Report on Resources
On June 16, 2005 the government announced a major re-organization. No major program or resource adjustments were applied to the Agency; however, responsibility and accountability for the Agency was transferred to the Minister of Community Services. Corporate support for the Agency, including financial, human resources, information services, facilities management, freedom of information, and planning and performance management are provided by the Ministry of Finance. As noted in Appendix 4, the Agency undertook an internal re-organization as well.
Resource Summary Table 2005/061
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| 1 | The Public Service Agency is funded through three distinct sources: the voted appropriation, an employee benefits chargeback (internal recovery under the Compensation, Benefits and Policy sub-vote) and other internal and external recoveries for direct client services. |
| Estimated1 | Other Authorizations2 | Total Estimated | Actual | Variance3 | |
|---|---|---|---|---|---|
| Operating Expenses ($000) | |||||
| Leadership and Learning Centre | 455 | 0 | 455 | 419 | (36) |
| Client Services | 13,133 | 0 | 13,133 | 12,764 | (369) |
| Hiring and Business Transformation | 1,354 | 0 | 1,354 | 1,033 | (321) |
| Employee Relations | 3,833 | 0 | 3,833 | 3,825 | (8) |
| Compensation, Benefits and Policy | 4,858 | 0 | 4,858 | 3,263 | (1,595) |
| Executive and Support Services | 499 | 104 | 603 | 92 | (511) |
| Total | 24,132 | 104 | 24,236 | 21,396 | (2,840) |
| Full-time Equivalents (FTEs) | |||||
| Leadership and Learning Centre | 11 | 0 | 11 | 14 | 3 |
| Client Services | 171 | 0 | 171 | 194 | 23 |
| Hiring and Business Transformation | 16 | 0 | 16 | 12 | (4) |
| Employee Relations | 35 | 0 | 35 | 32 | (3) |
| Compensation, Benefits and Policy | 125 | 0 | 125 | 108 | (17) |
| Executive and Support Services | 5 | 0 | 5 | 5 | 0 |
| Total | 363 | 0 | 363 | 365 | 2 |
| Ministry Capital Expenditures (Consolidated Revenue Fund) ($000) | |||||
| Hiring and Business Transformation | 3,000 | 0 | 3,000 | 169 | (2,831) |
| Executive and Support Services | 300 | 0 | 300 | 30 | (270) |
| Total | 3,300 | 0 | 3,300 | 199 | (3,101) |
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| 1 | The "Estimated" amount corresponds to the Estimates as presented to the Legislative Assembly in September 2005. |
| 2 | "Other Authorizations" include Supplementary Estimates, Statutory Appropriations and Contingencies. |
| 3 | Variance based on Actuals minus Total Estimated. |
Variance Explanations
Operating Expenses:
For the fiscal year ending March 31, 2006, the Public Service Agency under-spent its operating budget by $2.84 million. The variance represents 11.72 per cent of the total net funding envelope and largely consists of under-expenditures in the Learning Fund ($750,680) and Plan Carrier divisions ($785,831), both under the Compensation, Benefits and Policy sub vote.
At the end of the second quarter, the Agency self-imposed an expenditure freeze on discretionary spending to offset a projected over-expenditure that did not materialize. This contributed $320,526 to the under-expenditure at year-end under the Hiring and Business Transformation sub-vote and $256,000 under the Executive and Support Services sub-vote. The remaining under-expenditure of approximately 25 per cent or $727,083 can be attributed to small immaterial savings throughout the Agency.
All employee benefit expenditures for the public service are notionally funded through a $1,000 vote structure within the Compensation, Benefits and Policy sub-vote, where all expenditures, except $1,000, are recovered from ministries and any external clients who participate in public service benefit plans, including the BC Pension Corporation and Oak Bay Lodge. Recoveries fund benefit plan carrier programs, such as Pensions and Extended Health and Dental and internal benefit programs, such as the Public Service Employee Learning Fund and the Occupational Health and Safety Program.
2005/06 Estimates
| Gross Expenditures ($000) | Internal Recoveries ($000) | External Recoveries ($000) | Total ($000) | |
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| Compensation, Benefits and Policy | ||||
| Compensation (Voted Appropriation) | 4,941 | (84) | — | 4,857 |
| Employee Benefits ($1,000 Vote) | 386,609 | (363,551) | (23,057) | 1 |
| Total | 391,550 | (363,635) | (23,057) | 4,858 |
From an expenditure by group account perspective, the year-end variance was driven by higher than anticipated external recoveries under the Compensation, Benefits and Policy sub-vote.
| Budget ($000) | Expenditures ($000) |
(Under)/Over Expenditure($000) | |
|---|---|---|---|
| Gross Expenditures | 416,341 | 390,157 | (26,184) |
| Recoveries | |||
| Internal | (368,348) | (340,400) | 27,948 |
| External | (23,757) | (28,361) | (4,604) |
| Net Expenditures | 24,236 | 21,396 | (2,840) |
Although significant efforts are made to adequately budget and forecast benefit funding requirements, various factors may impact the Agency's ability to reliably predict what actual funding requirements will be and hence the Agency's ability to attain a $1,000 surplus. Employee benefits are based on terms and conditions of employment; they are non discretionary entitlements. The Agency cannot curtail costs in order to meet budget targets. Other contributing factors may include the following:
- post-Bluebook changes made to benefit plan carrier costs, such as MSP premium increases;
- fluctuating staffing complements and associated salary costs (i.e., brought about by workforce adjustment initiatives or hiring strategies);
- increases/decreases to benefit usage (i.e., during the recent workforce adjustment initiative, government experienced a dramatic increase in extended health/dental usage);
- unanticipated government reorganizations where entities are unexpectedly included/excluded in/from the public service (i.e., recent dissolution of Land, Water BC); and,
- post-Bluebook agreements (i.e., increased employer pension contributions for judges/Deputies/Corrections Branch/Crown Counsel).
Since its creation in 2003/04, the Agency's year-end variance has fluctuated within an absolute value of $5 million. In light of this trend, the 2005/06 under-expenditure is not unreasonable.
| (Under)/Over Expenditure | Employee Benefits Vote ($000) |
Agency Total ($000) |
|---|---|---|
| 2005/06 | (1,596) | (2,840) |
| 2004/05 | (4,508) | (5,040) |
| 2003/04 | 787 | 0 |
Based on lower than projected internal recoveries for employee benefits, the Agency requested access to the Contingencies Vote for up to $8.0 million during the year. Ministries were asked to absorb this cost pressure. Theoretically, a higher employee benefits chargeback rate would have had the same impact on ministries. The Agency received $104,408 of operational funding from Contingencies, although it was not ultimately needed.
| 2005/06 Funding Envelope ($000) |
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| Additional Benefit Costs Absorbed by Ministries | 5,047 |
| Contingency Access Provided to Ministries Requiring Assistance | 2,849 |
| Contingency Access Provided to the Public Service Agency | 104 |
| Total | 8,000 |
Full-time Equivalents:
The Agency consumed an extra 2.15 FTE's during the year. The overage can be attributed to additional activity incurred as a result of the internal re-organization cited in Appendix 4.
CRF Capital Expenses:
Except for minor capital acquisitions of office furniture and equipment valued at $30,000 all other capital spending ($169,000) was dedicated to the development and acquisition of information systems.
Planned spending on information technology infrastructure projects during the year was halted pending a re-design of the Agency's business delivery model. Although capital investments in supporting IT systems have resumed in 2006/07, the planned level of spending has been reduced to $0.984 million.
