Quarterly Financial Report for the Quarter ended December 31, 2020

ISSN 2561-7044

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

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.

The Office of the Director of Public Prosecutions (ODPP) was created on December 12, 2006, with the coming into force of the Director of Public Prosecutions Act. The ODPP is an independent prosecution service mandated to prosecute offences that are under the jurisdiction of the Attorney General of Canada.

On October 1, 2014, pursuant to amendments to the Canada Elections Act, the Office of the Commissioner of Canada Elections (OCCE) was transferred from Elections Canada to the ODPP. The Commissioner of Canada Elections and the Director of Public Prosecutions exercised their statutory duties independently from each other while operating within the same organization. Subsequently, on April 1, 2019, a notice was given in the Canada Gazette, making it official that the OCCE was transferred back to Elections Canada, pursuant to section 401 of An Act to amend the Canada Elections Act and other Acts.

Pursuant to the transfer of the OCCE, the ODPP's core responsibility is the provision of prosecution services in an independent, impartial and fair manner. The mandate of the ODPP includes:

In addition, Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refer to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition 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 and Supplementary 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 results 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

The ODPP's financial structure is mainly composed of voted budgetary authorities namely; Vote 1 Program expenditures and vote-netted revenue (VNR) authority, as well as statutory authorities for contributions to employee benefit plans.

Similar to many other entities worldwide, the global COVID-19 pandemic has had an impact on the ODPP third quarter results. The impact on the remainder of the fiscal year is uncertain with potential factors for increased risk being discussed further in section D and E of this report.

1. Spending Authorities

At the end of the third quarter of 2020-21, the ODPP had total net spending authorities of $211.0 million available for use as detailed in Chart 1 and Appendix A. This amount represents the authorities provided in the 2020-21 Main and Supplementary Estimates and the operating budget carry forward from the last fiscal year.

The decrease of $1.7 million (1%), compared to total net spending authorities at the same time in fiscal year 2019-20 ($212.7 million) is mainly due to:

2. Revenues collected during the Quarter Ended December 31, 2020

During the quarter ended December 31, 2020, the ODPP had collected $4.4 million in respendable revenue in comparison to $4.8 million during the same period the previous year, as detailed in Appendix B. The variance in quarterly revenue was the result of a lower demand for service due to the impacts of COVID-19 compared to the last year.

3. Expenditures for the Quarter Ended December 31, 2020

During the third quarter of 2020-21, the gross budgetary expenditures increased from $46.7 million in 2019-20 to $51.0 million in 2020-21, as detailed in Appendix B. This increase of $4.3 million (or 9%) in spending, consists of variances associated with the following:

As of the end of the third quarter, $0.3 million of OCCE expenditures have been recovered from Elections Canada as detailed in Chart 1 as well as in Appendices A and B.

4. Year-to-date Authorities and Expenditures as at December 31, 2020.

At the end of December 2020, the ODPP had net expenditures of $129.0 million (or 61%) of its total net spending authorities of $211.0 million as detailed in Appendix B. At the same time last year, the ODPP had net expenditures of $130.4 million (or 61%) of its total net spending authorities of $212.7 million.

Chart 1: Comparison of Budgetary Authorities and Expenditures as of December 31, 2020, and December 31, 2019 (in thousands of dollars)

Graph 1: Chart 1: Comparison of Budgetary Authorities and Expenditures as of December 31, 2020, and December 31, 2019 (in thousands of dollars)

** OCCE was transferred back to Elections Canada as of April 1, 2019, pursuant to section 401 of An Act to amend the Canada Elections Act and other Acts. The remaining authorities available for use by the OCCE and expenditures were transferred to Elections Canada by the end of fiscal year 2019-20.

Text Description

Graph: Comparison of Budgetary Authorities and Expenditures as of December 31, 2020, and December 31, 2019 (in thousands of dollars)

The graph presents the ODPP's year-to-date net budgetary authorities and net budgetary expenditures as of December 31, 2020. The graph then presents the ODPP's total year-to-date net budgetary authorities and net budgetary expenditures followed by the OCCE's total year-to-date budgetary authorities and budgetary expenditures as of December 31, 2019. The graph also shows the net vote authorities and the revenues netted against expenditures for the same period.

As of December 31, 2020, the net budgetary authorities of ODPP were $211,040 thousand and the net budgetary expenditures were $129,012 thousand. For the same period in the previous fiscal year, net budgetary authorities and net budgetary expenditures were $205,884 thousand and $129,796 thousand, respectively for the ODPP. The budgetary authorities of OCCE were $6,803 thousand and the budgetary expenditures were $605 thousand, respectively.

As of December 31, 2020, the net vote authorities of ODPP were $22,742 thousand and the revenues netted against expenditures were $9,273 thousand. For the same period in the previous fiscal year, net vote authorities and revenues netted against expenditures were $22,742 thousand and $12,138 thousand respectively.

As of December 31, 2020, the total budgetary authorities, combining net budgetary authorities and net vote authorities of ODPP totalled $233,782 thousand, and the total budgetary expenditures, combining net budgetary expenditures and revenues netted against expenditures totalled $138,285 thousand. For the same period in the previous fiscal year, the total budgetary authorities and the total budgetary expenditures totalled $228,626 thousand and $141,934 thousand, respectively for the ODPP. The total budgetary authorities and the total budgetary expenditures for OCCE totalled $6,803 thousand and $605 thousand, respectively.

D. Risks and Uncertainties

The ODPP's key corporate risks are identified and assessed through an annual update of the Corporate Risk Profile. In addition to the risk identified as having a potential financial impact, the ODPP has also recognized potential factors for increased risk caused by the COVID-19 pandemic. Strategies have been put in place to mitigate them.

The ODPP does not determine the number or types of cases referred to it for prosecution, nor does it control all of the levers of the criminal justice system. This reality combined with the uncertainty of the impact of COVID-19 on the capacity of law enforcement agencies or investigative bodies contributes to a risk that the organization might experience declining revenues, which could affect the resources needed to meet its prosecutorial obligations. To address this risk, the ODPP is making key investments in its digital platform to ensure that its prosecution practice continues to progress towards a dynamic and digital environment, allowing the organization to provide services and fulfill its mandate as effectively and efficiently as possible. The ODPP continues to monitor its business practices to ensure resources are managed in a cost effective manner through caseload and resource planning. In addition, the ODPP has built flexibility within its budget management processes to allow for the adjustment of resources in the event that there is a requirement.

Given the nature of ODPP's core mandate, employees are required to receive and handle a high volume of records from investigators that contain sensitive information. This, in turn, increases the risk that sensitive information could be inadvertently disclosed or lost, resulting in a potential privacy breach, a threat to the security and safety of individuals, and/or the public questioning the ability of the organization to adequately protect the information under its control. In addition, employees and agents (private sector prosecutors) could be exposed to incidents of threat and intimidation due to the nature of their work for the ODPP. Both the security of information and the safety of staff risks will be mitigated by developing and implementing a long-term security awareness strategy aimed at improving the departmental security posture in the areas of physical security, information security and personnel security.

The current state of the ODPP national programs (Agent Affairs Program and National Fine Recovery Program) could negatively impact the ODPP's ability to manage funds. To mitigate this risk, the ODPP will strengthen the financial accountabilities of the programs and related policies, procedures and delegations. The ODPP will also develop new approaches to create efficiencies in its processes and operations.

E. Significant Changes in Relations to Operations, Personnel and Programs

During the third quarter, later than in previous years, the ODPP received full supply for the 2020-21 Main Estimates. The COVID-19 pandemic has affected the department's supply for the first two quarters given that the Main Estimates had not yet been approved by Parliament due to limited sessions in the spring to study supply. The Standing Orders of the House of Commons were amended to extend the study period into the fall.

In addition, new departmental processes and procedures are being developed to adjust to the new workplace landscape. New and revised controls will be in place in fiscal year 2020-21 due to the implementation of the ODPP's Electronic Authentication and Authorization Directive and the impact of COVID-19.

Approval by Senior Officials

Approved by:
________________________
Kathleen Roussel
Director of Public Prosecutions and
Deputy Attorney General of Canada
Ottawa, Canada
________________________
Date


_______________________
Mélanie Lamoureux, CPA, CMA
Chief Financial Officer

Appendix A

Statement of Authorities (unaudited)
  Fiscal year 2020-21 Fiscal year 2019-20
(in thousands of dollars) Total available for use for the year ending  March 31, 2021* Used during the quarter ended December 31, 2020 Year-to-date used at quarter-end Total available for use for the year ending  March 31, 2020* Used during the quarter ended December 31, 2019 Year-to-date used at quarter-end
    ODPP OCCE** Total ODPP OCCE** Total ODPP OCCE** Total
Vote 1 - Net Operating expenditures 191,789 41,855 114,574 186,323 2,026 188,349 37,414 (308) 37,106 115,423 605 116,028
Budgetary Statutory Authorities:
Contributions to employee benefit plans
 19,251 4,813 14,438 19,561 413 19,974 4,791 0 4,791 14,373 0 14,373
Electoral expenditures**
 0 0 0 0 4,364 4,364 0 0 0 0 0 0
Total Budgetary statutory authorities 19,251 4,813 14,438 19,561 4,777 24,338 4,791 0 4,791 14,373 0 14,373
Total Budgetary Authorities 211,040 46,668 129,012 205,884 6,803 212,687 42,205 (308) 41,897 129,796 605 130,401
Non-budgetary Authorities 0 0 0 0 0 0 0 0 0 0 0 0
Total Authorities 211,040 46,668 129,012 205,884 6,803 212,687 42,205 (308) 41,897 129,796 605 130,401

* Includes authorities available for use and granted by Parliament at quarter-end.

** OCCE was transferred back to Elections Canada as of April 1, 2019, pursuant to section 401 of An Act to amend the Canada Elections Act and other Acts. The remaining authorities available for use by the OCCE and expenditures were transferred to Elections Canada by the end of fiscal year 2019-20.

Appendix B

Departmental budgetary expenditures by Standard Object (unaudited)
  Fiscal year 2020-21 Fiscal year 2019-20
(in thousands of dollars) Planned
expenditures
for the year
ending March 31, 2021*		 Expended during the
quarter ended December 31, 2020		 Year-to-date
used at
quarter-end		 Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year-to-date used at quarter-end
    ODPP OCCE** Total ODPP OCCE** Total ODPP OCCE** Total
Expenditures:
Personnel 156,871 35,991 106,165 149,703 4,214 153,917 32,907 (308) 32,599 98,735 605 99,340
Transportation and communications 7,255 844 1,877 7,614 90 7,704 1,636 0 1,636 3,941 0 3,941
Information 584 57 138 905 15 920 109 0 109 276 0 276
Professional, special & other services 56,440 10,530 23,174 56,745 2,328 59,073 10,230 0 10,230 33,758 0 33,758
Rentals 2,044 79 173 2,106 16 2,122 569 0 569 1,393 0 1,393
Repair and maintenance 4,103 25 43 1,841 0 1,841 78 0 78 153 0 153
Utilities, materials and supplies 1,362 603 1,103 1,587 90 1,677 293 0 293 1,059 0 1,059
Acquisition of machinery and equipment 1,436 578 1,112 893 50 943 246 0 246 1,152 0 1,152
Other subsidies and payments 3,687 2,335 4,500 7,232 0 7,232 921 0 921 1,467 0 1,467
Total gross budgetary expenditures 233,782 51,042 138,285 228,626 6,803 235,429 46,989 (308) 46,681 141,934 605 142,539
Less Revenues netted against expenditures:
Legal services (22,742) (4,374) (9,273) (22,742) 0 (22,742) (4,784) 0 (4,784) (12,138) 0 (12,138)
Total net budgetary expenditures 211,040 46,668 129,012 205,884 6,803 212,687 42,205 (308) 41,897 129,796 605 130,401

* Includes authorities available for use and granted by Parliament at quarter-end.

** OCCE was transferred back to Elections Canada as of April 1, 2019, pursuant to section 401 of An Act to amend the Canada Elections Act and other Acts. The remaining authorities available for use by the OCCE and expenditures were transferred to Elections Canada by the end of fiscal year 2019-20.

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