Quarterly Financial Report for PCO - Quarter ended December 31, 2011

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Statement outlining results, risks and significant changes in operations, personnel and program
For the quarter ended December 31, 2011

[ PDF 68 KB ]


Introduction

This quarterly report has been 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 Accounting Standard 1.3. This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates and with the previous Quarterly Financial Statements.

This quarterly report has not been subject to an external audit or review but has been reviewed by the Privy Council Office Audit Committee.

Authority, Mandate and Program Authorities

The Privy Council Office (PCO) provides non-partisan, public service support to the Prime Minister and to the Cabinet and its decision-making structures. Led by the Clerk of the Privy Council, PCO helps the Government to implement its vision and to respond effectively and quickly to issues facing the Government and the country. PCO has three main roles:

  1. Advice to the Prime Minister: PCO brings together quality, objective policy advice and information to support the Prime Minister, the ministers within the Prime Minister's portfolio and the Cabinet;
  2. Secretariat to the Cabinet: PCO facilitates the smooth, efficient and effective functioning of Cabinet and the Government of Canada on a day-to-day basis; and,
  3. Public Service Leadership: PCO supports the development and maintenance of a high quality Public Service that meets the highest standards of accountability, transparency and efficiency, one that is able to deliver the best advice to government and excellent services to Canadians.

Further information on PCO's program activities can be located in Part II of the Main Estimates. For more information on PCO's main roles, please visit PCO's website.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the 2011-12 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework (using a cash basis) designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before monies can be spent by the Government. Approvals are given in the form of annually approved limits through appropriations acts or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purpose of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Department uses the full accrual method of accounting to prepare and present its departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

Statement of Authorities

As of December 31, 2011, total authorities available for the year have increased by $1.2 million when compared to the same quarter of 2010-11.

The total authorities have increased from the quarter ended September 30, 2011 as a result of the approval of PCO's 2011-12 Supplementary Estimates B and from the funding received from Treasury Board Secretariat for the eligible paylist expenditures.

As per the Statement of Authorities, the net increase of $1.2 million can be mainly attributed to changes in funding approvals from year to year.

The increase can be mainly attributed to the following:

  • A net increase of $7.7 million from 2010-11 to 2011-12 is attributed to the funding being received from Treasury Board to compensate for the expenditures of maternity benefits and severance pay and termination benefits as a result of the changes in conditions within the agreement with the Public Service Alliance of Canada which resulted in the cash-out of severance pay.
  • An increase of $1.0 million approved in the 2011-12 Supplementary Estimates B, for the Office of the Special Advisor on Human Smuggling and Illegal Migration to coordinate the Government's strategy and response to migrant smuggling by sea, in particular through engagement with key domestic and international partners and governments in transit countries and partner states to promote international cooperation.

Partially offset by:

  • A decrease of $3.2 million related to the funding for the Commissions of inquiry. In 2010- 11, funding of $1.2 million was received for the Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney which is no longer in operation in 2011-12, and funding received to support the Commission of Inquiry into the Decline of Sockeye Salmon in the Fraser River has decreased by the amount of $1.4 million compared to the third quarter last year.
  • A net reduction of $2.6 million to support the implementation and coordination of a government-wide communications strategy for Canada's Economic Action Plan (EAP). PCO has a central role in the coordination and management of government communications as determined by the Prime Minister and Cabinet. The vast majority of measures contained in the EAP were temporary, and funding was sought until March 31, 2011. Following the Prime Minister's announcement of an extension for four large infrastructure programs until October 31, 2011 to allow for the completion of project construction, PCO requested the reprofiling of unspent funds ($1.0 million) from 2010-11 which was sought in the 2011-12 Supplementary B Estimates.
  • A reduction of $1.1 million in 2011-12 due to savings as part of the government's ongoing strategic review of departmental spending.
  • A reduction of $1.0 million for the office of the Coordinator for the 2010 Olympics and G8 Security. The Office completed its operations in 2010-11, coordinating security for the G20 and the G8 Leaders' Summits.

The main reason for the variance in personnel can be attributed to the changes in conditions within the agreement with Public Service Alliance for 2011-12 which resulted in the cash-out of severance pay. Other material variances in the standard objects is within professional services which decreased in 2011-12 due to less funding being needed for Commission of inquiries compared to 2010-11.

Statement of Departmental Budgetary Expenditures by Standard Object

As of December 31, 2011, the expenditure for the quarter ended December 31, 2011, has increased by $339 thousand compared to the same period for fiscal year 2010-11. Furthermore, the year-to-date used at quarter-end as of December 31, 2011, has increased by $4.9 million compared to the same quarter of 2010-11.

As per the Statement of Departmental Budgetary Expenditures by Standard Object, the increase in the year-to-date used at quarter-end can mainly be attributed to changes in personnel, as explained below:

Personnel:

  • Mostly due to an increase of $6.6 million attributed to the renegotiation of collective agreements related to the cash-out of severance pay.
  • Partially offset by $1.3 million comprised of two main items, a decrease of full time employees in the Prime Minister's Office as a result of reduced spending and fiscal restraint and a decrease in expenditures early in the fiscal year by the Ministerial Offices due to the May 2011 election.

Risks and Uncertainties

PCO faces a number of external and internal risks. The dominant financial risks lie in the area of funding initiatives to deal with issues that emerge unexpectedly. As part of its coordinating role, PCO is expected to launch these initiatives on short notice, and either manage the necessary expenditures within its own spending authorities, or cash manage until increased spending authorities are approved.

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 27, 2011. The department received no additional funding authorities in 2011-12 Supplementary Estimates A, however did receive $11.4 million in the 2011-12 Supplementary Estimates B.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. Management is reviewing various options to adjust to this constraint in funding.

Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel and programs over the last year except for:

  1. Ms. Michelle Doucet was appointed Assistant Deputy Minister, Corporate Services and Chief Financial Officer on January 23, 2012.
  2. Ms. Mary Richie was appointed as an external member on PCO's Departmental Audit Committee on November 17, 2011.
  3. The fluctuations in the number of Commissions of Inquiries and the winding down of the Office of the Coordinator for the 2010 Olympics and G8 Security. The following Commissions of Inquiries have now finalized their reports in 2010-11: Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney; the Commission of Inquiry into the Investigation of the Bombing of Air India Flight 182 and the Internal Inquiry into the Actions of Canadian Officials in relation to Abdullah Almaki, Ahmad Abou-Elmaati and Muayyed Nureddin; they are no longer in operation in 2011-12. The Commission of inquiry into the Decline of Sockeye Salmon in the Fraser River is the only one that is in full operation for fiscal year 2011-12.
  4. Pursuant to section 31.1 of the Financial Administration Act and Order-in-Council P.C. 2011- 1297 effective November 15, 2011, $4.1 million is deemed to have been appropriated to Shared Services Canada Vote 1, which results in a reduction for the same amount in Privy Council Office, Vote 1, Appropriation Act No.1, 2011-2012. For the period of November 15 to December 31, 2011 $632 thousand of expenditures have been incurred on behalf of Shared Services Canada by Privy Council Office against Shared Services Canada Vote 1.

Approved by Senior Officials:

Wayne Wouters
Clerk of the Privy Council
and Secretary to the Cabinet

Marc Bélisle, CA
Executive Director
Finance and Corporate Planning Division

Ottawa, Canada
February 29,2012

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 December 31, 2011 Year to date used at quarter end Total available for use for the year ending March 31, 2011 ** Used during the quarter ended December 31, 2010 Year to date used at quarter end
Vote 1 - Net operating expenditures 150,622 33,232 95,642 149,968 33,034 91,228
Budgetary statutory authorities 15,513 3,870 11,628 14,922 3,729 11,189
Total budgetary authorities 166,135 37,102 107,270 164,890 36,763 102,417
Total Authorities 166,135 37,102 107,270 164,890 36,763 102,417

**includes only Authorities available for use and granted by Parliament at quarter-end

Note: Details may not add to totals due to rounding.

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

(in thousands of dollars)

Fiscal year 2011-2012 Fiscal year 2010-2011
Planned expenditures for the year ending March 31, 2012 ** Expended during the quarter ended December 31, 2011 Year to date used at quarter end Planned expenditures for the year ending March 31, 2011** Expended during the quarter ended December 31,
2010
Year to date used at quarter end
Personnel 111,175 29,125 85,169 104,465 27,566 79,689
Transportation and communications 8,379 1,429 3,680 6,447 1,784 4,560
Information 2,654 282 798 3,898 677 1,787
Professional and special services 26,395 4,532 11,370 30,757 4,620 10,164
Rentals 2,092 316 1,051 3,695 676 1,542
Repair and maintenance 2,779 233 789 2,262 371 935
Utilities, materials and supplies 1,836 309 566 1,583 367 835
Acquisition of machinery and equipment 7,147 519 2,117 7,877 548 2,613
Transfer payments 3,100 558 1,537 3,424 6 7
Other subsidies and payments 578 (201) 193 482 148 285
Total Budgetary Expenditures 166,135 37,102 107,270 164,890 36,763 102,417

**includes only Authorities available for use and granted by Parliament at quarter-end

Note: Details may not add to totals due to rounding.