Quarterly Financial Report for the quarter ended
June 30, 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 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, 2020.

PCO spent approximately 21% of its authorities available for use by the end of the first quarter, compared to 25% in 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 Q1 2020-2021 and 2019-20

Graph 1
Text version - Graph 1
(in millions)
2020-21 2019-20
Total Authorities available for use 187.4 179.4
Q1 Expenditures 38.6 44.3

Significant changes to authorities

As per graph 2 below as at June 30, 2020 and Annex A, presented at the end of this document, PCO has authorities available for use of $187.4 million in 2020-21 compared to $179.4 million as of June 30, 2019, for a net increase of $8.0 million or 4%.

Graph 2: Variance in authorities as at June 30, 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 167.7 19.7 187.4
Fiscal year 2019-20 total available for use for the year ended March 31, 2020 161.1 18.3 179.4

The net increase in authorities of $8.0 million is mainly explained by:

Significant changes to quarter expenditures

Year-to-date expenditures recorded to the end of the first quarter decreased by $5.8 million, or 13%, from the same period of the previous year (from $44.3 million for 2019-20 to $38.6 million for 2020-21). Table 1 below presents budgetary expenditures by standard object.

Table 1
(in thousands of dollars)
Material Variances to Expenditures by Standard Object Fiscal year 2020-21
Expended during the quarter ended
30-June-2020
Fiscal year 2019-20
Expended during the quarter ended
30-June-2019
Variance $ Variance %
Personnel 32,679 33,306 (627) (2%)
Transportation and communications 336 1,451 (1,115) (77%)
Information 919 2,293 (1,374) (60%)
Professional and special services 3,635 4,289 (654) (15%)
Rentals 558 882 (324) (37%)
Repair and maintenance 18 26 (8) (31%)
Utilities, materials and supplies 41 118 (77) (65%)
Acquisition of machinery and equipment 181 711 (530) (75%)
Transfer payments - 887 (887) (100%)
Other subsidies and payments 193 367 (174) (47%)
Total gross budgetary expenditures* 38,559 44,330 -5,771 (13%)
* Details may not add to totals due to rounding

Personnel

The overall decrease of $0.6 million in personnel spending is mainly due to the timing of salary recoveries from other government departments.

Transportation and communications

The decrease of $1.1 million is mainly attributed to the completion of core activities in 2019-20 of the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Information

The decrease of $1.4 million is mainly attributed to communication professional services contracts to support the National Inquiry into Missing and Murdered Indigenous Women and Girls, as they completed its core activities in 2019-20.

Utilities, materials and supplies

The decrease of $0.1 million is mainly due to the completion of the National Inquiry into Missing and Murdered Indigenous Women and Girls core activities in 2019-20.

Acquisition of machinery and equipment

The decrease is related to a reduction in expenditures for office equipment, computer equipment and server computers as compared to 2019-20.

Transfer payments

Transfer payments have decreased by $0.9 million as the National Inquiry into Missing and Murdered Indigenous Women and Girls completed its 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 in communications 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

Operations and programs

In April 2020, the Privy Council Office created the COVID-19 Response Secretariat (Communications) to support a coherent government-wide approach to communications on the COVID-19 response. In addition, effective June 29, 2020 the control and supervision of the Minister’s Regional Office Program was transferred from PSPC to PCO.

Personnel

Isabelle Mondou became the Deputy Minister for the COVID-19 response Communications in April 2020.

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
Friday, August 28, 2020

Annex A & 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
June 30, 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
June 30, 2019
Year-to-date used at quarter–end
Vote 1 - Net operating expenditures 167,685 34,120 34,120 161,141 39,767 39,767
Budgetary statutory authorities  
Contributions to employee benefits plans 19,229 4,326 4,326 17,809 4,452 4,452
Prime Minister - Salary and motor car allowance 185 46 46 181 45 45
Leader of the Government in the House of Commons - Salary and motor car allowance 89 22 22 88 22 22
President of the Queen's Privy Council for Canada - Salary and motor car allowance 89 22 22 - - -
DPM and Minister of Intergovernmental affairs - Salary and motor car allowance 89 22 22 - - -
Minister of Democratic Institutions - Salary and motor car allowance - - - 88 22 22
Minister of Intergovernmental and Northern Affairs and Internal Trade - Salary and motor car allowance - - - 88 22 22
Total budgetary authorities 187,368 38,559 38,559 179,394 44,330 44,330
Total authorities 187,368 38,559 38,559 179,394 44,330 44,330
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 2020-2021 Fiscal year 2019-2020
Planned expenditures for the year ending
March 31, 2021 (note 1)
Expended during the quarter ended
June 30, 2020
Year-to-date used at quarter-end Planned expenditures for the year ending
March 31, 2020 (note 1)
Expended during the quarter ended
June 30, 2019
Year-to-date used at quarter-end
Budgetary expenditures  
Personnel 116,303 32,679 32,679 134,648 33,306 33,306
Transportation and communications 3,179 336 336 3,189 1,451 1,451
Information 48,251 919 919 3,168 2,293 2,293
Professional and special services 14,248 3,635 3,635 35,177 4,289 4,289
Rentals 1,287 558 558 925 882 882
Repair and maintenance 2,030 18 18 1,177 26 26
Utilities, materials and supplies 511 41 41 272 118 118
Acquisition of machinery and equipment 2,936 181 181 1,885 711 711
Transfer payments - - - - 887 887
Other subsidies and payments - 193 193 707 367 367
Total gross budgetary expenditures 188,744 38,559 38,559 181,150 44,330 44,330
Less Revenues netted against expenditures:
   Revenues
(1,377) - - (1,755) - -
Total revenues netted against expenditures (1,377) - - (1,755) - -
Total Budgetary Expenditures 187,368 38,559 38,559 179,394 44,330 44,330
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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