Public Services and Procurement Canada
Quarterly Financial Report for the quarter ended June 30, 2019

Quarterly Financial Report for the quarter ended June 30, 2019 (PDF, 1.3MB)

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1. Introduction

This Quarterly Financial Report (QFR) should be read in conjunction with the Main Estimates. It has been prepared by management as required under section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. It has not been subject to an external audit or review.

1.1 Raison d'être

Public Works and Government Services Canada (PWGSC) was established effective June 20, 1996, under the department of Public Works and Government Services Act. As of November 4, 2015, PWGSC started operating as Public Services and Procurement Canada (PSPC). PSPC plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in the achievement of their mandated objectives as their central purchasing agent, real property manager, linguistic authority, treasurer, accountant, pay and pension administrator, and common service provider. The department's vision is to excel in government operations, and its strategic outcome and mission are to deliver high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions.

A summary description of the department's core responsibilities can be found in Part II of the Main Estimates.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting and a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. The accompanying Table 1—Statement of authorities (unaudited) includes the department's spending authorities granted by Parliament, and those used by the department are consistent with the Main Estimates for the current fiscal year.

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.

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

1.3 Public Services and Procurement Canada's financial structure

PSPC provides services to many government departments, agencies and Crown corporations through a variety of funding mechanisms. This includes budgetary authorities that are comprised of voted and statutory authorities, as well as non-budgetary authorities. The voted budgetary authorities include operating expenditures, vote-netted revenues and capital expenditures, while the statutory authorities are mainly composed of revolving funds, employee benefit plans and payments in lieu of taxes (PILT). The non-budgetary authorities consist primarily of the Seized Property Working Capital Account (see description below).

PSPC's complex financial structure may result in significant fluctuations in authorities on a quarterly basis, which are due to timing differences that are resolved by year-end. These are summarized as follows:

2. Highlights of fiscal quarter and fiscal year-to-date results

2.1 Significant changes to authorities

When compared to the same quarter of the previous year, year-to-date PSPC's authorities available for use increased by $285.3 million ($3,275.8 million in Q1 of the fiscal year ending March 31, 2019; $3,561.1 million in Q1 of the fiscal year ending March 31, 2020) as reflected in Table 1—Statement of authorities (unaudited). Major reasons for the increase are outlined below:

Year-over-year variances in authorities available for use (in millions of dollars)
Project Operating Capital Budgetary statutory authorities Total variances
Phoenix pay system 291.0 (1.2) 46.2 336.0
Price and volume protection 63.2 0 0 63.2
Long Term Vision and Plan (17.1) 60.6 0 43.5
E-Procurement Solution 21.1 0 0.2 21.3
Revolving funds 0 0 8.6 8.6
Engineering assets (2.4) (77.9) 0 (80.3)
Carling Campus (0.6) (45.5) 0 (46.1)
Real Property Program Integrity 0 (33.3) 0 (33.3)
Federal infrastructure (2.3) (26.3) 0 (28.6)
Vote transfer 21.2 (21.2) 0 0
Other (5.5) 1.9 4.6 1.0
Cumulative variance in authorities available for use 368.6 (142.9) 59.6 285.3

Groupings can change between quarters due to materiality of initiatives.

Amounts may not balance with other public documents due to rounding.

The net increase of $285.3 million from the first quarter of the year ending March 31, 2019 can be explained by:

Phoenix Pay System—increase of $336.0 million
As announced in Budget 2019, this funding ensures that adequate resources are dedicated to address pay issues and system support. This funding is comparable to the previous year, however, it was received earlier in the fiscal year.
Price and volume protection—increase of $63.2 million
This funding increase for accommodation costs protects Public Services and Procurement Canada for inflation (price) and any variations in space requirements for public servants (volumes).
Long Term Vision and Plan (LTVP)—increase of $43.5 million
This funding increase is to continue the implementation of the Parliamentary Precinct Rehabilitation. Major projects such as the Center Block, the East Block and the Visitors Center (Phase II) will preserve Parliament buildings as heritage assets and national symbols.
E-Procurement Solution—increase of $21.3 million
This funding increase is to continue with the implementation of the E-Procurement Solution (EPS) as announced in Budget 2018 for a simpler and a better procurement.
Revolving funds—increase of $8.6 million
The variance is mainly due to investments in the modernization of service delivery tools and the workplace renewal initiative within the Real Property Services Revolving Fund.
Engineering assets—decrease of $80.3 million
Consist of reduction in Budget 2016 capital funding to address program integrity funding pressures faced by the Real Property Program for its portfolio of 17 public infrastructures across Canada.
Carling Campus—decrease of $46.1 million
Reduction of Budget 2010 funding for the design and construction of necessary base building upgrades, special purpose space, information technology (IT), and security for the Carling Campus Project.
Federal infrastructure: Program Integrity—decrease of $33.3 million
Decrease of Budget 2016 capital funding for the recapitalization and rehabilitation of federal buildings in order to provide a safe, healthy, and secure workplace.
Federal infrastructure: Accelerated Infrastructure Program—decrease of $28.6 million
The sunset of Budget 2016 funding to ensure that Canadians continue to benefit from modern, efficient and sustainable infrastructure.
Vote transfer—net variance of $0 million
PSPC has transferred some activities that cannot be capitalized such as swing space and minor accommodation adjustments under the Refit/Fit-up project.
Other—increase of $1.0 million
The net increase of $1 million is the result of funding variances in miscellaneous projects and activities such as Real Property initiatives.

2.2 Significant changes to year-to-date net expenditures

As presented in Table 2—Departmental budgetary expenditures by standard object (unaudited), year-to-date total net budgetary expenditures have decreased by $90.7 million when compared with the same quarter of the previous year ($1,232.4 million in the current fiscal year compared with $1,323.1 million in the previous fiscal year).

Overall, total spending at the end of the first quarter represents 35% of annual planned expenditures for this current fiscal year, compared with 40% for the first quarter of the previous year.

Year-over-year variances in net budgetary expenditures (presented by standard object) (in millions of dollars)
Standard object June 30, 2019 Year-to-date used at quarter end June 30, 2018 Year-to-date used at quarter end Year-over-year variance
Personnel 361.2 323.7 37.5
Professional and special services 232.1 258.7 (26.6)
Rentals 354.8 367.9 (13.1)
Repair and maintenance 191.6 182.4 9.2
Acquisition of land, buildings and works 67.4 58.3 9.1
Transfer payments 362.8 327.6 35.2
Other expenditures 132.7 134.7 (2.0)
Revenues netted against expenditures (470.2) (330.2) (140.0)
Total net budgetary expenditures 1,232.4 1,323.1 (90.7)

Comparative figures have been reclassified to conform to the current year's presentation.

Amounts may not balance with other public documents due to rounding.

The year-over-year net decrease of $90.7 million is mainly attributable to:

3. Risks and uncertainties

PSPC integrates risk management principles into business planning, decision-making and organizational processes to minimize negative impacts and maximize opportunities across our diverse range of services and operations. Risk management at PSPC is carried out in accordance with Treasury Board Secretariat (TBS)'s Framework for the Management of Risk, the Management Accountability Framework, and PSPC's Policy on Integrated Risk Management.

The following key risks were identified as having a potential financial impact on PSPC's operations:

4. Significant changes to operations, personnel and programs

There were no significant changes to operations, personnel and programs during the first quarter ended June 30, 2019.

Original signed by:

Bill Matthews
Deputy Minister
Public Services and Procurement Canada

Gatineau, Canada
August 29, 2019

Marty Muldoon, CPA, CMA, MBA
Chief Financial Officer
Public Services and Procurement Canada

Gatineau, Canada
August 29, 2019

Table 1—Statement of authorities (unaudited)
For the quarter ended June 30, 2019 (in thousands of dollars)
  Fiscal year ending March 31, 2020 Fiscal year ending March 31, 2019
Total available for use for the year ending March 31, 2020 Used during the quarter ended June 30, 2019 Year-to-date used at quarter end Total available for use for the year ending March 31, 2019 Used during the quarter ended June 30, 2018 Year-to-date used at quarter end
Vote 1
Gross operating expenditures 3,572,470 794,994 794,994 3,126,233 746,896 746,896
Vote-netted revenues (1,226,007) (250,656) (250,656) (1,148,387) (138,961) (138,961)
Net operating expenditures 2,346,463 544,338 544,338 1,977,846 607,935 607,935
Vote 5—Capital expenditures 1,038,155 158,486 158,486 1,181,026 205,406 205,406
Revolving fund authorities
Real Property Services Revolving Fund
Gross expenditures 1,991,322 310,046 310,046 1,857,643 306,218 306,218
Revenues (1,980,108) (167,245) (167,245) (1,853,943) (144,088) (144,088)
Net expenditures 11,214 142,801 142,801 3,700 162,130 162,130
Translation Bureau Revolving Fund
Gross expenditures 174,057 33,644 33,644 164,741 28,660 28,660
Revenues (165,908) (31,256) (31,256) (157,433) (30,759) (30,759)
Net expenditures 8,149 2,388 2,388 7,308 (2,099) (2,099)
Optional Services Revolving Fund
Gross expenditures 176,708 15,492 15,492 180,056 12,578 12,578
Revenues (176,500) (21,043) (21,043) (180,056) (16,387) (16,387)
Net expenditures 208 (5,551) (5,551) 0 (3,809) (3,809)
Total of all revolving funds
Gross expenditures 2,342,087 359,182 359,182 2,202,440 347,456 347,456
Revenues (2,322,516) (219,544) (219,544) (2,191,432) (191,234) (191,234)
Total revolving fund net expenditures 19,571 139,638 139,638 11,008 156,222 156,222
Other budgetary statutory authorities
Contributions to employee benefit plans 156,569 27,120 27,120 105,586 25,892 25,892
Minister of PSP salary and motor car allowance 88 22 22 86 22 22
Refunds of amounts credited to revenues in previous years 0 0 0 0 0 0
Spending of proceeds from the disposal of surplus Crown assets 266 0 0 218 0 0
Payment in lieu of taxes to municipalities and other taxing authoritiestable 1 note 2 0 362,760 362,760 0 327,638 327,638
Total other budgetary statutory authorities 156,923 389,902 389,902 105,890 353,552 353,552
Total budgetary authorities 3,561,112 1,232,364 1,232,364 3,275,770 1,323,115 1,323,115
Non-budgetary authority
Seized Property Working Capital Account 0 0 0 0 0 0
Total authorities 3,561,112 1,232,364 1,232,364 3,275,770 1,323,115 1,323,115

Table 1—Statement of authorities (unaudited) Notes

Table 1 Note 1

Includes only Authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 1 note 1 referrer

Table 1 Note 2

Consistent with the presentation in the Main Estimates, "Total available for use for the year", for both fiscal year ending March 31, 2020 and year ended March 31, 2019, under "Payment in lieu of taxes" (PILT), is presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in Section 1.3 of this report.

Return to table 1 note 2 referrer

Table 2—Departmental budgetary expenditures by standard object (unaudited)
For the quarter ended June 30, 2019 (in thousands of dollars)
Fiscal year ending March 31, 2020 Fiscal year ending March 31, 2019
Planned expenditures for the year ending March 31, 2020

Expended during the quarter ended June 30, 2019 Year-to-date used at quarter end Planned expenditures for the year ending March 31, 2019

Expended during the quarter ended June 30, 2018 Year-to-date used at quarter end
Expenditures
Personnel 1,483,419 361,151 361,151 1,184,598 323,664 323,664
Transportation and communications 80,405 15,236 15,236 72,139 14,508 14,508
Information 22,410 2,268 2,268 21,317 1,843 1,843
Professional and special services 1,888,189 232,057 232,057 1,838,504 258,712 258,712
Rentals 1,146,697 354,830 354,830 1,265,713 367,926 367,926
Repair and maintenance 1,112,854 191,580 191,580 1,055,548 182,370 182,370
Utilities, materials and supplies 261,054 26,434 26,434 107,729 23,934 23,934
Acquisition of land, buildings and works 421,188 67,441 67,441 373,026 58,310 58,310
Acquisition of machinery and equipment 108,665 17,108 17,108 92,657 16,591 16,591
Transfer paymentstable 2 note 2 0 362,760 362,760 0 327,638 327,638
Public Debt charges 123,452 30,863 30,863 128,574 33,046 33,046
Other subsidies and payments 461,301 40,836 40,836 475,784 44,768 44,768
Total gross budgetary expenditures 7,109,634 1,702,564 1,702,564 6,615,589 1,653,310 1,653,310
Less revenues netted against expenditures
Revolving funds revenues (2,322,515) (219,544) (219,544) (2,191,432) (191,234) (191,234)
Vote-netted revenues (1,226,007) (250,656) (250,656) (1,148,387) (138,961) (138,961)
Total revenues netted against expenditures (3,548,522) (470,200) (470,200) (3,339,819) (330,195) (330,195)
Total net budgetary expenditures 3,561,112 1,232,364 1,232,364 3,275,770 1,323,115 1,323,115

Table 2—Departmental budgetary expenditures by standard object (unaudited) Notes

Table 2 Note 1

Includes only Authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 2 note 1 referrer

Table 2 Note 2

Consistent with the presentation in the Main Estimates, "Planned expenditures for the year" for both fiscal year ending March 31, 2020 and year ended March 31, 2019, under "Transfer Payments", are presented net of planned Payments in Lieu of Taxes (PILT) made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in section 1.3 Public Services and Procurement Canada's financial structure of this report.

Return to table 2 note 2 referrer

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