Quarterly Financial Report - For the quarter ended September 30, 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.

A summary description of the Privy Council Office (PCO) programs can be found in Part II of the Main Estimates. For more information on PCO's main roles, 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) 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 September 30, 2017.

PCO spent approximately 44% of its authorities by the end of the second quarter, compared to 39% in the same quarter of 2016-17 (see graph 1 below).

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q2 2017-2018 and 2016-2017

Text version
In millions
Authorities/expenditures
2017-18
2016-17
Total Authorities
184.6
147.5
Q2 Expenditures
51.8
31.1
Expenditures Year-To-Date
81.9
58.1

Significant changes to authorities

As per graph 2 below as at September 30, 2017 and Table 2, presented at the end of this document, PCO has authorities available for use of $184.6 million in 2017-18 compared to $147.6 million as of September 30, 2016, for a net increase of $37 million or 25%.

Graph 2: Variance in Authorities as at September 30, 2017

Text version
In millions
Vote 1 - Operating
Statutory
Total budgetary authorities
Fiscal year 2016-17 total available for use for the year ended March 31 2017
132.1
15.5
147.5
Fiscal year 2017-18 total available for use for the year ended March 31 2018
168.3
16.3
184.6

The increase of $37.0 million in authorities in 2017-18 compared to 2016-17 is mainly related to an increase of $38.4 million for:

  • $33.1 million for the National Inquiry into Missing and Murdered Indigenous Women and Girls;
  • $4.6 million related to Budget 2016 initiatives to enhance PCO’s capacity and strengthen its security; and
  • $0.7 million related to employee benefit plans in accordance with Treasury Board Secretariat (TBS) guidelines.

This increase is partially offset by a decrease of $1.4 million for:

  • $0.8 million related to temporary initiatives due to the winding down of activities for the Beyond the Border Action Plan and the Office of the Special Advisor on Human Smuggling; and
  • $0.6 million for the implementation of the government-wide initiative to reduce spending in professional services, travel and government advertising.

Significant changes to expenditures

Significant changes to quarter expenditures

The second quarter expenditures recorded to the end of the second quarter increased by $20.8 million, or 67%, from previous year at the same time (from $31.1 million for 2016-17 to $51.8 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 30-Sept-2017
Fiscal year 2016-17
Expended during the quarter ended 30-Sept-2016
Variance $
Variance %
Personnel
35,149
24,223
10,926
45%
Transportation and communications
1,402
1,016
386
38%
Information
607
361
246
68%
Professional and special services
11,893
3,278
8,615
263%
Rentals
323
147
176
120%
Repair and maintenance
1,003
932
71
8%
Utilities, materials and supplies
252
97
155
160%
Acquisition of machinery and equipment
644
835
(191)
(23%)
Transfer payments
23
0
23
-
Other subsidies and payments
547
173
374
216%
Total gross budgetary expenditures *
51,843
31,062
20,781
67%
* Details may not add to totals due to rounding
Personnel

The overall increase of $10.9 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.

Professional and special services

The increase of $8.6 million is mainly due to spending related to the modernization of PCO’s information technology infrastructure related to Budget 2016 initiatives.

Transfer Payments

The increase of $23K in transfer payments is due to spending for the activities of the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Significant changes to year-to-date expenditures

Year-to-date expenditures recorded to the end of the second quarter increased by $23.8 million, or 41%, from previous year at the same time (from $58.1 million for 2016-17 to $81.9 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 Sept 30, 2017
YTD Expenditures as of Sept 30, 2016
Variance $
Variance %
Personnel
59,434
45,961
13,473
29%
Transportation and communications
2,259
1,692
567
34%
Information
1,011
735
276
38%
Professional and special services
14,739
5,961
8,778
147%
Rentals
850
864
(14)
(2%)
Repair and maintenance
1,033
956
77
8%
Utilities, materials and supplies
324
174
150
86%
Acquisition of machinery and equipment
1,160
1,047
113
11%
Transfer payments
23
0
23
0%
Other subsidies and payments
1,027
707
320
45%
Total gross budgetary expenditures *
81,860
58,098
23,762
41%
* Details may not add to totals due to rounding

Personnel

The overall increase of $13.5 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.

Professional and special services

The increase of $8.8 million is due to spending related to the modernization of PCO’s information technology infrastructure related to Budget 2016 initiatives.

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.

This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the 2017-18 Main Estimates, Supplementary Estimates (A) 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 adapts to the priorities of this 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. It also announced the creation of a center of expertise within PCO under the Impact Canada Initiative which mandate is to test and encourage non-traditional partnership & projects to enable greater innovation.

Programs

In August 2016, the government announced the National Inquiry into Missing and Murdered Indigenous Women and Girls. Activities related to this initiative continue to be implemented in the current fiscal year.

Approval by senior officials: (original signed by)

Original signed by
Michael Wernick
Clerk of the Privy Council and
Secretary to the Cabinet

Original signed by
Kami Ramcharan
Assistant Deputy Minister and
Chief Financial Officer
Corporate Services Branch

Ottawa, Canada
November 29, 2017

Appendix

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 September 30, 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 Seprember 30, 2016
Year-to-date used at quarter–end
Vote 1 - Net operating expenditures
168,338
44,455
71,986
132,069
27,299
50,658
Budgetary statutory authorities
 
Contributions to employee benefits plans
15,904
7,308
9,744
15,202
3,650
7,299
Prime Minister - Salary and motor car allowance
174
44
87
172
57
72
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
28
35
Minister of Democratic Institutions - Salary and motor car allowance
84
35
42
84
28
35
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
-
-
15
-
-
Total budgetary authorities
184,620
51,843
81,860
147,625
31,062
58,098
Total Authorities
184,620
51,843
81,860
147,625
31,062
58,098
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 September 30, 2017
Year-to-date used at quarter-end
Planned expenditures for the year ending March 31, 2017 (note 1)
Expended during the quarter ended Septemebr 30, 2016
Year-to-date used at quarter-end
Expenditures  
Personnel
120,168
35,149
59,434
102,930
24,223
45,961
Transportation and communications
11,887
1,402
2,259
4,173
1,016
1,692
Information
7,148
607
1,011
4,233
361
735
Professional and special services
27,587
11,893
14,739
27,276
3,278
5,961
Rentals
3,215
323
850
1,244
147
864
Repair and maintenance
5,257
1,003
1,033
2,400
932
956
Utilities, materials and supplies
586
252
324
690
97
174
Acquisition of machinery and equipment
4,302
644
1,160
4,833
835
1,047
Transfer payments
4,500
23
23
-
-
-
Other subsidies and payments
44
547
1,027
(79)
173
707
Total gross budgetary expenditures
184,695
51,843
81,860
147,701
31,062
58,098
Less Revenues netted against expenditures:
  Revenues
(75)
-
-
(75)
-
-
Total revenues netted against expenditures
(75)
-
-
(75)
-
-
Total Budgetary Expenditures
184,620
51,843
81,860
147,625
31,062
58,098
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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