Quarterly Financial Report For the quarter ending June 30, 2016 (unaudited)

Published on August 29, 2016

Table of contents

• Introduction
• Authority and objectives
• Basis of presentation
• Highlights of fiscal quarter and fiscal year-to-date results
  • Significant changes to authorities
  • Significant changes to gross budgetary expenditures
  • Significant changes in revenues netted against expenditures
• Risks and uncertainties
• Significant changes in relation to operation, personnel and programs
• Approved by senior officials
• Table 1: Statement of Authorities (unaudited)
• Table 2: Departmental budgetary expenditures by standard object (unaudited)

Introduction

This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates for fiscal year 2016-17.

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.

The quarterly report has been reviewed by the Internal Audit Committee of the Public Service Commission.

Authority and objectives

The Public Service Commission (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, 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 2016-17 Report on Plans and Priorities.

Basis of presentation

Management has prepared this quarterly 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 2016-17 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 Public Service Commission 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 June 30, 2016. In reading these highlights, it is important to note that the Public Service Commission (PSC) has the authority to re-spend revenues received from other government departments and agencies in a fiscal year — of an amount not to exceed $14,252K — to offset expenditures incurred in that fiscal year arising from the provision of assessment and counselling services and products.

Significant changes to authorities

The net increase of $0.1M, from $83.5M in 2015-16 to $83.6M in 2016-17, as per Table 1: Statement of Authorities, is mainly related to the following:

• A net decrease of $0.4M resulting from transfers to other government departments and agencies for the implementation of enterprise-wide government initiatives (e.g., Public Service Pay Centre and Back Office Transformation) and Census of the Population;
• A net increase of $0.3M resulting from compensation for applicable salary and wage increases and revisions to the rate used to determine the Employee Benefit Plan cost estimates; and
• An increase of $0.2M from Parks Canada for the early receipt of its contribution to the Public Service Resourcing System.

Significant changes to gross budgetary expenditures

As of June 30, 2016, total gross budgetary expenditures show an increase of $1.3M, from $19.0M in 2015-16 to $20.3M in 2016-17, as per Table 2: Departmental budgetary expenditures by standard object.

When comparing the value of professional and special services and personnel expenditures, the PSC is reporting an increase of $1.0M and $0.2M, respectively.

• Prior to the end of June 2016, the PSC paid $0.6M to the Department of Justice for the provision of its legal services, in advance of services rendered, as part of their new funding and billing model effective April 1, 2016; incurred $0.2M of additional expenditures for IM/IT projects and $0.2M for various other contractual obligations; and
• During the quarter, there have been significant delays in employee pay file transfers to the Pay Centre, specifically when employees move from one government organization to another, resulting in increased personnel expenditures.

Significant changes in revenues netted against expenditures

As of June 30, 2016, the PSC forecasted a total of $8.3M in annual re-spendable revenues for the current fiscal year, which is slightly above the levels of last year's first quarter ($8.0M).

The collection of Assessment and Counselling Services revenues at the end of the first quarter accounts for 8% of overall revenues anticipated for the current fiscal year, which is consistent with the first quarter of the previous fiscal year.

Risks and uncertainties

The Public Service Commission (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 2016-17 Report on Plans and Priorities.

Significant changes in relation to operation, personnel and programs

In 2015-16, the Public Service Commission completed its policy review and through extensive consultation with stakeholders, introduced a New Direction in Staffing (NDS) which is comprised of a new:

• Appointment Policy;
• Appointment and Delegation Accountability Instrument; and
• Oversight Model.

The NDS was introduced on April 1, 2016.

During the period covered by this report:

• Christine Donoghue was the Acting President of the Public Service Commission;
• Omer Boudreau retired as Vice-President of the Corporate Management Branch and as Chief Financial Officer;
• Philip Morton was the Acting Vice-President of the Corporate Management Branch up to May 31^st, and was appointed Chief Financial Officer as of June 1^st, 2016;
• Gerry Thom assumed the responsibility of Vice-President of the Corporate Management Branch and was acting Senior Vice-President of the Policy Branch; and
• Stan Lee was the Acting Vice-President of the Staffing and Assessment Services Branch.

Approved by senior officials

Original signed by: Christine Donoghue
Acting President
Signed on: August 17, 2016

Original signed by: Philip Morton, CPA, CGA
Chief Financial Officer
Signed on: August 17, 2016

Original signed by: Sophie Perreault, CPA, CGA
Deputy Chief Financial Officer
Signed on: August 17, 2016

Gatineau, Canada
Date of publication: August 29, 2016

Note: Differences are due to rounding

¹ Includes only Authorities available for use and granted by Parliament at quarter-end.

² The PSC has TBS approval to use cost recovery for assessment and counselling services of up to $14,252K.

Note: Differences are due to rounding

¹ Includes only Authorities available for use and granted by Parliament at quarter-end.