Quarterly financial report for the quarter ended December 31, 2021

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 should be read in conjunction with the Main Estimates. This quarterly report has not been subject to an external audit or review. However, it has been reviewed by the OCL Audit and Evaluation Committee.

The OCL mandate is stated in the Lobbying Act and covers three areas of activity:

• Establish and maintain the Registry of Lobbyists, which contains and makes public the information disclosed by lobbyists;
• Develop and implement educational programs to foster public awareness of the requirements of the Act; and
• Undertake investigations to ensure compliance with the Act and the Lobbyists' Code of Conduct.

Further details on the OCL’s programs may be found in the 2021—22 Departmental Plan and in the Main Estimates.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the OCL’s spending authorities granted by Parliament and those used by the organization consistent with the Main Estimates for the 2021-22 fiscal year. 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 fiscal year in which it is issued.

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

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

Statement of authorities

The total authorities available for use as of December, 2021 increased by $661,000 compared to the same quarter of the prior year. The increase reflects the approval of the Budget 2021 funds sought in the Supplementary Estimates B ($597,000) and ARLU compensation.

Statement of budgetary expenditures by standard object

The OCL has spent approximately 60% of its authorities at the end of the third quarter of 2021-22. The most significant expenditures are for personnel representing approximately 73% of the total amount spent as of December 31, 2021. Actual personnel costs versus planned at the end of Q3 are 63% vs 69% in the prior year, due in part to ongoing challenges in recruiting specialized talent in IM/IT during the COVID 19 pandemic.

The total spent for other operating costs is 27% of the total authorities available at the end of the third quarter of 2021-22. The Office of the Commissioner of Lobbying spent 54% of the annual planned expenditures related to other operating costs vs 74% in the prior year for the same period. This is explained by the fact that the OCL acquires some of its corporate services from other government entities through Memoranda of Understanding (MOUs) for information technology, human resources and financial services, and some of the invoices for services rendered for the third quarter were not received before the end of the quarter and consequently, not reflected in this report. In addition, the OCL has been challenged in obtaining consultant resources to complete a substantive project in relation cloud feasibility analysis and evergreening IT equipment for which the OCL received additional funding as compared to the prior year.

The organization’s spending at the end of the third quarter decreased by $71,000 when compared to the previous year results. The decrease is composed of lower personnel expenditures of $135,000 due to vacant positions and an increase in operating expenditures of $64,000 such as informatics equipment and software. However, the planned operating expenditure is $525K higher for 2021-22 when compared to 2020-21.

Risks and uncertainties

In connection with Budget 2021, Treasury Board has approved funding to hire five employees to enhance IM/IT systems to support transparent lobbying. In addition, Treasury Board has approved an increase in other operating expenditures for the cloud feasibility analysis and evergreening IT equipment referenced above. There is some degree of uncertainty as to when the new positions will be filled and when the cloud feasibility analysis can be launched given the availability of specialized IT resources. It is likely that a portion of the personnel funds that are included in the newly approved funding will be lapsed if positions remain unfilled. The financial and HR risks are high priority and staffing actions are proceeding.

A financial risk always exists due to the fact that the Commissioner’s decisions with respect to investigations and applications for exemption from the five-year prohibition on lobbying may be subject to judicial review by the Federal Court. The current amount allocated for funding legal work would be insufficient in the event of a significant litigation.

Significant changes in relation to operations, personnel and programs

There have been no significant changes in the organization during the current quarter.

Approval by senior officials

Approved by:

Ottawa, Canada
November 9, 2021

Statement of Authorities (unaudited)

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

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

Budgetary expenditures by Standard Object (unaudited)