Quarterly Financial Report for the quarter ended June 30, 2019

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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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the Main Estimates and previous Quarterly Financial Reports. For more information on PCO, please visit PCO's website.

This quarterly report has not been subject to an external audit or review but has been shared with the PCO Departmental Audit Committee and it reflects the committee members' comments.

Mandate

PCO supports the development and implementation of the Government of Canada's policy and legislative agendas, coordinates responses to issues facing the Government and the country, and supports the effective operation of Cabinet. PCO is led by the Clerk of the Privy Council, who also serves as Secretary to the Cabinet and the Head of the Public Service.

PCO serves Canada and Canadians by providing advice and support to the Prime Minister, portfolio ministers, and Cabinet.

PCO has three main roles:

  1. Provide professional non-partisan advice to the Prime Minister, portfolio ministers, Cabinet and Cabinet committees on matters of national and international importance.
  2. Support the smooth functioning of the Cabinet decision-making process and facilitate the implementation of the Government’s agenda.
  3. Foster a high-performing and accountable Public Service.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes PCO’s spending authorities granted by Parliament and those used by the department, consistent with the 2019-20 Main Estimates. This quarterly report has been prepared using a special purpose financial reporting framework (expenditure basis) designed to meet financial information needs with respect to the use of spending authorities.

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.

PCO uses the full accrual method of accounting to prepare and present its annual departmental financial statements1 that are part of the departmental performance reporting process. The spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year to date results

This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended June 30, 2019.

PCO spent approximately 25% of its authorities available for use by the end of the first quarter, compared to 22% in the same quarter of 2018-19 (see graph 1 below).

Graph 1: Comparison of Total Authorities Available For Use and Total Net Budgetary Expenditures as of Q1 2019-2020 and 2018-2019

Graph 1: Comparison of Total Authorities Available For Use and Total Net
Budgetary Expenditures as of Q1 2019-2020 and 2018-2019
Text version - Graph 1
(in millions)
2019-20 2018-19
Total Authorities available for use 179.4 166.0
Q1 Expenditures 44.3 37.0

Significant changes to authorities

As per graph 2 below as at June 30, 2019 and Annex A, presented at the end of this document, PCO has authorities available for use of $179.4 million in 2019-20 compared to $166.0 million as of June 30, 2018, for a net increase of $13.4 million or 8%.

Graph 2: Variance in Authorities as at June 30, 2019

Graph 2: Variance in Authorities as at June 30, 2019
Text version - Graph 2
(in millions)
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2019-20 total available for use for the year ended March 31, 2020 161.1 18.3 179.4
Fiscal year 2018-19 total available for use for the year ended March 31, 2019 149.9 16.1 166.0

The net increase in authorities of $13.4 million is mainly explained by:

Significant changes to expenditures

Year-to-date expenditures recorded to the end of the first quarter increased by $7.4 million, from the same period of the previous year (from $36.9 million for 2018-19 to $44.3 million for 2019-20). Table 1 below presents budgetary expenditures by standard object.

Table 1

(in thousands of dollars)
Material Variances to Expenditures by Standard Object Fiscal year 2019-20
Expended during the quarter ended
30-June-2019
Fiscal year 2018-19
Expended during the quarter ended
30-June-2018
Variance $ Variance %
Personnel 33,306 29,843 3,463 12%
Transportation and communications 1,451 835 616 74%
Information 2,293 521 1,772 340%
Professional and special services 4,289 4,422 (133) (3%)
Rentals 882 439 443 101%
Repair and maintenance 26 (305) 331 (109%)
Utilities, materials and supplies 118 122 (4) (3%)
Acquisition of land, buildings, and works - - - -
Acquisition of machinery and equipment 711 568 143 25%
Transfer payments 887 132 755 572%
Other subsidies and payments 367 380 (13) (3%)
Total gross budgetary expenditures * 44,330 36,957 7,373 20%
* Details may not add to totals due to rounding

Personnel

The overall increase of $3.5 million in personnel spending is related to an increase associated with approved funding increases outlined in the previous section.

Transportation and communications

The increase of $0.6 million is mainly attributed to the costs incurred to support Canada's first Youth Summit in May 2019.

Information

The increase of $1.8 million is mainly due to spending to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as they closed out activities.

Repairs and maintenance

The variance is due to an overestimated recovery transaction with another department in 2018-19, which was adjusted in the second quarter report, as previously mentioned in the Q1 2018-19 Quarterly Report.

Rentals

The increase is related to increased expenditures for software license fees.

Transfer payments

The National Inquiry into Missing and Murdered Indigenous Women and Girls increased its transfer payments by $0.8 million, as they closed out activities.

Risks and uncertainties

The dominant financial risks lie in 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.

PCO provides administrative and financial support to the National Inquiry into Missing and Murdered Indigenous Women and Girls. There are limitations to financial oversight due to the arms length relationship between PCO and the National Inquiry; however, financial obligations ultimately remain the responsibility of PCO.

PCO is closely monitoring pay transactions to identify and address over and under payments in a timely manner and continues to apply ongoing mitigating controls which were implemented in 2016.

Significant changes in relation to operations, personnel and programs

Operations and programs

PCO's operating environment has not significantly changed in the last quarter as it pursues the priorities of the government's mandate.

Personnel

Ian Shugart became the Clerk of the Privy Council and Secretary to the Cabinet in April 2019.

Approval by senior officials:

Ian Shugart
Clerk of the Privy Council and
Secretary to the Cabinet

Matthew Shea
Assistant Deputy Minister,
Corporate Services Branch and
Chief Financial Officer

Ottawa, Canada
August 29, 2019

Annex A & B

Annex A

Statement of autorities (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2019-2020 Fiscal year 2018-2019
Total available for use for the year ending March 31, 2020 (note 1) Used during the quarter ended
June 30, 2019
Year-to-date used at quarter–end Total available for use for the year ending
March 31, 2019 (note 1)
Used during the quarter ended
June 30, 2018
Year-to-date used at quarter–end
Vote 1 - Net operating expenditures 161,141 39,767 39,767 149,935 32,959 32,959
Budgetary statutory authorities  
Contributions to employee benefits plans 17,809 4,452 4,452 15,727 3,932 3,932
Prime Minister - Salary and motor car allowance 181 45 45 178 44 44
Leader of the Government in the House of Commons - Salary and motor car allowance 88 22 22 86 - -
Minister of Democratic Institutions - Salary and motor car allowance 88 22 22 86 22 22
Minister of Intergovernmental and Northern Affairs and Internal Trade - Motor car allowance 88 22 22 - - -
Spending of proceeds from the disposal of surplus Crown assets - - - 6 - -
Total budgetary authorities 179,394 44,330 44,330 166,017 36,957 36,957
Total Authorities 179,394 44,330 44,330 166,017 36,957 36,957
Note 1: Includes only Authorities available for use and granted by Parliament at quarter-end for each respective fiscal year (Including Frozen Allotments).
Note 2: Details may not add to totals due to rounding.

Annex B

Departmental budgetary expenditures by Standard Object (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2019-2020 Fiscal year 2018-2019
Planned expenditures for the year ending March 31, 2019 (note 1) Expended during the quarter ended June 30, 2019 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2019 (note 1) Expended during the quarter ended June 30, 2018 Year-to-date used at quarter-end
Budgetary expenditures  
Personnel 134,648 33,306 33,306 119,541 29,843 29,843
Transportation and communications 3,189 1,451 1,451 6,303 835 835
Information 3,168 2,293 2,293 5,261 521 521
Professional and special services 35,177 4,289 4,289 26,531 4,422 4,422
Rentals 925 882 882 1,807 439 439
Repair and maintenance 1,177 26 26 2,084 (305) (305)
Utilities, materials and supplies 272 118 118 516 122 122
Acquisition of machinery and equipment 1,885 711 711 4,707 568 568
Acquisition of land, buildings and works - - - - - -
Transfer payments - 887 887 - 132 132
Public debt charges - - - - - -
Other subsidies and payments 707 367 367 351 380 380
Total gross budgetary expenditures 181,150 44,330 44,330 167,102 36,957 36,957
Less Revenues netted against expenditures:
  Revenues
(1,755) - - (1,085) - -
Total revenues netted against expenditures (1,755) - - (1,085) - -
Total Budgetary Expenditures 179,394 44,330 44,330 166,017 36,957 36,957
Note 1: Includes only Authorities available for use and granted by Parliament at quarter-end for each respective fiscal year (Including Frozen Allotments).
Note 2: Details may not add to totals due to rounding.
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