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Real Property Services Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Real Property Services Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority provided and the reconciliation of unused authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

TIM MCGRATH
Assistant Deputy Minister
Real Property Branch
Public Works and Government Services Canada

May 26, 2008

STATEMENT OF AUTHORITY PROVIDED (unaudited)
For the year ended March 31


 
2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
Net results
-
7,059
-
(13,191)
Add: items not requiring use of funds
-
(6,531)
-
4,292
Operating source (use) of funds
-
528
-
(8,899)
Add: recovery of net draw down authority used
(note 1)
-
-
-
8,903
Less: items requiring use of funds
    Net other assets and liabilities
-
24
-
4
Authority provided
-
504
-
-

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Credit (debit) balance in the accumulated net charge
against the Fund's authority
8,731
(18,565)
Add:
PAYE charges against the appropriation account after
March 31
175,010
212,696
Less:
Amounts credited to the appropriation account after
March 31
184,245
194,131
Net authority provided, end of year
(504)
-
Authority limit (note 1)
150,000
150,000
Unused authority carried forward
150,504
150,000

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Real Property Services Revolving Fund (the “Fund”) as at March 31, 2008 and the statements of operations and net assets (liabilities) and cash flow for the year then ended. These financial statements have been prepared to comply with Section 6.4 of Treasury Board’s Policy on Special Revenue Spending Authorities. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with the basis of accounting described in Note 2 to the financial statements.

These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the management of the Fund and the Treasury Board to comply with Section 6.4 of the Policy on Special Revenue Spending Authorities. The financial statements are not intended to be and should not be used by anyone other than specified users or for any other purpose.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008

STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
Assets
Current
Cash in transit
80
19
Accounts receivable
Government of Canada
175,843
184,743
Outside parties
10,777
8,143
Other assets (note 3)
7,615
9,314
 
194,315
202,219
Liabilities and net assets (liabilities)
Current
Accounts payable and accrued liabilities
Government of Canada
8,741
3,644
Outside parties
156,193
198,114
Professional liability fund
2,138
2,301
Other liabilities
6,276
4,602
 
173,348
208,661
Allowance for employee termination benefits
11,008
17,954
 
184,356
226,615
Net assets (liabilities) (note 4)
9,959
(24,396)
 
194,315
202,219
Contractual obligations (note 5)
Contingent liabilities (note 6)

The accompanying notes are an integral part of the financial statements.

 

STATEMENT OF OPERATIONS AND NET ASSETS (LIABILITIES)
For the year ended March 31


 
2008
2007
In thousands of dollars
Gross revenues (note 7)
1,036,579
974,858
Recoverable disbursements made on behalf of clients
892,001
821,459
Net revenues
144,578
153,399
Operating expenses
Salaries and employee benefits
85,314
94,686
Employee termination benefits
(2,477)
(997)
Overhead chargeback
28,841
36,378
Corporate and administrative services
18,427
23,241
Occupancy costs
5,608
7,017
Provisions for claims and other expenses
1,806
6,265
 
137,519
166,590
Net results
7,059
(13,191)
Net liabilities, beginning of year
(24,396)
(37,669)
Recovery of net draw down authority used (note 1)
-
8,903
Net financial resources used and change in the accumulated net
charge against the Fund's authority account, during the year
27,296
17,561
Net assets (liabilities), end of year
9,959
(24,396)

The accompanying notes are an integral part of the financial statements.

 

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
Operating activities
Net results
7,059
(13,191)
Provision for employee termination benefits
(2,477)
(997)
 
4,582
(14,188)
Changes in working capital (note 8)
(27,409)
(9,060)
Payments on provision for employee termination benefits
(4,469)
(3,216)
Net financial resources used by operating activities
(27,296)
(26,464)
Financing activity
Recovery of net draw down authority used (note 1)
-
8,903
Net financial resources provided by the financing
activity
-
8,903
Net financial resources used and change
in the accumulated net charge against the
Fund's
authority account, during the year
(27,296)
(17,561)
Accumulated net charge against the Fund's authority
account, beginning of year
18,565
36,126
Accumulated net charge against the Fund's authority
account, end of year (note 4)
(8,731)
18,565

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Real Property Services Revolving Fund (“the Fund”) provides, on a fee-for-service basis, optional real property services to other custodian departments and to other departments and agencies requesting services over and above those provided under the Federal Accommodation and Holdings Service Line program. More specifically, the Fund looks after architectural and engineering activities, property management, holdings and divestiture, and support services.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $150,000,000 at any time.

The Fund receives funding by way of a separate vote, to cover the net draw down authority used in order to comply with the Policy on Special Revenue Spending Authorities. The amount received in 2007-2008 was nil (2006-2007: $8,903,266).

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because the employee termination benefits liability is based on management's estimate of this liability rather than based on actuarial valuations.

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Revenues earned on professional and technical services performed and revenues to recover disbursements made on behalf of other government departments and outside parties are recognized as costs are incurred by the Fund.

c) Expenses
Overhead chargeback, corporate and administrative services and occupancy costs are based on the budgeted direct service delivery personnel costs as determined in the 2007-2008 Budget Framework for the Fund and the Federal Accommodation and Holdings Program Activities of Public Works and Government Services Canada.

d) Inventories
Inventories are valued at cost and are recorded on a first-in, first-out basis.

e) Pension plan
Employees of the Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefits charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.

f) Employee termination benefits, vacation pay and time-off in lieu
Termination benefits accrue to employees over their years of service with the Government of Canada as provided for under collective agreements, and the estimated costs of these benefits are recorded in the accounts as they are earned by the employees.

The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and time-off in lieu benefits accruing to employees.

3. OTHER ASSETS



In thousands of dollars
 
2008
2007
Goods and Services Tax refundable advances
7,586
9,246
Other advances
20
7
Prepaid expenses
9
3
Inventories
-
58
 
7,615
9,314

4. NET ASSETS (LIABILITIES)

The accumulated surplus (deficit) is the accumulation of each fiscal year's surpluses and deficits since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
 
2008
2007
Accumulated deficit, beginning of year
(5,831)
(1,543)
Net results
7,059
(13,191)
Recovery of net draw down authority used (note 1)
-
8,903
Accumulated surplus (deficit), end of year
1,228
(5,831)
Accumulated net charge against the Fund's authority account,
end of year
8,731
(18,565)
 
9,959
(24,396)

5. CONTRACTUAL OBLIGATIONS

The Fund is engaged in contractual obligations for property services. Expected future payments are as follows:


In thousands of dollars    
Year ending March 31, 2009
253,042
  2010
41,112
  2011
20,411
  2012
18,469
  2013 and thereafter
85,389
   
418,423

6. CONTINGENT LIABILITIES

Multiple claims have been made against the Fund in the normal course of operations. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the financial statements. A material claim where the outcome is not determinable is described below.

A statement of claim has been filed against the Crown and other parties alleging damages of $39.7 million in connection with an implied breach of contractual obligations. The Crown has filed its statement of defence. The Crown is unable to assess the possibility of settlement and the amount at risk or estimate the amount of any settlement. No accrual for this contingency has been made in the financial statements.

7. GROSS REVENUES



In thousands of dollars
 
2008
2007
Recoverable disbursements made on behalf of clients
892,001
821,459
Project fees
133,217
139,308
Payroll recoveries
6,785
10,007
Inventory management fees
2,381
3,095
Other revenues
2,195
989
 
1,036,579
974,858

8. CHANGES IN WORKING CAPITAL



In thousands of dollars  
 
2008
2007
Changes
Current assets
194,315
202,219
7,904
Current liabilities
173,348
208,661
(35,313)
 
(27,409)

9. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

 

 

 

Real Property Disposition Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Real Property Disposition Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority provided and the reconciliation of unused authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

TIM MCGRATH
Assistant Deputy Minister
Real Property Branch
Public Works and Government Services Canada

May 26, 2008

STATEMENT OF AUTHORITY PROVIDED (unaudited)
For the year ended March 31


 
2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
Net results
8,000
8,796
8,000
6,741
Less: items requiring use of funds
-
85
-
636
Authority provided
8,000
8,711
8,000
6,105

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Debit balance in the accumulated net charge against
the Fund's authority
(1,912)
(1,594)
Add:
Deposits on disposals
603
203
Less:
Amounts credited to the appropriation account after
March 31
-
3
Net authority provided, end of year
(1,309)
(1,394)
Authority limit (note 1)
5,000
5,000
Unused authority carried forward
6,309
6,394

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Real Property Disposition Revolving Fund (the “Fund”) as at March 31, 2008 and the statements of operations and net assets and cash flow for the year then ended. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with generally accepted accounting principles.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008

STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
Assets
Current
Cash in transit
-
3
Accounts receivable
Outside parties
4
-
Work in process
3,691
3,606
 
3,695
3,609
Liabilities and net assets
Current
Accounts payable and accrued liabilities
Government of Canada
1
-
Deposits on disposals
606
203
 
607
203
Net assets (note 3)
3,088
3,406
 
3,695
3,609

The accompanying notes are an integral part of the financial statements.

STATEMENT OF OPERATIONS AND NET ASSETS
For the year ended March 31


 
2008
2007
In thousands of dollars
Revenues
11,163
8,861
Operating expenses
Fees
1,454
915
Disbursements
913
1,205
 
2,367
2,120
Net results
8,796
6,741
Net assets, beginning of year
3,406
2,561
Transfer of part of the accumulated surplus to the Consolidated
Revenue Fund (note 1)
(8,796)
(6,741)
Net financial resources used (provided) and change in the
accumulated net charge against the Fund's authority
account, during the year
(318)
845
Net assets, end of year
3,088
3,406

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
Operating activities
Net results
8,796
6,741
Changes in working capital (note 4)
318
(845)
Net financial resources provided by operating
activities
9,114 5,896
Financing activity
Transfer of part of the accumulated surplus to the Consolidated
Revenue Fund (note 1)
(8,796)
(6,741)
Net financial resources used by the financing activity
(8,796)
(6,741)
Net financial resources provided (used) and change in the
accumulated net charge against the Fund's authority
account, during the year
318 (845)
Accumulated net charge against the Fund's authority
account, beginning of year
1,594 2,439
Accumulated net charge against the Fund's authority
account, end of year (note 3)
1,912
1,594

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Real Property Disposition Revolving Fund (“the Fund”) provides, on a cost recovery basis, routine disposals of real property assets no longer required in order to generate revenue for the Crown.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, the total of which is not to exceed $5,000,000 at any time.

All proceeds of sale are deposited to the Consolidated Revenue Fund net of disposal costs and expenses. In accordance with the terms and conditions approved by the Treasury Board, any year end accumulated surplus in the Fund in excess of $5,000,000 is deposited to the Consolidated Revenue Fund. The amount transferred to the Consolidated Revenue Fund in 2007-2008 was $8,796,426 (2006-2007: $6,741,867).

2. SIGNIFICANT ACCOUNTING POLICIES

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

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Revenues are recognized in the period in which both the title is transferred to the purchaser and the full payment is received by the Fund.

c) Work in process
Work in process includes labour and disbursements incurred for services performed or goods delivered for sales or transfers of properties not finalized at the fiscal year end.

d) Deposits on disposals
Deposits on disposals represent receipts on future disposals of properties that are not closed at the fiscal year end.

3. NET ASSETS

The accumulated surplus is the accumulation of each fiscal year's surpluses since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
 
2008
2007
Accumulated surplus, beginning of year
5,000
5,000
Net results
8,796
6,741
Transfer of part of the accumulated surplus to the Consolidated
Revenue Fund (note 1)
(8,796)
(6,741)
Accumulated surplus, end of year
5,000
5,000
Accumulated net charge against the Fund's authority account,
end of year
(1,912)
(1,594)
 
3,088
3,406

4. CHANGES IN WORKING CAPITAL



In thousands of dollars
 
2008
2007
Changes
Current assets
3,695
3,609
(86)
Current liabilities
607
203
404
 
318

5. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

Optional Services Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Optional Services Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year. Some previous year's figures have been reclassified to conform to the current year's presentation.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority provided and the reconciliation of unused authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

LILIANE SAINT PIERRE
Assistant Deputy Minister
Acquisitions Branch
Public Works and Government Services Canada

May 28, 2008

STATEMENT OF AUTHORITY PROVIDED (unaudited)
For the year ended March 31


 
2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
Net results
-
3,043
-
2,099
Add: items not requiring use of funds
-
275
-
(1,204)
Operating source of funds
-
3,318
-
895
Less: items requiring use of funds
Net other assets and liabilities
-
(1)
-
2
Authority provided
-
3,319
-
893

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Debit balance in the accumulated net charge against the Fund's authority
(10,257)
(7,770)
Add:
PAYE charges against the appropriation account after
March 31
4,543
6,036
Less:
Amounts credited to the appropriation account after
March 31
852
1,512
Net authority provided, end of year
(6,566)
(3,246)
Authority limit (note 1)
35,000
35,000
Unused authority carried forward
41,566
38,246

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Optional Services Revolving Fund (the “Fund”) as at March 31, 2008 and the statements of operations and net liabilities and cash flow for the year then ended. These financial statements have been prepared to comply with Section 6.4 of Treasury Board’s Policy on Special Revenue Spending Authorities. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with the basis of accounting described in Note 2 to the financial statements.

These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the management of the Fund and the Treasury Board to comply with Section 6.4 of the Policy on Special Revenue Spending Authorities. The financial statements are not intended to be and should not be used by anyone other than specified users or for any other purpose.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008

STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
Assets
Current
Cash in transit
12
242
Accounts receivable
Government of Canada
798
812
Outside parties
2,684
2,988
Other assets (note 3)
41
459
 
3,535
4,501
Liabilities and net liabilities
Current
Accounts payable and accrued liabilities
Government of Canada
147
4
Outside parties
3,177
4,890
Other liabilities
177
116
 
3,501
5,010
Allowance for employee termination benefits
809
822
 
4,310
5,832
Net liabilities (note 4)
(775)
(1,331)
 
3,535
4,501
Contractual obligation (note 5)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF OPERATIONS AND NET LIABILITIES
For the year ended March 31


 
2008
2007
In thousands of dollars
Revenues (note 6)
104,491
96,665
Direct costs
94,556
88,565
Gross margin
9,935
8,100
Operating expenses
Salaries and employee benefits
3,865
3,451
Employee termination benefits
72
40
Professional and special services
1,776
1,513
Corporate and administrative services
505
278
Occupancy costs
462
452
Transportation and telecommunications
93
106
Information
43
46
Utilities, materials and supplies
24
26
Rentals
14
17
Purchased repairs and maintenance
5
5
Amortization
-
11
Other expenses
33
56
 
6,892
6,001
Net results
3,043
2,099
Net liabilities, beginning of year
(1,331)
(2,338)
Net financial resources used (provided) and change in the
accumulated net charge against the Fund's authority
account, during the year
(2,487)
2,908
Expenditure restraint measure (note 1)
-
(4,000)
Net liabilities, end of year
(775)
(1,331)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
Operating activities
Net results
3,043
2,099
Items not affecting use of the Fund's authority
Amortization
-
11
Provision for employee termination benefits
72
40
 
3,115
2,150
Changes in working capital (note 7)
(543)
(1,058)
Payments on provision for employee termination benefits
(85)
-
Net financial resources provided by operating
activities
2,487 1,092
Financing activity
Expenditure restraint measure (note 1)
-
(4,000)
Net financial resources used by the financing activity
-
(4,000)
Net financial resources provided (used) and change in the accumulated
net charge against the Fund's authority account, during the year
2,487 (2,908)
Accumulated net charge against the Fund's authority
account, beginning of year
7,770
10,678
Accumulated net charge against the Fund's authority
account, end of year (note 4)
10,257 7,770

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Optional Services Revolving Fund (“the Fund”) provides specialized services to client departments, such as communication procurement services, taxi management system, travel management services, central removal services and central freight services. The Fund also procures vaccines and drugs on behalf of provinces and territories.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $35,000,000 at any time.

On November 30, 2006, the Fund received authorization from the Treasury Board to contribute $4,000,000 from its accumulated surplus for the implementation of Budget 2006 expenditure restraint measures.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because the employee termination benefits liability is based on management's estimate of this liability rather than based on actuarial valuations.

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Recoveries from the vaccine program are recognized using a blended rate established by fixed price contracts and based on the proportion of total goods delivered at year end. Any losses on the fixed price contracts are recognized during the period in which they are identified.

Locally shared support services revenues are recognized as service provider costs are provided to the Fund.

Revenues earned on communication, printing and audio-visual services are recognized using the completed contract method.

Traffic management recoveries consist of travel commissions, central freight and central removal services. Travel commissions and central removal services recoveries are recognized based on service utilization whereas central freight recoveries are recognized as service provider costs are provided to the Fund.

c) Capital assets
Capital assets are recorded at their acquisition cost and amortized on a straight-line basis over the estimated useful life of each asset. All capital assets were fully amortized as at March 31, 2007.

d) Pension plan
Employees of the Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefits charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.

e) Employee termination benefits, vacation pay and time-off in lieu
Termination benefits accrue to employees over their years of service with the Government of Canada as provided for under collective agreements, and the estimated costs of these benefits are recorded in the accounts as they are earned by the employees.

The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and time-off in lieu benefits accruing to employees.

3. OTHER ASSETS



In thousands of dollars
 
2008
2007
Goods and Services Tax refundable advances
40
455
Other advances
1
4
 
41
459

4. NET LIABILITIES

The accumulated surplus is the accumulation of each fiscal year's surpluses, net of deficits, since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
 
2008
2007
Accumulated surplus, beginning of year
6,439
8,340
Net results
3,043
2,099
Expenditure restraint measure (note 1)
-
(4,000)
Accumulated surplus, end of year
9,482
6,439
Accumulated net charge against the Fund's authority account,
end of year
(10,257)
(7,770)
 
(775)
(1,331)

5. CONTRACTUAL OBLIGATION

The Fund leases its premises under an occupancy instrument. An occupancy instrument is a formal agreement between the Fund and Public Works and Government Services Canada recording the specific details of an individual occupancy and the terms and conditions that govern the provision and occupancy of the accommodation. Expected future payments for the existing occupancy instrument are as follows:


In thousands of dollars  
Year ending March 31, 2009
75
75

6. REVENUES



In thousands of dollars    
 
2008
2007
Vaccine program recoveries
61,073
53,998
Traffic management recoveries
34,810
33,162
Locally shared support service centre sales
5,074
6,304
Communication, printing and audio-visual recoveries
3,509
3,141
Benchmarking program
25
60
 
104,491
96,665

7. CHANGES IN WORKING CAPITAL



In thousands of dollars      
 
2008
2007
Changes
Current assets
3,535
4,501
966
Current liabilities
3,501
5,010
(1,509)
 
(543)

8. COMPARATIVE FIGURES

Certain of the prior year’s figures have been reclassified in order to conform to the presentation adopted in the current year.

9. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

Defence Production Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Defence Production Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada.

There were no financial transactions in the Fund during the year ended March 31, 2008.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

LILIANE SAINT PIERRE
Assistant Deputy Minister
Acquisitions Branch
Public Works and Government Services Canada

May 28, 2008

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Joint authority limit (note 1)
100,000
100,000
Net authority available for the Fund's account
100,000
100,000
Unused authority carried forward
100,000
100,000

DEFENCE PRODUCTION LOAN ACCOUNT

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Joint authority limit (note 1) 100,000 100,000
Less : Authority limit applied to the Defence Production    
Revolving Fund 100,000 100,000
Unused authority carried forward - -

NOTES TO THE FINANCIAL STATEMENTS (unaudited)
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Defence Production Revolving Fund (“the Fund”) was established by Section 15 of the Defence Production Act. It was established in 1951 for the purpose of:

a) financing the stockpiling of defence supplies or strategic materials;

b) making loans or advances to aid in defence procurement, such as working capital loans for advance payments on contracts, but not including loans or advance payments for capital purposes; and

c) permitting initial payments for defence supplies which can be promptly billed to a Government department, agency or an associated government in advance of delivery of goods.

The Adjustment of Accounts Act (S.C. 1980, c.17) had the effect of creating a separate Defence Production Loan Account for loans or advances authorized under the Defence Production Act, item (b) above.

The Fund and the Defence Production Loan Account have a joint continuing non-lapsing authority from the Parliament to make payments out of the Consolidated Revenue Fund, the total of which is not to exceed $100 million at any time.

Telecommunications and Informatics Common Services Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Telecommunications and
Informatics Common Services Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year. Some previous year's figures have been reclassified to conform to the current year's presentation.

Responsibility for the integrity and objectivity of these financial statements rests with the
management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and
issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority provided and the reconciliation of unused
authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

STEVEN POOLE
Chief Executive Officer
Information Technology Services Branch
Public Works and Government Services Canada

May 26, 2008

STATEMENT OF AUTHORITY PROVIDED (unaudited)
For the year ended March 31


 
2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
Net results
-
816
-
11,181
Add: Items not requiring use of funds
175
(80)
175
570
Operating source of funds
175
736
175
11,751
Less: items requiring use of funds
Net capital acquisitions
175
62
175
4,913
Net other assets and liabilities
-
4
-
3
Authority provided
-
670
-
6,835

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Debit balance in the accumulated net charge against
the Fund's authority
(6,942)
(10,342)
Add:
PAYE charges against the appropriation account after
March 31
54,168
47,544
Less:
Amounts credited to the appropriation account after
March 31
57,430
46,736
Net authority provided, end of year
(10,204)
(9,534)
Authority limit (note 1)
20,000
20,000
Unused authority carried forward
30,204
29,534

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Telecommunications and Informatics Common Services Revolving Fund (the “Fund”) as at March 31, 2008 and the statements of operations and net assets and cash flow for the year then ended. These financial statements have been prepared to comply with Section 6.4 of Treasury Board’s Policy on Special Revenue Spending Authorities. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable assurance
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with the basis of accounting described in Note 2 to the financial statements.

These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the management of the Fund and the Treasury Board to comply with
Section 6.4 of the Policy on Special Revenue Spending Authorities. The financial statements are not intended to be and should not be used by anyone other than specified users or for any other purpose.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008

STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
Assets
Current
Cash in transit
2
48
Accounts receivable
Government of Canada
54,786
43,919
Outside parties
1,322
889
Other assets (note 3)
2,615
2,739
 
58,725
47,595
Capital assets (note 4)
5,004
5,047
 
63,729
52,642
Liabilities and net assets
Current
Accounts payable and accrued liabilities
Government of Canada
578
70
Outside parties
53,634
47,499
Other liabilities
917
703
 
55,129
48,272
Allowance for employee termination benefits
3,406
3,392
 
58,535
51,664
Net assets (note 5)
5,194
978
 
63,729
52,642

The accompanying notes are an integral part of the financial statements.

STATEMENT OF OPERATIONS AND NET ASSETS
For the year ended March 31


 
2008
2007
In thousands of dollars
Revenues (note 6)
197,054
167,844
Cost of sales
152,972
123,774
Gross margin
44,082
44,070
Operating expenses
Salaries and employee benefits
17,599
14,472
Employee termination benefits
411
336
Professional and special services
21,490
14,913
Corporate and administrative services
1,939
1,456
Occupancy costs
744
784
Transportation and telecommunications
596
499
Purchased repairs and maintenance
187
20
Utilities, materials and supplies
150
249
Amortization
105
128
Other expenses
45
32
 
43,266
32,889
Net results
816
11,181
Net assets (liabilities), beginning of year
978
(2,124)
Net financial resources used and change in the accumulated net
charge against the Fund's authority account, during the year
3,400
10,921
Expenditure restraint measure (note 1)
-
(19,000)
Net assets, end of year
5,194
978

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
Operating activities
Net results
816
11,181
Items not affecting use of the Fund's authority
Amortization
105
128
Provision for employee termination benefits
411
336
 
1,332
11,645
Changes in working capital (note 7)
(4,273)
1,707
Payments on provision for employee termination benefits
(397)
(360)
Net financial resources provided (used) by operating
activities
(3,338)
12,992
Investing activity
Capital assets - acquisitions
(62)
(4,913)
Net financial resources used by the investing activity
(62)
(4,913)
Financing activity
Expenditure restraint measure (note 1)
-
(19,000)
Net financial resources used by the financing activity
-
(19,000)
Net financial resources used and change in the
accumulated net charge against the Fund's
authority account, during the year
(3,400)
(10,921)
Accumulated net charge against the Fund's authority
account, beginning of year
10,342
21,263
Accumulated net charge against the Fund's authority
account, end of year (note 5)
6,942
10,342

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Telecommunications and Informatics Common Services Revolving Fund (“the Fund”) provides network and infrastructure services, voice telecommunications services, satellite services and managed services.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $20,000,000 at any time.

On November 30, 2006, the Fund received authorization from the Treasury Board to contribute $19,000,000 from its accumulated surplus for the implementation of Budget 2006 expenditure restraint measures.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because the employee termination benefits liability is based on management's estimate of this liability rather than based on actuarial valuations.

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Revenues earned on telecommunications and informatics services are recognized as costs are incurred by the Fund. Revenues earned on goods purchased from telecom suppliers on behalf of customers are recognized when the goods are delivered to other government departments or outside parties.

c) Capital assets
Capital assets are recorded at their acquisition cost and amortized on a straight-line basis over the estimated useful life of each asset as follows:


Category
Estimated useful life
Informatics hardware 3 to 5 years
Informatics software 3 to 5 years
Assets under construction Once in service, in accordance with asset class

d) Pension plan
Employees of the Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefits charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.

e) Employee termination benefits, vacation pay and time-off in lieu
Termination benefits accrue to employees over their years of service with the Government of Canada as provided for under collective agreements, and the estimated costs of these benefits are recorded in the accounts as they are earned by the employees.

The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and time-off in lieu benefits accruing to employees.

3. OTHER ASSETS



In thousands of dollars    
 
2008
2007
Goods and Services Tax refundable advances
2,607
2,735
Prepaid expenses
8
4
 
2,615
2,739

4. CAPITAL ASSETS



In thousands of dollars      
Capital assets
Balance
beginning
of year
Acquisitions
Balance end
of year
Informatics hardware
1,275
-
1,275
Informatics software
216
-
216
Assets under construction
4,843
62
4,905
6,334
62
6,396
Accumulated amortization
Balance
beginning
of year
Current year
amortization
Balance end
of year
Informatics hardware
1,142
82
1,224
Informatics software
145
23
168
1,287
105
1,392
Net
5,047
5,004

5. NET ASSETS

The accumulated surplus is the accumulation of each fiscal year's surpluses, net of deficits, since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
 
2008
2007
Accumulated surplus, beginning of year
11,320
19,139
Net results
816
11,181
Expenditure restraint measure (note 1)
-
(19,000)
Accumulated surplus, end of year
12,136
11,320
Accumulated net charge against the Fund's authority account,
end of year
(6,942)
(10,342)
 
5,194
978

6. REVENUES



In thousands of dollars    
 
2008
2007
Data network infrastructure services
86,494
79,630
Voice network services
45,835
41,143
Government enterprise network management services
60,348
44,392
Perimeter defense services
2,432
2,289
Other revenues
1,945
390
 
197,054
167,844

7. CHANGES IN WORKING CAPITAL



In thousands of dollars      
 
2008
2007
Changes
Current assets
58,725
47,595
(11,130)
Current liabilities
55,129
48,272
6,857
 
(4,273)

8. COMPARATIVE FIGURES

Certain of the prior year’s figures have been reclassified in order to conform to the presentation adopted in the current year.

9. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

Consulting and Audit Canada Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Consulting and Audit Canada Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year. Some previous year's figures have been reclassified to conform to the current year's presentation.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority provided and the reconciliation of unused authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

JANE MEYBOOM-HARDY
Assistant Deputy Minister
Consulting, Information and
Shared Services Branch
Public Works and Government Services Canada

May 26, 2008

ANDR╔ AUGER
Chief Executive Officer
Audit Services Canada
Public Works and Government Services Canada

May 26, 2008

STATEMENT OF AUTHORITY PROVIDED (unaudited)
For the year ended March 31


2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
(restated)
Net results
(646)
(7,940)
(53)
(3,004)
Add: items not requiring use of funds
646
1,374
834
(1,867)
Operating source (use) of funds
-
(6,566)
781
(4,871)
Add: recovery of net draw down authority used
(note 1)
-
6,406
-
5,351
Less: items requiring use of funds
Net capital acquisitions
-
-
300
-
Net other assets and liabilities
-
(180)
-
19
Authority provided
-
20
481
461

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Debit balance in the accumulated net charge against
the Fund's authority
(1,825)
(4,389)
Add:
PAYE charges against the appropriation account after
March 31
2,080
8,395
Less:
Amounts credited to the appropriation account after
March 31
4,881
8,023
Allocation from the Treasury Board Vote 5
(Government Contingencies)
-
590
Net authority provided, end of year
(4,626)
(4,607)
Authority limit (note 1)
20,000
20,000
Unused authority carried forward
24,626
24,607

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Consulting and Audit Canada Revolving Fund (the “Fund”) as at March 31, 2008 and 2007 and the statements of operations and net liabilities and cash flow for the years then ended. These financial statements have been prepared to comply with Section 6.4 of Treasury Board’s Policy on Special Revenue Spending Authorities. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and 2007 and the results of its operations and its cash flow for the years then ended in accordance with the basis of accounting described in Note 2 to the financial statements.

These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the management of the Fund and the Treasury Board to comply with Section 6.4 of the Policy on Special Revenue Spending Authorities. The financial statements are not intended to be and should not be used by anyone other than specified users or for any other purpose.

As described in note 3, the financial statements of the Fund as at March 31, 2007 and for the year then ended have been restated. Our previous auditors’ report dated June 1, 2007 on those financial statements has been withdrawn.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008


STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
(restated)
Assets
Current
Cash in transit
-
185
Accounts receivable
Government of Canada
4,850
8,166
Outside parties
125
1,655
Other assets (note 4)
43
272
 
5,018
10,278
Capital assets (note 5)
7
89
 
5,025
10,367
Liabilities and net liabilities
Current
Accounts payable and accrued liabilities
Government of Canada
85
940
Outside parties
1,497
7,095
Other liabilities
2,053
1,643
 
3,635
9,678
Allowance for employee termination benefits
5,172
5,501
 
8,807
15,179
Net liabilities (note 6)
(3,782)
(4,812)
 
5,025
10,367
Contractual obligations (note 8)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF OPERATIONS AND NET LIABILITIES
For the year ended March 31


 
2008
2007
In thousands of dollars
(restated)
Revenues (note 7)
34,088
72,811
Direct costs
3,474
38,793
Gross margin
30,614
34,018
Operating expenses
Salaries and employee benefits
29,195
27,620
Employee termination benefits
418
(275)
Occupancy costs
2,772
2,020
Corporate and administrative services
2,720
3,208
Professional and special services
1,212
2,440
Transportation and telecommunications
1,077
1,197
Utilities, materials and supplies
500
435
Interest on draw down
138
19
Rentals
131
123
Amortization
82
183
Other expenses
309
52
 
38,554
37,022
Net results
(7,940)
(3,004)
Net liabilities, beginning of year as originally reported
(3,085)
(3,571)
Change in accounting policy (note 3)
(1,727)
(1,987)
Net liabilities, beginning of year as restated
(4,812)
(5,558)
Recovery of net draw down authority used (note 1)
6,406
5,351
Net financial resources used and change in the accumulated net
charge against the Fund's authority account, during the year
2,564
4,399
Expenditure restraint measure (note 1)
-
(6,000)
Net liabilities, end of year
(3,782)
(4,812)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
(restated)
Operating activities
Net results
(7,940)
(3,004)
Items not affecting use of the Fund's authority
Amortization
82
183
Provision for employee termination benefits
418
(275)
 
(7,440)
(3,096)
Changes in working capital (note 9)
(783)
(385)
Payments on provision for employee termination benefits
(747)
(269)
Net financial resources used by operating activities
(8,970)
(3,750)
Financing activities
Expenditure restraint measure (note 1)
-
(6,000)
Recovery of net draw down authority used (note 1)
6,406
5,351
Net financial resources provided (used) by financing
activities
6,406
(649)
Net financial resources used and change in the
accumulated net charge against the Fund's
authority account, during the year
(2,564)
(4,399)
Accumulated net charge against the Fund's authority
account, beginning of year
4,389
8,788
Accumulated net charge against the Fund's authority
account, end of year (note 6)
1,825
4,389

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Consulting and Audit Canada Revolving Fund ("the Fund") is a Special Operating Agency that provides, on an optional and fee-for-service basis, consulting and audit services to federal departments and agencies. Upon request, these services are also provided to provincial, territorial, municipal and aboriginal governments in Canada, to foreign governments and to international organizations.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $20,000,000 at any time.

The Fund receives funding by way of a separate vote, to cover the net draw down authority used in order to comply with the Policy on Special Revenue Spending Authorities. The amount received in 2007-2008 was $6,406,228 (2006-2007: $5,350,967).

On November 30, 2006, the Fund received authorization from the Treasury Board to contribute $6,000,000 from its accumulated surplus for the implementation of Budget 2006 expenditure restraint measures.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because the employee termination benefits liability is based on management's estimate of this liability rather than based on actuarial valuations.

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Revenues on consulting and audit services performed by the Fund are earned primarily on a daily rate basis and are recognized as the services are provided.

For fixed price projects, revenues are recognized using the percentage of completion method based on the proportion of services provided at year end. Any losses on fixed price projects are recognized during the period they are identified.

c) Capital assets
Capital assets are recorded at their acquisition cost and amortized on a straight-line basis over the estimated useful life of each asset as follows:


Category
Estimated useful life
Informatics hardware 3 to 5 years
Informatics software 3 to 5 years
Leasehold improvements Lesser of the remaining term of the occupancy instrument or useful life of the improvement

d) Pension plan
Employees of the Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefits charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.

e) Employee termination benefits, vacation pay and time-off in lieu
Termination benefits accrue to employees over their years of service with the Government of Canada as provided for under collective agreements, and the estimated costs of these benefits are recorded in the accounts as they are earned by the employees.

The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and time-off in lieu benefits accruing to employees.

f) Interest on draw down
Interest is charged to the Fund at a rate set by the Department of Finance and is calculated monthly on the credit balance of the accumulated net charge against the Fund’s authority account.

3. CHANGE IN ACCOUNTING POLICY

In 2007-2008, the Fund changed its accounting policy and recorded an accrual to recognize the allowance for employee termination benefits on service with the Government of Canada prior to April 1, 1992, the date the Fund was established.

The Treasury Board funded these severance entitlements for a period of 15 years from the commencement date of the Fund which ended on March 31, 2007. Effective April 1, 2007, the funding from Treasury Board ceased as this 15 year period ended. Henceforth, the Fund will record the full liability of these severance entitlements.

Accordingly, the Fund has restated its financial position as at March 31, 2007 as well as its results of operations and cash flow for the year then ended to reflect the new obligation. As a result of this change in accounting policy, the 2006-2007 operating expenses were reduced by $259,989, the net liabilities at the beginning of the 2006-2007 fiscal year were increased by $1,987,094 and the allowance for employee termination benefits was increased by $1,727,105 as at March 31, 2007.

4. OTHER ASSETS


In thousands of dollars    
 
2008
2007
Goods and Services Tax refundable advances
30
260
Other advances
13
12
 
43
272

5. CAPITAL ASSETS


In thousands of dollars
Capital assets
Balance
beginning
of year
Acquisitions
Balance end
of year
Informatics hardware
413
-
413
Informatics software
288
-
288
Leasehold improvements
683
-
683
 
1,384
-
1,384
Accumulated amortization
Balance
beginning
of year
Current year
amortization
Balance end
of year
Informatics hardware
412
1
413
Informatics software
288
-
288
Leasehold improvements
595
81
676
 
1,295
82
1,377
Net
89
7

6. NET LIABILITIES

The accumulated surplus (deficit) is the accumulation of each fiscal year's surpluses and deficits since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
2008
2007
 
(restated)
Accumulated surplus, beginning of year as originally reported
1,304
5,217
Change in accounting policy (note 3)
(1,727)
(1,987)
Accumulated surplus (deficit), beginning of year as restated
(423)
3,230
Net results
(7,940)
(3,004)
Recovery of net draw down authority used (note 1)
6,406
5,351
Expenditure restraint measure (note 1)
-
(6,000)
Accumulated deficit, end of year
(1,957)
(423)
Accumulated net charge against the Fund's authority account,
end of year
(1,825)
(4,389)
 
(3,782)
(4,812)

7. REVENUES


In thousands of dollars
 
2008
2007
Consulting services
17,702
55,559
Audit services
16,386
17,252
 
34,088
72,811

8. CONTRACTUAL OBLIGATIONS

The Fund leases its premises under occupancy instruments. An occupancy instrument is a formal agreement between the Fund and Public Works and Government Services Canada recording the specific details of an individual occupancy and the terms and conditions that govern the provision and occupancy of the accommodation. Expected future payments for the existing occupancy instruments are as follows:


In thousands of dollars    
Year ending March 31, 2009
2,287
  2010
1,868
  2011
1,747
  2012
1,750
  2013
1,705
   
9,357

9. CHANGES IN WORKING CAPITAL


In thousands of dollars      
 
2008
2007
Changes
Current assets
5,018
10,278
5,260
Current liabilities
3,635
9,678
(6,043)
 
(783)

10. COMPARATIVE FIGURES

Certain of the prior year’s figures have been reclassified in order to conform to the presentation adopted in the current year.

11. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

Translation Bureau Revolving Fund

Financial Statements
March 31, 2008

STATEMENT OF MANAGEMENT RESPONSIBILITY

We have prepared the accompanying financial statements of the Translation Bureau Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year. Some previous year's figures have been reclassified to conform to the current year's presentation.

Responsibility for the integrity and objectivity of these financial statements rests with the
management of the Fund. The information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and
issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of government funds and safeguard the assets under the Fund's administration. Management also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

With the exception of the statement of authority used and the reconciliation of unused authority, management has presented the financial statements to external auditors who have audited them and have provided an independent opinion which is appended to these financial statements.

Approved by:

MIKE HAWKES
Chief Financial Officer
Finance Branch
Public Works and Government Services Canada

May 30, 2008

FRANCINE KENNEDY
Chief Executive Officer
Translation Bureau
Public Works and Government Services Canada

May 26, 2008

STATEMENT OF AUTHORITY USED (unaudited)
For the year ended March 31


 
2008
2007
 
Estimates
Actual
Estimates
Actual
In thousands of dollars
Net results
(1,654)
(8,819)
(3,718)
(7,325)
Add: items not requiring use of funds
2,654
6,938
5,156
5,118
Operating source (use) of funds
1,000
(1,881)
1,438
(2,207)
Less: items requiring use of funds
Net capital acquisitions
1,000
1,397
1,000
2,439
Net other assets and liabilities
-
4
438
(30)
         
Authority used
-
(3,282)
-
(4,616)

RECONCILIATION OF UNUSED AUTHORITY (unaudited)
As at March 31


 
2008
2007
In thousands of dollars
Debit balance in the accumulated net charge against the Fund's authority
(7,859)
(14,915)
Add:
PAYE charges against the appropriation account after
March 31
10,535
15,371
Less:
Amounts credited to the appropriation account after
March 31
22,093
20,044
Allocation from the Treasury Board Vote 5
(Government Contingencies)
-
3,111
Allocation from the Treasury Board Vote 23
(Paylist Requirements)
1,319
-
Net authority provided, end of year
(20,736)
(22,699)
Authority limit (note 1)
10,000
10,000
Unused authority carried forward
30,736
32,699

Auditors’ Report

To the Chief Audit Executive and Director General of Evaluation
Public Works and Government Services Canada

We have audited the statement of financial position of the Translation Bureau Revolving Fund (the “Fund”) as at March 31, 2008 and the statements of operations and net liabilities and cash flow for the year then ended. These financial statements have been prepared to comply with Section 6.4 of Treasury Board’s Policy on Special Revenue Spending Authorities. These financial statements are the responsibility of the management of the Fund. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Fund as at March 31, 2008 and the results of its operations and its cash flow for the year then ended in accordance with the basis of accounting described in Note 2 to the financial statements.

These financial statements, which have not been, and were not intended to be, prepared in accordance with Canadian generally accepted accounting principles, are solely for the information and use of the management of the Fund and the Treasury Board to comply with Section 6.4 of the Policy on Special Revenue Spending Authorities. The financial statements are not intended to be and should not be used by anyone other than specified users or for any other purpose.

PricewaterhouseCoopers LLP

Chartered Accountants, Licensed Public Accountants
Ottawa, Ontario
May 30, 2008

STATEMENT OF FINANCIAL POSITION
As at March 31


 
2008
2007
In thousands of dollars
Assets
Current
Cash in transit
114
120
Accounts receivable
Government of Canada
21,623
19,615
Outside parties
432
214
Other assets (note 3)
353
302
Deferred employee termination benefits - current portion
1,319
3,111
 
23,841
23,362
Deferred employee termination benefits
7,270
8,589
Capital assets (note 4)
6,927
9,402
 
38,038
41,353
Liabilities and net liabilities
Current
Accounts payable and accrued liabilities
Government of Canada
1,383
5,939
Outside parties
12,101
12,424
Other liabilities
8,309
4,779
 
21,793
23,142
Allowance for employee termination benefits
29,929
30,132
 
51,722
53,274
Net liabilities (note 5)
(13,684)
(11,921)
 
38,038
41,353
Contractual obligations (note 6)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF OPERATIONS AND NET LIABILITIES
For the year ended March 31


 
2008
2007
In thousands of dollars
Revenues (note 7)
215,553
203,891
Operating expenses
Salaries and employee benefits
139,049
131,558
Employee termination benefits
2,225
3,149
Professional and special services
53,472
47,087
Corporate and administrative services
9,509
9,927
Occupancy costs
8,389
8,618
Transportation and telecommunications
4,012
4,183
Amortization
2,555
3,359
Purchased repairs and maintenance
1,814
1,200
Utilities, materials and supplies
1,720
1,875
Write-off of capital assets
1,317
-
Rentals
163
171
Information
77
73
Other expenses
70
16
 
224,372
211,216
Net results
(8,819)
(7,325)
Net liabilities, beginning of year
(11,921)
(3,029)
Net financial resources used and change in the accumulated net
charge against the Fund's authority account, during the year
7,056
9,433
Expenditure restraint measure (note 1)
-
(11,000)
Net liabilities, end of year
(13,684)
(11,921)

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CASH FLOW
For the year ended March 31


 
2008
2007
In thousands of dollars
Operating activities
Net results
(8,819)
(7,325)
Items not affecting use of the Fund's authority
Amortization
2,555
3,359
Write-off of capital assets
1,317
-
Provision for employee termination benefits
2,225
3,149
 
(2,722)
(817)
Changes in working capital (note 8)
(3,620)
8,064
Receipts on deferred employee termination benefits
3,111
-
Payments on provision for employee termination benefits
(2,428)
(2,632)
Net financial resources provided (used) by operating
activities
(5,659)
4,615
Investing activity
Capital assets - acquisitions
(1,397)
(3,048)
Net financial resources used by the investing activity
(1,397)
(3,048)
Financing activity
Expenditure restraint measure (note 1)
-
(11,000)
Net financial resources used by the financing activity
-
(11,000)
Net financial resources used and change in the
accumulated net charge against the Fund's
authority account, during the year
(7,056)
(9,433)
Accumulated net charge against the Fund's authority
account, beginning of year
14,915
24,348
Accumulated net charge against the Fund's authority
account, end of year (note 5)
7,859
14,915

The accompanying notes are an integral part of the financial statements.

NOTES TO THE FINANCIAL STATEMENTS
For the year ended March 31, 2008

1. AUTHORITY AND PURPOSE

The Translation Bureau Revolving Fund (“the Fund”) is a Special Operating Agency that provides, on a cost recovery basis, translation, technolinguistic and other linguistic services to the judiciary and federal departments and agencies and, upon request, to other governments in Canada and international organizations.

The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $10,000,000 at any time.

On April 19, 2007, the Fund received authorization from the Treasury Board to access its unused authority for a total amount of up to $14,200,000 to allow sustained funding of its investment program ($6,000,000 in 2006-2007; $6,200,000 in 2007-2008; $2,000,000 in 2008-2009). The actual amount used in 2007-2008 was $3,281,823 ($4,616,021 in 2006-2007).

On November 30, 2006, the Fund received authorization from the Treasury Board to contribute $11,000,000 from its accumulated surplus for the implementation of Budget 2006 expenditure restraint measures.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because:

  • the deferred employee termination benefits are based on management's estimate of this asset rather than based on actuarial valuations; and,
  • the employee termination benefits liability is based on management's estimate of this liability rather than based on actuarial valuations.

The significant accounting policies are as follows:

a) Use of estimates
The preparation of financial statements in accordance with the reporting requirements for Revolving Funds described by the Receiver General for Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

b) Revenue recognition
Revenues from translation services performed by the Fund for other government departments and external clients are recognized using the percentage of completion method based on the proportion of services provided at year end.

Revenues from the Parliamentary Vote for translation services and revenues for interpretation services are recognized as costs are incurred by the Fund.

c) Capital assets
Capital assets are recorded at their acquisition cost and amortized on a straight-line basis over the estimated useful life of each asset as follows:


Category
Estimated useful life
Machinery and equipment 3 to 20 years
Informatics hardware 3 to 5 years
Informatics software 3 to 5 years
Assets under construction Once in service, in accordance with asset class
Leasehold improvements Lesser of the remaining term of the occupancy instrument or useful life of the improvement

d) Pension plan
Employees of the Fund are covered by the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. The Government of Canada’s portion of the pension cost is included in the employee benefits charge assessed against the Fund. The actual payment of the pension is made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts.

e) Employee termination benefits, vacation pay and time-off in lieu
Termination benefits accrue to employees over their years of service with the Government of Canada as provided for under collective agreements, and the estimated costs of these benefits are recorded in the accounts as they are earned by the employees.

An accrual was made for severance entitlements on service prior to April 1, 1995. The asset account “Deferred Employee Termination Benefits” represents benefits earned prior to April 1, 1995. The account is drawn down as benefits are paid to the related employees and become recoverable from the Treasury Board. The Treasury Board will continue to reimburse for termination benefits paid by the Bureau, for service prior to April 1, 1995, until March 31, 2010. After March 31, 2010, the Treasury Board has no further obligation to reimburse for benefits paid.

The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and time-off in lieu benefits accruing to employees.

3. OTHER ASSETS


In thousands of dollars    
 
2008
2007
Goods and Services Tax refundable advances
328
286
Other advances
25
16
 
353
302

4. CAPITAL ASSETS


In thousands of dollars          
Capital assets Balance
beginning
of year
Transfers Acquisitions Write-off Balance end
of year
Machinery and equipment
114
-
-
-
114
Informatics hardware
1,796
-
110
(98)
1,808
Informatics software
12,344
1,475
318
-
14,137
Assets under construction
2,792
(1,475)
851
(1,317)
851
Leasehold improvements
3,513
-
118
-
3,631
20,559
-
1,397
(1,415)
20,541
Accumulated
amortization
Balance
beginning
of year
Transfers Current year
amortization
Write-off Balance end
of year
Machinery and equipment
62
-
9
-
71
Informatics hardware
1,526
-
184
(98)
1,612
Informatics software
7,461
-
1,718
-
9,179
Leasehold improvements
2,108
-
644
-
2,752
11,157
-
2,555
(98)
13,614
Net
9,402
6,927

5. NET LIABILITIES

The accumulated surplus (deficit) is the accumulation of each fiscal year's surpluses and deficits since the inception of the Fund. The accumulated net charge against the Fund’s authority is the non-lapsing authority amount that has been used since the inception of the Fund.


In thousands of dollars
 
2008
2007
Accumulated surplus, beginning of year
2,994
21,319
Net results
(8,819)
(7,325)
Expenditure restraint measure (note 1)
-
(11,000)
Accumulated surplus (deficit), end of year
(5,825)
2,994
Accumulated net charge against the Fund's authority
account, end of year
(7,859)
(14,915)
 
(13,684)
(11,921)

6. CONTRACTUAL OBLIGATIONS

The Fund leases its premises under occupancy instruments. An occupancy instrument is a formal agreement between the Fund and Public Works and Government Services Canada recording the specific details of an individual occupancy and the terms and conditions that govern the provision and occupancy of the accommodation. Expected future payments for the existing occupancy instruments are as follows:


In thousands of dollars  
Year ending March 31, 2009
6,547
  2010
3,072
  2011
2,051
  2012
468
 
2013
234
   
12,372

7. REVENUES


In thousands of dollars
 
2008
2007
Translation services
210,595
199,331
Interpretation services
3,208
3,034
Termium sales
1,643
1,402
Other
107
124
 
215,553
203,891

8. CHANGES IN WORKING CAPITAL


In thousands of dollars
 
2008
2007
Changes
Current assets
23,841
23,362
(479)
Less: Deferred employee termination benefits -
current portion
(1,319)
(3,111)
(1,792)
 
22,522
20,251
(2,271)
Current liabilities
21,793
23,142
(1,349)
 
(3,620)

9. COMPARATIVE FIGURES

Certain of the prior year’s figures have been reclassified in order to conform to the presentation adopted in the current year.

10. FINANCIAL INSTRUMENTS

The Fund's financial instruments consist of cash in transit, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity. Unless otherwise noted, it is management's opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.