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Section IV - Other Items of Interest

Financial Statements for the Year Ended March 31, 2007

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Public Appointments Commission Secretariat
Financial Statements (Unaudited)

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Statement of Management Responsibility
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2007 and all information contained in these statements rests with departmental management. These statements have been prepared by management of Privy Council Office on behalf of management of Public Appointments Commission Secretariat in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Management of PCO on behalf of management of PACS is responsible for the proper recording of the financial information and the proper reporting of that information in these financial statements. Some of the information in the financial statements is based on management’s of PCO on behalf of management of PACS best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management of PCO on behalf of management of PACS maintains a set of accounts that provides a centralized record of the Public Appointments Comission Secretariat’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Public Appointments Commission Secretariat’s Departmental Performance Report is consistent with these financial statements.
Management of PCO on behalf of management of PACS maintains complete, proper and accurate books of accounts and records, designed to provide reasonable assurance that financial information is reliable 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.
The financial statements of the Public Appointments Commission Secretariat have not been audited.
		Marilyn MacPherson
		Assistant Deputy Minister
		Corporate Services
Ottawa, Ontario
August 10, 2007

 

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Public Appointments Commission Secretariat
Statement of Operations (Unaudited)

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for the year ended March 31, 2007
Expenses	2007
	(in thousands of dollars)
Oversight of the Governor-in-Council appointments
Salaries and employee benefits	654
Professional and special services	76
Accommodation	67
Transportation and telecommunication	33
Other expenses	5
Utilities, materials and equipment	5
Rental	3
Total Expenses	843
Net Cost of Operations	843
The accompanying notes form an integral part of these financial statements.

 

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Public Appointments Commission Secretariat
Statement of Financial Position (Unaudited)

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at March 31, 2007
Liabilities and Equity of Canada	2007
	(in thousands of dollars)
Liabilities
Accounts payable to other federal government departments and agencies	54
Vacation pay and compensatory leave	25
Employee severance benefits (Note 4)	82
Total liabilities	161
Equity of Canada	(161)
Total	0
Contractual obligations (Note 5)
The accompanying notes form an integral part of these financial statements.

 

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Public Appointments Commission Secretariat
Statement of Equity of Canada (Unaudited)

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at March 31, 2007
	2007
	(in thousands of dollars)
Equity of Canada, beginning of year	0
Net cost of operations	(843)
Services provided without charge by other government departments (Note 6)	103
Current year appropriation used (Note 3)	633
Change in net position in the Consolidated Revenue Fund (Note 3)	(54)
Equity of Canada, end of year	(161)
The accompanying notes form an integral part of these financial statements.

 

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Public Appointments Commission Secretariat
Statement of Cash Flow (Unaudited)

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for the year ended March 31, 2007
		2007
		(in thousands of dollars)
Operating Activities
Net cost of operations		843
Non-cash items:
Services provided without charge by other government departments (Note 6)		(103)
Variation in Statement of Financial Position:
	(Increase) decrease in liabilities:
	Accounts payable to other federal government departments and agencies	(54)
	Vacation pay and compensatory leave	(25)
	Employee severance benefits	(82)
		(161)
Cash used by operating activities		579
Capital Investment Activities		0
Financing Activities		0
Net cash provided by Government of Canada		579
The accompanying notes form an integral part of these financial statements.

 

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Public Appointments Commission Secretariat
Notes to Financial Statements (Unaudited)

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for the year ended March 31, 2007
1. Authority and Objectives
The Public Appointments Commission Secretariat (PACS) was established by Order in Council on April 21, 2006. The Secretariat was created to prepare the ground for the establishment of the Public Appointments Commission, whose mandate is described in the Federal Accountability Act.
The Commission and its Secretariat are within the portfolio of the Prime Minister, reflecting the prerogative of the Prime Minister with respect to Governor-in-Coucil appointments.
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.  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 Canadian 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: Public Appointments Commission Secretariat operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the Public Appointments Commission Secretariat 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 between departments of the federal government.
c) Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non-respendable revenue recorded by the Public Appointments Commission Secretariat. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.
d) Expenses - Expenses are recorded on the accrual basis:
-	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.
-	Services provided without charge by other government departments for accommodation, the employer’s contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.
e) Employee future benefits:
i)	Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer 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 Public Appointments Commission Secretariat 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.
f) 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 reported in the financial statements. At the time of preparation of these statements, management believes these 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 Public Appointments Commission Secretariat 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 differences are reconciled in the following tables:
a) Reconciliation of net cost of operations to current year appropriation used:
						2007
						(in thousands of dollars)
Net cost of operations						843
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less) :
	Vacation pay and compensatory leave					(25)
	Services provided without charge by other government departments					(103)
	Employee severance benefits					(82)
Current year appropriation used						633
b) Appropriation provided and used:
						2007
						(in thousands of dollars)
Vote - Operating expenditures						986
Statutory amounts						54
Less:
Appropriations available for future years						0
Lapsed appropriations - Operating						(407)
Current year appropriation used						633
c) Reconciliation of net cash provided by Government to current year appropriation used:
						2007
						(in thousands of dollars)
Net cash provided by the Government						579
Change in net position in the Consolidated Revenue Fund
	Variation in accounts payable and accrued liabilities					54
Current year appropriation used						633
4. Employee Benefits
a) Pension benefits: The Public Appointments Commission Secretariat’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 are indexed to inflation.
Both the employees and the department contribute to the cost of the Public Service Pension Plan. The 2006-07 expense amounts to $39,920 which represents approximately 2.2 times the contributions by employee.
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 Public Appointments Commission Secretariat  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:
						2007
						(in thousands of dollars)
Accrued benefits obligation, beginning of year						0
Expenses for the year						82
Benefits paid during the year						0
Accrued benefits obligation, end of year						82

5. Contractual Obligations
The nature of the Public Appoinments Commission Secretariat’s activities can result in large multi-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received.  Significant contractual obligations that can be reasonably estimated are summarized as follows:
(in thousands of dollars)		2008		2009		2010		2011		2012 and thereafter		Total
Rental		2		3		0		0		0		5
Total		2		3		0		0		0		5
6. Related Party Transactions
The department is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The Privy Council Office enters into transactions with these entities in the normal course of business and on normal trade terms.
Services provided without charge: During the year, the Public Appointments Commission Secretariat received, without charge from other government departments, accommodation and the employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the department’s Statement of Operations as follows:
								2007
								(in thousands of dollars)
Accommodation								67
Employer's contribution to the health and dental insurance plans								36
Total								103
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 costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General, are not included as an expense in the department’s Statement of Operations.

Legislation Administered

Salaries Act      SS.1.1, 1.2

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