Quarterly Financial Reports for the quarter ended December 31, 2013

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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.  It should be read in conjunction with the Office of the Privacy Commissioner of Canada (OPC) Main and Supplementary Estimates.

The OPC’s mandate is overseeing compliance with both the Privacy Act (PA), 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. Its mission is to protect and promote the privacy rights of individuals via the following four key programs:

• Compliance activities, represented by the responsibility to investigate privacy-related complaints and responding to information requests from individuals and organizations;
• Research and policy development, 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 2013-14. 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. (More information can be found on the Treasury Board of Canada Secretariat website)

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 2013 was tabled in Parliament on March 21, after the tabling of the Main Estimates on February 25, 2013.  As a result the measures announced in the Budget 2013 could not be reflected in the 2013-14 Main Estimates.

In fiscal year 2013-2014, 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 2013.  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 variances in relation to actual expenditures and planned expenditures that affected both the quarter and the year to date results, compared to the same periods of the preceding fiscal year.

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 $29.1M compared to $24.6M in 2012-13.  The increase of $4.5M is essentially due to the one-time funding received in 2013-14 for the OPC’s move to Gatineau, Quebec.  This funding will be spent for the office set up and equipment as well as the new technology infrastructure and is expected to occur mostly in the second half of 2013-14.

Budgetary expenditures by standard object analysis

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 60% of its authorities as of December 31, 2013, of which 77% represents personnel costs.

Expenditures in this quarter have increased by $0.47 million or 8% compared to the same quarter in the previous fiscal year.  This increase is mainly due to the staffing vacant positions compared to the 2012-13 third quarter and an increase in acquisition of equipment related to the Office headquarter move to Gatineau, Québec.

Risks and Uncertainties

The risks identified in Q1 and Q2 of 2013-14 remain key risks for the organization which could have financial impacts should they materialize as well as strategies to mitigate them. These risks and mitigation strategies are reiterated below.

Relocation of OPC headquarters

The OPC is required to move its headquarter offices to a new building due to the retrofit of its current building. Significant costs will result from this move, scheduled for the winter of 2014. The OPC has received one-time funding in FY 2013-14 to cover the estimated costs.  This funding will be offset by future reductions to OPC annual reference levels for the next 15 years starting in fiscal year 2014-15.

Despite the significant funding pressures caused by this move, the OPC views it as an opportunity to work more closely with other Agents of Parliament some of which will also have their offices at this new site; this should create a work environment more conducive to greater information sharing and collaboration between employees. The Office is currently exploring opportunities for common and/or shared services with Agents of Parliament and continues to engage staff to ensure the new work environment is conducive to synergies and employee well-being.

Budget Pressures

The OPC is facing budget reductions of $0.7M in 2013-14 and $1.1M for 2014-15 and beyond (equivalent to 5% of its ongoing budget) as part of its contribution to the government’s efforts to generate operational efficiencies.

These budgetary reductions come at a time when demand for OPC privacy advice and expertise is rising as is the complexity of the requests. It is important to manage this situation well in order to maintain both the OPC’s solid credibility and a high quality of service for Canadians.

To manage this situation, the OPC strengthened its financial management framework and streamlined a number of its core processes resulting in increased effectiveness and efficiency of its operations.  Additionally, the Office continues to closely monitor its financial situation and strategically allocate its resources.

Significant changes in relation to operations, personnel and programs

December 2013 marked the end of Jennifer Stoddart’s mandate as Privacy Commissioner of Canada. On December 3, 2013, an interim Privacy Commissioner was appointed while a process is conducted to appoint a permanent Commissioner for a seven-year term. This change in leadership, the first in 10 years for the OPC, represents an important transition for the Office. Work continues to effectively manage operations during this transition period.

Approval by Senior Officials:

Approved by,

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

	Fiscal year 2013-2014			Fiscal year 2012-2013
	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	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
Program expenditures	26,628	5,500	15,521	22,131	5,031	15,004
Budgetary statutory authority - Employee benefit plan	2,471	618	1,854	2,474	619	1,856
TOTAL AUTHORITIES	29,099	6,118	17,375	24,605	5,650	16,860

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

	Fiscal year 2013-2014			Fiscal year 2012-2013
	Planned expenditures for the year ending March 31, 2014	Expended during the quarter ended December 31, 2013	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2013	Expended during the quarter ended December 31, 2012	Year to date used at quarter end
Expenditures
Personnel	16,675	4,567	13,377	16,532	4,252	12,895
Transportation and communications	851	185	487	972	190	515
Information	553	105	208	495	56	192
Professional and special services	4,667	1,012	2,048	3,714	938	2,278
Rentals	201	41	475	92	25	478
Repair and maintenance	454	10	102	590	19	131
Utilities, materials and supplies	213	(14)	130	302	37	175
Acquisition of machinery and equipment	4,976	205	519	1,398	133	179
Transfer payments	500	-	20	500	-	14
Other subsidies and payments	9	7	9	10	-	3
TOTAL BUDGETARY EXPENDITURES	29,099	6,118	17,375	24,605	5,650	16,860