Statement outlining results, risks and significant changes in operations, personnel and program

For the quarter ended June 30, 2011

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 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 favourably 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 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 2011-2012 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

The Board's quarterly and year-to-date spending are in line with that of the previous year and there are no significant variances in expenditures between years.

As can be seen in Figure 1, the VRAB has spent approximately 23% of its authorities in the first quarter. Given that the Board's most significant expense is salaries, the Board's spending is generally distributed equally throughout the year.

Figure 1 - First Quarter Expenditures Compared to Annual Authorities
Statement of Authorities

Comparison of Net Budgetary Authorities and Expenditures as of June 30, 2010 and June 30, 2011

  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, 2010-11 and 2011-12, 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 11.5 million in 2010-11 and is 11.5 million in 2011-12 and that the expenditures for the quarter ending June 30 were 2.7 million in 2010-11 and 2.6 million in 2011-12.

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. This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 27, 2011.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. The impact on departmental activities has been managed through the following actions and mitigation strategies: delays on planned staffing, restraints on O & M spending and use of video-conferencing to reduce travel expenditures. The Veterans Review and Appeal Board has estimated the impact of this government-wide initiative to be approximately $122K in 2011-12. The VRAB can accommodate the reduction in funding in 2011-12 without significantly impacting its operations. Management will continue to review various options to address the increasing reductions in funding for fiscal year 2012-13.

VRAB operates in an adjudicative environment where the volume of applications for hearings is difficult to predict. VRAB's expenditures are influenced by the number of Governor-in-Council members appointed and/or departing during the fiscal year, as well as the requirement to travel to approximately 30 locations to conduct review hearings; as well as other locations where there is sufficient demand. As legislated by sections 4 and 6 of the Veterans Review and Appeal Board Act, not more than 29 permanent members may be appointed by the Governor in Council and, based on the Board's workload, any number of temporary members. The Board's offices are centralized in Charlottetown where all staff are located to support the adjudicative process. Approximately one-half of the members are located in Charlottetown and the remainder are located in major cities across Canada. Appointing a full complement of GICs, requiring relocation assistance, could significantly increase expenditures and result in resource pressures that could require the department to seek additional funding from Parliament. The Board regularly apprises the Minister of its requirements for GICs based on the workload predictions. To identify and mitigate risks that may impact its budget, the Board has in place a continuous budget monitoring process, a governance and decision-making structure and an accountability regime. The Board has an Integrated Business and Human Resources Plan and holds quarterly business meetings to take into account operational priorities, human and financial resources and performance measures.

The Board's most significant expenditure is personnel, representing over 90% of its planned expenditures. Over the last few years, the Board has not had a full complement of GICs nor has it been required to absorb significant relocation expenses. An ongoing challenge for the VRAB is to anticipate appointments at a level sufficient to compensate for departures within budget. Given the Board's small size, the departure or hiring of several GICs in one quarter can have a significant impact on the quarter's expenditures.

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

Commencing April 1, 2010 the VRAB is now included in Schedule I.1 of the Financial Administration Act and established as a separate Department.

The change to becoming a small Department, has resulted in a significant increase on the demands of limited Corporate Services resources, to meet the full reporting requirements. It requires trying to do more with the same staff or finding additional resources for reallocation through efficiencies elsewhere in VRAB, in order to meet the burden of accountability and reporting.

Approved by:

James MacPhee, Acting Chair, Veterans Review and Appeal Board, Charlottetown, PE

Heather Parry, Chief Financial Officer Charlottetown, PE

Veterans Review and Appeal Board

Quarterly Financial Report

For the quarter ended June 30, 2011

Statement of Authorities (unaudited)

Fiscal year 2010-2011 (in thousands of dollars)
Category Total available for use for the year ending March 31, 2011 Footnote 1 Used during the quarter ended June 30, 2010 Year to date used at quarter-end
Vote 10 - Veterans Review and Appeal Board Operating expenditures 9,944 2,278 2,278
Budgetary statutory authorities 1,517 379 379
Total Budgetary authorities 11,461 2,657 5,657
Non-budgetary authorities - -
Total authorities 11,461 2,657 2,657
Fiscal year 2011-2012 (in thousands of dollars)
Category Total available for use for the year ending March 31, 2012 Footnote 1 Used during the quarter ended June 30, 2011 Year to date used at quarter-end
Vote 10 - Veterans Review and Appeal Board Operating expenditures 9,933 2,219 2,219
Budgetary statutory authorities 1,604 401 401
Total Budgetary authorities 11,537 2,620 2,620
Non-budgetary authorities - -
Total authorities 11,537 2,620 2,620

Veterans Review and Appeal Board

Quarterly Financial Report

For the quarter ended June 30, 2011

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2010-2011 (in thousands of dollars)
Category Planned expenditures for the year ending March 31, 2011 Expended during the quarter ended June 30, 2010 Year to date used at quarter-end
Expenditures:
01 Personnel 10,441 2,362 2,362
02 Transportation and communications 750 213 213
03 Information - - -
04 Professional and special services 100 62 62
05 Rentals - 2 2
06 Repair and maintenance 70 1 1
07 Utilities, materials and supplies 100 12 12
08 Acquisition of land, buildings and works - - -
09 Acquisition of machinery and equipment - 5 5
10 Transfer payments - - -
11 Public debt charges - - -
12 Other subsidies and payments - - -
Total gross budgetary expenditures 11,461 2,657 2,657
Less Revenues netted against expenditures:
Total Revenues netted against expenditures: - - -
Total net budgetary expenditures 11,461 2,657 2,657

Departmental budgetary expenditures by Standard Object (unaudited) (continued)

Fiscal year 2011-2012 (in thousands of dollars)
Category Planned expenditures for the year ending March 31, 2012 Expended during the quarter ended June 30, 2011 Year to date used at quarter-end
01 Personnel 10,517 2,353 2,353
02 Transportation and communications 750 179 179
03 Information - - -
04 Professional and special services 100 56 56
05 Rentals - 11 11
06 Repair and maintenance 70 - -
07 Utilities, materials and supplies 100 20 20
08 Acquisition of land, buildings and works - - -
09 Acquisition of machinery and equipment - 1 1
10 Transfer payments - - -
11 Public debt charges - - -
12 Other subsidies and payments - - -
Total gross budgetary expenditures 11,537 2,620 2,620
Less Revenues netted against expenditures:
Total Revenues netted against expenditures: - - -
Total net budgetary expenditures 11,537 2,620 2,620
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