Quarterly financial report for the quarter ended December 31, 2019

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 2019-20 Main Estimates and Budget Plan 2019.

The OPC’s mandate is overseeing compliance with both the Privacy Act (PA), which covers the personal information-handling practices of federal government institutions, and the Personal Information Protection and Electronic Documents Act (PIPEDA), Canada’s federal private sector privacy law.

Detailed information on the OPC’s authority, mandate and programs can be found in our Departmental Plan (DP) and the Main Estimates.

Basis for Presentation

This quarterly report has been prepared by management 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 2019-20. 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)

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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued. The Office did not request any special warrant during the quarter.

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

Overall OPC funding has increased as reflected in the statement of authorities table. Total authorities available for the year are $31.0M compared to $26.3M in 2018-19. The variance is mainly explained by the new funding for delivering Budget 2019 measure: Protecting the privacy of Canadians to enhance the Office’s capacity. It is also explained by compensation adjustments to fund salary increases to meet obligations under new collective agreements, reimbursement of eligible paylist expenditures and the adjustment to the employee benefit plans.

As of December 31, 2019, the OPC used 62.1% or $19.3M of its authorities available for the year. For the same period in the preceding fiscal year, OPC had used 62.4% of its available authorities.

The OPC provides Internal Support Services to other small government departments related to the provision of information technology services. Pursuant to section 29.2 of the Financial Administration Act, Internal Support Services agreements are recorded as revenues.

Budgetary expenditures by standard object analysis

As per the departmental budgetary expenditures by standard object table, the OPC’s quarterly spending has increased by $1.9M or 33.3% compared to the previous year while the year-to-date spending has increased by $2.9M or 17.6% when compared to the same period last fiscal year. These increases are mainly attributable to the implementation of the Budget 2019 measure and relates more specifically to additional personnel expenditures, retroactive payments following the ratification of collective agreements, staffing support services, additional software licenses and acquisition of informatics technology equipment.

Risks and Uncertainties

As mentioned in previous quarterly reports, the OPC’s key corporate risks are identified and assessed through its strategic planning process, which includes an environmental scanning exercise and an update of its Corporate Risk Profile. This year again, the Office continues to deal with a challenging operating context, stemming from the growing digital economy. For more information on these challenges, and how the OPC is addressing them, please refer to the section titled Plans at a glance and Operating Context of the OPC’s 2019-20 Departmental Plan.

As the OPC is in its first year of implementing Budget 2019 measure: Protecting the Privacy of Canadians, and is undertaking significant initiatives, it is continuously evaluating its capacity to spend its allocated funds. During the quarter, the OPC received the approval to reprofile funds to future years to be in a better position to deliver on its priorities and mandate.

In addition, the OPC continues to take actions to mitigate the issues arising with the implementation of the Phoenix pay system for its employees and to monitor closely any salary payments adjustments that may be required.

Significant changes in relation to operations, personnel and programs

During the period covered by this report, a new Executive Director of Communications Directorate has joined the OPC.

No other significant changes related to operations, personnel or programs occurred during the third quarter of 2019-20.

Approval by Senior Officials:

 

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Statement of Authorities (unaudited)
(in thousands of dollars)
For the quarter ended December 31, 2019

	Fiscal year 2019-2020			Fiscal year 2018-2019
	Total available for use for the year ending March 31, 2020	Used during the quarter ended December 31, 2019	Year to date used at quarter end	Total available for use for the year ending March 31, 2019	Used during the quarter ended December 31, 2018	Year to date used at quarter end
Program expenditures	27,789	6,801	17,320	24,187	5,050	14,760
Less: Revenues Netted Against Expenditures	(200)	(48)	(97)	(200)	(43)	(87)
Budgetary statutory authority - Employee benefit plan	3,455	687	2,060	2,291	572	1,718
Total budgetary authorities	31,044	7,439	19,283	26,278	5,579	16,391
TOTAL AUTHORITIES	31,044	7,439	19,283	26,278	5,579	16,391

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Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)
For the quarter ended December 31, 2019

	Fiscal year 2019-2020			Fiscal year 2018-2019
	Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended December 31, 2019	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2019	Expended during the quarter ended December 31, 2018Footnote 2	Year to date used at quarter endFootnote 3
Expenditures
Personnel	24,826	5,567	15,024	17,670	4,837	13,240
Transportation and communications	444	247	475	896	177	432
Information	377	59	207	696	77	261
Professional and special services	4,065	1,149	2,325	4,604	559	1,610
Rentals	429	273	664	917	85	413
Repair and maintenance	63	(17)	35	241	20	42
Utilities, materials and supplies	77	26	71	187	22	71
Acquisition of land, buildings and works	-	44	44	-	-	-
Acquisition of machinery and equipment	462	192	426	766	182	268
Transfer payments	500	8	27	500	24	24
Other subsidies and paymentsFootnote 1	1	(61)	82	1	89	117
Total gross budgetary expenditures	31,244	7,487	19,380	26,478	5,622	16,478
Less: Revenues netted against expenditures
Internal Support Services	(200)	(48)	(97)	(200)	(43)	(87)
TOTAL BUDGETARY EXPENDITURES	31,044	7,439	19,283	26,278	5,579	16,391