Thank you, Mr. Chairman. Many of our activities have nothing in them but salaries and wages, and very little O and M. So the collective agreement and the wages that are paid are the primary part of the appropriation. We have to control to the activity level. That is the requirement in the act. When we commit our salaries, that is because we have a contractual obligation. If we did not commit our salaries to the end of the year, then we would lose what we call free balance control, so our managers, when signing contracts against that appropriation, would not know what they have committed to the end of the year and may, as a result, sign contracts that over-commit the free balance in the appropriation. If they did that, that is a violation of the Financial Administration Act.
Our practice of committing salaries to the end of the year is in recognition that we must maintain free balance control. We must, throughout the year, know where we stand from a budgetary standpoint when we are making decisions on further expenditures. I would expect that if we de-commissioned the commitment system to do what is being suggested, and as a result lost free balance control, we would have severe criticism by the Auditor General.
The salary commitment system is in there so that our managers know how much money they have left in their budget all throughout the year.