Financial Statements 2008-09
AUDITOR'S REPORT
To the Speaker of the House of Commons and the Speaker of the Senate
I have audited the statement of financial position of the Office of the Commissioner of Official Languages as at March 31, 2009 and the statements of operations, equity of Canada and cash flow for the year then ended. These financial statements are the responsibility of the Office’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In my opinion, these financial statements present fairly, in all material respects, the financial position of the Office as at March 31, 2009 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
Further, in my opinion, the transactions of the Office that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Financial Administration Act and regulations and the Official Languages Act.
The original version was signed by
Sheila Fraser, FCA
Auditor General of Canada
Ottawa, Canada
July 10, 2009
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Management Responsibility for Financial Statements
Responsibility for the integrity and objectivity of the accompanying financial statements of the Office of the Commissioner of Official Languages (Office) for the year ended March 31, 2009 and all information contained in this report rests with the Office's management. These financial statements have been prepared by management in accordance with accounting policies issued by the Treasury Board of Canada Secretariat, which are consistent with Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Office’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Office’s Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by 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 regulations, policies, standards and managerial authorities are understood throughout the Office.
The Auditor General of Canada conducts an independent audit and expresses an opinion on the accompanying financial statements.
The original version was signed by The original version was signed by
Graham Fraser Lise Cloutier
Commissioner of Official Languages Senior Financial Officer
Assistant Commissioner
Corporate Services
Ottawa, Canada
July 10, 2009
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Statement of Financial Position
At March 31
| 2009 | 2008 | ||||
| Assets | |||||
| Financial assets | |||||
| Cash | $ | 3,900 | $ | 3,900 | |
| Due from the Consolidated Revenue Fund | 1,952,009 | 2,087,033 | |||
| Accounts receivable from other government departments and agencies | 236,448 | 228,985 | |||
| Total financial assets | 2,192,357 | 2,319,918 | |||
| Non-financial assets | |||||
| Prepaid expenses | 2,500 | 1,000 | |||
| Tangible capital assets (Note 4) | 2,164,973 | 2,457,068 | |||
| Total non-financial assets | 2,167,473 | 2,458,068 | |||
| TOTAL | $ | 4,359,830 | $ | 4,777,986 | |
| Liabilities | |||||
| Accounts payable and accrued liabilities | 2,202,271 | 2,238,598 | |||
| Provision for vacation pay and compensatory leave | $ | 663,797 | $ | 686,692 | |
| Employee severance benefits (Note 5) | 2,978,330 | 2,476,496 | |||
| Total liabilities | 5,844,398 | 5,401,786 | |||
| Equity of Canada | (1,484,568) | (623,800) | |||
| TOTAL | $ | 4,359,830 | $ | 4,777,986 | |
| Contingent liabilities (Note 8) | |||||
| Contractual obligations (Note 9) | |||||
The accompanying notes form an integral part of these financial statements.
The original version was signed by The original version was signed by
Graham Fraser Lise Cloutier
Commissioner of Official Languages Senior Financial Officer
Assistant Commissioner Corporate Services
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Statement of Operations
For the year ended March 31
| 2009 | 2008 | |||||||||
| Operating Expenses | Compliance Assurance | Policy and Communications | Total | |||||||
| Salaries and employee benefits | $ | 7,744,279 | $ | 8,740,267 | $ | 16,484,546 | $ | 14,853,928 | ||
| Professional and special services | 1,612,725 | 2,375,866 | 3,988,591 | 4,107,360 | ||||||
| Accommodation | 704,888 | 1,014,352 | 1,719,240 | 1,735,000 | ||||||
| Transportation and telecommunications | 447,606 | 713,370 | 1,160,976 | 1,068,184 | ||||||
| Amortization of tangible capital assets | 305,130 | 439,089 | 744,219 | 751,570 | ||||||
| Utilities, materials and supplies | 109,756 | 169,937 | 279,693 | 238,252 | ||||||
| Communication and printing | 6,147 | 221,855 | 228,002 | 262,375 | ||||||
| Repairs and maintenance | 78,665 | 122,168 | 200,833 | 75,076 | ||||||
| Rentals of photocopiers and other items | 45,146 | 77,800 | 122,946 | 117,884 | ||||||
| Other | 2,229 | 2,430 | 4,659 | 1,843 | ||||||
| Net cost of operations | $ | 11,056,571 | $ | 13,877,134 | $ | 24,933,705 | $ | 23,211,472 | ||
The accompanying notes form an integral part of these financial statements.
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Statement of Equity of Canada
For the year ended March 31
| 2009 | 2008 | |||
| Equity of Canada, beginning of the year | $ | (623,800) | $ | (472,017) |
| Net cost of operations | (24,933,705) | (23,211,472) | ||
| Net cash provided by Government | 21,284,969 | 20,854,372 | ||
| Change in due from the Consolidated Revenue Fund | (135,024) | (485,683) | ||
| Services provided without charge by other government departments (Note 7) | 2,922,992 | 2,691,000 | ||
| Equity of Canada, end of the year | $ | (1,484,568) | $ | (623,800) |
The accompanying notes form an integral part of these financial statements
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Statement of Cash Flow
For the year ended March 31
| 2009 | 2008 | |||||
| Operating activities | ||||||
| Net cost of operations | $ | 24,933,705 | $ | 23,211,472 | ||
| Non-cash items: | ||||||
| Amortization of tangible capital assets | (744,219) | (751,570) | ||||
| Services provided without charge by other government departments (Note 7) | (2,922,992) | (2,691,000) | ||||
| Variation in Statement of Financial Position: | ||||||
| Decrease (Increase) in liabilities | (442,612) | 559,532 | ||||
| Increase (Decrease) in accounts receivable | 7,463 | (148,509) | ||||
| Increase (Decrease) in prepaid expenses | 1,500 | (3,203) | ||||
| Cash used by operating activities | 20,832,845 | 20,176,722 | ||||
| Capital investment activities | ||||||
| Acquisitions of tangible capital assets | 452,124 | 676,928 | ||||
| Cash used by capital investment activities | 452,124 | 676,928 | ||||
| Financing activities | ||||||
| Net cash provided by Government of Canada | (21,284,969) | (20,854,372) | ||||
| Net Cash Used | - | 722 | ||||
| Cash, beginning of year | 3,900 | 3,178 | ||||
| Cash, end of year | $ | 3,900 | $ | 3,900 | ||
The accompanying notes form an integral part of these financial statements.
OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Notes to the Financial Statements
For the year ended March 31, 2009
1. Authority and Objectives
The Parliament of Canada adopted the first Official Languages Act in 1969. This Act provided that English and French would henceforth have “equality of status and equal rights and privileges as to their use in all the institutions of the Parliament and Government of Canada.”
A new Official Languages Act came into force in 1988 and was amended on November 25, 2005. The Act sets out three basic objectives of the Government of Canada:
- ensure respect for English and French as official languages of Canada, and ensure equality of status and equal rights and privileges as to their use in all federal institutions;
- set out the powers, duties and functions of federal institutions with respect to the official languages of Canada;
- support the development of English and French linguistic minority communities and generally advance the equality of status and use of the English and French languages within Canadian society.
The Office of the Commissioner of Official Languages (Office), which serves the public from its offices in Ottawa and its five regional offices, supports the Commissioner of Official Languages in fulfilling his mandate. The mandate of the Commissioner consists of taking all necessary measures to ensure recognition of the status of each of the official languages and compliance with the letter and the spirit of the Official Languages Act in the administration of the affairs of federal institutions, including any of their activities relating to the advancement of English and French in Canadian society.
The Office is named in Schedule I.1 of the Financial Administration Act (FAA) and is funded through annual appropriations.
The Commissioner of Official Languages is appointed after approval of the appointment by resolution of the Senate and the House of Commons for a seven-year term (renewable). The Commissioner reports directly to Parliament.
2. Significant Accounting Policies
a) Basis of presentation
These financial statements have been prepared on an accrual basis of accounting in accordance with accounting policies issued by the Treasury Board of Canada Secretariat, which are consistent with Canadian generally accepted accounting principles for the public sector.
b) Parliamentary appropriations
The Office is funded through annual parliamentary appropriations. Appropriations provided to the Office do not parallel financial reporting according to Canadian generally accepted accounting principles for the public sector. They are based in a large part on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides information regarding the source and disposition of these authorities and provides a high-level reconciliation between the two bases of reporting.
c) Net cash provided by Government
The Office operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Office is deposited to the CRF and all cash disbursements made by the Office are paid from the CRF. Net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
d) Due from the Consolidated Revenue Fund
Due from the CRF represents amounts of cash that the Office is entitled to draw from the Consolidated Revenue Fund, without further appropriations, in order to discharge its liabilities.
e) Accounts receivable
Accounts receivable are stated at amounts expected to be ultimately realized. A provision is made for receivables where recovery is considered uncertain.
f) Tangible capital assets
The Office records as capital assets all expenses providing multi year benefits and having an initial cost of $1,000 or more. Similar items under $1,000 are expensed in the Statement of Operations.
Amortization of capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:
Asset Class Amortization Period Machinery and equipment 5 years Informatics hardware 4 years Furniture 5 years Informatics software 3 years Motor vehicles 7 years Leasehold improvements Term of the lease g) Employee future benefits
i. Vacation pay and compensatory leave
Employee vacation pay and compensatory leave are expensed as the benefit accrues to employees under their respective terms of employment. The liability for vacation pay and compensatory leave is calculated at the salary levels in effect at the end of the year for all unused vacation pay and compensatory leave benefits accruing to employees. Employee vacation-pay liabilities payable on cessation of employment represent obligations of the Office that are normally funded through future years’ appropriations.
ii. Employee severance benefits
Employees are entitled to severance benefits, as provided for under labour contracts and conditions of employment. The cost of these benefits is accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
iii. Contributions to pension plan
The Office’s eligible employees participate in the Public Service Pension Plan, a multi‑employer plan administered by the Government of Canada. The Office’s contributions reflect the full cost as employer. This amount is currently based on a multiple of an employee’s contribution and may change over time depending on the experience of the Plan. The Office’s contributions are expensed during the year in which the services are rendered and represent the total pension obligation of the Office. The Office is not currently required to make contributions with respect to any actuarial deficiencies of the Public Service Pension Plan.
iv. Other benefits
The Government of Canada sponsors a variety of other benefit plans, which cover the employees of the Office. These include health care, dental and insurance plans for which no costs are charged to the Office. In these cases, an estimated cost is recorded as an operating expense under the item “Services provided without charge by other government departments”. The Government of Canada also sponsors workers’ compensation benefits available across Canada. The Office is charged for its share of the annual benefit payments incurred under this Plan. These amounts represent the Office’s contribution to the Plan and they are recorded by the Office as an expense in the period incurred. As a participant, the Office has no other obligation to any of these plans in addition to its annual contributions.
h) Services provided without charge by other government departments and agencies
Services provided without charge by other government departments and agencies are recorded as operating expenses at their estimated cost. A corresponding amount is reported in the Statement of Equity of Canada.
i) 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. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
j) Measurement uncertainty
Preparing financial statements in accordance with Treasury Board policies, which are consistent with Canadian generally accepted accounting principles for the public sector, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Actual results could differ significantly from these estimates. The most significant items where estimates are used are in determining the expected useful life of capital assets and in determining the provision for employee severance benefits. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
3. Parliamentary Appropriations
The Office receives most of its funding through annual Parliamentary appropriations. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Office has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
a) Reconciliation of net cost of operations to current year appropriations used
| 2009 | 2008 | |||
| Net cost of operations | $ | 24,933,705 | $ | 23,211,472 |
| Add or Less: Items affecting net cost of operations but not affecting appropriations | ||||
| Amortization of tangible capital assets | (744,219) | (751,570) | ||
| Services provided without charge by other government departments | (2,922,992) | (2,691,000) | ||
| Revenue not available for spending | 2,605 | 180 | ||
| Change in vacation pay and compensatory leave | 22,895 | 2,409 | ||
| Change in employee severance benefits | (501,834) | (180,223) | ||
| Other adjustments | (75,529) | 77,428 | ||
| 20,714,631 | 19,668,696 | |||
| Add : Items not affecting net cost of operations but affecting appropriations | ||||
| Tangible capital asset acquisitions | 452,124 | 676,928 | ||
| Current year appropriations used | $ | 21,166,755 | $ | 20,345,624 |
b) Reconciliation of appropriations provided to current year appropriations used
| 2009 | 2008 | |||
| Total Operating Vote | $ | 20,044,729 | $ | 19,191,090 |
| Statutory Vote | 1,993,560 | 1,962,335 | ||
| Spending of proceeds from the disposal of surplus Crown assets | 1,199 | 3,864 | ||
| Less : | ||||
| Lapsed appropriations | (872,522) | (810,677) | ||
| Available for use in subsequent years | (211) | (988) | ||
| Current year appropriations used | $ | 21,166,755 | $ | 20,345,624 |
c) Reconciliation of net cash provided by Government to current year appropriations used
| 2009 | 2008 | |||
| Net cash provided by Government | $ | 21,284,969 | $ | 20,854,372 |
| Revenue not available for spending | 2,605 | 180 | ||
| Change in accounts receivable and cash | (7,463) | 147,787 | ||
| Change in accounts payable and accrued liabilities | (36,327) | (737,346) | ||
| Other adjustments | (77,029) | 80,631 | ||
| Current year appropriations used | $ | 21,166,755 | $ | 20,345,624 |
4. Tangible Capital Assets
| Cost | March 31, 2008 | Additions | Disposals | March 31, 2009 | ||||
| Machinery and equipment | $ | 446,675 | $ | 2,395 | $ | --- | $ | 449,070 |
| Informatics hardware | 2,844,254 | 196,196 | --- | 3,040,450 | ||||
| Furniture | 952,197 | 36,604 | --- | 988,801 | ||||
| Informatics software | 497,538 | 45,170 | --- | 542,708 | ||||
| Motor vehicles | 30,630 | --- | --- | 30,630 | ||||
| Leasehold improvements | 1,235,593 | 171,759 | --- | 1,407,352 | ||||
| $ | 6,006,887 | $ | 452,124 | $ | --- | $ | 6,459,011 | |
| Accumulated amortization | March 31, 2008 | Amortization | Disposals | March 31, 2009 | ||||
| Machinery and equipment | $ | 274,933 | $ | 60,711 | $ | --- | $ | 335,644 |
| Informatics hardware | 1,654,952 | 424,793 | --- | 2,079,745 | ||||
| Furniture | 685,280 | 71,278 | --- | 756,558 | ||||
| Informatics software | 446,453 | 31,748 | --- | 478,201 | ||||
| Motor vehicles | 5,105 | 4,376 | --- | 9,481 | ||||
| Leasehold improvements | 483,096 | 151,313 | --- | 634,409 | ||||
| $ | 3,549,819 | $ | 744,219 | $ | --- | $ | 4,294,038 |
| Net Book Value | March 31, 2008 | March 31, 2009 | |||||
| Machinery and equipment | $ | 171,742 | $ | 113,426 | |||
| Informatics hardware | 1,189,302 | 960,705 | |||||
| Furniture | 266,917 | 232,243 | |||||
| Informatics software | 51,085 | 64,507 | |||||
| Motor vehicles | 25,525 | 21,149 | |||||
| Leasehold improvements | 752,497 | 772,943 | |||||
| $ | 2,457,068 | $ | 2,164,973 |
5. Employee Future Benefits
a) Accrued employee severance benefits
The Office provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
| 2009 | 2008 | |||
| Accrued benefit obligation, beginning of the year | $ | 2,476,496 | $ | 2,296,273 |
| Expense for the year | 822,139 | 531,481 | ||
| Benefits paid during the year | (320,305) | (351,258) | ||
| Accrued benefit obligation, end of the year | $ | 2,978,330 | $ | 2,476,496 |
b) Pension benefits
The Office’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension plans benefits and they are indexed to inflation.
Both the employees and the Office contribute to the cost of the Plan. The 2008‑09 expense amounts to $1,439,691 ($1,430,542 in 2007-08), which represents approximately 1.91 times the contributions by employees.
The Office’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.
c) Other benefits
The employees of the Office are also covered by workers’ compensation benefits across Canada. This plan is managed by Human Resources and Social Development Canada (HRSDC). As plan manager, HRSDC has authority to charge to the Office its share of the annual workers’ compensation benefit payments incurred under the plan. These amounts are expensed by the Office and charged to appropriations when the Office becomes liable to HRSDC in the year the amounts are billed.
In April 2002, the death of an employee resulted in the payment of benefits under the workers’ compensation death benefit plan. The total cost is expected to be approximately $685,000 and is payable under the plan by the Office to HRSDC, over the 13-year period following the death. The Office’s current year expense in relation to this claim amounts to $41,767 ($41,188 in 2008). It is expected that benefits totalling approximately $338,200 will be paid over the next 8 years by the Plan and that the Office in accordance with Treasury Board Policy will pay these amounts, as well as administration fees, to HRSDC. These amounts will be both expensed and charged to appropriations by the Office in the year they are billed by HRSDC.
6. Related Party Transactions
The Office is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The Office enters into transactions with these entities in the normal course of business.
During the year, the Office had net expenses of $6,070,932 ($5,468,305 in 2008) from transactions in the normal course of business with other Government departments, agencies and Crown corporations. These expenses include services provided without charge of $2,922,992 ($2,691,000 in 2008) as described in Note 7.
7. Services Provided Without Charge by Other Government Departments
During the year, the Office received services that were obtained without charge from other government departments and agencies. These are recorded at their estimated costs in the financial statements as follows:
| 2009 | 2008 | |||
| Public Works and Government Services Canada - accommodation | $ | 1,719,240 | $ | 1,735,000 |
| Treasury Board Secretariat - employer’s share of insurance premiums | 1,091,752 | 837,000 | ||
| Office of the Auditor General of Canada - audit services | 105,000 | 112,000 | ||
| Public Works and Government Services Canada - payroll services | 7,000 | 7,000 | ||
| Total | $ | 2,922,992 | $ | 2,691,000 |
8. Contingent Liabilities
In the normal course of its operations, the Office may become involved in various legal actions. Some of these legal actions may result in actual liabilities when one or more future events occur. To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, a liability is accrued and an expense recorded in the financial statements. No contingent liabilities relating to the Office of the Commissioner of Official Languages are recognized in the Office's financial statements for the fiscal year ended March 31, 2009.
9. Contractual Obligations
The Office has commitments arising in the normal course of operations for future years. These obligations include occupancy leases and equipment rental, as well as the obligation for workers’ compensation death benefits disclosed in Note 5 c). Significant contractual obligations that can be reasonably estimated are summarized as follows:
| Fiscal year | |||
| 2009-2010 | $160,527 | ||
| 2010-2011 | 160,527 | ||
| 2011-2012 | 160,527 | ||
| 2012-2013 | 156,610 | ||
| 2013 until 2017 | 192,612 | ||
| Total | $830,803 |
