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Quarterly financial report for the period ended September 30, 2011
Office of the Director of Public Prosecutions
Statement outlining results, risks and significant changes in operations, personnel and program
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 and Supplementary Estimates.
The Office of the Director of Public Prosecutions (ODPP) is an independent prosecution service mandated to prosecute offences under federal jurisdiction. Its sole strategic outcome is the prosecution of criminal and regulatory offences under federal law in a manner that is independent, impartial and fair. Created on December 12, 2006 with the coming into force of the Director of Public Prosecutions Act, it:
- provides legal advice to federal investigative agencies and departments on the criminal law implications of investigations and prosecutions;
- ensures the appropriate enforcement of federal laws through principled and independent decisions by prosecutors; and
- promotes confidence in the administration of justice through professionally conducted prosecutions that result in a judicial determination on the merits of the evidence.
The ODPP has three (3) program activities:
- Drug, Criminal Code and terrorism prosecution program
This program supports the protection of society against crime through the provision of legal advice and litigation support during police investigations, and the prosecution of: all drug offences under the Controlled Drugs and Substances Act and any related organized crime offences throughout Canada, except in Quebec and New Brunswick, where the Office of the Director of Public Prosecutions prosecutes such offences only where charges are laid by the Royal Canadian Mounted Police; proceeds of crime offences; pursuant to understandings with the provinces, Criminal Code offences where they are related to drug charges; all Criminal Code offences in the three territories; terrorism offences; and war crimes and crimes against humanity offences. This program activity also involves the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.
- Regulatory offences and economic crime prosecution program
This program supports the protection of society against crime through the provision of legal advice and litigation support to federal investigative agencies, and the prosecution of: offences under federal statutes aimed at protecting the environment and natural resources as well as the country’s economic and social health (e.g., Fisheries Act, Income Tax Act, Copyright Act, Canada Elections Act, Canadian Environmental Protection Act, Competition Act, Customs Act, Excise Act, and the Excise Tax Act); offences involving fraud against the government; capital market fraud offences; and any organized crime offences related to the foregoing offences. This program also includes the recovery of outstanding federal fines and the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.
- Internal services
Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Material Management; Internal Audit; Procurement Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.
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 for the 2011-2012 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 ODPP 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.
Highlights of net spending authorities
The accompanying Statement of Authorities (see Appendix A) includes all authorities granted at quarter end through Main and Supplementary Estimates and Treasury Board allotment transfers by Parliament and those used by the ODPP for this fiscal year and the previous fiscal year.
As of September 30, 2011, the total net authorities available for the year have increased by $8.6M compared to the prior year, from $169.8M to $178.4M in Vote 35 – Total authorities.
The following Table 1 highlights the significant items that contributed to the increase in the net spending authorities between 2011-12 and 2010-11 by standard objects.
| 2011-12 | 2010-11 | Variance | ||
|---|---|---|---|---|
| Personnel | 124,683 | 118,507 | 6,176 | 5% |
| Professional and special services | 46,588 | 42,804 | 3,784 | 9% |
| Transportation and communications | 7,313 | 6,393 | 920 | 14% |
| Other subsidies and payments | 6,107 | 5,613 | 494 | 9% |
| Acquisition of machinery and equipment | 2,562 | 2,526 | 36 | 1% |
| Repair and maintenance | 1,504 | 1,658 | (154) | (9%) |
| Rentals | 1,482 | 1,850 | (368) | (20%) |
| Utilities, materials and supplies | 1,013 | 1,013 | 0 | 0% |
| Information | 921 | 798 | 123 | 15% |
| Gross Budgetary Authorities | 192,173 | 181,162 | 11,011 | 6% |
| Less: Revenues netted against expenditures | 13,742 | 11,342 | 2,400 | 21% |
| Total Net Budgetary Authorities | 178, 431 | 169, 820 | 8,611 | 5% |
Significant Changes to Authorities
The overall increase of 5% is mainly attributable to: an increase in the salary levels for the Law Group; a revised fee schedule for Crown agents; increased demand for legal expert witnesses; an increase in travel costs notably in the Northern territories, and increase in forecasted revenues reflecting additional demand in services.
Highlights of fiscal quarter and fiscal year to date (YTD) results
Appendix B sets out the ODPP budgetary expenditures by standard object for both this fiscal year and the last one. The expenditures shown are the planned expenditures for the year, those expended during the quarter and the year-to-date used at quarter-end.
As of September 30, 2011 the total expenditures for the year have increased by 3% compared to the same period last year. The total expenditures for the same period correspond to 42% of the net spending authorities for both fiscal years.
The following Table 2 highlights the expenditures by standard object for the period ended September 30, 2011 compared to September 30, 2010.
| 2011-12 | 2010-11 | Variance | ||
|---|---|---|---|---|
| Personnel | 54,960 | 49,770 | 5,190 | 10% |
| Professional services | 13,589 | 16,709 | (3,120) | (19%) |
| Transportation and communications | 2,265 | 2,383 | (118) | (5%) |
| Information | 298 | 315 | (17) | (5%) |
| Rentals | 586 | 146 | 440 | 301% |
| Repair and maintenance | 454 | 34 | 420 | 1,235% |
| Utilities, materials and supplies | 467 | 384 | 83 | 22% |
| Acquisition of machinery and equipment | 319 | 287 | 32 | 11% |
| Other subsidies and payments | 3,241 | 3,424 | (183) | (5%) |
| Gross Budgetary Expenditures | 76,179 | 73,452 | 2,727 | 4% |
| Less: Revenues netted against expenditures | 1,295 | 538 | 757 | 141% |
| Total Budgetary Expenditures | 74,884 | 72,914 | 1,970 | 3% |
Significant changes to the expenditures
The increase in expenditures of 3% is consistent with the increase in the net budgetary authorities of 5% between 2011-12 and 2010-11.
The main increase in expenditures between the fiscal years is attributable to additional Full Time Equivalents (FTEs) and the decrease is due to the timing of processing payments.
It should be noted that revenues are collected on a quarterly basis, at the end of each quarter. Revenues were collected faster this fiscal year compared to last fiscal year.
Risks and Uncertainties
Dependence on Vote netted Revenue
To fulfill its mandate, the PPSC is funded through a combination of Parliamentary appropriations and cost recovery. Recovering prosecution costs is therefore necessary to allow us to provide prosecution services to federal departments and agencies so that they can achieve their enforcement objectives.
There are a number of issues with using this funding model in the area of prosecutions.
- Cost recovery is governed by the Common Services Policy. However, the requirements of this Policy do not correspond to the principle of providing independent prosecution services. Prosecutions are conducted in the name of the Crown and must be conducted in accordance with legal criteria only. It follows that prosecutions are not conducted to serve the interests or meet the requirements and specifications of individual government departments and agencies. While they may be consulted in respect of a prosecution, they can have no control over its initiation, conduct or continuance.
- Some smaller departments and agencies have expressed concern that they cannot predict or control and the prosecution costs in cases that flow from statutes for which they are responsible. This is particularly a problem for departments/agencies that do not encounter prosecutions regularly, and that have not set aside a budget for prosecution costs. Given the uncertainties associated with investigations and prosecutions, it is difficult to predict what costs might flow from regulatory prosecutions. In some years there may be no cases referred to the ODPP for prosecution, while in others there may be very large cases brought to the ODPP’s attention, either upon the laying of charges, or else, to seek charge review and advice. Given the independence of the prosecution function, once a prosecution is commenced, it must be continued so long as the test to prosecute is met and therefore not stopped due to concern from a department or agency over costs.
- Some departments and agencies which do not have an enforcement mandate object in principle to paying prosecution costs. The investigations in these cases are typically undertaken by the RCMP or provincial or municipal police forces with minimal or no consultation with the federal department whose minister is responsible for administering the legislation. They are therefore unable to budget for or forecast any prosecution costs.
Workload
The ODPP’s workload depends on the number of cases referred to it for prosecution by the police and other investigative agencies (whether federal, provincial or municipal) that lay charges under federal statutes. While the ODPP can look to past trends and does engage in joint planning with the major investigative agencies, its workload is dependent on the decisions of the agencies in respect of their priorities, tactics and allocation of resources. The result is that the ODPP’s workload can fluctuate unpredictably.
Resourcing issues
The Government has imposed a freeze on departmental operating budgets, thereby requiring federal organizations to fund any salary increases and other increased costs from reallocations within their current budget levels. Accordingly, the ODPP must reallocate resources in order to fund any growth in legal staff arising from any increase in workload intake over which it has no control, and to cover overtime costs for the Law Group (according to the terms of a new collective agreement introduced last year).
Strategic Review and Deficit Reduction Action Plan
As a result of Budget 2010, the ODPP was subject to the Strategic Review in 2010/11. Reallocation proposals resulting from the review will begin in 2012-13. The reference level for 2011/12 has not been affected.
Budget 2011 announced that departmental budgets would be examined through a Deficit Reduction Action Plan. Pursuant to this review, it is expected that future years' budgets will be reduced commencing in the 2012-13 fiscal year. However, at this time the nature and extent of any reductions are not known.
Action taken to minimize risks and uncertainties
In relation to the dependence on other departments and agencies, to minimize the risk of not recovering for services provided, the ODPP has developed and is entering into Memoranda of Understanding (agreements) with its concerned departments and agencies, which include workload projections, invoicing and payment, dispute resolution and other relevant clauses.
With regard to the workload, the ODPP is meeting with its concerned agencies, investigative agencies and other stakeholders to better foresee and plan.
Concerning the resourcing issue following the operating budget freeze, the ODPP developed new internal regulations on all human resources actions that imply a salary cost.
The ODPP is currently working on the Deficit Reduction Action Plan review to propose options to government to meet its reduction target.
Significant changes in relations to operations, personnel and programs
The ODPP is adjusting to the creation of a new occupational group for law managers. This new group of lawyers will be distinct from lawyers who are practitioners.
The ODPP has allocated annual budgets for travel, hospitality and conferences as required under the new Treasury Board Policy on the management of expenditures on Travel, Hospitality and Conference. The monitoring of the spending will be done through/via the monthly Financial Situation Report (FSR).
The ODPP provides internal support services to the Department of Justice in the northern territories. As per the forthcoming Treasury Board Directive on Interdepartmental Provision of Internal Support Services, the ODPP will have to seek authority to charge and re-spend revenues from internal support services. This will be done via the Estimates process.
Approval by Senior Officials
Approved by:
__________________________
Brian Saunders
Director of Public Prosecutions
__________________________
Lucie Bourcier
Chief Financial Officer
Ottawa, Canada
__________________________
Date
Appendix A
Statement of Authorities (unaudited)
| Total available for use for the year ending March 31, 2012* | Used during the quarter ended September 30, 2011 | Year to date used at quarter-end | |
|---|---|---|---|
| Vote 35 – Net Operating expenditures | 160,094 | 33,903 | 65,716 |
| Budgetary statutory authorities | 18,337 | 4,584 | 9,168 |
| Total Budgetary authorities | 178,431 | 38,487 | 74,884 |
| Non-budgetary authorities | - | - | - |
| Total authorities | 178,431 | 38,487 | 74,884 |
| Total available for use for the year ended March 31, 2011 * | Used during the quarter ended September 30, 2010 | Year to date used at quarter-end | |
| Vote 35 – Net Operating expenditures | 153,803 | 34,080 | 64,906 |
|---|---|---|---|
| Budgetary statutory authorities | 16,017 | 4,004 | 8,008 |
| Total Budgetary authorities | 169,820 | 38,084 | 72,914 |
| Non-budgetary authorities | - | - | - |
| Total authorities | 169,820 | 38,084 | 72,914 |
More information is available in the attached table.
* Includes only Authorities available for use and granted by Parliament at the end of the second quarter.
Appendix B
Departmental budgetary expenditures by Standard Object (unaudited)
| Planned expenditures for the year ending March 31, 2012* | Expended during the quarter ended September 30, 2011 | Year to date used at quarter-end | |
|---|---|---|---|
| Expenditures: | |||
| Personnel | 124,683 | 28,896 | 54,960 |
| Transportation and communications | 7,313 | 1,406 | 2,265 |
| Information | 921 | 166 | 298 |
| Professional and special services | 46,588 | 4,672 | 13,589 |
| Rentals | 1,482 | 349 | 586 |
| Repair and maintenance | 1,504 | 432 | 454 |
| Utilities, materials and supplies | 1,013 | 336 | 467 |
| Acquisition of machinery and equipment | 2,562 | 259 | 319 |
| Other subsidies and payments | 6,107 | 3,266 | 3,241 |
| Total gross budgetary expenditures | 192,173 | 39,782 | 76,179 |
| Less Revenues netted against expenditures: | |||
| Legal Services | 13,742 | 1,295 | 1,295 |
| Total net budgetary expenditures | 178,431 | 38,487 | 74,884 |
| Planned expenditures for the year ended March 31, 2011* | Expended during the quarter ended September 30,2010 | Year to date used at quarter-end | |
|---|---|---|---|
| Expenditures: | |||
| Personnel | 118,507 | 24,869 | 49,770 |
| Transportation and communications | 6,393 | 1,466 | 2,383 |
| Information | 798 | 186 | 315 |
| Professional and special services | 42,804 | 8,170 | 16,709 |
| Rentals | 1,850 | 89 | 146 |
| Repair and maintenance | 1,658 | 22 | 34 |
| Utilities, materials and supplies | 1,013 | 237 | 384 |
| Acquisition of machinery and equipment | 2,526 | 160 | 287 |
| Other subsidies and payments | 5,613 | 3,423 | 3,424 |
| Total gross budgetary expenditures | 181,162 | 38,622 | 73,452 |
| Less Revenues netted against expenditures: | |||
| Legal Services | 11,342 | 538 | 538 |
| Total net budgetary expenditures | 169,820 | 38,084 | 72,914 |
* Includes only Authorities available for use and granted by Parliament at the end of the second quarter.