Quarterly Financial Reports for the quarter ended December 31, 2012

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Office of the Privacy Commissioner of Canada

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

Introduction

This quarterly report was 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 of Canada Secretariat. It should be read in conjunction with the OPC Main and Supplementary Estimates.

The OPC’s mandate is overseeing compliance with both the Privacy Act, which covers the personal information-handling practices of federal government departments and agencies, and the Personal Information Protection and Electronic Document Act (PIPEDA), Canada’s private sector privacy law. The mission of the OPC is to protect and promote the privacy rights of individuals via the following four key program activities:

• Compliance activities, represented by the responsibility to investigate privacy-related complaints and responding to information requests from individuals and organizations;
• Research and policy development activities, through which the Office serves as a centre of expertise on emerging privacy issues in Canada and abroad by researching trends and technological developments, monitoring legislative and regulatory initiatives, providing legal, policy and technical analyses of key issues, and developing policy positions that advance privacy protection;
• Public outreach, which the Office delivers through public education and communications activities, including speaking engagements, special events, media relations, and producing and sharing of promotional and educational material;
• Internal services, which refers to activities and resources that support program needs and other OPC corporate obligations.

Detailed information on the OPC’s authority, mandate and program activities can be found in our Report on Plans and Priorities (RPP) and the Main Estimates.

Basis for Presentation

This report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Office’s spending authorities granted by Parliament and those used by the Office, consistent with the Main Estimates and the Supplementary Estimates for fiscal year 2012-13. This 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 federal organizations. 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 OPC uses full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.  Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012-13 Main Estimates.

In fiscal year 2012-2013, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

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

Highlights of fiscal quarter and fiscal year-to-date (YTD) results

This section highlights the significant items that contributed to the slight decrease in planned expenditures for the fiscal year ending March 31, 2013 as compared with March 31, 2012 and the decrease in actual expenditures for the quarter ended December 31, 2012 as compared with that of the prior year’s quarter.

Statement of authorities analysis

The permanent funding for OPC remained stable over the past fiscal year. As reflected in the table on statement of authorities (attached), total authority available for the year is $24.605M compared to $24.659M in 2011-12.

The OPC’s quarterly spending is on a downward trend compared to the previous year with a variance of $0.77M or 12%.

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 23% of its authorities in the third quarter of 2012-13 (Q3), which ended December 31, 2012.

The sections that follow explain the variance in the level of expenditures from the third quarter of 2012-13 to the corresponding quarter of 2011-12.

Budgetary expenditures by standard object analysis

The statement of budgetary expenditures by standard object of both 2012-13 and 2011-12 shows that notable spending variance can be found in the areas of personnel, and professional and special services.

Personnel

In Q3, the OPC spent approximately 25.7% of its personnel authorities. This spending trend is in line with the amount budgeted in 2012-13. The Q3 personnel expenditures compared to the same quarter in the previous fiscal year remained stable. However, year-to-date personnel expenditures have increased by $0.59M compared to 2011-12 year to date.

Professional and Special Services

There was a significant spending decrease of $0.56M on professional and special services in Q3 of 2012-13 ($0.94M) compared to that of 2011-12 ($1.5M); this difference is mainly due to the continuous efforts to enhance the OPC’s internal capacity in resolving investigations under both the Privacy Act and PIPEDA.

Risks and Uncertainties

The OPC is funded through annual appropriations. Consequently, its operations are impacted by any changes in funding approved through Parliament.

Budget Reductions

Any budget reductions were already mentioned in Q1 and Q2 of 2012-13. The OPC has already addressed the issue and the risk is being monitored closely to reduce its impact as the OPC spends two thirds of its 2012-13 budgets in salary costs.

OPC Relocation

As already mentioned in the Q1 & Q2 report, the OPC will be moving its headquarters office to a new building to free up space in the current location for a federal department that already occupies considerable space in the building. Significant costs will result from this move, which is scheduled for the fall of 2013. The OPC received approval of a repayable loan for 2013-14 to cover the estimated costs of moving.

Investigation workload

Human Resources and Skills Development Canada (HRSDC) announced in late December 2012 that a hard drive containing the personal information of more than half a million clients of the Canada Student Loans Program was missing. The Office is investigating this matter. Due to the sheer number of individuals impacted by this breach, the Office is expecting to encounter a significant increase in complaints and expects that it will need to engage contracted resources to ensure that it can respond and manage the investigation in a timely fashion and within OPC service standards. Management is monitoring the situation closely as it relates to workload and financial risks.

Significant changes in relation to operations, personnel and programs

No significant changes in key positions are expected until to the end of the fiscal year 2012-13 at this time.

Approval by Senior Officials:

Approved by,

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Statement of Authorities (unaudited)
(in thousands of dollars)

	Fiscal year 2012-2013			Fiscal year 2011-2012
	Total available for use for the year ending March 31, 2013	Used during the quarter ended December 31, 2012	Year to date used at quarter end	Total available for use for the year ending March 31, 2012	Used during the quarter ended December 31, 2011	Year to date used at quarter end
Program expenditures	22,131	5,031	15,004	22,129	5,788	15,494
Budgetary statutory authority - Employee benefit plan	2,474	619	1,856	2,530	633	1,898
TOTAL AUTHORITIES	24,605	5,650	16,860	24,659	6,421	17,392

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Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)

	Fiscal year 2012-2013			Fiscal year 2011-2012
	Planned expenditures for the year ending March 31, 2013	Expended during the quarter ended December 31, 2012	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2012	Expended during the quarter ended December 31, 2011	Year to date used at quarter end
Expenditures
Personnel	16,532	4,252	12,895	16,586	4,248	12,303
Transportation and communications	972	190	515	1,065	193	508
Information	495	56	192	475	142	322
Professional and special services	3,714	938	2,278	4,364	1,499	3,291
Rentals	92	25	478	98	18	49
Repair and maintenance	590	19	131	532	49	412
Utilities, materials and supplies	302	37	175	177	45	172
Acquisition of land, buildings and works	-	-	-	-	-	-
Acquisition of machinery and equipment	1,398	133	179	859	132	205
Transfer payments	500	-	14	500	91	116
Public debt charges	-	-	-	-	-	-
Other subsidies and payments	10	-	3	3	4	14
TOTAL BUDGETARY EXPENDITURES	24,605	5,650	16,860	24,659	6,421	17,392