2011–12 Quarterly Financial Report – Q1

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

1. Introduction

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

1.1 Authority, Mandate and Program Activities

The Office of the Public Sector Integrity Commissioner of Canada (PSIC) is an independent Agent of Parliament established to administer the Public Servants Disclosure Protection Act (PSDPA or the Act), which came into force in April 2007. The Office is mandated to provide a confidential, independent and effective response to:

• disclosures of wrongdoing in the federal public sector from public servants or members of the public; and
• complaints of reprisal from public servants and former public servants.

The Office has one Strategic Outcome and two Program Activities:

• Strategic Outcome
  • Wrongdoing in the federal public sector is detected, resolved and reported, while public servants are protected from reprisal, resulting in a greater integrity in the workplace.
• Program Activities
  • Disclosure and reprisal management;
  • Internal Services.

Further details on the Office’s authority, mandate and program activities can be found in its Reports on Plans and Priorities, Departmental Performance Reports and Annual Reports.

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 PSIC's spending authorities granted by Parliament and those used by the Office consistent with the Main Estimates for the 2011-12 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 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Department 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

Spending in the first quarter of 2011-12 increased by $198K, or 24%, over the expenditures in the first quarter of 2010-11. This was primarily due to:

• Higher salary costs, mostly associated with additional staff requirements for the Disclosure and Reprisal Management program;
• Higher professional and special services costs; and
• Other IT related costs.

The Office forecasts that the trend of increased expenditures in 2011-12 over 2010-11 will continue, driven by the Office’s need to increase capacity due to growing case workloads.

3. Risks and Uncertainties

Trust in and awareness of the Office and its mandate

The OAG’s December 2010 report on the former Commissioner heightened the risk of losing the trust of public servants and the general public in the Office’s capacity to carry out its mandate. Individuals are less likely to make disclosures if they do not have a clear understanding of the services available or if they lack trust that they will be adequately protected and that their concerns will be appropriately addressed. However, despite the release of the report, the Office has experienced an increase in case workloads and anticipates that this trend will continue. In light of this growing demand, the Office will continue to invest in building capacity to deliver on its mandate.

Internal capacity

Personnel represents the single largest category of expenses for the Office. Maintaining human resources, namely through attraction, development and retention of employees with adequate competencies, skills and experiences is a demanding management responsibility. The high mobility of skilled professionals and the greater impact of turnover on small organizations, from both a financial and a mandate delivery capacity, can create challenges for knowledge transfer, succession planning and corporate memory. To ensure sufficient capacity, the Office has developed a human resource management plan to mitigate this risk and to continue to meet the Office’s mandate within its parliamentary approved spending authorities.

Operating Budget Freeze

Budget 2010 announced that operating budgets would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. The main impact on the Office being that funding would not be provided for 2010-11 to 2012-13 wage and salary increases resulting from collective agreements. As departments must pay the salary increases to employees, organizations are expected to absorb these costs from their operating vote to fund these increases. The Office foresees that it is able to accommodate the operating budget freeze in 2011-12 without significantly impacting its operations. Additional analysis will be required to assess the impact of the operating budget freeze for 2012-13.

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

There have been no significant changes in relation to operations, personnel or programs over the first quarter of the 2011-12 fiscal year.

Approved by:

Ottawa, Ontario
August 29, 2011

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited):