Treasury Board of Canada Secretariat’s Quarterly Financial Report for the Quarter Ended September 30, 2017

Table of contents

• 1. Introduction
  • 1.1 Basis of presentation
  • 1.2 Raison d’être
  • 1.3 Secretariat’s financial structure
• 2. Highlights of fiscal quarter and fiscal year-to-date results
  • 2.1 Statement of voted and statutory authorities
  • 2.2 Statement of departmental budgetary expenditures by standard object
• 3. Risks and uncertainties
  • 3.1 Delivery of Results
  • 3.2 Employee Wellness
  • 3.3 Phoenix Impact on TBS Employees
  • 3.4 Information Technology Capacity
  • 3.5 Capacity for delivery of TBS-led Government-Wide Initiatives
• 4. Significant changes in relation to operations, personnel and programs
• 5. Approval by senior officials
• Appendix

1.1 Basis of presentation

This report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Treasury Board of Canada Secretariat’s spending authorities granted by Parliament and those used by the Secretariat, consistent with the Main Estimates and Supplementary Estimates (A) for the fiscal year ending March 31, 2018. This 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 money 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.

The Secretariat uses the full accrual method of accounting to prepare and present its annual departmental financial statements, which are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.2 Raison d’être

The Secretariat is the central agency that acts as the administrative arm of the Treasury Board, a committee of Cabinet. The Secretariat supports the Treasury Board in the following principal roles:

1.3 Secretariat’s financial structure

The Secretariat manages both departmental and Treasury Board central votes. Its departmental operating expenditures and revenues are managed under Vote 1, Program Expenditures.

The Secretariat manages 7 different central votes:

• Vote 5, Government Contingencies, supplements other appropriations to provide federal departments and agencies with temporary advances for urgent or unforeseen departmental expenditures between Parliamentary supply periods.
• Vote 10, Government-Wide Initiatives, supplements other appropriations to support the implementation of strategic management initiatives across the federal public service.
• Vote 15, Compensation Adjustments, supplements other appropriations to provide funding for adjustments made to terms and conditions of service or employment of the federal public administration as a result of collective bargaining.
• Vote 20, Public Service Insurance, provides the employer’s share of group benefit plan coverage costs as part of the Treasury Board’s role as the employer of the core public administration. These plans include the Public Service Health Care Plan, Public Service Dental Care Plan, Pensioners’ Dental Services Plan, Disability Insurance Plan, provincial payroll taxes (Manitoba, Newfoundland, Ontario and Quebec), Public Service Management Insurance Plan.
• Vote 25, Operating Budget Carry Forward, supplements other appropriations for the carry forward of unused operating funds from the previous fiscal year, up to 5% of the gross operating budget in an organization’s Main Estimates.
• Vote 30, Paylist Requirements, supplements other appropriations to meet legal requirements for the government as employer for items such as parental benefits and severance payments.
• Vote 33, Capital Budget Carry Forward, supplements other appropriations for the carry forward of unused capital funds from the previous fiscal year, up to 20% of an organization’s capital vote.

The funding in these votes is approved by Parliament. With the exception of Vote 20, funding in central votes is transferred from the Secretariat to individual departments and agencies once specified criteria are met. Like any other department, the Secretariat also receives its own share of appropriations from these votes. Any unused balance from these votes is returned to the fiscal framework at the end of the year and is reported as the Secretariat lapse.

Expenditures incurred against statutory authorities mainly reflect the government’s obligation to pay the employer’s share of the Public Service Pension Plan, the Canada Pension Plan and the Québec Pension Plan, Employment Insurance premiums and Public Service Death Benefits. The Secretariat recovers from other government departments and agencies their share of the employer contributions under the Public Service Superannuation Act, and is subsequently charged by Public Services and Procurement Canada for actual expenditures in the same statutory vote. Adjustments are made at year-end to individual departments’ statutory votes (including those of the Secretariat) for the difference between periodic recoveries and actual expenditures.

This quarterly report highlights the financial results of Vote 1, Program Expenditures, related to the delivery of the Secretariat’s mandate; Vote 20, Public Service Insurance related to the Treasury Board’s role as employer; and statutory authorities related to the government’s obligation to pay the employer’s share of employee benefit plans.

2.1 Statement of voted and statutory authorities

Total budgetary authorities available for use decreased by $49.7 million (1.6%) from the previous fiscal year. Vote 1 authorities decreased by $5.4 million, Vote 20 authorities increased by $59.6 million, and statutory payments decreased by $103.9 million. The following table provides a detailed explanation of these changes.

2.2 Statement of departmental budgetary expenditures by standard object

By the end of the fiscal quarter ended September 30, 2017, the year-to-date budgetary expenditures had increased by $213 million (22.3%) compared with the same period in the previous year. Vote 1 expenditures increased by $7.9 million, Vote 20 expenditures increased by $124.5 million, and statutory payments increased by $80.6 million.

For the fiscal quarter ended September 30, 2017, budgetary expenditures had increased by $58.6 million (11.4%) compared with the same period in the previous year. Vote 1 expenditures increased by $6.7 million, Vote 20 expenditures increased by $67.2 million, and statutory payments decreased by $15.3 million.

The following table provides a detailed explanation of these changes by standard object.

3.1 Delivery of Results

The Secretariat has been mandated to deliver many, complex priority initiatives, and there is a risk that the Secretariat may not have the necessary resources to generate results within the expected timeframes.

In 2017-18, the Secretariat will accelerate delivery of priority initiatives. There will be an increased focus on reviewing core business on an ongoing basis and eliminating unnecessary work in order to reallocate resources to emerging high priorities and to ensure that resources are being managed effectively to deliver results.

The Secretariat has also established a senior-level oversight panel to monitor priorities and intervene early, if required, as well as a surge team of experts to help support the delivery of high priority initiatives.

3.2 Employee Wellness

The Secretariat continues to face workload pressures due to the number and complexity of priority initiatives discussed above. There is a risk that sustaining an increased level and pace of work could affect the wellbeing of employees and the wellness of organization over time.

To address this risk, the Secretariat is developing a Wellness Action Plan which will include communication products, training and tools to support employee wellbeing.

3.3 Phoenix Impact on TBS Employees

The Secretariat is addressing the impact of phoenix pay errors on its employees by strengthening its forecasting activities and enhancing its’ challenge function to effectively monitor and track salary related forecasts and expenditures to report on overpayments in a timely manner and make appropriate adjustments at year-end.

As well, the Secretariat has established additional controls on high risk pay transactions such as emergency salary advances and priority payments to TBS employees that are underpaid. All transactions over $7 thousand are verified before the payment is released.

3.4 Information Technology Capacity

Some of the Secretariat’s new priority initiatives will depend on information technology (IT) to achieve its desired results. Without enhancements to the Secretariat’s departmental IT infrastructure, the delivery of some key priorities may be delayed.

To address this risk, the Secretariat, in collaboration with Shared Services Canada, continuously reviews allocated server capacity and decommissions unused applications to ensure optimal efficiency and reduced cost. To ensure that highly available, secure and fully managed network and infrastructure is in place, the Secretariat is developing disaster recovery plans for “business critical” systems. In 2017-18, the Secretariat will also increase IT capacity through the use of alternate sources such as subscription services, software-as-a-service and infrastructure-as-a-service.

3.5 Capacity for delivery of TBS-led Government-Wide Initiatives

The Secretariat is playing an increasingly prominent role in delivering government-wide initiatives such as the enabling functions transformation, open government, and the modernization of the Access to Information Act. Leading these initiatives is a challenge, particularly given the requirement to implement transformational change in an organization as large and complex as the federal government.

In response, in 2017-18, the Secretariat will strengthen the accountability and skills of its project managers as well as update the Secretariat’s investment plan. TBS will also improve its’ oversight of enterprise-wide initiatives to ensure the design, development and implementation of each initiative is phased in a manner that facilitates adjustments and course corrections along the way and that the results and benefits expected from each initiative are achieved.

For the quarter ended September 30, 2017

© Her Majesty the Queen in Right of Canada, represented by the President of the Treasury Board, 2017,
ISSN: 251-1852