2014-2015 - 3rd Quarter - Quarterly Financial Report

I. Statement outlining results, risks and significant changes in operations, personnel and program for the quarter ended December 31, 2014

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 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 2014-15 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.

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

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

Statement of Authorities

As at December 31, 2014, the Board's total authorities available for use has decreased when compared to the same quarter of 2013-14 to $11.38 million. Actual YTD expenditures at the end of the third quarter showed a decrease of 10.5%, from 3.07 million in 2013-14 to $2.75 million in 2014-15. Expenditures in all categories have decreased with the exception of Utilities, materials and supplies.

Figure 1 - Third 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, 2013-14 and 2014-15, a blue rectangular bar representing net budgetary authority and the red rectangular bar representing expenditures for the quarter ending December 31st. The chart shows that VRAB's budget was 11.9 million in 2013-14 and is 11.38 million in 2014-15 and that the expenditures for the quarter ending December 31 were 3.08 million in 2013-14 and 2.75 million in 2014-15.

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 third quarter are equivalent to 25% of authorities available for use.

Most standard object category expenditures are lower than prior year spending trends. Significant to note is the personnel category decrease of $268K due to a reduced workforce resulting from retirements and continued Human Resource efficiencies. Also included is $294 thousand in the Other Subsidies and Payments category due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada.

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.

Context: The 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 control.

The Board has an Integrated Business and Human Resources Plan and holds quarterly meetings to take into account operational priorities, human and financial resources, and performance measures. VRAB recruits new employees, as required, to replace departing staff to ensure adequate operational support to the redress process. Authorities and expenditures are monitored regularly with 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:

Financial Statements

Statement of Authorities (unaudited)

Quarterly Financial Report for the Quarter Ended December 31, 2013

Fiscal year 2013-14

(in thousands of dollars)	Total available for use for the year ending March 31, 2014*	Expended during the quarter ended December 31, 2013	Year to date used at quarter-end
Vote 1 - Veterans Review and Appeal Board Operating expenditures	10,437	2,684	7,496
Statutory authorities - Contributions to Employee Benefit Plans - Program	1,562	391	1,171
Total Budgetary authorities	11,999	3,075	8,667
Non-budgetary authorities	-	0	0
Total Authorities	11,999	3,075	8,667

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

Quarterly Financial Report for the Quarter Ended December 31, 2014

Fiscal year 2014-15

(in thousands of dollars)	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended December 31, 2014	Year to date used at quarter-end
Vote 1 - Veterans Review and Appeal Board Operating expenditures	9,979	2,401	7,177
Statutory authorities - Contributions to Employee Benefit Plans - Program	1,410	352	1,057
Total Budgetary authorities	11,389	2,753	8,234
Non-budgetary authorities	0	0	0
Total Authorities	11,389	2,753	8,234

*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 December 31, 2013

Fiscal year 2013-14

Expenditures (in thousands of dollars)	Total available for use for the year ending March 31, 2014*	Used during the quarter ended December 31, 2013	Year to date used at quarter-end
01 Personnel	10,578	2,731	7,777
02 Transportation and communications	859	214	544
03 Information	3	3	17
04 Professional and special services	395	95	201
05 Rentals	26	4	16
06 Repair and maintenance	28	5	37
07 Utilities, materials and supplies	73	8	32
08 Acquisition of land, buildings and works	0	0	0
09 Acquisition of machinery and equipment	37	15	43
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	11,999	3,075	8,667
Less Revenues netted against expenditures
Total Revenues netted against expenditures:	0	0	0
Total net budgetary expenditures	11,999	3,075	8,667

Quarterly Financial Report for the quarter ended December 31, 2014

Fiscal year 2014-15

Expenditures (in thousands of dollars)	Total available for use for the year ending March 31, 2015*	Used during the quarter ended December 31, 2014	Year to date used at quarter-end
01 Personnel	9,956	2,463	7,119
02 Transportation and communications	609	201	600
03 Information	8	1	6
04 Professional and special services	337	67	146
05 Rentals	15	1	12
06 Repair and maintenance	28	3	4
07 Utilities, materials and supplies	65	11	32
08 Acquisition of land, buildings and works	0	0	0
09 Acquisition of machinery and equipment	71	6	21
10 Transfer payments	0	0	0
11 Public debt charges	0	0	0
12 Other subsidies and payments	300	0	294
Total gross budgetary expenditures	11,389	2,753	8,234
Less Revenues netted against expenditures
Total Revenues netted against expenditures:	0	0	0
Total net budgetary expenditures	11,389	2,753	8,234