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PUBLIC SERVICE COMMISSION
Statement of Management Responsibility
Responsibility for the integrity and objectivity of the accompanying financial statements of the Public Service Commission (PSC) for the year ended March 31, 2007 and all information contained in these statements rests with PSC's management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector, and year-end instructions issued by the Office of the Comptroller General.
Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of PSC's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the PSC'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 and with prescribed regulations and the Public Service Employment Act, are 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 PSC.
Management is also supported and assisted by a program of internal audit services. The PSC has an Internal Audit Committee. The responsibilities of the Committee are to provide the President with independent, objective advice, guidance and deliberation on the adequacy of the PSC's control and accountability processes.
The PSC's financial statements have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.
Ottawa, Canada
July 6, 2007
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 Public Service Commission as at March 31, 2007 and the statements of operations, equity of Canada and cash flow for the year then ended. These financial statements are the responsibility of the Commission'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 Commission as at March 31, 2007 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 Commission 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 Public Service Employment Act.
Sheila Fraser, FCA
Auditor General of Canada
Ottawa, Canada
July 6, 2007
PUBLIC SERVICE COMMISSION
Statement of Financial Position
At March 31
(in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Assets | |||
Financial assets | |||
Due from the Consolidated Revenue Fund | 6,562 | 10,529 | |
Accounts receivable and advances (Note 4) | 5,497 | 2,135 | |
12,059 |
12,664 |
||
Non-financial assets | |||
Prepaid expenses | 439 | 635 | |
Tangible capital assets (Note 5) | 18,740 | 14,557 | |
19,179 |
15,192 |
||
Total assets | 31,238 | 27,856 | |
Liabilities |
|||
Accounts payable and accrued liabilities (Note 6) | 7,124 | 8,755 | |
Accrued salary | 3,263 | 3,090 | |
Accrued vacation leave | 3,715 | 3,749 | |
Employee severance benefits (Note 7) | 14,988 | 14,872 | |
29,090 | 30,466 | ||
Equity of Canada |
2,148 |
(2,610) |
|
Total liabilities and Equity of Canada | 31,238 | 27,856 |
Contingent liabilities (Note 8)
Contractual obligations (Note 9)
The accompanying notes form an integral part of these financial statements.
Approved by:
PUBLIC SERVICE COMMISSION
Statement of Operations
For the year ended March 31
(in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Expenses (Note 10) |
|||
Recruitment and assessment services |
|||
Recruitment and staffing services | 35,920 | 38,477 | |
Assessment services | 22,361 | 19,380 | |
Client services | 13,449 | 13,324 | |
71,730 |
71,181 | ||
Appointment integrity and political neutrality |
|||
Audits and studies | 12,270 | 11,357 | |
Investigations, appeals and inquiries | 10,810 | 10,138 | |
Appointment delegation and accountability | 9,734 | 10,194 | |
Policy, regulation and exclusion approval orders | 7,835 | 9,650 | |
Non-delegated authorities | 5,018 | 4,535 | |
45,667 | 45,874 | ||
Total expenses |
117,397 |
117,055 |
|
Revenues |
|||
Assessment and counselling services and products | 6,511 | 4,812 | |
Activities on behalf of: |
|||
Canada School of Public Service | 333 | 1,081 | |
Treasury Board Secretariat of Canada | 341 | 327 | |
674 | 1,408 | ||
Less: Costs recovered | (674) | (1,408) | |
Net cost of operations | 110,886 | 112,243 |
The accompanying notes form an integral part of these financial statements.
PUBLIC SERVICE COMMISSION
Statement of Equity of Canada
For the year ended March 31
(in thousands of dollars)
2007 | 2006 | |||
---|---|---|---|---|
Equity of Canada, beginning of year | (2,610) | 1,077 | ||
Net cost of operations | (110,886) | (112,243) | ||
Net cash provided by Government of Canada | 103,347 | 88,183 | ||
Change in Due from the Consolidated Revenue Fund | (3,967) | 3,464 | ||
Services received without charge from other government departments and agencies (Note 12) | 16,264 | 16,909 | ||
Equity of Canada, end of year | 2,148 | (2,610) |
The accompanying notes form an integral part of these financial statements.
PUBLIC SERVICE COMMISSION
Statement of Cash Flow
For the year ended March 31
(in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Operating activities |
|||
Cash received from: | |||
Assessment and counselling services and products |
5,278 | 4,743 | |
Cash paid for: |
|||
Salaries and employee benefits | 79,603 | 67,719 | |
Professional and special services | 10,835 | 9,268 | |
Transportation and telecommunications | 3,973 | 3,352 | |
Informatics, office equipment, furniture and fixtures | 2,218 | 2,111 | |
Repair and maintenance | 1,738 | 1,540 | |
Rentals | 1,335 | 581 | |
Utilities, materials and supplies, and other payments | 721 | 1,070 | |
Printing and publications services | 562 | 561 | |
100,985 | 86,202 | ||
Cash used by operating activities |
95,707 | 81,459 | |
Capital investment activities |
|||
Acquisitions of tangible capital assets | 7,642 | 6,729 | |
Proceeds from disposal of tangible capital assets | (2) | (5) | |
Cash used by capital investment activities |
7,640 |
6,724 |
|
Net cash provided by Government of Canada | 103,347 | 88,183 |
The accompanying notes form an integral part of these financial statements.
PUBLIC SERVICE COMMISSION
Notes to the Financial Statements
For the year ended March 31, 2007
1. Authority and objectives
The Public Service Commission (PSC) of Canada is an independent agency established under the Public Service Employment Act (PSEA) and listed in schedules 1.1 and IV of the Financial Administration Act (FAA). The PSC is dedicated to building a public service that strives for excellence by protecting merit, non-partisanship, representativeness of Canadian society and the use of both official languages. This responsibility is performed in the best interests of the public service as part of Canada's governance system, by administering and applying the provisions of the PSEA and by carrying out responsibilities as provided for in the Employment Equity Act and the Official Languages Act. The new PSEA came into force in December 2005. This legislation emphasizes the PSC's accountability to Parliament and delegates staffing authority to deputy heads who in turn are accountable to the PSC for exercising this power. The Commission also carries out audits and investigations and administers measures under the new PSEA regarding political activities of public servants.
The PSC, from its offices in Ottawa and its seven regional offices, offers recruitment services that allow talented Canadians, drawn from across the country, to join the public service and continually renews staffing services to meet the needs of a modern and innovative public service. The PSC has two program activities that contribute to the achievement of its objectives:
The Appointment Integrity and Political Neutrality activity develops, maintains and monitors the implementation of a policy and regulatory framework for safeguarding the integrity of public service staffing and ensuring political neutrality. This activity includes establishing policies and standards, delegation and oversight of appointment authorities to departments and agencies, and administering non-delegated authorities such as executive appointments and priority administration. This activity also includes conducting audits, studies, investigations and inquiries as well as administering the appeal process and reporting to Parliament on the integrity of public service staffing.
The Recruitment and Assessment Services activity develops and maintains the resourcing systems that link Canadians and public servants seeking employment opportunities in the federal public service with hiring departments and agencies. It provides assessment-related products and services in the form of research and development, consultation, assessment operations and counselling for use in recruitment, selection and development throughout the federal public service. This activity also includes delivering resourcing services, programs and products to departments and agencies, to Canadians and public servants, through client service units located across Canada.
2. Summary of significant accounting policies
Asset class | Amortization period |
---|---|
Office equipment | 3 and 10 years |
Informatics hardware and infrastructure | 4 and 5 years |
Computer software | 3 years |
In-house developed software | 3 to 10 years |
Furniture and fixtures | 15 years |
Vehicles | 6 years |
Leasehold improvements | Lesser of 10 years or term of lease |
3. Parliamentary appropriations
The PSC 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 PSC 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):
2007 | 2006 | ||
---|---|---|---|
Net cost of operations |
110,886 |
112,243 |
|
Adjustments for items affecting net cost of operations but not affecting appropriations: | |||
Services received without charge | (16,264) | (16,909) | |
Amortization of tangible capital assets | (3,416) | (2,558) | |
Revenue not available for spending 1 | 34 | 4,812 | |
Employee severance benefits | (116) | (468) | |
Vacation leave | 34 | (104) | |
Other | 272 | (276) | |
91,430 | 96,740 | ||
Adjustments for items not affecting net cost of operations but affecting appropriations: |
|||
Acquisitions of tangible capital assets | 7,642 | 6,729 | |
Prepaid expenses | (196) | 518 | |
7,446 | 7,247 | ||
Current year appropriations used | 98,876 | 103,987 |
1For 2006-2007, Treasury Board approved a vote netting authority allowing PSC to respend revenues from Assessment and counselling services and products provided to other federal government departments and agencies under the PSC's jurisdiction and extended jurisdiction.
(b) Appropriations provided and used (in thousands of dollars):
2007 | 2006 | ||
---|---|---|---|
Parliamentary appropriations provided: |
|||
Voted - Operating expenditures | 96,448 | 96,427 | |
Statutory contributions to employee benefit plans | 11,370 | 11,937 | |
Spending of proceeds from disposal of surplus assets | 2 | 8 | |
107,820 | 108,372 | ||
Less: Lapsed appropriations - operating expenditures1 |
(8,944) |
(4,385) |
|
Current year appropriations used |
98,876 | 103,987 |
1The lapse in 2006-2007 is principally due to the transition period and related capacity building associated with the implementation of the new Public Service Employment Act, staffing delays resulting from staff turnover and less than anticipated expenditures for an information technology project (Public Service Staffing Modernization Project). The latter accounts for approximately $7,470,000 of the total lapse, $4,917,000 of which was re-profiled (carried forward) to 2007-2008.
(c) Reconciliation of net cash provided by Government to current year appropriations used (in thousands of dollars):
2007 | 2006 | ||
---|---|---|---|
Net cash provided by Government |
103,347 |
88,183 |
|
Revenue not available for spending | 34 | 4,812 | |
Variation in accounts payable, accrued liabilities and accrued salary | (958) | 3,370 | |
Variation in accounts receivable and advances | (3,362) | 7,895 | |
Other adjustments |
(185) |
(273) |
|
Current year appropriations used | 98,876 | 103,987 |
4. Accounts receivable and advances (in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Receivables- Federal Government departments, agencies and Crown corporations |
5,479 | 2,030 | |
Receivables - External parties | 12 | 98 | |
Advances to PSC's Employees |
6 |
7 |
|
Total | 5,497 | 2,135 |
5. Tangible capital assets (in thousands of dollars)
Cost: March 31, 2006 | Cost: Acquisitions | Cost: Disposals, write-offs & transfers | Cost:March 31, 2007 | Net book value - 2007 | Net book value - 2006 | ||
---|---|---|---|---|---|---|---|
Office equipment | 842 | 28 | 127 | 743 | 350 | 407 | |
Informatics hardware and infrastructure | 6,372 | 1,676 | (364) | 8,412 | 2,891 | 1,401 | |
In-house developed software | 10,061 | 656 | (4,638) | 15,355 | 10,263 | 7,204 | |
Furniture and fixtures | 243 | 527 | - | 770 | 579 | 76 | |
Vehicles | 25 | - | - | 25 | 12 | 16 | |
Leasehold improvements | 302 | 38 | - | 340 | 203 | 197 | |
Assets under development | 5,256 | 4,717 | 5,531 | 4,442 | 4,442 | 5,256 | |
Total | 23,101 | 7,642 | 656 | 30,087 | 18,740 | 14,557 |
2007 Accumulated amortization (in thousands of dollars)
March 31, 2006 | Amortization | Disposals, write-offs | March 31, 2007 | |||
---|---|---|---|---|---|---|
Office equipment | 435 | 61 | 103 | 393 | ||
Informatics hardware and infrastructure | 4,971 | 1,021 | 471 | 5,521 | ||
In-house developed software | 2,857 | 2,274 | 39 | 5,092 | ||
Furniture and fixtures | 167 | 24 | - | 191 | ||
Vehicles | 9 | 4 | - | 13 | ||
Leasehold improvements | 105 | 32 | - | 137 | ||
Total | 8,544 | 3,416 | 613 | 11,347 |
Amortization expense for the year ended March 31, 2007 is $3,416,000 ($2,558,000 in 2005-2006).
6. Accounts payable and accrued liabilities (in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Payables - Federal Government departments, agencies and Crown corporations |
1,957 | 1,666 | |
Payables - External parties |
5,167 |
7,089 |
|
Total | 7,124 | 8,755 |
7. Employee benefits
2007 | 2006 | ||
---|---|---|---|
Accrued benefit obligation, beginning of year |
14,872 | 14,404 | |
Expense for the year | 2,067 | 2,253 | |
Benefits paid during the year |
(1,951) |
(1,785) |
|
Accrued benefit obligation, end of year | 14,988 | 14,872 |
8. Contingent liabilities
Claims have been made against the PSC in the normal course of operations. Legal proceedings for claims totalling approximately $395,000 were still pending at March 31, 2007 ($6,255,000 at March 31, 2006). 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. In the opinion of management, the outcome of these suits is not determinable at this time.
9. Contractual obligations
The nature of the PSC's activities can result in some large multi-year obligations whereby the PSC will be obligated to make future payments when the services 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 | |
---|---|---|---|---|---|---|
Service contracts |
1,608 |
446 |
- |
- |
- |
2,054 |
Operating leases |
189 |
106 |
60 |
40 |
3 |
398 |
Total | 1,797 | 552 | 60 | 40 | 3 | 2,452 |
10. Expenses by major classification (in thousands of dollars)
2007 | 2006 | ||
---|---|---|---|
Salaries and employee benefits |
83,278 | 82,432 | |
Professional and special services | 10,828 | 12,036 | |
Accommodation | 10,032 | 10,532 | |
Transportation and telecommunications | 3,799 | 3,523 | |
Amortization of tangible capital assets | 3,416 | 2,558 | |
Informatics, office equipment, furniture and fixtures | 2,549 | 2,760 | |
Repair and maintenance | 1,660 | 1,721 | |
Rentals | 1,312 | 629 | |
Printing and publications services | 650 | 617 | |
Utilities, materials and supplies, and other | 373 | 247 | |
Adjustment to the provision for contingent liabilities |
(500) |
- |
|
Total | 117,397 | 117,055 |
11. Related party transactions
The PSC is related in terms of common ownership to all Government of Canada departments, agencies and Crown corporations. The PSC enters into transactions with these entities in the normal course of business and on normal trade terms.
During 2006-2007, the PSC incurred expenses of $34,208,000 ($28,867,000 in 2005-2006) and earned revenues of $6,496,000 ($4,687,000 in 2005-2006) from transactions in the normal course of business with other federal government departments, agencies and Crown Corporations. These expenses include services received without charge as described in Note 12.
12. Services received without charge
During the year, the PSC received services that were obtained without charge from other government departments and agencies. These services without charge have been recognized in the PSC's Statement of Operations as follows (in thousands of dollars):
2007 | 2006 | ||
---|---|---|---|
Public Works and Government Services Canada - accommodation |
10,032 | 10,532 | |
Treasury Board Secretariat - employer's share of insurance premiums | 5,522 | 5,270 | |
Justice Canada - legal services | 440 | 802 | |
Human Resources and Social Development Canada - employer's portion of Worker's compensation payments | 136 | 135 | |
Office of the Auditor General of Canada - audit services |
134 |
170 |
|
Total | 16,264 | 16,909 |
13. Comparative information
Comparative figures have been reclassified to conform to the current year's presentation.