Quarterly Financial Report for the quarter ended December 31, 2017

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Program

1. Introduction

1.1 Background to the Quarterly Financial Report

As per GC 4400, Departmental Quarterly Report, the Office of the Communications Security Establishment Commissioner (Office) is submitting its quarterly report for the period ending December 31, 2017.

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 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:

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 2017–18 Departmental Plan and in the Main Estimates.

1.3 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's spending authorities granted by Parliament and those used by the Office consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2017–18 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 Office uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results 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

Third Quarter

It should be noted that the Authorities in the Statement of Authorities and the Planned Expenditures in Table 1: Departmental budgetary expenditures by Standard Object have been adjusted to account for the receipt of the operating budget carry-forward ($97 thousand) carried over from fiscal year 2016–17 and the compensation adjustments ($22 thousand) resulting from collective agreements settled. 

As reflected in the attached Statement of Authorities and in Table 1 Departmental budgetary expenditures by Standard Object (below) and illustrated in the chart (below), the Office's third quarter spending in 2017–18 is down $103 thousand from the same quarter of the previous year. 

This change can be attributed to the following factors:

Budgetary expenditures by Standard Object

Fiscal Year to date

As reflected in the attached Statement of Authorities and in Table 1 Departmental budgetary expenditures by Standard Object (below) and illustrated in the chart (below), the Office's year to date spending in 2017–18 is down $117 thousand from the year to date expenditures in 2016–17.

This change can be attributed to the following factors:

budgetary expenditures by Standard Object

3. Risks and Uncertainties

Bill C-59

On June 20, 2017, Bill C-59, An Act respecting national security matters, was given first reading in the House of Commons.  Under the proposed legislation, when the legislation comes into force, the Commissioner of the Communications Security Establishment becomes the Intelligence Commissioner, the Office of the Communications Security Establishment Commissioner becomes the Office of the Intelligence Commissioner, the employees of the Office of the Communications Security Establishment Commissioner become employees of the Office of the Intelligence Commissioner and the money remaining from the appropriation to the Office of the Communications Security Establishment Commissioner is deemed to be an amount appropriated to the Office of the Intelligence Commissioner. 

With no certainty as to when the legislation will come into force, the Office continues to conduct reviews and support the Commissioner in the discharge of his mandate.

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

The Office is in the process of restructuring the organization to be able to continue to deliver on the Commissioner's review mandate while at the same time managing the risks related to, and preparing for, the potential changes that may result under Bill C-59.

5. Approval by Senior Officials

Original signed by:

The Honourable Jean-Pierre Plouffe, CD
Commissioner                                                           

J. William Galbraith
Chief Financial Officer

Ottawa, Canada
February 23, 2018

Statement of Authorities (unaudited)

Fiscal year 2017–18 (in thousands of dollars)
  Total available for use for the year ending March 31, 2018 Used during the quarter ended Dec 31, 2017 Year to date used at quarter-end
Vote 1 - Program Expenses 2,059 364 1,162
Statutory authorities – Contributions to employee benefit plans 169 43 127
Total Budgetary authorities 2,228 407 1,289
Total authorities 2,228 407 1,289
Fiscal year 2016–17 (in thousands of dollars)
  Total available for use for the year ended March 31, 2017 Used during the quarter ended Dec 31, 2016 Year to date used at quarter-end
Vote 1 - Program Expenses 2,026 464 1,267
Statutory authorities – Contributions to employee benefit plans 185 46 139
Total Budgetary authorities 2,211 510 1,406
Total authorities 2,211 510 1,406

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

Fiscal year 2017–18 (In thousands of dollars)
  Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended Dec 31, 2017 Year to date used at quarter-end
Expenditures:      
Personnel 1,268 229 810
Transportation and communications 32 6 18
Information 65 5 27
Professional and special services 484 66 170
Rentals 320 80 232
Repair and maintenance 3 0 1
Utilities, materials and supplies 31 5 15
Acquisition of land, buildings and works 0 0 0
Acquisition of machinery and equipment 25 16 16
Other subsidies and payments 0 0 0
Total gross budgetary expenditures 2,228 407 1,289
Total net budgetary expenditures 2,228 407 1,289
Fiscal year 201617 (In thousands of dollars)
  Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended Dec 31, 2016 Year to date used at quarter-end
Expenditures:      
Personnel 1,323 348 982
Transportation and communications 32 9 19
Information 24 3 17
Professional and special services 446 65 161
Rentals 317 76 206
Repair and maintenance 4 0 1
Utilities, materials and supplies 27 9 20
Acquisition of land, buildings and works 0 0 0
Acquisition of machinery and equipment 38 0 0
Other subsidies and payments 0 0 0
Total gross budgetary expenditures 2,211 510 1,406
Total net budgetary expenditures 2,211 510 1,406
Date modified: