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Section IV – Other Items of Interest

Contact Information

Security Intelligence Review Committee
P.O. Box 2430 Station "D"
Ottawa, Ontario
K1P 5W5

Telephone: (613) 990-8441
Facsimile: (613) 990-5230
Internet: www.sirc-csars.gc.ca
E-Mail: ellardm@sirc-csars.gc.ca

Legislation Administered

Canadian Security Intelligence Service Act

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2008 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Security Intelligence Review Committee's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Security Intelligence Review Committee's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable; that assets are safeguarded; and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Security Intelligence Review Committee.

The financial statements of the Security Intelligence Review Committee have not been audited.

Ottawa, Ontario

August 08, 2008

 

Expenses (Note 4)	2007-08	2006-07
	(in dollars)
Salaries and employee benefits	1,948,504	1,958,053
Professional and special services	324,431	389,487
Accommodation (Note 11)	224,062	220,000
Travel and relocation	192,796	191,615
Information	85,543	64,355
Communication	58,285	47,950
Equipment rental	49,914	14,766
Repairs	38,935	10,983
Allowance for vacation pay	30,346	(37,576)
Equipment	15,290	65,026
Utilities, material and supplies	13,769	15,900
Amortization of tangible capital assets (Note 7)	11,414	7,730
Miscellaneous	1,500	2,507
Total Expenses	2,994,789	2,950,796
Revenues (Note 5)
Miscellaneous revenues	20	5
Net Cost of Operations	2,994,769	2,950,791

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

 

Assets	2007-08	2006-07
	(in dollars)
Financial assets
Advance	1,700	700
Accounts receivable (Note 6)	53,063	88,040
Total financial assets	54,763	88,740
Non-financial assets
Tangible capital assets (Note 7)	58,607	69,423
Total non-financial assets	58,607	69,423
Total	113,370	158,163

 

Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (Note 8)	183,877	239,779
Vacation pay	111,192	80,845
Employee severance benefits (Note 9b)	304,787	321,042
Total liabilities	599,856	641,666
Equity of Canada	(486,486)	(483,503)
Total	113,370	158,163

Contractual obligations (Note 10)
The accompanying notes form an integral part of these financial statements.

 

	2007-08	2006-07
	(in dollars)
Equity of Canada, beginning of year	(483,503)	(350,911)
Net cost of operations	(2,994,769)	(2,950,791)
Refund and adjustment of previous year expenditures	(7,711)	(2,228)
Revenue not available for spending	(20)	(5)
Services received without charge from other government departments (Note 11)	351,380	342,081
	(2,651,120)	(2,610,943)
Current year appropriations used (Note 3)	2,626,212	2,626,834
Change in net position in the Consolidated Revenue Fund (Note 3c)	21,925	(148,483)
Equity of Canada, end of year	(486,486)	(483,503)

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

 

	2007-08	2006-07
	(in dollars)
Operating Activities
Net cost of operations	2,994,769	2,950,791
Non-cash items
Amortization of tangible capital assets (Note 7)	(11,414)	(7,730)
Services received without charge from other government departments (Note 11)	(351,380)	(342,081)
	(362,794)	(349,811)
Variations in Statement of Financial Position
Increase in advances	1,000	-
Increase (decrease) in accounts receivable	(34,977)	88,040
Increase (decrease) in prepaid expenses	-	(75,398)
Decrease (increase) in liabilities	41,810	(137,504)
	7,833	(124,862)
Cash used by operating activities	2,639,808	2,476,118
Capital Investment Activities
Acquisition of tangible capital assets (Note 7)	598	-
Net cash provided by Government of Canada (Note 3c)	2,640,406	2,476,118

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

1. Authority and Purpose

The Security Intelligence Review Committee was created to provide external review the Canadian Security Intelligence Service (CSIS) performance of its duties and functions; and to examine complaints by individuals or reports by Ministers related to security of Canada.

The Security Intelligence Review Committee derives its powers from the Canadian Security Intelligence Service (CSIS) Act promulgated on July 16, 1984. The first Chair and Members were appointed by His Excellency the Governor General on November 30, 1984. Security Intelligence Review Committee is empowered to set its own Rules of Procedures, and to employ an executive director and adequate staff to support its activities. The Act requires Security Intelligence Review Committee to report annually to the Solicitor General of Canada who must, in turn, table the report in each House of Parliament on any of the first fifteen days on which that House is sitting after the day the Minister receives it. Security Intelligence Review Committee may also require CSIS or the Inspector General appointed under the CSIS Act to conduct a review of specific activities of the Service and provide Security Intelligence Review Committee with a report of the review.

2. Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector.

Significant accounting policies are as follows:

1. Parliamentary appropriations: The Security Intelligence Review Committee is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Security Intelligence Review Committee do not parallel financial reporting according to Canadian generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.
   
   
2. Net cash provided by government: The Security Intelligence Review Committee operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Security Intelligence Review Committee is deposited to the CRF and all cash disbursements made by the Security Intelligence Review Committee 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 federal government.
   
   
3. Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the Security Intelligence Review Committee. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
   
   
4. Expenses are recorded on the accrual basis:
   
   
   • Vacation pay is expensed as the benefits accrue to 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.
     
     
5. Employee future benefits:
   
   
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The Security Intelligence Review Committee's contributions to the plan are charged to expenses in the year incurred and represent the total obligation to the plan. Current legislation does not require the Security Intelligence Review Committee 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.
      
      
6. Accounts receivable and advances are stated at amounts expected to be ultimately realized. A provision is made for receivables where recovery is considered uncertain.
   
   
7. Tangible capital assets having an initial cost of $3,000 or more are recorded at their acquisition cost. The Security Intelligence Review Committee does not capitalize intangibles, works or art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
   
   

   Asset Class	Amortization Period
   Informatics	3 years
   Other equipment	3 years

   
   
   
8. Measurement uncertainty: The preparation of these financial statements in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes these estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Appropriations

The Security Intelligence Review Committee receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Security Intelligence Review Committee 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) Reconciliation of net cost of operations to current year appropriations used:

	2007-08	2006-07
	(in dollars)
Net cost of operations	2,994,769	2,950,791
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (less):
Services received without charge from other government departments (Note 11)	(351,380)	(342,081)
Vacation pay	(30,347)	37,576
Amortization of tangible capital assets (Note 7)	(11,414)	(7,730)
Employee severance benefits (Note 9b)	16,255	(13,986)
Refund and adjustment of previous year expenditures	7,711	2,228
Revenue not available for spending	20	5
Other	-	31
	(369,155)	(323,957)
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add:
Acquisitions of tangible capital assets (Note 7)	598	-
Current year appropriations used	2,626,212	2,626,834

b) Appropriations provided and used:

	2007-08	2006-07
	(in dollars)
Vote - Operating expenditures	2,766,000	2,615,000
Statutory amounts	253,339	258,394
Less:
Lapsed appropriations : Operating	(393,127)	(246,560)
Current year appropriations used	2,626,212	2,626,834

c) Reconciliation of net cash provided by Government to current year appropriations used:

	2007-08	2006-07
	(in dollars)
Net cash provided by government	2,640,406	2,476,118
Refund and adjustment of previous year expenditures	7,711	2,228
Revenue not available for spending	20	5
	2,648,137	2,478,351
Change in net position in the Consolidated Revenue Fund
Variation in financial assets	33,977	(88,040)
Variation in accounts payable and accrued liabilities	(55,902)	236,141
Other	-	382
	(21,925)	148,483
Current year appropriations used	2,626,212	2,626,834

4. Expenses

The following table presents details of expenses by program activity:

	2007-08	2006-07
	(in dollars)
Program Activity
Complaints	1,210,638	1,097,461
Reviews	1,784,151	1,853,335
Total	2,994,789	2,950,796

5. Revenues

The following table presents details of revenues by program activity:

	2007-08	2006-07
	(in dollars)
Program Activity
Complaints	8	2
Reviews	12	3
Total	20	5

6. Accounts Receivable

The following table presents details of accounts receivable:

	2007-08	2006-07
	(in dollars)
Receivables from other federal government departments and agencies	50,973	83,951
Receivables from external parties	2,090	4,089
Total	53,063	88,040

7. Tangible Capital Assets

(in dollars)	Cost					Accumulated amortization
Capital asset class	Opening Balance	Acquisi- tions	Disposals and write- offs	Closing Balance		Opening Balance	Amortiza- tion	Disposal and write- offs	Closing Balance	Net Book Value 2007-08	Net Book Value 2006-07
Informatics	447,850	598	-	448,448		429,545	8,228	-	437,773	10,675	18,304
Other equipment	105,482	-	-	105,482		54,364	3,186	-	57,550	47,932	51,119
	553,332	598	-	553,931		483,909	11,414	-	495,324	58,607	69,423

8. Accounts payable and accrued liabilities

The following table presents details of accounts payable and accrued liabilities:

	2007-08	2006-07
	(in dollars)
Payables to external parties	164,729	226,229
Payables to other federal government departments and agencies	19,148	13,550
Total	183,877	239,779

9. Employee Benefits

(a) Pension benefits: The Security Intelligence Review Committee participates 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/Quebec Pension Plans benefits and are indexed to inflation.

Both the employees and the Security Intelligence Review Committee contribute to the cost of the Public Service Pension Plan. The 2007-08 expense amounts to $229,525 ($190,436 in 2006-07) which represents approximately 2.1 times (2.2 in 2006-07) the contributions by employee.

The Security Intelligence Review Committee'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.

(b) Severance benefits: The Security Intelligence Review Committee 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 appropriations. Information about the severance benefits, measured as at March 31, is as follows:

	2007-08	2006-07
	(in dollars)
Accrued benefits obligation, beginning of year	321,042	307,056
Expense for the year	(16,255)	13,986
Accrued benefit obligation, end of year	304,787	321,042

10. Contractual obligations

The nature of the Security Intelligence Review Committee activities can result in large multi-year contracts and obligations whereby the Department will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars)	2008-09	2009-10	Total
Professional and special services	24,838	13,173	38,011
Rental	6,128	-	6,128
Total	30,966	13,173	44,139

11. Related Party Transactions

The Security Intelligence Review Committee is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The Security Intelligence Review Committee enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the Security Intelligence Review Committee received services which were obtained without charge from other Government departments as presented below.

Services provided without charge: During the year, the Security Intelligence Review Committee received service without charge from other departments. These services have been recognized in the Security Intelligence Review Committee's Statement of Operations as follows:

	2007-08	2006-07
	(in dollars)
Accommodation	224,062	220,000
Employer's contribution to the health and dental insurance plans	127,318	122,081
Total	351,380	342,081

The government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada are not included as an expense in the Security Intelligence Review Committee's Statement of Operations.

12. Program Activity Structure

The 2007-08 Financial Statements for the Security Intelligence Review Committee were prepared on the Treasury Board Secretariat reporting requirements for the program activities. As a result, charges for Corporate Services activities have been distributed between Program Activities.

13. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.

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