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2011-12 Future Oriented Financial Statements

Statement of Management Responsibility

Office of the Public Sector Integrity Commissioner of Canada

(Back to Report on Plans and Priorities)

The Office's management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 15, 2010 and reflect the plans described in the Report on Plans and Priorities.

 

Mario Dion
Interim Public Sector Integrity Commissioner of Canada
  Kurt Chin Quee
Chief Financial Officer



Denis Pelchat
Deputy Chief Financial Officer
Canadian Human Rights Commission
(Service provider to PSIC)

 

Ottawa, Canada
March 4, 2011

 

 

Future-Oriented Statement of Operations (Unaudited)

For The Year ending March 31

(in dollars)
Estimated
Results
2011
Forecast
2012
Operating Expenses    
Disclosure and Reprisal Management 3,968,812 4,922,747
Internal Services 2,448,610 2,470,490
Net Cost of Operations 6,417,422 7,393,237

 

Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.

Segmented information (Note 11)

The accompanying notes form an integral part of these future-oriented financial statements.

 

Future-Oriented Statement of Financial Position (Unaudited)

As at March 31

(in dollars)
Estimated
Results
2011
Forecast
2012
Assets
Financial Assets
Due from Consolidated Revenue Fund 176,268 408,559
Accounts Receivable and Advances (Note 6) 80,864 1,000
Total Financial Assets 257,132 409,559
 
Non-Financial Assets
Tangible Capital Assets (Note 7) 109,482 533,805
Total Non-Financial Assets 109,482 533,805
  366,614 943,364
 
Liabilities and Equity of Canada
Liabilities    
Accounts Payable and Accrued Liabilities (Note 8) 256,132 408,559
Vacation Pay and Compensatory Leave 175,289 177,918
Employee Future Benefits (Note 9) 667,717 677,733
Total Liabilities 1,099,138 1,264,210
     
Equity of Canada (732,524) (320,846)
  366,614 943,364

 

Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.

The accompanying notes form an integral part of these future-oriented financial statements.

 

Future-Oriented Statement of Equity of Canada (Unaudited)

For the year ending March 31

(in dollars)
Estimated
Results
2011
Forecast
2012
Equity of Canada, Beginning of Year (411,052) (732,524)
Net Cost of Operations (6,417,422) (7,393,237)
Change in Due from the Consolidated Revenue Fund 138,199 232,291
Net cash provided by the Government of Canada 5,484,839 7,056,689
Services provided without charge from other government departments (Note 10) 472,912 515,935
Equity of Canada, End of Year (732,524) (320,846)

 

Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.

The accompanying notes form an integral part of these future-oriented financial statements.

 

Future-Oriented Statement of Cash Flow (Unaudited)

For the year ending March 31

(in dollars)
Estimated
Results
2011
Forecast
2012
Operating Activities
Net Cost of Operations 6,417,422 7,393,237
Non-Cash Items:
Amortization of Tangible Capital Assets (Note 7) (25,089) (30,677)
Services provided without charge from other government departments (Note 10) (472,912) (515,935)
Variations in Statement of Financial Position:    
Decrease in Accounts Receivable and Advances (69,428) (79,864)
Increase in Liabilities (395,304) (165,072)
Cash used in Operating Activities 5,454,689 6,601,689
     
Capital Investing Activities    
Acquisitions of Tangible Capital Assets 30,150 455,000
Cash used in Capital Investing Activities 30,150 455,000
     
Net Cash Provided by Government of Canada 5,484,839 7,056,689

 

Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.

The accompanying notes form an integral part of these future-oriented financial statements.

 

Notes to the Future-Oriented Financial Statements (Unaudited)

1. Authority and Objectives

The Office of the Public Sector Integrity Commissioner of Canada (the Office) was created under the Public Servants Disclosure Protection Act, which came into force on April 15, 2007. The Office is established under the authority of Schedule I.1 of the Financial Administration Act and is funded through annual appropriations. The Commissioner as an Agent of Parliament, is accountable for, and reports directly to Parliament on the results achieved.

The Office has the mandate to establish a safe, confidential mechanism for public servants or members of the public to disclose potential wrongdoing in the public sector. The Office also protects the public servants from reprisal for making such disclosures or participating in investigations.

Disclosure and Reprisal Management Program:

To provide advice to federal public sector employees and members of the public who are considering making a disclosure and to accept, investigate and report on disclosures of information concerning possible wrongdoing. Based on this activity, the Public Sector Integrity Commissioner will exercise exclusive jurisdiction over the review, conciliation and settlement of complaints of reprisal, including making applications to the Public Servants Disclosure Protection Tribunal to determine if reprisals have taken place and to order appropriate remedial and disciplinary action.

Internal Services:

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Corporate Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the Office as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. The Office's activities will remain substantially the same as the previous year.

  2. Expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.

  3. Estimated year end information for 2010-11 is used as the opening position for the 2011-12 forecasts.

These assumptions are adopted as at December 15, 2010.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010-11 and for 2011- 12, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements the Office has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented financial statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.

  2. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Office will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary Authorities
    The Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Office do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-Oriented Statement of Operations and the Statement of Future-oriented Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the basis of reporting.

  2. Net Cash Provided by Government
    The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

  3. Amounts Due from/to the CRF
    Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Office is entitled to draw from the CRF without further appropriations to discharge its liabilities.

  4. Expenses
    Expenses are presented on an accrual basis:

  • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

  • Services provided without charge by other government departments for accommodation and the employer's contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

  • Employee Future benefits
  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government of Canada. The Office's contributions to the Plan are charged to expenses in the year incurred and represent the Office's total departmental obligation to the Plan. Current legislation does not require the Office to make contributions for any actuarial deficiencies of the Plan.

  2. Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

    • Accounts Receivables
      Accounts receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

      • Tangible Capital Assets
        Tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The Office does not capitalize intangibles. Amortization of tangible capital assets is done on a staight-line basis over their estimated useful lives, as follows:
Asset classAmortization periodInformatics hardware3 to 5 yearsInformatics software3 to 5 yearsOther equipment1 to 15 yearsLeasehold improvementsLesser of the remaining term of the lease or useful life of the improvement.Assets in DevelopmentOnce in service, in accordance with asset type

 

5. Parliamentary Authorities

The Office receives its funding through annual Paliamentary authorities. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Office has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a. Authorities requested

(in dollars)
Estimated
Results
2011
Forecast
2012
Authorities requested
Vote 45 (Vote 50 in 2011/12) 6,474,250 6,754,020
Statutory 425,376 534,960
Authorities Available 6,899,626 7,288,980
Lapse 1,276,461 -
Forecast authorities to be used 5,623,165 7,288,980

 

Forecast authorities requested for the year are the planned spending amounts which are based on the Main Estimates, Supplementary Estimates (A), (B) and (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

b. Reconciliation of Net Cost of Operations to forecast authorities to be used

(in dollars)
Estimated
Results
2011
Forecast
2012
Net Cost of Operations 6,417,422 7,393,237
Adjustments for items affecting Net Cost of Operations but not affecting authorities:    
Add (Less):
Amortization of Tangible Capital Assets (Note 7) (25,089) (30,677)
Increase in Employee Future Benefits (258,517) (10,016)
Increase in Vacation Pay and Compensatory Leave (67,889) (2,629)
Services provided without Charge by other Government Departments (Note 10) (472,912) (515,935)
  (824,407) (559,257)
Adjustments for items not affecting Net Cost of Operations but affecting authorities:    
Add (Less):    
Acquisitions of Tangible Capital Assets (Note 7) 30,150 455,000
  30,150 455,000
Forecast authorities to be used 5,623,165 7,288,980

 

6. Accounts Receivable and Advances

(in dollars)Estimated
Results
2011
Forecast
2012
Accounts Receivable    
Other Government Departments 79,864 -
Advances    
Petty Cash 1,000 1,000
Total 80,864 1,000

 

7. Tangible Capital Assets

(in dollars)Estimated
Results
2011
Forecast
2012
Opening balance 104,421 109,482
Acquisition of Tangible Capital Assets 30,150 455,000
Less: Current year amortization (25,089) (30,677)
Net Book Value 109,482 533,805

 

8. Accounts Payable and Accrued Liabilities

(in dollars)Estimated
Results
2011
Forecast
2012
External Parties
Accounts Payable and Accrued Liabilities 200,661 309,494
Accrued Salaries 11,825 23,780
 
Other Government Departments
Accounts Payable 43,646 75,286
Total 256,132 408,560

 

9. Employee Future Benefits

  1. Pension Benefits:
    The Office's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

    Both the employees and the Office contribute to the cost of the Plan. The forecast expenses are $298,614 in 2010/11 and $375,542 in 2011/12. The Office's contribtuion represents 1.9 times the contributions of employees in 2009/10.

    The Office's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

  2. Severance Benefits:
    The Office provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, estimated as at the date of these statements, is as follows:
(in dollars)Estimated
Results
2011
Forecast
2012
Accrued benefit obligation, beginning of year 409,200 667,717
Expense for the year 398,117 129,386
Expected benefits payments during the year (139,600) (119,370)
Accrued benefit obligation, end of year 667,717 677,733

 

10. Related Party Transactions

The Office is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Office enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Office has shared service agreements with other government departments related to the provision of Finance, Human Resources, Administration and Information Technology services. The forecast expenses are $320,900 in 2010/11 and $500,000 in 2011/12. The Office also obtained common services without charge from other Government departments as disclosed below.

Common services provided without charge by other government departments

During the year, the Office is forecasted to receive service without charge from certain common service organization related to accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recorded in the Office's Future-Oriented Statement of Operations as follows:

(in dollars)Estimated
Results
2011
Forecast
2012
Accommodation 260,225 263,316
Employer's contributions to the health and dental insurance plans 212,687 252,619
Total 472,912 515,935

 

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the Department's Statement of Operations.

11. Segmented information

Presentation by segment is based on the Office's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 4. The following table presents the forecasted expenses for the main program activities, by major object of expense. The segment estimates for the period are as follows:

 2012
(in dollars)Total 2011Disclosure and Reprisal ManagementInternal ServicesTotal
2012
Operating Expenses
Salaries and Employee Benefits 4,038,858 2,785,769 1,105,825 3,891,594
Professional and Special Services 1,733,900 1,777,650 1,000,000 2,777,650
Accommodation 260,225 194,854 68,462 263,316
Travel & Relocation 88,200 88,662 11,338 100,000
Information 84,500 17,041 132,959 150,000
Equipment expenses 60,650 - 30,000 30,000
Communication 45,800 11,026 38,974 50,000
Utilities, Materials and Supplies 28,200 5,851 24,149 30,000
Repairs and Maintenance 27,100 - 30,000 30,000
Amortization of tangible capital assets 25,089 22,700 7,977 30,677
Rentals 24,800 19,194 20,806 40,000
Other 100 - - -
Net Cost of Operations 6,417,422 4,922,747 2,470,490 7,393,237

 

2015-10-21