Quarterly Financial Report - Statement outlining results, risks and significant changes in operations, personnel and programs - For the quarter ended December 31, 2021

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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 2021-22 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. 

When Parliament is dissolved for the purposes 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.

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, 2021.

PCO spent approximately 66% of its authorities available for use by the end of the third quarter, compared to 60% at the end of the same quarter of 2020-21 (see graph 1 below).

Graph 1: Comparison of total authorities available for use and total net budgetary expenditures as of Q3 2021-22 and 2020-21

Graph  1
Text version - Graph 1
$ Millions
  2021-22 2020-21
Total authorities available for use 215.4 207.3
Q3 expenditures 51.2 46.0
Year-to-date expenditure 142.0 125.2
 

Significant changes to authorities

As per graph 2 below as at December 31, 2021 and Annex A, presented at the end of this document, PCO has authorities available for use of $215.4 million in 2021-22 compared to $207.3 million as of December 31, 2020, for a net increase of $8.1 million or 4%.

Graph 2: Variance in authorities as at December 31, 2021

Graph 2
Text version - Graph 2
$ 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 2021-22 total available for use for the year ended March 31, 2022 194.5 20.9 215.4
 

The net increase in authorities of $8.1 million is mainly explained by:

Significant changes to quarter expenditures

The third quarter expenditures totaled $51.2 million for a net increase of $5.2 million (11%) when compared to $46.0 million spent during the same period in 2020-21. Table 1 below presents budgetary expenditures by standard object.

Table 1

(in thousands of dollars)
Variances to Expenditures by Standard Object Fiscal year 2021-22
Expended during the quarter ended December 31, 2021
Fiscal year 2020-21
Expended during the quarter ended December 31, 2020
Variance $ Variance %
Personnel 38,378 35,832 2,546 7%
Transportation and communications 1,497 286 1,211 423%
Information 942 1,188 (246) (21%)
Professional and special services 4,421 4,912 (491) (10%)
Rentals 3,875 992 2,883 291%
Repair and maintenance 371 927 (556) (60%)
Utilities, materials and supplies 111 127 (16) (13%)
Acquisition of machinery and equipment 1,615 2,083 (468) (22%)
Transfer payments 416 - 416 0%
Other subsidies and payments 95 97 (2) (2%)
Total gross budgetary expenditures * 51,719 46,444 5,275 11%
Less revenues netted against expenditures (541) (434) (107) 25%
Total budgetary expenditures 51,178 46,010 5,168 11%
* Details may not add to totals due to rounding

Personnel:

The overall increase of $2.5 million in personnel spending is mainly due to the timing of salary recoveries from other government departments and activities relating to the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Transportation and communications:

The increase of $1.2 million is mainly attributed to resumed travelling compared to 2020-21 and to the travel costs related to the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Rentals:

The increase of $2.9 million is mainly attributed to software license applications and to the rental of office buildings for the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Repairs and maintenance:

The decrease of $0.6 million is mainly related to reduced expenditures for accommodation projects in 2021-22 as compared to 2020-21.

Acquisition of machinery and equipment:

The decrease of $0.5 million is mainly related to a reduction in expenditures for computer equipment as compared to the same period in 2020-21 primarily related to the timing of deliveries due to global supply chain challenges.

Transfer payments:

Transfer payments have increased by $0.4 million due to spending for the activities of the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Significant changes to year-to-date expenditures

The year-to-date expenditures totaled $142.0 million for a net increase of $16.7 million (13%) when compared to $125.2 million spent during the same period in 2020-21. 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, 2021 YTD Expenditures as of December 31, 2020 Variance $ Variance %
Personnel 111,879 101,380 10,499 10%
Transportation and communications 2,988 779 2,209 284%
Information 2,812 2,988 (176) (6%)
Professional and special services 13,749 12,176 1,573 13%
Rentals 5,665 1,810 3,855 213%
Repair and maintenance 518 1,060 (542) (51%)
Utilities, materials and supplies 250 292 (42) (14%)
Acquisition of machinery and equipment 3,703 4,658 (955) (21%)
Transfer payments 416 - 416 0%
Other subsidies and payments 733 539 194 36%
Total gross budgetary expenditures * 142,711 125,681 17,031 14%
Less revenues netted against expenditures (735) (434) (301) 69%
Total budgetary expenditures 141,977 125,247 16,730 13%
* Details may not add to totals due to rounding

Personnel:

The overall increase of $10.5 million in personnel spending is mainly due to the timing of salary recoveries from other government departments for employees whose pay files are in the process of being transferred, and salaries for employees supporting the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy and the Ministers’ Regional Offices.

Transportation and communications:

The increase of $2.2 million is mainly attributed to resumed travelling compared to 2020-21 and to the travel costs related to the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Rentals:

The increase of $3.9 million is mainly attributed to software license applications and to the rental of office buildings for the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Repairs and maintenance:

The decrease of $0.5 million is mainly related to reduced expenditures for accommodation projects in 2021-22 as compared to 2020-21.

Acquisition of machinery and equipment:

The decrease of $1.0 million is mainly related to a reduction in expenditures for computer equipment as compared to the same period in 2020-21 primarily related to the timing of deliveries due to global supply chain challenges.

Transfer payments:

Transfer payments increased by $0.4 million due to spending for the activities of the Joint Public Inquiry into the Nova Scotia April 2020 Tragedy.

Risks and uncertainties

The dominant financial risks lie in the need to reallocate departmental resources to deal with issues that emerge unexpectedly. As part of its coordinating role, PCO must be able to address emerging issues on short notice, and either manage the necessary expenditures within its own spending authorities, or cash manage until increased spending authorities are approved. 

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

Personnel

In October 2021, the Honourable Bill Blair was appointed President of the Queen’s Privy Council for Canada and Minister of Emergency Preparedness which led PCO to create the Emergency and Preparedness Secretariat, the Honourable Mark Holland was appointed Leader of the Government in the House of Commons, and the Honourable Dominic LeBlanc was appointed as Minister of Intergovernmental Affairs, Infrastructure and Communities.

Approval by senior officials:

Janice Charette
Interim Clerk of the Privy Council and
Secretary to the Cabinet

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

Ottawa, Canada
Tuesday March 1, 2022

Annexes A and B

Annex A

Statement of authorities (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2021-2022 Fiscal year 2020-2021
Total available for use for the year ending
March 31, 2022 (note 1)
Used during the quarter ended
December 31, 2021
Year-to-date used at quarter–end 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
Vote 1 - Net operating expenditures 194,498 46,135 126,849 187,512 41,571 111,931
Budgetary statutory authorities  
Contributions to employee benefits plans 20,514 4,927 14,782 19,366 4,326 12,977
Prime Minister - Salary and motor car allowance 188 47 141 185 46 138
Leader of the Government in the House of Commons - Salary and motor car allowance 91 23 68 89 22 67
President of the Queen's Privy Council for Canada and the Minister of Intergovernmental Affairs - Salary and motor car allowance - 15 60 89 22 67
President of the Queen's Privy Council for Canada and the Minister of Emergency Preparedness - Salary and motor car allowance 91 15 15 - - -
Minister of Intergovernmental Affairs, Infrastructure and Communities - Salary and motor car allowance - 8 8 - - -
Minister and Special Representative for the Prairies - Salary and motor car allowance - 8 53 - - -
Deputy Prime Minister and Minister of Finance - Salary and motor car allowance - - - 89 22 -
Total budgetary authorities 215,381 51,178 141,977 207,330 46,010 125,247
Total authorities 215,381 51,178 141,977 207,330 46,010 125,247
Note 1: Includes 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 2021-2022 Fiscal year 2020-2021
Planned expenditures for the year ending
March 31, 2022 (note 1)
Expended during the quarter ended
December 31, 2021
Year-to-date used at quarter–end Planned expenditures for the year ending
March 31, 2021 (note 1)
Expended during the quarter ended
December 31, 2020
Year-to-date used at quarter–end
Budgetary expenditures  
Personnel 164,331 38,378 111,879 153,585 35,832 101,380
Transportation and communications 4,898 1,497 2,988 4,488 286 779
Information 3,748 942 2,812 15,313 1,188 2,988
Professional and special services 29,098 4,421 13,749 24,132 4,912 12,176
Rentals 2,802 3,875 5,665 1,716 992 1,810
Repair and maintenance 3,289 371 518 2,706 927 1,060
Utilities, materials and supplies 725 111 250 682 127 292
Acquisition of machinery and equipment 9,339 1,615 3,703 6,395 2,083 4,658
Transfer payments 3,346 416 416 - - -
Other subsidies and payments 462 95 733 819 97 539
Total gross budgetary expenditures 222,038 51,719 142,711 209,837 46,444 125,681
Less revenues netted against expenditures
   Revenues
(6,657) (541) (735) (2,507) (434) (434)
Total revenues netted against expenditures (6,657) (541) (735) (2,507) (434) (434)
Total budgetary expenditures 215,381 51,178 141,977 207,330 46,010 125,247
Note 1: Includes 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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