Quarterly financial report for the quarter ended September 30, 2018

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 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 investigations to ensure compliance with the to ensure compliance with the Act and the Lobbyists' Code of Conduct.

Further details on the OCL’s programs may be found in the 2018-19 Departmental Plan 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 for the 2018-19 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 September 30, 2018 have increased by $1,604K compared to the same quarter of the prior year, which is mainly attributable to the increase of $1,400K in funding for the relocation of the Office, $128K for legal costs and a lower carry-forward of $73K.

The total authorities available include the Treasury Board allotment transfer for the operating budget carry forward in the amount of approximately $73K in 2018-19 and $131K in 2017-18. The OCL expects to receive an additional authority through the Supplementary Estimates process to provide for increases related to the collective agreements.

Statement of budgetary expenditures by standard object

The OCL has spent approximately 31% of its authorities by the end of the second quarter of 2018-19. The most significant expenditures are for personnel expenditures and they represent approximately 72% of the total amount spent as of September 30, 2018.

The total spent for other operating costs is approximately 17% of the annual planned expenditures related to other operating costs. This is explained by the fact that the OCL has not yet engaged any cost for its relocation project (planned 1,400K). When comparing 2018-19 to 2017-18 and not including the relocation project authorities the total spent would be 32% versus 34%. The variance is explained by the corporate services it acquires 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 second quarter were not received before the end of the quarter and consequently, not reflected in this report.

The organization’s overall spending is lower than that of the previous year (decrease of $392K or 11%). The most significant changes are a decrease for personnel, and a decrease in professional and special services.

Personnel expenditures for 2018-19 have decreased by $191K due to the difference in the one-time cost of the signing of collective agreements ($70K) when comparing 2017-18 and 2018-19. The remaining decrease of $121K is linked to severance pay, vacation pay and parental allowances.

The decrease in professional and special services ($50K) is due to less dependence on temporary help services due to the full complement of employees.

Risks and uncertainties

A financial risk arises because the Commissioner’s decisions with respect to 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.

Lobbyists, public office holders and others use the online Lobbyists Registration System (LRS) daily. The LRS is the main tool to ensure transparency of lobbying activities, and ensure lobbyists comply with the requirements of the Lobbying Act. The LRS is more than ten years old. As technology is constantly evolving, the reliability and the security of the LRS may be at risk should the maintenance and the development not be maintained.

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.

Approval by senior officials

Approved by:

Ottawa, Canada
November 29, 2018

Statement of authorities (unaudited)

Budgetary expenditures by standard object (unaudited)