Quarterly Financial Report - Statement outlining results, risks and significant changes in operations, personnel and programs - For the quarter ended December 31, 2020

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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 2020-21 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 December 31, 2020.

PCO spent $125.2 million of its authorities available for use by the end of the third quarter, compared to $130.8 million at the end of the same quarter of 2019-20 (see graph 1 below).

Graph 1: Comparison of total authorities available for use and total net budgetary expenditures as of Q3 2020-21 and 2019-20

Graph 1
Text version - Graph 1
(in millions)
2020-21 2019-20
Total authorities available for use 207.3 195.0
Q3 Expenditures 46.0 44.4
Year-to-date expenditure 125.2 130.8
 

Significant changes to authorities

As per graph 2 below as at December 31, 2020 and Annex A, presented at the end of this document, PCO has authorities available for use of $207.3 million in 2020-21 compared to $195.0 million as of December 31, 2019, for a net increase of $12.3 million or 6%.

Graph 2: Variance in Authorities as at December 31, 2020

Graph 2
Text version - Graph 2
(in millions)
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2020-21 total available for use for the year ended March 31, 2021 187.5 19.8 207.3
Fiscal year 2019-20 total available for use for the year ended March 31, 2020 176.8 18.3 195.0
 

The net increase in authorities of $12.3 million is mainly explained by:

Significant changes to quarter expenditures

The third quarter expenditures totaled $46.0 million for a net increase of $1.6 million (4%) when compared to $44.4 million spent during the same period in 2019-20. Table 1 below presents budgetary expenditures by standard object.

Table 1

(in thousands of dollars)
Variances to Expenditures by Standard Object Fiscal year 2020-21
Expended during the quarter ended
31-December-2020
Fiscal year 2019-20
Expended during the quarter ended
31-December-2019
Variance $ Variance %
Personnel 35,832 33,524 2,308 7%
Transportation and communications 286 977 (691) (71%)
Information 1,188 1,979 (791) (40%)
Professional and special services 4,912 5,854 (942) (16%)
Rentals 992 186 806 433%
Repair and maintenance 927 1,606 (679) (42%)
Utilities, materials and supplies 127 225 (98) (44%)
Acquisition of machinery and equipment 2,083 467 1,616 346%
Transfer payments - 251 (251) (100%)
Other subsidies and payments 97 (244) 341 (140%)
Total gross budgetary expenditures* 46,444 44,825 1,618 4%
Less revenus netted against expenditures (434) (418) (16) 4%
Total budgetary expenditures 46,010 44,408 1,602 4%
* Details may not add to totals due to rounding

Personnel:

The overall increase of $2.3 million in personnel spending is mainly due to a combination of additional staff required to deliver on an expanded departmental mandate, for the whole-of-government strategy for communicating with Canadians about COVID-19 and new expenditures for the transfer of Ministers’ Regional Offices budget for Exempt Staff from PSPC. The increase is offset by a decrease mainly attributed to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as core activities were completed in 2019-20.

Transportation and communications:

The decrease of $0.7 million is mainly attributed to lower travel expenses due to travel restrictions imposed by the COVID-19 pandemic.

Information:

The decrease of $0.8 million is mainly attributed to communication professional services contracts to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as core activities were completed in 2019-20.

Professional services:

The decrease of $0.9 million is mainly attributed to the completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls core activities in 2019-20 and the timing of the interdepartmental settlement for Legal and IT services.

Rentals:

The increase of $0.8 million is mainly attributed to additional accommodation rental expenditures as a result of the transfer of Ministers’ Regional Offices from PSPC.

Repairs and maintenance:

The decrease of $0.7 million is mainly attributed to a reduction of office building repairs delayed due to the COVID-19 pandemic.

Acquisition of machinery and equipment:

The increase of $1.6 million is mainly related to IT equipment the purchases in 2020-21.

Transfer payments:

Transfer payments have decreased by $0.3 million as the National Inquiry into Missing and Murdered Indigenous Women and Girls completed its core activities in 2019-20.

Significant changes to year-to-date expenditures

The year-to-date expenditures totaled $125.2 million for a net decrease of $5.5 million (4%) when compared to $130.8 million spent during the same period in 2019-20. Table 2 below presents budgetary expenditures by standard object.

Table 2

(in thousands of dollars)
Variances to Expenditures by Standard Object YTD Expenditures as of
December 31, 2020
YTD Expenditures as of
December 31, 2019
Variance $ Variance %
Personnel 101,380 98,530 2,850 3%
Transportation and communications 779 3,722 (2,943) (79%)
Information 2,988 6,656 (3,668) (55%)
Professional and special services 12,176 14,505 (2,329) (16%)
Rentals 1,810 1,493 317 21%
Repair and maintenance 1,060 1,814 (754) (42%)
Utilities, materials and supplies 292 709 (417) (59%)
Acquisition of machinery and equipment 4,658 1,786 2,872 161%
Transfer payments - 1,390 (1,390) (100%)
Other subsidies and payments 539 624 (85) (14%)
Total gross budgetary expenditures* 125,681 131,229 (5,548) (4%)
Less revenues netted against expenditures (434) (464) 30 (6%)
Total budgetary expenditures 125,247 130,765 (5,518) (4%)
* Details may not add to totals due to rounding

Personnel:

The overall increase of $2.9 million in personnel spending is mainly due to a combination of additional staff required to deliver on an expanded departmental mandate, for the whole-of-government strategy for communicating with Canadians about COVID-19 and new expenditures for the transfer of Ministers’ Regional Offices budget for Exempt Staff from PSPC. The increase is offset by a decrease mainly attributed to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as core activities were completed in 2019-20.

Transportation and communications:

The decrease of $2.9 million is mainly attributed to lower travel expenses due to travel restrictions imposed by the COVID-19 pandemic, completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls core activities in 2019-20 and increased travel expenses for the Youth Summit that occurred in 2019-20.

Information:

The decrease of $3.7 million is mainly attributed to communication professional services contracts to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as core activities were completed in 2019-20.

Professional services:

The decrease of $2.3 million is mainly attributed to the completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls core activities in 2019-20.

Repairs and maintenance:

The decrease of $0.8 million is mainly attributed to a reduction of office building repairs delayed due to the COVID-19 pandemic.

Acquisition of machinery and equipment:

The increase of $2.9 million is mainly related to IT equipment purchases in 2020-21.

Transfer payments:

Transfer payments have decreased by $1.4 million due to the completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls core activities in 2019-20.

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. 

Responding to the COVID-19 crisis has demanded a significant investment to help mitigate the propagation risks among the Canadian population and support citizens and businesses directly affected with economic measures. PCO will effectively manage the risks associated through ongoing cooperation and engagement with other federal departments and agencies, provincial/territorial governments, as well as its stakeholders and partners.

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

There have not been any significant changes in relation to operations, personnel and programs during the quarter.

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
Monday March 1, 2021

Annexes A and B

Annex A

Statement of authorities (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2020-2021 Fiscal year 2019-2020
Total available for use for the year ending
March 31, 2021 (note 1)
Used during the quarter ended
December 31, 2020
Year-to-date used at quarter–end Total available for use for the year ending
March 31, 2020 (note 1)
Used during the quarter ended
December 31, 2019
Year-to-date used at quarter–end
Vote 1 - Net operating expenditures 187,512 41,571 111,931 176,769 39,813 117,090
Budgetary statutory authorities  
Contributions to employee benefits plans 19,366 4,326 12,977 17,809 4,498 13,356
Prime Minister - Salary and motor car allowance 185 46 138 181 45 136
Leader of the Government in the House of Commons - Salary and motor car allowance 89 22 67 88 15 58
President of the Queen's Privy Council for Canada and the Minister of Intergovernmental Affairs - Salary and motor car allowance 89 22 67 - - -
Deputy Prime Minister and Minister of Finance - Salary and motor car allowance 89 22 67 - - -
Minister of Democratic Institutions - Salary and motor car allowance - - - 88 15 58
Minister of Intergovernmental and Northern Affairs and Internal Trade - Salary and motor car allowance - - - 88 22 66
Total budgetary authorities 207,330 46,010 125,247 195,022 44,408 130,765
Total authorities 207,330 46,010 125,247 195,022 44,408 130,765
Note 1: Includes only Authorities available for use and granted by Parliament at quarter-end for each respective fiscal year.
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 2020-2021 Fiscal year 2019-2020
Planned expenditures for the year ending
March 31, 2021 (note 1)
Used during the quarter ended
December 31, 2020
Year-to-date used at quarter–end Planned expenditures for the year ending
March 31, 2020 (note 1)
Used during the quarter ended
December 31, 2019
Year-to-date used at quarter–end
Budgetary expenditures  
Personnel 153,585 35,832 101,380 139,977 33,524 98,530
Transportation and communications 4,488 286 779 3,666 977 3,722
Information 15,313 1,188 2,988 7,586 1,979 6,656
Professional and special services 24,132 4,912 12,176 37,605 5,854 14,505
Rentals 1,716 992 1,810 1,018 186 1,493
Repair and maintenance 2,706 927 1,060 1,177 1,606 1,814
Utilities, materials and supplies 682 127 292 539 225 709
Acquisition of machinery and equipment 6,395 2,083 4,658 1,885 467 1,786
Transfer payments - - - 2,900 251 1,390
Other subsidies and payments 819 97 539 979 (244) 624
Total gross budgetary expenditures 209,837 46,444 125,681 197,332 44,825 131,229
Less revenues netted against expenditures
Revenues
(2,507) (434) (434) (2,310) (418) (464)
Total revenues netted against expenditures (2,507) (434) (434) (2,310) (418) (464)
Total budgetary expenditures 207,330 46,010 125,247 195,022 44,408 130,765
Note 1: Includes only Authorities available for use and granted by Parliament at quarter-end for each respective fiscal year.
Note 2: Details may not add to totals due to rounding.
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