Quarterly financial report for the quarter ended December 31, 2016

Statement outlining results, risks and significant changes in operations, personnel and programs

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 (PA), 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, through 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 $25,392K compared to $24,990K in 2015-16.  The variance is mainly explained by the difference in the carry forward funding received for each fiscal year, the additional funding for collective agreements, 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.

As of December 31, 2016, the OPC used 64% or $16,245K of its authorities available for the year.

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 per the attached Departmental budgetary expenditures by standard object table, the OPC’s total budgetary expenditures as of December 31, 2016 increased by $341K when compared to the same period last fiscal year.   The relatively small increase continues to be attributable to:

• personnel expenditures, specifically the terminable allowance for the law management group following the revised rates of pay as approved by the Treasury Board of Canada in June 2016;
• professional and special services, including management consulting, training and educational services and translation service requests;
• repairs and maintenance to the OPC’s communications and networking equipment (upgrade of storage area network capacity and local area network capacity).

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 continues to take 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.  As directed by the Treasury Board Secretariat of Canada, the OPC established a claims process to address Phoenix related pay issues in a timely manner.

Significant changes in relation to operations, personnel and programs

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

Approval by Senior Officials:

Approved by,

Statement of Authorities (unaudited)

Office of the Privacy commissioner of Canada
For the quarter ended December 31, 2016
(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 December 31, 2016	Year to date used at quarter end	Total available for use for the year ending March 31, 2016	Used during the quarter ended December 31, 2015	Year to date used at quarter end
Program expenditures	23,026	4,677	14,413	22,571	4,685	14,090
Less: Revenues Netted Against Expenditures	(115)	(29)	(29)	-	-	-
Budgetary statutory authority - Employee benefit plan	2,481	620	1,861	2,419	605	1,814
TOTAL AUTHORITIES	25,392	5,268	16,245	24,990	5,290	15,904

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Departmental budgetary expenditures by Standard Object (unaudited)

Office of the Privacy commissioner of Canada
For the quarter ended December 31, 2016
(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 December 31, 2016	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2016	Expended during the quarter ended December 31, 2015	Year to date used at quarter end
Expenditures
Personnel	16,946	4,451	13,504	16,820	4,405	13,402
Transportation and communications	894	203	475	867	189	429
Information	687	112	285	511	57	264
Professional and special services	4,720	438	1,288	4,405	485	1,142
Rentals	767	38	387	671	78	445
Repair and maintenance	228	-	111	314	2	39
Utilities, materials and supplies	210	7	51	297	26	74
Acquisition of machinery and equipment	552	69	97	597	29	49
Transfer payments	500	30	40	500	-	10
Other subsidies and payments	3	(51)	36	8	17	50
Total budgetary expenditures	25,507	5,297	16,274	24,990	5,288	15,904
Less: Revenues netted against expenditures
Internal Support Services	(115)	(29)	(29)	-	-	-
TOTAL BUDGETARY EXPENDITURES	25,392	5,268	16,245	24,990	5,288	15,904