Quarterly financial report for the quarter ended June 30, 2020

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 2020-21 Main Estimates.

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 OPC’s spending authorities granted by Parliament and those used by the OPC, consistent with the Main Estimates and the Supplementary Estimates (as applicable) for fiscal year 2020-21. 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 OPC 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

As reflected in the statement of authorities table, the authorities available for use for the year are $22.2M, which represents 9/12 of the OPC’s 2020-21 Main Estimates amount. This decrease of $7.3M when compared to 2019-20 in the authorities available for use is due to the reduced supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The OPC is expected to receive full supply for the 2020-21 Main Estimates in December 2020.

The OPC’s expected total authorities available for use for the year 2020-21 are $29.7M compared to $29.5M in 2019-20. The increase is mainly explained by the compensation adjustments to fund salary increases to meet obligations under new collective agreements, Budget 2019 funds and the adjustment to the employee benefit plans.

As of June 30, 2020, the OPC used $6.6M of its authorities available for use while for the same period in the preceding fiscal year, the OPC had used $5.8M of its authorities available for use.

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 and as identified in the previous section, the OPC’s quarterly spending has increased by $0.8M or 13.9% compared to the previous year. This increase is mainly attributable to the implementation of the Budget 2019 measure and relates more specifically to additional personnel expenditures due to new hiring’s and salary increases following the ratification of collective agreements.

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 OPC 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 2020-21 Departmental Plan.

The outbreak of the Coronavirus disease [“COVID-19”] has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. The duration and impact of the COVID-19 outbreak is unknown at this time. As a result, it is not possible to estimate reliably the length and severity of the impact on OPC’s financial position and financial results in future periods.

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

As other government departments and agencies, the COVID-19 outbreak is creating challenges for the OPC. Teleworking has been very effective for the OPC and staff are able to provide services as usual, however, from time to time, there may be delays in responding to requests for information. There may also be delays in responding to complaints as some organizations and institutions are operating at reduced capacity. Further, so far, the year to date number of complaints received has decreased compared to recent years. Lastly, during the quarter, the OPC has published an assessment framework intended to assist government institutions faced with responding to the COVID-19 crisis.

No other significant changes related to operations, personnel or programs occurred during the first quarter of 2020-21.

Approval by Senior Officials:

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Statement of authorities (unaudited)
For the quarter ended June 30, 2020
(in thousands of dollars)

	Fiscal year 2020-2021			Fiscal year 2019-2020
	Total available for use for the year ending March 31, 2021	Used during the quarter ended June 30, 2020	Year to date used at quarter end	Total available for use for the year ending March31, 2020	Used during the quarter ended June 30, 2019	Year to date used at quarter end
Program expenditures	20,074	5,782	5,782	27,404	5,069	5,069
Less: Revenues Netted Against Espenditures	(150)	-	-	(200)	-	-
Budgetary statutory authority - Employee benefit plan	2,322	774	774	2,269	687	687
Total budgetary authorities	22,246	6,556	6,556	29,473	5,756	5,756
TOTAL AUTHORITIES	22,246	6,556	6,556	29,473	5,756	5,756

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Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended June 30, 2020
(in thousands of dollars)

	Fiscal year 2020-2021			Fiscal year 2019-2020
	Planned expenditures for the year ending March 31, 2021	Expended during the quarter ended June 30, 2020	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended June 30, 2019	Year to date used at quarter end
Expenditures
Personnel	18,014	5,520	5,520	24,031	4,682	4,682
Transportation and communications	441	42	42	444	101	101
Information	381	35	35	377	56	56
Professional and special services	2,169	362	362	3,289	391	391
Rentals	431	497	497	429	334	334
Repair and maintenance	62	18	18	63	29	29
Utilities, materials and supplies	80	17	17	77	23	23
Acquisition of machinery and equipment	442	2	2	462	51	51
Transfer payments	375	-	-	500	2	2
Other subsidies and payments *	1	63	63	1	87	87
Total gross budgetary expenditures	22,396	6,556	6,556	29,673	5,756	5,756
Less: revenues netted against expenditures
Internal Support Services	(150)	-	-	(200)	-	-
TOTAL BUDGETARY EXPENDITURES	22,246	6,556	6,556	29,473	5,756	5,756
* The main purpose of this reporting object is to capture costs that will be transferred to other reporting objects prior to the end of the fiscal year, for example, transactions related to the Government of Canada "corporate acquisition cards" and Interdepartmental Settlements