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.

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 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 Part V.1 of the National Defence Act:

• to review the activities of the Communications Security Establishment to ensure they comply with the law;
• to undertake any investigation the Commissioner considers necessary in response to a written complaint;
• to review and report annually to the Minister on review activities carried out under an (ministerial) authorization;
• to inform the Minister of National Defence and the Attorney General of Canada of any Communications Security Establishment activities that may not be in compliance with the law; and
• to submit 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 if they believe it is in the public interest to release special operational information of CSE.

Further information on the mandate, roles, responsibilities and programs of the Office can be found in the Office's 2019–20 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 2019–2020 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

First Quarter/ Year to Date

As reflected in the Statement of Authorities and the Departmental budgetary expenditures by Standard Object (below), the Office's first quarter/year to date spending in 2019–2020 is up $3 thousand from the same quarter/year to date of the previous year. 

This change can be attributed to the following factors:

• an increase in rental costs of $50 thousand in the current quarter due to the late billing in 2018–2019 of rental charges for office space;
• an increase of $25 thousand in the cost of legal services in the current quarter related to advice on the implementation of bill C-59 as there were no similar costs in 2018–2019;
• a decrease of $61 thousand for salaries and benefits was due primarily to employee departures and the late billing by other government departments of first quarter salary costs;
• transportation costs decreased $7 thousand in the current quarter mostly as a result of meetings held in 2018–2019 with senior review officials in London, England that were not repeated in 2019–2020; and
• all other costs were down $4 thousand as information costs and the costs of supplies each decreased by $2 thousand.

3. Risks and Uncertainties

See 4 below.

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

On June 21, 2019, Bill C-59, An Act respecting national security matters, received Royal Assent. July 11, 2019 was the last day of operations for the Office of the CSE Commissioner. On July 12, 2019, the legislation came into force. Under the Intelligence Commissioner Act, the Commissioner of the Communications Security Establishment became the Intelligence Commissioner; staff occupying a position in the Office of the Communications Security Establishment Commissioner occupied a similar position in the Office of the Intelligence Commissioner, and unexpended monies appropriated to the Office of the CSE Commissioner would be deemed to be an amount appropriated to the Office of the Intelligence Commissioner. 

5. Approval by Senior Officials

Approved by:

The Honourable Jean-Pierre Plouffe, CD
Commissioner

Guylaine A. Dansereau
Chief Financial Officer

Ottawa, Canada
August 28, 2019

Statement of Authorities (unaudited)

Fiscal year 2019–20 (in thousands of dollars)

	Total available for use for the year ending March 31, 2020	Used during the quarter ended June 30, 2019	Year to date used at quarter-end
Vote 1 - Program Expenses	1,975	346	346
Statutory authorities – Contributions to employee benefit plans	170	43	43
Total Budgetary authorities	2,145	389	389
Total authorities	2,145	389	389

Fiscal year 2018–19 (in thousands of dollars)

	Total available for use for the year ended March 31, 2019	Used during the quarter ended June 30, 2018	Year to date used at quarter-end
Vote 1 - Program Expenses	1,955	344	344
Statutory authorities – Contributions to employee benefit plans	166	42	42
Total Budgetary authorities	2,121	386	386
Total authorities	2,121	386	386

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2019–20 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended June 30, 2019	Year to date used at quarter-end
Personnel	1,282	243	243
Transportation and communications	35	6	6
Information	25	11	11
Professional and special services	451	75	75
Rentals	310	50	50
Repair and maintenance	2	0	0
Utilities, materials and supplies	25	4	4
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	15	0	0
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,145	389	389
Total net budgetary expenditures	2,145	389	389

Fiscal year 2018–19 (In thousands of dollars)

Expenditures:	Planned expenditures for the year ending March 31, 2019	Expended during the quarter ended June 30, 2018	Year to date used at quarter-end
Personnel	1,326	304	304
Transportation and communications	90	13	13
Information	25	13	13
Professional and special services	311	50	50
Rentals	320	0	0
Repair and maintenance	2	0	0
Utilities, materials and supplies	27	6	6
Acquisition of land, buildings and works	0	0	0
Acquisition of machinery and equipment	20	0	0
Other subsidies and payments	0	0	0
Total gross budgetary expenditures	2,121	386	386
Total net budgetary expenditures	2,121	386	386