Quarterly Financial Reports for the quarter ended September 30, 2013

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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 Office of the Privacy Commissioner of Canada (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 Document 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 program activities:

  • 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 program activities can be found in our Report on Plans and Priorities (RPP) and the Main Estimates.

Basis for Presentation

This 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 for fiscal year 2013-14. This 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 of Canada Secretariat website)

The authority of Parliament is required before money can be spent by federal organizations. 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.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.  Budget 2013 was tabled in Parliament on March 21, after the tabling of the Main Estimates on February 25, 2013.  As a result the measures announced in the Budget 2013 could not be reflected in the 2013-14 Main Estimates.

In fiscal year 2013-2014, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2013.  In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

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 periods 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 $29.1M compared to $24.6M in 2012-13.  The increase of $4.5M is essentially due to the one-time funding received in 2013-14 for the OPC’s move to Gatineau, Quebec.  This funding will be spent for the office set up and equipment as well as the new technology infrastructure and is expected to occur in the second half of 2013-14.

Budgetary expenditures by standard object analysis

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 39% of its authorities as of September 30, 2013, of which 78% represents personnel costs.

Expenditures in this quarter have decreased by $0.4 million or 8% compared to the same quarter in the previous fiscal year.  This decrease is mainly due to a correction related to an over estimation of salary accruals that was processed in Q2 and the decrease of the use of professional services.  However, the Office is expecting a significant increase in its expenditures in the remaining quarters of 2013-14 due to the Office headquarter move to Gatineau, Québec.

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 as well as strategies to mitigate them. These risks and mitigation strategies are described in more detail below.

Relocation of OPC headquarters

As mentioned in Q1, the OPC is required to move its headquarter offices to a new building due to the retrofit of its current building. Significant costs will result from this move, scheduled for the winter of 2014. The OPC has received one-time funding in FY 2013-14 to cover the estimated costs. This funding will be offset by future reductions to reference levels for the next 15 years starting in FY 2014-15.

Despite the significant funding pressures caused by this move, the OPC views it as an opportunity to work more closely with other Agents of Parliament who will also have their offices at this new site; this should create a work environment more conducive to greater information sharing and collaboration between employees. The Office is currently exploring opportunities for common and/or shared services with Agents of Parliament and continues to engage staff to ensure the new work environment is conducive to synergies and employee well-being.

Budget Reductions

As mentioned in Q1, the OPC is facing budget reductions of $0.7M in 2013-14 and $1.1M for 2014-15 and beyond (equivalent to 5% of its ongoing budget) as part of its contribution to the government’s efforts to generate operational efficiencies.

These budgetary reductions come at a time when demand for OPC privacy advice and expertise is rising as is the complexity of the requests. It is important to manage this situation well in order to maintain both the OPC’s solid credibility and a high quality of service for Canadians.

To manage this situation, the OPC strengthened its financial management framework and streamlined a number of its core processes resulting in increased effectiveness and efficiency of its operations.  Additionally, the Office continues to closely monitor its financial situation and strategically allocate its resources.

Significant changes in relation to operations, personnel and programs

December 2013 will mark the end of the current Commissioner’s mandate. This change in leadership, the first in 10 years for the OPC, represents an important transition for the Office. Work is still underway to effectively manage this transition.

Approval by Senior Officials:

Approved by,

(Original signed by)

Jennifer Stoddart
Privacy Commissioner of Canada
Ottawa, Canada

(Original signed by)

Daniel Nadeau, CPA, CGA
Chief Financial Officer
Ottawa, Canada

Date

Date


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

  Fiscal year 2013-2014 Fiscal year 2012-2013
Total available for use for the year ending March 31, 2014 Used during the quarter ended September 30, 2013 Year to date used at quarter end Total available for use for the year ending March 31, 2013 Used during the quarter ended September 30, 2012 Year to date used at quarter end
Program expenditures 26,628 4,747 10,021 22,131 5,192 9,973
Budgetary statutory authority -
Employee benefit plan
2,471 618 1,236 2,474 619 1,237
TOTAL AUTHORITIES 29,099 5,365 11,257 24,605 5,811 11,210

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

  Fiscal year 2013-2014 Fiscal year 2012-2013
Planned expenditures for the year ending March 31, 2014 Expended during the quarter ended September 30, 2013 Year to date used at quarter end Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended September 30, 2012 Year to date used at quarter end
Expenditures
Personnel 16,675 3,941 8,810 16,532 4,489 8,643
Transportation and communications 851 169 302 972 209 325
Information 553 47 103 495 66 136
Professional and special services 4,667 610 1,036 3,714 749 1,340
Rentals 201 174 434 92 175 453
Repair and maintenance 454 9 92 590 2 112
Utilities, materials and supplies 213 63 144 302 80 138
Acquisition of machinery and equipment 4,976 299 314 1,398 25 46
Transfer payments 500 20 20 500 14 14
Other subsidies and payments 9 33 2 10 2 3
TOTAL BUDGETARY EXPENDITURES 29,099 5,365 11,257 24,605 5,811 11,210
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