Treasury Board of Canada Secretariat’s Quarterly Financial Report for the Quarter Ended September 30, 2018
Statement outlining results, risks and significant changes in operations, personnel and programs
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This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the manner prescribed by the Treasury Board. The report should be read in conjunction with the Main Estimates and the Supplementary Estimates (A), as well as Budget Plan 2014, Budget Plan 2015, Budget Plan 2016, Budget Plan 2017 and Budget Plan 2018.
The report has been reviewed by the Departmental Audit Committee.
1.1 Basis of presentation
This report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Treasury Board of Canada Secretariat’s spending authorities granted by Parliament and those used by the Secretariat, consistent with the Main Estimates and Supplementary Estimates (A) for the fiscal year ending . This 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 Secretariat uses the full accrual method of accounting to prepare and present its annual departmental financial statements, which are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
1.2 Raison d’être
The Secretariat is the central agency that acts as the administrative arm of the Treasury Board, a committee of Cabinet. The Secretariat supports the Treasury Board in the following principal roles:
Review spending proposals and authorities; review existing and proposed government programs for efficiency, effectiveness and relevance; provide information to Parliament and Canadians on government spending.
Lead government wide initiatives; develop policies and set the strategic direction for government administration related to service delivery, access to government information, and the management of assets, finances, information and technology.
Develop and oversee policies to promote good regulatory practices; review proposed regulations to ensure they adhere to the requirements of government policy; and advance regulatory cooperation across jurisdictions.
Develop policies and set the strategic direction for people management in the public service; manage total compensation (including pensions and benefits) and labour relations; undertake initiatives to improve performance in support of recruitment and retention objectives.
1.3 Secretariat’s financial structure
The Secretariat manages both departmental and Treasury Board central votes. Its departmental operating expenditures and revenues are managed under Vote 1, Program Expenditures.
The Secretariat manages 8 different central votes:
- Vote 5, Government Contingencies, supplements other appropriations to provide federal departments and agencies with temporary advances for urgent or unforeseen departmental expenditures between Parliamentary supply periods.
- Vote 10, Government-Wide Initiatives, supplements other appropriations to support the implementation of strategic management initiatives across the federal public service.
- Vote 15, Compensation Adjustments, supplements other appropriations to provide funding for adjustments made to terms and conditions of service or employment of the federal public administration as a result of collective bargaining.
- Vote 20, Public Service Insurance, provides the employer’s share of group benefit plan coverage costs as part of the Treasury Board’s role as the employer of the core public administration. These plans include the Public Service Health Care Plan, Public Service Dental Care Plan, Pensioners’ Dental Services Plan, Disability Insurance Plan, provincial payroll taxes (Manitoba, Newfoundland, Ontario and Quebec), Public Service Management Insurance Plan.
- Vote 25, Operating Budget Carry Forward, supplements other appropriations for the carry forward of unused operating funds from the previous fiscal year, up to 5% of the gross operating budget in an organization’s Main Estimates.
- Vote 30, Paylist Requirements, supplements other appropriations to meet legal requirements for the government as employer for items such as parental benefits and severance payments.
- Vote 35, Capital Budget Carry Forward, supplements other appropriations for the carry forward of unused capital funds from the previous fiscal year, up to 20% of an organization’s capital vote.
- Vote 40, Budget Implementation, a new central vote was added in 2018–19 for new measures approved in Budget 2018 to facilitate timely availability of supply for Budget 2018 activities being carried out this fiscal year. Funding provided through this vote is tied to a detailed table in Budget 2018 that shows the amount of funding required by each department to implement each budget initiative.
The funding in these votes is approved by Parliament. With the exception of Vote 20, funding in central votes is transferred from the Secretariat to individual departments and agencies once specified criteria are met. Like any other department, the Secretariat also receives its own share of appropriations transferred from these votes to its own Vote 1. Any unused balance from these votes is returned to the fiscal framework at the end of the year and is reported as the Secretariat lapse.
Expenditures incurred against statutory authorities mainly reflect the government’s obligation to pay the employer’s share of the Public Service Pension Plan, the Canada Pension Plan and the Québec Pension Plan, Employment Insurance premiums and Public Service Death Benefits. The Secretariat recovers from other government departments and agencies their share of the employer contributions under the Public Service Superannuation Act, and is subsequently charged by Public Services and Procurement Canada (PSPC) for actual expenditures in the same statutory vote. Adjustments are made at year-end to individual departments’ statutory votes (including those of the Secretariat) for the difference between periodic recoveries and actual expenditures.
This quarterly report highlights the financial results of:
- Vote 1, Program expenditures, related to the delivery of the Secretariat’s mandate
- Vote 20, Public Service Insurance related to the employer’s share of group benefit coverage to employees of the core public service under the various plans listed above
- statutory authorities that cover any residual amounts between the government’s contributions to the various plans and the distribution of these costs to departments
Transfer amounts from all other central votes mentioned above will be included in the financial reports of the individual recipient departments.
2. Highlights of fiscal quarter and fiscal year-to-date results
- highlights the financial results for the quarter and fiscal year-to-date ended
- provides explanations of variances compared to the same period last year that exceed materiality thresholds of:
- $1 million for Vote 1, Program expenditures and statutory votes
- $10 million for Vote 20, Public Service Insurance
|2017–18 Budgetary authorities to||2018–19 Budgetary authorities to||Variance in budgetary authorities||Year-to-date expenditures as at Q2 2017–18
|Year-to-date expenditures as at Q2 2018–19
|Variance between 2018–19 year-to-date and 2017–18 year-to-date expenditures||Q2 Expenditures 2017–18||Q2 Expenditures 2018–19||Variance between 2018–19 Q2 and 2017–18 Q2 expenditures|
|Vote 1: Program expenditures||260,482||254,808||-5,674||118,194||116,095||-2,099||67,400||55,736||-11,664|
|Vote 20: Public Service Insurance||2,398,571||2,952,919||554,348||1,222,213||1,299,722||77,509||601,545||630,305||28,760|
2.1 Statement of voted and statutory authorities
Total budgetary authorities available for use increased by $549.9 million (18.2%) from the previous fiscal year:
- Vote 1 authorities decreased by $5.7 million
- Vote 20 authorities increased by $554.3 million
- Statutory authorities increased by $1.2 million
The following table provides a detailed explanation of these changes.
|Changes to voted and statutory authorities (2018–19 compared with 2017–18)||$ thousands|
|Vote 1: Program Expenditures|
|Second year of funding for the Canadian Digital Service to develop digital mobile applications to improve ways in which Canadians access government services||7,008|
|Budget 2018 funding to establish a dedicated Human Resources Pay Solutions Team to put forward a recommended approach for a new pay system||6,992|
|Compensation adjustments to fund salary increases to meet obligations under new collective agreements||4,291|
|Ongoing funding contributed by other government departments and agencies to the Executive Leadership Development Programs to strengthen our world-class Canadian Public Service by developing high-performing, results-oriented executives characterized by innovation, agility and collaboration||3,653|
|The second and final year of funding for the Web Renewal Initiative to consolidate departmental websites, providing 70% of online services to Canadians into one single Canada.ca website||2,425|
|Compensation adjustments to fund salary increases||1,811|
|Other miscellaneous increases||1,361|
|Funding to extend Access to Information to other government departments and agencies||1,130|
|Ongoing funding to support a joint career development committee with the Association of Canadian Financial Officers to fund the training of the FI community from external providers||1,000|
|Funding to support the Federal Leadership at the Canadian Free Trade Agreement (CFTA)||945|
|A reduction in the level of other government departments and agencies contributions to support the Secretariat-led Government-Wide Back Office Transformation initiative||-24,800|
|Sunset of funding for the Workspace Renewal Initiative in 2017–18 the Secretariat completed the Phase II of the initiative||-11,491|
|Subtotal Vote 1||-5,674|
|Vote 20: Public Service Insurance|
|Budget 2018 funding for Public Service Insurance and Service Income Security Insurance Plan||554,014|
|Subtotal Vote 20||554,348|
|An increase in the Secretariat’s share of contributions to EBP for its employees related to the increase in funding received in 2018-19||1,246|
|Subtotal statutory authorities||1,248|
2.2 Statement of departmental budgetary expenditures by standard object
By the end of the fiscal quarter ended , year-to-date budgetary expenditures had increased by $160.6 million (13.8%) compared to the same period in the previous year:
- Vote 1 expenditures decreased by $2.1 million
- Vote 20 expenditures increased by $77.5 million
- Statutory payments increased by $85.2 million
For the fiscal quarter ended , budgetary expenditures had increased by $17.5 million (3.1%) compared to the same period in the previous year:
- Vote 1 expenditures decreased by $11.7 million
- Vote 20 expenditures increased by $28.8 million
- Statutory payments increased by $0.4 million
The following table provides a detailed explanation of these changes by standard object.
|Standard object||Changes to voted and statutory expenditures||Variance between 2018-19 year-to-date and 2017-18 year-to-date expenditures (April 1 to September 30)||Variance between 2018-19 Q2 and 2017-18 Q2 expenditures (July 1 to September 30)|
|Vote 1: Program expenditures ($ thousand)|
|1 Personnel||The decrease in the second quarter of 2018–19 compared to last year is mainly due to the retro payments paid in 2017–18 as a result of the implementation of collective agreements. The increase in year-to-date expenditures is due to additional staff hired to work on the following initiatives: Greening Government, Access to Information Program, Horizontal Skills Review and Canadian Digital Service.||536||-4,661|
|4 Professional Services||
The decrease in the second quarter is due to:
|9 Construction and/or Acquisition of Machinery||The increase is mainly due to the purchase of computers as per the life-cycle replacement strategy, whereby in 2017–18 the purchase of computers was made in the fourth quarter.||1,354||676|
|12 Other Subsidies and Payments||
The decrease in year-to-date expenditures compared with last year is mainly due to the recovery of two specific cost-sharing agreements:
|46 Vote-Netted revenue||The decrease in expenditures is due to the timing of the recovery of internal services costs from other government departments and agencies in 2018–19 compared to last year. TBS recorded additional revenues related to PeopleSoft System and MyGCHR project and the Financial Systems SAP and BI Cognos.||-1,344||-1,344|
|Subtotal Vote 1||-2,099||-11,664|
|Vote 20: Public Service Insurance|
|1 Personnel||The increase is due to higher costs per service and increase in the number of members for the Public Service Health Care Plan benefits. As well, an increase in the Disability Insurance Plan, Service Income and Security Income Plan, RCMP Life and Disability Insurance Plan, and the Public Service Management Insurance Plan. These increases are attributable to a higher salary base for the calculation of employer premiums following the ratification of collective agreements in 2017–18 and premiums rate increases for the Long Term Disability line of insurance effective .||101,976||43,858|
|46 Vote-netted revenue||The increase in revenues is attributable to increased pensioner contribution rates that came into effect on , for the Public Service Health Care Plan, and on , for the Public Service Dental Care Plan.||-21,671||-13,806|
|Subtotal Vote 20||77,509||28,760|
|1 Personnel||PSPC charges the Secretariat for the employer’s share of contributions to the Public Service Pension Plan, the Canada Pension Plan, the Québec Pension Plan, the Employment Insurance Plan and the Supplementary Death Benefit Plan. The Secretariat recovers these payments from other government departments and agencies. The increase in year-to-date expenditures is mainly due to the timing of recoveries from other government departments and agencies of the employer’s share of contributions to employee benefit plans; however, the net effect on the Secretariat’s financial statements will be zero by year-end.||85,236||372|
|Subtotal statutory expenditures||85,236||372|
3. Risks and uncertainties
The Secretariat operates in a dynamic environment, dominated by:
- economic fluctuations
- rapid technological change
- evolving demographics,
- geopolitical and security instability
Internally, the Secretariat faces workload pressures and increased expectations for quality and timely advice due to the need to deliver an increased number of complex priorities within short time frames and with constrained financial resources. The Secretariat must continually plan for, and respond to, changes in this environment. The following describes key risks that the Secretariat is facing and their corresponding response strategies.
3.1 Delivery of results
The Secretariat has been mandated to deliver many complex priority initiatives, and there is a risk that the Secretariat may not have the necessary resources to generate results within the expected time frames.
In 2018–19, the Secretariat will continue to accelerate delivery of priority initiatives. There continues to be an increased focus on the following in order to reallocate resources to emerging key priorities and to ensure that resources are being managed effectively to deliver results:
- reviewing core business on an ongoing basis
- eliminating unnecessary work
The Secretariat has also established a deployable team of experts to help support the delivery of high-priority initiatives.
3.2 Capacity for delivery of Secretariat-led government-wide initiatives
The Secretariat is playing an increasingly prominent role in delivering government-wide initiatives such as:
- back office transformation
- open government
- the modernization of the Access to Information Act
- NextGen and HR to Pay
Leading these initiatives is a challenge, particularly given the requirement to implement transformational changes in an organization as large and complex as the federal government.
In response, the Secretariat will:
- strengthen the accountability and skills of its project managers
- update its investment plan
The Secretariat will also improve its oversight of enterprise-wide initiatives to ensure that:
- the design, development and implementation of each initiative is phased in a manner that facilitates adjustments and course corrections along the way
- the results and benefits expected from each initiative are achieved
3.3 Employee wellness
The Secretariat continues to face workload pressures due to the number and complexity of priority initiatives discussed above. There is a risk that sustaining an increased level and pace of work could affect the well-being of employees and the wellness of the organization over time.
To address this risk, the Secretariat is implementing a Wellness Action Plan that includes communications products, training and tools to support employee well-being.
3.4 Impact of Phoenix on Secretariat employees
The Secretariat is addressing the impact of Phoenix pay errors on employees by:
- effectively monitoring and tracking salary expenditures
- following up on overpayments in a timely manner
- making appropriate adjustments at year-end
The Secretariat approved a Management Action Plan in response to the Office of the Auditor General’s recommendations on payroll management. These activities will enable the Secretariat to further assess the accuracy and completeness of payroll information that affects employees and departmental appropriations.
3.5 Information technology capacity
Some of the Secretariat’s new priority initiatives will depend on information technology to achieve the desired results. Without enhancements to the Secretariat’s departmental information technology infrastructure, the delivery of some key priorities may be delayed.
To address this risk, the Secretariat, in collaboration with Shared Services Canada, continually reviews allocated server capacity and decommissions unused applications to ensure optimal efficiency and reduce costs. To ensure that its network and infrastructure are highly available, secure and fully managed, the Secretariat is developing disaster recovery plans for business-critical systems. The Secretariat will also increase its information technology capacity through the use of alternate sources such as:
- cloud services
- software as a service
- infrastructure as a service
4. Significant changes in relation to operations, personnel and programs
This section highlights significant changes in operations, personnel and programs of the Secretariat during the second quarter of the fiscal year.
The Honourable Scott Brison remains President of the Treasury Board. However, on July 18, 2018, his title became President of the Treasury Board and Minister of Digital Government to reflect his leadership in advancing the government’s digital agenda.
On August 28, 2018, the Treasury Board began assuming responsibility for key delivery challenges that include defence procurement and modernizing the public service pay system. In addition, a special subcommittee of the Treasury Board will address the unacceptable hardships caused by the Phoenix pay system and implement a modern and reliable long-term solution.
Other notable changes:
- Elevation of Alex Benay, currently the Chief Information Officer of the Government of Canada, to a position at the deputy minister level, effective .
- Dominic Rochon was appointed Assistant Deputy Minister, Next Generation HR and Pay System Solution, effective .
- Yazmine Laroche was appointed Deputy Minister, Public Service Accessibility, effective .
- Yves Bacon was appointed Assistant Comptroller General, Financial Management Transformation Sector in the Office of the Comptroller General, effective .
- Nancy Chahwan was appointed Chief Human Resources Officer, effective .
- Kerry Buck was appointed Assistant Secretary of the Economic Sector, effective .
- Glenn Purves was appointed Assistant Secretary, Expenditure Management Sector, effective .
- Siobhan Harty was appointed Assistant Secretary, Government Operations Sector, effective .
5. Approval by senior officials
Original signed by
Peter Wallace, Secretary
Original signed by
Karen Cahill, Chief Financial Officer
|Fiscal year 2017-2018||Fiscal year 2018-2019|
|Total available for use for the year ending table 3 note *||Used during the quarter ended||Year to date used at quarter-end||Total available for use for the year ending table 3 note *||Used during the quarter ended||Year to date used at quarter-end|
Table 3 Note
|Vote 1 - Program Expenditures||260,482,035||67,400,126||118,193,830||254,807,787||55,735,762||116,095,334|
|Vote 20 - Public Service Insurance||2,398,570,604||601,545,239||1,222,213,178||2,952,919,397||630,304,687||1,299,721,941|
A111 - President of the Treasury Board - Salary and motor car allowance
A140 - Contributions to employee benefit plans
A145 - Unallocated employer contributions made under the PSSA and other retirement acts and the Employment Act (EI)
A681 - Payments under the Public Service Pension Adjustment Act
A683 - Payments for the pay equity settlement pursuant to section 30 of the Crown Liability and Proceedings Act
|Total Statutory Authorities||367,427,334||-97,826,851||-172,769,973||368,675,290||-97,454,902||-87,534,277|
|Fiscal year 2017-2018||Fiscal year 2018-2019|
|Planned expenditures for the year ending table 4 note *||Expended during the quarter ended||Year to date used at quarter-end||Planned expenditures for the year ending table 4 note *||Expended during the quarter ended||Year to date used at quarter-end|
Table 4 Note
2 Transportation and communications
4 Professional and special services
6 Repair and maintenance
7 Utilities, materials and supplies
9 Acquisition of machinery and equipment
10 Transfer payments
12 Other subsidies and payments
|Total gross budgetary expenditures||3,715,830,443||728,751,635||1,436,533,348||4,266,560,482||764,202,003||1,625,308,932|
|Less Revenues netted against expenditures:|
Vote Netted Revenues (VNR) - Centrally managed items
Vote Netted Revenues (VNR) - Program expenditures
Total Revenues netted against expenditures
|Total net budgetary expenditures||3,026,479,973||571,118,514||1,167,637,035||3,576,402,475||588,585,548||1,328,282,997|
|Government-Wide Expenses included abovetable 4 note *|
2 Transportation and communications
4 Professional and special services
10 Transfer payments
12 Other subsidies and payments
© Her Majesty the Queen in Right of Canada, represented by the President of the Treasury Board, 2018,
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