Future-Oriented Financial Statements for the Years Ending March 31, 2011 and March 31, 2012
Statement of Management Responsibility
Senior Management of the Commission for Public Complaints Against the RCMP is responsible for the appropriateness of the assumptions on which this future-oriented financial statement is prepared. This future-oriented financial statement is based on the best information available and assumptions adopted as at January 21, 2011 and reflects the plans described in the Report on Plans and Priorities.
This future-oriented financial statement has been prepared in accordance with the Treasury Board's accounting policies and its guide on the preparation of general purpose future-oriented financial statements.
This future-oriented financial statement has not been audited.
Originally signed by:
Ian McPhail, Q.C.
Date: April 6, 2011
Chief Financial Officer
Date: April 6, 2011
Future-oriented Statement of Operations (unaudited)
For the Year Ending March 31, 2012
|Net Cost of Operations|
|Net Cost of Operations||$8,797,221||$6,047,360|
Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.
Segmented information can be found in Note 9.
The accompanying notes form an integral part of this financial statement.
Subsequent to the preparation of this report, interim funding in the amount of approximately $3M was approved by the Treasury Board on March 10, 2011 for the 2011/2012 fiscal year.
Notes to the Future-oriented Statement of Operations (unaudited)
For the Year Ended March 31, 2012
1. Authority and purpose
The Commission for Public Complaints Against the RCMP (Commission) is an independent agency created by Parliament and is not part of the Royal Canadian Mounted Police (RCMP). The mandate of the Commission is set out in Part VII of the Royal Canadian Mounted Police Act. The Commission's fundamental role is to provide civilian review of the conduct of the RCMP members in carrying out their policing duties, thereby holding the RCMP accountable to the public. The Commission ensures that complaints about the conduct of RCMP members are examined fairly and impartially. Its findings and recommendations help identify, correct and prevent the recurrence of policing problems caused by the conduct of specific RCMP members or by deficiencies in RCMP policies or practices. The Commission has the authority to make findings and recommendations, but cannot impose discipline or make monetary awards to complainants.
Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization.
2. Significant assumptions
The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with 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:
The future-oriented statement of operations has 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 future-oriented statement of operation is prepared based on the Program Activity Architecture Structure approved by Treasury Board Secretariat for fiscal year 2011-12.
The main assumptions are as follows:
- (a) The organization's activities will remain substantially the same as in the previous year.
- (b) 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.
- (c) Estimated year end information for 2010-11 is used as the opening position for the 2011-12 forecasts.
These assumptions are adopted as at January 21, 2011.
3. Variations and changes to the Forecast Financial Information
While every attempt has been made to accurately forecast final results for the remainder of 2010-11 and for 2011-12, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing this financial statement, the Commission has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements 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 historical statements of operations include:
- (a) The timing and amounts of acquisition and disposals of equipment may affect gains/losses and amortization expense.
- (b) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
- (c) At the time of preparation of this financial statement approval was pending for interim funding in the amount of approximately $3M as received over the last three fiscal years to allow the Commission to continue to fulfill its existing mandate. The Treasury Board approved the interim funding on March 10, 2011 for the 2011/2012 fiscal year.
Once the Report on Plans and Priorities is presented, the Commission will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.
4. Summary of significant accounting policies
The Future-oriented Statement of Operations has been prepared in accordance with the Treasury Board's guide on the preparation of general purpose future-oriented financial statements and its 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 Commission is financed by the Government of Canada through Parliamentary appropriations. The cash accounting basis is used to recognize transactions affecting parliamentary appropriations. The future-oriented statement of operations is based on accrual accounting. Consequently, items presented in the Future-oriented Statement of Operations are not necessarily the same as the those provided through appropriations from Parliament. Note 5 provides a reconciliation between the bases of reporting.
Expenses are presented on an accrual basis:
- Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
- Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
Expenses are presented 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 the employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
(d) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Commission does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, or assets located on Indian reserves and museum collections.
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
|Asset class||Amortization Period|
|Other equipment including furniture||5 years|
|Computer Hardware||4 years|
|Computer Software||3 - 5 years|
|Leasehold improvements||Lesser of the remaining term of the lease or useful life of the improvement|
(e) Employee future benefits
- Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government of Canada. The Commission's contributions to the Plan are charged to expenses in the year incurred and represent the Commission's total obligation to the Plan. Current legislation does not require the Commission to make contributions for any actuarial deficiencies of the Plan.
- Severance benefits: Employees are entitled to severance benefits under 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.
5. Parliamentary appropriations
The Commission receives most of its funding through annual Parliamentary authorities. Items recognized in the statement of operations in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Commission 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 table:
|Net cost of operations||8,797,221||6,047,360|
|Adjustments for items affecting net cost of operations but not affecting appropriations:
|Services provided without charge by other government departments (Note 7)||(945,746)||(817,529)|
|Refund of prior year expenditures||423||423|
|Adjustments of accounts payable at year end||21,668||21,668|
|Increase (Decrease) in Employee severance benefits||(55,000)||(55,000)|
|Increase (Decrease) in vacation pay and compensatory leave||(7,026)||(7,026)|
|Revenue not available for spending||11,850||11,850|
|Amortization of tangible capital assets||(14,393)||(113,000)|
|Adjustments for items not affecting net cost of operations but affecting appropriations:
|Acquisition of tangible capital assets||514,114||323,000|
|Forecast authorities available||8,323,111||5,411,746|
|Program expenditures – Vote 70||$7,765,371||4,822,531|
|Contributions to employee benefits plan||557,740||589,215|
|Forecast authorities available||$8,323,111||5,411,746|
Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-12 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-11 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. Employee benefits
(a) Pension benefits
The Commission'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 Commission contribute to the cost of the Plan. The expense amounts for both 2010-11 and 2011-12 is estimated at $450,000 each year, represents approximately 1.9 times the contributions by employees.
The Commission's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
(b) Severance benefits
The Commission provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits measured as at March 31, is as follows:
|Accrued benefit obligation, beginning of year||$ 632,830||687,830|
|Expense or adjustment for the year||100,000||100,000|
|Benefits paid during the year||(45,000)||(45,000)|
|Accrued benefit obligation, end of year||$ 687,830||742,830|
7. Related party transactions
The Commission is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Commission receives common services which are obtained without charge from Government departments as disclosed below:
Common services provided without charge by other government departments
During the year the Commission is forecasted to receive services without charge from departments for accommodation, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the Commission's Future-oriented Statement of Operations as follows:
|Employer contributions to the health and dental insurance plans||217,561||217,561|
8. Subsequent Events
Subsequent to the preparation of this report, interim funding in the amount of approximately $3M was approved by the Treasury Board on March 10, 2011 for the 2011/2012 fiscal year. The interim funding numbers are not reflected in the 2012 forecast amounts.
9. Segmented Information
Presentation by segment is based on the Commission'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 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:
|Salaries and employee benefits||5,583,011||1,772,408||2,351,744||4,124,152|
|Professional and special services||1,787,924||472,249||407,430||879,680|
|Travel and relocation||231,977||102,533||15,589||118,122|
|Utilities, material and supplies||87,783||12,347||29,107||41,454|
|Net Cost of Operations|
|Net Cost of Operations||$8,797,221||$2,691,330||$3,356,030||$6,047,360|
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