Quarterly Financial Report - For the quarter ended December 31, 2018

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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, Supplementary 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 2018-19 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 statements1 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, 2018.

PCO spent approximately 53% of its authorities available for use by the end of the third quarter, compared to 58% in the same quarter of 2017-18 (see graph 1 below).

Graph 1: Comparison of Total Authorities Available For Use and Total Net Budgetary Expenditures as of Q3 2018-2019 and 2017-2018

Graph 1: Comparison of Total Authorities
Text version - Graphic 1
(in millions)
  2018-19 2017-18
Total Authorities available for use 235.9 221.2
Q2 Expenditures 45.7 45.5
Year-To-Date Expenditures 124.0 127.4

Significant changes to authorities

As per graph 2 below, PCO has authorities available for use of $235.9 million in 2018-19 compared to $221.2 million as of December 31, 2017, for a net increase of $14.7 million or 7%.

Graph 2: Variance in Authorities as at December 31, 2018

Graph 2: Variance in Authorities as at December 31, 2018
Text version - Graphic 2
(in millions)
  Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2017-18 total available for use for the year ended March 31 2018 217.0 18.9 235.9
Fiscal year 2018-19 total available for use for the year ended March 31 2019 204.5 16.7 221.2

The net increase in authorities of $14.7 million is mainly explained by:

  • Increase in authorities
    • $28.0 million for the National Inquiry into Missing and Murdered Indigenous Women and Girls;
    • $7.0 million to address funding increase to support ministers for which PCO has responsibility; and
    • $4.5 million for supporting a full implementation of an open, transparent and merit-based selection process for Governor in Council (GIC) appointments.
  • Decrease in authorities
    • $22.6 million relating to PCO's information technology modernization project as a number of projects were finalized in 2017-18; and
    • $2.2 million that was provided in 2017-18 for the establishment of the Secretariat for the National Security and Intelligence Committee of Parliamentarians (NSICOP).

Significant changes to quarterly expenditures by Standard Object

The third quarter expenditures totaled $45.7 million for a net increase of $0.2 million (0%) when compared to $45.5 million spent during the same period in 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 2018-19
Expended during the quarter ended 31-Dec-2018
Fiscal year 2017-18
Expended during the quarter ended 31-Dec-2017
Variance $ Variance %
Personnel 33,763 30,530 3,233 11%
Transportation and communications 1,801 1,782 19 1%
Information 862 631 231 37%
Professional and special services 6,617 9,587 (2,970) (31%)
Rentals 431 293 138 47%
Repair and maintenance 240 784 (544) (69%)
Utilities, materials and supplies 236 122 114 93%
Acquisition of machinery and equipment 317 1,586 (1,269) (80%)
Transfer payments 1,262 0 1,262 -
Other subsidies and payments 169 206 (37) (18%)
Total gross budgetary expenditures* 45,698 45,521 177 0%
* Details may not add to totals due to rounding
  • Personnel
    • The overall increase of $3.2 million in personnel spending is mainly related to the timing of the salary recoveries from other departments completed in this quarter, spending for the National Inquiry into Missing and Murdered Indigenous Women and Girls, and increased department-wide personnel costs.
  • Professional and special services
    • The decrease in spending of $3.0 million is mainly due to spending for PCO's information technology modernization project, as a number of sub-projects were substantially completed in 2017-18.
  • Repair and maintenance
    • Spending related to accommodation and building services has decreased by $0.5M, due to the timing of project schedules.
  • Acquisition of machinery and equipment
    • The decrease of $1.3 million is mainly due to a reduction in purchases of telecommunication and security equipment related to Budget 2016 initiatives.
  • Transfer Payments
    • The National Inquiry into Missing and Murdered Indigenous Women and Girls increased its transfer payments by $1.3 million.

Significant changes to year-to-date expenditures by Standard Object

The year-to-date expenditures totaled $124.0 million for a net decrease of $3.4 million (3%) when compared to $127.4 million spent during the same period in 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, 2018
YTD Expenditures as of
Dec 31, 2017
Variance $ Variance %
Personnel 94,129 89,964 4,165 5%
Transportation and communications 4,456 4,041 415 10%

Information

2,339 1,641 698 43%
Professional and special services 16,021 24,326 (8,305) (34%)
Rentals 1,237 1,143 94 8%
Repair and maintenance 340 1,818 (1,478) (81%)
Utilities, materials and supplies 575 446 129 29%
Acquisition of machinery and equipment 2,087 2,746 (659) (24%)
Transfer payments 2,081 23 2,058 8,948%
Other subsidies and payments 764 1,232 (468) (38%)
Total gross budgetary expenditures * 124,029 127,380 (3,351) (3%)
* Details may not add to totals due to rounding
  • Personnel
    • The overall increase of $4.2 million in personnel spending is mainly related to 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 decrease of $8.3 million is mainly due to decreased spending for PCO's information technology modernization project as a number of sub-projects were substantially completed in 2017-18, offset by an increase in spending for the National Inquiry into Missing and Murdered Indigenous Women and Girls.
  • Repair and maintenance
    • Spending related to accommodation and building services has decreased by $1.5M, due to the timing of project schedules.
  • Acquisition of machinery and equipment
    • The decrease of $0.7 million is mainly due to spending on telecommunication and security equipment related to Budget 2016 investments.
  • Transfer Payments
    • The National Inquiry into Missing and Murdered Indigenous Women and Girls increased its transfer payments by $2.1 million.

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 2018-19 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

PCO's operating environment has not significantly changed in the last quarter as it pursues the priorities of the gouvernment's mandate.

In December 2018, the Prime Minister announced the appointment of Catherine Blewett as the new Deputy Clerk of the Privy Council and Associate Secretary to the Cabinet, effective January 7, 2019.

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
Friday, March 1, 2019

Annexes A & B

Annex A

Statement of authorities (unaudited) (note 2)

(in thousands of dollars)
Fiscal year 2018-2019 Fiscal year 2017-2018
Total available for use for the year ending March 31, 2019 (note 1) Used during the quarter ended December 31, 2018 Year-to-date used at quarter–end 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
Vote 1 - Net operating expenditures 216,981 41,682 112,018 204,482 41,803 116,223
Budgetary statutory authorities  
Contributions to employee benefits plans 18,457 3,932 11,795 16,381 3,654 10,962
Prime Minister - Salary and motor car allowance 178 44 133 174 44 131
Minister of Intergovernmental Affairs and President of the Queen's Privy Council for Canada - Salary and motor car allowance 86 18 18 - - -
Leader of the Government in the House of Commons - Salary and motor car allowance 86 - - 84 - -
Minister of Democratic Institutions - Salary and motor car allowance 86 22 65 84 21 63
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 6 - - 34 - -
Total budgetary authorities 235,880 45,698 124,029 221,240 45,521 127,380
Total Authorities 235,880 45,698 124,029 221,240 45,521 127,380
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 2018-2019 Fiscal year 2017-2018
Planned expenditures for the year ending March 31, 2019 (note 1) Expended during the quarter ended December 31, 2018 Year-to-date used at quarter-end 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
Budgetary expenditures  
Personnel 138,802 33,763 94,129 125,367 30,530 89,964
Transportation and communications 13,986 1,801 4,456 11,941 1,782 4,041
Information 9,652 862 2,339 7,148 631 1,641
Professional and special services 48,293 6,617 16,021 54,882 9,587 24,326
Rentals 2,789 431 1,237 3,215 293 1,143
Repair and maintenance 2,091 240 340 5,257 784 1,818
Utilities, materials and supplies 660 236 575 591 122 446
Acquisition of machinery and equipment 4,785 317 2,087 8,370 1,586 2,746
Transfer payments 15,400 1,262 2,081 4,500 - 23
Public debt charges - - - - - -
Other subsidies and payments 507 169 764 44 206 1,232
Total gross budgetary expenditures 236,964 45,698 124,029 221,315 45,521 127,380
Less Revenues netted against expenditures:
  Revenues
(1,085) - - (75) - -
Total revenues netted against expenditures (1,085) - - (75) - -
Total Budgetary Expenditures 235,880 45,698 124,029 221,240 45,521 127,380
Note 1: Includes only Authorities available for use and granted by Parliament at quarter-end for each respective fiscal year (Frozen budget of $401K included for 2018-19).
Note 2: Details may not add to totals due to rounding.
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