Quarterly Financial Report for the quarter ended December 31, 2019 - Secretariat of the National Security and Intelligence Committee of Parliamentarians

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Introduction

This Quarterly Financial 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 2019-20 Main Estimates, as well as previous Quarterly Financial Reports. This quarterly report has not been subject to an external audit or review.

Mandate

The National Security and Intelligence Committee of Parliamentarians Act received Royal Assent on June 22, 2017. It formally establishes the Secretariat of the National Security and Intelligence Committee of Parliamentarians (the Secretariat). The Secretariat assists the National Security and Intelligence Committee of Parliamentarians in fulfilling its mandate, which is to review:

The Secretariat ensures the Committee receives timely access to relevant, classified information and strategic and expert advice in the exercise of reviews by the Committee. It assists in the development of reports and provides support to ensure compliance with security requirements.

As the Secretariat was created in 2017-18, no Program Alignment Architecture existed for reporting purposes. A Departmental Results Framework and accompanying Program Inventory are under development, to be completed during the 2020-21 fiscal year.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department’s spending authorities granted by Parliament and those used by the department, consistent with the 2019-20 Main Estimates. 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.

The Secretariat 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 the fiscal quarter and the fiscal year to date (YTD) 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, 2019.

The Secretariat spent approximately 53% of its authorities by the end of the third quarter, compared to 15% in the same quarter of 2018-19 (see graph 1 below).

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q3 2019-2020 and 2018-2019

Graph 1: Comparison of Total Authorities and Total Net Budgetary Expenditures as of Q3 2019-2020 and 2018-2019
Text version - Graph 1
$ Million
2019-20 2018-19
Total Authorities 3.6 6.8
Q3 Expenditures 0.9 0.7
Year-To-Date-Expenditures 1.9 1.0

Significant changes to authorities

As per graph 2 below as at December 31, 2019, the Secretariat has authorities available for use of $3.6 million in 2019-20 compared to $6.8 million as of December 31, 2018, for a net decrease of $3.2 million or 47%. The net decrease is explained by the movement of funding from 2017-18 to 2018-19 to align funding with the one-time construction costs for the Secretariat’s permanent facility.

Graph 2: Variance in Authorities as at December 31, 2019

Graph 2: Variance in Authorities as at December 31, 2019
Text version - Graph 2
$ Million
Vote 1 - Operating Statutory Total budgetary authorities
Fiscal year 2018-19 total available for use for the year ended 31-Mar-19 6.6 0.2 6.8
Fiscal year 2019-20 total available for use for the year ended 31-Mar-20 3.4 0.2 3.6

Significant changes to quarter expenditures

The third quarter expenditures totaled $882K for an increase of $200K (29%) when compared to $682K spent during the same period in 2018-19. Table 1 below presents budgetary expenditures by standard object.

Table 1: Material Variances to Expenditures by Standard Object Quarterly Comparison

(in thousands of dollars)
Material Variances to Expenditures by Standard Object Fiscal year 2019-20
Expended during the quarter ended 31-December-2019
Fiscal year 2018-19
Expended during the quarter ended 31-December-2018
Variance $ Variance %
Personnel 461 444 17 4%
Transportation and communications 25 8 17 205%
Information 0 3 (3) (111)%
Professional and special services 375 222 153 69%
Rentals 10 - 10 0%
Repair and maintenance (3) - (3) 0%
Utilities, materials and supplies 1 - 1 0%
Acquisition of machinery and equipment 12 5 7 137%
Total gross budgetary expenditures 882 682 200 29%
* Details may not add to totals due to rounding
Transportation and communications

The increase of $17,000 is mainly related to the timing of transactions in the organization’s financial system and will be adjusted in the last quarter of the current fiscal year. The overall increase is also attributable to international travel by the Secretariat to attend the 2019 International intelligence Oversight Forum.

Information

The decrease of $3,000 is explained by the absence of costs for communications services in 2019-20 when compared to the same quarter in the previous year. During the third quarter of 2018-19, the Committee’s first Special Report on the Prime Minister’s trip to India was tabled in Parliament. The Committee and Secretariat drew on the expertise of external professional communications services to support preparations for the tabling of the Committee’s first report.

Professional and special services

The increase of $153,000 is attributable to a timing difference of payment of invoices related to translation services for the Committee’s Annual Report and administrative support provided by the Privy Council Office.

Acquisition of machinery and equipment

The increase of $7,000 is mainly explained by the acquisition of additional secure cabinets.

Repairs

The $3,000 credit for repairs follows a correction to a previously paid bill associated with the construction of the Secretariat’s permanent facility.

Significant changes to year-to-date expenditures

The year-to-date expenditures totaled $1,909M for an increase of $873K (84%) when compared to $1,036M spent during the same period in 2018-19. Table 2 below presents budgetary expenditures by standard object.

Table 2: Material Variances to Expenditures by Standard Object Year-to-date Comparison

(in thousands of dollars)
Material Variances to Expenditures by Standard Object YTD Expenditures as of 31-December-2019 YTD Expenditures as of 31-December-2018 Variance $ Variance %
Personnel 1,109 622 487 78 %
Transportation and communications 44 25 19 77 %
Information 13 7 6 88 %
Professional and special services 643 305 338 111 %
Rentals 61 - 61 0 %
Repair and maintenance 17 8 9 120 %
Utilities, materials and supplies 5 - 5 0 %
Acquisition of machinery and equipment 16 70 (54) (78) %
Other subsidies and payment 2 - 2 0 %
Total gross budgetary expenditures 1,909 1,036 873 84 %
* Details may not add to totals due to rounding
Personnel

The increase of $487,000 is mainly related to the Secretariat operating with a nearly full staff complement during the entire fiscal year as compared to 2018-19. The Secretariat is currently operating with one vacancy but is implementing temporary measures to address this gap. In 2018-19, as the Secretariat built the organization, staffing actions were finalized in October 2018.

Transportation and communications

The increase of $19,000 is mainly explained by the previously noted international travel by Secretariat staff, along with additional outreach activities by Secretariat staff with stakeholders and non-governmental organizations throughout the year.

Information

The increase of $6,000 is attributed to a timing difference of payments of invoices for professional editing services related to the Annual Report to the Prime Minister.

Professional and special services

The increase of $338,000 is mainly explained by the considerable differences in organizational operating requirements between the two fiscal years. In 2018-19, the majority of the expenditures incurred under this object related to the provision of security services to monitor the renovation of the Secretariat’s permanent facility. In 2019-20, the Secretariat’s annual payment for specialized IT support services from the Communications Security Establishment has increased now that it is operating at full capacity. As previously noted, there is a timing difference for the payment of invoices related to administrative support provided by the Privy Council Office.

Repair and maintenance

The 2019-20 expenditures for repair and maintenance are attributable to additional costs to meet certain facility standards for the Secretariat’s permanent office space. Year to date expenditures in 2018-19 were associated with adjustments to the Secretariat’s temporary office space. The Secretariat moved to its permanent facility in October 2018 and all renovation bills for fit-up were paid in the last quarter of that fiscal year.

Acquisition of machinery and equipment

The decrease of $54,000 is attributed to one-time expenditures incurred in 2018-19 to fit up the new office space with workstations.

Risks and uncertainties

This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the 2019-20 Main Estimates.

The Secretariat does not expect to request additional funding and is planning to conduct all activities and operations within the current funding envelope. Previously identified risks or pressures have been addressed, notably confirmation that no Memorandum of Understanding with Shared Services Canada will be required for the provision of information technology support. The Privy Council Office will deliver these services under an existing agreement with the Secretariat.

Significant changes in relation to operations, personnel and programs

The Secretariat's operating environment has not significantly changed. The Secretariat has established its organizational and governance structure to support the delivery of its mandate.

The Secretariat is currently operating with one vacancy and is implementing temporary measures to address this gap.

Approval by senior officials

Rennie Marcoux, Executive Director
Ottawa, Ontario
February 26, 2020

Sean Jorgensen, Director of Operations and Chief Financial Officer
Ottawa, Ontario
February 26, 2020

Annex A & B

Annex A

Statement of authorities (unaudited) (note 2)

(In dollars)
Authorities Fiscal year 2019-2020 Fiscal Year 2018-2019
Total available for use for the year ending
March 31, 2020 (note 1)
Used during the quarter ended
December 31, 2019
Year-to-date used at quarter-end 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
Vote 1 - Net operating expenditures 3,408,604 827,309 1,744,831 6,572,965 632,109 886,470
Budgetary statutory authorities            
Contributions to employee benefits plans 219,405 54,851 164,554 199,081 49,771 149,311
Total budgetary authorities 3,628,009 882,161 1,909,385 6,772,046 681,880 1,035,781
Total authorities 3,628,009 882,161 1,909,385 6,772,046 681,880 1,035,781
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 dollars)
Expenditures Fiscal year 2019-2020 Fiscal Year 2018-2019
Planned expenditures for the year ending
March 31, 2020 (note 1)
Expended during the quarter ended
December 31, 2019
Year-to-date used at quarter-end Planned expenditures for the year ending
March 31, 2019 (note 1)
Used during the quarter ended
December 31, 2018
Year-to-date used at quarter-end
Budgetary expenditures  
Personnel 1,790,706 460,701 1,108,813 1,673,026 444,275 621,956
Transportation and communications 330,004 25,394 43,742 332,040 8,285 24,678
Information 56,003 100 12,926 77,100 2,685 6,785
Professional and special services 1,137,921 375,299 643,203 1,526,803 221,565 305,397
Rentals 87,491 9,648 60,732 86,705 - -
Repair and maintenance 100,000 -2,521 17,038 2,626,618 - 7,536
Utilities, materials and supplies 15,337 1,351 4,830 40,200 - -
Acquisition of machinery and equipment 110,547 11,928 16,245 409,554 5,070 69,452
Other subsidies and payments - 261 1,856 - - -23
Total gross budgetary expenditures 3,628,009 882,161 1,909,385 6,772,046 681,880 1,035,781
Total budgetary expenditures 3,628,009 882,161 1,909,385 6,772,046 681,880 1,035,781
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.

Library and Archives Canada Cataloguing in Publication

© Secretariat of the National Security and Intelligence Committee of Parliamentarians (2020)
All rights reserved

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thereof shall be addressed to Secretariat of the National Security and Intelligence Committee of Parliamentarians.

Cette publication est également disponible en français :
Rapport financier trimestriel pour le trimestre se terminant le 31 décembre 2019 - Secrétariat du Comité des parlementaires sur la sécurité nationale et le renseignement

ISSN 2562-8356

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