Quarterly Financial Reports for the quarter ended June 30, 2011

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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 has been prepared by management as required under Section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Office of the Privacy Commissioner of Canada’s (the Office) Main Estimates and Supplementary Estimates.

Detailed information on the Office’s authority, mandate and program activities can be found in the Office’s Report on Plans and Priorities.

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 for the 2011-12 fiscal year. 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.

The authority of Parliament is required before money 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.

As part of the departmental performance reporting process, the Office prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

The quarterly 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 items that contributed to the net increase in planned expenditures for the year ending March 31, 2012 and the decrease in actual expenditures for the quarter ended June 30, 2011.

Total authorities available for the year have increased by $2.2 million from $22.390 million to $24.659 million. This net increase is a combination of increases in Vote 45 - Program expenditures ($2.0 million) and in budgetary statutory authorities ($0.2 million) from funding received following Royal Assent of anti-spam legislation in December 2010. This increased funding is reflected mostly in Personnel expenditures as well as for Professional and Special Services.

The Office’s quarterly and year-to-date spending are in line with the previous year with a variance of only four percent (4%).

While there is no significant variance in salary expenditures between years, we expect an overall increase of salary expenditures in Q2 of 2011-12 and more significantly in Q3. The total available, allocated to personnel for use in 2011-12, increased from 2010-11 with funding received following Royal Assent of anti-spam legislation in December 2010.

There was a decrease in the amount of spending on Transportation and Communications in the first quarter of 2011-12 ($80,000) compared to the first quarter of 2010-11 ($205,000). This is mostly due to special events that occurred in the first quarter of 2010-11 such the Office’s consultations with Canadians on online tracking, profiling and targeting; and cloud computing. The consultations were also intended to inform the next Parliamentary review of the Personal Information Protection and Electronic Documents Act (PIPEDA). The Office was also involved in a a collaborative initiative with the Organisation for Economic Cooperation and Development, which resulted in an overseas posting of one employee; the Office also participated in the Leadership Across Borders Program. The overall annual spending for Transportation and Communications is expected to be consistent between years.

There was a modest increase in spending on Professional and Special Services in the first quarter of 2011-12 ($384,000) compared to the first quarter of 2010-11 ($311,000); the difference was due to an investment in improving technologies to enhance sharing tools and documentation within the Office. Spending on Professional and Special Services spending in 2011-12 will be higher than the previous year because the Office is implementing a new information classification system and continuing to improve its case management system.

There was a decrease in the amount of spending on Repair and Maintenance in the first quarter of 2011-12 ($133,000) compared to the first quarter of 2010-11 ($248,000), although the difference was due to the timing of purchases on the maintenance fees related to computer equipment. Overall spending on the Repair and Maintenance by year-end is expected to be consistent between years.

As shown in the Departmental budgetary expenditures by Standard Object table, the Office has spent approximately 17.4% of its authorities in the first quarter. We expect an overall increase of salary expenditures in Q2 of 2011-12 but more significantly in Q3, due to hiring of new staff to reach full capacity.

Given that the Office’s most significant expense is salaries (67% of total available for use), the Office’s spending is generally distributed equally throughout the year.

Risks and Uncertainties

The Office is funded through annual appropriations. As a result, its operations are impacted by any changes in funding approved through Parliament.

The 2010 federal budget included an announcement that departments would not be funded for 2010-11 to 2012-13 wage and salary increases resulting from collective agreements. As departments must pay the salary increases to employees, organizations are expected to find efficiencies within their vote to fund these increases. The Office has addressed the issue and the risk is deemed to be minimal.

There has been an internal reorganization to reallocate resources to the Office’s priority of improving service to Canadians. The reorganization was implemented in mid April 2011 and may  influence the Office’s spending profile for Q1 and Q2.

Significant changes in relation to Operations, Personnel and Programs

The Office’s Chief Financial Officer (CFO) will retire at the end of Q3; however a replacement will join the Office in August 2011. Support will be available to assist the new CFO to ensure a smooth transition.

The departure of the Director of Research and Outreach, at the beginning of Q1, influenced the direction of the reorganization that took place through the end of 2010-11 fiscal year. The reorganization was implemented mid-April and adjustments may influence the spending profile for Q1 and Q2.

Approval by Senior Officials

Approved by,

(Original signed by)

Jennifer Stoddart
Privacy Commissioner of Canada

(Original signed by)

Daniel Nadeau, CGA
Chief Financial Officer

Date

Date


Statement of Authorities (unaudited)
(in thousands of dollars)
Fiscal year 2011-2012 Fiscal year 2010-2011
Total available for use for the year ending March 31, 2012 Used during the quarter ended June 30, 2011 Year to date used at quarter end Total available for use for the year ending March 31, 2011 Used during the quarter ended June 30, 2010 Year to date used at quarter end
Vote 45 - Net operating expenditures 22,129 3,666 3,666 20,099 3,917 3,917
Budgetary statutory authority 2,530 633 633 2,291 573 573
TOTAL AUTHORITIES 24,659 4,299 4,299 22,390 4,490 4,490

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)
Fiscal year 2011-2012 Fiscal year 2010-2011
Total available for use for the year ending March 31, 2012 Used during the quarter ended June 30, 2011 Year to date used at quarter end Total available for use for the year ending March 31, 2011 Used during the quarter ended June 30, 2010 Year to date used at quarter end
Expenditures
Personnel 16,586 3,580 3,580 15,770 3,562 3,562
Transportation and communications 1,065 80 80 964 205 205
Information 475 39 39 356 58 58
professional and special services 4,364 384 384 3,231 311 311
Rentals 98 7 7 78 13 13
Repair and maintenance 532 133 133 361 248 248
Utilities, materials and supplies 177 69 69 112 89 89
Acquisition of machinery and equipment 859 6 6 1,018 3 3
Transfer payments 500 - - 500 - -
Other subsidies and payments 3 1 1 - 1 1
Total net budgetary expenditures 24,659 4,299 4,299 22,390 4,490 4,490
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