Financial Statements (unaudited) 2012-2013

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013, and all information contained in these statements rests with the management of the Commission for Public Complaints Against the RCMP (Commission). 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 fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Commission's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the Commission'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 (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 Commission 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 Commission is subject to periodic Core Control Audits performed by the Office of the Comptroller General (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.

A Core Control Audit was completed in 2011–2012 by the OCG. The Audit Report and related Management Action Plan are posted on the departmental website.

The financial statements of the Commission have not been audited.

Originally signed by:

_____________________
Ian McPhail, Q.C.
Interim Chair
Ottawa, Canada
August 21, 2013

_____________________
Helen Banulescu
Chief Financial Officer
Ottawa, Canada
August 16, 2013


Statement of Financial Position (unaudited)

As at March 31
(in dollars)

  2013 2012
Liabilities    
Accounts payable and accrued liabilities (Note 4) $552,435 $252,461
Vacation pay and compensatory leave 225,493 195,712
Employee future benefits (Note 5) 377,400 338,010
Total Liabilities 1,155,328 786,183
Financial assets    
Due from Consolidated Revenue Fund 552,009 253,461
Accounts receivable and advances (Note 6) 41,391 55,419
Total financial assets 593,400 308,880
Departmental Net Debt 561,927 477,303
Non-financial assets    
Tangible capital assets (Note 8) 551,526 703,201
Total non-financial assets 551,526 703,201
Departmental net financial position $(10,402) $225,898

The accompanying notes form an integral part of these financial statements

_____________________
Ian McPhail, Q.C.
Interim Chair
Ottawa, Canada
August 21, 2013

_____________________
Helen Banulescu
Chief Financial Officer
Ottawa, Canada
August 16, 2013


Statement of Operations and Departmental Net Financial Position (unaudited)

For the Year Ended March 31
(in dollars)

  2013
Planned Results
(Restated)
2013 2012
Expenses      
Civilian Review of RCMP members' conduct $2,527,862 $3,789,274 $4,058,456
Internal Services 3,705,839 5,620,111 4,082,610
Total expenses 6,233,701 9,409,385 8,141,066
  2013
Planned Results
(Restated)
2013 2012
Revenues      
Miscellaneous revenues 10,000 7,957 7,993
Revenues earned on behalf of government (10,000) (7,351) (7,993)
Total revenues - - -
Net cost of operations before government funding and transfers 6,223,701 9,409,385 8,141,066
  2013
Planned Results
(Restated)
2013 2012
Government funding and transfers      
Net cash provided by government   7,651,773 7,829,613
Change in due from the Consolidated Revenue Fund   298,548 (20,777)
Services provided without charge by other government departments (Note 7)   1,222,764 1,120,881
Net cost of operations after government funding and transfers   236,300   (788,651)
  2013
Planned Results
(Restated)
2013 2012
Departmental net financial position – Beginning of Year   225,898 (562,753)
  2013
Planned Results
(Restated)
2013 2012
Departmental net financial position – End of Year   $(10,402) $225,898

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)

  2013 2012
Net cost of operations after government funding and transfers $236,300 $(788,651)
Change due to tangible capital assets    
Acquisition of tangible capital assets 27,630 491,603
Amortization of tangible capital assets (179,306) (70,280)
Total change due to tangible capital assets (151,676) 421,323
Net increase (decrease) in departmental net debt due to operations 84,624 (367,328)
Departmental net debt beginning of year 477,303 844,631
Departmental net debt end of year $561,927 $477,303

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

Statement of Cash Flows (unaudited)

For the Year Ended March 31
(in dollars)

  2013 2012
Operating activities    
Net cost of operations before government funding and transfers $9,409,385 $8,141,066
Non-cash items    
Amortization of tangible capital assets (Note 8) (179,306) (70,280)
Services provided without charge by other government  departments (Note 7) (1,122,764) (1,120,881)
Variations in statement of financial position    
Decrease (increase) in accounts receivable and advances (14,208) 4,627
Decrease (increase) in accounts payable and accrued liabilities (299,974) 21,378
Decrease (increase) in vacation pay and compensatory leave (29,781) (26,689)
Decrease (increase) in employee future benefits (39,390) 388,789
Cash used in operating activities 7,624,143 7,338,010
Capital investing activities    
Acquisitions of tangible capital assets (Note 8) 27,630 491,603
Cash used in capital investing activities 27,630 491,603
Net cash provided by Government of Canada $7,651,773 $7,829,613

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 Commission for Public Complaints Against the RCMP (Commission) 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 Commission is entirely separate from and independent of the RCMP. The mandate of the Commission 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 and examine RCMP conduct when it is in the public interest to do so;
  • to conduct reviews when complainants are not satisfied with the RCMP's handling of their complaints;
  • to hold hearings and conduct investigations; and
  • to report findings and make recommendations.

The Commission 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 Commission is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Commission does 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 Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012–2013 Report on Plans and Priorities. The future-oriented financial statements for 2012–2013 have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in a $10,000 increase in net costs of operations.  In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

(b) Net cash provided by government

The Commission operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF and all cash disbursements made by the Commission are paid from the CRF. The net cash provided by the 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 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 Commission is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) 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 Commission's 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 in 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 estimated cost.

(f) Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer 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. 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.

Severance benefits: Employees entitled to severance benefits under labour contracts or 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.

(g) Accounts receivable and advances

Accounts receivables 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 Commission 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
Computer hardware 4 Years
Computer software 3-5 Years
Leasehold improvements Lesser of the remaining term of the lease or useful life of improvement
Other equipment, including furniture 5 Years

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 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.

3. Parliamentary authorities

The Commission 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 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 tables:

(a) Reconciliation of net cost of operations to current year authorities used:

  2013
(in dollars)
2012
(in dollars)
Net cost of operations before government funding and transfers $9,409,385 $8,141,066
Adjustments for items affecting net cost of operations but not affecting authorities:    
Amortization of tangible capital assets (Note 8) (179,306) (70,280)
Services provided without charge by other government departments (Note 7) (1,222,764) (1,120,881)
Decrease (increase) in vacation pay and compensatory leave (29,781) (26,689)
Decrease (increase) in employee future benefits (39,390) 388,789
Bad debt expenses 0 (1,079)
Refund of prior year expenditures 28,435 6,708
Adjustments to previous years' payables at year-end 16,792 71,662
Total items affecting net cost of operations but not affecting authorities (1,426,014) (751,770)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisitions of tangible capital assets (Note 8) 27,630 491,603
Total items not affecting net cost of operations but affecting authorities 27,630 491,603
Current year authorities used 8,011,001 7,880,899

(b) Authorities provided and used:

  2013
(in dollars)
2012 (in dollars)
Authorities provided:    
Program expenditures - Vote 65 7,962,033 8,094,978
Contributions to employee benefits plan 827,623 589,215
Less:    
Lapsed: Program (778,654) (803,294)
Current year authorities used $8,011,001 $7,880,899

4. Accounts payable and accrued liabilities

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

  2013
(in dollars)
2012
(in dollars)
Accounts payable to other government departments and agencies $309,668 $82,068
Accounts payable to external parties 207,871 137,595
Total accounts payable 517,538 219,663
Accrued liabilities 34,896 32,798
Total accounts payable and accrued liabilities $552,435 $252,461

5. Employee future 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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Commission contribute to the cost of the plan. The 2012–2013 expense amounts to $590,923 ($408,907 in 2011–2012), which represents approximately 1.7 times the contributions by employees (1.8 in 2011–2012). 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

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. Information about the severance benefits, measured as at March 31, is as follows:

  2013
(in dollars)
2012
(in dollars)
Accrued benefit obligation, beginning of year $338,010 $726,799
Expense for the year 245,524 (56,922)
Benefits paid during the year (206,134) (331,867)
Accrued benefit obligation, end of year $377,400 $338,010

6. Accounts receivable and advances

The following table presents details of accounts receivable and advances:

  2013
(in dollars)
2012
Restated
(Note 10)
(in dollars)
Receivables – Other government departments and agencies $41,191 $54,819
Receivables – External parties 0 1,079
Employee advances 200 600
Subtotal 41,391 56,498
Allowance for doubtful accounts on receivables from external parties - (1,079)
Net accounts receivable $41,391 $55,419

7. Related party transactions

The Commission is related as a result of common ownership to all government departments, agencies, and Crown corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Commission has an agreement with Public Safety Canada related to the provision of finance, human resources, and information technology and management services. Also, during the year, the Commission 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 Commission 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 Commission's Statement of Operations and Departmental Net Financial Position as follows:

  2013
(in dollars)
2012
(in dollars)
Accommodation $766,178 $757,258
Employer's contribution to the health and dental insurance plans 456,586 363,623
Total $1,222,764  $1,120,881

(b) Other transactions with related parties

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 Commission's Statement of Operations and Departmental Net Financial Position.

  2013
(in dollars)
2012
(in dollars)
Expenses – Other government departments and agencies 681,942 791,910

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

8. Tangible capital assets
(in dollars)

Cost (in dollars)
Capital asset class Opening balance
Acquisitions Disposals & write-offs Closing balance
Computer hardware 66,357 0 0 66,357
Computer software 15,569 0 0 15,569
Other equipment including furniture 170,436 0 0 170,436
Assets under construction 0 27,630 0 27,630
Leasehold improvements 647,008 0 0 647,008
Total $899,370 $27,630 $0 $927,000
Accumulated Amortization (in dollars)
Capital asset class Opening balance
Amortization Disposals & write-offs Closing balance
Computer hardware 23,556 9,480 0 33,036
Computer software 6,228 3,114 0 9,342
Other equipment including furniture 56,038 34,087 0 90,125
Assets under construction 0 0 0 0
Leasehold improvements 110,347 132,625 0 242,972
Total $196,169 $179,306 $0 $375,475
Net book value (in dollars)
Capital asset class 2013 2012
Computer hardware 33,321 42,801
Computer software 6,227 9,341
Other equipment including furniture 80,311 114,398
Assets under construction 27,630 0
Leasehold improvements 404,037 536,661
Total $551,525 $703,201

* Amortization expense for the year ended March 31, 2013, is $179,306 ($70,280 for the year ended March 31, 2012).

9. Segmented information

Presentation by segment is based on the Commission'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 programs, 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 of
RCMP members'
conduct
2013
(in dollars)
Internal
Services
2013
(in dollars)
Total
2013
(in dollars)
Total
2012)
Salaries and employee benefits $2,856,067 $3,597,698 $6,453,765 $5,556,832
Professional and special services 304,264 871,098 1,175,362 1,227,625
Accommodation 405,464 378,163 783,627 779,242
Repairs 160 57,780 57,940 12,687
Travel and relocation 119,880 54,553 174,433 132,213
Equipment 60,346 294,290 354,636 91,733
Communication 18,545 50,941 69,486 88,856
Utilities, material and supplies 9,075 73,902 82,977 82,102
Equipment rentals 15,112 53,071 68,183 79,077
Amortization 0 179,306 179,306 70,280
Information 361 9,309 9,670 19,411
Bad debt 0 0 0 1,079
Total operating expenses 3,789,274 5,620,111 9,409,385 8,141,066
Revenues
  Civilian review of
RCMP members'
conduct
2013 (in dollars)
Internal Services
2013 (in dollars)
Total
2013 (in dollars)
Total
2012 (in dollars)
Miscellaneous revenues   (7,531) (7,531) (7,993)
Revenue earned on behalf of government   7,531 7,531 7,993
Total revenues   - - -
  Civilian review of
RCMP members'
conduct
2013 (in dollars)
Internal Services
2013 (in dollars)
Total
2013 (in dollars)
Total
2012 (in dollars)
Net cost from continuing operations $3,789,274 $5,620,111 $9,409,385 $8,141,066
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