Quarterly Financial Report for the quarter ended September 30, 2012

Mandate and program activities

The Office of the Commissioner of Official Languages (OCOL) supports the Commissioner of Official Languages in fulfilling his mandate, which consists of taking all actions and measures within his authority to ensure recognition of the status of each of the official languages and compliance with the spirit and intent of the Official Languages Act in the administration of the affairs of federal institutions, including any of their activities relating to the advancement of English and French in Canadian society.

Further information about OCOL's responsibilities and program activities can be found in the 2012–13 Report on Plans and Priorities 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 OCOL's spending authorities granted by Parliament and used by OCOL, consistent with the Main Estimates for the 2012–13 fiscal year. This quarterly report has also 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.

OCOL uses the full accrual method of accounting to prepare and present its annual financial statements, which are part of the organization's performance reporting process. However, the spending authorities voted by Parliament are prepared on an expenditure basis.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012. As a result the measures announced in the Budget 2012 could not be reflected in the 2012–13 Main Estimates.

In fiscal year 2012–13, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

Significant changes to authorities

As of September 30, 2012, total authorities available for the fiscal year increased by $0.4 million compared to the previous fiscal year, mainly due to the increase in the operating budget carry forward amount.

Significant changes to budgetary expenditures

OCOL has spent approximately 43% of its authorities as of September 30, 2012, of which 82% represent personnel costs.

Expenditures in this quarter have decreased by $1.1 million, or 19%, compared to the same quarter last fiscal year. This is primarily related to the fact that, in the previous fiscal year, most of the eligible employees had exercised the option for the immediate payout of their accumulated severance benefits, for a total of $1.0 million. As of September 30, 2012, there has been less than $0.1 million paid for this benefit.

Funding required for IM/IT

The inadequate core systems and support related to IM/IT are still a high risk. OCOL is gradually implementing its strategic plan as funding permits. The Budget 2012 reflected necessary IT investments to address its deteriorating applications. Details are discussed in the Budget 2012 Implementation section.

A-Base Review

Management is presently implementing the action plan prepared in response to the A-Base Review conducted in 2010–11. This review identified several constraints within the organization as well as opportunities for optimizing resources.

Budget 2010

The cost containment measures announced in Budget 2010 are another financial risk OCOL faces because it has to absorb salary increases that have been agreed on in collective agreements through its A-Base funding. Management has implemented various measures to adjust to this financial constraint.