Quarterly financial report for the quarter ended December 31, 2017

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. This quarterly report has not been subject to an external audit or review. However, it has been reviewed by the Office of the Commissioner of Lobbying’s (OCL) Audit and Evaluation Committee.

The OCL mandate is stated in the Lobbying Act and covers three areas of activity:

• Establish and maintain the Registry of Lobbyists, which contains and makes public the information disclosed by lobbyists;
• Develop and implement educational programs to foster public awareness of the requirements of the Act; and
• Undertake administrative reviews and investigations to ensure compliance with the Act and the Lobbyists' Code of Conduct.

Further details on the OCL’s programs may be found in the 2017-18 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 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 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, 2017 have increased by $377K compared to the same quarter of the prior year, which is mainly attributable to a special purpose allotment for legal fees for a court challenge ($400K) and funding increases related to the collective agreements (86K), decrease of the operating carry forward (71K) and a decrease of the employee benefits plan ($38K).

The total authorities available include the Treasury Board allotment transfer for the operating budget carry forward in the amount of approximately $130K in 2017-18 and $201K in 2016-17.

Statement of budgetary expenditures by standard object

The OCL has spent approximately 62% of its authorities by the end of the third quarter of 2017-18. The most significant expenditures are for personnel at 74% of the 2017-18 planned expenditures for that line object and they represent approximately 69% of the total amount spent as of December 31, 2017.

The total spent for other operating costs is approximately 46% of the annual planned expenditures related to other operating costs. This is partly 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 invoices for legal services provided for the third quarter were not received before the end of the quarter and consequently, not reflected in this report. Due to an unexpected court challenge and inherent funding pressures many projects were set aside to cash manage the potential shortfall. Additional funding for legal services costs in relation to the court challenge was received in December. Once the funding was secured, OCL restarted the projects that had been set aside.

The organization’s overall spending is lower than that of the previous year (decrease of $24K or .8%). The most significant changes are for personnel, professional and special services and acquisitions of machinery and equipment.

The decrease of $17K in personnel expenditures is due to delays in staffing vacant positions in 2017-18.

The increase in professional and special services ($28K) is due to an increase of the cost for services obtained from other government departments and IT consultants.

A decrease ($32K) in the acquisition of machinery and equipment is due to the strain on financial resources caused by the court challenge.

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 normal amount allocated for funding legal work would be insufficient in the event of a significant litigation. In fact, this year, OCL has incurred significant litigation costs in relation to an ongoing court challenge which required OCL to seek additional funds through a Financial Authorities Instrument.

Significant changes in relation to operations, personnel and programs

A new Commissioner was appointed December 30, 2017. There have been no other significant changes in the organization during the current quarter related to programs.

Approval by Senior Officials

Approved by:

Ottawa, Canada
February 17, 2018

Statement of authorities (unaudited)

Budgetary expenditures by standard object (unaudited)