Predrafted Letter of Representation for 2012-2013

By courier to:
The Auditor General of Canada
c/o Principal
Public Accounts Audit Team
Stop 8062
240 Sparks Street
Ottawa, Ontario
K1A 0G6
By courier to:
The Deputy Receiver General for Canada
c/o Julien Maynard
Financial Analyst, Accounts of Canada and Financial Reporting
Public Accounts Section
Central and Public Accounts Reporting Directorate
Accounting, Banking and Compensation Branch
Public Works and Government Services Canada
Place du Portage,
Phase III, Floor 13A1
11 Laurier Street
Gatineau, Quebec
K1A 0S5

Letter of Representation

We are providing this letter to the Auditor General of Canada and to the Deputy Receiver General for Canada on behalf of the signatories of the consolidated financial statements of the Government of Canada - the Secretary of the Treasury Board of Canada, the Deputy Minister of Finance, the Deputy Receiver General for Canada and the Comptroller General of Canada in connection with the audit by the Auditor General of Canada of transactions and financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada.

We acknowledge management's responsibility for the proper recording of financial information, and for the proper reporting of that information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada included therein, for the year ended March 31, 2013.

Certain representations in this letter are described as being limited to matters that are material. An item is considered material, regardless of its monetary value, if it is probable that its omission from or misstatement in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada would influence the decision of a reasonable person relying on the Public Accounts of Canada and on the audited consolidated financial statements of the Government of Canada.

"Enter the complete legal name of your organization in this space", hereinafter referred to as the reporting organization, we make the following representations to the best of our knowledge and belief, in respect to:

1. All financial transactions of the reporting organization have been accurately reported to the Deputy Receiver General for recording in the accounts of Canada on forms CC-1 through CC-8 and CC-10 ¹ (and other plates in accordance with Receiver General Manual (RGM) Chapter 15, "Public Accounts Instructions" ²) as per RGM Chapter 18, "Reporting Instructions for Crown corporations and Other Reporting Entities".
2. The reporting organization has maintained complete, proper, and accurate books of accounts and records, from which complete and accurate financial statements and supplementary reports and CC forms (and other plates, if applicable), required for the Public Accounts of Canada, have been prepared. There are no material transactions during the year that have not been properly reflected in the accounts. All amounts recorded in subsidiary accounts in the reporting organization's accounting system have been reconciled to the corporation general ledger. (We are a corporation with Section 33 authority under the Financial Administration Act (FAA), and further declare that all accounts representing transactions recorded in the Consolidated Revenue Fund (CRF) are reflected correctly and have been reconciled to those of the corporation ².)
3. The reporting organization has maintained disclosure controls and procedures to provide reasonable assurance that material information relating to the reporting organization, including its consolidated subsidiaries, is made known to us by others within those entities.
4. The reporting organization has maintained internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada.
   
5. In the recording and reporting of financial information to be included in the accounts of Canada, the Public Accounts of Canada and other monthly and quarterly consolidated financial statements, the reporting organization has complied with:
   
   1. RGM Chapter 18, significant accounting policies of the Government of Canada, if appropriate, as well as any other Treasury Board requirements (i.e. directives, circulars and regulations);
   2. the Financial Administration Act;
   3. all other legislation affecting the reporting organization (and accounts in the CRF ²). In addition,
   4. the reporting organization's financial statements have been prepared in accordance with (include your reporting organizations financial reporting framework) (except for those accounts maintained in the CRF, for which all relevant accounting policies of the government of Canada have been applied ²); and,
   5. the consolidated Crown corporations and other entities which have adopted International Financial Reporting Standards, have presented the information on the CC forms (and other plates, if applicable) in accordance with Canadian Public Sector Accounting Standards with the exception of those accounts and balances specifically excluded from this requirement as noted in RGM Chapter 18 ³.
6. All contractual arrangements entered into by the reporting organization with third parties have been properly reflected in the accounting records or/and, where material (or potentially material) to the financial information for inclusion in the Public Accounts of Canada and in the audited consolidated financial statements of the Government of Canada, have been disclosed to you. We have complied with all aspects of contractual agreements that could have a material effect on the financial information in the event of non-compliance.
7. All environmental liabilities and related contingent liabilities have been reported to the Deputy Receiver General on the appropriate CC forms.
8. All contingent liabilities have been reported to the Deputy Receiver General on the appropriate CC forms (and Plates I-11 and I-12, if applicable ²) for disclosure in the Public Accounts of Canada. The reporting organization has no knowledge of any other lawsuits, tax claims or pending litigation, including possible claims, of any consequence or of any other contingent liabilities of whatever nature.
9. Letters of comfort to financial institutions from the reporting organization have not been issued nor, to the best of our knowledge and belief, has the Minister for the reporting organization issued such letters. Nor have any such letters been in force at any time during the year or during the period to June 10, 2013.
10. All obligations related to capital lease and contractual obligations as well as details of borrowing transactions have been reported to the Deputy Receiver General on appropriate CC forms for disclosure in the Public Accounts of Canada in accordance with RGM Chapter 18.
11. Commitments for future purchases are for quantities not in excess of anticipated requirements and at prices that will not result in loss.
    

    Note: Representations Number 1 to 11 are mandatory for all reporting organizations.

12. The reporting organization has submitted to the Deputy Receiver General details of the insurance funds/provisions, including all underwriting statistics, results of operations, and supplementary information as required, on Form CC-10 ¹.
13. The reporting organization has made available to the corporation’s external auditor all financial records and related data, summations of meetings, and minute books which contain complete and authentic minutes of all meetings of the management committee and internal audit committee (and specify other management level committees as appropriate ___________) applicable to the period April 1, 2012 to June 10, 2013 (or date of Separate Opinion Audit report if no audit work was performed by the external auditor on the CC forms). The most recent meetings of these committees for the said period were held on ___________ and ___________ respectively.
14. Accounts receivable represent valid claims against debtors for transactions arising on or before March 31, 2013 and all uncollectible accounts have been properly disclosed and deletions properly authorized. The reporting organization has taken appropriate action to collect all monies owing the organization (and Her Majesty in Right of Canada in which latter case, monies collected have been promptly deposited to the credit of the Receiver General for Canada ²).
15. Loans receivable represent bona fide claims against debtors as at March 31, 2013. These loans are subject to the ordinary terms of credit of the reporting organization.
16. The reporting organization (and Her Majesty in Right of Canada ²) has satisfactory title to all recorded assets, essential records have been properly maintained and the rules and procedures applied are sufficient to safeguard and control them. In particular, the subsidiary records for:
    
    1. inventories are valued at cost. If they no longer have service potential, they are valued at the lower of cost or net realizable value. Items for which the costs are not readily available have been valued using management's best estimate at original cost based on available information;
    2. records respecting tangible capital assets for which the reporting organization is responsible are accurate and complete, and all acquisitions and disposals of tangible capital assets during the year have been properly authorized;
    3. prepaid expenses represent amounts paid for services to be rendered in future periods; and,
    4. tangible capital assets with a limited life are being amortized or otherwise written off as a charge to expense over our estimation of their useful lives in a systematic and rational manner.
17. Inventory quantities at March 31, 2013 were determined from the reporting organization's perpetual inventory records, which have been adjusted on the basis of physical inventories taken by competent employees at various times during the year. The inventory balances do not include goods on consignment from others.
18. There were no liens or encumbrances on the reporting entity's assets or assets pledged as collateral.
19. We have recorded or disclosed, as appropriate, all liabilities and provisions on the appropriate CC forms.
20. Pension and other future benefit costs and obligations and the related assets have been measured, accounted for and disclosed on the appropriate CC forms in accordance with RGM Chapter 18 and represent management's best estimate of the respective liability and expenses of the pension and other future benefits.
    
    More specifically:
    
    1. All pension and other future benefits of the reporting organization and the provisions of each plan have been fully disclosed to you.
    2. The source data used in the preparation of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2013 is complete and accurate.
    3. Choose representation that applies to a specific type of organization:
       
       For Enterprise Crown corporations: The actuarial obligations for pension and other future benefits at March 31, 2013 have been determined in accordance with International Financial Reporting Standards (IFRS).
       
       For consolidated Crown corporations and other entities that adopted Public Sector Accounting Standards (PSAS): The actuarial obligations for pension and other future benefits at March 31, 2013 have been determined in accordance with PSAS.
       
       For consolidated Crown corporations and other entities that adopted IFRS: The actuarial obligations for funded pension plans reported in the CC Forms at March 31, 2013 have been determined in accordance with PSAS.
       
       The actuarial obligations for unfunded pension plans and other employee future benefits reported in the CC Forms at March 31, 2013 have been determined in accordance with benefits (include the appropriate financial reporting framework).
    4. All assumptions used in the determination of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2013 are our best estimate of the most likely set of conditions affecting future events. These assumptions are appropriate, internally consistent, and are consistent with the asset valuation method.
    5. The extrapolation of the actuarial present value of accrued pension benefits to March 31, 2013 from the date of the most recent actuarial valuations at March 31, 20XX has been properly prepared using source data which is complete and accurate. All assumptions used in the preparation of the extrapolation are consistent with the assumptions used in the preparation of such valuations, and events occurring in the extrapolation period that materially affect the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2013 have been properly reflected in the determination of those accrued benefits.
    6. No events have occurred subsequent to March 31, 2013 that materially affect the amount of the actuarial present value of accrued pension benefits attributed to services rendered up to March 31, 2013.
    7. All plan assets have been disclosed on the appropriate CC forms.
    8. The reporting organization has good title to such assets.
    9. The pension plan assets are valued in accordance with (include the appropriate financial reporting framework).
    10. Choose representation that applies to a specific type of organization:
        
        For Enterprise Crown corporations: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with IFRS
        
        For consolidated Crown corporations and other entities that adopted PSAS: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with PSAS.
        
        For consolidated Crown corporations and other entities that adopted IFRS: Adjustments arising from changes in assumptions and experience gains and losses and adjustments arising from plan amendments have been recognized in accordance with (PSAS or the requirements of RGM Chapter 18).
21. We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reported to you on the CC forms (e.g. to dispose of the business or to cease operations).
22. All income earned for the year on investments has been recorded in the accounts.
23. All expenses for the year have been recorded in the accounts.
24. All non-monetary transactions have been recorded and disclosed in the financial information in accordance with (include the appropriate financial reporting framework).
25. Since March 31, 2013 (or date of last audit) to the date of this letter, there have not been any events, new or amended legislation, regulations or directives, other than those reflected in the financial statements or notes thereto, which should be reflected or disclosed in the audited consolidated financial statements of the Government of Canada or supplementary reports of the Government of Canada.
26. The reporting organization is not aware of any information that was not disclosed to the external auditor and to the Deputy Receiver General, which could affect the consolidated financial statements of the Government of Canada or the Auditor General's opinion on them.
27. The reporting organization understands that the prevention and detection of error and fraud are primarily its responsibility and may not necessarily be detected by you, even if they are material in amount. The reporting organization also acknowledges its responsibility to design, implement and maintain internal controls that are designed to prevent and detect fraud and error. Furthermore, we have disclosed to you the results of our assessment of the risk that the financial records may be materially misstated as a result of fraud, and have determined such risk to be (low, moderate, high…). Choose one of the following: [The reporting organization has disclosed to you all significant facts relating to any known frauds or suspected frauds involving management, employees who have significant roles in internal control or others, where the fraud could have a significant effect on the financial information of the reporting organization.] or [The reporting organization has no knowledge of any frauds or suspected frauds involving management, employees who have significant roles in internal control or others where the fraud could have a non-trivial effect on the financial records of the organization.] Choose one of the following: [The reporting organization has also disclosed to you our knowledge of any allegations of fraud or suspected fraud affecting the financial records communicated by employees, former employees, analysts, regulators or others.] or [The reporting organization has no knowledge of any allegations of fraud or suspected fraud affecting the financial records communicated by employees, former employees, analysts, regulators or others].
28. The reporting organization has disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effect should be considered when preparing financial information.
29. The reporting organization is not aware of:
    
    1. any illegal or possibly illegal acts, including those committed by directors, officers or employees acting on the reporting organization's behalf. (We have disclosed to you all facts related to illegal or possibly illegal acts identified.); and/or
    2. any conflicts of interest involving (name of organization) where it has directly or indirectly, entered into any purchase, sale or any other transaction with a member of Parliament, a member of the Board, a member of senior management, a manager, or with an organization in which one of these persons had a direct or indirect interest; and/or
    3. any violations or possible violations of laws or regulations the effect of which should be considered for disclosure in the Public Accounts of Canada or as a basis for recording a liability or loss contingency; and/or
    4. actions taken in Canada that are not in accordance with the laws of Canada (federal or provincial) or actions taken outside Canada that violate the laws of the place where the transactions occurred, or that if taken in Canada would be in violation of the Criminal Code of Canada; and/or
    5. bribes, or improper benefits rendered or accepted; and/or
    6. influences applied improperly; and/or
    7. business inconsistent with the Corporation's charter; and/or
    8. loss of money or property as a result of defalcation, fraudulent acts or omission of corporate officer; and/or
    9. any irregularities involving management or employees who have significant roles in the system of internal accounting controls or any irregularities involving other employees that could have a material effect on the financial statements; and/or
    10. any communications from regulatory agencies concerning non-compliance with laws or regulations which could have a material effect on the information for inclusion in the Public Accounts of Canada (state exceptions, if any).
30. Choose one of the following: There have been no related party transactions outside the reporting organization's normal course of business.] or [All known related party transactions outside the reporting organization's normal course of business have been properly recorded for inclusion in the Public Accounts of Canada.]
31. Choose one of the following: [No guarantees have been made by the reporting organization, nor have any guarantees been in force at any time during the year or subsequently.] or [All guarantees potentially having a material impact on the financial statements have been recorded and disclosed as appropriate in the CC forms as provided to you for audit.]

    Note: Representations Number 13 to 31 are mandatory for all reporting organizations.

    Note: Representations Number 32, 33 and 34, apply only to those Crown corporations exercising authority under Section 33 of the FAA (See Appendix B of RGM Chapter 17).

    Note: Representation Number 35 is applicable only to Export Development Canada. Other Crown corporations and all other reporting entities need not respond.

32. The reporting organization has adhered to all legislative requirements respecting the entering into of financial transactions, including those pertaining to accounts payable at year end, and all such transactions have been accurately recorded in accordance with, and as appropriate, within the authorized limits of Appropriation Acts and other governing statutes.
33. All specified purpose accounts, other liabilities and unmatured debt:
    
    1. originated under the authority of appropriate legislation; and,
    2. represent financial obligations to organizations and individuals outside the Government of Canada as an accounting entity.
34. All unpaid accounts relating to annually lapsing and non-lapsing budgetary appropriations and annually lapsing non-budgetary appropriations on which Parliament has imposed an annual ceiling have been recorded as payables.
35. To be completed by Export Development Canada only
    
    Provisions have been determined for all loan guarantee programs that were in force at any time during the year or during the period to June 10, 2013. Proper documentation relative to the calculation of these amount(s) is on file for review by the Treasury Board Secretariat and/or the Office of the Auditor General. These amounts were established in accordance with the criteria outlined in RGM Chapter 15. Particulars have been forwarded to the Deputy Receiver General for disclosure in the Public Accounts of Canada.
    
    The reporting organization has not issued any offering documents during the year nor does it intend to issue offering documents in the near term (except for, [state exceptions, if any]).
36. The reporting organization has engaged in activities involving derivative financial instruments during the year. Management's objectives with respect to derivative financial instruments are: [list management objectives here]. The financial records reflect all transactions involving derivative financial instruments, all embedded derivative financial instruments have been identified and the assumptions and methodologies used in the valuation models applied to derivative financial instruments are reasonable. The terms of transactions involving derivative financial instruments include: [list terms here]. All transactions involving derivative financial instruments have been conducted at arm's length and at fair values. The reporting organization has not entered into any side agreements associated with any derivative financial instruments (except for, [state exceptions, if any]). The reporting organization has not entered into any written options (except for, [state exceptions, if any]). The reporting organization has complied with the documentation requirements required under (include the appropriate financial reporting framework) for hedge accounting [if applicable].
37. Significant assumptions used by the reporting organization in making accounting estimates, including fair value accounting estimates, are reasonable.
38. For recorded or disclosed amounts in the financial information that incorporate fair value measurements, we confirm that:
    
    1. the measurement methods are appropriate and consistently applied;
    2. the significant assumptions used in determining fair value measurements represent our best estimates, are reasonable and have been consistently applied;
    3. no subsequent event requires adjustment to the accounting estimates and disclosures included in the financial information;
    4. the significant assumptions used in determining fair value measurements are consistent with the reporting organization's planned courses of action. We have no plans or intentions that have not been disclosed to you, which may materially affect the recorded or disclosed fair values of assets or liabilities; and
    5. disclosures are complete and appropriate under the stated accounting policies of the reporting organization. Significant estimates and measurement uncertainties known to management have been appropriately disclosed.
39. Complete and appropriate disclosures required related to fair values have been reported to the Deputy Receiver General on the appropriate CC forms.

    Note: Representations Number 36 to 39 are mandatory for all reporting organizations.

Please enter particulars of these situations here.