Geomatics Canada Revolving Fund
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Statement of management responsibility
We have prepared the accompanying financial statements of the Geomatics Canada Revolving Fund as required by and in accordance with the Treasury Board Directive on Charging and Special Financial Authorities and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared by management of the Fund in accordance with the significant accounting policies set out in note 2 of the 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. The information included in these financial statements in based on management's best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, the Fund maintains a set of accounts, which provides a centralized record of the Fund's financial statements and benefits from the advice of accounting personnel of Corporate Management and Services Sector (CMSS). Financial information contained in the ministerial statements and elsewhere in the Public Accounts of Canada is consistent with that in these financial statements, unless indicated otherwise.
CMSS develops and disseminates financial management and accounting policies and issues specific directives, which maintains standards of accounting and financial management. Transactions are executed in accordance with prescribed regulations, within parliamentary authorities and are properly recorded to maintain accountability of Government funds and safeguard the Fund's assets. Financial management and internal control systems are maintained at appropriate costs and are augmented by the maintenance of internal audit programs. Management also seeks to assure the objectivity and integrity of data in its financial statements. This is accomplished by a careful selection, training and development of qualified staff, organizational arrangements that provide appropriate divisions of responsibility and communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.
In order to assure maximum objectivity and freedom from bias, an external auditor has examined the financial data contained in these financial statements. Its role is to express an independent opinion as to whether the Fund's financial statements, considered in their entirety, present fairly, in conformity with stated accounting policies, the Fund's financial condition and transactions. This judgment is based on procedures described in the opinion appended to these financial statements.
Approved by:
Grace Chennette, CPA, CMA
Deputy Chief Financial Officer
Corporate Management and Services Sector
Grace Chennette, CPA, CMA
Deputy Chief Financial Officer
for Cheri Crosby
Assistant Deputy Minister,
Chief Financial Officer
Corporate Management and Services Sector
May 30, 2018
Ottawa, Canada
Statement of authority provided (used) (unaudited) for the year ended March 31
(in thousands of dollars)
| 2018 | 2017 | |||
|---|---|---|---|---|
| EstimatesLink to footnote 1 | Actual | EstimatesLink to footnote 1 | Actual | |
| Net results | 100 | 320 | 100 | 574 |
| Items not requiring use of funds | – | – | – | – |
| Operating source of funds | 100 | 320 | 100 | 574 |
| Items requiring use of funds | ||||
| Net other assets (liabilities) | – | (negative 138) | – | 36 |
| Authority provided (used) | 100 | 182 | 100 | 610 |
Table notesThe dash means that the amount is 0 or is rounded to 0. | ||||
Reconciliation of unused authority (unaudited) as at March 31
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Debit balance in the accumulated net charge against the Fund's authority account | 3,559 | 3,450 |
| Payables at year-end charged against the appropriation account after March 31 | (negative 929) | (negative 1,002) |
| Net authority provided, end of year | 2,630 | 2,448 |
| Authority limit | 5,000 | 5,000 |
| Unused authority carried forward | 7,630 | 7,448 |
Independent auditor's report
To the Assistant Deputy Minister and Chief Financial Officer, Natural Resources Canada
We have audited the accompanying financial statements of the Geomatics Canada Revolving Fund (the "Fund"), which comprise the statement of financial position as at March 31, 2018, and the statements of operations and net liabilities, and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. These financial statements have been prepared by management of the Fund in accordance with section 8.1 of the Receiver General for Canada Public Accounts Instructions.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with section 8.1 of the Receiver General for Canada Public Accounts Instructions, 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.
Auditor's 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 Fund's preparation and fair presentation 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 Fund'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 present fairly, in all material respects, the financial position of the Geomatics Canada Revolving Fund as at March 31, 2018 and the results of its operations and cash flows for the year then ended in accordance with section 8.1 of the Receiver General for Canada Public Accounts Instructions.
Basis of accounting and restriction on use
Without modifying our opinion, we draw attention to note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Geomatics Canada Revolving Fund to meet the requirements of section 8.1 of the Receiver General for Canada Public Accounts Instructions. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the management of Natural Resources Canada and should not be used by parties other than Natural Resources Canada and the Treasury Board of Canada.
PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants
May 30, 2018
Ottawa, Canada
Statement of financial position as at March 31
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Assets | ||
| Financial assets | ||
| Accounts receivable (note 3) | 22 | 23 |
| Inventory (note 4) | 51 | 48 |
| Subtotal | 73 | 71 |
| Non-financial assets | ||
| Prepaid expenses | 81 | – |
| Tangible capital assets (note 5) | 233 | – |
| Total | 387 | 71 |
| Liabilities | ||
| Accounts payable and accrued liabilities (note 6) | 1,024 | 1,050 |
| Vacation pay | 84 | 64 |
| Deferred revenue | 141 | 30 |
| Subtotal | 1,249 | 1,144 |
| Net liabilities (note 7) | (negative 862) | (negative 1,073) |
| Total | 387 | 71 |
|
The dash means that the amount is 0 or is rounded to 0. Contingencies (note 8) The accompanying notes form an integral part of these financial statements. | ||
Approved by:
Louise Métivier
Assistant Deputy Minister
Strategic Policy and Results Branch
May 30, 2018
Statement of operations and net liabilities for the year ended March 31
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Revenues | ||
| Services | 5,074 | 5,270 |
| Products | 529 | 360 |
| Subtotal | 5,603 | 5,630 |
| Expenses | ||
| Professional and special services | 2,115 | 1,333 |
| Salaries and employee benefits | 1,451 | 1,214 |
| Utilities, materials and supplies | 1,104 | 1,965 |
| Corporate and sector services | 404 | 327 |
| Rentals | 85 | 71 |
| Repairs and maintenance | 57 | 96 |
| Transportation and communication | 29 | 40 |
| Amortization of tangible capital assets | 26 | – |
| Other expenses | 10 | 10 |
| Information | 2 | – |
| Subtotal | 5,283 | 5,056 |
| Net results | 320 | 574 |
| Net liabilities, beginning of year | (negative 1,073) | (negative 717) |
| Net financial resources provided and change in the accumulated net charge against the Fund's authority, during the year | (negative 109) | (negative 930) |
| Net liabilities, end of year | (negative 862) | (negative 1,073) |
|
The dash means that the amount is 0 or is rounded to 0. The accompanying notes form an integral part of these financial statements. | ||
Statement of cash flows for the year ended March 31
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Operating activities | ||
| Net results | 320 | 574 |
| Items not requiring use of funds | ||
| Amortization of tangible capital assets (note 5) | 26 | – |
| Subtotal | 346 | 574 |
| Variations in the statement of financial position | ||
| Decrease (increase) in accounts receivable | 1 | (negative 21) |
| Decrease (increase) in inventory | (negative 3) | (negative 24) |
| Decrease (increase) in prepaid expenses | (negative 81) | 15 |
| Increase (decrease) in accounts payable and accrued liabilities | (negative 26) | 359 |
| Increase (decrease) in vacation pay | 20 | 32 |
| Increase (decrease) in deferred revenues | 111 | 30 |
| Increase (decrease) in obligation for future employee benefits | – | (negative 35) |
| Net financial resources provided by operating activities | 368 | 930 |
| Capital investing activities | ||
| Acquisitions of tangible capital assets (note 5) | (negative 259) | – |
| Cash used in capital investing activities | (negative 259) | – |
| Net financial resources provided and change in the accumulated net charge against the Fund's authority account, during the year | 109 | 930 |
| Accumulated net charge against the Fund's authority account, beginning of year | 3,450 | 2,520 |
| Accumulated net charge against the Fund's authority account, end of year | 3,559 | 3,450 |
|
The dash means that the amount is 0 or is rounded to 0. The accompanying notes form an integral part of these financial statements. | ||
Notes to the financial statements for the year ended March 31, 2018
1. Authority and purpose
The Geomatics Canada Revolving Fund (the Fund) was originally established under Appropriation Act No 3 1993–1994 as the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" and approval was conditional on specified conditions. The purpose of the Fund was to shift the costs of offering goods and services from taxpayers to those specific users who directly benefit from them. Subsequently, on December 8, 1994, the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" was renamed the "Geomatics Canada Revolving Fund". Having met its specified conditions, permanent continuing authority for the Fund was obtained from and registered with the Treasury Board of Canada on February 9, 1995.
The Fund has received a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, capital acquisitions and temporary financing of accumulated operating deficits, the total of which at any time is not to exceed $5,000,000.
The Fund's mandate is to produce geomatics products, services, and expertise that can be exploited commercially. Revenue-generating activities further build on this work to produce saleable products or services for specific clients in the federal government, Canadian industry, Canadian public, provinces, territories, and other countries.
2. Significant accounting policies
a. Basis of accounting
The financial statements have been prepared in accordance with the reporting requirements of the Receiver General for Canada for revolving funds. The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles for the public sector because:
- the net debt indicator and the statement of change in net debt are not presented in the financial statements
- expenses are reported by type in the statement of operations and net liabilities and not by function or major program
- budgeted expenses are not reported in the statement of operations
- services received without charge from other government departments are not reported as expenses
- no liability is recorded for sick leave
- contractual rights are not disclosed in the notes to financial statements
b. Use of estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates used in the preparation of the financial statements are the amount of certain accrued liabilities, the estimated useful lives of tangible capital assets, the allowance for doubtful accounts, the provision for inventory obsolescence and the estimates related to the obligation for employee future benefits. Actual results could differ from these estimates. These estimates are reviewed annually and as adjustments become necessary, they are recorded in the financial statements in the period in which they become known.
c. Revenues
Revenues are recognized when products are sold or services rendered.
d. Expenses
Unless otherwise disclosed, expenses are recorded in the period they are incurred. Internal service costs of Natural Resources Canada incurred on behalf of the Fund are recorded in these financial statements as corporate and sector service costs.
e. Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables when a recovery is considered uncertain.
f. Inventory
The inventory of maps is valued at the lower of cost or net realizable value, with cost being determined using the weighted average cost of each title.
g. Tangible capital assets
Tangible capital assets purchased by the Fund since April 1, 1994 are recorded at cost. These assets are amortized on a straight-line basis over their estimated useful lives, commencing with the month subsequent to acquisition. The estimated useful lives of these assets are as follows:
| Machinery and equipment | 2 to 10 years |
|---|---|
| Informatics hardware | 4 years |
| Computer software | 4 years |
| Other equipment | 10 years |
| Motor vehicles | 5 to 7 years |
h. Pension benefits
The Public Service Superannuation Act and the Supplementary Retirement Benefits Act cover employees of Natural Resources Canada whose salaries and other benefits are paid by the Fund. The Government's portion of the pension cost is included in the employee benefits expenses assessed against the Fund. Actual pension payments are made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. The Fund is not required under present legislation to make contributions with respect to actuarial deficiencies of the Public Service Superannuation Account and/or with respect to charges to the Consolidated Revenue Fund for the indexation of payments under the Supplementary Retirement Benefits Act.
i. Vacation pay
Vacation pay is expensed as the benefits accrue to employees under their respective terms of employment.
j. Employee severance benefits
Employees of the Fund are entitled to specified severance benefits, calculated based on salary levels in effect at the time of termination as provided for under collective agreements and conditions of employment. The costs for benefits earned, as these accrue to employees, are recorded in the accounts.
k. Sick leave
Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. Payments of sick leave benefits are expensed as incurred and no amount has been accrued in these financial statements.
3. Accounts receivable
Accounts receivables are as follows:
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Other government departments and agencies | – | 5 |
| Outside parties | 33 | 19 |
| Subtotal | 33 | 24 |
| Less: allowance for doubtful accounts on receivables from outside parties | (negative 11) | (negative 1) |
| Total | 22 | 23 |
|
The dash means that the amount is 0 or is rounded to 0. | ||
4. Inventory
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Topographic maps | – | 343 |
| Geographic maps | 51 | 48 |
| Subtotal | 51 | 391 |
| Less: provision for inventory obsolescence | – | (negative 343) |
| Total | 51 | 48 |
|
The dash means that the amount is 0 or is rounded to 0. | ||
5. Tangible capital assets
(in thousands of dollars)
| Cost | Balance beginning of year | Acquisitions | Write-offs | Balance end of the year |
|---|---|---|---|---|
| Machinery and equipment | 1,610 | 49 | (negative 1,610) | 49 |
| Informatics hardware | 1,186 | 141 | (negative 1,186) | 141 |
| Computer software | 57 | – | (negative 57) | – |
| Other equipment | 15 | 38 | (negative 15) | 38 |
| Motor vehicle | – | 31 | – | 31 |
| Total | 2,868 | 259 | (negative 2,868) | 259 |
| Accumulated amortization | Balance beginning of year | Amortization | Write-offs | Balance end of the year |
| Machinery and equipment | 1,610 | 1 | (negative 1,610) | 1 |
| Informatics hardware | 1,186 | 25 | (negative 1,186) | 25 |
| Computer software | 57 | – | (negative 57) | – |
| Other equipment | 15 | – | (negative 15) | – |
| Motor vehicle | – | – | – | – |
| Total | 2,868 | 26 | (negative 2,868) | 26 |
| Net book value | 2018 | 2017 | ||
| Machinery and equipment | 48 | – | ||
| Informatics hardware | 116 | – | ||
| Computer software | – | – | ||
| Other equipment | 38 | – | ||
| Motor vehicle | 31 | – | ||
| Total | 233 | – | ||
|
The dash means that the amount is 0 or is rounded to 0. A blank cell means there is no available data. | ||||
The asset classes of the Fund were reclassified effective April 1, 2017 for presentation purposes to align with Receiver General financial reporting accounts.
6. Accounts payable and accrued liabilities
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Other government departments and agencies | 269 | 562 |
| Outside parties | 755 | 488 |
| Total | 1,024 | 1,050 |
7. Net assets (liabilities)
The accumulated net charge against the Fund's authority is the non-lapsing authority amount that has been used since the inception of the Fund.
The accumulated surplus is an accumulation of each year's surpluses and deficits including the absorption of the opening net assets upon establishment of the Fund.
Contributed capital represents the value of capital assets financed from capital contributions at the inception of the Fund.
(in thousands of dollars)
| 2018 | 2017 | |
|---|---|---|
| Contributed capital | 1,438 | 1,438 |
| Accumulated net charge against the Fund's authority | (negative 3,559) | (negative 3,450) |
| Transfer of the transition payments for implementing salary payments in arrears | (negative 20) | (negative 20) |
| Accumulated surplus | 1,279 | 959 |
| Net assets (liabilities) | (negative 862) | (negative 1,073) |
8. Contingencies
In the normal course of its operations, the Fund may become involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the financial statements. As at March 31, 2018, there were no claims outstanding against the Fund.
9. Related party transactions
Through common ownership, the Geomatics Canada Revolving Fund is related to all Government of Canada departments, agencies and Crown corporations. The Fund enters into transactions with such entities in the normal course of business which have been recorded at the exchange amount.
10. Comparative figures
Comparative figures have been reclassified to conform to the current year's presentation.