Financial Statements
Notes to the Financial Statements (Unaudited)
1. Authority and objectives
The Department of Justice was created by an Act of Parliament in 1868 to be responsible for the legal affairs of the Government of Canada and to provide legal services to individual departments and agencies. The Department's work reflects the duties of its Minister's dual role as Attorney General of Canada and as Minister of Justice. The Department is established under the authority of Schedule I to the Financial Administration Act and is funded through annual appropriations.
The department conducts its two priorities along four program activities:
(a) A fair, relevant and accessible justice system that reflects Canadian values
Justice policies, laws and programs
Under Canada's federal system, the administration of justice is an area of shared jurisdiction between the federal government and the provinces. Through this program activity, the Department fulfils its constitutional responsibility to ensure a bilingual and bijural national legal framework for the administration of justice by developing policies and laws and testing innovative approaches to strengthen the framework within the following domains: criminal law, youth criminal justice, sentencing, marriage and divorce, access to justice and Aboriginal justice. Through this program activity, the Department also provides significant ongoing funding to provinces and territories in support of their constitutional responsibility for the day to day administration of justice.
The Office of the Federal Ombudsman for Victims of Crime
This program activity raises awareness of the needs and concerns of victims in areas of federal responsibility, provides an independent resource that addresses complaints of victims about compliance with the provisions of the Corrections and Conditional Release Act that apply to victims of offenders under federal supervision, and assists victims to access existing federal programs and services.
(b) A federal government that is supported by effective and responsive legal services
Services to government
As a common service provider, the Department of Justice provides an integrated suite of legal advisory, litigation and legislative services to departments and agencies to help them meet their policy and programming priorities and advance the overall objectives of the Government. Through this program activity, the Department also provides legal services to the Justice Portfolio and supports the Minister as legal advisor to the Cabinet on complex, whole of government issues.
(c) The following program activity supports all strategic outcomes within this organization.
Internal Services
Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.
2. Summary of significant accounting policies
These financial statements have been prepared in accordance with Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.
The significant accounting policies are as follows:
(a) Parliamentary appropriations
The Department is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the Department do not parallel financial reporting according to generally accepted accounting principles for the public sector 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 4 provides a high-level reconciliation between the bases of reporting.
(b) Net cash provided by Government
The Department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Department is deposited to the CRF and all cash disbursements made by the Department are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions with departments of the federal government.
(c) Due from the Consolidated Revenue Fund (CRF)
The amounts are the result of timing differences between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further appropriations.
(d) Revenues
- Revenues are derived from the provision of advisory, litigation and legislative services provided by Department of Justice's law practitioners and they are recognized in the year the services are rendered. These revenues are based on legal services rates approved annually by Treasury Board in accordance with the Common Services Policy, for non-appropriated mandatory legal services to Government departments and agencies as well as legal services to Crown corporations and non-federal and international organizations.
- Service and administration fees revenues under the Family Law programs are recognized based upon the services provided in the year, such as upon validation of the garnishment application or upon issuance of the divorce clearance certificate. The fees prescribed by Family Orders and Agreements Enforcement Assistance Act are to cover the administrative costs of processing each garnishee summons served on the Minister.
- Fines, forfeitures and awarded court costs are recognized upon receipt of payment by the Department. Fines and forfeitures include two groups of payments: those provided for under the Criminal Code (s.734 through s.737) and those provided for under the Contraventions Act . Fines and forfeitures are in effect penalties for illigal actions, rather than fees.
(e) Expenses
- Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
- Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement.
- Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment. The liability is calculated based on salary levels in effect at March 31 and the number of days remaining unpaid at the end of the fiscal year. Payments of these obligations are funded through future year appropriations.
- Expenses related to the provision of legal services are limited to those costs borne and settled directly by the Department. The cost of legal services which are paid directly by client departments to outside suppliers such as legal agents, are not included in the expenses of the Department.
- Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, audit services, and workers' compensation coverage are recorded as operating expenses at their estimated cost.
(f) Employee future benefits
i. Pension benefits
Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The Department'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 the Department to make contributions for any actuarial deficiencies of the Plan.
ii. 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; an allowance for doubtful accounts is made for receivables where recovery is considered uncertain. The allowance for doubtful accounts represents management's best estimate of probable losses in receivables. The allowance is determined based on an analysis of historic loss experience and an assessment of current conditions. The allowance is increased for losses and reduced by amounts written-off.
Under the Family Orders and Agreements Enforcement Assistance Act, remission order PC 1994-269, outstanding receivables are written-off once the garnishee application has terminated. The application terminates when the five-year life of the garnishment summons has expired or when the province or territory has requested that the application be cancelled.
(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 and leasehold improvements are recorded at their cost and amortized over their estimated useful life on a straight-line basis as follows:
| Asset class | Acquisition cost equal or greater than | Amortization Period |
|---|---|---|
| Office and other equipment | $10,000 | 5 to 8 years |
| Telecommunications equipment | $10,000 | 4 to 5 years |
| 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 remaining term of the lease |
| Work in progress | In accordance with asset class | Once in service, in accordance with asset class |
Amortization of the tangible capital asset commences the month following the date the asset is put into service.
(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, allowance for doubtful accounts, 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. Restatement of prior year figures
The financial statement results for the year ended March 31, 2009 have been restated to reflect the correction of an error with respect to recognition of accrued salaries for unratified collective agreements where the Government has little or no discretion to avoid a payment and the amount is reasonably determinable.
This resulted in an understatement of expenses of $10,687,159 and an understatement of liabilities of $16,176,638 for the year ended March 31, 2009. The March 31, 2009 deficit of Canada, beginning of the year was understated by $5,489,479.
4. Parliamentary appropriations
The Department 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 Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The following tables present the reconciliation between the current year appropriation used and the net cost of operations:
| 2010 | 2009 Restated |
|
|---|---|---|
| Net cost of operations | 804,413 | 776,620 |
| Adjustments for items affecting net cost of operations but not affecting appropriations | ||
| Amortization of tangible capital assets (Note 8) | (10,700) | (10,605) |
| Vacation pay and compensatory leave | (1,750) | (1,183) |
| Employee severance benefits | 5,952 | (22,883) |
| Accrual for unratified collective agreements | 18,856 | (13,254) |
| Adjustments to previous year's accounts payable | 12,839 | 33,960 |
| Bad debt expense | (4,499) | (6,471) |
| Revenue not available for spending | 9,156 | 8,401 |
| Employee benefits recovered | 32,838 | 33,501 |
| Services provided without charge by other government departments (Note 14) | (82,462) | (76,765) |
| Write off tangible capital assets (Note 8) | - | (27) |
| Other | - | 1,025 |
| Total items affecting net cost of operations but not affecting appropriations | (19,770) | (54,301) |
| Adjustments for items not affecting net cost of operations but affecting appropriations | ||
| Acquisitions of tangible capital assets (Note 8) | 14,146 | 14,800 |
| Change in prepaid expenses | 7 | (25) |
| Other | (292) | - |
| Total items not affecting net cost of operations but affecting authorities | 13,861 | 14,775 |
| Current year appropriations used | 798,504 | 737,094 |
| 2010 | 2009 | |
|---|---|---|
| Vote 1 - Operating expenditures | 362,604 | 321,119 |
| Vote 5 - Grants and contributions | 394,142 | 389,190 |
| Statutory amounts | 79,076 | 62,896 |
| Less | ||
| Appropriations available for future years | (8) | (4) |
| Voted appropriations lapsed | (37,310) | (36,107) |
| Current year appropriations used | 798,504 | 737,094 |
5. Expenses
| 2010 | 2009 Restated |
|
|---|---|---|
| Operating | ||
| Salaries and employee benefits | 554,669 | 531,010 |
| Professional and special services | 47,226 | 44,965 |
| Accommodation | 45,478 | 43,699 |
| Travel and relocation | 11,791 | 13,728 |
| Amortization of tangible capital assets (Note 8) | 10,700 | 10,605 |
| Utilities, materials and supplies | 10,470 | 7,109 |
| Communications | 7,484 | 7,036 |
| Bad debts | 4,499 | 6,471 |
| Information | 3,678 | 3,587 |
| Repairs and maintenance | 3,646 | 3,055 |
| Rentals | 980 | 949 |
| Other | 795 | 642 |
| Claims and ex-gratia payments | 541 | 4,379 |
| Total operating expenses | 701,957 | 677,235 |
| Transfer payments | ||
| Provinces and territories | 337,153 | 310,550 |
| Non-profit institutions and organizations | 22,440 | 20,215 |
| Individuals | 13,287 | 10,549 |
| International organizations | 524 | 416 |
| Total transfer payments | 373,404 | 341,730 |
| Total expenses | 1,075,361 | 1,018,965 |
6. Revenues
| 2010 | 2009 | |
|---|---|---|
| Services | ||
| Legal services | 261,973 | 234,030 |
| Family Law fees | 8,200 | 7,865 |
| Total | 270,173 | 241,895 |
| Other revenues | 775 | 450 |
| Total revenues | 270,948 | 242,345 |
7. Receivables and Advances
| 2010 | 2009 | |
|---|---|---|
| Federal government departments and agencies | 17,290 | 18,181 |
| External parties | ||
| Family Law | 12,657 | 12,794 |
| Less: allowances for doubtful accounts | (11,474) | (12,038) |
| Total accounts receivable from Family Law | 1,183 | 756 |
| Other receivables and advances | 885 | 978 |
| Less: allowances for doubtful accounts | (207) | (224) |
| Total other receivables and advances | 678 | 754 |
| Total receivables and advances | 19,151 | 19,691 |
8. Tangible Capital Assetts
| Opening balance | Acquisitions | Disposals and transfers | Closing balance | |
|---|---|---|---|---|
| Office and other equipment | 1,001 | 88 | - | 1,089 |
| Telecommunications equipment | 3,436 | 1,161 | - | 4,597 |
| Informatics hardware | 24,899 | 3,150 | - | 28,049 |
| Informatics software | 23,039 | 440 | 8 | 23,487 |
| Furniture and furnishings | 19,314 | 3,023 | - | 22,337 |
| Motor vehicles | 58 | - | - | 58 |
| Leasehold improvements | 16,163 | 125 | 4,043 | 20,331 |
| Work in progress - software development | 762 | 2,007 | (8) | 2,761 |
| Work in progress - leasehold improvements | 593 | 4,152 | (4,043) | 702 |
| Total tangible capital assets | 89,265 | 14,146 | - | 103,411 |
| Opening balance | Current year amortization | Disposals and transfers | Closing balance | |
|---|---|---|---|---|
| Office and other equipment | 309 | 162 | - | 471 |
| Telecommunications equipment | 1,845 | 519 | - | 2,346 |
| Informatics hardware | 17,787 | 3,100 | - | 20,887 |
| Informatics software | 15,330 | 2,625 | - | 17,955 |
| Furniture and furnishings | 7,987 | 2,018 | - | 10,005 |
| Motor vehicles | 47 | 6 | - | 53 |
| Leasehold improvements | 9,124 | 2,270 | - | 11,394 |
| Total accumulated amortization | 52,429 | 10,700 | - | 63,129 |
| 2010 | 2009 | |
|---|---|---|
| Office and other equipment | 618 | 692 |
| Telecommunications equipment | 2,233 | 1,591 |
| Informatics hardware | 7,162 | 7,112 |
| Informatics software | 5,532 | 7,709 |
| Furniture and furnishings | 12,332 | 11,327 |
| Motor vehicles | 5 | 11 |
| Leasehold improvements | 8,937 | 7,039 |
| Work in progress - software development | 2,761 | 762 |
| Work in progress - leasehold improvements | 702 | 593 |
| Total net book value | 40,282 | 36,836 |
Amortization expense for the year ended March 31, 2010 is $10,700,000 ($10,605,000 in 2008-09).
9. Accounts payable and accrued liabilities
| 2010 | 2009 | |
|---|---|---|
| Federal government departments and agencies | 20,721 | 3,448 |
| External parties | ||
| Accounts payable | 37,285 | 45,202 |
| Accrued salaries | - | 12,892 |
| Total accounts payable to external parties | 37,285 | 58,094 |
| Accrual for unratified collective agreements | 12,274 | 31,130 |
| Other liabilities | 4 | - |
| Total other receivables and advances | 49,563 | 89,224 |
| Total accounts payable and accrued liabilities | 70,284 | 92,672 |
10. Family Law account
Under the Family Orders and Agreements Enforcement Assistance Act, the Department assists provinces and territories in the enforcement of family support orders and agreements by providing garnishment assistance through the interception of designated federal moneys payable to individuals owing family financial support. These intercepted moneys (consisting of garnisheed moneys such as income tax refunds, employment insurance benefits, etc.) are deposited into the Family Law account from which payments to the provinces and territories are then made. The provinces and territories distribute these payments to the beneficiaries.
| 2010 | 2009 | |
|---|---|---|
| Family Law account, beginning of year | 6,626 | 4,578 |
| Receipts | 167,847 | 140,917 |
| Payments | (167,895) | (138,869) |
| Family Law account, end of year | 6,578 | 6,626 |
11. Employee future benefits
(a) Pension benefits
The Department'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 Department contribute to the cost of the Plan. The expense presented below represents approximately 1.9 times (2.0 in 2008-09) the employees' contributions.
| 2010 | 2009 | |
|---|---|---|
| Pension expense | 56,847 | 45,279 |
The Department'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 Department 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:
| 2010 | 2009 | |
|---|---|---|
| Accrued future benefit obligation, beginning of year | 96,249 | 73,366 |
| Expense for the year | (1,488) | 27,262 |
| Benefits paid during the year | (4,464) | (4,379) |
| Accrued future benefit obligation, end of year | 90,297 | 96,249 |
12. Contingent liabilities
Claims and litigation
Claims have been made against the Department in the normal course of operations. Legal proceedings for claims estimated at approximately $58,055,000 were still pending at March 31, 2010 ($509,297,000 at March 31, 2009). Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements. For this fiscal year, no amounts have been recorded.
13. Contractual obligations
The nature of the Department's activities results in some large multi-year contracts and obligations whereby the Department will be obligated to make future payments when the services and/or goods are received.
Significant contractual obligations that can be reasonably estimated are summarized as follows:
| 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 and thereafter |
|
|---|---|---|---|---|---|
| Transfer payments | 310,979 | 13,848 | 13,848 | 2,800 | - |
| Other goods and services | 2,067 | 3,668 | - | - | - |
| Total | 313,046 | 17,516 | 13,848 | 2,800 | - |
14. Related party transactions
The Department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Department enters into transactions with these entities in the normal course of business and on normal trade terms.
Also, during the year, the Department received without charge from other departments, 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 Department's Statement of Operations as follows:
| 2010 | 2009 | |
|---|---|---|
| Accommodation provided by Public Works and Government Services Canada | 44,441 | 43,725 |
| Employer's contributions to the health and dental insurance plans paid by Treasury Board Secretariat | 37,943 | 32,706 |
| Audit services provided by the Office of the Auditor General | - | 206 |
| Workers’ compensation coverage provided by Human Resources and Skills Development Canada | 78 | 74 |
| Total | 82,462 | 76,765 |
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 Department of Justice has provided legal services, such as advisory, litigation and legislative services, without charge to other government departments for a total amount of $227,202,000 ($191,020,000 in 2008-09). The amount is determined based on actual salary and operating expenses attributed to non-recoverable services provided to other government departments.
15. Comparative information
Certain 2009 comparative figures are reclassified to conform to the current year's presentation.
16. Segmented information
Presentation by segment is based on the Department's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:
| The Office of the Federal Ombudsman for Victims of Crime | Justice policies, laws and programs | Services to government | Internal Services | 2010 | 2009 Restated |
|
|---|---|---|---|---|---|---|
| Operating expenses | ||||||
| Salaries and employee benefits | 1,020 | 54,640 | 390,075 | 108,934 | 554,669 | 531,010 |
| Professional and special services | 119 | 7,230 | 22,963 | 16,914 | 47,226 | 44,965 |
| Accommodation | 53 | 18,591 | 19,338 | 7,496 | 45,478 | 43,699 |
| Travel and relocation | 38 | 1,924 | 7,834 | 1,995 | 11,791 | 13,728 |
| Amortization of tangible capital assets | 4 | 114 | 572 | 10,010 | 10,700 | 10,605 |
| Utilities, materials and supplies | 17 | 478 | 2,773 | 7,202 | 10,470 | 7,109 |
| Communications | 14 | 540 | 2,330 | 4,600 | 7,484 | 7,036 |
| Bad debts | - | 4,499 | - | - | 4,499 | 6,471 |
| Information | 82 | 339 | 2,722 | 535 | 3,678 | 3,587 |
| Repairs and maintenance | - | 29 | 496 | 3,121 | 3,646 | 3,055 |
| Rentals | 5 | 180 | 310 | 485 | 980 | 949 |
| Other | 1 | 531 | 35 | 228 | 795 | 642 |
| Claims and ex-gratia payments | - | 20 | 118 | 403 | 541 | 4,379 |
| Total operating expenses | 1,353 | 89,115 | 449,566 | 161,923 | 701,957 | 677,235 |
| Transfer payments | ||||||
| Provinces and territories | - | 337,153 | - | - | 337,153 | 310,550 |
| Non-profit institutions and organizations | - | 22,440 | - | - | 22,440 | 20,215 |
| Individuals | - | 13,287 | - | - | 13,287 | 10,549 |
| International organizations | - | 524 | - | - | 524 | 416 |
| Total transfer payments | - | 373,404 | - | - | 373,404 | 341,730 |
| Total expenses | 1,353 | 462,519 | 449,566 | 161,923 | 1,075,361 | 1,018,965 |
| Services | ||||||
| Legal services | - | - | 261,973 | - | 261,973 | 234,030 |
| Family Law fees | - | 8,200 | - | - | 8,200 | 7,865 |
| Sub total revenues | - | 8,200 | 261,973 | - | 270,173 | 241,895 |
| Other revenues | - | 403 | 308 | 64 | 775 | 450 |
| Total revenues | - | 8,603 | 262,281 | 64 | 270,948 | 242,345 |
- Previous Page Next Page
- Date modified: