Financial Statements

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Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013, and all information contained in these statements rests with the management of the Department of Justice. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

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 Department of Justice's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Department of Justice's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Department of Justice and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2013 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of the Department of Justice's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Department of Justice's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the deputy head of the Department of Justice.

The financial statements of the Department of Justice have not been audited.

Statement of Financial Position (unaudited)
As at March 31
(In thousands of dollars)

	2013	2012
Liabilities
Accounts payable and accrued liabilities (Note 4)	68,905	62,966
Family Law account (Note 5)	4,332	3,173
Transfer payments payable	375,184	429,873
Vacation pay and compensatory leave	19,620	19,253
Employee future benefits (Note 6)	83,007	87,076
Total liabilities	551,048	602,341
Financial assets
Due from the Consolidated Revenue Fund	395,336	451,461
Accounts receivable and advances (Note 7)	37,522	23,997
Total gross financial assets	432,858	475,458
Financial assets held on behalf of Government
Accounts receivable and advances (Note 7)	(11,432)	(10,181)
Total net financial assets	421,426	465,277
Departmental net debt	129,622	137,064
Non-financial assets
Prepaid expenses	88	124
Tangible capital assets (Note 8)	50,298	51,530
Total non-financial assets	50,386	51,654
Departmental net financial position	(79,236)	(85,410)

Notes:

• Contingent liabilities (Note 9)
• Contractual obligations (Note 10)

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

Statement of Operations and Departmental Net Financial Position (unaudited)
For the year ended March 31
(In thousands of dollars)

	2013 Planned Results	2013 Actuals	2012
Expenses
Legal Services to Government Program	516,039	479,148	481,735
Stewardship of the Canadian Legal Framework	455,709	459,432	454,452
The Office of the Federal Ombudsman for Victims of Crime	1,405	1,294	1,346
Internal Services	178,264	169,525	183,668
Total expenses	1,151,417	1,109,399	1,121,201
Revenues
Legal services	354,355	332,753	349,752
Common Services	9,140	8,062	6,145
Family Law fees	9,087	6,764	7,653
Other revenues	-	634	620
Revenues earned on behalf of Government	(9,087)	(7,398)	(8,273)
Total revenues	363,495	340,815	355,897
Net cost from continuing operations	787,922	768,584	765,304
Transferred Operations (Note 12)
Expenses	-	-	7,447
Net cost of transferred operations		-	7,447
Net cost of operations before government funding and transfers	787,922	768,584	772,751
Government Funding and Transfers
Net cash provided by Government	709,879	738,332	663,710
Change in due from the Consolidated Revenue Fund	(18,331)	(56,125)	27,043
Services provided without charge by other government departments (Note 11)	96,718	92,551	86,419
Transfer of assets to other government departments (Note 12)	-	-	(799)
Net cost or (revenue) of operations after government funding and transfers	(344)	(6,174)	(3,622)
Departmental net financial position - Beginning of year	(85,410)	(85,410)	(89,032)
Departmental net financial position - End of year	(85,066)	(79,236)	(85,410)

Note:

Segmented Information (Note 13)

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

Statement of Change in Departmental Net Debt (unaudited)
For the year ended March 31
(In thousands of dollars)

	2013 Planned Results	2013	2012
Net cost of operations after government funding and transfers	(344)	(6,174)	3,622
Change due to tangible capital assets
Acquisitions of tangible capital assets (Note 8)	16,722	12,954	20,935
Amortization of tangible capital assets (Note 8)	(13,061)	(14,186)	(12,386)
Proceeds from disposal of tangible capital assets	-	-	(136)
Transfer to other government departments (Note 12)	-	-	(799)
Total change due to tangible capital assets	3,661	(1,232)	7,614
Change due to prepaid expenses	(70)	(36)	54
Net increase in departmental net debt	3,247	(7,442)	4,046
Departmental net debt - Beginning of year	137,064	137,064	133,018
Departmental net debt - End of year	140,311	129,622	137,064

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

Statement of Cash Flows (unaudited)
For the year ended March 31
(In thousands of dollars)

	2013	2012
Operating activities
Net cost of operations before government funding and transfers	768,584	772,751
Non-cash items
Amortization of tangible capital assets (Note 8)	(14,186)	(12,386)
Services provided without charge by other government departments (Note 11)	(92,551)	(86,419)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances	12,274	(382)
(Decrease) increase in prepaid expenses	(36)	54
Decrease (increase) in liabilities	51,293	(30,707)
Cash used by operating activities	725,378	642,911
Capital investment activities
Acquisitions of tangible capital assets (Note 8)	12,954	20,935
Proceeds from disposal of tangible capital assets	-	(136)
Cash used by capital investment activities	12,954	20,799
Net cash provided by Government	738,332	663,710

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

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