Translation Bureau Revolving Fund
Public Accounts of Canada 2016 Volume III—Top of the page Navigation
- Real Property Services Revolving Fund
- Section 2—Supplementary information required by the Financial Administration Act
Statement of management responsibility
We have prepared the accompanying financial statements of the Translation Bureau Revolving Fund as required by and in accordance with the Treasury Board Policy on Special Revenue Spending Authorities. These financial statements were prepared by the management of the Fund in accordance with the significant accounting policies set out in note 2 of the financial statements, on a basis consistent with that of the preceding year.
Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. Information included in these financial statements is based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.
Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of financial management, accounting and reporting. Management maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of Government funds and safeguard the assets under the Fund's administration. Financial management and internal control systems are augmented by the maintenance of internal audit programs. Management also seeks to assure the objectivity and integrity of data in its financial statements by the careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.
Management has presented the financial statements to the external auditor who audited them and has provided an independent auditor's report opinion which is appended to these financial statements.
Approved by:
Julie Charron, CPA, CA
A/Chief Financial Officer,
Public Works and Government Services Canada
Donna Achimov
Chief Executive Officer,
Translation Bureau
Public Works and Government Services Canada
May 27, 2016
Gatineau, Canada
Statement of authority provided (used) (unaudited) for the year ended March 31
Table summary
The table presents on a comparative basis the statement of authority provided (used) (unaudited). It consists of five columns: item descriptions, current year with two columns—estimates and actual, and previous year with two columns—estimates and actual. Subtotals are displayed at operating source (use) of funds and totals are displayed at the authority provided (used).
(in thousands of dollars)
| 2016 | 2015 | |||
|---|---|---|---|---|
| Estimates | Actual | Estimates | Actual | |
| Net results | 28 | 1,818 | (negative 1,341) | 9,017 |
| Items not requiring use of funds | – | 3,795 | – | 3,226 |
| Operating source (use) of funds | 28 | 5,613 | (negative 1,341) | 12,243 |
| Items requiring use of funds | ||||
| Net tangible capital assets acquisitions | – | (negative 1,760) | – | (negative 2,871) |
| Employee severance benefits charged to the Fund | – | (negative 41) | – | (negative 1,577) |
| Transition payments for implementing salary payments in arrears (note 10) | – | (negative 45) | (negative 1,511) | (negative 3,246) |
| Net other assets and liabilities | – | 2,487 | – | 23 |
| Subtotal | – | 641 | (negative 1,511) | (negative 7,671) |
| Authority provided (used) | 28 | 6,254 | (negative 2,852) | 4,572 |
Reconciliation of unused authority (unaudited) as at March 31
Table summary
The table presents on a comparative basis the reconciliation of unused authority (unaudited). It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at net authority provided end of year and totals are displayed at the unused authority carried forward.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Debit balance in the accumulated net charge against the Fund's authority | 20,333 | 11,878 |
| Payables charged against the appropriation at year-end | (negative 11,075) | (negative 11,680) |
| Receivables credited to the appropriation at year-end | 7,624 | 10,408 |
| Other items | 6,391 | 4,902 |
| Net authority provided, end of year | 23,273 | 15,508 |
| Allocation from Treasury Board for the transition to salary payments in arrears | – | 1,511 |
| Authority limit (note 1) | 20,000 | 20,000 |
| Unused authority carried forward | 43,273 | 37,019 |
Independent auditors' report
To the Deputy Minister, Public Works and Government Services Canada
We have audited the accompanying financial statements of the Translation Bureau Revolving Fund (the "Fund"), which comprise the statement of financial position as at March 31, 2016, and the statements of operations and net liabilities and of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information. The financial statements have been prepared by management of the Fund based on the financial reporting provisions of section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities.
Management's responsibility for the financial statements
Management is responsible for the preparation of these financial statements in accordance with the financial reporting provisions of section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements of the Fund for the year ended March 31, 2016 are prepared, in all material respects, in accordance with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities.
Basis of accounting and restrictions on use
Without modifying our opinion, we draw attention to note 2 to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist the Fund to comply with the financial reporting provisions of section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the Fund and the Treasury Board of Canada and should not be used by parties other than the Fund and the Treasury Board of Canada.
Other matter
The financial statements of the Fund as at and for the year ended March 31, 2015 were audited by another auditor who expressed an unmodified opinion on those financial statements on May 28, 2015.
Deloitte LLP
Chartered Professional Accountants,
Licensed Public Accountants
May 27, 2016
Ottawa, Canada
Statement of financial position as at March 31
Table summary
The table presents on a comparative basis the statement of financial position. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: the assets and the liabilities and net liabilities, both displaying totals. Current item descriptions are grouped together for assets and for liabilities, both displaying subtotals.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Assets | ||
| Financial assets | ||
| Cash in transit | 4 | 2 |
| Accounts receivable (note 3) | 7,889 | 10,741 |
| Other assets (note 4) | 774 | 660 |
| Subtotal | 8,667 | 11,403 |
| Non-financial assets | ||
| Prepaid expenses | 19 | 62 |
| Tangible capital assets (note 5) | 7,751 | 9,786 |
| Subtotal | 7,770 | 9,848 |
| Total | 16,437 | 21,251 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (note 6) | 14,404 | 12,398 |
| Vacation pay and compensatory leave | 3,241 | 3,338 |
| Subtotal | 17,645 | 15,736 |
| Long-term liabilities | ||
| Employee severance benefits (note 7) | 6,002 | 6,043 |
| Total | 23,647 | 21,779 |
| Net liabilities (note 8) | (negative 7,210) | (negative 528) |
| Total | 16,437 | 21,251 |
Statement of operations and net liabilities for the year ended March 31
Table summary
The table presents on a comparative basis the statement of operations and net liabilities. It consists of three columns: item descriptions, current year and previous year. Item descriptions for revenues and operating expenses are grouped together, both displaying subtotals. Subtotals for revenues net of operating expenses are displayed at net results and totals are displayed at net liabilities end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Revenues | ||
| Translation services | 129,342 | 127,074 |
| Interpretation services | 16,932 | 17,165 |
| Terminology services | 13,850 | 14,017 |
| Other | 6,935 | 7,352 |
| Total revenues | 167,059 | 165,608 |
| Operating expenses | ||
| Salaries and employee benefits | 97,338 | 97,040 |
| Professional and special services | 32,152 | 23,589 |
| Corporate and administrative services | 21,386 | 21,861 |
| Occupancy costs | 7,822 | 8,659 |
| Amortization | 3,795 | 3,164 |
| Transportation and telecommunications | 1,046 | 1,221 |
| Employee severance benefits (note 7) | 920 | (negative 241) |
| Other expenses | 655 | 649 |
| Utilities, materials and supplies | 127 | 649 |
| Total operating expenses | 165,241 | 156,591 |
| Net results | 1,818 | 9,017 |
| Net liabilities, beginning of year | (negative 528) | (negative 2,171) |
| Transfer of the transition payments for implementing salary payments in arrears (note 10) | (negative 45) | (negative 3,246) |
| Net financial resources provided and change in the accumulated net charge against the Fund's authority, during the year (note 8) | (negative 8,455) | (negative 4,128) |
| Net liabilities, end of year (note 8) | (negative 7,210) | (negative 528) |
Statement of cash flow for the year ended March 31
Table summary
The table presents on a comparative basis the statement of cash flows. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: operating activities and investing activities, both displaying subtotals. Subtotals are displayed at net financial resources used and change in the accumulated net charge against the Fund's authority account during the year. Totals are displayed at accumulated net charge against the Fund's authority account end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Operating activities | ||
| Net results | 1,818 | 9,017 |
| Items not requiring use of funds | ||
| Amortization | 3,795 | 3,164 |
| Loss on disposal of capital assets | – | 62 |
| Subtotal | 3,795 | 3,226 |
| Variations in statement of financial position | ||
| (Increase) decrease in cash in transit | (negative 2) | 6 |
| Decrease (increase) in accounts receivable | 2,852 | (negative 1,551) |
| Increase in other assets | (negative 114) | (negative 170) |
| Decrease (increase) in prepaid expenses | 43 | (negative 32) |
| Increase in accounts payable and accrued liabilities | 2,006 | 1,880 |
| Decrease in vacation pay and compensatory leave | (negative 97) | (negative 554) |
| Decrease in employee severance benefits | (negative 41) | (negative 1,577) |
| Subtotal | 4,647 | (negative 1,998) |
| Transition payments for implementing salary payments in arrears (note 10) | (negative 45) | (negative 3,246) |
| Net financial resources provided by operating activities | 10,215 | 6,999 |
| Capital investing activities | ||
| Acquisitions of tangible capital assets (note 5) | (negative 1,760) | (negative 2,871) |
| Net financial resources used by capital investing activities | (negative 1,760) | (negative 2,871) |
| Net financial resources provided and change in the accumulated net charge against the Fund's authority, during the year (note 8) | 8,455 | 4,128 |
| Accumulated net charge against the Fund's authority, beginning of year | 11,878 | 7,750 |
| Accumulated net charge against the Fund's authority, end of year | 20,333 | 11,878 |
Notes to the financial statements for the year ended March 31, 2016
1. Authority and purpose
The Translation Bureau Revolving Fund (the "Fund") is a Special Operating Agency that provides, on a cost recovery basis, translation, technolinguistic and other linguistic services to the judiciary and federal departments and agencies and, upon request, to other governments in Canada and international organizations. Although the Translation Bureau has existed since 1934 when the Translation Bureau Act came into effect, it was not until April 1993 that the Treasury Board approved the establishment of the Bureau as a Special Operating Agency, effective April 1, 1995. The Translation Bureau also became a revolving fund on April 1, 1995.
The Fund has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for the purposes of working capital, capital acquisitions and the temporary financing of accumulated operating deficits, the total of which is not to exceed $20,000,000 at any time.
2. Significant accounting policies
These financial statements have been prepared in accordance with the significant accounting policies set out below to comply with the requirements of the Treasury Board of Canada Policy on Special Revenue Spending Authorities and the reporting requirements for revolving funds prescribed by the Receiver General for Canada. The basis of accounting used in these financial statements differs from Canadian public sector accounting standards because:
- no liability is recorded for sick leave; and
- the net debt indicator and statement of change in net debt are not presented in the financial statements.
The significant accounting policies are as follows:
a. Revenues
Revenues from translation services performed by the Fund for other government departments and agencies and external clients are recognized using the percentage of completion method based on the proportion of services provided at year end.
Revenues from the terminology standardization program, interpretation services, and other services are recognized as services are rendered.
b. Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized. An allowance is made for receivables where recovery is considered uncertain.
c. Expenses
All expenses are recorded on an accrual basis.
Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
d. Tangible capital assets
Tangible capital assets are amortized from the year of acquisition on a straight-line basis over their estimated useful life as follows:
Table summary
The table presents capital assets and consists of two columns: the asset categories with their respective amortization periods.
| Category | Estimated useful life |
|---|---|
| Machinery and equipment | 3 to 15 years |
| Computer hardware | 3 to 10 years |
| Computer software | 3 years |
| Leasehold improvements | Lesser of the remaining term of the occupancy instrument or useful life of the improvement |
| Assets under construction | Once in service, in accordance with asset class |
e. Employee future benefits
Pension benefits
Eligible employees of the Fund participate in the Public Service Pension Plan (the "Plan"), a multiemployer pension plan administered by the Government of Canada. The Fund's contributions to the Plan are charged to expenses in the year incurred and represent the total Fund obligation to the Plan. The Fund'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
Eligible employees of the Fund are entitled to severance benefits under labour contracts or conditions of employment. These benefits are earned 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.
f. Sick leave
Employees are permitted to accumulate unused sick leave. However, such leave entitlements may only be used in the event of an illness. As per current government practice, unused sick leave upon employee termination is not payable to the employee. Accordingly, no amount has been accrued in these financial statements.
g. Financial instruments
The fair value of the financial instruments approximates costs unless otherwise specified. The Fund's financial instruments consist of cash in transit, accounts receivable, other assets, and accounts payable and accrued liabilities. It is management's opinion that the Fund is not exposed to significant interest, currency or credit risks rising from these financial instruments.
h. Measurement uncertainty
The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses reported in the financial statements. At the time of preparation of these financial statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the allowance for doubtful accounts on external receivables, estimated useful lives of tangible capital assets, accrued liabilities, the liability for vacation pay and compensatory leave and the liability for employee severance benefits. 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. Accounts receivable
Table summary
The table presents on a comparative basis the accounts receivable. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Other government departments and agencies | 7,624 | 10,408 |
| External parties | 268 | 337 |
| Subtotal | 7,892 | 10,745 |
| Less: allowance for doubtful accounts on receivables from external parties | (negative 3) | (negative 4) |
| Net accounts receivable | 7,889 | 10,741 |
4. Other assets
Table summary
The table presents on a comparative basis the other assets. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Sales tax refundable advances | 768 | 655 |
| Other advances | 6 | 5 |
| Total other assets | 774 | 660 |
5.Tangible capital assets
Table summary
The table presents the capital assets (above) and the accumulated amortization (below), both displaying subtotals. The capital asset section of the table consists of five columns (item descriptions, balance beginning of year, Dispositions and transfers, acquisitions and balance end of year) and the accumulated amortization section of the table consists of five columns (item descriptions, balance beginning of year, Dispositions and transfers, amortization and balance end of year). The bottom of the table displays the capital assets, net of accumulated amortization totals at net for the columns: balance beginning of year and balance end of year.
(in thousands of dollars)
| Cost | Balance at beginning of year | Acquisitions | Dispositions and transfers | Balance at end of year |
|---|---|---|---|---|
| Machinery and equipment | 114 | – | (negative 114) | – |
| Computer hardware | 1,930 | – | – | 1,930 |
| Computer software | 29,135 | 1,019 | 182 | 30,336 |
| Leasehold improvements | 9,220 | 158 | (negative 631) | 8,747 |
| Assets under construction | 451 | 583 | (negative 182) | 852 |
| Total | 40,850 | 1,760 | (negative 745) | 41,865 |
| Accumulated amortization | Balance at beginning of year | Current year amortization | Dispositions and transfers | Balance at end of year |
| Machinery and equipment | (negative 114) | – | 114 | – |
| Computer hardware | (negative 1,930) | – | – | (negative 1,930) |
| Computer software | (negative 22,249) | (negative 3,231) | – | (negative 25,480) |
| Leasehold improvements | (negative 6,771) | (negative 564) | 631 | (negative 6,704) |
| Total | (negative 31,064) | (negative 3,795) | 745 | (negative 34,114) |
| Net book value | 2016 | 2015 | ||
| Machinery and equipment | – | – | ||
| Computer hardware | – | – | ||
| Computer software | 4,856 | 6,886 | ||
| Leasehold improvements | 2,043 | 2,449 | ||
| Assets under construction | 852 | 451 | ||
| Total | 7,751 | 9,786 | ||
6. Accounts payable and accrued liabilities
Table summary
The table presents the accounts payable and accrued liabilities on a comparative basis. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| External parties | 9,705 | 10,025 |
| Other government departments and agencies | 1,370 | 1,655 |
| Subtotal | 11,075 | 11,680 |
| Accrued liabilities | 3,329 | 718 |
| Total accounts payable and accrued liabilities | 14,404 | 12,398 |
7. Employee severance benefits
The Fund provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid by future authorities.
Commencing in 2012, as part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or to collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.
Information about the severance benefits, measured as at March 31, is as follows:
Table summary
The table presents on a comparative basis the employee severance benefits. It consists of three columns: item descriptions, current year and previous year. The totals net of the expense for the year are displayed at accrued benefit obligation end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Accrued benefit obligation, beginning of year | 6,043 | 7,620 |
| Expense for the year | 920 | (negative 241) |
| Benefits paid during the year | (negative 961) | (negative 1,336) |
| Accrued benefit obligation, end of year | 6,002 | 6,043 |
8. Net liabilities
The accumulated surplus is the accumulation of each fiscal year's surplus net of deficits since the inception of the Fund.
The accumulated net charge against the Fund's authority represents the cumulative receipts and disbursements over the life of the Fund.
Table summary
The table presents on a comparative basis the net liabilities. It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at accumulated deficit closing balance and totals are displayed at net liabilities end of year.
(in thousands of dollars)
| 2016 | 2015 | |
|---|---|---|
| Accumulated surplus, beginning of year | 11,350 | 5,579 |
| Net results | 1,818 | 9,017 |
| Transfer of the transition payments for implementing salary payments in arrears | (negative 45) | (negative 3,246) |
| Accumulated surplus, end of year | 13,123 | 11,350 |
| Accumulated net charge against the Fund's authority, beginning of year | (negative 11,878) | (negative 7,750) |
| Net financial resources provided and change in the accumulated net charge against the Fund's authority, during the year | (negative 8,455) | (negative 4,128) |
| Accumulated net charge against the Fund's authority, end of year | (negative 20,333) | (negative 11,878) |
| Net liabilities, end of year | (negative 7,210) | (negative 528) |
9. Contractual obligations
The nature of the Fund's activities can result in some large multi-year contracts and obligations whereby the Fund will be obligated to make future payments when the services/goods are received. Estimated future payments are as follows:
Table summary
The table presents the total annual contractual obligations. The left hand column lists the years, and the right hand column lists the estimated future payments. The last row presents the totals for those years.
(in thousands of dollars)
| Year ending March 31 | |
|---|---|
| 2017 | 8,320 |
| 2018 | 5,702 |
| 2019 | 3,744 |
| 2020 | 887 |
| 2021 and thereafter | 1,339 |
| Total contractual obligations | 19,992 |
10. Transfer of the transition payments for implementing salary payments in arrears
The Government of Canada implemented salary payments in arrears in 2014–2015. As a result, a one-time payment was issued to employees and will be recovered from them in the future. Payments issued this year relate to employees that were on leave without pay when the initial one-time transition payments were issued and have since returned to work. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the revolving fund. However, it did result in the use of authorities by the revolving fund and impacted the accumulated net charge against the Fund's authority. Prior to year-end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, which is responsible for the administration of the Government pay system.
11. Related party transactions
Through common ownership, the Fund is related to all Government of Canada departments, agencies, and Crown corporations. The Fund enters into transactions with these entities in the normal course of business and on normal trade terms.
12. Comparative figures
Comparative figures have been reclassified to conform to the current year's presentation.
Public Accounts of Canada 2016 Volume III—Bottom of the page Navigation
- Real Property Services Revolving Fund
- Section 2—Supplementary information required by the Financial Administration Act
- Date modified: