Quarterly Financial Reports for the quarter ended December 31, 2014

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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 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 2014-15. 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 at the following address 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 2014 was tabled in Parliament on February 11, just before the tabling of the Main Estimates on February 17, 2014. As a result the measures announced in the Budget 2014 could not be reflected in the 2014-15 Main Estimates.

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 $25,592K compared to $29,099K in 2013-14. The net decrease of $3,507K is mainly due to the one-time funding received in 2013-14 for the OPC's move to Gatineau, Quebec, the carry forward of operating funds from 2013-14 and the transfer to the Canadian Radio-television and telecommunications Commission (CRTC) to assist with the establishment and lawful operation of the Spam Reporting Centre.

Budgetary expenditures by standard object analysis

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 65.6% of its authorities as of December 31, 2014, of which 78.4% represents personnel costs.

OPC overall expenditures in this quarter decreased by $410K or 1.1% compared to the same quarter in the previous fiscal year. This is mainly due to a decrease in spending on professional and special services related to the move to 30 Victoria, Gatineau, which diminished by $405K during Q3 of 2014-15 ($607K) compared to that of 2013-14 ($1,012K).

Risks and Uncertainties

The OPC's key corporate risks are identified and assessed through an annual update of the Office's Corporate Risk Profile. This year the Office identified a number of key risks which could have financial impacts should they materialize and strategies have been put in place to mitigate them. These risks and mitigation strategies are described below in more detail.

Budgetary Pressures

As previously highlighted in the 2013-14 Quarterly Financial Reports, the OPC is facing a budget reduction of $1,106K 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. This is in addition to the budget reduction of $276K stemming from the reimbursement of the one-time funding received to address the move costs.

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 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. However challenges remain for OPC in meeting certain service standards in the current environment and work is ongoing to find ways to address this. Additionally, the Office continues to closely monitor its financial situation and strategically allocate its resources.

Significant changes in relation to operations, personnel and programs

No other significant changes in relation to operations, personnel or programs occurred during the third quarter of 2014-15.

Approval by Senior Officials:

Approved by,

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

	Fiscal year 2014-2015			Fiscal year 2013-2014
	Total available for use for the year ending March 31, 2015	Used during the quarter ended December 31, 2014	Year to date used at quarter end	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
Program expenditures	23,221	5,115	15,018	26,628	5,500	15,521
Budgetary statutory authority - Employee benefit plan	2,371	593	1,779	2,471	618	1,854
TOTAL AUTHORITIES	25,592	5,708	16,797	29,099	6,118	17,375

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

	Fiscal year 2014-2015			Fiscal year 2013-2014
	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended December 31, 2014	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2014	Expended during the quarter ended December 31, 2013	Year to date used at quarter end
Expenditures
Personnel	16,026	4,595	13,179	16,675	4,567	13,377
Transportation and communications	719	147	400	851	185	487
Information	326	63	159	553	105	208
Professional and special services	4,539	607	1,612	4,667	1,012	2,048
Rentals	41	72	430	201	41	475
Repair and maintenance	561	7	87	454	10	102
Utilities, materials and supplies	146	32	165	213	(14)	130
Acquisition of machinery and equipment	62	183	227	4,976	205	519
Transfer payments	500	-	-	500	-	20
Other subsidies and payments	2,672	1	538	9	7	9
TOTAL BUDGETARY EXPENDITURES	25,592	5,708	16,797	29,099	6,118	17,375