Quarterly Financial Report for period ending June 30, 2011
Introduction
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 an external audit or review.
Authority, Mandate and Program
The Commissioner derives his authority and mandate from the National Defence Act:
- reviewing Communication Security Establishment Canada (CSEC) activities to ensure they comply with the law;
- conducting any investigations deemed necessary in response to complaints about CSEC; and
- informing the Minister of National Defence and the Attorney General of Canada of any CSEC activities that may not be in compliance with the law.
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 program of the Office can be found in the Commissioner's 2011-12 Report on Plans and Priorities and Main Estimates available on the following websites: http://www.tbs-sct.gc.ca/rpp/2011-2012/inst/srt/srt00-eng.asp and http://www.tbs-sct.gc.ca/est-pre/20112012/me-bpd/docs/me-bpd-eng.pdf
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 the 2011-2012 fiscal year. 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 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.
When Parliament is dissolved for the purposes of a general election, as it was in the Spring of 2011, 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 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.
Highlights of fiscal quarter and fiscal year to date (YTD) results
As reflected in the attached Statement of Authorities, the Office's quarterly and year-to-date 2011-12 spending is down $50 thousand (includes employee benefit costs of $9 thousand) from the previous year. Pay costs are down $37 thousand from 2010-11. The reduction is a combination of payments for severance and performance pay made in the first quarter of 2010-11 being offset by payments for two additional staff in the first quarter of 2011-12. Information costs of $5 thousand related to the Annual Report were made in the first quarter of 2010-11 while costs related to the Annual Report were not paid until the second quarter in 2011-12. (See 4. below for additional details)
Risks and Uncertainties
Review Capability and Capacity
CSEC's operations are growing and increasing in complexity. The Commissioner's office must ensure that its review capabilities can meet this growth in size and complexity. This requires that review methodologies must be regularly assessed for effectiveness and efficiency and that review officers maintain a high level of professionalism and proficiency as well as training to keep up to date with technology and policy. The Office intends to engage the services of additional review professionals but has been unable to proceed because of a lack of office space.
Accommodations
The Office requires additional office space. It is, however, a slow process, demanding extensive collaboration with Public Works and building management, to both acquire the required space and to ensure that it meets the stringent security requirements of the Office. Until the additional space is acquired, the Office will not be able to engage the staff necessary for both its review and internal service activities.
Significant changes in relation to operations, personnel and programs
Programs and operations this quarter remained basically the same as in the previous quarter. There were, however, changes in personnel that impacted personnel costs during the first quarter of 2011-12:
- A review officer and a legal counsel were added to the staff; and
- Costs related to the retirement of the previous Executive Director in the 1st quarter of 2010-11 were not present in 2011-12.
These changes along with the costs related to performance pay, present in the 1st quarter in 2010-11 but not in the 1st quarter of 2011-12, account for a $37 thousand reduction in personnel costs from 2010-11 to 2011-12. The resultant employee benefit costs during the 1st quarter of 2010-11 were $9 thousand higher than in 2011-12.
Approval by Senior Officials
Original signed by:
Robert Décary, Q.C.
Commissioner
J. William Galbraith
Chief Financial Officer
Ottawa, Canada
August 22, 2011
Statement of Authorities (unaudited)
| Fiscal year 2011-12 | Fiscal year 2010-2011 | |||||
|---|---|---|---|---|---|---|
| (in thousands of dollars) | Total available for use for the year ending March 31, 2012 | Used during the quarter ended June 30, 2011 | Year to date used at quarter-end | Total available for use for the year ended March 31, 2011 | Used during the quarter ended June 30, 2010 | Year to date used at quarter-end |
| Vote 25 - Program Expenses | 1,971 | 246 | 246 | 1,971 | 287 | 287 |
| Statutory authorities – Contributions to employee benefit plans | 137 | 23 | 23 | 130 | 32 | 32 |
| Total Budgetary authorities | 2,108 | 269 | 269 | 2,101 | 319 | 319 |
| Total authorities | 2,108 | 269 | 269 | 2,101 | 319 | 319 |
Departmental budgetary expenditures by standard object (unaudited)
| Fiscal year 2011-2012 | Fiscal year 2010-2011 | |||||
|---|---|---|---|---|---|---|
| (In thousands of dollars) | Planned expenditures for the year ending March 31, 2012 | Expended during the quarter ended June 30, 2011 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2011 | Expended during the quarter ended June 30, 2010 | Year to date used at quarter-end |
| Expenditures: | ||||||
| Personnel | 899 | 219 | 219 | 892 | 265 | 265 |
| Transportation and communications | 177 | 3 | 3 | 177 | 4 | 4 |
| Information | 79 | 79 | 5 | 5 | ||
| Professional and special services | 709 | 42 | 42 | 709 | 40 | 40 |
| Rentals | 165 | 1 | 1 | 159 | 2 | 2 |
| Repair and maintenance | 5 | 0 | 0 | 5 | 0 | 0 |
| Utilities, materials and supplies | 15 | 4 | 4 | 65 | 3 | 3 |
| Acquisition of land, buildings and works | 0 | 0 | 0 | 0 | 0 | 0 |
| Acquisition of machinery and equipment | 59 | 0 | 0 | 15 | 0 | 0 |
| Other subsidies and payments | 0 | 0 | 0 | 0 | 0 | 0 |
| Total gross budgetary expenditures | 2,108 | 269 | 269 | 2,101 | 319 | 319 |
| Total net budgetary expenditures | 2,108 | 269 | 269 | 2,101 | 319 | 319 |
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