Board Of Directors Review of Draft Budget For 2013/14 April 2, :00 – 6:00 pm

DRAFT BUDGET FOR REVIEW 2 Agenda Introduction Review of IOG’s Draft Budget 2013/14 –Business Line Overview –Revenue Profile –Overhead –Headcount –Supporting Schedules Comparison of Y/Y Quarterly Revenues Qtrly Statement of Financial Position Qtrly Statement of Operations Qtrly Statement of Changes in Financial Position

Introduction Two step process: –Step 1: Coordination and approval of 2013/14 budget (baseline) –Step 2: May 7 board retreat Broader discussion of strategic direction and plan Budget may be adjusted to reflect decisions DRAFT BUDGET FOR REVIEW 3

Business Line Overview

Public Governance Overall story – ongoing advisory work with slight shift to a higher ratio of funded research work. Key Assumptions – steady demand for advisory in Ottawa, slight increase in OPS for advisory work. Investments – marketing time on the part of the VP and Executive Director of Public Governance Exchange (PGEx) to shift focus to proactive research projects and higher membership levels. No new resources required. 5

Not for Profit (NFP) Governance Overall story – consolidating growth of last 2 years. Key Assumptions – continued, steady demand for traditional services, residual work from new Canada and Ontario NFP Acts, some lift from Board/Stakeholder research project. Investments – completion of analysis on board/stakeholder research project and accompanying publication. No new resources. 6

Indigenous Governance Overall story – steady increase in advisory work as business line has been rebuilt; projected numbers are in keeping with historical #s. Key Assumptions – ongoing work from a couple of key clients, ability to build off of very successful Section 35 events, launch of research agenda (multiple partners). Revenue being generated by BC office. Investments – require 1 dedicated mid-level experienced researcher, 1 dedicated mid-level secondment. 7

Modernizing Overall story – significant shift in mix of work, with greater in-house delivery and research intensity. Key Assumptions – ongoing work at City of Ottawa, select strategic advisory work driven by GoC and OPS transformations, launch of Public Governance Exchange.business transformation (PGEx.bt) Investments – new Senior Associate, possible hire at the Director level. 8

Learning Lab – generic courses Overall story - after a slow year, numbers in 3 rd and 4 th quarters grew, although not back to 2011 levels Key assumptions – numbers will not grow rapidly in new fiscal; ongoing steady demand for learning fundamentals offered by these courses; stick to core courses; use of internal, senior level facilitators adds value Investment - work with new associate to develop & implement marketing strategy; VP Policy & Strategy to review and revise Policy 1 & 2 teach and market products; use senior internal people for other courses with minimal use of associates No new resources. 9

Learning Lab – Boot Camps Overall story – Functional community (HR, communications, IT, policy, science-policy, comptrollership) leadership boot camps appear to be responding to market need Key assumptions – communities will support and help market products; senior level facilitators add value; there is a market for customized boot camps in departments Investment – develop community support; market offerings; use senior level facilitators No new resources 10

Learning Lab – ELP Overall story – ELP is now in its fourth cohort, with two more planned: May (science-policy) and September Key assumptions – continuing room for growth; value rests on high standard of content; senior level facilitators Investment – high quality research and lineup, including off-site Nunavut visit; 2 senior level facilitators in classroom; marketing May and September No new resources 11

Learning Lab - Events Overall story – there is an opportunity at the federal level to market embedded and customized events to departments and functional communities Key assumptions – contracting and budgeting restrictions that open this opportunity will remain in place; focused effort on this market required No new resources 12

Learning Lab - Toronto Overall story – significant investment to date, modest expansion of OPS courses planned; ELP program for provincial, federal and municipal sectors in GTA being explored Key assumptions – marketing, planning and delivery can succeed using existing OPS networks Investment – a larger number of former OPS Associates supported by Ottawa team 13

Historical Annual Revenues 14 DRAFT BUDGET FOR REVIEW F = Forecasted B = Budget

Revenue Profile CDN $000’s FY 13 (est.) FY14 Budget Y/Y % Learning Centre Total$1,167$1,626+39% Generic Courses 1 $404$679+68% Executive Learning$556$782+41% Custom (Includes Events)$207$165-25% Advisory & Research Total$1,967$2,085+6% Aboriginal Governance$458$678+48% Public Sector$584$671+15% Modernizing Government$688$479-44% Not for Profit Sector$237$257+8% DRAFT BUDGET FOR REVIEW 1 Includes Boot and Day courses 15

Business Line Overview CDN $000’s LL 2 Budget FY 14 A&R 3 Budget FY 14 Total Budget FY 14 FY13 Forecast (est.) Variance % Gross Revenue $1,626$2,085$3,711$3,134+18% Direct Costs (includes subs) $243$438$681$652+5% Direct Labour$643$944$1,587$1,380+15% Gross Profit$740$703$1,443$1,102+31% Gross Profit %46%34%39%35%+11% Overhead Allocation 1 $443$658$1,101$1,134- Excess (Deficiency) of Revenue over Expenses $297$45$342($32)- DRAFT BUDGET FOR REVIEW 1 Overhead Allocated based on direct Labour costs 2 Learning Lab Business Line 3 Advisory & Research Business Line 16

Operating Expenses 17 CDN $000’s FY14 Budget FY 13 Forecast (est.) Y/Y % Salaries & Benefits $2,036$1,889+8% Outreach $42 - Occupancy $388$396-2% Audit/Legal $14$9+56% Office $172$142+21% Amortization $37 - Total$2,689$2,515+7% DRAFT BUDGET FOR REVIEW

Headcount DRAFT BUDGET FOR REVIEW Q4 ‘13Q1 ’14Q2 ‘14Q3 ‘14Q4 ‘14 Professional Staff Sr. Research Officer Research Officer Administration Total FTE Sr. Associates Associates Does not include Summer Interns or Associates 2 Includes 2 PTE’s 3 Includes CEO and VP’s 4 Consultants 18

Cash Position 19 1H ‘ 14 Cash Position impacted by: Cohort 4 and forecasted Cohort 5 prepayment Q4 ‘13 forecasted billings Vendor repayment plans Risks Forecast Accuracy Timeliness of Billings Working Capital assumptions DRAFT BUDGET FOR REVIEW

Supporting Schedules 20

Financial Assumptions Working Capital Assumptions Project Billings – net 60 days Learning Centre – 30% prepaid/70% up to 90 days Accounts Payable – 45 – 60 days of expenses Capital Additions $60k Labour Costs –COLA 3% (52K) –Bonus Accrual $80k (plan forthcoming) DRAFT BUDGET FOR REVIEW 21

Financial Assumptions (cont’d) Facilities located in: –Ottawa –Toronto –Vancouver No accounting for Work in Process DRAFT BUDGET FOR REVIEW 22

Quarterly Revenue Comparison 23 DRAFT BUDGET FOR REVIEW Note: Q4 of FY 13 is forecast

Balance Sheet DRAFT BUDGET FOR REVIEW 24

Statement of Changes in Financial Position 25 DRAFT BUDGET FOR REVIEW

Statement of Operations DRAFT BUDGET FOR REVIEW 26