Quarterly Financial Report for the Quarter Ended December 31, 2023

Table of contents

1. Introduction
2. Highlights of fiscal quarter and fiscal year to date results
3. Risks and Uncertainties
4. Significant changes in relation to operations, personnel, and programs
5. Approval by Senior Officials
6. Appendix A - Statement of Authorities (unaudited)
7. Appendix B - Departmental Budgetary Expenditures by Standard Object (unaudited)

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

The Military Police Complaints Commission of Canada (the Commission) reviews and investigates complaints concerning Military Police conduct and investigates allegations of interference in Military Police investigations. It reports its findings and makes recommendations directly to the Military Police and National Defence leadership. Further details on the Commission’s mandate and responsibilities may be found in the 2023-2024 Departmental Plan.

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 Commission’s spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates for the fiscal year 2023-24. 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 Commission uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of Fiscal Quarter and Fiscal Year to Date Results

This section highlights the significant variances between actual expenditures and planned expenditures that affected both the quarter and the year-to-date results, compared to the same period the preceding fiscal year.

The Statement of Authorities below shows that the Commission spent approximately 21% of its authorities in the third quarter of 2023-24 compared to 22% in 2022-23. The Commission’s total authorities increased by $533,000 from last quarter. This amount includes $300,000 as an in-year transfer from the Department of National Defence, $191,000 in compensation and paylist allocations, and $42,000 accessed through the reprofile of a frozen allotment which was created in 2022-23. Similarly, the Commission’s total budgetary expenditures increased by $47,000 in the third quarter of 2023-24, compared to the same period in 2022 23. This variance is mostly explained by changes in the following areas:

• Professional and special services in the third quarter of 2023-24 have increased by $76,000 compared to the third quarter of 2022-23. This is mainly the result of increased spending in investigative services and legal services as compared to both the second quarter of 2023-24 and the third quarter of 2022-23.
• An increase in Personnel related expenses by $51,000 compared to the third quarter of 2022-23 is attributable to the Commission now being fully staffed, including a full-time Chairperson for the first time since October 2021.
• Expenditures related to Rentals have decreased by $68,000 this quarter compared to the third quarter of 2022-23 and the second quarter of the current fiscal year. This is due to a timing delay in the billing of invoices for monthly rent. Rent invoices for multiple quarters were paid in both quarter three of 2022-23 and quarter two of 2023-24.

The total authorities available for use this fiscal year is $394,000 greater than last fiscal year. The major differences include the $300,000 transfer from the Department of National Defence and various compensation allocations received due to the signing of multiple collective agreements.

The following graph shows that after three quarters, the Commission has spent approximately 70% of its authorities, which is higher compared to 60% the same period last fiscal year. This signaled a need for additional funding, as many of these expenditures are unavoidable.

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

3. Risks and Uncertainties

The Commission is complaint-based and therefore a risk the Commission will always face is the uncertainty regarding the number and complexity of complaints it must monitor and/or investigate each year. Within the last few years, the Commission has experienced an unforeseeable increase in expenses related to the quantity and complexity of complaints. The reality is that it is difficult to predict if this recent rise is a trend that will continue.

Since 2022, the Commission has seen an increase in conduct complaint files related to sexual misconduct, as well as an increase in the general workload of conduct complaints files, review/interference files, and Public Interest Investigations. These files require more resources. In addition to external investigator expenses, many other costs are incurred, such as legal services, court transcripts, investigator travel, interview transcriptions, and translation of key documents to comply with the Official Languages Act. These operational services received by external providers increase year after year.

While the number and complexity of files continue to grow steadily, the Commission’s funding had remained unchanged since 2013. Combined with the increase in our fixed costs, there is a risk that the Commission will reach its financial breaking point in the near future. To mitigate this risk, in November 2023, the Commission submitted a request to the Department of National Defence for additional permanent funding starting in fiscal year 2024-2025. By the end of this reporting period, a response to our request for additional funding had not been received. However, in mid-January 2024, we were informed that the Minister of National Defence has approved $250,000 in permanent funding and $250,000 in temporary funding, effective April 1, 2024. These amounts will therefore be reflected in our next quarterly financial report.

In terms of Human Resources Management, working in a micro organization, Commission employees often occupy unique positions, with several responsibilities but without a direct feeder group unlike in larger organizations. It is important to retain skilled employees and reduce hiring delays when vacancies arise. This is a constant challenge, especially for a micro organization. To mitigate this risk, the Commission will continue to be proactive in hiring and offering flexible work arrangements to employees.

4. Significant Changes in Relation to Operations, Personnel and Programs

During the second quarter of 2023-24, the Commission communicated to the Department of National Defence the need for additional funding to be able to deliver on its mandate. A transfer of $300,000 was agreed and has been included in the Commission’s 2023-24 Supplementary Estimates B request. The Commission received this temporary funding in November 2023, and it is reflected in this third quarter financial report. This funding was requested in particular due to an unforeseeable increase in expenses linked to the record increase in the volume and complexity of complaints filed with the Commission. In November 2023, a second request was made to the Minister of National Defence to secure additional recurrent funding of $500,000 starting April 1, 2024 to ensure the organization is able to adequately fulfil its mandate. In mid-January, we were informed that both a permanent and temporary increase was allocated. Adequate recurring funding will allow the MPCC to deal with the rising volume and complexity of complaints by adding staff and resources.

5. Approval by Senior Officials

This section is to provide the approval of Senior Officials, as required by the Policy on Financial Management.

Approved by:

Ottawa, Canada
February 7, 2024

Appendix A - Statement of Authorities (unaudited)

Appendix B - Departmental Budgetary Expenditures by Standard Object (unaudited)