FINANCIAL STATEMENTS 2009-2010

Statement of Management Responsibility (unaudited)

Responsibility for the integrity and objectivity of the accompanying financial statements for the period ended March 31, 2010, and all information contained in these statements rests with the management of the Office of the Correctional Investigator (OCI). These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the organization's financial transactions. Financial information submitted in the preperation of the Public Accounts of Canada and included in the Office'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 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, authortities 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 Office.

The financial statements of the Office have not been audited.

Original signed by:
Howard Sapers
Correctional Investigator
Ottawa, Canada

Manuel Marques
Chief Financial Officer
Ottawa, Canada

Statement of Financial Position (unaudited)
As at March 31
(in dollars)
2010 2009
Restated (Note 9)
Assets    
Financial Assets    

Due from Consolidated Revenue Fund

$99,340 $293,855

Accounts receivable and advances (Note 4)

4,592 2,235
Total Assets $103,932 $296,090
Liabilities and Equity of Canada    
Liabilities    
Accounts payable and accrued liabilities (Note 5) $99,340 $294,455
Vacation pay and compensatory leave 102,686 90,980
Employee severance benefits (Note 6) 449,846 423,641
Total Liabilities 651,872 809,076

Equity of Canada

(547,940) (512,986)
Total Liabilities and Equity of Canada $103,932 $296,090

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

 

Statement of Operations (unaudited)
For the year ended March 31
(in dollars)
2010 2009
Expenses    
Ombudsman for federal offenders $3,653,942 $3,255,505
Internal services 721,178 598,280
Total Expenses 4,375,120 3,853,785
Revenues    
Ombudsman for federal offenders 15 5
Total revenues 15 5
Net Cost of Operations $4,375,105 $3,853,780

Segmented information (note 8)
The accompanying notes form an integral part of these financial statements.

 

Statement of Equity of Canada (unaudited)
For the year ended March 31
(in dollars)
2010 2009
Restated (Note 9)
Equity of Canada, beginning of year $(512,986) $(549,208)

Net cost of operations

(4,375,105) (3,853,780)

Net cash provided by Government

4,144,691 3,345,458

Change in net position in the Consolidated Revenue Fund

(194,515) 164,991

Services provided without charge by other government departments (Note 7)

389,975 379,553
Equity of Canada, end of year $(547,940) $(512,986)

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

 

Statement of Cash Flow (unaudited)
For the year ended March 31
(in dollars)
2010 2009
Operating activities    
Net Cost of Operations $4,375,105 $3,853,780
Non-cash items:    
Services provided without charge by other government departments (Note 7) (389,975) (379,553)
Variations in Statement of Financial Position:    
Increase (decrease) in accounts receivable and advances 2,357 (206)
(Increase) Decrease in account payables and accrued liabilities 195,115 (165,091)
(Increase) Decrease in vacation pay and compensatory leave (11,706) 0
(Increase) Decrease in employee future benefits (Note 6) (26,205) 36,528
Total Cash used by Operating Activities 4,144,691 3,345,458
 
Net cash provided by Government of Canada $(4,144,691) $(3,345,458)

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

 

1. Authority and purpose

The Office of the Correctional Investigator was established in 1973 pursuant to Part II of the Inquiries Act. With the proclamation in November 1992 of Part III of the Corrections and Conditional Release Act, this is now the enabling legislation. The mandate of the Correctional Investigator, as defined by this legislation, is to function as an Ombudsman for federal offenders. The Correctional Investigator is independent of the Correctional Service of Canada and may initiate an investigation on receipt of a complaint by or on behalf of an offender, at the request of the Minister or on his own initiative. The Correctional Investigator is required by legislation to report annually through the Minister of Public Safety to both Houses of Parliament.

In addition, Section 19 of the Corrections and Conditional Release Act requires that the Correctional Service of Canada “where an inmate dies or suffers serious bodily injury” conduct an investigation and provide a copy of the report to the Correctional Investigator.

Internal Services supports the delivery of the Office's Ombudsman role to offenders as well as its corporate obligations to the Central Agencies of Govenment.

2. Significant accounting policies

The financial statements have been prepared in accordance with 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:

(a) Parliamentary appropriations

The Office is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Office 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.

(b) Net Cash Provided by Government

The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Amounts due from/to the CRF

Amounts due from/to 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 Office is entitled to draw from the CRF without further appropriations to discharge its liabilities.

(d) Revenues

Revenues from regulatory fees are recognized in the accounts based on the services 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 wich the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided the Office 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 wich the underlying transaction or event that gave rise to it takes place.

(e) Expenses

Expenses are recorded on the accrual basis:

  • 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 and the employer contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government of Canada. The Office's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. Current legislation does not require the Office 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.

(g) Account Receivables and Advances

Accounts receivables and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) 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 used are the liability for employee severance benefits. 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 Office receives most of 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 Office has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year appropriations used:
(in dollars) 2010 2009
Net cost of operations $4,375,105 $3,853,780
Adjustments for items affecting net cost of operations but not affecting appropriations:    
Add (Less):    
Refunds of previous year expenditures 0 1,265
Adjustments to accounts payable at year end 54,457 19,594
Increase in employee future benefits (26,205) 36,527
Decrease in vacation pay and compensatory leave (11,706) 0
Revenue not available for spending 15 5
Services provided without charge by other government departments (389,975) (379,553)
  (373,414) (322,161)
Current year authorities used $4,001,692 $3,531,619
(b) Authorities provided and used:
Authorities Provided:
Program expenditures - Vote 45
$3,673,392 $3,755,984
Less:
Lapsed: Operating
(77,395) (697,783)
  3,595,997 3,058,201
Add statutory amounts:
Contributions to employee benefits plan
405,695 473,418
Current year appropriations used $4,001,692 $3,531,619

 

4. Accounts Receivable and Advances

The following table presents details of the Office's accounts receivable and advances balance:
(in dollars) 2010 2009
Receivables from other Federal Government departments and agencies $4,092 $1,635
Employee advances 500 600
Total $4,592 $2,235

 

5. Accounts payable and accrued liabilities

The following table presents details of the Office's accounts payable and accrued liabilities:
(in dollars) 2010 2009
Receivables from other Federal Government departments and agencies $15,435 $53,813
Accounts payable to external parties 83,905 166,525
Accrued salaries - 74,117
Total $99,340 $294,455

 

6. Employee Future Benefits

(a) Pension benefits

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

Both the employees and the Office contribute to the cost of the Plan. The 2009-10 expense amounts to $292,911.61 ($341,808 in 2008-09), which represents approximately 1.9 times (2.0 in 2008-09) the contributions by employees.

The office's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

The Office 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:

(in dollars) 2010 2009
Accrued benefit obligation, beginning of year $423,641 $460,169
Accrued expense for the year 113,655 132,769
Benefits paid during the year (87,450) (169,297)
Accrued benefit obligation, end of year $449,846 $423,641

7. Related party transactions

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

(a) Common services provided without charge by other government departments:

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

(in dollars) 2010 2009
Accommodation $235,322 $253,657
Employer's contribution to the health and dental insurance plans 154,653 125,896
  $389,975 $379,553

The Government has centralized some of its administrative activities for efficiency and cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service orgranizations 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 Office's Statement of Operations.

(b) Other transactions with related parties

(in dollars) 2010 2009
Expenses - Other Government departments and agencies $185,544 $158,090

8. Segmented Information

Presentation by segment is based on the organization's program activity architecture. 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 revenue 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:

  2010 2009
  Ombudsman for federal offenders Internal Services Total  
Expenses        
Salaries and employee benefits $2,936,463 $324,955 3,261,418 $2,792,332
Professional and special services 231,558 233,329 464,887 417,821
Accommodation 221,015 39,143 260,158 283,246
Travel and relocation 240,871 2,108 242,979 205,524
Communication - 35,813 35,813 42,532
Equipment - 35,416 35,416 58,911
Utilities, material and supplies 2,201 31,156 33,357 22,600
Information 20,443 4,655 25,098 20,720
Repairs 1,391 11,961 13,352 6,364
Equipment rentals - 2,642 2,642 3,735
Total Expenses 3,653,942 721,178 4,375,120 3,853,785
Revenues 15   15 5
Net Cost of Operations $3,653,927 $721,178 $4,375,105 $3,853,780

9. Adoption of new accounting policies

During the year, the organization adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Office for the 2009-10 fiscal year. The major change in the accounting policies of the organization 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 comparatives for 2009-2010:

Statement of Financial Position
(in dollars)
2009
As previously stated
Effect of changes 2009
Restated
Assets $2,235 $293,855 $296,090
Equity of Canada (806,841) 293,855 (512,986)

10. Comparative Information

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