Financial Statements for the year ended March 31, 2011 (Unaudited) - Public Appointments Commission Secretariat

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Statement of Management Responsibility

The Privy Council Office (PCO) provides administrative and financial services to the Public Appointments Commission Secretariat (PACS) and as such, these financial statements have been prepared by PCO on behalf of PACS and are in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. Although PCO's Chief Financial Officer attests to the quality of the financial information contained in these statements, the responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011, and all information contained in these statements rests with PACS management.

PACS 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 assist PACS to fulfill its accounting and reporting responsibilities, PCO maintains a set of accounts that provides a centralized record of the Public Appointments Commission Secretariat's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the department's Departmental Performance Report, is consistent with these financial statements.

PACS management is also responsible for maintaining an effective system of internal control over financial reporting 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.

PCO, on behalf of PACS, seeks to ensure the objectivity and integrity of data in the 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 Public Appointments Commission Secretariat.

The financial statements of the Public Appointments Commission Secretariat have not been audited.

The paper version was signed by

Marilyn MacPherson
Chief Financial Officer
Privy Council Office

Ottawa, Ontario
August 31, 2011

Statement of Financial Position (Unaudited)

As at March 31

Financial Position

(in thousands of dollars)
2011 Restated
(Note 9)
2010
Assets
Financial assets
Accounts receivable from other federal government departments and agencies 93 92
Total financial assets 93 92
Liabilities
Due to the Consolidated Revenue Fund 21 73
Accounts payable and other liabilities (note 4) 73 19
Employee future benefits (note 5) 0 45
Total liabilities 94 137
Equity of Canada (1) (45)
Total Liabilities and Equity of Canada 93 92

Contractual obligations (note 6)

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

Statement of Operations (Unaudited)

For the year ended March 31

Operations

(in thousands of dollars)
2011 2010
Expenses
Oversight of the Governor-in-Council appointments 216 233
Internal Services 143 171
Total Expenses 359 404
Net cost of operations 359 404

Segmented information (note 8)

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

Statement of Equity of Canada (Unaudited)

For the year ended March 31

Equity of Canada

(in thousands of dollars)
2011 Restated
(Note 9)
2010
Equity of Canada, beginning of year (45) (39)
Net cost of operations (359) (404)
Net cash provided by Government 240 375
Change in due from the Consolidated Revenue Fund 52 (84)
Services provided without charge by other government departments (note 7) 111 107
Equity of Canada, end of year (1) (45)

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

Statement of Cash Flow (Unaudited)

For the year ended March 31

Statement of Cash Flow

(in thousands of dollars)
2011 2010
Operating activities
Net cost of operations 359 404
Non-cash items:
Services provided without charge by other government departments (note 7) (111) (107)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances 1 32
Decrease (increase) in accounts payable and accrued liabilities (54) 52
Decrease (increase) in employee future benefits 45 (6)
Cash used in operating activities 240 375
Net cash provided by Government of Canada 240 375

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

Notes to the Financial Statements (Unaudited)

For the Year Ended March 31

1. Authority and objectives

The Public Appointments Commission Secretariat (PACS) was established by Order-in-Council number PC 2006-0228, on April 21, 2006. The Secretariat was created to prepare the ground for the establishment of the Public Appointments Commission, and once established, to provide ongoing support. The mandate of the Commission and its Secretariat is described in the Federal Accountability Act.

The Commission and its Secretariat are within the portfolio of the Prime Minister, reflecting the prerogative of the Prime Minister with respect to Governor-in-Council appointments.

To achieve its strategic outcome and to deliver results for Canadians, PACS articulates its plans and priorities based on core program activities included below.

1.1 Oversight of Governor-in-Council appointments

Oversight of Governor-in-Council appointments program activities help to ensure that selection processes for Governor-in-Council appointment are fair and competency based.

1.2 Internal services

Internal services program activities support the effective and efficient delivery of activities under Program Activity 1.

2. Summary of significant accounting policies

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

Significant accounting policies are as follows:

  1. Parliamentary authorities

    PACS is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Public Appointments Commission Secretariat do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting.
  2. Net Cash Provided by Government

    PACS operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Public Appointments Commission Secretariat is deposited to the CRF and all cash disbursements made by the Public Appointments Commission Secretariat are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between Government departments.
  3. Due from the CRF

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

    Expenses are recorded on the accrual basis:
    • Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation coverage are recorded as expenses at their estimated cost.
  5. Employee future benefits

    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government. The Public Appointments Commission Secretariat's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the Public Appointments Commission Secretariat to make contributions for any actuarial deficiencies of the Plan.
    • Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  6. Accounts receivables

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

    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Authorities

The Public Appointments Commission Secretariat receives its funding through annual Parliamentary authorities. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Public Appointments Commission Secretariat 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 authorities used

(in thousands of dollars)
2011 2010
Net cost of operations 359 404
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less):
Services provided without charge by other government departments (note 7) (111) (107)
(Increase) decrease in employee future benefits 45 (6)
Refund of prior years' expenditures 1 -
(65) (113)
Current year authorities used 294 291

(b) Authorities provided and used

(in thousands of dollars)
2011 2010
Authorities provided:
Vote - Program expenditures 992 992
Statutory amounts - Contributions to employee benefits plan 26 26
Less:
Lapsed authorities (724) (727)
Current year authorities used 294 291

4. Accounts receivable and advances

The following table presents details of the Public Appointments Commission Secretariat accounts payable and accrued liabilities:

Accounts receivable and advances

(in thousands of dollars)
2011 2010
Payables to external parties 8 3
Payables to other federal government departments and agencies 65 16
73 19

5. Employee future benefits

  1. Pension benefits

    The Public Appointments Commission Secretariat'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 Plan
    benefits and multiplied by indexed to inflation.

    Both the employees and the Public Appointments Commission Secretariat contribute to the cost of the Plan. The 2010-11 expense amounts to
    $23,174 ($23,707 in 2009-10), which represents approximately 1.9 times (1.9 times in 2009-10) the contributions by employees.

    The Public Appointments Commission Secretariat's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses
    or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
  2. Severance benefits

    The Public Appointments Commission Secretariat provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:
    Severance benefits

    (in thousands of dollars)
    2011 2010
    Accrued benefit obligation, beginning of year 45 39
    Expense for the year (45) 6
    Accrued benefit obligation, end of year - 45

6. Contractual obligations

The nature of the Public Appointments Commission Secretariat's activities can result in some large multi-year contracts and obligations whereby the Public Appointments Commission Secretariat will be obligated to make future payments when the goods or services are received. These obligations include service contracts and equipment rental. Contractual obligations are summarized as follows:

Public Appointments Commission Secretariat

(in thousands of dollars)
2012 2013 2014 2015 2016 and thereafter Total
Professional and special services 26 - - - - 26
Rental 6 8 - - - 14
Total 32 8 0 0 0 40

7. Related party transactions

The Public Appointments Commission Secretariat is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The Public Appointments Commission Secretariat enters into transactions with these entities in the normal course of business and on normal trade terms.

In addition, the Public Appointments Commission Secretariat has an agreement with the Privy Coucil Office related to the provision of finance and administration services. During the year, the Public Appointments Commission Secretariat received common services which were obtained without charge from other Government departments as disclosed below.

  1. Common services provided without charge by other government departments

    During the year the Public Appointments Commission Secretariat received services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the department's Statement of Operations as follows:

    Common services provided without charge by other government departments

    (in thousands of dollars)
    2011 2010
    Accommodation 94 93
    Employer’s contribution to the health and dental insurance plans 17 14
    Total 111 107

    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, are not included in the Public Appointments Commission Secretariat's Statement of Operations.
  2. Other transactions with related parties

    Other transactions with related parties

    (in thousands of dollars)
    2011 2010
    Expenses - Other Government departments and agencies 248 247

8. Segmented Information

Presentation by segment is based on the Public Appointments Commission Secretariat's program activity architecture. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Segmented Information

(in thousands of dollars)
Oversight of the
Governor-in-Council
appointments
Internal Services 2011 2010
Expenses
Salaries and employee benefits 162 37 199 255
Professional and special services 52 6 57 49
Accommodation - 94 94 93
Transportation and telecommunications - 1 1 1
Acquisition of machinery and equipment - 5 5 -
Rentals 3 - 3 4
Utilities, materials and supplies - 1 1 1
Other - (1) (1) 1
Total Expenses 216 143 359 404
Net cost of operations 216 143 359 404

9. Adoption of new accounting policies

During the year, the Public Appointments Commission Secretariat adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements, which is effective for the Public Appointments Commission Secretariat for the 2010-11 fiscal year. The major change in the accounting policies of the Public Appointments Commission Secretariat required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively, with the following impact on the comparative figures for 2009-10:

Statement of Financial Position

(in thousands of dollars)
Statement of Financial Position 2010
As previously stated
Effect
of the
adjustment
2010
Revised
amount
Assets 64 73 137
Equity of Canada 28 (73) (45)

10. Comparative information

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