Quarterly Financial Report for the Quarter Ended September 30, 2023
Statement outlining results, risks and significant changes in operations, personnel and program
On this page
- List of charts
- List of tables
- List of acronyms and abbreviations
- Introduction
- Highlights of fiscal quarter and fiscal year-to-date results
- Risks and uncertainties
- Significant changes in relation to operations, personnel and programs
- Annex A: Statement of Authorities (unaudited)
- Annex B: Budgetary expenditures by standard object (unaudited)
List of charts
List of tables
- Table 1: Cumulative variance in authorities available for use in 2023-24 in comparison to 2022-23 (in thousands of dollars)
- Table 2: Expenditure of fiscal quarter (in thousands of dollars)
- Table 3: Expended by standard object at quarter end (in thousands of dollars)
- Table 4: Statement of Authorities (unaudited) (in thousands of dollars)
- Table 5: Departmental budgetary expenditures by standard object (unaudited) (in thousands of dollars)
List of acronyms and abbreviations
- CA
- Chartered Accountant
- CPA
- Chartered Professional Accountant
- DNA
- Deoxyribonucleic acid
- IT
- Information technology
- RCMP
- Royal Canadian Mounted Police
1. Introduction
This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. The report should be read in conjunction with the Main Estimates for 2023-24. The quarterly report has not been subject to an external audit or review.
Mandate
The Minister of Public Safety is the minister responsible for the Royal Canadian Mounted Police. The responsibilities of the RCMP are set out in section 18 of the Royal Canadian Mounted Police Act. The RCMP's mandate is multi-faceted, it includes preventing and investigating crime; maintaining peace and order; enforcing laws; contributing to national security; ensuring safety of state officials, visiting dignitaries and foreign missions; and providing vital operational support services to other police and law enforcement agencies within Canada and abroad.
Further information on the mandate, roles, responsibilities and programs of the RCMP can be found in the Main Estimates (Part II of Estimates) and the Departmental Plan and Departmental Results Report (Part III of Estimates).
Basis of presentation
This quarterly report has been prepared by management using the expenditure basis of accounting. The accompanying Statement of Authorities includes the RCMP's spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and Supplementary Estimates (A) and allotment adjustments for Operating and Capital carry forwards. 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 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 authority for specific purposes.
The RCMP uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on a cash expenditure basis.
The RCMP is funded through annual appropriations and is, therefore, impacted by any changes in funding approved through Parliament. In addition, it receives a significant portion of funding through vote netted revenue from the provision of policing services to provinces, territories, municipalities and first nations communities, as well as from cost sharing agreements with provinces and territories for the provision of DNA analysis by the RCMP. The RCMP also receives vote netted revenue authorities to bill Parliamentary Protective Service for the provision of security services throughout the Parliamentary precinct and the grounds of Parliament Hill and for the administration of the RCMP's Pension Plan.
The RCMP's authorities are allocated in a number of discrete envelopes with varying sources of funds. A number of Special Purpose Allotments have been created over the years to manage the various programs and/or initiatives.
2. Highlights of the fiscal quarter and fiscal year-to-date results
The following section provides financial results and explanations for the quarter ended September 30, 2023 as compared to the quarter ended September 30, 2022. The following graph illustrates the net budgetary authorities and expenditures for the quarter ended September 30, 2023, along with comparative figures for the quarter ended September 30, 2022, for the department's combined Vote 1 - Operating, Vote 5 - Capital, Vote 10 - Grants and Contributions and statutory elements.
Chart 1: Highlights of the fiscal quarter and the fiscal year-to-date
| 2023-24 | 2022-23 | |
|---|---|---|
| Net budgetary authorities | $4,814 million | $4,393.7 million |
| Year to date | $2,253.4 million | $2,417.3 million |
| Second quarter expenditures to date | $813.3 million | $1,150.1 million |
Significant changes to authorities
For the period ending September 30, 2023, the RCMP has $4,814.0 million in total authorities. This amount includes the Main Estimates, Supplementary Estimates (A), Operating and Capital Carry Forwards and proceeds from the disposal of Crown assets.
As illustrated in the table below, total authorities as at September 30, 2023 increased by $420.3 million compared to the second quarter of fiscal 2022-23.
| Based on the end of the second quarter (September) | Total authorities | Year over year variance | ||
|---|---|---|---|---|
| 2023-24 | 2022-23 | Authorities | Percentage | |
| Gross operating | 5,252,266 | 4,873,270 | 378,996 | 8% |
| Less: Vote netted revenues | 2,032,365 | 1,771,565 | 260,800 | 15% |
| Vote 1 - Net operating | 3,219,901 | 3,101,705 | 118,196 | 4% |
| Vote 5 - Capital | 359,762 | 336,144 | 23,618 | 7% |
| Vote 10 - Grants and contributions | 660,740 | 428,273 | 232,467 | 54% |
| Total voted authorities | 4,240,404 | 3,866,122 | 374,282 | 10% |
| Pensions and other employee benefits - Members of the Force | 483,366 | 455,479 | 27,887 | 6% |
| Contributions to employee benefit plans (public servants) | 84,830 | 66,826 | 18,004 | 27% |
| Pensions under the Royal Canadian Mounted Police Pension Continuation Act | 5,000 | 5,000 | 0% | |
| Proceeds from the disposal of Crown assets under the Surplus Crown Assets Act | 432 | 295 | 137 | 46% |
| Total statutory authorities | 573,628 | 527,600 | 46,028 | 9% |
| Total budgetary authorities | 4,814,032 | 4,393,722 | 420,310 | 10% |
Table 1 footnotes
- Table 1 footnote 1
-
Totals may not add due to rounding.
Explanation of changes in voted and statutory authorities
Vote 1 - Gross operating
The organization's Vote 1 increased by $379 million compared to the second quarter of 2022-23, mainly due to:
- An increase of $260.8 million in Vote Netted Revenues as a result of higher ongoing collections from Contract Policing Partners resulting from the National Police Federation collective bargaining.
- An increase of $78.5 million in funding for occupational and supplemental health costs for Members as designated under the Royal Canadian Mounted Police Act.
- An increase of $19.8 million in compensation adjustments for public service employees and members of the RCMP.
- An increase of $4.9 million in funding related to the organisation's Operating Budget Carry Forward.
- A net increase of $15.0 related to following projects and initiatives:
- Increase of $13.5 million for aviation safety and security modernisation initiatives.
- Increase of $11.5 million in funding to address systemic racism in the RCMP.
- Increase of $6.3 million in funding for the renewal of the federal framework for the legalization and regulation of cannabis.
- Increase of $5.8 million in funding to address the Freedom Convoy and Emergencies Act related activities including public inquiries, parliamentary studies, Access to Information requests, criminal or civil proceedings, and conduct security investigations
- Decrease of $9.7 million in funding for Canada's firearm control framework.
- Decrease of $9.0 million in funding to provide a national body-worn camera program for frontline. officers to improve public transparency and accountability of the Royal Canadian Mounted Police.
- Decrease of $3.4 million in funding to other previously approved and new initiatives.
Vote netted revenues
- The organization's Vote Netted Revenues authority increased by $260.8 million compared to the second quarter of 2022-23 as a result of anticipated higher ongoing collections from Contract Policing Partners resulting from the National Police Federation collective bargaining.
Vote 5 - Gross capital
The organization's Vote 5 increase of $23.6 million, compared to second quarter of 2022-23, mainly due to:
- An increase of $20.8 million in funding for real property and movable assets, as a result of a reprofile to address supply chain delays.
- An increase of $11.0 million in funding to implement the National Cybercrime Solution Information Management and Information Technology Project.
- An increase of $2.2 million in funding related to the organisations Capital Budget Carry Forward
- A decrease of $7.8 million in funding in support of ensuring security and prosperity in the digital age initiative.
- A decrease of $2.6 million in funding to other previously approved initiatives.
Vote 10 - Grants and contributions
The organization's Vote 10 increase of $232.5 million, compared to second quarter of 2022-23, mainly due to:
- A net increase of $229.0 million in funding to compensate members of the Royal Canadian Mounted Police for injuries received in the performance of duty.
- An increase of $3.1 million in contribution funding to enhance Canada's firearms control framework.
- An increase of $0.4 million in grant funding to address systemic racism and discrimination in the Royal Canadian Mounted Police.
Statutory (Employee Benefits Plan)
The organization's Employee Benefits Plan authority increased by $46.0 million compared to the second quarter of 2022-23, mainly due to:
- An increase of $38.7 million in Employee Benefit Plans as a result of changes to collective agreements, changes in the attribution of RCMP members and Public Service Employees costs, as well as changes in their respective rates.
- An increase of $5.7 million in Public Service Employees and Members of the Force Employee Benefits Plan related to new and previously approved initiatives.
- An increase of $1.5 million related to Compensation adjustments for public service employees and members of the RCMP.
- An increase of $0.1 million related to the Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act.
Explanation of significant variances from previous year expenditures
As demonstrated in table 2 below, the total year-to-date expenditures, for the period ended September 30, 2023, have decreased by $163.9 million (or 7%) compared to previous year.
| Expenditures during the quarter ended September 30, 2023 | 2023-24 | 2022-23 | Variance | Percentage |
|---|---|---|---|---|
| Vote 1 - Net Operating expenditures | 1,603,200 | 1,831,760 | (228,560) | (12%) |
| Vote 5 - Capital expenditures | 106,654 | 83,736 | 22,918 | 27% |
| Vote 10 - Grants and contributions | 291,962 | 290,607 | 1,355 | 0% |
| Budgetary statutory authorities | 251,545 | 211,188 | 40,357 | 19% |
| Total authorities | 2,253,362 | 2,417,291 | (163,929) | (7%) |
Table 2 footnotes
- Table 2 footnote 1
-
Totals may not add due to rounding.
The decrease in net budgetary expenditures ($164 million) is mainly due to the timing of revenue collections from Contract Policing Partners ($324.6 million). This decrease is offset by increases in many of the other standard objects ($160.7 million). The majority of the increases are related to higher personnel and employee benefit plan costs as a result of full time equivalents growth coupled with the ratification of new collective bargaining agreements. Additionally, Professional and special services increased as a result of incremental RCMP Member health costs.
The RCMP continues to experience increases in overall expenditures related to the implementation of newly approved initiatives and mandated responsibilities.
Lastly, supply chain issues and the cost of inflation has resulted in a steep rise in the price of goods and services. It is observed that multiple standard objects had significant increases in year-over-year expenditures primarily for these reasons.
Expenditures by standard object at quarter end (in thousands of dollars)
| Standard objects | 2023-24 | 2022-23 | Variance | Percentage |
|---|---|---|---|---|
| Personnel | 2,073,921 | 1,985,791 | 88,130 | 4% |
| Transportation and communications | 125,537 | 112,822 | 12,715 | 11% |
| Information | 1,846 | 1,292 | 554 | 43% |
| Professional and special services | 303,807 | 269,294 | 34,513 | 13% |
| Rentals | 61,219 | 53,231 | 7,988 | 15% |
| Repair and maintenance | 44,330 | 35,179 | 9,151 | 26% |
| Utilities, materials and supplies | 82,569 | 80,213 | 2,356 | 3% |
| Acquisition of land, buildings and works | 31,457 | 35,248 | (3,791) | (11%) |
| Acquisition of machinery and equipment | 104,770 | 85,424 | 19,346 | 23% |
| Transfer payments | 293,355 | 292,498 | 857 | 0% |
| Public debt charges | 274 | 292 | (18) | (6%) |
| Other subsidies and payments | 37,568 | 48,652 | (11,084) | (23%) |
| Total gross budgetary expenditures | 3,160,653 | 2,999,936 | 160,717 | 5% |
| Less: Revenues and other reductions | 907,291 | 582,645 | 324,646 | 56% |
| Total net budgetary expenditures | 2,253,362 | 2,417,291 | (163,929) | (7%) |
Table 3 footnotes
- Table 3 footnote 1
-
Totals may not add due to rounding.
- Table 3 footnote 2
-
There is not a direct correlation between total expenditure and revenue trends as expenditures reflect total RCMP, whereas revenues are related primarily to contract policing activities.
Expenditure analysis by standard object
Personnel
The increase in expenditures by $88.1 million (or 4%) is attributed to a year-over-year increase in full time equivalents as well as higher pay expenditures for Regular Members and Public Servants. With the ratification of various collective agreements, the RCMP has seen year-over-year increases with regard to personnel expenditures, including associated employee benefits plan expenditures, through the second quarter of the fiscal year 2023-24 in comparison to 2022-23.
Transport and communications
The increase in expenditures by $12.7 million (or 11%) is mainly related to increases in the frequency and overall travel costs, as well as the rise in training costs and the timing of transactions in 2023-24.
Information
The increase in expenditures by $0.55 million (or 43%) is mainly attributed to the printing services for firearms communications regarding recent announcements and an increase in advertising and publication services due to increased effort in recruiting.
Professional and special services
The increase in expenditures by $34.5 million (or 13%) is mainly due to increased Member Health costs and Professional and Contracting services expenditures due to timing of invoice payments.
Rentals
The increase in expenditures by $8.0 million (or 15%) is mainly due to the increased cost of building rentals and the timing of invoices for service level agreements with Public Services and Procurement Canada.
Purchased repair and maintenance
The increase in expenditures by $9.2 million (or 26%) is mainly due to the various life cycle costs for assets, including Heating Ventilation and Air Conditioning, vehicle maintenance and structural repairs.
Acquisition of land, buildings and works
The decrease in expenditures by $3.8 million (or 11%) is mainly due to the timing of payments and the phases related to various capital projects.
Acquisition machinery and equipment
The increase in expenditures by $19.3 million (or 23%) is mainly due to incremental costs for the acquisition of vehicles, and increased costs related to equipment and office expenses, offset by decreases in software and communications equipment acquisitions.
Other subsidies and payments
The decrease in expenditures by $11.1 million (or 23%) is mainly due to the timing differences associated with clearing suspense accounts.
Revenues and other reductions
The increase in Vote netted revenues by $324.6 million (or 56%) is attributable to the timing of collections from contract partners year-over-year. The majority of first quarter invoices were collected by the end of second quarter this fiscal year versus third quarter last fiscal year.
3. Risks and uncertainties
The RCMP's risk environment, as noted in the 2021-24 Corporate Risk Profile, continues to help guide funding decisions. Five risks in particular have been identified with a High-risk rating:
- Recruitment, retention and modernized skillsets - the Risk that the RCMP will be unable to adequately attract and retain diverse groups of employees with the appropriate skills, attributes, characteristics and mindset to police the crimes of the future; and
- Expanding commitments - Risk that the RCMP's commitments continue to expand without sufficient resources, impeding its ability to deliver on priorities and core services.
- IT Infrastructure and Systems - the Risk that the RCMP's IT infrastructure, systems and applications will become increasingly inadequate to support the administrative and operational requirements of the organization.
- Technology - Risk that the RCMP may not have the technology to sufficiently combat the changing nature of crime.
- Employee wellness - Maximize opportunities to promote and optimize employee wellness as well as support employees who experience stress, trauma or serious injury as a result of the nature of policing work and the environments in which they operate.
Other risks noted in the Corporate Risk Profile are: strategic decision-making; transformation resistance; and, intelligence and information sharing.
Additionally, the operational nature of the RCMP is impacted by inflationary increases to cost of goods and services, and due to the size of the organization these types of increases have significant impacts on expenditures.
Quarterly monitoring of all identified corporate risks and their mitigations is ongoing.
4. Significant changes in relation to operations, personnel and programs
By the end of the second quarter, the following change to the senior ranks of the department has occurred:
Rouben Khatchadourian, previously the Vice-President of Strategic Policy for Public Health Agency of Canada, became the Chief Strategic Policy and External Relations Officer for the Royal Canadian Mounted Police.
Approved by senior officials
Approved by:
_____________________________
Mike Duheme, Commissioner
Approved by:
_____________________________
Samantha Hazen, CPA, CA, Chief Financial Officer
Ottawa, Canada
Annex A: Statement of Authorities (unaudited)
| Fiscal year 2023-24 | Fiscal year 2022-23 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2024 Table 4 footnote 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 Table 4 footnote 1 | Used during the quarter ended September 30, 2022 | Year-to-date used at quarter-end | |
| Gross operating expenditures | 5,252,266 | 1,296,721 | 2,510,519 | 4,873,270 | 1,226,356 | 2,414,405 |
| Less: vote netted revenues | 2,032,365 | 800,729 | 907,318 | 1,771,565 | 383,839 | 582,645 |
| Vote 1 - Net operating expenditures | 3,219,901 | 495,992 | 1,603,201 | 3,101,705 | 842,517 | 1,831,760 |
| Vote 5 - Capital expenditures | 359,762 | 64,688 | 106,654 | 336,144 | 56,298 | 83,736 |
| Vote 10 - Grants and contributions | 660,740 | 146,152 | 291,962 | 428,273 | 145,412 | 290,607 |
| Pensions and other employee benefits - Members of the Force | 483,366 | 84,872 | 207,967 | 455,479 | 88,288 | 176,131 |
| Contributions to employee benefit plans (public servants) | 84,830 | 20,883 | 41,766 | 66,826 | 16,466 | 32,932 |
| Pensions under the Royal Canadian Mounted Police Pension Continuation Act | 5,000 | 682 | 1,392 | 5,000 | 907 | 1,891 |
| Refunds of amounts credited to revenues in previous years | 0 | 27 | 28 | 0 | 6 | 8 |
| Proceeds from the disposal of Crown assets under the Surplus Crown Assets Act | 432 | 0 | 392 | 295 | 226 | 226 |
| Court awards | 0 | 0 | 0 | 0 | 0 | 0 |
| Statutory authorities | 573,628 | 106,464 | 251,545 | 527,600 | 105,893 | 211,188 |
| Total budgetary authorities | 4,814,032 | 813,296 | 2,253,362 | 4,393,722 | 1,150,120 | 2,417,291 |
Table 4 footnotes
- Table 4 footnote 1
-
Includes only authorities available for use and granted by Parliament at quarter-end as well as a statutory authority for proceeds from the disposal of Crown assets.
Annex B: Budgetary expenditures by standard object (unaudited)
| Fiscal year 2023-24 | Fiscal year 2022-23 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2024 | 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 | 4,245,899 | 1,040,913 | 2,073,921 | 3,906,864 | 1,007,720 | 1,985,791 |
| Transportation and communications | 243,175 | 58,637 | 125,537 | 230,931 | 55,049 | 112,822 |
| Information | 4,163 | 1,002 | 1,846 | 3,659 | 854 | 1,292 |
| Professional and special services | 595,115 | 156,526 | 303,807 | 567,273 | 131,439 | 269,294 |
| Rentals | 160,032 | 33,365 | 61,219 | 150,832 | 26,933 | 53,231 |
| Repair and maintenance | 125,413 | 26,272 | 44,330 | 119,398 | 19,879 | 35,179 |
| Utilities, materials and supplies | 176,701 | 44,771 | 82,569 | 167,836 | 41,618 | 80,213 |
| Acquisition of land, buildings and works | 127,305 | 20,977 | 31,457 | 115,219 | 20,382 | 35,248 |
| Acquisition of machinery and equipment | 337,360 | 61,427 | 104,770 | 317,913 | 49,632 | 85,424 |
| Transfer payments | 665,740 | 146,835 | 293,355 | 433,273 | 146,319 | 292,498 |
| Public debt charges | 985 | 137 | 274 | 624 | 146 | 292 |
| Other subsidies and payments | 164,506 | 23,137 | 37,568 | 151,465 | 33,988 | 48,652 |
| Total gross budgetary expenditures | 6,846,396 | 1,613,999 | 3,160,653 | 6,165,287 | 1,533,959 | 2,999,936 |
| Less revenues netted against expenditures | 0 | 0 | 0 | 0 | 0 | 0 |
| Vote netted revenues | 2,032,365 | 800,703 | 907,291 | 1,771,565 | 383,839 | 582,645 |
| Total revenues netted against expenditures | 2,032,365 | 800,703 | 907,291 | 1,771,565 | 383,839 | 582,645 |
| Total net budgetary expenditures | 4,814,032 | 813,296 | 2,253,362 | 4,393,722 | 1,150,120 | 2,417,291 |
- Date modified: