Uncertainties

The Veterans Review and Appeal Board is funded through annual appropriations. As a result, its operations are impacted by any changes in funding approved through Parliament. There is a risk that VRAB's capacity to address emerging financial pressures will decrease, as a result of Budget 2010 or other centrally-imposed cost containment measures which require government departments and agencies to manage increased spending within existing reference levels.

Context: VRAB is the independent appeal tribunal for the disability pension and disability award programs administered by Veterans Affairs Canada (VAC). The Board was created by Parliament in 1995 to provide Veterans and other applicants with an independent avenue of appeal for disability decisions made by VAC, the Department. Applicants who are dissatisfied with their departmental decision have two levels of redress before VRAB: review and appeal. The Board also hears final appeals of War Veterans Allowance applications. As a service-oriented agency, the majority of VRAB's operating expenditures are salary based and demand-driven. Managing the demand for hearings is driven by a variety of factors over which VRAB has limited influence, including; societal trends where there is increased reliance on the Board to hear appeals. Overall, increasing litigation and the requirement for legal advice on complex issues is placing pressure on the Board's legal services and its ability to manage the demand.

As a means of managing this risk, VRAB monitors and adjusts its workload accordingly to avoid sudden unexpected increases or drops in demand. As required, departing Governor in Council appointees or departing staff members are replaced to ensure adequate human resources support to the redress process. The Board has also developed succession plans and extensive training programs to prepare its staff for the future. In addition, VRAB has a multi-year plan to proactively prioritize spending initiatives and address emerging pressure. Authorities and expenditures are monitored regularly through progress reports and with the engagement of senior management.

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

There have been no significant changes in relation to operations, personnel and programs over the last year.

5. Budget 2012 Implementation

Veterans Review and Appeal Board was not identified for savings in Budget 2012.

Approved by:

II. Financial Statements

Statement of Authorities (unaudited)

Quarterly Financial Report for the quarter ended June 30, 2012

Fiscal year 2012-13

(in thousands of dollars)	Total available for use for the year ending March 31, 2013*	Used during the quarter ended June 30, 2012	Year to date used at quarter-end
Vote 10 - Veterans Review and Appeal Board Operating expenditures	9,933	2,293	2,293
Statutory authorities - Contributions to Employee Benefit Plans - Program	1,568	392	392
Total Budgetary authorities	11,501	2,685	2,685
Non-budgetary authorities	-	0	0
Total Authorities	11,501	2,685	2,685

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

Quarterly Financial Report for the quarter ended June 30, 2013

Fiscal year 2013-14

(in thousands of dollars)	Total available for use for the year ending March 31, 2014*	Used during the quarter ended June 30 , 2013	Year to date used at quarter-end
Vote 10 - Veterans Review and Appeal Board Operating expenditures	9,995	2,320	2,320
Statutory authorities - Contributions to Employee Benefit Plans - Program	1,562	390	390
Total Budgetary authorities	11,557	2,710	2,710
Non-budgetary authorities	0	0	0
Total Authorities	11,557	2,710	2,710

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

Departmental budgetary expenditures by Standard Object (unaudited)

Quarterly Financial Report for the quarter ended June 30, 2012

Fiscal year 2012-13

Expenditures (in thousands of dollars)	Total available for use for the year ending March 31, 2013*	Used during the quarter ended June 30, 2012	Year to date used at quarter-end
01 Personnel	10,481	2,385	2,385
02 Transportation and communications	565	196	196
03 Information	4	0	0
04 Professional and special services	350	53	53
05 Rentals	19	2	2
06 Repair and maintenance	21	30	30
07 Utilities, materials and supplies	46	18	18
08 Acquisition of land, buildings and works	0	0	0
09 Acquisition of machinery and equipment	15	2	2
10 Transfer payments	0	0	0
11 Public debt charges	0	0	0
12 Other subsidies and payments	0	0	0
Total gross budgetary expenditures	11,501	2,685	2,685
Less Revenues netted against expenditures:
Total Revenues netted against expenditures:	0	-	-
Total net budgetary expenditures	11,501	2,685	2,685

Quarterly Financial Report for the quarter ended June 30, 2013

Fiscal year 2013-14

Expenditures (in thousands of dollars)	Total availalbe for use for the year ending March 31, 2014*	Used during the quarter ended June 30, 2013	Year to date used at quarter-end
01 Personnel	10,537	2,443	2,443
02 Transportation and communications	627	165	165
03 Information	2	0	0
04 Professional and special services	276	44	44
05 Rentals	18	1	1
06 Repair and maintenance	20	31	31
07 Utilities, materials and supplies	51	8	8
08 Acquisition of land, buildings and works	0	0	0
09 Acquisition of machinery and equipment	26	19	19
10 Transfer payments	0	0	0
11 Public debt charges	0	0	0
12 Other subsidies and payments	0	0	0
Total gross budgetary expenditures	11,557	2,710	2,710
Less Revenues netted against expenditures:
Total Revenues netted against expenditures:	0	0	0
Total net budgetary expenditures	11,557	2,710	2,710