Quarterly Financial Report for the quarter ended June 30, 2014 – Revised

Office of the Director of Public Prosecutions

Erratum

Date: September 25, 2014
Location: Statement of Authorities (unaudited), Used during the quarter ended June 30, 2014, Vote 1 – Program expenditures.
Revision: “Vote 1 – Program expenditures $36,838 thousands” replaces “Vote 1 – Program expenditures $38,850 thousands”.
Rationale for the revision: Gross expenditures represent the original amount reported. Presentation has been updated to reflect net expenditures.

Statement outlining results, risks and significant changes in operations, personnel and program

A. 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 has not been subject to an external audit or review. This quarterly report should be read in conjunction with the Main Estimates and Supplementary.

The Office of the Director of Public Prosecutions (ODPP) is an independent prosecution service mandated to prosecute criminal and regulatory offences under federal jurisdiction. Its sole strategic outcome is the prosecution of these offences in a manner that is independent, impartial and fair. The ODPP plays an integral role in the criminal justice system, promoting due process and working to safeguard the rights of all those who come into contact with the justice system.

The benefits to Canadians from the work carried out by the ODPP include:

The ODPP has one strategic outcome and two program activities in addition to internal services:

B. Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ODPP's spending authorities granted by Parliament and those used by the ODPP consistent with the Main Estimates. This quarterly report has been prepared using a 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 ODPP uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

C. Highlights of fiscal quarter and fiscal year to date results

Total Spending Authorities

At the end of the first quarter of 2014–2015, the ODPP had a total funding of $167,816 thousand available for use as detailed in Table 1 and Appendix A. This amount represents the 2014–2015 Main Estimates. The increase of $5,387 thousand (or 3%) compared to total spending authorities at the same time in fiscal year 2013–2014 is mainly due to additional funding received for renewed collective agreements and an increase in revenues from the provision of prosecution services recovered from other government departments and agencies.

Table 1. Available Authorities of 2014–2015 compared to 2013–2014 (in thousands of dollars)
Vote 1 - Program Expenditures 2014–2015 2013–2014 Variance
$ %
Total Spending Authorities 167,816 162,429 5,387 3%
Personnel costs and employee benefit plans 128,758 123,121 5,637 5%
Other O&M costs 61,800 57,050 4,750 8%
Less: Revenues credited to the vote (22,742) (17,742) (5,000) 28%

Total Expenditures

At the end of the first quarter of 2014–2015, the ODPP had spent $41,397 thousand dollars, compared to $37,373 thousand dollars for the same period in fiscal year 2013–2014. The net increase of $4,024 thousand dollars (or 11%) is primarily related to a one-time transition payment of $3,716 thousand dollars for implementing salary payment in arrears by the Government of Canada and to the timing of payments, rather than, to significant changes in spending patterns.

Appendix B presents the 2014–2015 total planned expenditures by Standard Object. The main variance in expenditures between 2014–2015 and 2013–2014 by standard object, aside from the one-time salary transition payment (in Other Subsidies and Payments), is in Professional and Special Services, with an increase of $3,669 thousand (or 82%), of which the majority is related to the provision of prosecution services by Crown Agents and an increase in legal service rates. This increase is offset by an increase in revenues as these services are recovered from Other Government Departments and Agencies.

For personnel, the decrease of $2,191 thousand (or 7%) is primarily a result of a reduction in costs associated with the elimination of severance and retroactive pay increases paid in the previous fiscal year. For the other standard objects, variances reflect timing of payments rather than significant changes in spending patterns.

Table 2 presents the authorities available for use and granted by Parliament at quarter end as well as personnel and O&M expenditures as at June 30, 2013 and 2014.

Table 2. Total Expenditures as of June 30, 2014 and June 30, 2013 (in thousands of dollars)
Vote 1 - Program Expenditures Authorities Expenditures Variance
At the end
June 30, 2014
At the end
June 30, 2013
From Authorities 2014 vs 2013 Expenditures
Total 167,816 41,397 37,373 126,419 4,024 11%
Personnel costs and employee benefit plans 128,758 30,175 32,366 98,583 (2,191) -7%
Other O&M costs 61,800 13,234 6,686 48,566 6,548 98%
Less: Revenues credited to the vote (22,742) (2,012) (1,679) (20,730) (333) 20%

D. Risks and Uncertainties

The ODPP’s key corporate risks are identified and assessed through an annual update of the Corporate Risk Profile. This year, a number of key risks could have financial impacts should they materialize. Strategies have been put in place to mitigate them.

Funding is the highest priority for action and the contributing factors are:

To minimize the risk, the ODPP created committees to control spending and staffing actions. It is also working closely with investigative agencies to anticipate and plan for resource-intensive actions by police.

E. Significant changes in relations to operations, personnel and programs

Budget 2010 (Strategic Review)

The ODPP achieved the reductions of Budget 2010 by:

The only proposal that is still outstanding is the outsourcing of the fine recovery program. The ODPP proposed to have the collection of outstanding federal fines conducted by outside entities under ODPP supervision as a means of increasing the collection of fines and thereby increasing their deterrent effect as well as public confidence in the administration of justice. As a result, the ODPP’s reference levels were permanently reduced by $1.6 million which corresponded to the savings in salary costs and other FTE-related costs of the 19 FTEs dedicated to the program. Presently, the Government is considering having the Canada Revenue Agency administer the collection activities instead of an outside entity. The collection of the outstanding federal fines is expected to begin in the next fiscal year.

Budget 2012 Implementation

Budget 2012 announced saving measures 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. The ODPP achieved the reductions by:

None of the measures affected staff levels and none contain any financial risks for the fiscal year 2014–2015.

Accounting treatment – Salary payment

In April 2014, the Government of Canada implemented payment in arrears for salary payments. Previously, pay was calculated and processed two weeks in advance of the work being performed. Now employees will be paid for the period that concluded two weeks before the payment is issued. Hence, new employees will have to wait four weeks before receiving a salary payment.

The Government has decided not to recover from existing employees for the pay in advance. Instead a one-time transition payment to existing employees was processed in the pay system in May 2014 to bring the pay period to two weeks prior to the date the payment is received. Unlike new employees, existing employees did not have to wait four weeks to receive a salary payment when the transition to payment in arrears occurred. Existing employees continue to receive a salary payment every two weeks, therefore, they will not be entitled to a "regular" salary payment two weeks after they depart from the public service. Instead, a final payment will be made to cover the difference between their current salary at departure and the transition payment which was issued in May 2014.

Approval by Senior Officials



________________________
Brian Saunders

Director of Public Prosecutions


________________________
Lucie Bourcier CPA, CGA

Chief Financial Officer

Ottawa, Canada


________________________
Date

Appendix A

Statement of Authorities (unaudited)

  Fiscal Year 2014–2015   Fiscal Year 2013–2014
(in thousands of dollars) Total available for use for the year ending
March 31, 2015*
Used during the quarter ended
June 30, 2014
Year to date used at quarter-end   Total available for use for the year ended
March 31, 2014*
Used during the quarter ended
June 30, 2013
Year to date used at quarter-end
Total authorities 167,816 41,397 41,397   162,429 37,373 37,373
Vote 1 – Program expenditures 149,580 36,838** 36,838   144,181 32,811 32,811
Statutory authority 18,236 4,559 4,559   18,248 4,562 4,562
Total Budgetary authorities 167,816 41,397 41,397   162,429 37,373 37,373
Non-budgetary authorities - - -   -    

* Includes only Authorities available for use and granted by Parliament at quarter end.
** Authorities used during the quarter ended June 30, 2014 have been updated to reflect revenues netted against expenditures. Authorities used have been reduced by an amount of $2,012 thousands.

Appendix B

Departmental budgetary expenditures by Standard Object (unaudited)

  Fiscal Year 2014–2015   Fiscal Year 2013–2014
(In thousands of dollars) Planned expenditures for the year ending
March 31, 2015
Expended during the quarter ended
June 30, 2014
Year to date used at quarter-end   Planned expenditures for the year ended
March 31, 2014
Expended during the quarter ended
June 30, 2013
Year to date used at quarter-end
Total net budgetary expenditures 167,816 41,397 41,397   162,429 37,373 37,373
Expenditures:
Personnel 128,758 30,175 30,175   123,121 32,366 32,366
Transportation and communications 8,800 822 822   6,180 892 892
Information 800 117 117   779 119 119
Professional and special services 41,000 8,117 8,117   39,172 4,448 4,448
Rentals 1,400 149 149   1,279 41 41
Repair and maintenance 1,300 37 37   1,297 553 553
Utilities, materials and supplies 1,500 181 181   860 157 157
Acquisition of machinery and equipment 2,000 45 45   2,202 73 73
Other subsidies and payments 5,000 3,766 3,766   5,281 403 403
Total gross budgetary expenditures 190,558 43,409 43,409   180,171 39,052 39,052
Less Revenues netted against expenditures:
Legal Services 22,742 2,012 2,012   17,742 1,679 1,679
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