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Two internal audits and one audit by the Office of the Auditor General were completed this past year. As 2006 was a census year, one of the internal audits and the one by the Office of the Auditor General covered different aspects of the Census of Population.
The Office of the Auditor General report, tabled on October 30, 2007, found that Statistics Canada satisfactorily managed the 2006 Census of Population in accordance with its quality assurance systems and practices but did not prepare an integrated and comprehensive document describing the overall approach. Statistics Canada had taken a proactive approach to identifying risks to the 2006 Census; however, it did not fully comply with the requirements of the government’s policy on risk management. In particular, despite the numbers of temporary field staff it needed and the challenges it faced in hiring and retaining them, it did not develop formal and detailed contingency plans to respond in the event that it could not meet those challenges. Statistics Canada managed risks related to the privacy of respondent information with significant and successful efforts to ensure that the privacy of census data was protected. It will continue to improve its processes and practices and address the areas that were identified for the 2011 Census.
The first internal audit, entitled Audit of 2006 Census Related to Selected Security, Administrative and Quality Practices, found that pay was processed in an accurate way, mainly in accordance with established legislation, policies and procedures. However, payments to employees were not always timely as streamlining and adjustment of some controls were necessary to show evidence of due diligence. Personnel screening for new census Statistics Act employees met most of the requirements of the Government Security Policy (2002) and Personnel Security Standard (1994). Reliability checks were done before employees began work, although improvements to some tools and procedures are required for 2011 Census field operations. Employees swore the oath of office under the Statistics Act and had a reliability status before accessing a computing device connected to any Statistics Canada network. Overall, management controls were in place related to monitoring of Census Help Line telephone operators either responding to the Canadian public or contacting them for information as part of failed edit follow-up, although their effectiveness should be improved. Work has already begun on improving these areas for the next census.
The second internal audit was the second part of the Audit of Central Regional Office (Toronto) Administrative Processes. In this part, it was found that the regional office was mainly compliant with staffing under the Public Service Employment Act. Regarding staffing for Statistical Survey Operations, it was found that the staffing files had been centralized. There was evidence of competitive processes and that merit was applied. However, a list of key documents to be found in the staffing files was not available. A working committee has been tasked with developing and identifying the key staffing documents that will be required when conducting each Statistical Survey Operations staffing process.
The terms of reference of an internal audit entitled Asset Protection and Life Cycle Management were approved by the Internal Audit Committee in the fall of 2007. The audit is being performed by outside contractors and the report is expected to be presented to the committee in the fall of 2008. The terms of reference of the Audit of Confidentiality of Sensitive Statistical Information were approved in the spring of 2007. The conduct phase is well underway and the report is planned for the winter of 2008.
Statistics Canada developed a multiyear risk-based audit plan responding to the requirements of the Policy on Internal Audit, which was approved by the Internal Audit Committee in March 2008. It is working on a transition plan to fully implement the 2006 Policy on Internal Audit as outlined by the Office of the Comptroller General, including the selection of a Chief Audit Executive. It is expected that the new Chief Audit Executive will start work in the second quarter of 2008/2009. Statistics Canada expects to establish a new Audit Committee, which will conform with the 2006 Policy on Internal Audit, by the end of 2008/2009.
Table 4.1: Internal Audits
For supplementary information on the Agency's Internal Audits, please visit: http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp.
As described in Section 1, Statistics Canada has a unique system of ongoing evaluation of all its statistical and corporate services programs. Each group at Statistics Canada prepares a thorough quadrennial program review that identifies accomplishments, challenges and future priorities along with users’ satisfaction of services provided. A biennial program report updates the quadrennial program reviews at mid-cycle.
Table 4.2: Evaluations
For the timetable of the Agency's Evaluations, please visit: http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp.
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 Statistics Canada’s (StatCan) 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 fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of StatCan’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in StatCan’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, 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 StatCan.
The financial statements of Statistics Canada have not been audited.
The original version was signed by Munir A. Sheikh, Chief Statistician of Canada and by Colleen Falconer, Senior Financial Officer.
2008 | 2007 | |
---|---|---|
Expenses (Note 4) | ||
Economic Statistics | 254,742 | 237,904 |
Social Statistics | 235,916 | 212,968 |
Census Statistics | 126,779 | 344,427 |
Total expenses | 617,437 | 795,299 |
Revenues (Note 5) | ||
Economic Statistics | 20,500 | 21,692 |
Social Statistics | 60,363 | 58,182 |
Census Statistics | 26,929 | 37,802 |
Total revenues | 107,792 | 117,676 |
Net cost of operations | 509,645 | 677,623 |
The accompanying notes form an integral part of these financial statements. |
2008 | 2007 | |
---|---|---|
ASSETS | ||
Financial assets | ||
Accounts receivable and advances (Note 6) | 9,100 | 32,158 |
Total financial assets | 9,100 | 32,158 |
Non-financial assets | ||
Prepaid expenses | 416 | 385 |
Inventory | 3,076 | 3,595 |
Tangible capital assets (Note 7) | 106,998 | 89,822 |
Total non-financial assets | 110,490 | 93,802 |
TOTAL | 119,590 | 125,960 |
Liabilities | ||
Accounts payable and accrued liabilities (Note 8) | 46,312 | 49,033 |
Deferred revenue (Note 9) | 6,368 | 14,450 |
Vacation pay and compensatory leave | 24,944 | 26,042 |
Lease obligation for tangible capital asset (Note 10) | 642 | 881 |
Employee severance benefits (Note 11) | 78,858 | 79,332 |
157,124 | 169,738 | |
Equity of Canada | (37,534) | (43,778) |
TOTAL | 119,590 | 125,960 |
Contingent liabilities (Note 12) Contractual obligations (Note 13) The accompanying notes form an integral part of these financial statements. |
2008 | 2007 | |
---|---|---|
Equity of Canada, beginning of year | (43,778) | (99,108) |
Net cost of operations | (509,645) | (677,623) |
Current year appropriations used (Note 3) | 474,031 | 619,520 |
Revenue not available for spending | (4,637) | (3,894) |
Change in net position in the Consolidated Revenue Fund (Note 3) | (13,813) | 50,716 |
Services received without charge from other government departments (Note 14) | 60,308 | 66,611 |
Equity of Canada, end of year | (37,534) | (43,778) |
The accompanying notes form an integral part of these financial statements. |
2008 | 2007 | |
---|---|---|
Operating activities | ||
Net cost of operations | 509,645 | 677,623 |
Non-cash items: | ||
Amortization of tangible capital assets | (19,500) | (21,389) |
Loss on disposal of tangible capital assets | (593) | (464) |
Services provided without charge | (60,308) | (66,611) |
Variations in Statement of Financial Position: | ||
Increase (decrease) in accounts receivable and advances | (23,058) | 27,231 |
Increase (decrease) in prepaid expenses | 31 | (135) |
Decrease in inventory | (519) | (179) |
Decrease in liabilities | 12,611 | 15,442 |
Cash used by operating activities | 418,309 | 631,518 |
Capital investment activities | ||
Acquisitions of tangible capital assets (Note 7) | 37,272 | 34,823 |
Financing activities | ||
Net cash provided by Government of Canada | (455,581) | (666,342) |
The accompanying notes form an integral part of these financial statements. |
Statistics Canada was established in 1918 pursuant to the Statistics Act. StatCan received full departmental status by Order in Council in 1965.
Statistics Canada is a division of the public service named in Schedule I.1 of the Financial Administration Act. The Minister currently responsible for Statistics Canada is the Minister of Industry, who represents StatCan in Parliament and Cabinet.
Statistics Canada’s mandate derives primarily from the Statistics Act. The Act requires StatCan, under the direction of the Minister, to collect, compile, analyze and publish statistical information on the economic, social and general conditions of the country and its citizens. Statistics Canada’s mandate also provides for coordination and leadership of the country’s statistical system.
From StatCan’s mandate are derived two primary objectives:
To facilitate the understanding of Statistics Canada’s program activity architecture (PAA), its activities have been grouped into three program activities: Economic Statistics, Social Statistics and Census Statistics. The Economic Statistics provides information and analysis on the entire spectrum of Canadian economic activity, both domestic and international, through a set of macro-economic statistics and focuses on the business and trade sectors of the Canadian economy. The Social Statistics provides information on the economic and social characteristics of individuals, families and households in Canada, and on the major factors which can contribute to their well being. The Census Statistics provides benchmark information on the structure of the Canadian population and its demographic, social and economic conditions.
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:
Asset Class | Amortization period |
---|---|
Informatics hardware | 5 years |
Informatics software | 5 years |
Other equipment | 5 years |
Motor vehicles | 7 years |
Leasehold improvements | 25 years |
Software under development | Once in service, 5 years |
Leased tangible capital assets | Term of lease |
Statistics Canada 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, Statistics Canada 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:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Net cost of operations | 509,645 | 677,623 |
Adjustments for items affecting net cost of operations but not affecting appropriations: | ||
Add (Less): | ||
Services provided without charge | (60,308) | (66,611) |
Amortization of tangible capital assets | (19,500) | (21,389) |
Refunds of previous years expenditures | 1,563 | 2,978 |
Bad debt expense | (6) | - |
Legal fees | - | (129) |
Revenue not available for spending | 4,637 | 3,894 |
Reversal of previous year prepaid expenses | (385) | (520) |
Inventory usage | (444) | (40) |
Loss on disposal of tangible capital assets and write-down of inventory | (669) | (603) |
Vacation pay and compensatory leave | 1,098 | (4,326) |
Employee severance benefits | 474 | (6,748) |
Capital lease payments | 238 | 184 |
436,343 | 584,313 | |
Adjustments for items not affecting net cost of operations but affecting appropriations: | ||
Add: | ||
Acquisitions of tangible capital assets | 37,272 | 34,822 |
Prepaid expenses | 416 | 385 |
Current year appropriations used | 474,031 | 619,520 |
(b) Appropriations provided and used
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Vote 95 - Operating expenditures | 439,845 | 569,903 |
Statutory amounts | 69,043 | 73,351 |
Spending of proceeds from the disposal of tangible capital assets | 52 | 45 |
508,940 | 643,299 | |
Less lapsed appropriations: | ||
Operating | (34,909) | (23,748) |
Proceeds from the disposal of tangible capital assets | - | (31) |
Current year appropriations used | 474,031 | 619,520 |
c) Reconciliation of net cash provided by Government to current year appropriations used
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Net cash provided by Government | 455,581 | 666,342 |
Revenue not available for spending | 4,637 | 3,894 |
460,218 | 670,236 | |
Change in net position in the Consolidated Revenue Fund | ||
Variation in accounts receivable and advances | 23,057 | (27,231) |
Variation in accounts payable and accrued liabilities | (2,721) | (25,312) |
Variation in deferred revenue | (8,082) | (1,022) |
Refunds of previous years expenditures | 1,565 | 2,978 |
Other adjustments | (6) | (129) |
13,813 | (50,716) | |
Current year appropriations used | 474,031 | 619,520 |
The following table presents details of expenses by category:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Transfer payment - Canadian Institute of Health Information (CIHI) | 561 | 561 |
Total transfer payment | 561 | 561 |
Salaries and employee benefits | 452,276 | 496,767 |
Services provided without charge | 60,308 | 66,611 |
Transportation and postage | 25,363 | 34,942 |
Professional services | 23,078 | 126,268 |
Repairs and maintenance | 20,239 | 16,192 |
Amortization | 19,500 | 21,389 |
Materials and supplies | 9,325 | 12,905 |
Rentals | 4,175 | 6,231 |
Communication and printing | 1,778 | 12,745 |
Loss on disposal of tangible capital assets | 593 | 464 |
Other | 129 | 46 |
Loss on write-down of inventory | 75 | 139 |
Interest component on leased tangible capital assets | 31 | 39 |
Bad debts | 6 | - |
Total operating expenses | 616,876 | 794,738 |
Total Expenses | 617,437 | 795,299 |
The following table presents details of revenues by category:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Special statistical services | 106,179 | 115,846 |
Publications | 1,599 | 1,811 |
Interest on overdue accounts | 14 | 19 |
Total Revenues | 107,792 | 117,676 |
The following table presents details of accounts receivable and advances:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Receivables from other Federal Government departments and agencies | 2,334 | 29,148 |
Receivables from external parties | 6,634 | 2,718 |
Employees advances | 147 | 301 |
9,115 | 32,167 | |
Less: allowance for doubtful accounts on external receivables | (15) | (9) |
Total | 9,100 | 32,158 |
Cost | Accumulated amortization | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Capital asset class | Opening balance | Acquisitions | Disposals | Closing balance | Opening balance | Amortization | Disposals | Closing balance | 2008 Net book value | 2007 Net book value |
Informatics hardware | 60,898 | 8,106 | 6,657 | 62,347 | 39,285 | 8,229 | 6,626 | 40,888 | 21,459 | 21,613 |
Informatics software | 58,296 | 19,610 | 1,204 | 76,702 | 32,264 | 9,798 | 642 | 41,420 | 35,282 | 26,032 |
Other equipment | 6,002 | 283 | 74 | 6,211 | 4,020 | 547 | 72 | 4,495 | 1,716 | 1,982 |
Motor vehicles | 1,078 | - | - | 1,078 | 162 | 209 | - | 371 | 707 | 917 |
Leasehold improvements | 7,824 | 2,871 | - | 10,695 | 712 | 352 | - | 1,064 | 9,631 | 7,112 |
Software under development | 31,310 | 6,276 | - | 37,586 | - | - | - | - | 37,586 | 31,310 |
Leased tangible capital assets | 1,568 | 126 | 247 | 1,447 | 712 | 365 | 247 | 830 | 617 | 856 |
Total | 166,976 | 37,272 | 8,182 | 196,066 | 77,155 | 19,500 | 7,587 | 89,068 | 106,998 | 89,822 |
Amortization expense for the year ended March 31, 2008 is $19,500,000 (2007 - $21,389,000). |
The following table presents details of payables and accrued liabilities:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Accounts payable external parties | 21,692 | 29,827 |
Accounts payable other Federal Government departments and agencies | 7,219 | 6,604 |
Accrued Salaries and Wages | 17,378 | 12,590 |
Goods and services tax payable to Canada Revenue Agency | 23 | 12 |
Total Payables and accrued liabilities | 46,312 | 49,033 |
Statistics Canada has the authority to expend revenue received during the fiscal year. Deferred revenue represents the balance of unearned revenue stemming from contracts in place for the provision of statistical information. Amounts are transferred to revenue once services have been delivered. Details of the transactions related to this account are as follows:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Opening balance | 14,450 | 15,472 |
Receipts | 103,155 | 113,782 |
Revenues earned | (111,237) | (114,804) |
Closing balance | 6,368 | 14,450 |
Statistics Canada has entered into agreements to rent all photocopiers under capital lease with a cost of $1,447,651 and accumulated amortization of $830,023 as at March 31, 2008 ($1,568,101 and $711,571 respectively as at March 31, 2007). The obligations for the upcoming years include the following:
Maturing year | 2008 | 2007 |
---|---|---|
(in thousands of dollars) | ||
2008 | - | 377 |
2009 | 320 | 286 |
2010 | 205 | 172 |
2011 | 111 | 88 |
2012 | 31 | 12 |
2013 and thereafter | 10 | - |
Total future minimum lease payments | 677 | 935 |
Less: imputed interest (3.08% to 4.77%) | (35) | (54) |
Balance of obligations under leased tangible capital assets | 642 | 881 |
a) Pension benefits: Statistics Canada'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 they are indexed to inflation.
Both the employees and the Agency contribute to the cost of the Plan. The 2007-08 expense amounts to $50,332,603 ($54,059,527 in 2006-07), which represents approximately 2.1 times (2.2 in 2006-07) the contributions by employees.
Statistics Canada'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: Statistics Canada 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:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Accrued benefit obligation, beginning of year | 79,332 | 72,582 |
Expense for the year | 7,270 | 12,887 |
Benefits paid during the year | (7,744) | (6,137) |
Accrued benefit obligation, end of year | 78,858 | 79,332 |
In order to measure the March 31, 2008 liability, Statistics Canada used the ratio, determined by Treasury Board, of 23.27% to StatCan’s annual gross payroll at year-end subject to severance pay, which is the payroll related to indeterminate employees. The comparative ratios used to determine the March 31, 2007 and March 31, 2006 liabilities are 23.64% and 23.20% respectively.
Claims and litigation
Claims have been made against Statistics Canada in the normal course of operations. Legal proceedings for claims, which cannot be estimated (no estimation provided in 2007) were still pending at March 31, 2008. 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.
The nature of Statistics Canada’s activities can result in some large multi-year contracts and obligations whereby it 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:
2009 | 2010 | 2011 | 2012 | 2013 and thereafter |
Total | |
---|---|---|---|---|---|---|
Transfer payments | 561 | 561 | - | - | - | 1,122 |
Multi-year contracts | 22,328 | 6,762 | 826 | 292 | 17 | 30,225 |
Total | 22,889 | 7,323 | 826 | 292 | 17 | 31,347 |
Statistics Canada is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. StatCan enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, StatCan received services which were obtained without charge from other Government departments as presented below:
Services provided without charge:
During the year Statistics Canada received without charge from other departments, accommodation, the employer’s contribution to the health and dental insurance plans, worker’s compensation and legal services. These services without charge have been recognized in StatCan’s Statement of Operations as follows:
2008 | 2007 | |
---|---|---|
(in thousands of dollars) | ||
Accommodation | 31,341 | 31,318 |
Employer's contribution to the health and dental insurance plans | 28,710 | 35,093 |
Worker’s compensation | 171 | 173 |
Legal services | 86 | 27 |
Total | 60,308 | 66,611 |
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 StatCan’s Statement of Operations.