Quarterly Financial Reports for the quarter ended June 30, 2014

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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.

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 2014 was tabled in Parliament on February 11, just before the tabling of the Main Estimates on February 17, 2014. As a result the measures announced in the Budget 2014 could not be reflected in the 2014-15 Main Estimates.

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 $24,320K compared to $29,099K in 2013-14. The decrease of $4,779K is essentially due to the one-time funding of $4,141K received in 2013-14 for the OPC’s move to Gatineau, Quebec. This additional funding was spent on office set up and equipment as well as new technology infrastructure. This one time funding provided for the move is to be reimbursed annually ($276K) from OPC reference levels for a period of 15 years starting fiscal year 2014-15 to 2028-29.

Budgetary expenditures by standard object analysis

As shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 23.8% of its authorities as of June 30, 2014, of which 73.7% represents personnel costs.

Expenditures in this quarter decreased by $109K or 1.8% compared to the same quarter in the previous fiscal year. This spending variance can be found in the areas of personnel, transportation and communications and other subsidies and payments.

Personnel

In Q1, the OPC spent approximately 25.5% of its personnel authorities. Compared to the previous fiscal year, OPC personnel expenditures for Q1 have decreased by $607K. The variance is due to the overestimation of salary accruals of $530K which occurred in Q1 of 2013/14 and the remaining is due to normal staff turnover.

Transportation and Communications

There was a spending decrease of $46K on transportation and communications in Q1 of 2014-15 ($87K) compared to that of 2013-14 ($133K). This difference is mainly due to the OPC’s overall efforts to reduce public service travel costs by streamlining operational processes through the use of videoconference and teleconference as well as a lower travel trend in Q1 of 2014-15 due to the transition to a new Commissioner.

Other subsidies and payments

The increase of $563K for other subsidies and payments is mainly due to a one-time transition payment of $532K for implementing salary payment in arrears by the Government of Canada.

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 and strategies have been put in place to mitigate them. These risks and mitigation strategies are described below in more detail.

Budgetary Pressures

As previously highlighted in the 2013-14 Quarterly Financial Reports, the OPC is facing a budget reduction of $1,106K 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. This is in addition to the budget reduction of $276K stemming from the reimbursement of the one-time funding received to address the move costs.

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

On June 5, 2014 Daniel Therrien was appointed as Privacy Commissioner of Canada for a seven-year term. This change in leadership, the first in 10 years for the OPC, represents an important transition for the Office. Operations continue to be effectively managed during this transition period.

The Office’s Deputy Chief Financial Officer (DCFO) will retire at the end of Fiscal Year 2014-15; however a replacement has joined the Office in August 2014. Support will be available to assist the new DCFO to ensure a smooth transition.

Approval by Senior Officials:

Approved by,

(Original signed by)

Daniel Therrien
Privacy Commissioner of Canada
Gatineau, Canada

(Original signed by)

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

Date

Date


Statement of Authorities (unaudited)
(in thousands of dollars)
  Fiscal year 2014-2015 Fiscal year 2013-2014
Total available for use for the year ending March 31, 2015 Used during the quarter ended June 30, 2014 Year to date used at quarter end Total available for use for the year ending March 31, 2014 Used during the quarter ended June 30, 2013 Year to date used at quarter end
Program expenditures 21,849 5,190 5,190 26,628 5,274 5,274
Budgetary statutory authority -
Employee benefit plan
2,471 593 593 2,471 618 618
TOTAL AUTHORITIES 24,320 5,783 5,783 29,099 5,892 5,892

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)
  Fiscal year 2014-2015 Fiscal year 2013-2014
Planned expenditures for the year ending March 31, 2015 Expended during the quarter ended June 30, 2014 Year to date used at quarter end Planned expenditures for the year ending March 31, 2014 Expended during the quarter ended June 30, 2013 Year to date used at quarter end
Expenditures
Personnel 16,743 4,262 4,262 16,675 4,869 4,869
Transportation and communications 758 87 87 851 133 133
Information 510 33 33 553 56 56
Professional and special services 3,997 413 413 4,667 426 426
Rentals 682 278 278 201 260 260
Repair and maintenance 139 74 74 454 83 83
Utilities, materials and supplies 234 82 82 213 81 81
Acquisition of machinery and equipment 751 22 22 4,976 15 15
Transfer payments 500 - - 500 - -
Other subsidies and payments 6 532 532 9 (31) (31)
TOTAL BUDGETARY EXPENDITURES 24,320 5,783 5,783 29,099 5,892 5,892
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