Quarterly Financial Report for the Quarter Ending September 30, 2014

Table of Contents

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

1. 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. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates.

The Military Police Complaints Commission (MPCC) reviews and investigates complaints concerning Military Police (MP) conduct and investigates allegations of interference in MP investigations. It reports its findings and makes recommendations directly to the MP and national defence leadership.

1.1 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the MPCC’s spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for the fiscal year (FY) 2014-15. 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 FY in which it is issued.

The MPCC 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.

The quarterly report has not been subject to an external audit or review.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

In 2012, the MPCC conducted a program evaluation and determined that it could no longer financially support its program activities: Complaints Resolution and Internal Services. In 2013, the MPCC requested an increase in its annual budget to mitigate the risks. Based on this program review and a cost benefit analysis, the MPCC determined that $1,149,259 (including EBP) was the appropriate amount of funds to ensure the future integrity of the program. As a result, the MPCC requested an ongoing transfer of $1.2M and funds were identified, requested and transferred by Department of National Defence. The permanent transfer of funds only occurred in December 2013 through the Supplementary B Estimates.

The Statement of Authorities below shows that the MPCC spent approximately 18% of its authorities in the second quarter of 2014-15 compared to 25% in 2013-14. The decrease can be attributed to the following:

Operating Budget: The MPCC’s traditional on-going annual budget was $3,495,640 (including EBP). As of December 2013, the MPCC’s on-going budget increased to $4,673,496 (including EBP) which includes the 1,149,259 from the program review/cost benefit analysis and $28,597 for collective bargaining.

The total authorities increased during the second quarter by $161,000 as a result of the operating budget carry-forward.

The MPCC’s total budgetary expenditures decreased by $362,000 (26%) in the second quarter of 2014-15, compared to the same period in 2013-14. There were five significant variances:

Full-time equivalent (FTE): The planned FTE was 21. With the new budget, the FTE count increased to 30 (The FTE for Complaints Resolution increased from 8 to 10; The FTE for Internal Services increased from 13 to 18; in addition to the Chairperson (1) and Assistant to the Chairperson (1)). The four part-time Governor in Council positions are excluded from the FTE count although, they are part of the MPCC’s personnel.

Fynes PIH: In 2013, the MPCC received a total of $1,798,673 in special purpose funding via the Main Estimates process and carried forward $2,244,195, from the previous year, to support the Fynes PIH.

Multi-jurisdictional Conduct Review Complaint: In 2013, the MPCC received a total of $254,437 in special purpose funding via the Main Estimates process and carried forward $1,105,364, from the previous year, to support the Conduct Review.

Additional Financial Information: Additional financial information on the MPCC’s financial and expenditure management can be found in the Reports on Plans and Priorities, the Annual Reports, the Departmental Performance Reports, the Future-oriented Financial Statements, the Quarterly Financial Reports and the Annual Financial Statements.

3. Risks and Uncertainties

Based on the quarterly assessment, the following are the high level risks and uncertainties:

Included in the December 2013 funding was a one-time transfer to accommodate personnel and to renovate the boardroom which could be converted into a hearing room at any time, including the fit-up of the floor. The MPCC completed the requirements to launch the renovations which were part of the business case costing, a precursor to the funding.

The MPCC is dependent on Public Works and Government Services of Canada (PWGSC) as the lease holder and as a result, the renovations have not begun. PWGSC must adhere to their National Project Management System and phases which are lengthy and require substantial approval processes, internal to PWGSC, even though a substantial amount of funding has been secured by the MPCC. In addition to the renovations, PWGSC must adhere to the new Fit-up Standard 2.0 which has also initiated a renegotiation of the lease renewal beyond 2017, causing further delays and will require re-profiling into FY 2015-16 (anticipate work beginning in April 2015).

4. Significant changes in relation to operations, personnel and programs

There were no significant changes in relation to operations, personnel and programs in the second quarter of FY 2014-15.

However, the MPCC is forecasting an increase in personnel (salaries) surplus due to the lengthy staffing processes associated with the newly created positions as a result of the program integrity review.

5. Approval by Senior Officials

This section is to provide the approval of Senior Officials, as required by the Policy on Financial Resource Management, Information and Reporting as follows:

Approved by:



__________________________________
Glenn M. Stannard, O.O.M., Chairperson
Signed in Ottawa, Canada
September 30, 2014



__________________________________
Sylvain Roy, Chief Financial Officer
Signed in Ottawa, Canada
September 30, 2014

A. Statement of Authorities (unaudited)

Fiscal Year 2014-15 (in thousands of dollars)
Authority
Vote/Statutory
Total available for use for the year ended
March 31, 2015*
Expended during the quarter ended
September 30, 2014
Year to date used at quarter-end
Total Authorities 5,780 1,037 2,200
Vote 25 - Net operating expenditures 5,332 925 1,976
Budgetary statutory authorities - Contributions to employee benefit plans 448 112 224
Fiscal Year 2013-14 (in thousands of dollars)
Authority
Vote/Statutory
Total available for use for the year ended
March 31, 2014*
Expended during the quarter ended
September 30, 2013
Year to date used at quarter-end
Total Authorities 5,615 1,399 2,378
Vote 25 - Net operating expenditures 5,270 1,284 2,202
Budgetary statutory authorities - Contributions to employee benefit plans 345 115 176

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

B. Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2014-15 (in thousands of dollars)
Expenditures Planned expenditures for the year ending
March 31, 2015
Expended during the quarter ended
September 30, 2014
Year to date used at
quarter-end
Total net budgetary expenditures 5,780 1,037 2,200
Personnel 3,159 607 1,155
Transportation and communications 128 30 64
Information 24 2 15
Professional and special services 1,346 322 738
Rentals 432 68 155
Repair and maintenance 2 1 1
Utilities, materials and supplies 52 3 13
Acquisition of land, buildings and works 615 0 0
Acquisition of machinery and equipment 22 0 1
Other subsidies and payments 0 4 58
Fiscal Year 2013-14 (in thousands of dollars)
Expenditures Planned expenditures for the year ending
March 31, 2014
Expended during the quarter ended
September 30, 2013
Year to date used at
Quarter-end
Total net budgetary expenditures 5,615 1,399 2,378
Personnel 2,325 648 1,244
Transportation and communications 93 31 73
Information 15 2 10
Professional and special services 2,727 579 845
Rentals 344 102 163
Repair and maintenance 16 0 0
Utilities, materials and supplies 33 15 21
Acquisition of land, buildings and works 0 0 0
Acquisition of machinery and equipment 62 22 22
Other subsidies and payments 0 0 0
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