Quarterly Financial Report: October 1 to December 31, 2014

For the period October 1, 2014 to December 31, 2014

Management Statement for the Quarter Ended December 31, 2014

Introduction

This quarterly report has been prepared as required by section 65.1 of the Financial Administration Act and in accordance with Treasury Board Accounting Standard 1.3. It should be read in conjunction with the Main Estimates and Supplementary Estimates for Fiscal Year 2014–2015 as well as Canada's Economic Action Plan 2012 (Budget 2012).

The Canada School of Public Service (the School) was created on April 1, 2004, when the legislative provisions of Part IV of the Public Service Modernization Act came into force. The School is a departmental corporation under the Treasury Board Secretariat, and its mission is set out in the Canada School of Public Service Act.

The School is the common learning service provider for the Public Service of Canada. It has a legislative mandate to provide a range of learning activities to build individual and organizational capacity and management excellence within the public service. The School is in a unique position to offer relevant, affordable and quality learning services in both official languages to all public service employees at all levels and across the country, as well as to functional communities and public service organizations.

The School's program priorities are geared to delivering results in accordance with the Treasury Board's Policy on Learning, Training and Development, which came into effect on January 1, 2006. The Policy highlights the value of learning and the importance of creating a learning culture within the public service.

The School has a single strategic outcome: "Public servants have the common knowledge and the leadership and management competencies they require to fulfil their responsibilities in serving Canadians." Four programs support this strategic outcome:

1. Foundational Learning
2. Organizational Leadership Development
3. Public Sector Management Innovation
4. Internal Services

The School was created to ensure that all employees of the Public Service of Canada have the competencies and common knowledge required to serve Canadians in the most efficient and effective way possible. To achieve this goal, the School continues to offer a strong and consistent curriculum that focuses on the key skills and knowledge required by a dynamic public service that must constantly adapt to the needs of its stakeholders and Canadians.

Basis of Presentation

This quarterly report has been prepared using expenditure-based accounting. The accompanying Statement of Authorities includes the School's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates for Fiscal Year 2014–2015. This report has also been guided by 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 monies can be spent by the government. Approvals are given through appropriation acts in the form of annually approved limits or through legislation in the form of statutory spending authority for specific purposes.

As part of the departmental performance reporting process, the School prepares its annual financial statements on a full accrual basis in accordance with Treasury Board accounting standards, which are based on generally accepted accounting principles for the Canadian public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

Highlights of the Quarter Ended December 31, 2014, and Fiscal Year 2014–2015 Results to Date

1. Total Authorities for Fiscal Year 2014–2015

• The School has two sources of funding:
  • appropriated funding as voted by Parliament for those activities to be paid from the Consolidated Revenue Fund; and
  • statutory funding authority for the respending of revenue and contributions to the employee benefit plans.
• The School's appropriations were reduced to $42.3 million for fiscal year 2014–2015 compared to $42.5 million reported at the end of the third quarter for fiscal year 2013–2014. This decrease is primarily due to the savings measures announced in Budget 2012 and is partially offset by the funding received further to the transfer of the National Managers' Community and the Federal Youth Network to the School.
• The statutory funding authority of $84.3 million for 2014–2015 consists of $40 million of forecasted revenue, $38.7 million of respendable revenue brought forward from the previous fiscal year under the provisions of section 18(2) of the Canada School of Public Service Act and $5.6 million for employee benefit plans.
• The total authorities available in fiscal year 2014–2015 amount to $126.6 million. This is $3.5 million lower than the amount available in fiscal year 2013–2014 due to a decrease in the revenue forecast and appropriations partially offset by an increase in respendable revenue brought forward from the previous fiscal year.

2. Planned Expenditures for Fiscal Year 2014–2015

• The School has planned expenditures of $126.6 million in 2014–2015, consisting of $70 million for salaries and benefits and $56.6 million for operating and maintenance.

3. Expenditures for the Quarter Ended December 31, 2014

• Overall expenditures increased by $2.7 million in the third quarter of fiscal year 2014–2015 compared to the same quarter last year ($20.8 million versus $18.1 million). This is primarily due to increases in expenditures in personnel ($2.5 million) and in repair and maintenance ($0.4 million) partially offset by reductions in rental expenditures ($0.3 million).

4. Year-to-Date Expenditures as at December 31, 2014

• At the end of the third quarter of 2014–2015, the School spent $53.9 million compared to $55.2 million during the same period in the previous fiscal year. This decrease of $1.3 million is primarily attributable to expenditure reductions in personnel ($3.7 million) and rentals ($0.8 million), partially offset by increases in professional and special services ($0.7 million), repair and maintenance ($0.7 million) and a one-time transition payment of $1.7 million for the implementation of salary payment in arrears in accordance with the Government of Canada's decision.

Significant Changes in Relation to Operations, Personnel and Programs

In support of the enterprise-wide approach to learning announced by the Clerk of the Privy Council in May 2014, the School is transitioning to a new business model over three years, beginning in 2014–2015. Under this new business model, the School will play a central role in the design and delivery of a curriculum common to the operation of all federal organizations, regardless of mandate or location. The School will also move from a model dependent on cost recovery to one in which expenditures are primarily funded from voted appropriations.

Risks and Uncertainties

The management of risk pertaining to the implementation of the new business model is closely aligned with the risk management policies of the School. Given the complexity of the implementation of the new business model, failure to oversee ongoing progress could undermine achievement of time-dependent objectives. The management of risks affecting the implementation is tracked and presented by the assigned risk owners as a standing item before a senior management committee overseeing the transition to the new business model. This approach ensures effective monitoring and timely implementation of corrective action.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs, to make it easier for Canadians and businesses to deal with their government and to modernize and reduce the back office.

The School achieved savings of $3.5 million in accordance with the approved targets for the first two years of the implementation of the Budget 2012 measures. Additional savings of $3.1 million are required in 2014–2015 to achieve ongoing savings of $6.6 million. These savings are being achieved through efficiency measures and program reductions that align resources with the School's core mandate by scaling back where needs are reduced, transforming how the organization works internally and consolidating and streamlining its operations.

The difference of $0.2 million in appropriations between 2014–2015 and 2013–2014 therefore reflects the savings measures for 2014–2015, which were partially offset by the operating budget carry forward and the funds transferred for the National Managers' Community and the Federal Youth Network.

No significant financial risks or uncertainties related to the implementation of initiatives and savings measures from Budget 2012 have been identified. As part of integrated risk management, the School monitors its environment to identify emerging risks and, if these risks are deemed significant, implement mitigation actions.

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)

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