Quarterly Financial Report - For the quarter ended December 31, 2014
Table of contents
- Authority and objectives
- Basis of presentation
- Highlights of fiscal quarter and fiscal year-to-date results
- Risks and uncertainties
- Significant changes in relation to operation, personnel and programs
- Budget 2012 implementation
- Approved by senior officials
- Table 1: Statement of authorities (unaudited)
- Table 2: Departmental budgetary expenditures by standard object (unaudited)
This quarterly financial report should be read in conjunction with the Main Estimates, Supplementary Estimates for fiscal year 2014-2015 as well as Canada’s Economic Action Plan 2012 (Budget 2012).
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 Treasury Board Accounting Standard 1.3.
This quarterly report has not been subject to an external audit or review, but it has been reviewed by members of the Internal Audit Committee of the Public Service Commission (PSC).
Authority and objectives
The PSC is an independent agency established under the Public Service Employment Act (PSEA) and listed in schedules I.1 and IV of the Financial Administration Act.
The PSC is mandated to:
- Make appointments to and within the public service, based on merit and free from political influence. The PSEA provides the authority to the Commission to delegate to deputy heads its authority to make appointments to positions in the public service. This authority is currently delegated to the deputy heads subject to the PSEA, across the federal government;
- Administer the provisions of the PSEA that are related to the political activities of employees and deputy heads. Part 7 of the PSEA recognizes the right of employees to engage in a political activity, while maintaining the principle of political impartiality in the public service. It also sets out specific roles and responsibilities for employees and for the PSC related to political activities; and
- Oversee the integrity of the staffing system and, in collaboration with other stakeholders, ensure non-partisanship. This oversight role includes: The regulatory authority and policy-setting function; the ongoing support and guidance and the monitoring of the staffing performance of delegated organizations; the conduct of audits that provide an independent assessment of the performance and management of staffing activities and the conduct of investigations of staffing processes and improper political activities by public servants.
A summary description of the PSC's programs can be found in section II of the 2014-2015 Report on Plans and Priorities.
Basis of presentation
Management has prepared this report using an expenditure basis of accounting for both expenditures and revenues. The accompanying Statement of Authorities includes the organization's spending authorities granted by Parliament and those used by the organization, consistent with the Main Estimates and Supplementary Estimates for the 2014-2015 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 monies 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 PSC uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis of accounting.
Highlights of fiscal quarter and fiscal year-to-date results
This section highlights the significant items that contributed to the net decrease in resources available for the current year and in actual expenditures for the quarter ended December 31, 2014. In reading these highlights, it is important to note that the PSC has the authority to re-spend revenues received from other government departments and agencies in a fiscal year to offset expenditures incurred in that fiscal year, arising from the provision of assessment and counselling services and products.
Significant changes to authorities
As at December 31, 2014, total authorities available for the current year, compared to the previous year, show a decrease of $6.1M, from $94.9M to $88.8M, as per Table 1: Statement of Authorities.
This variance is attributable to the following:
- A decrease of $4.5M pertaining to the third consecutive year of savings measures announced in Budget 2012;
- A decrease of $1.3M due to a requested re-profile of funds (in 2013-2014, the PSC requested additional funds of $3.9M to be offset by annual reductions of $1.3M over the next three years) to support the relocation of the PSC’s offices from Ottawa to Gatineau, which took place during the fall of 2013;
- A decrease of $0.2M resulting from transfers between organizations due to the consolidation of some corporate services; and
- A decrease of $0.1M pertaining to the Operating Budget Carry Forward being less than the one from the previous year.
Significant changes to gross budgetary expenditures
Compared to the figures at the same quarter for last fiscal year, the total gross budgetary expenditures show a decrease of $4.1M (from $24.8M to $20.7M), as per Table 2: Departmental Budgetary Expenditures by Standard Object.
The variance is mainly attributable to the following:
- The most significant decrease occurred in personnel expenditures (from $22.0M to $18.5M) for a total of $3.5M (or 16%). This results from the implementation of the third consecutive year of Budget 2012 savings measures;
- A decrease of over $0.4M in “Rentals” is mainly due to the disbursement of recurring invoices that occured in two different quarters;
- The decrease of over $0.2M in “Repair & Maintenance” is due to the non-recurring expenditures pertaining to the relocation of the PSC’s offices from Ottawa to Gatineau that happened in the fall of 2013; and
- The increase of $0.1M in “Acquisition of Machinery & Equipment” is related to the license cost incurred for the conversion from MS Office 2007 to MS Office 2013, which took place during the fall of 2014.
Significant changes in revenues netted against expenditures
As of December 31, 2014, the PSC forecasted annual re-spendable revenues for the current fiscal year remained stable at $8.5M, which is $0.2M lower than the figure at the end of the same quarter last fiscal year.
The collection of Assessment and Counselling Services revenues at the end of the third quarter accounts for 56% of overall revenues anticipated for the current fiscal year, which is comparable to the 53% of the previous fiscal year.
Risks and uncertainties
The PSC operates in a dynamic and complex environment that requires it to be efficient, adaptive and innovative. It uses integrated risk management, including the annual development of a Corporate Risk Profile, to identify and respond to challenges and opportunities.
The PSC's key risks and the corresponding mitigation strategies are outlined in section I of the 2014-2015 Report on Plans and Priorities.
Significant changes in relation to operation, personnel and programs
There were no significant changes in relation to operations, personnel and programs during the third quarter of 2014-2015.
Budget 2012 implementation
This section provides an overview of the savings measures announced in Budget 2012 that have been implemented in order to re-focus government and programs; make it easier for Canadians and businesses to deal with their government and modernize and reduce the back office.
The PSC will have achieved Budget 2012 ongoing savings of $9.0M by the end of fiscal year 2014-2015 through a variety of means. These include: Redesigning work processes, closing of two regional offices, leveraging advancements in technologies and benefitting from mature methodologies, the development and use of centralized data, finding administrative efficiencies and reducing the size of internal services relative to a smaller PSC. This will set the stage to simplify reporting and accountability structures and streamline administrative processes.
In the first two years of implementation, the PSC achieved savings of $4.5M, which represents 50% of its three-year reduction. In 2014-2015, fiscal year savings have increased by another $4.5M, to reach the total PSC target of $9.0M in savings and a cumulative reduction of 87 full time equivalents (FTE). As at the end of the 2014-2015 third quarter, the implementation of savings measures were on target.
In addition to the PSC implementing its own expenditure reduction as an organization, Budget 2012 savings measures had an impact on the Priority Administration Program. The program experienced increases in the volume of priority persons due to the increase in the number of employees declared surplus. The PSC had identified financial, technological and operational risks and took some steps to mitigate them, such as the reallocation of PSC resources to the Priority Administration Program to support any further changes in volume and the implementation of an enhanced priority appointment policy framework, with related system and communication improvements, to ensure the appointment of priority persons. The number of active cases observed at the end of this quarter is approaching the annual average prior to the implementation of Budget 2012 savings measures.
In parallel, as a result of reductions to the size of the public service, the PSC experienced changes in demand for some of its programs and services. From 2011-2012 to 2012-2013, this translated to a decline in demand for certain staffing, balanced by an increase in demand for policy advice and guidance and certain assessment services. The PSC manages this evolving environment on an ongoing basis.
Approved by senior officials
Chief Financial Officer
Phil Morton, CGA
Deputy Chief Financial Officer
Date of Publication: February 27, 2015
Table 1: Statement of Authorities (unaudited)
|Fiscal Year 2014-2015
||Fiscal Year 2013-2014
|Total available for use for the year ending March 31, 2015Footnote1||Used during the quarter ended December 31, 2014||Year to date used at quarter-end||Total available for use for the year ending March 31, 2014Footnote1||Used during the quarter ended December 31, 2013||Year to date used at quarter-end|
|Vote 1 – Operating Expenditures||$91,061||$17,688||$54,254||$96,006||$22,577||$61,070|
|Less: Revenues Netted Against Expenditures||(14,252)||(2,242)||(4,825)||(14,252)||(2,196)||(4,725)|
|Net Vote 1 – Net Operating Expenditures||76,809||15,446||49,429||81,754||20,381||56,345|
|Statutory – Refunds of Previous Year's Revenue||1||(3)||1||-||(2)||-|
|Statutory – Spending of proceeds from the disposal of surplus Crown assets||–||–||–||–||–||–|
|Statutory – Contributions to Employee Benefit Plans||12,017||3,005||9,013||13,171||2,195||8,781|
|Total Statutory Authorities||12,018||3,002||9,014||13,171||2,193||8,781|
Note: Differences are due to rounding
Table 2: Departmental Budgetary Expenditures by Standard Object (unaudited)
|Fiscal Year 2014-2015
||Fiscal Year 2013-2014
|Planned expenditures for the year ending March 31, 2015||Expenditures during the quarter ended December 31, 2014||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2014||Expenditures during the quarter ended December 31, 2013||Year to date used at quarter-end|
|Transportation and telecommunications||451||118||202||608||120||210|
|Professional and special services||11,251||1,653||3,685||12,166||1,578||3,402|
|Repair and maintenance||41||3||5||2,027||234||257|
|Utilities, materials and supplies||306||35||120||405||107||187|
|Acquisition of machinery and equipment||955||167||315||2,636||67||75|
|Other subsidies and payments||3,372||45||2,426||406||(1)||18|
|Total gross budgetary expenditures||103,079||20,690||63,268||109,177||24,770||69,851|
|Less: Revenues netted against expenditures||(14,252)||(2,242)||(4,825)||(14,252)||(2,196)||(4,725)|
|Total net budgetary expenditures||$88,827||$18,448||$58,443||$94,925||$22,574||$65,126|
Note: Differences are due to rounding
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