2013-14 Future-oriented Financial Statement

Statement of Management Responsibility (unaudited)

Management of the Office of the Correctional Investigator (OCI) is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at January 9, 2013 and reflect the plans described in the Report on Plans and Priorities.

These Future-oriented Financial Statements have been prepared in accordance with the Treasury Board's accounting policies and it’s Guide on the preparation of general purpose Future-oriented Financial Statements.

These Future-oriented Financial Statements have not been audited.

Howard Sapers
Correctional Investigator
Ottawa, Canada

Manuel Marques
Chief Financial Officer
Ottawa, Canada

Future-oriented Statement of Financial Position (unaudited)
As at March 31
(in dollars)
Estimated Results
2013
Forecast
2014
Liabilities
Accounts payable and accrued liabilities (note 7) $114,303 $121,674
Vacation pay and compensatory leave 122,682 129,348
Employee future benefits (note 8) 361,525 343,104
Total net Liabilities $598,510 $594,126
Financial assets
Due from Consolidated Revenue Fund $113,870 $121,263
Accounts receivable and advances (note 6) 15,415 19,022
Total net financial assets $129,285 $140,285
 
Departmental Net Debt $469,225 $453,841
     
Departmental net financial position $(469,225) $(453,841)

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


Future-oriented Statements of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in dollars)
Estimated Results
2013
Forecast
2014
Expenses
Ombudsman to federal offenders $3,394,722 $3,287,183
Internal services 1,909,531 1,849,040
Total expenses $5,304,253 $5,136,223
Revenues
Respendable revenue $250 $300

Miscellaneous revenues
Revenues earned on behalf of government

(250) (300)
Total revenues $ - $ -
 
Net Cost of Operations $5,304,253 $5,136,223

Government Funding and Transfers
For the Year Ended March 31
(in dollars)
Estimated Results
2013
Forecast
2014
Net cash provided by Government $4,926,198 $4,727,598
Change in amounts due from the Consolidated Revenue Fund 2,374 7,393
Services provided without charge by other government departments (note 9) 423,137 416,616
Net Cost of Operations after government funding and transfers $(47,456) $(15,384)
 
Departmental Net Financial Position - Beginning of Year $(516,681) $(469,225)

 

   
Departmental Net Financial Position - End of Year $(469,225) $(453,841)

Segmented information (note 10)
The accompanying notes form an integral part of these future-oriented financial statements.


Future-oriented Statement of Change in Departmental Net Debt (unaudited)
For the Year Ended March 31
(in dollars)
Estimated Results
2013
Forecast
2014
Net Cost of Operations after government funding and transfers $(47,456) $(15,384)
Net Increase in Departmental Net Debt due to operations $(47,456) $(15,384)
     
Departmental Net Debt Beginning of Year $516,681 $469,225
     
Departmental Net Debt End of Year $469,225 $453,841

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


Future-oriented Statement of Cash Flows (unaudited)
For the Year Ended March 31
(in dollars)
Estimated Results
2013
Forecast
2014
Operating activities
Net Cost of Operations before government funding and transfers $5,304,253 $5,136,223
 
Non-cash items:
Services provided without charge by other government departments (Note 11) (423,137) (416,616)
 
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable (9,419) 3,607
Decrease (increase) in accounts payable and accrued liabilities (2,157) (7,371)
Decrease (increase) in vacation pay and compensatory leave (207) (6,666)
Decrease (increase) in employee future benefits 56,865 18,421
Cash used by operating activities $4,926,198 $4,727,598
 
Net cash provided by Government of Canada $4,926,198 $4,727,598

The accompaning notes form an intergral part of this financial statement.

 

Notes to the Future-oriented Financial Statements (unaudited)
For the Year Ended March 31, 2014

1. Authority and objectives

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 to 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 Government.

2. Significant assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the organization as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. The organization's activities will remain substantially the same as in the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  3. Allowances for uncollectibility are based on the likely outcome of actual situations.
  4. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 forecasts.

These assumptions are adopted as at January 9, 2013

3. Variations and changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2012-13 and for 2013-14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements, the Office has made estimates and assumptions concerning the future. These estimates and judgments may differ from the subsequent actual results. Estimates and judgment are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors could lead to material differences between the Future-oriented Statements of Operations and Departmental Net Financial Position and historical statements of operations include:

  1. The timing and amounts of acquisition and disposals of equipment may affect gains/losses and amortization expense; and/or
  2. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Office will not be updating the forecasts for any changes to appropriations or forecast financial information made after January 9, 2013. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The future-oriented 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 (GAAP).

Significant accounting policies are as follows:

  1. 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 Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-14 Report on Plans and Priorities.
  2. 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.
  3. 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 authorities to discharge its liabilities.
  4. Revenues: 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 Office's liabilities. While the Correctional Investigator is expected to maintain accounting control, he 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.
  5. Expenses: are recorded on an 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 employer contributions to the health and dental insurance plans, are recorded as operating expenses at their estimated cost.

  6. Employee future benefits:

    (i) Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Office’s contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. 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.

    (ii)Severance benefits: Employees entitled to severance benefits under conditions of employment earn these benefits as services necessary to earn them are rendered. 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.

  7. Accounts receivable and advances: Accounts receivables and advances are stated at the lower of cost and recoverable value. A provision is made for receivables where recovery is considered uncertain.

5. 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 appropriations 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 requested authorities:
(in dollars) Estimated Results
2013
Forecast
2014
Net cost of operations before government funding and transfers $5,304,253 $5,136,223
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less)
   
Services provided without charge by other government departments (note 11) (423,137) (416,616)
Refund of prior year expenditures - -
Adjustments to previous years' payables at year-end - -
Decrease (increase) in vacation pay and compensatory leave (207) (6,666)
Decrease (increase) in employee future benefits (note 9) 56,865 18,421
  (366,478) (404,861)
Forecast authorities available $4,937,774 $4,731,362
(b) Authorities requested
(in dollars) Estimated Results
2013
Forecast
2014
Program expenditures - Vote 40 $4,317,905 $4,139,837
Contributions to employee benefits plan 619,869 591,525
Forecast authorities available $4,937,774 $4,731,362

Forecast authorities requested for the year ending March 31, 2014 are the planned spending amounts presented in the 2013-14 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2013 include amounts presented in the 2012-13 Main Estimates and supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

6. Accounts receivable and advances

The following table presents details of accounts receivable and advances:
(in dollars) Estimated Results
2013
Forecast
2014
Receivables - Other government departments and agencies $14,982 $18,611
Receivables - External parties - -
Employee advances 433 411
Net accounts receivable $15,415 $19,022

7. Accounts payable and accrued liabilities

The following table presents details of the Office's accounts payable and accrued liabilities:
(in dollars) Estimated Results
2013
Forecast
2014
Accounts payable to other government departments and agencies $9,588 $7,599
Accounts payable to external parties 78,335 76,479
     
Total accounts payable 87,893 84,078
Accrued liabilities 26,410 37,596
Total accounts payable and accrued liabilities $114,303 $121,674

 

b) Other transactions with related parties
(in dollars) 2012 2013
Expenses - Other Government departments and agencies $388,071 $476,308

8. 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. 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 2012-13 and 2013-14 expense amounts are estimated at $407,050 for both years, which represents approximately 1.8 times 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 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 changes to conditions of employment for executives and 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.

Information about the severance benefits, measured as at March 31
(in dollars) Estimated Results
2013
Forecast
2014
Accrued benefit obligation - Beginning of year $418,390 $361,525
Expense for the year (56,865) (18,421)
Benefits paid during the year - -
Accrued benefit obligation - End of year $361,525 343,104

 

9. 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 receives common services which are obtained without charge from other Government departments as disclosed below:

Common services provided without charge by other government departments

During the year the Office is forecasting to receive services without charge from other departments related to accommodation as well as the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Office's Future-oriented Statement of Operations and Net Accountability as follows:

Office's Future-oriented Statement of Operations and Net Accountability
(in dollars) Estimated Results
2013
Forecast
2014
Accommodation $239,293 $227,100
Employer's contribution to the health and dental insurance plans 183,844 189,516
Total $423,137 $416,616

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 services organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as 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 Future-oriented Statement of Operations and Departmental Net Financial Position.

Other transactions with related parties
(in dollars) Estimated Results
2013
Forecast
2014
Expenses - Other Government departments and agencies $329,590 $330,000

Expenses and revenues disclosed in (b) exclude common services provided without charge, which is already disclosed in (a).

10. Segmented Information

Presentation by segment is based on the organization's program alignment 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:

Segmented Information
(in dollars) 2013 2014
Expenses Total Ombudsman for
federal
offenders
Internal Services Total
Transfer payments $- $- $- $-
Operating expenses        
Salaries and employee benefits 4,180,317 2,577,670 1,449,939 4,027,609
Professional and special services 401,156 157,975 241,762 399,737
Accommodation 252,068 158,073 81,756 239,829
Travel and relocation 335,738 333,148 1,402 334,550
Equipment 26,277 0 26,184 26,184
Communication 22,608 0 22,527 22,527
Equipment rentals 2,793 0 2,784 2,784
Information 58,138 54,658 3,273 57,931
Repairs 2,522 443 2,072 2,515
Utilities, material and supplies 22,554 5,216 17,258 22,474
Miscellaneous 82 - 83 83
Total Expenses 5,304,253 3,287,183 1,849,040 5,136,223
Revenues
Regulatory fee 250 - 300 300
Revenues (250) - (300) (300)
Total Revenues - - - -
 
Net Cost of Operations $5,304,253 $3,287,183 $1,849,040 $5,136,223