Quarterly Financial Report for the quarter ended June 30, 2016

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 (if applicable).

The OPC’s mandate is overseeing compliance with both the Privacy Act, which covers the personal information-handling practices of federal government departments and agencies, and the Personal Information Protection and Electronic Documents 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 programs:

  • Compliance activities, related to the Office’s responsibility to investigate privacy-related complaints and respond to inquiries from individuals and organizations, review breach reports and have the power to initiate its own investigations when warranted (Commissioner initiated complaints). Through audits and reviews, the Office also assesses how well organizations are complying with requirements set out in the two federal privacy laws, and provides recommendations on Privacy Impact Assessments (PIAs), pursuant to the Treasury Board Directive on Privacy Impact Assessment;
  • 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 and analysing legislative and regulatory initiatives, providing strategic legal, policy and technical advice on key issues, and developing policy positions that advance the protection of privacy rights in both the public and private sectors;
  • Public outreach, which the Office delivers public education and communications activities, including speaking engagements and special events, exhibiting, media relations, and the production and distribution of promotional and educational material;
  • Internal services, which refers to activities and resources that are administered to support the needs of programs and other corporate obligations of the OPC.

Detailed information on the OPC’s authority, mandate and programs can be found in our Report on Plans and Priorities (RPP) 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 2016-17. 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.

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

Permanent funding for the OPC remained stable over the past fiscal year. As reflected in the statement of authorities table (attached), total authorities available for the year are $24,518K compared to $24,327K in 2015-16. The variance is mainly explained by the end of term agreement of the transfer to the Canadian Radio-television and Telecommunications Commission (CRTC) to assist with the establishment and operation of the Spam Reporting Centre associated with Canada’s Anti-Spam Law (CASL) and an adjustment to the employee benefit plans.

The OPC provides Internal Support Services to other small government department 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 shown in the departmental budgetary expenditures by standard object table (attached), the OPC spent approximately 22.8% of its authorities as of June 30, 2016, of which 81% represents personnel costs.

Overall expenditures as of the end of this quarter increased by $46K, or 0.8%, compared to the expenditures reported for the same quarter in the previous fiscal year. This spending variance made up of both increases and decreases can be found in the areas of personnel, information, professional and special services as well as rentals.

Personnel

As of Q1, the OPC spent approximately 26.8% of its authorities for personnel. Compared to the previous fiscal year, OPC personnel expenditures for Q1 have decreased by $53K due to normal staffing turnover.

Information

There was a spending increase of $93K on information in Q1 of 2016-17 ($117K) compared to that of 2015-16 ($24K). This difference is mainly due to exhibition related activities and database access services expenses.

Professional and special services

There is an increase of $93K on professional and special services as of Q1 of 2016-17 ($319K) compared to that of 2015-16 ($226K). The difference is mainly due to management consulting and translation services expenses.

Rentals

The decrease of $76K in rentals as of Q1 of 2016-17 ($288K) compare to that of 2015-16 ($364K) is mainly due to informatics technology software purchase which has been delayed to later quarters of 2016-17.

Risks and Uncertainties

As mentioned in previous quarterly reports, 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 along with mitigating strategies in its Report on Plans and Priorities that could have a financial impact should they materialize.

The OPC’s mandate as well as the complexity and volume of work continue to grow with no additional resources. For example, the federal government introduced mandatory material privacy breach reporting to the OPC (and the Treasury Board Secretariat) for federal institutions in May 2014. It also passed Bill S-4, the Digital Privacy Act, which amended PIPEDA to mandate private sector organizations to report certain breaches to the OPC. This legislation also allows the OPC to enter into court-enforceable compliance agreements with private sector organizations following an investigation. While such measures bolster accountability and privacy governance within federal institutions and private sector organizations, it will be a challenge for the OPC to deliver on this expanded mandate with the resources currently available. To help manage this risk, the Office will continue to pursue opportunities for efficiencies in its operations. As well, OPC will monitor closely the impacts of decisions of the Government as it further defines and implements new policy direction.

One key area of uncertainty is the impact of planned government-wide initiatives to standardize and consolidate back-office systems and services. As these initiatives are implemented in the years to come, the OPC takes a proactive approach and remain engaged in discussions to ensure the operating and financial context of small organizations such as the OPC are taken into consideration in the design and roll-out of these initiatives.

The OPC is also taking actions to mitigate the issues arising with the implementation of the new Phoenix pay system for its employees and monitor closely any salary payments adjustments that may be required.

Significant changes in relation to operations, personnel and programs

No other significant changes related to operations, personnel or programs occurred during the first quarter of 2016-17.

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 2016-2017 Fiscal year 2015-2016
Total available for use for the year ending March 31, 2017 Used during the quarter ended June 30, 2016 Year to date used at quarter end Total available for use for the year ending March 31, 2016 Used during the quarter ended June 30, 2015 Year to date used at quarter end
Program expenditures 22,152 4,979 4,979 21,908 4,948 4,948
Less: Revenues Netted
Against Espenditures
(115) - - - - -
Budgetary statutory authority -
Employee benefit plan
2,481 620 620 2,419 605 605
TOTAL AUTHORITIES 24,518 5,599 5,599 24,327 5,553 5,553

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)
  Fiscal year 2016-2017 Fiscal year 2015-2016
Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended June 30, 2016 Year to date used at quarter end Planned expenditures for the year ending March 31, 2016 Expended during the quarter ended June 30, 2015 Year to date used at quarter end
Expenditures
Personnel 16,908 4,533 4,533 16,817 4,586 4,586
Transportation and communications 894 158 158 867 96 96
Information 687 117 117 510 24 24
Professional and special services 3,885 319 319 3,746 226 226
Rentals 766 288 288 671 364 364
Repair and maintenance 228 59 59 314 20 20
Utilities, materials and supplies 210 25 25 297 72 72
Acquisition of machinery and equipment 552 11 11 597 14 14
Transfer payments 500 10 10 500 10 10
Other subsidies and payments 3 79 79 8 141 141
Total budgetary budgetary 24,633 5,599 5,599 24,327 5,553 5,553
Less: revenues netted against expenditures
Internal Support Services (115) - - - - -
TOTAL BUDGETARY EXPENDITURES 24,518 5,599 5,599 24,327 5,553 5,553
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