Quarterly Financial Report for period ending December 31, 2014

1. Introduction

1.1 Background to the Quarterly Report

As per the Treasury Board Accounting Standard (TBAS) 1.3, the Office of the Communications Security Establishment Commissioner (Office) is submitting its quarterly report.

This section of the quarterly financial report should be read in conjunction with the Main Estimates (and as applicable - Supplementary Estimates and previous interim reports for the current year).  The 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 financial report has not been subject to external audit or review.

1.2 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting.  The accompanying Statement of Authorities includes the Office spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for both fiscal years. This quarterly report has been prepared using a special purpose financial reporting framework, as prescribed by Treasury Board, 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 Office 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. 

1.3 Authority, Mandate and Program

The position of Communications Security Establishment Commissioner was created to review the activities of Communications Security Establishment (CSE) to determine whether it performs its duties and functions in accordance with the laws of Canada.  This includes having due regard for the privacy of Canadians.

The Commissioner derives his authority and mandate from the National Defence Act:

• reviewing Communication Security Establishment (CSE) activities to ensure they comply with the law;
• conducting any investigations deemed necessary in response to complaints about CSE;
• reviewing and reporting annually to the Minister on review activities carried out under an (ministerial) authorization
• informing the Minister of National Defence and the Attorney General of Canada of any CSE activities that may not be in compliance with the law; and
• submitting to the Minister for tabling in Parliament, within 90 days after the end of each fiscal year, an annual report on the Commissioner’s activities and findings.

In addition the Commissioner also has a mandate under the Security of Information Act to receive information from persons who are permanently bound to secrecy seeking to release special operational information on the grounds that it is in the public interest.

Further information on the mandate, roles, responsibilities and programs of the Office can be found in the Office’s 2014-15 Report on Plans and Priorities and in the Main Estimates available on the following web sites: http://www.ocsec-bccst.gc.ca/finance/2014-2015/rpp/index_e.php and http://www.tbs-sct.gc.ca/ems-sgd/me-bpd/20142015/me-bpd02-eng.asp#toc2-91

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

This section highlights the significant items that contributed to the net increase or decrease in actual expenditures for the quarter and period ended December 31, 2014.

Third Quarter

As illustrated in the chart below and reflected in the attached Statement of Authorities and in Table 1 Departmental budgetary expenditures by Standard Object, the Office’s 2014-15 spending for the third quarter is down $16 thousand from the third quarter of the previous year. 

This change can be attributed to the following factors:

• an increase of $30 thousand for increased salary costs and related benefits;
• an increase of $4 thousand for transportation and communication costs primarily due to timing differences in payments;
• a decrease of $28 thousand for rent as a result of late billings by PWGSC;
• a decrease of $6 thousand for professional services primarily due to timing difference in payments; and
• the total of all other costs increased $4 thousand, primarily as the result of tangible capital asset acquisitions.

Year to date

As illustrated in the chart below and reflected in the attached Statement of Authorities and in Table 1 Departmental budgetary expenditures by Standard Object, the Office’s year to date 2014-15 spending is up $96 thousand from the previous year. 

This change can be attributed to the following significant variations in expenditures:

• an increase in salary and benefits of $111 thousand due to a combination of factors: salary and related benefit increases in 14-15 compared to 2013-14 salary costs that were down slightly as a result of salary recovery for an employee on Interchange offset by one-time severance payments.
• an increase in transportation and communication costs of $27 thousand, due in part to attendance at the 2014 IIRAC (International Intelligence Review Agencies Conference) in London, England and in part to attend conferences in Toronto and Vancouver;
• a decrease of $28 thousand for rent as a result of late billings by PWGSC;
• a decrease in professional services of $16 thousand as one-time costs in 13-14 related to information management, temporary help and training services were not repeated in 14-15; and
• the year to date total of all other costs increased $2 thousand in 14-15, primarily as a result of the acquisition of tangible capital assets.

3. Risks and Uncertainties

Transparency

The Office continues to expand its communications activity to help ensure that public discourse is based on fact and on information as comprehensive as possible within the confines of the Security of Information Act.

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

There were no significant changes in relation to operations, personnel and programs.

5. Economic Action Plan 2012 (Budget 2012) Implementation

The Office has not been directly affected by the savings measures announced in the Economic Action Plan 2012 (Budget 2012).  However, the Office committed to the Minister to formally review its operations in 16-17 for cost savings following the repayment of reprofiling costs for security retrofit incurred in 2012-13.  In the interim, the Office continues to seek more efficient ways to deliver its programs and reduce costs.

Approval by Senior Officials

Approved by:

The Honorable Jean-Pierre Plouffe, C.D.
Commissioner

J. William Galbraith
Chief Financial Officer

Ottawa, Canada
March 13, 2015  

STATEMENT OF AUTHORITIES (unaudited)

Fiscal year 2014-15 (in thousands of dollars)

	Total available for use for the year ending March 31, 2015	Used during the quarter ended Dec 31, 2014	Year to date used at quarter-end
Vote 30 - Program Expenses	1,939	414	1,298
Statutory authorities – Contributions to employee benefit plans	177	44	133
Total Budgetary authorities	2,116	458	1,431
Total authorities	2,116	458	1,431

Fiscal year 2013-2014 (in thousands of dollars)

	Total available for use for the year ended March 31, 2014	Used during the quarter ended Dec 31, 2013	Year to date used at quarter-end
Vote 30 - Program Expenses	2,097	409	1,235
Statutory authorities – Contributions to employee benefit plans	134	33	100
Total Budgetary authorities	2,231	442	1,335
Total authorities	2,231	442	1,335

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2014-2015 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended Dec 31, 2014	Year to date used at quarter-end
Personnel	1,255	263	944
Transportation and communications	36	5	32
Information	17	2	11
Professional and special services	467	96	218
Rentals	310	78	206
Repair and maintenance	3	0	0
Utilities, materials and supplies	16	6	12
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	12	8	8
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,116	458	1,431
Total net budgetary expenditures	2,116	458	1,431

Fiscal year 2013-2014 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2014	Expended during the quarter ended Dec 31, 2013	Year to date used at quarter-end
Personnel	1,064	233	833
Transportation and communications	15	1	5
Information	24	2	11
Professional and special services	453	90	234
Rentals	347	106	234
Repair and maintenance	4	1	1
Utilities, materials and supplies	17	6	14
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	307	3	3
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,231	442	1,335
Total net budgetary expenditures	2,231	442	1,335