Financial Statements (unaudited) 2017–2018

ISSN: 2818-0151

Statement of Management Responsibility (Unaudited)

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2018, and all information contained in these statements rests with the management of the Civilian Review and Complaints Commission for the RCMP (CRCC). 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 CRCC's financial transactions.  Financial information submitted in the preparation of the Public Accounts of Canada and included in CRCC's Departmental Results Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal controls 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 CRCC 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.

The CRCC 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 completed in 2011–12 by the OCG. The Audit Report and related Management Action Plan are posted on the departmental website.

The financial statements of CRCC have not been audited.

_____________________
Guy Bujold
Chairperson
Ottawa, Canada
September 7, 2018

_____________________
Tim Cogan
Chief Financial Officer
Ottawa, Canada
September 7, 2018


Statement of Financial Position (unaudited)

As at March 31
(in dollars)

  2018 2017

The accompanying notes form an integral part of these financial statements

Liabilities    
Accounts payable and accrued liabilities (note 4) $461,306 $1,046,247
Vacation pay and compensatory leave 295,428 238,088
Employee future benefits (note 5) 266,797 267,237
Total liabilities 1,023,531 1,551,572
Financial assets    
Due from Consolidated Revenue Fund 369,691 881,571
Accounts receivable and advances (note 6) 198,694 283,288
Total financial assets 568,385 1,164,859
Departmental net debt 455,146 386,713
Non-Financial assets    
Tangible capital assets (note 7) 189,186 280,504
Total non-financial assets 189,186 280,504
Departmental net financial position (265,960) (106,209)

_____________________
Guy Bujold
Chairperson
Ottawa, Canada
September 7, 2018

_____________________
Tim Cogan
Chief Financial Officer
Ottawa, Canada
September 7, 2018


Statement of Operations and Departmental Net Financial Position (unaudited)

For the Year Ended March 31
(in dollars)

  2018
Planned Results
2018 2017
Expenses      
Civilian Review of RCMP members' conduct in the performance of their duties $8,159,330 6,884,520 7,198,006
Internal Services 2,895,662 3,424,740 2,756,683
Total expenses 11,054,992 10,309,260 9,954,689
Revenues      
Miscellaneous revenues 10,837 (3,758) 7,721
Revenues earned on behalf of government (10,837) (3,758) (7,721)
Total revenues 0 0 0
Net cost of operations before government funding and transfers 11,054,992 10,309,260 10,309,260
Government funding and transfers      
Net cash provided by Government   9,434,955 9,075,698
Change in due from the Consolidated Revenue Fund   (511,879 (183,450)
Services provided without charge by other government departments (note 8)   1,226,433 1,191,889
Net cost of operations after government funding and transfers   159,751 (129,248)
Departmental net financial position - Beginning of Year   (106,209) (235,457)
Departmental net financial position - End of Year   (265,960) (106,209)
Segmented information (note 9)      

Segmented information (Note 9)

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

Statement of Change in Departmental Net Debt (unaudited)

For the Year Ended March 31
(in dollars)

  2018 2017
Net cost of operations after government funding and transfers $159,751 $(129,248)
Change due to tangible capital assets    
Amortization of tangible capital assets (91,318) (112,701)
Total change due to tangible capital assets (91,318) (112,701)
Net increase (decrease) in departmental net debt 68,433 (241,949)
Departmental net debt - Beginning of Year 386,713 628,662
Departmental net debt - End of Year $455,146 $386,713

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

Statement of Cash Flows (unaudited)

For the Year Ended March 31
(in dollars)

  2018 2017
Operating activities    
Net cost of operations before government funding and transfers $10,309,260 $9,954,689
Non-cash items    
Amortization of tangible capital assets (note 7) (91,318) (112,701)
Services provided without charge by other government departments (note 8) (1,226,433) (1,191,889)
Variations in Statement of Financial Position:    
Increase (decrease) in accounts receivable and advances (84,595) 222,440
Decrease (increase) in accounts payable and accrued liabilities 584,941 35,752
Decrease (increase) in vacation pay and compensatory leave (57,340) 12,814)
Decrease (increase) in employee future benefits 440 154,393
Cash used in operating activities 9,434,955 9,075,498
Capital investing activities    
Acquisitions of tangible capital assets (note 7) 0 0
Cash used in capital investing activities 9,434,955 9,075,498
Net cash provided by Government of Canada $9,434,955 $9,075,498

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

Notes to the Financial Statements (unaudited)

For the Year Ended March 31

1. Authority and objectives

The Civilian Review and Complaints Commission for the RCMP (CRCC) is a federal agency reporting to Parliament that receives and reviews public complaints about the conduct of members of the RCMP in the performance of any duty or function under the Royal Canadian Mounted Police Act. The CRCC is entirely separate from and independent of the RCMP. The mandate of the CRCC is set out in Part VII of the Royal Canadian Mounted Police Act and can be summarized as follows:

  • To receive complaints from the public about the conduct of RCMP members;
  • To conduct reviews when complainants are not satisfied with the RCMP's handling of their complaints;
  • To hold hearings and carry out investigations; and
  • To report findings and make recommendations.

The CRCC has two programs, Civilian review of RCMP members' conduct in the performance of their duties and Internal Services. Internal Services include all services that support the program, including management and oversight, communications, legal, human resources, financial management, procurement, information management and technology and other administrative services. 

2. Summary of significant accounting policies

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:

(a) Parliamentary authorities

The CRCC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the CRCC 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 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2017-18 Departmental Plan. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2017-18 Departmental Plan.

(b) Net cash provided by government

The CRCC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada.  All cash received by the CRCC is deposited to the CRF and all cash disbursements made by the CRCC 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 Government.

(c) Amounts due from or to the CRF

Amounts due from or 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 CRCC is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues

Revenues from regulatory fees are recognized based on the services provided in the year.

Revenues are then recognized in the period in which the related expenses are incurred.

Other revenues are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge the CRCCs liabilities. While the Chair 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 as a reduction of the entity's gross revenues.

(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 employer contributions to the health and dental insurance plans are recorded as operating expenses at their carrying value.

(f) Employee future benefits

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

Severance benefits: The accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Accounts receivable and advances

Accounts receivable are initially recorded at cost and where necessary, are discounted to reflect their concessionary terms. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.

(h) Non-financial assets

The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, are amortized to expense over the estimated useful lives of the assets, as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.  Inventories are valued at cost and are comprised of spare parts and supplies held for future program delivery and are not primarily intended for resale. Inventories that no longer have service potential are valued at the lower of cost or net realizable value.

(i) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, environmental liabilities, the liability for employee future 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.

(j) Related party transactions

Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis and are measured at the carrying amount, except for the following:

  1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
  2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.

3. Parliamentary authorities

The CRCC 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 CRCC 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:

  2018
(in dollars)
2017
(in dollars)
Net cost of operations before government funding and transfers 10,309,260 9,954,689
Adjustments for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (note 7) (91,318) (112,701)
Services provided without charge by other government departments (note 8) (1,226,433) (1,191,889)
Decrease (increase) in vacation pay and compensatory leave (57,340) 12,814
Decrease (increase) in employee future benefits 440 154,393
Refund of prior year expenditures 6,349 5,236
Adjustments to previous years' payables at year-end 29,624 125,040
  (1,338,678) (1,007,107)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisitions of tangible capital assets    
Increase in salary overpayments 43,147 78,125
Increase in other loans and advances to employees 8,102 10,245
  51,249 88,370
Current year authorities used 9,021,831 9,035,952

(b) Authorities provided and used:

  2018
(in dollars)
2017
(in dollars)
Vote 1 – Program expenditures 9,674,697 9,447,435
Contributions to employee benefits plan 830,983 845,762
  10,505,680 10,323,197
Less:
Lapsed : Operating
(1,483,849) (1,287,245)
Current year authorities used 9,021,831 9,035,952

4. Accounts payable and accrued liabilities

The following table presents details of the CRCC's accounts payable and accrued liabilities:

  2018
(in dollars)
2017
(in dollars)
Accounts payable to other government departments and agencies 54,204 58,888
Accounts payable to external parties 288,780 304,863
Total accounts payable  342,984 363,751
Accrued liabilities 118,322 682,496
Total accounts payable and accrued liabilities 461,306 1,046,247

5. Employee future benefits

(a) Pension benefits

The CRCC's employees participate in the Public Service Pension Plan (the “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 Plan benefits and they are indexed to inflation.

Both the employees and the CRCC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2017-18 expense amounts to $565,899 ($589,242 in 2016-17). For Group 1 members, the expense represents approximately 1.01 times (1.12 times in 2016-17) the employee contributions and, for Group 2 members, approximately 1.00 times (1.08 times in 2016-17) the employee contributions.

The CRCC'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

Severance benefits provided to the CRCC's employees were previously based on an employee's eligibility, years of service and salary at termination of employment.  However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees.  Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service.  By March 31, 2018, substantially all settlements for immediate cash out were completed.  Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities. 

The changes in the obligations during the year were as follows:

  2018
(in dollars)
2017
(in dollars)
Accrued benefit obligation, beginning of year 267,237 421,630
Expense for the year 20,129 (75,351)
Benefits paid during the year (20,569) (79,042)
Accrued benefit obligation, end of year $266,797 $267,237

6. Accounts receivable and advances

The following table presents details of the CRCC's accounts receivable and advances balances:

  2018
(in dollars)
2017
Restated
(in dollars)
Receivables – Other government departments and agencies 90,836 194,904
Receivables – External parties 89,765 76,639
Employee advances 18,102 11,745
Total accounts receivable $198,646 $283,288

7. Tangible capital assets

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost.  The CRCC does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.

Asset Class Amortization Period
Computer hardware 4 to 7 years
Computer software 3 to 5 years
Other equipment including furniture 5 years
Leasehold improvements Over the useful life of the improvement or the lease term, whichever is shorter
Assets under construction once in service, in accordance with asset type
(in dollars)
  Cost Accumulated amortization Net book value
Capital asset class Opening balance Acquisitions Disposals & write-offs Closing balance Opening balance Amortization Disposals & write-offs Closing balance 2018 2017
Computer hardware 350,107 0 0 350,107 165,968 54,591 0 220,559 129,548 184,139
Computer software 15,569 0 0 15,569 15,569 0 0 15,569 0 0
Other equipment including furniture 181,061 0 0 181,061 174,685 2,125 0 176,810 4,251 6,376
Leasehold improvements 813,110 0 0 813,110 723,121 34,602 0 785,418 55,387 89,989
Total $1,359,847 $0 $0 $1,359,847 $1,079,343 $91,318 $0 $1,255,072 $189,186 $280,504

Assets under construction are recorded in the applicable asset class in the year they are put into service and are not amortized until they are put into service.

8. Related party transactions

The CRCC is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual. The CRCC enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the CRCC has an agreement with Public Safety Canada related to the provision of finance, human resource and security services. During the year, the CRCC received common services which were obtained without charge from other government departments as disclosed below.

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

During the year the CRCC 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 CRCC's Statement of Operations and Departmental Net Financial Position as follows:

  2018
(in dollars)
2017
(in dollars)
Accommodation 690,695 660,501
Employer's contribution to the health and dental insurance plans 535,738 531,388
Total 1,226,433 1,191,889

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 organization 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 Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in the CRCC's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

  2018
(in dollars)
2017
(in dollars)
Accounts receivable – Other government departments and agencies 90,836 194,904
Accounts payable – Other government departments and agencies 54,204 58,888
Expenses – Other government departments and agencies 758,323 990,012
Total 903,363 $1,243,804

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

9. Segmented information

Presentation by segment is based on the CRCC'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, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Expenses
Operating expenses Civilian review
(in dollars)
Internal services
2018
(in dollars)
Total
2018
(in dollars)
Total
2017
(in dollars)
Salaries and employee benefits 5,348,267 1,874,623 7,222,890 6,803,111
Professional and special services 627,972 368,319 996,291 1,318,338
Accommodation 544,692 197,879 784,660 725,064
Equipment 15,537 369,667 407,771 134,215
Other 1,143 226,211 227,185 199,630
Rentals 106,873 98,477 148,815 151,929
Repair and maintenance 349 126,779 134,339 20,350
Travel and relocation 220,272 4,513 111,459 294,597
Amortization 41,407 43,004 91,318 112,701
Communication 24,720 53,129 77,856 78,500
Utilities, materials and supplies 23,524 45,499 53,422 77,596
Information 127,165 16,640 53 254 38,658
Total expenses 6,884,520 3,242,740 10,309,260 9,954,689
Revenues        
Miscellaneous revenues   3,758 3,758 7,721
Revenue earned on behalf of government   (3,758) (3,758) (7,721)
Total revenues   0 0 0
Net cost of operations before government funding and transfers 6,884,520 3,424,740 10,309,260 9,954,689
Date modified: