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Quarterly financial report for the quarter ended December 31, 2014

Introduction

This quarterly 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. It should be read in conjunction with the Main Estimates as well as Canada’s Economic Action Plan 2012 (Budget 2012). This quarterly report has not been subject to an external audit or review.

The OCL mandate is stated in the Lobbying Act and covers three areas of activity: maintaining a registry of lobbyists that is accessible to Canadians; fostering greater awareness of the requirements of the Lobbying Act through education and outreach; and ensuring compliance with the legislation and the Lobbyists’ Code of Conduct.

Further details on the OCL’s programs may be found in the 2014-15 Report on Plans and Priorities and in the Main Estimates.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the OCL’s spending authorities granted by Parliament and those used by the organization consistent with the Main Estimates and Supplementary Estimates for the 2014-15 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 OCL uses the full accrual method of accounting to prepare and present its annual 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

Statement of authorities

The total authorities available as of December 31, 2014 have increased by $31k compared to the same quarter of the prior year, which is mainly attributable to the operating budget carry forward, adjustments to the salary envelope and related employee benefits plan.

The total authorities available include the Treasury Board allotment transfer for the operating budget carry forward which increased by $27k ($199k in 2014-15 compared to $172k in 2013-14). The remaining $4k difference compensates for items related to personnel expenditures, including compensation for collective agreements and maternity/paternity benefits.

Statement of budgetary expenditures by standard object

The OCL has spent approximately 70% of its authorities by the end of the third quarter of 2014-15. The most significant expenditures are for personnel expenditures and they represent approximately 73% of the total amount spent as of December 31, 2014.

The total spent for other operating costs is approximately 57% of the annual planned expenditures related to other operating costs. This is explained by the fact that the OCL acquires some of its corporate services from other government entities through Memoranda of Understanding (MOUs) for information technology, human resources and financial services, and some of the invoices for services rendered for the third quarter were not received before the end of the quarter and consequently, not reflected in this report.

The organization’s overall spending to the end of December is higher than that of the previous year (increase of $386k or 14%). The most significant changes are for professional and special services, personnel expenditures, and other subsidies and payments.

The increase in professional and special services ($202k or 51%) is due in part to an increase in IT consultant fees for a special project. The rest of the increase is due to timing differences in the receipt of invoices for services rendered by other government departments, which should not result in any significant variances at year end.

The increase in personnel expenditures ($65k or 3%) is due to the creation of a temporary position to deal with new organizational initiatives.

The increase of $116k in other subsidies and payments is due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada and to the payment of a Departmental Allocation of Government Wide License Agreement for SAP.

Risks and uncertainties

A financial risk arises due to the fact that the Commissioner’s decisions with respect to administrative reviews, investigations and applications for exemption from the five-year prohibition on lobbying may be subject to judicial review by the Federal Court. The current amount allocated for funding legal work would be insufficient in the event of a significant litigation.

Significant changes in relation to operations, personnel and programs

There have been no significant changes in the organization during the current quarter related to programs.

Budget 2012 implementation

This section provides an overview of the savings measures announced in Budget 2012 that have been implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

As part of the measures announced in the Budget 2012, the OCL’s reference levels for its operating budget were reduced by 5% ($230k) starting in 2013-14.

In order to absorb the reduction, the development of new system features in the Registry of Lobbyists has been deferred. Also, to reduce the cost of maintaining the Lobbyists Registration System and the dependency on consultants, a Business and Systems Analyst was hired as of April 2, 2013.

Essential maintenance work continued to be performed on the registration system to prevent system failure and minimize downtime when failures do occur.

Approval by Senior Officials

Approved by:

Karen E. Shepherd
Commissioner of Lobbying
René Leblanc
Deputy Commissioner and
Chief Financial Officer

Ottawa, Canada

Statement of authorities (unaudited)

Fiscal year 2014–2015 (in thousands of dollars)
  Total available for use for the year ending Footnote 1 Used during the quarter ended Year to date used at quarter-end
Vote 45 — Net Operating Expenditures 4,226 1,060 2,939
Budgetary Statutory Authorities 417 104 313
Total Authorities 4,643 1,164 3,252
Fiscal year 2013–2014 (in thousands of dollars)
  Total available for use for the year ending Footnote 2 Used during the quarter ended Year to date used at quarter-end
Vote 45 — Net Operating Expenditures 4,177 878 2,540
Budgetary Statutory Authorities 435 109 326
Total Authorities 4,612 987 2,866

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2014–15 (in thousands of dollars)
  Planned expenditures for the year ending Expended during the quarter ended Year to date used at quarter-end
Expenditures:
Personnel 3,117 776 2,385
Transportation and communications 73 20 44
Information 45 7 25
Professional and special services 1,306 324 599
Rentals 57 12 42
Repair and maintenance 15 1 3
Utilities, materials and supplies 20 3 10
Acquisition of machinery and equipment 10 9 28
Other subsidies and payments - 12 116
Total net budgetary expenditures 4,643 1,164 3,252
Fiscal year 2013–14 (in thousands of dollars)
  Planned expenditures for the year ending Expended during the quarter ended Year to date used at quarter-end
Expenditures:
Personnel 2,950 762 2,320
Transportation and communications 71 15 43
Information 32 11 27
Professional and special services 1,420 152 397
Rentals 40 14 37
Repair and maintenance 4 - -
Utilities, materials and supplies 40 3 10
Acquisition of machinery and equipment 55 30 32
Other subsidies and payments - - -
Total net budgetary expenditures 4,612 987 2,866
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