Translation Bureau Revolving Fund

Public Accounts of Canada 2019 Volume III—Top of the page Navigation

Statement of management responsibility

We have prepared the accompanying financial statements of the Translation Bureau Revolving Fund as required by the Treasury Board Directive on Charging and Special Financial Authorities in accordance with the Receiver General reporting requirements. 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 department's Departmental Results Report is consistent with these financial statements.

Management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. 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 ensure 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 independent external auditor, who audited them and has provided an independent opinion, which has been appended to these financial statements.

Approved by:

Marty Muldoon, CPA, CMA, MBA
Chief Financial Officer
Public Services and Procurement Canada

Stéphan Déry
Chief Executive Officer,
Translation Bureau
Public Services and Procurement Canada

June 3, 2019
Gatineau, Canada

Statement of authority provided (used) (unaudited) for the year ended March 31

(in thousands of dollars)

  2019 2018
EstimatesLink to Table note 1 Actual EstimatesLink to Table note 1 Actual
Net results (negative 1,718) 8,565 (negative 272) 1,522
Items not requiring use of funds
Amortization 1,706 1,736 2,170 1,968
Loss on disposal – – – 645
Subtotal 1,706 1,736 2,170 2,613
Operating source (use) of funds (negative 12) 10,301 1,898 4,135
Items requiring use of funds
Net tangible capital assets acquisitions (negative 6,726) (negative 2,570) (negative 5,062) (negative 1,941)
Transition payments for implementing salary payments in arrears – – – (negative 3)
Net other assets and liabilities (negative 570) 188 (negative 793) (negative 5,183)
Total (negative 7,296) (negative 2,382) (negative 5,855) (negative 7,127)
Authority provided (used) (negative 7,308) 7,919 (negative 3,957) (negative 2,992)

Reconciliation of unused authority (unaudited) as at March 31

(in thousands of dollars)

  2019 2018
Debit balance in the accumulated net charge against the Fund's authority 36,375 26,474
Payables charged against the appropriation at year-end (negative 12,927) (negative 11,441)
Receivables credited to the appropriation at year-end 7,451 7,899
Other items 6,379 6,427
Net authority provided (used), end of year 37,278 29,359
Authority limit (note 1) 20,000 20,000
Unused authority carried forward 57,278 49,359

Independent auditor's report

To the Deputy Minister, Public Services and Procurement Canada

Opinion

We have audited the financial statements of Translation Bureau Revolving Fund (the "Fund"), which comprise the statement of financial position as at March 31, 2019, and the statements of operations and net liabilities and of cash flow for the year then ended, and notes to the financial statements including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the financial statements of the Fund for the year ended March 31, 2019 are prepared, in all material respects, in accordance with the financial reporting provisions for revolving funds described by the Receiver General for Canada under the Directive on Charging and Special Financial Authorities.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of Public Services and Procurement Canada in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter–Basis of Accounting and Restriction on Use

We draw attention to Note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Fund to meet the financial reporting requirements for revolving funds described by the Receiver General for Canada under the Directive on Charging and Special Financial 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. Our opinion is not modified in respect of this matter.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the financial reporting provisions for revolving funds described by the Receiver General for Canada under the Directive on Charging and Special Financial 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.

In preparing the financial statements, management is responsible for assessing the Fund's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Fund's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Deloitte LLP
Chartered Professional Accountants,
Licensed Public Accountants

June 3, 2019

Statement of financial position as at March 31

(in thousands of dollars)

  2019 2018
Assets
Financial assets
Cash in transit 62 –
Accounts receivable (note 3) 9,703 9,672
Other assets (note 4) 1,121 1,031
Subtotal 10,886 10,703
Non-financial assets
Prepaid expenses 1 2
Tangible capital assets (note 5) 5,786 4,952
Subtotal 5,787 4,954
Total assets 16,673 15,657
Liabilities
Accounts payable and accrued liabilities (note 6) 14,203 11,622
Vacation pay and compensatory leave 3,159 3,154
Employee severance benefits (note 7) 3,953 4,187
Total 21,315 18,963
Net liabilities (note 8) (negative 4,642) (negative 3,306)
Net financial position of the Fund 16,673 15,657

Statement of operations and net liabilities for the year ended March 31

(in thousands of dollars)

  2019 2018
Revenues
Translation services 125,169 117,623
Interpretation services 18,866 17,735
Terminology services 14,201 14,573
Other 8,576 8,320
Total revenues 166,812 158,251
Operating expenses
Salaries and employee benefits 96,775 94,490
Professional and special services 30,549 30,451
Corporate and administrative services 21,483 21,426
Occupancy costs 4,804 4,996
Amortization (note 5) 1,736 1,968
Transportation and telecommunications 1,661 1,417
Other expenses 838 1,177
Utilities, materials and supplies 486 161
Employee severance benefits (note 7) (negative 85) 643
Total operating expenses 158,247 156,729
Net results 8,565 1,522
Net liabilities, beginning of year (negative 3,306) (negative 6,580)
Transfer of the transition payments for implementing salary payments in arrears – (negative 3)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (note 8) (negative 9,901) 1,755
Net liabilities, end of year (note 8) (negative 4,642) (negative 3,306)

Statement of cash flow for the year ended March 31

(in thousands of dollars)

  2019 2018
Operating activities
Net results 8,565 1,522
Items not requiring use of funds
Amortization of tangible capital assets (note 5) 1,736 1,968
Loss on disposal of tangible capital assets – 645
Total of itens not requiring use of funds 1,736 2,613
Variations in statement of financial position
Decrease (increase) in cash in transit (negative 62) 3
Decrease (increase) in accounts receivable (negative 31) 1,865
Decrease (increase) in other assets (negative 90) (negative 153)
Decrease (increase) in prepaid expenses 1 (negative 2)
Increase (decrease) in accounts payable and accrued liabilities 2,581 (negative 5,734)
Increase (decrease) in vacation pay and compensatory leave 5 48
Increase (decrease) in employee severance benefits (negative 234) 27
Subtotal 2,170 (negative 3,946)
Transition payments for implementing salary payments in arrears – (negative 3)
Net financial resources provided (used) by operating activities 12,471 186
Capital investing activities
Acquisitions of tangible capital assets (note 5) (negative 2,570) (negative 1,941)
Net financial resources used by capital investing activities (negative 2,570) (negative 1,941)
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority, during the year (note 8) 9,901 (negative 1,755)
Accumulated net charge against the Fund's authority, beginning of year 26,474 28,229
Accumulated net charge against the Fund's authority, end of year 36,375 26,474

Notes to the financial statements for the year ended March 31, 2019

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 reporting requirements for revolving funds described by the Receiver General for Canada under the Treasury Board of Canada's Directive on Charging and Special Financial Authorities. The basis of accounting used in these financial statements differs from Canadian public sector accounting standards mainly because:

The significant accounting policies are as follows:

(a) Revenue recognition

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. Accounts receivable include the estimated amount of revenue earned for services rendered but not billed at year end.

(c) Expense recognition

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 conditions 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:

Category Estimated useful life
Computer hardware 3 to 5 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 which they are incurred and represent the total Fund obligation to the Plan. The Fund's responsibility with regard to the Plan is limited to the contributions paid. 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 were entitled to severance benefits under labour contracts or conditions of employment. These benefits were earned as the services necessary to earn them were 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 liability has been accrued in these financial statements. Payments of sick leave benefits are included in current operations as incurred.

(g) Contingent liabilities

Contingent liabilities are potential liabilities which 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 recorded. However, if the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(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 receivables from outside parties, the estimated useful lives of tangible capital assets, the amount of certain liabilities, the liability for vacation pay and compensatory leave, and the liability for employee severance benefits. Actual results could significantly differ from those estimates. 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

(in thousands of dollars)

  2019 2018
Other government departments and agencies 7,451 7,899
Outside parties 2,254 1,774
Subtotal 9,705 9,673
Less: allowance for doubtful accounts on receivables from outside parties (negative 2) (negative 1)
Net accounts receivable 9,703 9,672

4. Other assets

(in thousands of dollars)

  2019 2018
Sales tax refundable advances 925 851
Other advances 196 180
Total other assets 1,121 1,031

5.Tangible capital assets

(in thousands of dollars)

Cost Balance at beginning of year Acquisitions Dispositions and transfers Balance at end of year
Computer hardware 2,032 72 69 2,175
Computer software 33,644 280 50 33,974
Leasehold improvements 6,849 – 674 7,523
Assets under construction 1,072 2,216 (793) 2,495
Total 43,597 2,570 –
 46,167
Accumulated amortization Balance at beginning of year Current year amortization Dispositions and transfers Balance at end of year
Computer hardware (1945)
 (20) – (1,965)
Computer software (30,002) (1,503) – (31,505)
Leasehold improvements (6,698) (213) – (6,911)
Total (38,645)
 (1,736)
 – (40,381)
Net book value 2019 2018
Computer hardware 210 87
Computer software 2,469 3,642
Leasehold improvements 612 151
Assets under construction 2,495 1,072
Total 5,786 4,952
The dash means that the amount is 0 or is rounded to 0.

6. Accounts payable and accrued liabilities

(in thousands of dollars)

  2019 2018
Outside parties 10,946 10,816
Other government departments and agencies 1,981 625
Subtotal 12,927 11,441
Accrued liabilities 1,276 181
Total accounts payable and accrued liabilities 14,203 11,622

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 and changes to conditions of employment, the accumulation of severance benefits under the employee severance pay program ceased. The employees were 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 benefits obligation.

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

(in thousands of dollars)

  2019 2018
Employee severance benefit obligation, beginning of year 4,187 4,160
Expense for the year (negative 85) 643
Benefits paid during the year (negative 149) (negative 616)
Employee severance benefit obligation, end of year 3,953 4,187

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 (ANCAFA) represents the cumulative receipts and disbursements over the life of the Fund.

(in thousands of dollars)

  2019 2018
Accumulated surplus, beginning of year 23,168 21,649
Net results 8,565 1,522
Transfer of the transition payments for implementing salary payments in arrears – (negative 3)
Accumulated surplus, end of year 31,733 23,168
Accumulated net charge against the Fund's authority, beginning of year (negative 26,474) (negative 28,229)
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (negative 9,901) 1,755
Accumulated net charge against the Fund's authority, end of year (negative 36,375) (negative 26,474)
Net liabilities, end of year (negative 4,642) (negative 3,306)

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 goods and services are received. Estimated future payments are as follows:

(in thousands of dollars)

Year ending March 31
2020 8,122
2021 4,273
2022 4,234
2023 3,141
2024 and thereafter 4,403
Total contractual obligations 24,173

10. Contingent liabilities

In connection with its operations, the Fund is involved in certain legal action. The amount of the litigation is not determinable. Settlement, if any, that may be made with respect to litigation is expected to be accounted for as a charge against income of the applicable years.

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.

Public Accounts of Canada 2019 Volume III—Bottom of the page Navigation

Report a problem or mistake on this page
Date modified: