1.1 This Treasury Board Accounting Standard (TBAS) applies to financial statements prepared by government departments for the 2011–12 fiscal year and subsequent years.
1.2 This standard supersedes Treasury Board Accounting Standard 1.2 issued in 2010.
2.1 This standard applies to any element of the federal public administration referred to in Section 2 of the Financial Administration Act (FAA) and that may be referred to using the terms “department,” “government-wide” and “across government” throughout this document.
2.2 In this standard, any reference to all or part of Canadian accounting standards (such as the Public Sector Accounting (PSA) Handbook) shall be construed as a reference to the accounting standards valid at the time of publication of this document. Any subsequent changes to the referenced Canadian standards following the date of publication of this document would be considered for future inclusion.
2.3 Section 6.4.2 relating to the role of the Treasury Board of Canada Secretariat in monitoring compliance does not apply with respect to the Office of the Auditor General, the Office of the Privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with TBAS 1.2 within their organizations.
3.1 The Government of Canada uses financial information as a strategic business resource to support decision-making and management activities, policy development, program and service delivery, evidential needs, as well as for historical purposes and as an accountability mechanism.
3.2 Parliament and Canadians expect the Government of Canada to be well managed, which includes decision-making based on reporting supported by integrated financial and related non-financial information that is fairly presented in all material respects, and is consistent, timely, relevant, reliable and complete. In addition, they expect transparency and accountability as to how government spends public funds to achieve results for Canadians.
3.3 The financial statements for the Government of Canada are prepared in accordance with the Government's accounting policies, which are based on Canadian public sector accounting standards.
3.4 Departments are integral components of the Government of Canada. They are administrative divisions that perform operations and deliver programs and services. As such, departments should prepare their financial statements in accordance with the same accounting policies as those of the Government of Canada.
3.5 While the Canadian public sector accounting standards address the accounting and disclosure of governments, government business enterprises, government not-for-profit organizations and other government organizations, the standards do not provide specific guidance regarding the entities that are integral components of the government (e.g., departments, funds, accounts).
3.6 This standard provides additional guidance regarding the preparation of departmental financial statements in order to complement the Canadian public sector accounting standards and to ensure that departmental financial statements present relevant financial information in a transparent and understandable manner to Parliamentarians and Canadians.
3.7 This standard is issued pursuant to Section 7 and Subsection 9(1) of the Financial Administration Act (FAA) and to Section 6 of the Policy on Financial Resource Management, Information and Reporting and Section 5.3 of the Policy on Financial Management Governance.
3.8 This standard is to be read in conjunction with the Policy on Financial Resource Management, Information and Reporting, the Policy on Financial Management Governance and the Policy on Internal Control.
Encompass broad principles and conventions of general application, as well as rules and procedures that determine accepted accounting practices at a particular time.
The departmental reporting entity comprises the activities for which the deputy head (DH), as the accounting officer, is expected to maintain accounting control.
5.1.1 The objective of this standard is to provide guidance regarding the preparation of departmental financial statements in order to complement the Canadian public sector accounting standards.
The departmental Chief Financial Officer is responsible for:
6.1 Preparing the financial statements in accordance with the requirements outlined in this standard. The financial statements comprise:
A statement of management responsibility also accompanies the departmental financial statements.
6.2 Ensuring that departmental financial statements are published annually as part of the departmental performance reporting process.
6.3 Consulting with the Office of the Comptroller General before engaging an external auditor to audit the financial statements.
6.4 Monitoring and Reporting Requirements
6.4.1 Deputy heads are responsible for:
6.4.2 The Treasury Board of Canada Secretariat is responsible for:
6.4.3 The Office of the Comptroller General is responsible for:
7.1 The consequences of non-compliance with this standard are identified in Section 8 of the Policy on Financial Resource Management, Information and Reporting.
This section identifies other significant departments with respect to this standard. In and of itself, it does not confer an authority.
8.1.1 The Treasury Board of Canada Secretariat provides interpretive advice and guidance on this standard.
Please direct enquiries about this standard to your department's headquarters. For interpretation of this standard, departmental headquarters should contact:
Assistant Comptroller General
Financial Management Sector
Office of the Comptroller General
Treasury Board of Canada Secretariat
Ottawa ON K1A 0R5
Email: Contact Assistant Comptroller General at fin-www@tbs-sct.gc.ca
Fax: 613-952-9613
The objective of this appendix is to provide detailed requirements related to the form and content of departmental financial statements, as well as a model package. These requirements establish sound objectives for departmental financial statement reporting, a consistent definition of the departmental reporting entity and clear direction for the accounting and presentation of specific items such as the amounts due from or to the Consolidated Revenue Fund (CRF), services provided without charge, contingencies, etc.
The financial statement package is also part of this appendix and provides a model of financial statements. The model should be used in order to ensure presentation and disclosure consistency across departments. It sets out overall considerations for the presentation of financial statements, guidance for their structure, and minimum requirements for the content of financial statements prepared using the accrual basis of accounting while also providing information on the use of funding provided through annual parliamentary authorities.
1.1 The goal of departments is to deliver programs and services following the government's directions and priorities. Resources are provided to departments for the performance of their activities to fulfill their mandate, as reflected in their approved Program Activity Architecture (PAA) See footnote [1]. From time to time, ministerial portfolios are changed, new programs are created and other programs are either amalgamated or abolished. Central agencies, common services organizations and all other government departments work together to achieve the objectives of the whole of government.
1.2 The primary objective of departmental financial statements is to demonstrate accountability for the resources provided to and managed by a department on behalf of the Government of Canada.
1.3 Users of departmental financial statements should have the ability to compare financial performance among federal government departments. As such, one important feature of departmental financial statements is to provide users with comparable information on departments' cost of operations. Departments' cost of operations should therefore be measured in a consistent manner to achieve comparability among federal government departments.
1.4 The department's cost of operations represents expenses incurred and revenues earned for which the department has primary responsibility and accountability, as reflected in its approved PAA and Report on Plans and Priorities (RPP). As a guiding principle, expenses incurred by other government departments for which no consideration was exchanged, such as central agency functions and the activities of common services organizations, are not to be recognized in departmental financial statements except as provided in Section 3.6.3.2 and Section 3.6.3.3 as applicable, of this appendix.
1.5 Financial statements should demonstrate the accountability of a department for its resources, obligations and financial affairs, by providing information useful for:
1.5.1 Evaluating the department's management of its resources, obligations and financial affairs.
1.5.2 Assessing whether resources were administered by the department in accordance with limits established by the appropriate legislative authorities.
1.6 Departmental financial statements should provide information on the full nature and extent of the activities performed by the department to fulfill its mandate, including:
1.6.1 A description of the activities being reported on by the department, including its authority and objectives;
1.6.2 A description of the significant accounting policies of the department;
1.6.3 Information on the department's financial position, including:
1.6.3.1 The financial and non-financial assets that are available for use by the department in its activities;
1.6.3.2 The liabilities and contractual obligations arising from the department's activities for which it is accountable;
1.6.3.3 The changes in the department's financial position in the accounting period;
1.6.3.4 A departmental net debt / net financial assets indicator.
1.6.4 Information on the department's operations, including:
1.6.4.1 The expenses incurred by the department for the performance of its activities to fulfill its mandate, including specific significant services provided by other departments without charge.
1.6.4.2 The revenues generated by the department through the performance of its activities.
1.6.5 Information on elements that have had an impact on the departmental net debt or net financial assets position.
1.6.6 Information on the cash resources generated and used by the department through the performance of its activities.
2.1 The financial statements of a department include all those organizations that the deputy head (DH) is accountable for as the accounting officer of the department. This is different from a reporting entity that is based on a ministerial portfolio. The financial transactions of revolving funds, special operating agencies and consolidated specified purpose accounts which are under the DH's accountability as the accounting officer, will be included in the departmental financial statements to reflect the financial operations and position of the department as a single reporting entity. Transactions between the various sub-entities (i.e., intradepartmental transactions) must be eliminated.
2.2 Departments are generally not expected to have investments in other entities. Crown corporations are not consolidated in the financial statements of departments unless the DH is accountable for the Crown corporation. Part X of the Financial Administration Act (FAA) sets out the accountability of Crown corporations to Parliament as being through the responsible minister, not the department.
2.3 Payments to Crown corporations from appropriations are not included in the department's financial statements, as these funds do not relate to its activities. In these situations, the department is simply acting as a flow-through mechanism for administration purposes so that the Crown corporation may receive its Parliamentary authorities.
2.4 Since departments do not normally have the risks and rewards of ownership and since these assets are not normally under the DH's responsibility, investments in and loans and advances to Crown corporations, as well as any transactions related to these, such as interest revenue and dividends, are not to be recorded in the departmental financial statements, unless they are departmental assets over which the department has clear and demonstrated responsibilities.
2.5 Although they are not under the DH's responsibility and assuming that amounts are immaterial to the departmental financial statements, some organizations that meet the definition of a department pursuant to Section 2 of the FAA, such as commissions of inquiry, will be reported in the financial statements of the department through which their funding is provided.
3.1.1 The purpose of the Statement of Financial Position is to present, as at the reporting date (normally March 31):
3.1.1.1 The liabilities arising from the department's activities for which it is responsible;
3.1.1.2 The assets that are available for use to the department in its activities and for which the DH is accountable;
3.1.1.3 The departmental net debt indicator, which is the difference between the sum of all liabilities and the sum of financial assets.
3.2.1 The purposes of the Statement of Operations and Departmental Net Financial Position are:
3.2.1.1 To report the expenses by major program or function, revenues by major type and the net cost of operations for the reporting period (normally the year ending March 31):
3.2.1.1.1 In addition, a distinction is made between revenues that are respendable versus the ones that are not. Although the DH is expected to maintain accounting control, he or she has no authority regarding their disposition. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.
3.2.1.2 To present the evolution of the balance of the departmental net financial position for the reporting period.
3.2.1.2.1 Departments should use the program activity level of the entity's PAA in determining their major programs or functions. Where a department has a very large number of program activities, it may be appropriate to group certain program activities together.
3.2.1.2.2 Departments that have presented future-oriented financial statements in their RPP should include planned information in the Statement of Operations and Departmental Net Financial Position. The planned results information is the original forecast for the fiscal year. For example, the original forecast for 2011–12 included in the 2011–12 RPP is the planned results to be included in the 2011–12 financial statements.
3.2.1.2.3 Departmental net financial position represents the residual remaining when the department's total liabilities are deducted from its total assets, representing the “reported net economic resources” for which the DH is accountable. The main items affecting the balance of the departmental net financial position are:
3.3.1 The purpose of the Statement of Change in Departmental Net Debt is to explain the difference between the department's or the agency's net cost of operations reported in the Statement of Operations and Departmental Net Financial Position and the change in departmental net debt for the reporting period.
3.3.1.1 The main items explaining the difference between the net cost of operations and the change in departmental net debt are:
3.3.2 Departments that have presented future-oriented financial statements in their RPP should include planned information in the Statement of Change in Departmental Net Debt. The planned results information is the original forecast for the fiscal year. For example, the original forecast for 2011–12 included in the 2011–12 RPP is the planned results to be included in the 2011–12 financial statements.
3.4.1 The purpose of the Statement of Cash Flows is to present information on how the department generated and used cash in the reporting period.
3.4.1.1 The Statement of Cash Flows should present the net cash provided to the department for the reporting period.
3.5.1 The purpose of the notes to the departmental financial statements is to provide clarification or further explanation of items in the financial statements to help users better understand and interpret the financial statements.
3.5.1.1 Departments should include notes to the financial statements that are specific to the department's operations and that provide additional relevant information to allow readers to better understand and interpret the departmental financial statements. In preparing their financial statements, departments should determine the appropriate level of detail to be included in the notes so that the information provided is relevant, understandable and useful to a user of the financial statements.
3.5.2 In specific circumstances or situations not covered by this standard, departments must apply professional judgment in determining the content and presentation of their financial statements. The statements should communicate information that is relevant to users, reliable, comparable between periods, understandable and clearly presented in a manner that maximizes their usefulness. Entities should refer to the complete recognition, measurement, presentation and disclosure requirements contained in Treasury Board Accounting Standards and the Public Sector Accounting Handbook.
3.5.3 The financial statements may include items that are not recorded in the Central Financial Management and Reporting System (CFMRS) trial balance. These items, such as certain services provided without charge and amounts due from or to the CRF, are required for the presentation of the financial statements but are not to be recorded in the trial balance. Conversely, the financial statements may exclude items that are recorded in the CFMRS trial balance. These items, such as investments in and loans and advances to Crown corporations, as well as associated revenues or losses may not be required for the presentation of the department's financial statements.
3.5.4 Although the GST refundable advance account is shown under the Advance classification in the Government chart of accounts, the nature of the account at the departmental level is an account receivable. For presentation purposes, departments should include the amount in other government departments (OGD) accounts receivable or as a reduction to OGD payables.
Due to the unique nature of departmental financial statements, appropriate presentation and disclosure of the following items, should be provided:
3.6.1.1 The amount due from the CRF represents the net amount that the department is able to withdraw from the CRF in order to discharge its liabilities without generating any additional charges against its authorities in the year of the withdrawal. The amounts to be recorded at year-end as due from the CRF include:
3.6.1.2 The amount due from the CRF should be reduced by any amounts due to the CRF by the department at year-end. Amounts due to the CRF at year-end could include:
3.6.2.1 Employee future benefits, except severance liabilities, are not under the responsibility of departments. The Department's pension contributions should be recorded as expenses in the year incurred and represent the total departmental obligation to the plan.
3.6.2.2 The obligation related to the severance benefits earned by employees of a department should be recorded. It is calculated based on a whole of government actuarial valuation and distributed across departments on a percentage basis. For this obligation, the Government Accounting Policy and Reporting Division of Treasury Board of Canada Secretariat (the Secretariat) does provide guidance to departments on an annual basis.
3.6.3.1 Departments transact with each other on a regular basis, consistent with normal operating relationships between the entities. For the purposes of this Treasury Board Accounting Standard (TBAS), services between departments are categorized as follows:
3.6.3.2 To ensure comparability between departments, it is important that common services between departments be accounted for on a consistent basis regardless of whether the service was provided without charge or on a recovery basis. Therefore, services between departments should be accounted for as follows:
The services recognized above are considered to be material and have a significant portion of their costs recovered by the providing department.
3.6.3.3 The above noted list of services is not exhaustive. Therefore, using the guiding principles included above, it is the department's responsibility to review the services received from other government departments to determine whether material additional services will need to be recorded and/or disclosed.
3.6.3.4 The department providing the service without charge should determine the estimated cost of the service and communicate in a timely manner, along with sufficient supporting details, the information to the recipient department for the purposes of annual financial statements.
3.6.3.5 Given the complexity, the assumed immateriality of the amounts involved and the desire to minimize administrative burden, services received without charge that meet the criteria for recognition and that relate to assets under construction are not to be capitalized as part of the assets' cost and should be expensed in the year by the receiving department. Should these costs be deemed material, the receiving department is to consult with the Government Accounting Policy and Reporting Division of the Secretariat, on the appropriate treatment.
3.6.4.1 Departments are to record contingencies, as per TBAS 3.6. The following two exceptions apply:
In these situations, it may be necessary to limit the accounting treatment to note disclosure. Consultation with the Office of the Comptroller General is mandatory. The liability and related expense stemming from these contingencies should be communicated to the Secretariat so that they may be recorded in the consolidated financial statements. The Department will record the expense and liability in its accounts when there is no longer uncertainty surrounding the liability. In some cases, multiple departments may have to record their share of a liability related to contingencies.
The financial statement package contained in this section cannot consider all unique circumstances and peculiarities and therefore, departmental personnel must use professional judgment in modifying the package to meet their reporting requirements. It should not be used as a template.
It is recognized that reporting needs may differ by department. Consequently, departments have the flexibility to adjust the format to meet their reporting requirements, provided all relevant TBAS reporting requirements are met.
For all purposes:
In general terms, a Statement of Management Responsibility (SMR) states management responsibility for the financial statements and other financial information, as well as the financial reporting process that produces such statements and other information. The statement also sets out the role of the board of directors (if it exists) and the audit committee (if applicable) in relation to the external financial reporting process. The purpose of the statement is to communicate to users of the financial statements the key elements of responsibility for the representations made in the financial statements and other financial information, to clarify whose representations they are and the limits of their accuracy. It is to be signed by the deputy head and the Chief Financial Officer.
As accounting officers, and under the Treasury Board Policy on Internal Control, deputy heads are responsible for ensuring the maintenance of an effective departmental system of internal control. This includes a system of internal control over financial reporting.
The SMR may be modified or tailored, as required, to suit the department's mode of operation and to properly reflect the departmental context and realities, including variations that may stem from whether the entity is subject or not to a Core Control Audit by the Office of the Comptroller General.
The Comptroller General undertakes Core Control Audits in small departments and agencies to facilitate access to professional internal audit resources. For the purpose of adhering to the Treasury Board Policy on Internal Control, these organizations are able to use the results of such audits.
As a result, two templates of SMRs are provided below based on whether or not the organization is subject to Core Control Audits by the Office of the Comptroller General. In relation to the SMR template for departments not subject to a Core Control Audit and who are annexing the summary of results and action plans from the annual risk-based assessment of effectiveness of their internal controls over financial reporting, this annex is to be placed after the financial statement notes as the final component of this package. In addition, this annex should be titled “Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting of [Department/Agency] for Fiscal Year 20XX-20XX (unaudited)”. Finally departments are to ensure that each page of this annex is identified as unaudited through a footnote or header.
The SMR should be dated to indicate the points to which events have been taken into account. The date would normally be as near as practicable to, but not after the date of the auditor's report (as applicable) with a view to ensuring consistent consideration of subsequent events. Furthermore, the statement should be dated no earlier than the date when all the financial statements, including the related notes, have been prepared and those with the recognized authority have confirmed that they have taken responsibility for those financial statements.
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 20XX, and all information contained in these statements rests with the management of the [Department/Agency]. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the [Department/Agency]'s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the [Department/Agency]'s Departmental Performance Report, is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the [Department/Agency] and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.
The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
A risk-based assessment of the system of ICFR for the year ended March 31, 20XX was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.
As applicable add: The effectiveness and adequacy of the [Department/Agency]'s system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the [Department/Agency]'s operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the [deputy head of Department/Agency].
As applicable add: The Office of the Auditor General, the independent auditor for the Government of Canada, (or the firm of XX) has expressed an opinion on the fair presentation of the financial statements of [Department/Agency] which does not include an audit opinion on the annual assessment of the effectiveness of the department's internal controls over financial reporting, or
The financial statements of [Department/Agency] have not been audited.
Name, Deputy Head
[City where signed, e.g. Ottawa, Canada]
[Date signed]
Name, Chief Financial Officer
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 20XX, and all information contained in these statements rests with the management of the [Department/Agency]. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the [Department/Agency]'s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the [Department/Agency]'s Departmental Performance Report, is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the [Department/Agency] and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.
The system of ICFR is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
For organizations subject to a Core Control Audit and for which such an audit has taken place, add:
The [Department/Agency] is subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.
A Core Control Audit was performed in [fiscal year] by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan are posted on the departmental web site at (hyperlinks to the audit report and Management Action Plan).
For organizations subject to a Core Control Audit but for which an audit has not taken place yet, add:
The [Department/Agency] will be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to the Treasury Board Policy on Internal Control.
In the interim, the [Department/Agency] has undertaken a risk-based assessment of the system of ICFR for the year ended March 31, 20XX, in accordance with the Treasury Board Policy on Internal Control, and the [results and] action plan are summarized in the annex.
As applicable add: The Office of the Auditor General, the independent auditor for the Government of Canada, (or the firm of XX) has expressed an opinion on the fair presentation of the financial statements of [Department/Agency] which does not include an audit opinion on the annual assessment of the effectiveness of the department's internal controls over financial reporting, or
The financial statements of [Department/Agency] have not been audited.
Name, Deputy Head
[City where signed, e.g. Ottawa, Canada]
[Date signed]
Name, Chief Financial Officer
2012 | 2011 Restated (note 18) | |
---|---|---|
Contractual obligations (note 13) The accompanying notes form an integral part of these financial statements. | ||
Liabilities | ||
Accounts payable and accrued liabilities (note 4) | 190,441 | 162,016 |
Vacation pay and compensatory leave | 47,866 | 47,441 |
Deferred revenue (note 5) | 13,425 | 12,598 |
Lease obligation for tangible capital assets (note 6) | 124 | 142 |
Employee future benefits (note 7) | 63,796 | 61,454 |
Total gross liabilities | 315,652 | 283,651 |
Liabilities held on behalf of Government See table note 1 * | ||
Deferred revenues (note 5) | (2,685) | (2,520) |
Total liabilities held on behalf of Government | (2,685) | (2,520) |
Total net liabilities | 312,967 | 281,131 |
Financial assets | ||
Due from Consolidated Revenue Fund | 156,302 | 150,000 |
Accounts receivable and advances (note 8) | 31,160 | 14,088 |
Loans receivable (note 9) | 3,450 | 9,440 |
Total gross financial assets | 190,912 | 173,528 |
Financial assets held on behalf of Government See table note 1 * | ||
Accounts receivable and advances (note 8) | (10,000) | (4,000) |
Loans receivable (note 9) | (3,450) | (9,440) |
Total financial assets held on behalf of Government | (13,450) | (13,440) |
Total net financial assets | 177,462 | 160,088 |
Departmental net debt See table note 2 ** | 135,505 | 121,043 |
Non-financial assets | ||
Prepaid expenses | 2,379 | 25 |
Inventory (note 10) | 21,796 | 11,199 |
Tangible capital assets (note 11) | 1,242,797 | 1,257,513 |
Total non-financial assets | 1,266,972 | 1,268,737 |
Departmental net financial position (note 12) | 1,131,467 | 1,147,694 |
Name, Deputy Head
[City where signed, e.g. Ottawa, Canada]
[Date signed]
Name, Chief Financial Officer
The signature block is to be customized as applicable.
Explanatory Notes:
* Assets/liabilities held on behalf of Government are presented in these financial statements as the deputy head must maintain accounting control for these elements; however, they are later derecognized as the deputy head has no authority regarding their disposition.
** Departmental net debt is an intermediary calculation. It is calculated as the difference between the sum of all liabilities and the sum of net financial assets. If the difference between financial assets and liabilities is positive, the result would be a net financial asset. If that is the case, the financial assets should be presented before the liabilities in the Statement of Financial Position and notes should be reordered accordingly.
2012See table note 3* Planned Results | 2012 | 2011 Restated (note 18) | |
---|---|---|---|
Segmented information (note 17) The accompanying notes form an integral part of these financial statements. | |||
Expenses | |||
Benefit programs and other services | 781,968 | 802,142 | 743,256 |
Appeals | 654,886 | 621,851 | 586,416 |
International issues | 265,124 | 261,793 | 252,630 |
Internal services | 79,400 | 78,500 | 72,400 |
Expenses incurred on behalf of Government | (600) | (500) | (800) |
Total expenses | 1,780,778 | 1,763,786 | 1,653,902 |
Revenues | |||
Regulatory fees | 94,128 | 79,238 | 27,793 |
Miscellaneous revenues | 11,976 | 10,018 | 7,560 |
Revenues earned on behalf of Government | (20,195) | (22,500) | (19,251) |
Total revenues | 85,909 | 66,756 | 16,102 |
Net cost from continuing operations | 1,694,869 | 1,697,030 | 1,637,800 |
Transferred operations (note 16) See table note 4 ** | |||
Expenses | 13,700 | 15,000 | 20,000 |
Revenue | 600 | 500 | 1,000 |
Net cost of transferred operations | 13,100 | 14,500 | 19,000 |
Net cost of operations before government funding and transfers | 1,707,969 | 1,711,530 | 1,656,800 |
Government funding and transfers | |||
Net cash provided by Government | 1,595,354 | 1,568,251 | 1,509,763 |
Change in due from Consolidated Revenue Fund | 2,358 | 6,302 | 6,340 |
Services provided without charge by other government departments (note 15) | 127,895 | 124,750 | 116,850 |
Transfer of assets and liabilities from (to) other government departments (note 16)See table note 5 *** | 0 | (4,000) | 0 |
Net cost of operations after government funding and transfers | (17,638) | 16,227 | 23,847 |
Departmental net financial position - Beginning of year | 1,145,657 | 1,147,694 | 1,171,541 |
Departmental net financial position - End of year | 1,163,295 | 1,131,467 | 1,147,694 |
Explanatory Notes:
If there are no transferred operations the section should be removed from the statements and the "Net cost from continuing operations" subtotal label should be renamed "Net cost of operations".
* Planned Results column to be added as per corresponding future-oriented financial statements. See Section 3.2.1.2.2 of this TBAS.
** These represent the operating results prior to the Order-in-Council date of the transferred operations as a result of a government reorganization.
*** Would only be used if a department has transferred assets or liabilities to other departments as a result of a government reorganization, please refer to note 16 for more detail.
2012See table note 6* Planned Results | 2012 | 2011 | |
---|---|---|---|
The accompanying notes form an integral part of these financial statements. | |||
Net cost of operations after government funding and transfers | (17,638) | 16,227 | 23,847 |
Change due to tangible capital assets | |||
Acquisition of tangible capital assets | 91,160 | 76,906 | 123,925 |
Amortization of tangible capital assets | (79,380) | (74,564) | (74,713) |
Proceeds from disposal of tangible capital assets | (15,203) | (674) | (41,159) |
Net (loss) or gain on disposal of tangible capital assets including adjustments | (5,321) | (6,384) | (3,472) |
Transfer to other government departments | 0 | (10,000) | 0 |
Total change due to tangible capital assets | (8,744) | (14,716) | 4,581 |
Change due to inventories | 5,392 | 10,597 | 1,000 |
Change due to prepaid expenses | 2,425 | 2,354 | (569) |
Net increase (decrease) in departmental net debt | (18,565) | 14,462 | 28,859 |
Departmental net debt - Beginning of year | 121,043 | 121,043 | 92,184 |
Departmental net debt - End of year | 102,478 | 135,505 | 121,043 |
Explanatory Notes:
* Planned Results column to be added by departments as per corresponding future-oriented financial statements. See Section 3.3.2 of this TBAS.
2012 | 2011 Restated (note 18) | |
---|---|---|
The accompanying notes form an integral part of these financial statements. | ||
Operating activities | ||
Net cost of operations before government funding and transfers | 1,711,530 | 1,656,800 |
Non-cash items: | ||
Amortization of tangible capital assets | (74,564) | (74,713) |
Gain (Loss) on disposal of tangible capital assets | (6,384) | (3,472) |
Services provided without charge by other government departments (note 15) | (124,750) | (116,850) |
Variations in Statement of Financial Position: | ||
Increase (decrease) in accounts receivable and advances | 11,072 | (15,648) |
Increase (decrease) in prepaid expenses | 2,354 | (569) |
Increase (decrease) in inventory | 10,597 | 1,000 |
Decrease (increase) in accounts payable and accrued liabilities | (28,425) | (14,918) |
Decrease (increase) in vacation pay and compensatory leave | (425) | (1,500) |
Decrease (increase) in deferred revenue | (662) | 63 |
Decrease (increase) in future employee benefits | (2,342) | (3,215) |
Transfer of liabilities to other government departments (note 16) | (6,000) | 0 |
Cash used in operating activities | 1,492,001 | 1,426,978 |
Capital investing activities | ||
Acquisitions of tangible capital assets | 76,906 | 123,925 |
Proceeds from disposal of tangible capital assets | (674) | (41,159) |
Cash used in capital investing activities | 76,232 | 82,766 |
Financing activities | ||
Lease payments for tangible capital assets | 18 | 19 |
Cash used in financing activities | 18 | 19 |
Net cash provided by Government of Canada | 1,568,251 | 1,509,763 |
Explanatory Notes:
This Statement of Cash Flows is intended to illustrate the presentation when using the indirect method.
Departments have the option of preparing the Statement of Cash Flows using the indirect method or the direct method.
A separate category called "Investing activities" should be added as applicable.
2012 | 2011 Restated (note 18) | |
---|---|---|
The accompanying notes form an integral part of these financial statements. | ||
Operating activities | ||
Cash received from: | ||
Services and fees | (76,758) | (54,313) |
Cash paid for: | ||
Transfer payments | 2,985 | 2,426 |
Salaries and employee benefits | 1,050,753 | 1,006,118 |
Professional and special services | 399,895 | 375,155 |
Utilities, materials and supplies | 54,993 | 54,892 |
Travel and communication | 39,851 | 31,515 |
Other | 1,782 | 935 |
Revenues collected on behalf of Government | 18,500 | 10,250 |
Cash used in operating activities | 1,492,001 | 1,426,978 |
Capital investing activities | ||
Acquisitions of tangible capital assets | 76,906 | 123,925 |
Proceeds from disposal of tangible capital assets | (674) | (41,159) |
Cash used in capital investing activities | 76,232 | 82,766 |
Financing activities | ||
Lease payments for tangible capital assets | 18 | 19 |
Cash used in financing activities | 18 | 19 |
Net cash provided by Government of Canada | 1,568,251 | 1,509,763 |
Explanatory Notes:
This Statement of Cash Flows is intended to illustrate the presentation when using the direct method.
Departments have the option of preparing the Statement of Cash Flows using the indirect method or the direct method.
A separate category called "Investing activities" should be added as applicable.
A brief description of the authority and objectives of the department must be included here.
As well, a description of the program activities (or other groupings) of the department should be included for those that are reported in the Statement of Operations and Departmental Net Financial Position and in the Segmented information note.
These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.
Significant accounting policies are as follows:
Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.
Funds that have been received are recorded as deferred revenue, provided the Department has an obligation to other parties for the provision of goods, services or the use of assets in the future.
Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
Revenues that are non-respendable are not available to discharge the Department's liabilities. While the DH is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.
Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their estimated cost. (The department should adapt this note to its own situation.)
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows: (This portion of the note would be amended to reflect the amortization methodology, rates and classes of assets being used in the department. Classes should match those listed in note 11.)
Asset Class | Amortization Period |
---|---|
Buildings | (Number) years |
Works and infrastructure | (Number) years |
Machinery and equipment | (Number) years |
Vehicles | (Number) years |
Computer hardware | (Number) years |
Computer software | (Number) years |
Leasehold improvements | Lesser of the remaining term of lease or useful life of the improvement |
Leased tangible capital assets | Over term of lease / useful life |
Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.
Explanatory Notes:
Departments should not include accounting policy notes that are not relevant to their operations.
The Department receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Department 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:
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Net cost of operations before government funding and transfers | 1,711,530 | 1,656,800 |
Adjustments for items affecting net cost of operations but not affecting authorities: | ||
Amortization of tangible capital assets | (74,564) | (74,713) |
Gain (loss) on disposal of tangible capital assets | (6,384) | (3,472) |
Services provided without charge by other government departments | (124,750) | (116,850) |
Increase in vacation pay and compensatory leave See table note 7* | (1,625) | (1,500) |
Increase in employee future benefits See table note 7* | (7,142) | (3,215) |
Increase in accrued liabilities not charged to authorities | (6,578) | (4,912) |
Bad debt expense | (500) | (350) |
Refund of prior years' expenditures | 1,625 | 3,350 |
Total items affecting net cost of operations but not affecting authorities | (219,918) | (201,662) |
Adjustments for items not affecting net cost of operations but affecting authorities: | ||
Acquisition of tangible capital assets | 76,906 | 123,925 |
Proceeds from disposal of tangible capital assets | (674) | (41,159) |
Decrease in lease obligations for tangible capital assets | 18 | 19 |
Loans issued on behalf of Government | 1,750 | 7,000 |
Increase in inventory | 10,597 | 1,000 |
Increase in prepaid expenses | 2,354 | (569) |
Total items not affecting net cost of operations but affecting authorities | 90,951 | 90,216 |
Current year authorities used | 1,582,563 | 1,545,354 |
Explanatory Notes:
* Usually these amounts are equal to the amounts found in the Cash Flow Statement as they are normally expensed using an F authority. In this case, the difference is due to the transfer of liabilities to other government departments.
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Authorities provided: | ||
Vote xx _ Operating expenditures | 1,140,976 | 1,109,089 |
Vote xx _ Capital expenditures | 130,766 | 126,865 |
Statutory amounts | 364,956 | 361,517 |
Less: | ||
Authorities available for future years | (50,000) | (49,000) |
Lapsed: Operating | (4,135) | (3,117) |
Current year authorities used | 1,582,563 | 1,545,354 |
Explanatory Notes:
Note (b) should be modified to include only those authorities applicable to the department.
The amount to include is the total amount for each type of authority. There is no need to break the amounts down into more detail.
Amounts of authorities provided and used must agree with the amounts shown as Available for Use and Authorities Used as reflected in the Source and Disposition of Authorities in Volume II of the Public Accounts.
The following table presents details of the Department's accounts payable and accrued liabilities:
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Accounts payable - Other government departments and agencies | 32,456 | 27,894 |
Accounts payable - External parties | 144,266 | 126,116 |
Total accounts payable | 176,722 | 154,010 |
Accrued liabilities | 13,719 | 8,006 |
Total accounts payable and accrued liabilities | 190,441 | 162,016 |
Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties that are restricted in order to fund the expenditures related to specific research projects and stemming from amounts received for fees prior to services being performed. Revenue is recognized in the period in which these expenditures are incurred or in which the service is performed. Details of the transactions related to this account are as follows:
2012 | 2011 Restated (note 18) | |
---|---|---|
(in thousands of dollars) | ||
Opening balance | 12,598 | 10,068 |
Amounts received | 1,509 | 3,660 |
Revenue recognized | (682) | (1,130) |
Gross closing balance | 13,425 | 12,598 |
Deferred revenues held on behalf of Government | (2,685) | (2,520) |
Net closing balance | 10,740 | 10,078 |
Explanatory Notes:
The above is an example of disclosure when a department generates deferred revenue from the collection of fees prior to the service being provided (e.g., licences, passports, etc.).
The Department has entered into agreements to lease certain equipment under capital leases with a cost of $111,000 and accumulated amortization of $47,000 as at March 31, 2012 ($111,000 and $36,000 respectively as at March 31, 2011). The obligations related to the upcoming years include the following:
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
2012 | 0 | 19 |
2013 | 19 | 19 |
2014 | 19 | 19 |
2015 | 19 | 19 |
2016 and thereafter | 103 | 103 |
Total future minimum lease payments | 160 | 179 |
Less: imputed interest (2.3% to 6.0%) | 36 | 37 |
Balance of obligations under leased tangible capital assets | 124 | 142 |
Explanatory Notes:
The type of asset under capital lease should be disclosed.
Any significant restrictions imposed on the department as a result of the lease agreement should be disclosed.
For departments with significant tangible capital lease obligations, consult the disclosure requirements contained in PSG-2 and PSG-5, as applicable.
The Department's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the Department contribute to the cost of the Plan. The 2011-2012 expense amounts to $XXX ($YYY in 2010-2011), which represents approximately XX times ( YY times in 2010-2011) the contributions by employees.
The Department'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.
The Department provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:
As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Accrued benefit obligation - Beginning of year | 61,454 | 56,318 |
Transferred to other government department, effective November 15, 2011 (note 16) | (4,800) | 0 |
Subtotal | 56,654 | 56,318 |
Expense for the year | 9,310 | 7,306 |
Benefits paid during the year | (2,168) | (2,170) |
Accrued benefit obligation - End of year | 63,796 | 61,454 |
Explanatory Notes:
The “Transferred to other government department” line is only used when the department has transferred a program activity or business line as part of a government reorganization. This line is not to be used for the regular movement of employees between departments.
The following table presents details of the Department's accounts receivable and advances balances:
2012 | 2011 Restated (note 18) | |
---|---|---|
(in thousands of dollars) | ||
Receivables - Other government departments and agencies | 25,697 | 8,872 |
Receivables - External parties | 5,632 | 6,941 |
Employee advances | 345 | 322 |
Subtotal | 31,674 | 16,135 |
Allowance for doubtful accounts on receivables from external parties | (514) | (2,047) |
Gross accounts receivable | 31,160 | 14,088 |
Accounts receivable held on behalf of Government | (10,000) | (4,000) |
Net accounts receivable | 21,160 | 10,088 |
The following table presents details of the Department's loans and transfer payments recoverable balances:
2012 | 2011 Restated (note 18) | |
---|---|---|
(in thousands of dollars) | ||
Loans receivable | 2,900 | 3,000 |
Less: Unamortized discount | (1,400) | (1,700) |
Subtotal | 1,500 | 1,300 |
Transfer payments recoverable | 4,450 | 10,640 |
Subtotal | 5,950 | 11,940 |
Less: Allowance for uncollectibility | (2,500) | (2,500) |
Total loans receivable | 3,450 | 9,440 |
The loans receivable portfolio consists of 12 non-interest bearing loans issued in the years from 2001 to 2007, with prescribed annual repayment terms. The loans are recorded at their discounted net present values using market interest rates at the time of the loans. An allowance of $1,500,000 ($1,000,000 in 2010-2011) has been recorded.
Transfer payments recoverable relate to contributions made to outside parties which are repayable based on conditions specified in the contribution agreement that have come into being. An allowance of $1,000,000 ($1,500,000 in 2010-2011) has been recorded.
Explanatory Notes:
This note is suggested for organizations that have repayable transfer payments or other loans receivable. It must be changed to reflect the department's particular operating environment.
Departments with significant repayable contributions and other loans receivable should consult the disclosure requirements in PS 3050.54 and .56 of the Public Sector Accounting Handbook to determine the extent of information to disclose.
The following table presents details of the inventory, measured at cost using the average cost method.
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Spare parts | 16,346 | 5,987 |
Materials | 3,521 | 3,978 |
Other | 1,929 | 1,234 |
Total inventory | 21,796 | 11,199 |
The cost of consumed inventory recognized as an expense in the Statement of Operations and Departmental Net Financial Position is $44,212,000 in 2011-2012 ($38,700,000 in 2010-2011).
Capital Asset Class | (in thousands of dollars) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Cost | Accumulated Amortization | Net Book Value | ||||||||||
Opening Balance | Acquisitions | Adjustments See table note 8(1) | Disposals and Write-Offs | Closing Balance | Opening Balance | Amortization | Adjustments See table note 8(1) | Disposals and Write-Offs | Closing Balance | 2012 | 2011 | |
(1) Adjustments include assets under construction of $58,492 that were transferred to the other categories upon completion of the assets. Effective November 15, 2011, the Department transferred land and buildings with a net book value of $10,000,000 to (name of other department). This transfer is included in the adjustment columns (refer to note 16 for further detail on the transfer). | ||||||||||||
Land | 12,989 | 0 | (1,000) | 0 | 11,989 | 0 | 0 | 0 | 0 | 0 | 11,989 | 12,989 |
Buildings | 1,324,284 | 4,981 | 23,845 | 0 | 1,353,110 | 425,488 | 40,465 | (6,809) | 0 | 459,144 | 893,966 | 898,796 |
Works and infrastructure | 370,059 | 3,128 | 10,694 | 0 | 383,881 | 202,792 | 17,267 | 0 | 0 | 220,059 | 163,822 | 167,267 |
Machinery and equipment | 169,327 | 7,977 | 8,144 | 19,276 | 166,172 | 117,194 | 12,735 | 0 | 12,519 | 117,410 | 48,762 | 52,133 |
Vehicles | 35,641 | 7,076 | 0 | 3,900 | 38,817 | 23,536 | 4,004 | 0 | 3,599 | 23,941 | 14,876 | 12,105 |
Leasehold improvements | 1,255 | 67 | 0 | 0 | 1,322 | 95 | 82 | 0 | 0 | 177 | 1,145 | 1,160 |
Leased tangible capital assets | 111 | 0 | 0 | 0 | 111 | 36 | 11 | 0 | 0 | 47 | 64 | 75 |
Computer hardware | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Computer software | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Assets under construction | 112,988 | 53,677 | (58,492) | 0 | 108,173 | 0 | 0 | 0 | 0 | 0 | 108,173 | 112,988 |
Total | 2,026,654 | 76,906 | (16,809) | 23,176 | 2,063,575 | 769,141 | 74,564 | (6,809) | 16,118 | 820,778 | 1,242,797 | 1,257,513 |
A portion of the Department's net financial position is used for a specific purpose. Related revenues and expenses are included in the Statement of Operations and Departmental Net Financial Position.
The (name of account) was established pursuant to the (name of the Act) and related regulations to record fines and penalties levied by courts under the Act. The balance of the account is to be used for (state purpose). Activity in the account is as follows:
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Account's name - Restricted | ||
Balance - Beginning of year - Restricted | 15,576 | 15,987 |
Revenues | 1,291 | 1,576 |
Expenses | (2,493) | (1,987) |
Balance - End of year - Restricted | 14,374 | 15,576 |
Unrestricted | 1,117,093 | 1,132,118 |
Departmental net financial position - End of year | 1,131,467 | 1,147,694 |
Explanatory Notes:
This note is required only if the department has a consolidated specified purpose account for which it is responsible.
The nature of the Department's activities can result in some large multi-year contracts and obligations whereby the Department will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
2013 | 2014 | 2015 | 2016 | 2017 and thereafter | Total | |
---|---|---|---|---|---|---|
(in thousands of dollars) | ||||||
Transfer payments | 3,000 | 2,500 | 1,000 | 0 | 0 | 6,500 |
Operating leases | 1,000 | 1,000 | 1,000 | 900 | 100 | 4,000 |
Total | 4,000 | 3,500 | 2,000 | 900 | 100 | 10,500 |
Explanatory Notes:
The department should provide details of significant contractual obligations. Significance is assessed based on the departmental materiality policy without consideration for Public Accounts materiality levels.
Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories (if applicable) as follows:
Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the Department is obligated or likely to be obligated to incur such costs. The Department has identified approximately 50 sites (49 sites in 2010-2011) where such action is possible and for which a liability of $10,300,000 ($8,000,000 in 2010-2011) has been recorded in accrued liabilities. The Department has estimated additional clean-up costs of $13,000,000 ($14,000,000 in 2010-2011) that are not accrued, as these are not considered likely to be incurred at this time. The Department's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by the Department in the year in which they become likely and are reasonably estimable.
Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. The Department has recorded an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $20,000,000 ($14,000,000 in 2010-2011) at March 31, 2012.
Explanatory Notes:
The department should provide details of significant cases. Refer to disclosure requirements in PS 3300.28 of the Public Sector Accounting Handbook and TBAS 3.6.
For significant claims and litigations, departments must consult with the Government Accounting Policy and Reporting division of TBS before any note disclosure is made. Significance is assessed based on the departmental materiality policy without consideration for Public Accounts materiality levels.
The Department is related as a result of common ownership to all government departments, agencies, and Crown corporations. The Department enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Department has an agreement with the (name of other department) related to the provision of finance and administration services. During the year, the Department received (and provided if applicable) common services which were obtained without charge from other government departments as disclosed below.
During the year, the Department received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the Department's Statement of Operations and Departmental Net Financial Position as follows:
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Employer_s contribution to the health and dental insurance plans | 75,000 | 70,000 |
Accommodation | 41,700 | 40,500 |
Legal services | 6,850 | 5,250 |
Workers' compensation | 1,200 | 1,100 |
Total | 124,750 | 116,850 |
The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the Department's Statement of Operations and Departmental Net Financial Position.
During the year, the Department provided services without charge to other government departments, related to the provision of (name of services), in the amount of $17,000,000 ($15,000,000 in 2010-2011).
Under a memorandum of understanding signed with (name of other department) on April 1, 2005, the Department administers program XXX in Northern Canadian communities. During the year, the Department incurred expenses of $XXX ($YYY in 2010-2011) on behalf of (name of other department). These expenses are reflected in the financial statements of (name of other department) and are not recorded in these financial statements.
2012 | 2011 | |
---|---|---|
(in thousands of dollars) | ||
Accounts receivable - Other government departments and agencies | 25,697 | 8,872 |
Accounts payable - Other government departments and agencies | 32,456 | 27,894 |
Expenses - Other government departments and agencies | 12,560 | 11,480 |
Revenues - Other government departments and agencies | 2,388 | 2,277 |
Expenses and revenues disclosed in (d) exclude common services provided without charge, which are already disclosed in (a).
Explanatory Notes:
Note (b) is only required if a department (e.g., PWGSC, Treasury Board of Canada Secretariat, Justice Canada and HRSDC) provided services without charge to and recorded by other government departments.
Note (c) is only required for departments that administer significant amounts of funds on behalf of other government departments.
Note (d): If the amount of receivables and payables with related parties is presented elsewhere in the financial statements, there is no need to present the information in this note.
Effective November 15, 2011, the Department transferred responsibility for the (name of program/business line etc.) to the (name of other department) in accordance with (e.g., Act of Parliament, Order-in-Council, Treasury Board of Canada Secretariat Directive etc.), including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Department transferred the following assets and liabilities related to the (name of program/business line etc.) to (name of other department) on November 15, 2011:
2012 | |
---|---|
(in thousands of dollars) | |
Assets: | |
Tangible capital assets (net book value) (note 11) | 10,000 |
Total assets transferred | 10,000 |
Liabilities: | |
Vacation pay and compensatory leave | 1,200 |
Employee future benefits (note 7) | 4,800 |
Total liabilities transferred | 6,000 |
Adjustment to the departmental net financial position | 4,000 |
In addition, the 2011 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the revenues and expenses of the transferred operations.
During the transition period, the Department continued to administer the transferred activities on behalf of (name of other department). The administered revenues and expenses amounted to $543 and to $6,845 respectively, for the year. These revenues and expenses are not recorded in these financial statements. See table note 9*
Explanatory Notes:
This note is required in years when the department transfers significant assets and liabilities to another federal government department or agency or when the department receives transfers of significant assets and liabilities from another federal government department. These transactions would typically be a part of a government reorganization.
The transferred amounts should be measured at the carrying values reported by the transferring department.
The net assets or net liabilities transferred should be recorded as an adjustment to departmental net financial position in the Statement of Operations and Departmental Net Financial Position.
* These represent the transactions after the Act of Parliament, Order-in-Council, Treasury Board of Canada Secretariat Directive, etc. date.
The above example is for the transferring department. The receiving department's note disclosure for this transaction would be similar to the following:
Effective November 15, 2011, the Department was transferred the responsibility for the (name of program/business line etc.) from the (name of other department) in accordance with (e.g., Act of Parliament, Order-in-Council, Treasury Board of Canada Secretariat Directive, etc.), including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Department received the following assets and liabilities related to the (name of program or business line, etc.) from (name of other department) on November 15, 2011:
2012 | |
---|---|
(in thousands of dollars) | |
Assets: | |
Tangible capital assets (net book value) (note 11) | 10,000 |
Total assets received | 10,000 |
Liabilities: | |
Vacation pay and compensatory leave | 1,200 |
Employee future benefits (note 7) | 4,800 |
Total liabilities received | 6,000 |
Adjustment to the departmental net financial position | 4,000 |
Presentation by segment is based on the Department's program activity architecture See table note 10*. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expense and by major type of revenue. The segment results for the period are as follows:
(in thousands of dollars) | |||||||
---|---|---|---|---|---|---|---|
Benefit Programs and Other Services | Appeals | International Issues | Internal Services | Intersegment and Unallocated | 2012 Total | 2011 Total Restated (note 18) | |
Transfer payments | |||||||
Industry | 2,813 | 0 | 0 | 0 | 0 | 2,813 | 2,850 |
Individuals | 255 | 0 | 0 | 0 | 0 | 255 | 58 |
Total transfer payments | 3,068 | 0 | 0 | 0 | 0 | 3,068 | 2,908 |
Operating expenses | |||||||
Salaries and employee benefits | 513,158 | 399,123 | 147,450 | 65,620 | 0 | 1,125,351 | 1,049,122 |
Professional and special services | 187,573 | 145,890 | 80,116 | 3,250 | 0 | 416,829 | 395,995 |
Amortization of tangible capital assets | 33,554 | 26,097 | 13,913 | 1,000 | 0 | 74,564 | 74,713 |
Utilities, materials and supplies | 19,926 | 15,498 | 6,296 | 2,560 | 0 | 44,280 | 48,460 |
Accommodation | 19,575 | 15,225 | 6,170 | 2,530 | 0 | 43,500 | 42,250 |
Travel | 15,996 | 12,441 | 5,653 | 1,456 | 0 | 35,546 | 21,448 |
Communication | 5,762 | 4,481 | 1,729 | 832 | 0 | 12,804 | 13,805 |
Other | 3,530 | 3,096 | 466 | 1,252 | 0 | 8,344 | 6,001 |
Expenses incurred on behalf of Government | 0 | (350) | (150) | 0 | 0 | (500) | (800) |
Total operating expenses | 799,074 | 621,501 | 261,643 | 78,500 | 0 | 1,760,718 | 1,650,994 |
Total expenses | 802,142 | 621,501 | 261,643 | 78,500 | 0 | 1,763,786 | 1,653,902 |
Revenues | |||||||
Regulatory fees | 30,629 | 30,933 | 17,676 | 0 | 0 | 79,238 | 27,793 |
Miscellaneous revenues | 9,261 | 482 | 275 | 0 | 0 | 10,018 | 7,560 |
Revenues earned on behalf of Government | 0 | (14,318) | (8,182) | 0 | 0 | (22,500) | (19,251) |
Total revenues | 39,890 | 17,097 | 9,769 | 0 | 0 | 66,756 | 16,102 |
Net cost from continuing operations | 762,252 | 604,404 | 251,874 | 78,500 | 0 | 1,697,030 | 1,637,800 |
Explanatory Notes:
This note should be adapted by departments to their own specific situation.
Departments that need to group some of their program activities may do so.
The method of significant allocations to segments should be disclosed as applicable.
* Starting April 1st, 2012, “program activity architecture”, will be referred to as “program alignment architecture”, and “program activities” will be referred to as “programs”.
During 2011, amendments were made to Treasury Board Accounting Standard 1.2 - Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to the Department's financial statements are described below. These changes have been applied retroactively, and comparative information for 2010-11 has been restated.
Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, the Department now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.
Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Departmental Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations before government funding and transfers by $22,500,000 for 2012 ($19,251,000 for 2011) and decrease total financial assets by $13,450,000 for 2012 ($13,440,000 for 2011).
Government funding and transfers, as well as the credit related to services provided without charge by other government departments, are now recognized in the Statement of Operations and Departmental Net Financial Position below “Net cost of operations before government funding and transfers.” In previous years, the Department recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations before government funding and transfers by $1,695,303,000 for 2012 ($1,632,953,000 for 2011).
2011 As previously stated | Effect of change | 2011 Restated | |
---|---|---|---|
(in thousands of dollars) | |||
Statement of Financial Position: | |||
Liabilities held on behalf of Government | 0 | (2,520) | (2,520) |
Assets held on behalf of Government | 0 | (13,440) | (13,440) |
Departmental financial position | 1,158,614 | (10,920) | 1,147,694 |
Statement of Operations and Departmental Net Financial Position: | |||
Revenues | 35,353 | (19,251) | 16,102 |
Expenses | 1,654,702 | (800) | 1,653,902 |
Government funding and transfers | |||
Net cash provided by Government | 0 | 1,509,763 | 1,509,763 |
Change in due from Consolidated Revenue Fund | 0 | 6,340 | 6,340 |
Services provided without charge by other government departments | 0 | 116,850 | 116,850 |
Transfer of assets and liabilities from (to) other government departments | 0 | 0 | 0 |
Explanatory Notes:
A similar note may be required in subsequent years for the adoption of new accounting policies by the department in that year.
On August 1, 2012, the Government of Canada announced its decision to sell eight buildings. The buildings and land that are located in six major cities across Canada will be sold for an amount approximating $800,000,000. The impact of this sale, once finalized, will be reflected in the 2012-13 financial statements.
Explanatory Notes:
The above is an example of subsequent event disclosure for a significant or unusual event that has occurred between the date of the financial statements and the date of their completion that do not relate to conditions that existed at the date of the financial statements.
Comparative figures have been reclassified to conform to the current year's presentation.
Explanatory Notes:
This note is only required in years that the comparative figures have been changed from the prior year financial statements, due to reclassifications or changes in the groupings in financial statements presentation.