Quarterly Financial Reports for the quarter ended June 30, 2015

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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 Documents 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 programs can be found in our Report on Plans and Priorities (RPP) and the Main Estimates.

Basis for Presentation

This quarterly 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 for fiscal year 2015-16. 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. (More information can be found on the Treasury Board Secretariat website).

The authority of Parliament is required before moneys 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.

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.

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 period 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 $24,327K compared to $24,320K in 2014-15. 

Budgetary expenditures by standard object analysis

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 22.8% of its authorities as of June 30, 2015, of which 82.9% represents personnel costs.

OPC overall expenditures in this quarter decreased by $230K or 4.0% compared to the same quarter in the previous fiscal year.  This spending variance can be explained by fluctuations in the areas of personnel, professional and special services, rentals, repair and maintenance and other subsidies and payments.

Personnel

In Q1, the OPC spent approximately 27.3% of its personnel authorities.  Compared to the previous fiscal year, OPC personnel expenditures for Q1 have increased by $324K. This variance is due to the payment of severance pay for departing employees and increase due to fulfilling vacant positions to enhance our internal investigative capacity.

Professional and special services

There was a spending decrease of $187K on professional and special services in Q1 of
2015-16 ($226K) compared to that of 2014-15 ($413K).  This difference is mainly due to the OPC’s overall efforts to reduce the use of consultants for investigative purposes by developing a greater internal capacity.

Rentals

In Q1, the spending has increased by $86K ($364K in 2015-16) compared to 2014-15 ($278K).  This is related to the information technology costs for the operating systems and utility software related to the servers, storage, peripherals and components.

Repair and maintenance

The spending for repair and maintenance decreased by $54K in Q1 of 2015-16 compare to the same period in 2014-15.  This variance is related to the move to 30 Victoria which was completed in the early part of 2014-15.

Other subsidies and payments

The decrease of $391K for other subsidies and payments is mainly due to the one-time transition payment in 2014-15 for implementing salary payment in arrears by the Government of Canada.

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.

The OPC’s mandate and complexity and volume of work continue to grow with no additional resources. The federal government introduced mandatory material privacy breach reporting to the OPC (and the Treasury Board Secretariat) for federal institutions in May 2014. It also passed Bill S-4, the Digital Privacy Act which amended PIPEDA to require organizations to report certain breaches to the OPC. This legislation also allows the OPC to enter into court-enforceable compliance agreements with organizations at the end of an investigation. While such measures bolster accountability and privacy governance within institutions and organizations, it will be a challenge for OPC to deliver on this expanded mandate with resources  currenlty available.  To help manage this risk, the Office will continue to pursue opportunities for efficiencies in its operations.

One key area of uncertainty is the impact of planned Government-wide initiatives to standardize and consolidate back-office systems and services. As these initiatives are implemented in the years to come, the OPC will continue to take a proactive approach and remain engaged in discussions to ensure the operating and financial context of small organizations such as the OPC are taken into consideration in the design and roll-out of these initiatives.

Significant changes in relation to operations, personnel and programs

On April 1, 2015, the Office migrated to a new financial operating system (GX).  The new system is hosted by a third party, the Canadian Human Rights Commission.  The necessary business processes and controls have been put in place to ensure a smooth transition and an effective and efficient new financial platform for the OPC.

During the first quarter of 2015-16, the OPC announced its renewed privacy priorities. These priorities guide the Office’s forward-thinking work and enable it to better leverage its limited resources to maximize its potential of having significant and positive impact in protecting individuals’ privacy rights. The new privacy priorities were announced in June 2015 and are: Economics of Personal Information; Government Surveillance; Reputation and Privacy; and, the Body as Information. The Office will work to advance these priorities for the next five years.

No other significant changes in relation to operations, personnel or programs occurred during the first quarter of 2015-16.

Approval by Senior Officials:

Approved by

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

	Fiscal year 2015-2016			Fiscal year 2014-2015
	Total available for use for the year ending March 31, 2016	Used during the quarter ended June 30, 2015	Year to date used at quarter end	Total available for use for the year ending March 31, 2015	Used during the quarter ended June 30, 2014	Year to date used at quarter end
Program expenditures	21,908	4,948	4,948	21,849	5,190	5,190
Budgetary statutory authority - Employee benefit plan	2,419	605	605	2,471	593	593
TOTAL AUTHORITIES	24,327	5,553	5,553	24,320	5,783	5,783

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

	Fiscal year 2015-2016			Fiscal year 2014-2015
	Planned expenditures for the year ending March 31, 2016	Expended during the quarter ended June 30, 2015	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended June 30, 2014	Year to date used at quarter end
Expenditures
Personnel	16,817	4,586	4,586	16,743	4,262	4,262
Transportation and communications	867	96	96	758	87	87
Information	510	24	24	510	33	33
Professional and special services	3,746	226	226	3,997	413	413
Rentals	671	364	364	682	278	278
Repair and maintenance	314	20	20	139	74	74
Utilities, materials and supplies	297	72	72	234	82	82
Acquisition of machinery and equipment	597	14	14	751	22	22
Transfer payments	500	10	10	500	-	-
Other subsidies and payments	8	141	141	6	532	532
TOTAL BUDGETARY EXPENDITURES	24,327	5,553	5,553	24,320	5,783	5,783