Assessment Tool for Departments and Agencies Departmental Financial Statements (DFSs)
Fiscal Year 2012‒13

Is the department subject to a core control audit by the Office of the Comptroller General (OCG)?

If yes, ensure that the template for organizations subject to core control audits by the OCG is used

If no, ensure that the template for organizations not subject to core control audits by the OCG is used

Includes statement regarding:

Responsibility of management

Prepared in accordance with the government's accounting policies

Use of estimates

Management responsible for internal control over financial reporting (ICFR)

Objectivity and integrity of data

Role of internal audit and audit committee

Other (specific to department)

All comparative figures (statements and notes) match prior year’s signed DFS

All pages of the statements contain the correct reporting date

All pages of the statements have “unaudited” in the heading

All statements and notes are mathematically accurate, and there are no rounding issues present

All statements contain the basis of presentation (i.e., in $ or $000)

Terminology and presentation is consistent throughout the financial statement package

Terminology avoids government jargon (i.e., specified purpose accounts)

Notes have been appropriately tailored to the organization (i.e., not just a strict copy of the TBAS 1.2 template)

Overall, immaterial items were appropriately grouped or not disclosed (both in financial statements and notes)

Was there an opening balance adjustment, and is it presented appropriately?

Liabilities

Listed before assets if the liabilities amount is more important than the financial assets amount

“Liabilities Held on Behalf of Government” are presented separately (as an offset of liabilities)

Listed in order of repayment

Assets

Segregated between financial and non-financial assets

Amount due from the Consolidated Revenue Fund (CRF) is present

If considered immaterial, cash (in transit) can be grouped with accounts receivable, unless the department or agency has its own bank account

“Financial Assets Held on Behalf of Government” are presented separately from other financial assets (as an offset of financial assets)

Non-financial assets presented after “Departmental Net Debt” indicator

Intangible capital assets excluded

(TBAS 3.1)

Other

“Departmental Net Debt” indicator is presented (represents the difference between the sum of all liabilities and the sum of financial assets)

“Equity of Canada” has been renamed with the departmental net financial position

General

Dated “As at March 31”

Appropriate aggregation

Appropriate wording

Cross-references to notes

The signature block is present

Name of the statement has been renamed to Statement of Operations and Departmental Net Financial Position

Expenses

Expenses appear before revenues when revenues are insignificant

Expenses are presented by major programs, and their labelling is consistent with the Report on Plans and Priorities labelling and DFS Note 1

Expenses incurred on behalf of government presented as a separate line item (as an offset to expenses)

Costs of internal services are presented as a separate program activity

Revenues

Revenues are presented by type as opposed to by major programs

Revenues earned on behalf of government presented as a separate line item (as an offset to revenues)

Transferred operations

Ensure that both planned amounts and the prior-year comparative have been reclassified to be presented on the same basis as the current year actual; if not, a note disclosure must be present to advise the reader.

Ensure that this section refers to appropriate note disclosure, which should include more details on the transferred operations

Government funding and transfers include:

Net cash provided by Government

Change in the “Due from Consolidated Revenue Fund (CRF)”

Services provided without charge by other government department (OGD)

Transfer of assets and liabilities from or to OGD

Beginning and ending balance of the departmental net financial position

Other

Includes planned amounts column

Figures consistent with published Report on Plans and Priorities (RPP) (if figures do not match the RPP, ensure there is disclosure in the notes to that effect)

General

Dated “For the year ended March 31”

Appropriate aggregation

Appropriate wording

Cross-references to notes

Other

Net cost of operations after government funding and transfers

Change due to tangible capital assets

Change due to inventories

Change due to prepaid expenses

Beginning and ending balances of departmental net debt presented

Includes “Planned Amounts” column if applicable

Figures consistent with published RPP (if figures do not match the RPP, ensure there is disclosure in the notes to that effect)

Other

General

Dated “For the year ended March 31”

Appropriate aggregation

Appropriate wording

Cross-references to notes

Other

1. Authority and Objectives

Defines main objectives of the department

Identifies key legislation under which the department operates or administers

Describes programs and/or strategic outcomes. If there is a change in the current year, please ensure that the description is updated, prior-year amounts are reclassified accordingly, and that a note on comparative information is present to explain this change.

Categories match Statement of Operations and Departmental Net Financial Position

Level of detail is appropriate

2. Summary of Significant Accounting Policies

Basis of accounting: Prepared using the Government's accounting policies based on Canadian public sector accounting standards

(a) Parliamentary authorities: Not gerneally accepted accounting principales (GAAP); reference to Note 3 reconciliation

Planned results description is included in Note 2a

(b) Consolidation: Method and sub-entities

List of consolidated entities if applicable

(c) Net cash provided by Government: CRF; difference between receipts or disbursements

(d) Amounts due from or to CRF: Description (i.e., timing differences)

(e) Revenues

Recognition tailored to revenues of the department

Deferred revenue policy

Non-respendable revenues description

(f) Expenses

Transfer payments

Vacation pay and compensatory leave

Services without charge (recorded as operating expenses)

(g) Employee future benefits

Pension benefits

Severance benefits

(h) Accounts receivables and advances

Basis of valuation

Provision

Concessionary loans

Loans, if an entity has significant loans, a distinct accounting policy should be included

(i) Contingent liabilities

(j) Environmental liabilities

(k) Inventories: Nature and valuation method

(l) Foreign currency transactions: Indicates line on Statement of Operations and Departmental Net Financial Position or note

Exception of foreign exchange gain or loss relating to a long-term foreign currency denomination

(m) Tangible capital assets (including leased capital assets)

Threshold (is appropriate given size of organization)

Not including intangibles, etc.

Amortization method and periods

Asset under construction note included

(n) Measurement uncertainty: Tailored to financial statement elements

(o) Other

3. Parliamentary Appropriations

Introductory paragraph

(a) Reconciliation of net cost of operations to current year authorities used

Appropriate aggregation

Appropriate wording

Amounts and direction of signs are correct

Ensure consistency of figures with the Cash Flow Statement where applicable

(b) Authorities provided and used

Appropriate aggregation

Appropriate wording

Amounts and direction of signs are correct

4. Accounts Payable and Accrued Liabilities

Segregated between OGD and external

Split between accounts payable and accrued liabilities

Paragraph added for obligation for termination benefits

5a. Deferred Revenue

Nature and source of external restrictions and brief description of each major deferred revenue category

Continuity schedule showing beginning balance, receipts, payments and ending balance for each major deferred revenue category

Deferred revenues held on behalf of government are offset from the closing balance

5b. Specified Purpose Accounts (SPAs)

Nature and source of external restrictions and brief description of each major SPA

Continuity schedule showing beginning balance, receipts, payments and ending balance for each major SPA

6. Lease Obligation for Tangible Capital Assets

Show separately from other long-term obligations

Particulars, including interest rates and expiry dates, should be shown separately from other long-term obligations

Significant restrictions imposed on the lessee as a result of the lease agreement should be disclosed

Future minimum lease payments in aggregate and for each of the five succeeding years. A separate deduction should be made from the aggregate figure for amounts included in the minimum lease payments representing executory costs and imputed interest (show range of imputed interest).

Interest expense: Disclosed separately or as part of interest on long-term indebtedness

7. Employee Future Benefits

(a) Pension benefits

Part of the note should be adapted as follows: “The 2012-13 expense amounts to $XXX ($XXX in 2011-12), which represents approximately 1.7 times (1.8 in 2011-12) the contributions by employees.”

Description of the department’s responsibility with regard to the plan

Amount expensed by the department for current and prior year

(b) Severance benefits

Description of severance benefits

Information with respect to changes to the accumulation of severance pay as a result of the collective agreement bargaining process

Continuity schedule: Accrued benefit obligation (beginning and end of year), expense for year, benefits paid for year

8. Accounts Receivable and Advances

Segregated between OGD and external

OGD includes GST, not presented separately

External split between trade and other unusual items of material amounts

Allowance for doubtful accounts: Shown separately and specified to external

“Accounts Receivable Held on Behalf of Government” are offset from gross accounts receivable

9. Loans Receivable (i.e., transfer payments recoverable or other loans receivable) (PS 3050)

Recorded value of the loan should be the face value discounted by the amount of the “grant portion” if applicable

Loan discount amortized to revenue in a rational and systematic manner over the term of the loan (effective interest rate method or straight-line, if applicable)

Interest revenue when earned, no accrual of revenue when deemed uncollectible

“Loans Receivable Held on Behalf of Government” are offset from gross loans receivable

Disclose:

Recorded cost, related valuation allowance and net recoverable value

General terms and conditions:

Repayment terms

Interest terms

Forgiveness and other conditions

Security held

Foreign-denominated loans: Amount outstanding in foreign currency, Canadian equivalent, basis of translation

9a. Impaired Loans (PS 3050)

Total recorded investment in individual loans identified as impaired and the amount of the related allowance for loan impairment, analyzed by groups of loans with similar characteristics

The net charge or credit to income in respect of loan impairment, identifying separately recoveries of loans written off in previous periods

Write-offs of loans during the reporting period, identifying separately amounts relating to loans restructured during the reporting period

The basis of determining the amount of the allowance for loan impairment as well as the events and conditions considered in determining the charge to income for the period in respect of the allowance for loan impairment

9b. Temporary Investments (PS 3030)

Nature and terms of investments and related valuation allowance, including outstanding amounts and method of valuation

Market and carrying value for marketable securities (valuated at lower of carrying value or quoted market value)

9c. Portfolio Investments (PS 3040)

Portfolio investments (excluding investments in Crown corporations)

Write-downs for permanent declines in value

Disclose basis of valuation (lower of carrying value or quoted market value and average carrying value for gains or losses, quoted market value if marketable securities)

Reported separately on Statement of Financial Position

Income reported separately on Statement of Operations or segmented information note

Investments in Crown corporations

As per the reporting entity, since departments do not normally have the risk and rewards of ownership and as these assets are not normally under the department’s responsibility, departments are generally not expected to have investments in Crown corporations

10. Inventory

Inventory is presented by category

Method of valuating inventory is stated at cost using the XXX method (e.g., average cost method,...)

Cost of inventory consumed is disclosed

11. Tangible Capital Assets (PS 3150, TBAS 3.1)

Acquisitions

Adjustments (includes assets under construction transferred to an asset category upon completion and transfer of assets to or from OGD)

Disposals and write-offs

Net book value of current and prior year

Asset categories match accounting policy note and categories of prior-year signed DFS

Continuity schedules to include assets under capital leases, by major categories

Note on “Assets Under Construction Transferred Upon Completion” is present

Calculation of gain (loss) is adequate with the elements found in schedule and Cash Flow Statement

Proceeds of disposal are in the Cash Flow Statement

12. Departmental Net Financial Position

Consolidated SPAs

Equity of Canada is renamed with departmental net financial position

Note showing split of the departmental net financial position balance between unrestricted and restricted

Nature and source of restrictions and brief description of each major consolidated SPA

Continuity schedule showing beginning balance, revenues, expenses and ending balance for each major consolidated SPA

Use of term “SPAs” (“specified purpose accounts”) in DFS is avoided

13. Contractual Obligations

Introductory paragraph

Obligations for five years (transfer payments, operating leases, acquisition of capital assets, acquisition of other goods or services)

14. Contingent Liabilities

(a) Contaminated sites

Description: When liabilities accrued and not accrued

Nature and amount (if possible) of environmental liabilities where likelihood is not determinable or an amount cannot be reasonably estimated

Number of sites that have been identified as a liability and also recorded as such

Ensure that the amounts provided are consistent with the Public Accounts submitted

(b) Claims and litigation

Description: When liabilities accrued and not accrued

Nature and amount (if possible) of claims and litigation where outcome is not determinable or an amount cannot be reasonably estimated

Disclosure is not excessive (i.e., confidentiality issues)

Ensure that the amounts provided are consistent with the Public Accounts submitted

(c) Others (i.e., loan guarantees) if applicable

15. Related Party Transactions (RPTs)

Description regarding common ownership of departments, transactions occurred in normal course of business, and services received without charge

(a) Services provided without charge

Included in Statement of Operations (at minimum the following services without charge):

Accommodation

Employer's contribution to health and dental insurance plans

Legal services

Workers' compensation

Other significant services without charge to the department are disclosed

Paragraph indicating that government is centralized so that some administrative functions are performed on an overall basis

(b) Common services provided without charge to OGD

If a department provides significant services without charge to other government departments, this is disclosed in the financial statements of the department providing the services, with an estimate of the amounts involved

(c) Administration of programs on behalf of other government departments

Disclosed if significant to the department

Should include the MOU, name of OGD, and description of agreement and amounts involved

(d) Other transactions with related parties

Accounts receivable and payables with OGD to be disclosed (to appear as part of RPT note or elsewhere in notes)

Expenses and revenues with OGD to be disclosed

16. Transfers From or To OGD

Contains a description of the transferred activities/responsibility being transferred (to and from what entity)

The initiation (reason) of the transfer (according to XXX)

Date of the transfer

Statement of Financial Position items being transferred (in the standard Statement of Financial Position presentation format)

Note on “Administering Transferred Activities on Behalf of Another Department” is included

Transactions (expenses and revenues) prior to the OIC date are reported in the “Transferred Operations” section in the Statement of Operations and Departmental Net Financial Position

17. Segmented Information

Expenses section

Appropriate aggregation: Consistent with Statement of Operations and Departmental Net Financial Position (by type)

Appropriate wording (expense-oriented, not objects of expenditure)

Reimbursements of expenses should be offset against the original object of expense

Expenses incurred on behalf of government is presented as an offset

Total matches the Statement of Operations and Departmental Net Financial Position expenses

Revenues section

Appropriate aggregation: Consistent with Statement of Operations and Departmental Net Financial Position (by type)

Appropriate wording (by revenue-generating activity, not respendable / non-respendable)

Revenues earned on behalf of government presented as an offset

Total matches the Statement of Operations and Departmental Net Financial Position revenues

Other

18. Accounting Changes

Description of the changes/amendments to TBAS 1.2

Reason for the adoption

Date of the adoption

Explanation of changes:

$ impact of the adoption on prior-year figures; 3 columns: as previously stated, effect of changes, restated amount

19. Subsequent Event

Detailed review of all subsequent events must be performed, as this cannot be a repetition of previous year's event

20. Comparative Information

This note is required when prior-year figures have been reclassified