Quarterly Financial Report - For the quarter ended December 31, 2017

Statement outlining results, risks and significant changes in operations, personnel and programs

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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 2017-18 Main Estimates, Supplementary Estimates (A), Supplementary Estimates (B) and TB Central Votes for the same year. This quarterly report has been prepared using a special purpose financial reporting framework (cash 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 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 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, 2017.

PCO spent approximately 58% of its authorities by the end of the third quarter, compared to 55% in the same quarter of 2016-17 (see graph 1 below).

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q3 2017-2018 and 2016-2017

Text version
In Millions
2017-18 2016-17
Total Authorities 221.2 159.9
Q3 Expenditures 45.5 30.2
Expenditures Year-To-Date 127.4 88.2

Significant changes to authorities

As per graph 2 below as at December 31, 2017 and Table 2, presented at the end of this document, PCO has authorities available for use of $221.2 million in 2017-18 compared to $159.9 million as of December 31, 2016, for a net increase of $61.3 million or 38%.

Graph 2: Variance in Authorities as at December 31, 2017

Graph 2: Variance in Authorities as at December 31, 2017
Text version 
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2016-17 total available for use for the year ended March 31, 2017 143.0 16.9 159.9
Fiscal year 2017-18 total available for use for the year ended March 31, 2018 204.5 16.8 221.2

The authorities increase of $61.3 million is mainly explained by:

Increase in authorities
  • $33.1 million for the National Inquiry into Missing and Murdered Indigenous Women and Girls;
  • $14.6 million for Budget 2016 initiatives to enhance PCO’s capacity and strengthen security;
  • $11.2 million for the IM/IT Modernization Project;
  • $2.3 million for collective bargaining; and
  • $2.2 million for the establishment of a Secretariat for the National Security and Intelligence Committee of Parliamentarians (NSICOP).
Decrease in authorities
  • $0.8 million for the Beyond the Border Action Plan and the Office of the Special Advisor on Human Smuggling;
  • $0.6 million for the implementation of the government-wide initiative to reduce spending in professional services, travel and government advertising;
  • $0.4 million to Department of Foreign Affairs, Trade and Development to support the Organisation for Economic Co-operation and Development's Public Sector Innovation Review; and
  • $0.3 million for the new non-partisan, merit-based Senate Appointment Process.

Significant changes to expenditures

The third quarter expenditures recorded to the end of the third quarter increased by $15.4 million, or 51%, from previous year at the same time (from $30.2 million for 2016-17 to $45.5 million for 2017-18). Table 1 below presents budgetary expenditures by standard object.

Table 1

(in thousands of dollars)
Material Variances to Expenditures by Standard Object Fiscal year 2017-18 Expended during the quarter ended 31-Dec-2017 Fiscal year 2016-17 Expended during the quarter ended 31-Dec-2016 Variance $ Variance %
Personnel 30,530 24,772 5,758 23%
Transportation and communications 1,782 1,037 745 72%
Information 631 538 93 17%
Professional and special services 9,587 1,581 8,006 506%
Rentals 293 166 127 77%
Repair and maintenance 784 1,011 (227) (22%)
Utilities, materials and supplies 122 157 (35) (22%)
Acquisition of machinery and equipment 1,586 735 851 116%
Transfer payments - - -  - 
Other subsidies and payments 206 154 52 34%
Total gross budgetary expenditures * 45,521 30,152 15,370 51%

* Details may not add to totals due to rounding

Personnel

The overall increase of $5.8 million in personnel spending is related to Budget 2016 initiatives to enhance PCO capacity and strengthen security, spending for the National Inquiry into Missing and Murdered Indigenous Women and Girls, and an increase in contributions to Employee Benefit Plans.

Transportation and communications

The increase of $0.7 million is mainly due to travel expenses related to the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Professional and special services

The increase of $8.0 million is mainly due to spending for the modernization of PCO’s information technology infrastructures approved in Budget 2016.

Acquisition of machinery and equipment

The increase of $0.9 million is due to spending on telecommunication and security equipment.

Significant changes to year-to-date expenditures

Year-to-date expenditures recorded to the end of the third quarter increased by $39.1 million, or 44%, from previous year at the same time (from $88.2 million for 2016-17 to $127.4 million for 2017-18). Table 2 below presents budgetary expenditures by standard object.

Table 2

(in thousands of dollars)
Material Variances to Expenditures by Standard Object YTD Expenditures as of Dec 31 2017 YTD Expenditures as of Dec 31 2016 Variance $ Variance %
Personnel 89,964 70,733 19,231 27%
Transportation and communications 4,041 2,729 1,312 48%
Information 1,641 1,274 367 29%
Professional and special services 24,326 7,542 16,784 223%
Rentals 1,143 1,030 113 11%
Repair and maintenance 1,818 1,967 (149) (8%)
Utilities, materials and supplies 446 331 115 35%
Acquisition of machinery and equipment 2,746 1,782 964 54%
Transfer payments 23 0 23 0%
Other subsidies and payments 1,232 861 371 43%
Total gross budgetary expenditures * 127,380 88,249 39,131 44%

* Details may not add to totals due to rounding

Personnel

The overall increase of $19.2 million in personnel spending is related to Budget 2016 initiatives to enhance PCO capacity and strengthen security and spending for the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Transportation and communications

The increase of $1.3 million is due to travel expenses related to the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Professional and special services

The increase of $16.8 million is mainly due to spending related to the modernization of PCO’s information technology infrastructure related to Budget 2016 initiatives.

Acquisition of machinery and equipment

The increase of $1.0 million is due to spending on telecommunication and security equipment.

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.

This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the 2017-18 Main Estimates, Supplementary Estimates (A), Supplementary Estimates (B) and TB Central Votes for the same year.

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

PCO's current operating environment continues to change as it pursues the priorities of the government's mandate. Budget 2017 announced the creation of two new secretariats within PCO to support the work of the Special Advisor on LGBTQ2 (Lesbian, Gay, Bisexual, Transgender, Queer, Two-spirited) issues and the Working Group on the Review of Laws and Policies related to Indigenous Peoples. Budget 2017 also announced the creation of a centre of expertise within PCO under the Impact Canada Initiative whose mandate is to test and encourage non-traditional partnership and projects to enable greater innovation.

Personnel

In December 2017, Matthew Shea was appointed the new Chief Financial Officer for the PCO.

Approval by senior officials

Michael Wernick
Clerk of the Privy Council and
Secretary to the Cabinet

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

Ottawa, Canada
February 28, 2018

Annexes A & B

Statement of authorities (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2017-2018
Fiscal year 2016-2017
Total available for use for the year ending March 31, 2018 (note 1)
Used during the quarter ended December 31, 2017
Year-to-date used at quarter–end
Total available for use for the year ending March 31, 2017 (note 1)
Used during the quarter ended December 31, 2016
Year-to-date used at quarter–end
Vote 1 - Net operating expenditures
204,482
41,803
116,223
143,024
27,633
78,290
Budgetary statutory authorities
 
Contributions to employee benefits plans
16,381
3,654
10,962
16,545
2,433
9,732
Prime Minister - Salary and motor car allowance
174
44
131
172
43
115
Minister of Infrastructure, Communities and Intergovernmental Affairs and Minister of the Economic Development Agency of Canada for the Regions of Quebec - Salary and motor car allowance
-
-
-
-
-
-
Leader of the Government in the House of Commons - Salary and motor car allowance
84
-
-
84
21
56
Minister of Democratic Institutions - Salary and motor car allowance
84
21
63
84
21
56
Minister of State (Democratic Reform) - Motor car allowance
-
-
-
-
-
-
Minister of State and Chief Government Whip - Motor car allowance
-
-
-
-
-
-
Spending of proceeds from the disposal of surplus Crown assets
34
-
-
41
-
-
Total budgetary authorities
221,240
45,521
127,380
159,950
30,152
88,249
Total Authorities
221,240
45,521
127,380
159,950
30,152
88,249
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.

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

(in thousands of dollars)
Fiscal year 2017-2018
Fiscal year 2016-2017
Planned expenditures for the year ending March 31, 2018 (note 1)
Expended during the quarter ended December 31, 2017
Year-to-date used at quarter-end
Planned expenditures for the year ending March 31, 2017 (note 1)
Expended during the quarter ended December 31, 2016
Year-to-date used at quarter-end
Expenditures  
Personnel
125,367
30,530
89,964
110,990
24,772
70,733
Transportation and communications
11,941
1,782
4,041
4,721
1,037
2,729
Information
7,148
631
1,641
4,345
538
1,274
Professional and special services
54,882
9,587
24,326
30,340
1,581
7,542
Rentals
3,215
293
1,143
1,375
166
1,030
Repair and maintenance
5,257
784
1,818
2,400
1,011
1,967
Utilities, materials and supplies
591
122
446
700
157
331
Acquisition of machinery and equipment
8,370
1,586
2,746
5,231
735
1,782
Transfer payments
4,500
-
23
-
-
-
Public debt charges
-
-
-
-
-
-
Other subsidies and payments
44
206
1,232
(79)
154
861
Total gross budgetary expenditures
221,315
45,521
127,380
160,025
30,152
88,249
Less Revenues netted against expenditures:
  Revenues
(75)
-
-
(75)
-
-
Total revenues netted against expenditures
(75)
-
-
(75)
-
-
Total Budgetary Expenditures
221,240
45,521
127,380
159,950
30,152
88,249
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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