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Section III – Supplementary Information

PSC Financial Statements

PUBLIC SERVICE COMMISSION

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements of the Public Service Commission (PSC) for the year ended March 31, 2009 and all information contained in these statements rests with PSC's 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 fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of PSC's financial transactions.  Financial information submitted to the Public Accounts of Canada and included in the PSC'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 and regulations and the Public Service Employment Act, are 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 PSC.

Management is also supported and assisted by a program of internal audit services. The PSC has an Internal Audit Committee.  The responsibilities of the Committee are to provide the President with independent, objective advice, guidance and deliberation on the adequacy of the PSC's control and accountability processes.

The PSC's financial statements have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.

AUDITOR’S REPORT

To the Speaker of the House of Commons and the Speaker of the Senate

I have audited the statement of financial position of the Public Service Commission as at March 31, 2009 and the statements of operations, equity of Canada and cash flow for the year then ended. These financial statements are the responsibility of the Commission’s management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I 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 my opinion, these financial statements present fairly, in all material respects, the financial position of the Commission as at March 31, 2009 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Further, in my opinion, the transactions of the Commission that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Public Service Employment Act.

 

Sheila Fraser, FCA
Auditor General of Canada

Ottawa, Canada
July 10, 2009

.

 

Statement of Financial Position

($ in thousands of dollars)

Statement of Financial Position At March 31 (March 31, 2009)	2009	2008
Assets
Financial assets
Due from the Consolidated Revenue Fund	10,057	7,464
Accounts receivable and advances (Note 4)	2,155	7,021
Total - Financial assets	12,212	14,485
Non-financial assets
Prepaid expenses	388	363
Tangible capital assets (Note 5)	21,352	22,287
Total - Non-financial assets	21,740	22,650
Total Assets	33,952	37,135
Liabilities
Accounts payable and accrued liabilities (Note 6)	6,925	7,982
Accrued salary	6,234	3,899
Accrued vacation leave	3,630	3,724
Employee severance benefits (Note 7)	19,274	16,092
	36,063	31,697
Equity of Canada (Note 8)	(2,111)	5,438
Total liabilities and Equity of Canada	33,952	37,135
Contingent liabilities (Note 9)
Contractual obligations (Note 10)

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

Approved by:

Statement of Operations

($ in thousands of dollars)

Statement of Operations For the year ended March 31	2009	2008
Expenses (Note 11)
Staffing services and assessment
Staffing services	44,832	41,297
Assessment services	33,718	31,472
Total	78,550	72,769
Oversight of integrity of staffing and political neutrality
Audits, studies and evaluations	26,573	19,335
Investigations and early intervention mechanisms	7,678	9,233
Monitoring	5,329	5,199
Total	39,580	33,767
Appointment integrity and political neutrality
Policy, regulation and exclusion approval orders	8,679	7,986
Non-delegated appointment authorities	6,877	5,444
Delegated appointment authorities	4,694	6,005
Total	20,250	19,435
Total expenses	138,380	125,971
Revenues
Assessment and counselling services and products	12,044	10,752
Activities on behalf of:
Canada School of Public Service	119	119
Canada Public Service Agency	-	325
Total	119	444
Less: Costs recovered	(119)	(444)
Net cost of. operations	126,336	115,219

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

Statement of Equity of Canada

($ in thousands of dollars)

Statement of Equity of Canada For the year ended March 31	2009	2008
Equity of Canada, beginning of year	5,438	2,148
Net cost of operations	(126,336)	(115,219)
Net cash provided by Government of Canada	98,138	101,128
Change in Due from the Consolidated Revenue Fund	2,593	902
Services received without charge from other government departments and agencies (Note 13)	18,056	16,479
Equity of Canada, end of year	(2,111)	5,438

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

Statement of Cash Flow

($ in thousands of dollars)

Statement of Cash Flow For the year ended March 31	2009	2008
Operating activities
Cash received from:
Assessment and counselling services and products	15,498	8,787
Cash paid for:
Salaries and employee benefits	85,860	80,785
Professional and special services	13,193	12,651
Transportation and telecommunications	2,865	3,939
Informatics, office equipment, furniture and fixtures	1,990	1,678
Repair and maintenance	1,924	1,102
Utilities, materials and supplies, and other payments	941	570
Printing and publications services	797	686
Rentals	777	1,015
	108,347	102,426
Cash used by operating activities	92,849	93,639
Capital investment activities
Acquisitions of tangible capital assets	5,293	7,489
Proceeds from disposal of tangible capital assets	(4)	-
Cash used by capital investment activities	5,289	7,489
Net cash provided by Government of Canada	98,138	101,128

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

Notes to the Financial Statements

For the year ended March 31, 2009

1. Authority and objectives

The Public Service Commission (PSC) of Canada is an independent agency established under the Public Service Employment Act (PSEA) and listed in schedules 1.1 and IV of the Financial Administration Act (FAA). The PSC is dedicated to building a public service that strives for excellence by protecting merit, non-partisanship, representativeness of Canadian society and the use of both official languages. This responsibility is performed in the best interests of the public service as part of Canada's governance system, by administering and applying the provisions of the PSEA and by carrying out responsibilities as provided for in the Employment Equity Act and the Official Languages Act.  The new PSEA came into force in December 2005.  This legislation emphasizes the PSC's accountability to Parliament and delegates staffing authority to deputy heads who in turn are accountable to the PSC for exercising this power.  The Commission also carries out audits and investigations and administers measures under the new PSEA regarding political activities of public servants.

The PSC, from its offices in Ottawa and its seven regional offices, offers recruitment services that allow talented Canadians, drawn from across the country, to join the public service and continually renews staffing services to meet the needs of a modern and innovative public service.  The PSC has three program activities that contribute to the achievement of its objectives:

The Appointment Integrity and Political Neutrality activity develops and maintains a policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring political neutrality. This activity includes establishing policies and standards, providing advice, interpretation and guidance and administering delegated and non-delegated appointment authorities.

The Oversight of Integrity of Staffing and Political Neutrality activity provides an accountability regime for the implementation of the appointment policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring political neutrality. This activity includes monitoring departments' and agencies' compliance with legislative requirements, conducting audits, studies and evaluations, carrying out investigations, and reporting to Parliament on the integrity of public service staffing.

The Staffing Services and Assessment activity develops and maintains systems that link Canadians and public servants seeking employment opportunities in the federal public service with hiring departments and agencies. It provides assessment-related products and services in the form of research and development, consultation, assessment operations and counselling for use in recruitment, selection and development throughout the federal public service. This activity also includes delivering staffing services, programs and products to departments and agencies, to Canadians and public servants, through client service units located across Canada.

2. Summary of significant accounting policies

1. Basis of presentation
   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.
2. Parliamentary appropriations
   The PSC is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the PSC do not parallel financial reporting according to Canadian generally accepted accounting principles for the public sector 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.
3. Due from the Consolidated Revenue Fund
   The PSC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by the PSC is deposited to the CRF and all cash disbursements made by the PSC are paid from the CRF. Due from the CRF represents amounts of cash that the PSC is entitled to draw from the CRF, without further appropriations, in order to discharge its liabilities.  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.
4. Accounts receivable
   Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
5. Tangible capital assets
   All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded as capital assets at their acquisition cost. Similar items under $5,000 are expensed in the Statement of Operations.  The PSC does not capitalize intangibles.  The cost of assets under development by the PSC includes material, direct labour and related overhead.  Amounts included in assets under development are transferred to the appropriate class of asset upon completion, and are then amortized.  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
   Office equipment	3 and 10 years
   Informatics hardware and infrastructure	4 and 5 years
   Computer software	3 years
   In-house developed software	Lesser of 10 years or useful life
   Furniture and fixtures	15 years
   Vehicles	6 years
   Leasehold improvements	Lesser of 10 years or term of lease

   
   
6. Salaries and benefits, and vacation leave
   Salaries and benefits, and vacation leave are expensed as the salary benefits accrue to employees under their respective terms of employment. The employee salaries and benefits liability is calculated based on the respective terms of employment using the employees' salary levels at year end, and the number of days remaining unpaid at the end of the year.  The liability for vacation leave is calculated at the salary levels in effect at March 31st for all unused vacation leave benefits accruing to employees. Employee vacation pay liabilities payable on cessation of employment represent obligations of the PSC that are normally funded through future years' appropriations.
7. Employee future benefits.
   1. Pension benefits
      The PSC's eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The PSC's contributions to the Plan are charged to expenses in the year incurred and represent the total pension obligation of the PSC.  The PSC is not required under current legislation to make contributions with respect to 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.
8. Revenues
   Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
9. Services received without charge
   Services received without charge from other federal government departments and agencies are recorded as operating expenses at their estimated cost. A corresponding amount is reported directly in the Statement of Equity of Canada.
10. 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 amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the 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 estimated 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 PSC 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 PSC 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:

($ in thousands of dollars)

	2009	2008
Net cost of operations	126,336	115,219
Adjustments for items affecting net cost of operations but not affecting appropriations:
Services received without charge	(18,056)	(16,479)
Amortization of tangible capital assets	(6,203)	(3,924)
Revenue not available for spending	1,471	1,385
Employee severance benefits	(3,182)	(1,104)
Vacation leave	94	(9)
Other	507	380
	100,967	95,468
Adjustments for items not affecting net cost of operations but affecting appropriations:
Acquisitions of tangible capital assets	5,293	7,489
Prepaid expenses	25	(76)
	5,318	7,413
Current year appropriations used	106,285	102,881

(b) Appropriations provided and used:

($ in thousands of dollars)

	2009	2008
Parliamentary appropriations provided:
Voted - Operating expenditures	99,103	98,817
Statutory contributions to employee benefit plans	12,680	12,189
Spending of proceeds from disposal of surplus assets	4	-
Refund of previous year revenue	19	-
	111,806	111,006
Less: Lapsed appropriations - operating expenditures	(5,521)	(8,125)
Current year appropriations used	106,285	102,881

Note 1: In 2008-2009, PSC expenditures were $106,285 thousand against authorities of $111,806 thousand. The under-expenditure is mainly due to delays in staffing, delays in the implementation of some projects and changes in program responsibility. The PSC is planning to carry forward to 2009-2010 the maximum amount of $4,917 thousand, representing 5% of its total spending authorities in the Main Estimates

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

($ in thousands of dollars)

	2009	2008
Net cash provided by Government	98,138	101,128
Revenue not available for spending	1,471	1,385
Variation in accounts payable, accrued liabilities and accrued salary	1,278	1,494
Variation in accounts receivable and advances	4,866	(1,524)
Other adjustments	532	398
Current year appropriations used	106,285	102,881

4. Accounts receivable and advances

($ in thousands of dollars)

	2009	2008
Receivables - Federal Government departments, agencies and Crown corporations	2,146	7,005
Receivables - External parties	3	8
Advances to PSC's Employees	6	8
Total	2,155	7,021

5. Tangible capital assets

($ in thousands of dollars)

	Cost					2009	2008
	March 31, 2008	Acquisitions	Disposals, write-offs	Transfers	March 31, 2009	Net book value	Net book value
Office equipment	679	33	70	7	649	290	319
Informatics hardware and infrastructure	7,800	1,248	624	679	9,103	3,231	2,519
In-house developed software	16,634	633	17	6,200	23,450	10,851	8,771
Furniture and fixtures	822	174	-	474	1,470	1,204	628
Vehicles	25	30	25	-	30	27	8
Leasehold improvements	1,053	-	-	24	1,077	785	869
Assets under development	9,173	3,175	-	(7,384)	4,964	4,964	9,173
Total	36,186	5,293	736	-	40,743	21,352	22,287

($ in thousands of dollars)

	2009 Accumulated amortization
	March 31, 2008	Amortization	Disposals, write-offs	March 31, 2009
Office equipment	360	49	50	359
Informatics hardware and infrastructure	5,281	1,215	624	5,872
In-house developed software	7,863	4,755	19	12,599
Furniture and fixtures	194	72	-	266
Vehicles	17	4	18	3
Leasehold improvements	184	108	-	292
Total	13,899	6,203	711	19,391

Amortization expense for the year ended March 31, 2009 is $6,203,000 ($3,924,000 in
2007-2008).

6. Accounts payable and accrued liabilities

($ in thousands of dollars)

	2009	2008
Payables - Federal Government departments, agencies and Crown corporations	1,832	2,030
Payables - External parties	5,093	5,952
Total	6,925	7,982

7. Employee benefits

(a) Pension Benefits

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

Both the employees and the PSC contribute to the cost of the Plan.  The 2008-2009 expense amounts to $9,493,000 ($8,887,000 in 2007-2008), which represents approximately 2 times the employees' contributions.

The PSC'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) Employee severance benefits

The PSC 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:

($ in thousands of dollars)

	2009	2008
Accrued benefit obligation, beginning of year	16,092	14,988
Expense for the year	5,087	2,977
Benefits paid during the year	(1,905)	(1,873)
Accrued benefit obligation, end of year	19,274	16,092

8. Equity of Canada

The deficit represents liabilities incurred by the PSC, net of capital assets and prepaid expenses that have not yet been funded through appropriations.  Significant components of this amount are employee severance benefits and vacation pay liabilities.  These amounts are expected to be funded by appropriations in future years as they are paid.

9. Contingent liabilities

Claims have been made against the PSC in the normal course of operations. There are no claims pending at March 31, 2009 ($315,000 at March 31, 2008). 

10. Contractual obligations

The nature of the PSC's activities can result in some large multi-year obligations whereby the PSC will be obligated to make future payments when the services are received.  Significant contractual obligations that can be reasonably estimated are summarized as follows:

($ in thousands of dollars)

	2010	2011	2012	2013 and thereafter	Total
Service contracts	2,248	278	38	38	2,602
Operating leases	161	121	28	24	334
Total	2,409	399	66	62	2,936

11. Expenses by major classification

($ in thousands of dollars)

	2009	2008
Salaries and employee benefits	99,273	89,020
Professional and special services	14,567	13,770
Accommodation	10,409	10,111
Amortization of tangible capital assets	6,203	3,924
Transportation and telecommunications	2,740	3,969
Repair and maintenance	1,668	1,276
Informatics, office equipment, furniture and fixtures	1,308	1,669
Utilities, materials and supplies, and other	774	590
Rentals	730	1,010
Printing and publications services	708	632
Accrued benefit obligation, end of year	138,380	125,971

12. Related party transactions

The PSC is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The PSC enters into transactions with these entities in the normal course of business and on normal trade terms.

During 2008-2009, the PSC incurred expenses of $35,772,000 ($34,334,000 in 2007-2008) and earned revenues of $12,037,000 ($10,750,000 in 2007-2008) from transactions in the normal course of business with other federal government departments, agencies and Crown Corporations.  These expenses include services received without charge as described in Note 13.

13. Services received without charge

During the year, the PSC received services that were obtained without charge from other government departments and agencies.  These services without charge have been recognized in the PSC's Statement of Operations as follows:

($ in thousands of dollars)

	2009	2008
Public Works and Government Services Canada - accommodation	10,409	10,111
Treasury Board Secretariat - employer's share of insurance premiums	6,401	5,175
Justice Canada - legal services	997	919
Human Resources and Social Development Canada-employer's proportion of Worker's compensation payments	137	133
Office of the Auditor General of Canada - audit services	112	141
Total	18,056	16,479

List of Tables

Supplementary information on the following tables can be found on the Treasury Board of Canada Secretariat's Web site at http://www.tbs-sct.gc.ca.

• Sources of Respendable and Non-Respendable Revenue
• User Fees / External Fees
• Details on Project Spending
• Green Procurement
• Response to Parliamentary Committees, the Auditor General and to the Public Service Commission on External Audits
• Internal Audits and Evaluations

Other Items of Interest

Supplementary information on the following subjects can be found in the publications section of the PSC's Web site at http://www.psc-cfp.gc.ca.

• Organizational information
• Information by sub-activities

This document is available on the Treasury Board of Secretariat's Web site at http://www.tbs-sct.gc.ca and on the publications section of the PSC's Web site at http://www.psc-cfp.gc.ca.

 

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Foot Notes

1. PSES results are from the Centre for Workforce Analysis and Forecasting, Statistics Canada [Return]

2. Assessed 76 delegated departments and agencies' performance for 2008-2009. Two organizations were not assessed, due to being newly created in 2008-2009. 4 organizations were not assessed due to being subject to a PSC audit. Total delegation departments and agencies 82. [Return]

3. The PSC has developed a new sampling methodology, which is reflected in the Survey of Staffing (SOS) covering internal and external appointments, term and indeterminate, for processes ending between October 1, 2007 and September 30, 2008.  This is the first year that SOS data is available and, thus, no comparative analysis is possible. [Return]

4. Workforce Availability based on 2006 census data. [Return]

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