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SECTION III - SUPPLEMENTARY INFORMATION

Departmental Link to Government of Canada Outcome Areas


Strategic Outcome: An independent and efficient federal judiciary
  Actual Spending 2007-08 Alignment to Government of Canada Outcome Area
Budgetary Non-budgetary Total
Payments Pursuant to the Judges Act $390,180,386 - $390,180,386 Safe and Secure Communities
Canadian Judicial Council $1,658,231 - $1,658,231 Safe and Secure Communities

Government Affairs

Federal Judicial Affairs $8,093,014 - $8,093,014 Safe and Secure World Through International Cooperation.

Government Affairs


Table 1: Comparison of Planned Spending and Full-time Equivalents


 
($ millions) 2005-06 Actual 2006-07 Actual 2007-2008
Main Estimates Planned Spending Total Authorities Total Actuals
Federal Judicial Affairs 8.5 8.1 8.1 8.3 9.0 8.1
Canadian Judicial Council 1.8 1.7 1.7 1.7 1.8 1.7
Payments Pursuant to the Judges Act 341.5 394.8 390.5 390.5 390.2 390.2
Total 351.8 404.6 400.3 400.5 401.0 300.9
 
Total 351.8 404.6 400.3 400.5 401.0 300.9
Less: Non Respendable revenue 10.6 12.5 13.8 13.8 12.1 12.1
Plus: Cost of services received without charge 1.2 1.3 1.3 1.3 1.4 1.4
Net cost of Department 342.4 393.4 387.8 388.0 390.3 389.2
 
Full-time Equivalents 68 65 70 70 70 65

Table 2: Voted and Statutory Items


 
Vote or Statutory Item Truncated Vote or Statutory Wording 2007-2008
Main Estimates Planned Spending Total Authorities Total Actuals
20 Operating expenditures 7,368,000 7,568,000 8,432,995 7,461,007
25 Operating expenditures Canadian Judicial Council 1,594,000 1,594,000 1,673,450 1,564,231
(S) Payments pursuant to the Judges Act 390,465,000 390,465,000 390,180,386 390,180,386
(S) Contributions to employee benefit plans 847,000 847,000 726,007 726,007
  Total 400,274,000 400,474,000 401,012,838 399,931,631

Table 3: Departmental Financial Statements

Office of the Commissioner for Federal Judicial Affairs
Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2008 and all information contained in these statements rests with the Office of the Commissioner for Federal Judicial Affairs (FJA) 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.

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 fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of FJA's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the FJA Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal controls designed to provide reasonable assurance that financial administration is reliable, that assets are safeguarded 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. 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 FJA.

The financial statements of the Office of the Commissioner for Federal Judicial Affairs have not been audited.


________________________
Claude Provencher
Commissioner
 
________________________
Marc A. Giroux
Deputy Commissioner
Senior Financial Officer

Ottawa, Canada
September 29, 2008

 


Office of the Commissioner for Federal Judicial Affairs Statement of Operations (unaudited) for the year ended March 31
      2008   2007
  Federal Judicial Affairs Canadian Judicial Council Statutory Expenses Total Total
Operating Expenses          
Salaries and benefits 4,807,223 679,494 357,441,708 362,928,425 372,491,568
Transportation and telecommunications 571,647 130,664 27,040,022 27,742,333 23,730,269
Professional and special services 2,577,030 749,128 264,828 3,590,986 3,189,181
Accommodations 875,298 237,010 - 1,112,308 1,013,085
Utilities, materials and supplies 72,097 11,700 3,412 87,209 315,348
Communications 161,547 79,124 6,525 247,196 121,085
Repairs and maintenance 112,671 2,616 - 115,287 115,967
Rentals 31,058 18,581 10,126 59,765 67,311
Amortization (Note 5) 105,259 - - 105,259 110,988
Machinery and equipment 142,697 28,064 - 170,761 103,730
Loss on write-down of capital assets 3,465 - - 3,465 3,818
Other expenses 62,370 - 5,163,217 5,225,587 4,970,703
Total operating expenses 9,522,362 1,936,381 389,929,838 401,388,581 406,233,092
Total Expenses 9,522,362 1,936,381 389,929,838 401,388,581 406,233,092
           
Revenues          
Pension Contributions Credited to Revenue 0 0 (12,055,180) (12,055,180) (12,473,066)
User charges (173,750) 0 0 (173,750) (173,066)
Total Revenues (173,750) 0 (12,055,180) (12,228,930) (12,646,132)
           
Net Cost of Operations 9,348,612 1,936,381 377,874,658 389,159,651 393,586,960

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


Office of the Commissioner for Federal Judicial Affairs Statement of Financial Position (unaudited) at March 31(in dollars)
    2008 2007
ASSETS      
Financial assets    
  Receivables and Advances (Note 4) 1,203,410 2,086,830
  Total financial assets 1,203,410 2,086,830
  Non-financial assets    
  Prepaid expenses 283,005 121,382
  Capital assets (Note 5) 146,359 210,248
  Total non-financial assets 429,364 331,630
TOTAL   1,632,774 2,418,460
Liabilities    
  Accounts payable and accrued liabilities (Note 6) 1,872,975 1,814,733
  Vacation pay and compensatory leave 211,260 202,126
  Judges Supplementary Retirement    
  Benefit Account (Note 8) 138,248,550 127,564,956
  Employee severance benefits (Note 7) 989,178 954,065
  Total Liabilities 141,321,963 130,535,880
Equity of Canada (139,689,189) (128,117,420)
       
TOTAL   1,632,774 2,418,460

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


Office of the Commissioner for Federal Judicial Affairs Statement of Equity of Canada (unaudited) at March 31 (in dollars)
  2008 2007
     
Equity of Canada, beginning of year (128,117,421) (117,745,530)
Net cost of operations (389,159,651) (393,586,960)
Current year appropriations used (Note 3) 399,961,631 404,584,428
Revenue not available for spending (12,055,180) (12,473,066)
Change in net position in the Consolidated Revenue Fund (Note 3c) (11,750,244) (10,253,257)
Services received without charge from other government departments (Note 8) 1,461,676 1,356,964
Equity of Canada, end of year (139,689,189) (128,117,421)

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


Office of the Commissioner for Federal Judicial Affairs Statement of Cashflow (unaudited) for the year ended March 31 (in dollars)
  2008 2007
     
Operating activities    
Net cost of operations (389,159,651) (393,586,960)
Non-cash items:    
  • Amortization of capital assets (Note 5)
(105,259) (110,988)
  • Loss on write-down of capital assets
(3,465) (3,818)
  • Services provided without charge other government departments (Note 9)
(1,461,676) (1,356,964)
Variations in Statement of Financial Position:    
  • Increase (decrease) in receivables and advances
(883,420) 831,890
  • Increase (decrease) prepaid expenses
161,623 62,228
  • Decrease (increase) in liabilities
(10,786,083) (11,181,071)
Cash used by operating activities 376,227,730 381,828,236
Capital investment activities    
  • Acquisition of tangible capital assets
44,836 29,869
Cash used by capital investment activities 44,836 29,869
Financing activities    
Net cash provided by Government of Canada (376,272,566) (381,858,105)

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

Office of the Commissioner for Federal Judicial Affairs
Notes to the Financial Statements (unaudited)
Year ended March 31, 2008

1. Authority and Objectives

The Office of the Commissioner for Federal Judicial Affairs (FJA) was created in 1978 under the authority of the Judges Act to safeguard the independence of the judiciary and to put federally appointed judges at arm's length from the administration of the Department of Justice. It exists to promote the better administration of justice and focuses its efforts on providing a sound support role to the federal judiciary.

It administers three distinct and separate components that are funded from three very distinct sources. Statutory funding is allocated for the judges' salaries, allowances and annuities and surviving beneficiaries' benefits. Vote appropriations are provided in two separate votes to support the administrative activities of the Office of the Commissioner and the administrative activities of the Canadian Judicial Council.

The administration of the Office of the Commissioner is structured to reflect the distinctiveness of its role in supporting federal judicial activities. Under the Program Activity Architecture, the organization is broken down into three program activities: Payments Pursuant to the Judges Act; Canadian Judicial Council; and Federal Judicial Affairs (FJA).

These activities strive to meet our priorities of: developing organizational capacity; building a strong, integrated team; improving service delivery; enhancing communications; and managing information.

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 - FJA is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to FJA 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 provide a high‑level reconciliation between the bases of reporting.

(b) Net Cash Provided by Government- FJA 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 departments are paid from the CRF. The net cash provided by the 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 the Government and appropriations used in a year. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues - Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses - Expenses are recorded on the accrual basis:

  • Vacation pay and compensatory leave are expenses 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.

(f) Employee and federally appointed judges future benefits

(i) Pension benefits:

Eligible employees participate in the Public Service Pension Plan (PSSA) multiemployer administered by the Government of Canada. FJA'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 FJA 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.

(iii) Federally appointed judges pension benefits;

Federally appointed judges pension plan. Eligible federally appointed judges and their survivors are entitled to fully indexed annuities providing that the judges meet minimum age and service requirements. The main benefits paid from this plan are recorded on a pay-as-you-go basis. They are included in the Statement of Operations as a component of salaries and benefits and the judges contributions are credited to revenue. Contributions made by FJA and judges pertaining to the portion of the plan that relates to indexation of benefits is recorded in a Supplementary Retirement Benefits Account, which is presented on the Statement of Financial Position. FJA's contribution towards indexation is expensed at the time it is accrued in the Account in accordance with the legislation. The actuarial liability associated with the judges pension plan is recorded in the financial statements of the Government of Canada, the ultimate sponsor of the plan.

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

h) Tangible capital assets - all tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. FJA does not capitalize intangibles, works of art and historical treasures the have cultural, aesthetic or historical value. Amortization of tangible capital assets is done on a straight-line basis with an assumed residual value of zero ($0) over the estimated useful life of the capital asset as follows:


Asset Class Amortization period
Machinery and equipment 5 to 10 years
Furniture & Fixtures 10 years
Informatics Hardware & Software 3 years

(i) 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 the estimates and assumptions to be reasonable. The most significant items where estimates are used are 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

FJA 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 appropriations used
(in dollars) 2008 2007
Net cost of operations 389,159,651 393,586,960
Adjustments for items affecting net cost of operations But not affecting appropriations:    
Add (Less):
Services provided without charge (1,461,676) (1,356,964)
Employee Severance Benefits (35,113) (49,457)
Amortization of tangible capital assets (105,259) (110,988)
Loss on write-down of tangible capital assets (3,465) (3,818)
Vacation pay and compensatory leave (9,134) 26,028
Judges Pensions Contributions 12,055,180 12,473,066
Adjustment to prior year expenses 3,606 167
Other - (10,435)
Adjustments for items not affecting net cost of operations but affecting appropriations    
Add (Less):
Acquisitions of tangible capital assets 44,836 29,869
Prepaid Expenses * 283,005 -
Current year appropriations used 399,931,631 404,584,428

* In fiscal year 2007-2008, prepaid expenses were charged to current year appropriations. In previous years, prepaid expenses were booked initially as an accrual, and then charged to current year appropriations as the expense was consumed.


(b)Appropriations provided and used
(in dollars) 2008 2007
Vote 20 - Operating expenditures-FJA 8,432,995 8,055,613
Vote 25 - Operating expenditures-CJC 1,673,450 1,851,950
Statutory amounts 390,906,393 395,581,531
Less:
Lapsed appropriations: Operating (1,081,207) (904,666)
Current year appropriations used 399,931,631 404,584,428

 


(c) Reconciliation of net cash provided by Government to current year appropriations used
(in dollars) 2008 2007
Net cash provided by Government 376,126,207 381,858,105
Revenue not available for spending 12,055,180 12,473,066
Change in net position in the Consolidated Revenue Fund    
  • Variation in accounts receivable
545,307 (483,129)
  • Variation in advances
338,113 (348,760)
  • Variation in prepaid
(161,623) (62,228)
  • Add back: Prepaid Expenses
283,005 -
  • Variation in accounts payable and accrued liabilities
10,786,083 11,157,642
  • Other adjustments
(40,641) (10,268)
  11,750,244 10,253.257
Current year appropriations used 399,931,631 404,584,428

4. Accounts Receivable and Advances


The following table presents details of Accounts Receivable and Advances:
(in dollars) 2008 2007
Receivables from other Federal Government Departments and agencies 146,330 703,342
Receivables from external parties 128,825 117,120
Advances 928,255 1,266,368
Total 1,203,410 2,086,830

5. Tangible Capital Assets (in dollars)


Cost Accumulated amortization Net Book Value
Capital asset Class Opening Balance Acquisitions Disposals and write-offs Closing Balance Opening Balance Amortization Disposals and write-offs Closing Balance 2008 2007
Machinery & equipment 86,180 - (11,551) 74,629 34,589 8,832 (8,086) 35,335 39,293 51,591
Informatics Hardware 593,099 26,816 (203,085) 416,830 475,291 68,062 (203,085) 340,268 76,562 117,808
Furniture & Fixtures 19,552 - - 19,552 11,731 1,955 - 13,686 5,866 7,821
Software 84,785 18,020 - 102,805 51,757 26,410 - 78,167 24,638 33,028
Total 783,616 44,836 (214,636) 613,816 573,368 105,259 (211,171) 467,456 146,359 210,248

Amortization expense for the year ended March 31, 2008 is $105,259 (2007-$110,988).

6. Accounts Payable and Accrued Liabilities


The following table presents details or Accounts Payable and Accrued Liabilities:
(in dollars) 2008 2007
Payable to other Federal Government Departments and agencies 172,757 52,601
Payables to external parties 1,446,026 1,513,494
Accrued Salaries/Wages 254,192 248,638
Total 1,872,975 1,814,733

7. Employee Benefits

(a) Pension benefits: FJA'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 FJA contribute to the cost of the Plan. The 2007-08 expense amount to $529,259 ($577,774 in 2006-07), which represents approximately 2.1 times the contributions by employees (2.2 times in 2006-07).

FJA'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: FJA 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 dollars) 2008 2007
Accrued benefit obligation, beginning of year 954,065 904,608
Expense for the year 35,113 49,457
Accrued benefit obligation, end of year 989,178 954,065

8. Judges Supplementary Retirement Benefit Account


 
(in dollars) 2008 2007
Liability, beginning of year 127,564,956 117,060,075
Contributions 5,322,032 5,611,579
Interest 5,361,562 4,893,302
Liability, end of year 138,248,550 127,564,956

The pension plan for federally appointed judges provides fully indexed annuities to judges and to all eligible survivors providing they meet minimum age and service requirements. Unlike other pension plans, the judges’ plan lacks an explicit accrual rate for benefits. Instead the full benefit amount is generally payable when the member has completed 15 years of pensionable service and the total of the members age and years of service totals 80. Judges who elect Supernumerary Status or judges, who qualify for retirement, make required contributions of 1% of salary. All other judges make contributions of 7% of salary.

The main benefits from this plan are expensed on a pay-as-you-go basis. However, in virtue of the Supplementary Retirement Benefits Act, for the portion of the plan that relates to indexation of benefits, the 1% portion of salary contributed by the judges is recorded in a Supplementary Retirement Benefits Account, along with a matching contribution of 1% recorded by FJA. In addition, interest is accrued on the outstanding balance of the Account. The actuarial liability associated with the judges pension plan is recorded in the financial statements of the Government of Canada.]

9. Related party transactions

FJA is related in terms of common ownership to all Government of Canada departments, and Crown Corporations. FJA enters into transactions with these entities in the normal course of business and on normal trade terms applicable to all individuals and enterprises except that certain services, as shown below, are provided without charge.

a) Services provided without charge:
During the year, FJA received without charge from other 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:
 
(in dollars) 2008 2007
Accommodation provided by Public Works and Government Services Canada 1,112,308 1,013,085
Contributions covering employer’s share of employees’ insurance premiums and costs paid by Treasury Board Secretariat 349,368 343,879
Total 1,461,676 1,356,964

 

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, are not included as an expense in FJA’s Statement of Operations.

b) Payables and receivables outstanding at year-end with related parties


 
(in dollars) 2008 2007
Accounts receivable with other government departments and agencies 146,330 703,342
Accounts payable to other government departments and agencies 172,757 52,601