Quarterly Financial Report For the quarter ended September 30, 2018 (unaudited)

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates for fiscal year 2018-19. It 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. It has been reviewed by the Internal Audit Committee of the Public Service Commission of Canada.

This quarterly report has not been subject to an external audit or review.

1.1 Authority and objectives

The Public Service Commission (the agency) is an independent agency established under the Public Service Employment Act and listed in schedules I.1 and IV of the Financial Administration Act.

A summary description of the agency’s programs can be found in its 2018-19 Departmental Plan.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency’s spending authorities granted by Parliament and those used by the agency consistent with the Main Estimates for the 2018-19 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money 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.

The agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.3 Financial structure

The agency has a financial structure comprised of voted budgetary authorities for program expenditures and statutory authorities for contributions to employee benefit plans.

In addition, the agency has the authority to re-spend certain revenues received from other government departments and agencies in a fiscal year to offset expenditures incurred in that same year, for the provision of assessment and counselling products and services.

2. Highlights of fiscal quarter and fiscal year-to-date results

This section highlights the significant items that contributed to the change in resources available for the current year and in the actual expenditures for the quarter ended September 30, 2018.

The following graph provides a comparison of the net budgetary authorities available for spending and the expenditures for the quarters ended September 30, 2018, and September 30, 2017, for the agency’s combined Vote 1 – Program Expenditures and Statutory Authorities.

2.1 Significant changes to authorities

As shown in Section 6: Statement of Authorities, at September 30, 2018, there has been an increase of $2,118,000 in authorities available for use in the current year, as compared to the previous year.

The variance is due mainly to additional funding of $2,004,000 received from the Treasury Board for the increase to cover higher current salary rates following the implementation of new collective agreements.

2.2 Significant variances in expenditures from prior year

As shown in Section 7: Budgetary expenditures by standard object, total net budgetary expenditures during the quarter decreased from $23,864,000 in 2017-18 to $21,909,000 in 2018-19; a variance of $1,955,000 or 8.2%.

The principal reasons for the variance are the following:

• there was a decrease of $1,089,000 in personnel, mainly the result of 3 factors:
  • a decrease of $2,616,000 mainly resulting in a difference between retroactive salary payments in the 2nd quarter of 2018-19 compared to retroactive salary payments made in the 2nd quarter of 2017-18, following the implementation of new collective agreements
  • offset by an increase of $627,000 resulting mainly from the hiring of new employees in the Corporate Affairs Sector and Services and Business Development Sector
  • an increase of $924,000 due mainly to a timing difference in the payment of employee benefit plan contributions
• there was a decrease of $524,000 in professional and special services, mainly due to the fact that there were no payments for legal services made in the 2nd quarter of 2018-19 as Justice Canada will not bill the agency for legal services until the new collective agreement for the lawyers is signed
• there was a decrease of $411,000 in rentals, mainly due to timing differences in the payment cycle for various software licences

3. Risks and uncertainties

The agency operates in a dynamic and complex environment that requires it to be efficient, adaptive and innovative. It uses integrated risk management, including a Corporate Risk Profile that is updated annually, to identify and respond to challenges and opportunities.

The agency’s key risks and the corresponding mitigation strategies are outlined in its Corporate Risk Profile 2018-19.

4. Significant changes in relation to operations, personnel and programs

There were no significant changes to operations, personnel or programs during the second quarter of 2018-19.

5. Approved by senior officials

Approved by:

Patrick Borbey
President

Philip Morton, CPA, CGA
Chief Financial Officer

Gatineau, Canada
November 22, 2018

6. Statement of Authorities (unaudited)

7. Budgetary expenditures by standard object (unaudited)