Quarterly Financial Reports for the quarter ended September 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 (if applicable).

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 and the Supplementary Estimates (as applicable) 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 at the following address on the Treasury Board of Canada 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 between actual expenditures and planned expenditures that affected both the quarter and the year-to-date results, compared to the same period the preceding fiscal year.

Statement of authorities analysis

Permanent funding for the OPC remained stable over the past fiscal year. As reflected in the statement of authorities table (attached), total authorities available for the year are $24,327K compared to $24,320 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 43.6% of its authorities as of September 30, 2015, of which 84.8% represents personnel costs.

Overall expenditures in this quarter decreased by $475K, or 2%, compared to the same quarter the previous fiscal year. This spending variance can be found in the areas of personnel, professional and special services as well as other subsidies and payments.

Personnel

As of Q2, the OPC spent approximately 53.5% of its authorities for personnel. Compared to the previous fiscal year, OPC personnel expenditures for Q2 have increased by $412K. As explained in Q1, the salary expenditures are increasing due to the severance payouts for departing employees and the efforts to fill vacant positions in order to enhance our internal investigative capacity.

Professional and special services

There was a spending decrease of $348K on professional and special services as of Q2 of
2015-16 ($657K) compared to that of 2014-15 ($1,005K). As in Q1, this difference is mainly due to OPC’s efforts to reduce the use of consultants for investigative purposes by boosting internal capacity.

Other subsidies and payments

The decrease of $503K for other subsidies and payments as of Q2 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

As mentioned last quarter, 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 that could have a financial impact should they materialize, as well as strategies have been put in place to mitigate them.

The OPC’s mandate as well as the complexity and volume of work continue to grow with no additional resources.  For example, 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 mandate private sector organizations to report certain breaches to the OPC. This legislation also allows the OPC to enter into court-enforceable compliance agreements with private sector organizations following of an investigation. While such measures bolster accountability and privacy governance within federal institutions and private sector organizations, it will be a challenge for the OPC to deliver on this expanded mandate with the resources currently 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

Besides changes highlighted in Q1 regarding the migration to a new financial system and the identification of new privacy priorities, no other significant changes related to operations, personnel or programs occurred during the second 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 September 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 September 30, 2014	Year to date used at quarter end
Program expenditures	21,908	4,457	9,405	21,949	4,713	9,903
Budgetary statutory authority - Employee benefit plan	2,419	604	1,209	2,371	593	1,186
TOTAL AUTHORITIES	24,327	5,061	10,614	24,320	5,306	11,089

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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 September 30, 2015	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended September 30, 2014	Year to date used at quarter end
Expenditures
Personnel	16,817	4,410	8,996	16,743	4,322	8,584
Transportation and communications	867	144	240	758	166	253
Information	511	182	207	510	64	96
Professional and special services	3,746	430	657	3,997	592	1,005
Rentals	671	3	367	682	80	358
Repair and maintenance	314	17	37	139	6	80
Utilities, materials and supplies	297	(24)	48	234	51	133
Acquisition of machinery and equipment	597	6	20	751	22	44
Transfer payments	500	-	10	500	-	-
Other subsidies and payments	8	(108)	33	6	3	536
TOTAL BUDGETARY EXPENDITURES	24,327	5,061	10,614	24,320	5,306	11,089