PPSC Financial Statements 2009-2010

Office of the Director of Public Prosecutions

Financial Statements

Management Responsibility for Financial Statements

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2010 and all information contained in these statements rests with management of the Office of the Director of Public Prosecutions. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on 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 in the preparation of the Public Accounts of Canada and included in the Office's Departmental Performance Report is consistent with these financial statements.

Management maintains an effective 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 and applicable legislation, regulations, authorities and policies. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, through 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 of the Director of Public Prosecutions.

The financial statements of the Office have not been audited.

 

__________________________
Brian Saunders
Director of Public Prosecutions

 

__________________________
Lucie Bourcier
Chief Financial Officer

 

Ottawa, Canada

 

__________________________
Date

 

Statement of Financial Position (unaudited)

As at March 31
In thousands of dollars

  2010 2009
Assets
Financial assets
Receivables (Note 6) 4,599 5,526
Advances (Note 7) 4 4
Total financial assets 4,603 5,530
Non-financial assets
Tangible capital assets (Note 8) 5,602 5,890
Total non-financial assets 5,602 5,890
Total 10,205 11,420
 
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (Note 9) 21,936 21,592
Vacation pay and compensatory leave 3,561 3,094
Employee severance benefits (Note 10) 15,496 13,866
Total liabilities 40,993 38,552
Equity of Canada (30,788) (27,132)
Total 10,205 11,420

The accompanying notes form an integral part of these financial statements.

 

 

Statement of Operations (unaudited)

For the year ended March 31
In thousands of dollars

  2010 2009
Expenses (Note 4)
Drug, Criminal Code and terrorism prosecution program 115,526 98,447
Regulatory offences and economic crime prosecution program 30,510 28,039
Internal services 27,988 29,285
Total expenses 174,024 155,771
 
Revenues (Note 5)
Regulatory offences and economic crime prosecution program 13,157 12,529
Total revenues 13,157 12,529
 
Net cost of operations 160,867 143,242

The accompanying notes form an integral part of these financial statements.

 

 

Statement of Equity of Canada (unaudited)

For the year ended March 31
In thousands of dollars

  2010 2009
Equity of Canada, beginning of year (27,132) (19,519)
Net cost of operations (160,867) (143,242)
Current year appropriations used (Note 3) 146,968 132,191
Revenue not available for spending (Note 5) (1,026) (1,038)
Change in net position in the Consolidated Revenue Fund (Note 3) (3,116) (8,523)
Services provided without charge by other government departments (Note 12) 14,385 13,000
Equity of Canada, end of year (30,788) (27,132)

The accompanying notes form an integral part of these financial statements.

 

 

Statement of Cash Flow (unaudited)

For the year ended March 31
In thousands of dollars

  2010 2009
Operating activities
Net cost of operations 160,867 143,242
Non-cash items
Amortization of tangible capital assets (Note 8) (1,666) (1,594)
Services provided without charge by other government departments (Note 12) (14,385) (13,000)
Variations in Statement of Financial Position
Increase in accounts receivable and advances (927) (3)
Increase in liabilities (2,441) (9,125)
Cash used by operating activities 141,448 119,520
 
Capital investment activities
Acquisitions of tangible capital assets (Note 8) 1,379 3,110
Cash used by capital investment activities 1,379 3,110
 
Financing activities
Net cash provided by Government of Canada (142,826) (122,629)
Cash used by financing activities (142,826) (122,629)

The accompanying notes form an integral part of these financial statements.

 

 

Notes to the Financial Statements (unaudited)

1. Authority and objectives

On December 12, 2006, the Office of the Director of Public Prosecution (ODPP), also known as the Public Prosecution Service of Canada, was created by the Director of Public Prosecutions Act which is Part 3 of the Federal Accountability Act. This Office took over the duties of the former Federal Prosecution Service within the Department of Justice.

The Office has three (3) program activities:

  1. Drug, Criminal Code and terrorism prosecution program

    Under this program activity, the PPSC provides prosecution-related advice and litigation support during the police investigation, and prosecutes all drug charges under the Controlled Drugs and Substances Act, regardless of whether a federal, provincial or municipal police agency lays the charges, except in the case of Quebec and New Brunswick, where the PPSC prosecutes drug charges laid by the RCMP. Some of these cases involve organized crime.

  2. Regulatory offences and economic crime prosecution program

    Under this program activity, the PPSC provides prosecution-related advice and litigation support to federal investigative agencies, and prosecutes all non drug cases under 50 federal statutes, including regulatory offences and economic crimes. Examples include offences under the Canadian Environmental Protection Act, the Income Tax Act, the Competition Act, the Fisheries Act and the Canada Elections Act, as well as offences under the Customs Act, the Excise Act and the Excise Tax Act.

  3. Internal services

    Internal Services comprise groups of related activities that are administered to support the needs of the above two program activities and other corporate obligations of the organization.

2. Summary of significant accounting policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.

The significant accounting policies are as follows:

(a) Parliamentary appropriations

The Office is financed by the Government of Canada mostly through parliamentary appropriations. Appropriations provided to the Office do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based 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 a high-level reconciliation between the bases of reporting.

(b) 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 is deposited to the CRF and all cash disbursements are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Change in net position in the Consolidated Revenue Fund

The change in net position in the Consolidated Revenue Fund (CRF) is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues

  • Revenues derived from the provision of legal services are recognized in the year the services are rendered.
  • Fines, forfeitures and court costs are recognized upon receipt of payment by the department.

(e) Expenses

  • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
  • Expenses related to the provision of advisory and prosecution functions are limited to those costs borne and settled directly by the Office. These functions may or may not be recovered as revenue from the government department and agencies. The costs of the provision of advisory and prosecution services which are paid directly by government departments and agencies to outside suppliers such as legal agents, are not included in the expenses.
  • Services provided without charge by other government departments for accommodation, the employer’s contribution to the health and dental insurance plans, and workers' compensation coverage are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

  1. Pension benefits

    Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The Office's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require contributions for any actuarial deficiencies of the Plan.

  2. Severance benefits

    Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are 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.

(g) Receivables

Receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) 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.

(i) Tangible capital assets

All tangible capital assets are recorded at their acquisition cost and amortized over their estimated useful life on a straight-line basis as follows:

Asset class Acquisition cost equal or greater Amortization period
Informatics hardware $1,000 3 to 5 years
Informatics software $10,000 3 to 5 years
Furniture and furnishings $1,000 10 years
Motor vehicles $10,000 5 years
Leasehold improvements $10,000 Lesser of useful life or term of the lease

(j) Measurement uncertainty

The preparation of these financial statements in accordance with Treasury Board accounting 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. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. 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

In thousands of dollars
  2010 2009
Net cost of operations 160,867 143,242
Adjustments for items affecting net cost of operations but not affecting appropriations
Add (Less)
Services provided without charge by other government departments (Note 12) (14,385) (13,000)
Amortization of tangible capital assets (Note 8) (1,666) (1,594)
Employee severance benefits (1,630) (1,313)
Vacation pay and compensatory leave (467) (547)
Revenue not available for spending 1,026 1,038
Employee benefits plan (EBP) (part of employer) component of legal services revenue 1,510 1,660
Adjustment on contingent liabilities 0 (800)
Refunds and reversals of previous year expenses 334 395
  (15,278) (14,161)
Adjustments for items not affecting net cost of operations but affecting appropriations
Add
Acquisitions of tangible capital assets (Note 8) 1,379 3,110
Current year appropriations used 146,968 132,191

(b) Appropriations provided and used

In thousands of dollars
  2010 2009
Vote 35 - program expenditures 167,046 153,322
Statutory amounts 14,372 11,454
  181,418 164,776
Less
Voted authorities lapsed (34,450) (32,585)
Current year appropriations used 146,968 132,191

(c) Reconciliation of net cash provided by Government to current year appropriations used

In thousands of dollars
  2010 2009
Net cash provided by Government 142,826 122,629
Revenue not available for spending 1,026 1,038
  143,852 123,668
Change in net position in the Consolidated Revenue Fund
Variation in accounts receivable and advances 927 (3)
Variation in accounts payable and accrued liabilities 344 7,266
Adjustments and refunds of previous year accounts payable 334 395
Employee benefits componant of legal services revenue 1,510 1,660
Other adjustments 1 (795)
  3,116 8,523
Current year appropriations used 146,968 132,191

4. Expenses

In thousands of dollars
  2010 2009
Operating
Salaries and employee benefits 111,504 96,969
Professional and special services 39,381 37,912
Accommodation 9,746 9,117
Travel and relocation 5,816 5,359
Utilities, materials and supplies 2,245 1,552
Amortization of tangible capital assets 1,666 1,594
Communications 1,470 1,339
Information 892 816
Repairs and maintenance 777 483
Other 279 256
Rentals 248 324
Claims and ex-gratia payments 0 51
Total expenses 174,024 155,771

5. Revenues

In thousands of dollars
  2010 2009
Services
Legal services 12,131 11,491
Other revenues
Fines and forfeitures 663 617
Rent from residential housing provided to employees 352 382
Other 11 39
  1,026 1,038
Total revenues 13,157 12,529

6. Receivables

In thousands of dollars
  2010 2009
Federal government departments and agencies (include GST) 4,538 5,361
External parties 61 165
Total receivables 4,599 5,526

7. Advances

In thousands of dollars
  2010 2009
Standing advances held by employees for petty cash 4 4
Total advances 4 4

8. Tangible capital assets

In thousands of dollars
Capital asset class Opening balance Acquisitions Disposals and transfers Closing balance
Informatics hardware 1,929 591 0 2,520
Informatics software 337 458   795
Furniture and furnishings 2,128 263 0 2,391
Motor vehicles 56 50   106
Leasehold improvements 7,018 17 0 7,035
Total tangible capital assets 11,468 1,379 0 12,847

In thousands of dollars
Accumulated amortization
Capital asset class Opening balance Current Year amortization Disposals and transfers Closing balance
Informatics hardware 985 339 0 1,324
Informatics software 132 86 0 218
Furniture and furnishings 331 225 0 556
Motor vehicles 45 6 0 51
Leasehold improvements 4,086 1,010 0 5,096
Total tangible capital assets 5,579 1,666 0 7,245

In thousands of dollars
Capital asset class 2010
Net book value		 2009
Net book value
Informatics hardware 1,196 944
Informatics software 577 205
Furniture and furnishings 1,835 1,797
Motor vehicles 55 11
Leasehold improvements 1,939 2,932
Total tangible capital assets 5,602 5,889

9. Accounts payable and accrued liabilities

In thousands of dollars
  2010 2009
Federal government departments and agencies
Accounts payable 814 689
 
External parties
Accounts payable 20,115 17,716
Accrued salaries 0 2,187
Other liabilities 1,007 1,000
  21,122 20,903
 
Total accounts payable and accrued liabilities 21,936 21,592

10. Employee benefits

(a) 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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Office contribute to the cost of the Plan. The expense presented below represents approximately 1.9 times (2.0 in 2008-2009) the contributions by employees.

In thousands of dollars
  2010 2009
Pension expense 10,372 8,269

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.

(b) 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:

In thousands of dollars
  2010 2009
Accrued benefit obligation, beginning of year 13,866 12,553
Expense for the year 1,948 1,863
Benefits paid during the year (318) (550)
Accrued benefit obligation, end of year 15,496 13,866

11. Contingent liabilities

Claims and litigation

Claims have been made against the Office in the normal course of operations. Legal proceedings for claims totalling approximately $10,025,000 were still pending at March 31, 2010 ($10,355,000 in 2008-2009) . Some of these potential liabilities may become actual liabilities when the event occurs or fails 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. An amount of $1,000,000 has been recorded for the fiscal year 2009-2010 ($1,000,000 in 2008-2009).

12. Related party transactions

The Office is related as a result 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 and on normal trade terms.

Also, during the year, the Office received without charge from other government departments and agencies accommodation, the employer's contribution to the health and dental insurance plans, and workers' compensation coverage. These services without charge have been recognized in the Statement of Operations as follows:

In thousands of dollars
  2010 2009
Accommodation provided by Public Works and Government Services Canada 8,647 7,652
Employer’s contributions to the health and dental insurance plans paid by Treasury Board Secretariat 5,738 5,348
Total 14,385 13,000

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The cost of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the department's Statement of Operations.

In addition, the Office of the Director of Public Prosecutions has provided legal services without charge to other government departments throughout the fiscal year for a total amount of $7,682,899 ($8,737,387 in 2008-2009).

13. Comparative information

Comparative figures have been reclassified to conform to the current year's presentation.