2014-15 Future-oriented Financial Statement

Statement of Management Responsibility (unaudited)
For the Year ending March 31, 2015

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 8, 2014 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 its 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 Operations (unaudited)
For the Year ending March 31, 2015
(in dollars)
Estimated Results
2013-14
Planned Results
2014-15
Expenses
Ombudsman to federal offenders
$4,642,476 $4,484,146
Internal services
819,899 789,473
Total expenses $5,462,375 $5,273,619
Revenues
Miscellaneous revenues
$215 $190
Revenues earned on behalf of government
(215) (190)
Total revenues $ 0.00 $ 0.00
 
Net Cost of Operations $5,462,375 $5,273,619

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

Notes to the Future-Oriented Statement of Operations (unaudited)
For the Year ending March 31, 2015

1. Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of government priorities and departmental plans as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2013–14 is based on actual results as at January 8th, 2014 and on forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for the 2014-15 fiscal year.

The main assumptions, adopted as at January 8th, 2014, underlying the forecasts are as follows:

  • The organization’s activities will remain substantially the same as for the previous year;
  • 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.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2013–14 and for 2014-15, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this future-oriented statement of operations the Office of the Correctional Investigator (OCI) has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions 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 that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include:

  • The timing and amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  • Implementation of new salary rates.
  • Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
  • Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
  • 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 of the Correctional Investigator (OCI) will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

3. Summary of Significant Accounting Policies

The future-oriented statement of operations has been prepared using Government’s accounting policies that came into effect for the 2013–14 fiscal year 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:

a) Consolidation

This consolidated financial statement includes the accounts of the sub-entities that the Correctional Investigator is accountable for.  The accounts of these sub-entities have been consolidated with those of the organization, and all inter-organizational balances and transactions have been eliminated. 

b) Expenses

Expenses are recorded on an accrual basis. Expenses for the organization’s operations are recorded when goods are received or services are rendered including services provided without charges for accommodation, employee contributions to health and dental insurance plans and worker’s compensation which are recorded as expenses at their estimated cost.  Vacation pay and compensatory leave as well as severance benefits are accrued and expenses are recorded as the benefits are earned by employees under their respective terms and conditions of employment.

Transfer payments are recorded as expenses when the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions which do not form part of an existing program, 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 statement.  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.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental liabilities to the extent the future event is likely to occur and a reasonable estimate can be made.

Expenses also include amortization of tangible capital assets which are capitalized at their acquisition cost.  Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset. 

c) Revenues

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 organization 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 organization’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.

4. Parliamentary Authorities

The organization 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. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, the organization has different net cost 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
2013-14
Planned
2014-15
Net cost of operations $5,462,375 $5,273,619
Adjustments for items affecting net cost of operations but not affecting authorities:
Add (Less)
   
Decrease (increase) in employee future benefits
1,842 1,542
Services provided without charge by other government departments
(591,075) (599,530)
Decrease (increase) in vacation pay and compensatory leave
(1,488) (1,350)
Refunds of previous years' expenditures
1,501 2,700
Adjustments to previous years’ payables at year end
8,298 3,500
Total items affecting net cost of operations but not affecting authorities
(580,922) (593,138)
Adjustment for items not affecting net cost of operations but affecting appropriations:    
Total items not affecting net cost of operations but affecting authorities
- -
Requested authorities $4,881,453 $4,680,481

 

b) Authorities requested
(in dollars) Estimated
2013-14
Planned
2014-15
Authorities requested:    
Vote 40 – Program expenditures
$4,314,505 $4,112,981
Contributions to employee benefits plan
566,948 567,500
Requested authorities $4,881,453 $4,680,481