Office of the Information Commissioner of Canada Quarterly Financial Report For the quarter ended June 30, 2012

Statement outlining results, risks and significant changes in operation, personnel and program

1. Introduction

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. This quarterly report should be read in conjunction with the Main Estimates. This quarterly report has not been subject to an external audit or review.

The Office of the Information Commissioner of Canada (OIC) conducts efficient, fair and confidential investigations into complaints about federal institutions’ handling of access to information requests. The goal is to maximize compliance with the Access to Information Act while fostering disclosure of public sector information using the full range of tools, activities and powers at the Commissioner’s disposal, from information and mediation to persuasion and litigation, where required.
The OIC also supports the Commissioner in her advisory role to Parliament and parliamentary committees on all access to information matters. In delivering its mandate, the OIC promotes information rights and advocates a pro-disclosure culture to ensure government transparency, accountability and citizen engagement.

Further information on the mandate, responsibilities and program activities can be found in the Office’s 2012-13 Report on Plans and Priorities.

1.1 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the OIC's spending authorities granted by Parliament and those used by the OIC, consistent with the Main Estimates for the 2012-2013 fiscal years. 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 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.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.  Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012-13 Main Estimates.

In fiscal year 2012-2013, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

The OIC 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.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

The Statement of Authorities below shows that the OIC spent approximately 24% of its authorities in the first quarter of 2012–2013. Because personnel expenses represent 78% of planned expenditures, the spending is spread out equally over the year.

As Table 1 indicates, the OIC’s total budgetary expenditures have increased by $180,000 when comparing the first quarter of 2012−2013 to the same period in 2011−2012. The variance in expenditures is primarily attributable to the following areas:

  1. An increase in personnel of $138,000 resulting mainly from annual collective agreement compensation and related economic increases.
  2. An increase in professional and special services of $102,000 mainly due to the agreement signed with Public Works and Government Services Canada – Shared Human Resource (SHRS) Services in April 2012. As per the agreement, the Office is outsourcing all its human resources activities to SHRS. The agreement should allow the Office to gain efficiencies and obtain a high quality of service.
  3. Acquisition of information technology equipment eased off as the OIC enters into the 4th year of a five-year Information Management/Information Technology (IM/IT) renewal strategy. This resulted in a decrease of $47,000 in acquisition of machinery during the first quarter of 2012-2013. By the close of 2011-2012, IT had completed one of the major projects identified in the strategy and commenced other renewal projects, including a newly identified IM requirement.  We are on schedule to have the IM/IT renewal strategy completed before the end 2013-2014.

3. Risks and Uncertainties

The OIC is funded through annual appropriations. Consequently, its operations are impacted by any changes in funding approved by Parliament.

Since 2009-10 the OIC has been implementing program delivery and efficiency improvements in order to ensure that it can continue to perform its mandate within the resources provided.  Included in this has been  the 2010-11 salary strategy aimed at ensuring the OIC will have sufficient O&M funding over the next 3-5 years to sustain its operations and program delivery. This strategy addresses the chronic shortfall in our salary budget which has historically been subsidized with operating funding, and the pressures created by the government –wide cost containment measures imposed in 2010-11.  If the decision is made to extend the cost containment measures beyond 2012-13, the OIC would have to absorb an additional $200K, representing approximately 2% of the total appropriations, which will jeopardize the financial sustainability of the Office.

Prior to Budget 2012, the OIC has been able to achieve optimum program results and demonstrate fiscal responsibility. Specifically:

  • A concerted effort has been made to successfully reduce the inventory of long standing cases
  • Internal legal capacity has been augmented to address court proceedings and deal with complex and contentious cases
  • Operating (non-salary) expenditures has decreased by 14% (about $500K) over the last three fiscal years due to reduced reliance on costly external professional services
  • The implementation of PWGSC Shared Services related to the Human Resources Function
  • Lapse as a percentage of Total Authority have been minimal (1% in 2010/11, including $400,000 of emergency funding to address complex cases, and 2% in 2009/10)

The OIC currently faces financial uncertainty with regard to the PWGSC mandated relocation of our office in 2013/14. Preliminary estimates show that relocation costs could be as high as $3M while source of funding remains unknown. Without a new source of funding, the OIC will not be able to move to its new location. Furthermore, if Treasury Board funding is secured; there is the possibility that the OIC will have to pay back these funds, similar to a loan arrangement. Any loan arrangement would have significant impact on the OIC’s budget.

As a result of Budget 2012, the OIC was assigned a budget reduction of $100K (12/13); $300K (13/14); and $500K (14/15) which will have an adverse impact on the program results including our ability to deal with the demands of the current inventory. In order to be able to address the 5% reduction in Year 3, the OIC will need to accelerate or advance future year cost savings stemming from the salary strategy and put them in place today. It is important to note that senior level positions that have been affected in this exercise will contribute additional stress to the Program.

Notwithstanding this, the OIC is vulnerable to unexpected spikes in workload triggered by events outside of its control such as an influx of complaints or unexpected court cases.  The OIC does not have flexibility within its funding envelope to respond to increases in its workload or any other unexpected situation.

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

The Office is outsourcing all its human resources activities to Public Works and Government Services Canada – Shared Human Resource Services since April 2012.

Original signed by

Suzanne Legault
Suzanne Legault, Information Commissioner of Canada

Original signed by

Layla Michaud, DPF
Layla Michaud, Director General, CFO, Corporate services

Ottawa, Canada

August 29, 2012

Statement of Authorities (unaudited)
(In thousands of dollars) Fiscal year 2012-2013 Fiscal year 2011-2012
Total available for use for the year ending March 31, 2013 * Used during the quarter ended June 30, 2012 Year to date used at quarter end Total available for us for the year ending March 31, 2012 * Used during the quarter ended June 30, 2011 Year to date used at quarter end
Vote 40 - Program expenditures 10,349 2,510 2,510 10,615 2,323 2,323
Budgetary statutory authorities – Contributions to employee benefit plans 1,359 340 340 1,390 347 347
Total budgetary authority 11,708 2,850 2,850 12,005 2,670 2,670

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

Statement of Authorities (unaudited) - Text Version

Table 1: Departmental Budgetary Expenditures by Standard Object (unaudited)
(In thousands of dollars) Fiscal year 2012-2013 Fiscal year 2011-2012
Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended June 30, 2012 Year to date used at quarter end Planned expenditures for the year ending March 31, 2011 Expended during the quarter ended June 30, 2012 Year to date used at quarter end
Personnel 9,080 2,543 2,543 9,109 2,405 2,405
Transportation and communications 196 25 25 216 35 35
Information 127 13 13 194 2 2
Professional and special services 1,781 250 250 1,994 148 148
Rentals 91 8 8 82 18 18
Repair and maintenance 88 2 2 106 8 8
Utilities, materials and supplies 58 9 9 83 7 7
Acquisition of machinery and equipment 287 - - 221 47 47
TOTAL BUDGETARY EXPENDITURES 11,708 2,850 2,850 12,005 2,670 2,670

Table 1: Departmental Budgetary Expenditures by Standard Object (unaudited) - Text Version