Financial Statements 2010-2011

unaudited

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011, and all information contained in these statements rests with the management of the Commission for Public Complaints Against the RCMP (CPC). These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on 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 CPC's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in CPC's Departmental Performance Report, is consistent with these financial statements.

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

The financial statements of the CPC have not been audited.

Originally signed by:

_____________________
Ian McPhail, Q.C.
Interim Chair

Date: August 24, 2011

_____________________
Helen Banulescu
Chief Financial Officer

Date: August 24, 2011


Statement of Financial Position (unaudited)

Assets as at March 31 (in dollars)
Financial Assets 2011 2010
Due from Consolidated Revenue Fund $ 274,238 $ 124,855
Accounts receivable and advances (Note 4) 50,792 12,919
Total Financial Assets 325,030 137,774
Assets as at March 31 (in dollars)
Non-financial assets 2011 2010
Tangible capital assets (Note 8) 281,877 195,681
Total Asset $ 606,907 $ 333,455
Liabilities and Equity of Canada as at March 31 (in dollars)
Liabilities 2011 2010
Accounts payable and accrued liabilities (note 5) $ 273,839 $ 124,555
Vacation pay and compensatory leave 169,023 154,337
Employee future benefits (Note 6) 726,799 632,830
Total Liabilities 1,169,661 911,722
Liabilities and Equity of Canada as at March 31 (in dollars)
Equity of Canada (562,753) (578,267)
Total Liabilities and Equity of Canada $ 606,907 $ 333,455

The accompanying notes form an integral part of these financial statements

_____________________
Ian McPhail, Q.C.
Interim Chair

Date: August 24, 2011

_____________________
Helen Banulescu
Chief Financial Officer

Date: August 24, 2011


Statement of Operations (unaudited)

Statement of Operations For the Year Ended March 31 (in dollars)
Expenses 2011 2010
Civilian Review of RCMP members' conduct $ 3,594,568 $ 3,421,877
Internal Services 4,842,133 4,558,548
Total Expenses 8,436,701 7,980,425
Statement of Operations For the Year Ended March 31 (in dollars)
Revenues 2011 2010
Civilian Review of RCMP members' conduct $ 329 $ 50
Internal Services 13,438 11,735
Total Revenues 13,768 11,785
Net Cost of Operations $ 8,422,933 $ 7,968,640

Segmented information (Note 9)

The accompanying notes form an integral part of these financial statements

Statement of Equity of Canada (unaudited)

Statement of Equity of Canada For the Year Ended March 31 (in dollars)
  2011 2010
Equity of Canada, beginning of year $ (578,266) $ (832,129)
Net cost of operations (8,422,933) (7,968,640)
Net cash provided by Government 7,316,135 7,925,952
Change in due from the Consolidated Revenue Fund) 149,383 (484,854)
Services provided without charge by other government departments (Note 7) 972,928 781,405
Equity of Canada, end of year $ (562,753) $ (578,267)

The accompanying notes form an integral part of these financial statements

Statement of Cash Flows (unaudited)

Statement of Cash Flows For the Year Ended March 31 (in dollars)
Operating activities 2011 2010
Net Cost of Operations $ 8,422,933 $ 7,968,640
Non-cash items:
Services received without charge from other government departments (Note 7) (972,928) (781,405)
Amortization of tangible capitale assets (Note 8) (37,187) (35,703)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances 37,873 (38,236)
Decrease (increase) in accounts payable and accrued liabilities (149,283) 529,517
Decrease (increase) in vacation pay and compensatory leave (14,686) 58,999
Decrease (increase) in employee future benefits (Note 6) (93,969) 74,466
Cash used by operating activities 7,192,753 7,776,278
 
Capital investing activities
Acquisitions of tangible capital assets (Note 8) 123,383 149,673
Net cash provided by Government of Canada $ (7,316,135) $ (7,925,952)

The accompanying notes form an integral part of these financial statements

Notes to the Financial Statements (unaudited)

For the Year Ended March 31, 2011

1. Authority and purpose

The Commission for Public Complaints Against the RCMP (CPC) 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 (RCMP Act). The CPC is entirely separate from and independent of the RCMP. The mandate of the CPC is set out in Part VII of the RCMP Act and can be summarized as follows:

  • To receive complaints from the public about the conduct of RCMP members;
  • To initiate complaints to delve into RCMP conduct when it is in the public interest to do so;
  • To conduct reviews when complainants are not satisfied with the RCMP’s disposition of their complaints;
  • To hold hearings and conduct investigations; and
  • To report findings and recommendations.

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. Summary of 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 authorities

The CPC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the CPC 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 CPC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the CPC is deposited to the CRF and all cash disbursements made by the CPC 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) Amount due from/to 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 CPC 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 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.

(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 contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

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

Accounts receivables and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) 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 CPC 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.

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

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(i) 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 are used are the liability for employee future benefits and the estimated 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.

3. Parliamentary authorities

The CPC 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 CPC 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:

Reconciliation of net cost of operations to current year authorities used (in dollars)
  2011 2010
Net cost of operations $ 8,422,933 $ 7,968,640
Adjustments for items affecting net cost of operations but not affecting authorities: 2011 2010
Services provided without charge by other government departments (Note 7) (972,928) (781,405)
Refund of prior years' expenditures 1,021 3,263
Adjustments of accounts payable at year end 21,668 99,783
Decrease (increase) in Employee future benefits (93,969) 74,466
Decrease (increase) in vacation pay and compensatory leave (14,687) 58,999
Revenue not available for spending 13,768 11,785
Amortization of tangible capital assets (37,187) (35,703)
  (1,082,313) (568,812)
Adjustments for items not affecting net cost of operations but affecting authorities: 2011 2010
Acquisition of tangible capital assets 123,383 149,673
Current year authorities used $ 7,464,003 $ 7,549,501

(b) Authorities provided and used:

Authorities provided and used: (in dollars)
Authorities Provided: 2011 2010
Program expenditures – Vote 70 $ 7,775,528 $ 7,965,414
Statutory amounts – Contributions to employee benefits plan $ 618,179 $ 601,776
Less:
Lapsed: Operating
(929,704) (1,017,689)
Current year authorities used $7,464,003 7,549,501

4. Accounts receivable and advances

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

Accounts receivable and advances (in dollars)
  2011 2010
Receivables from other government departments and agencies $ 50,192 $ 12,119
Employee advances 600 800
Total $ 50,792 $ 12,919

5. Accounts payable and accrued liabilities

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

Accounts payable and accrued liabilities (in dollars)
  2011 2010
Accounts payable to other government departments and agencies $ 116,268 $ 102,517
Accounts payable to external parties 157,570 22,039
Accrued liabilities - -
Total $ 273,839 $ 124,555

6. Employee future benefits

(a) Pension benefits

The CPC'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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the CPC contribute to the cost of the Plan. The 2010-11 expense amounts to $433,962 ($434,483 in 2009-10), which represents approximately 1.9 times (1.9 in 2009-10) the contributions by employees.

The CPC'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 CPC 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:

Severance benefits (in dollars)
  2011 2010
Accrued benefit obligation, beginning of year $ 632,830 $ 707,296
Expense or adjustment for the year 93,969 (74,061)
Benefits paid during the year - (405)
Accrued benefit obligation, end of year $ 726,799 $ 632,830

7. Related party transactions

The CPC is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The CPC enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the CPC received common 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 CPC received common service 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 CPC's Statement of Operations as follows:

Common services provided without charge by other government departments (in dollars)
  2011 2010
Accommodation $ 713,248 $ 563,844
Employer contributions to the health and dental insurance plans 259,680 217,561
  $ 972,928 $ 781,405

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 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 Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the CPC's Statement of Operations.

b) Other transactions with related parties

Other transactions with related parties (in dollars)
  2011 2010
Expenses – Other government departments and agencies $ 828,477 $ 455,095

8. Tangible capital assets

For the Year Ended March 31, 2011

Cost
Capital asset class Opening
balance
1/04/2010
Acquisitions Disposals
&
write-offs
Closing
balance
31/03/2011
Computer hardware 66,357 0   66,357
Computer software 15,569 0   15,569
Other equipment including furniture 122,957 0   122,957
Leasehold improvements 79,501 123,383   202,884
Total  $284,384  $123,383  $ -  $407,767

Accumulated Amortization
Capital asset class Opening
balance
01/04/2010
Amortization Disposals
&
write-offs
Closing
balance
31/03/2011
Computer hardware 4,596 9,480   14,076
Computer software   3,114   3,114
Other equipment including furniture 4,607 24,591   29,198
Leasehold improvements 79,500 1   79,502
Total  $88,703  $37,187    $125,890

Net book value
Capital asset class 2011 2010
Computer hardware 52,281 61,761
Computer software 12,455 15,569
Other equipment including furniture 93,759 118,350
Leasehold improvements 123,382 1
Total  $281,877  $195,681

Amortization expenses for the year ended March 31, 2011, is $37,187 ($35,703 for the year ended March 31, 2010).

9. Segmented Information

For the Year Ended March 31, 2011
(in dollars)

Presentation by segment is based on the CPC'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:

For the Year Ended March 31, 2011 Civilian Review
2011
Internal Services
2011
Total
2011
Total
2010
Expenses
Salaries and employee benefits $ 2,694,714 $ 2,523,438 $5,218,152 $ 4,855,018
Professional and special services 387,834 1,269,511 1,657,345 1,842,509
Accommodation 391,174 338,309 729,483 571,579
Travel and relocation 67,063 80,904 147,967 152,605
Equipment 3,487 206,454 209,941 122,768
Utilities, material and supplies 17,325 109,977 127,302 111,943
Communication 18,201 66,447 84,648 96,292
Equipment rentals 9,096 76,555 85,651 93,801
Information 4,108 29,565 33,673 70,820
Amortization - 37,187 37,187 35,703
Repairs 1,566 103,786 105,352 27,387
Other - - - -
Total Expenses 3,594,568 4,842,133 8,436,701 7,980,425
Revenues
Other revenues 329 13,438 13,768 11,785
Net Cost of Operations
Net Cost of Operations $ 3,594,239 $ 4,828,695 $ 8,422,933 $ 7,968,640
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