Departmental Performance Report - Financial Statements 2012-2013

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013 and all information contained in these statements rests with the management of the Canadian Human Rights Commission (the Commission). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

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 the Commission’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Commission's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded, and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Commission; and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The Commission is subject to periodic Core Control Audits performed by the Office of the Comptroller General of Canada (OCG) and uses the results of such audits to comply with the Treasury Board Policy on Internal Control. A Core Control Audit was performed in 2012 by the OCG. The Audit Report and related Management Action Plan are posted on the Commission's web site.

Also, during the fiscal year 2012-13, the Commission finished documenting and evaluating its key internal controls, in accordance with the Treasury Board Policy on Internal Control. An action plan was developed and is included in the annex.

The financial statements of the Commission have not been audited.

_______________________________________
David Langtry
Acting Chief Commissioner
_______________________________________
Heather Throop
Chief Financial Officer
 

_______________________________________
Denis Pelchat
Deputy Chief Financial Officer

July 31, 2013

 

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2013 2012
Liabilities
Accounts payable and accrued liabilities (note 4) 2,494,553 1,681,894
Vacation pay and compensatory leave 776,800 815,500
Employee future benefits (note 5) 1,521,800 1,958,600
Total liabilities 4,783,153 4,455,994
Financial assets
Due from the Consolidated Revenue Fund 2,399,715 1,596,089
Accounts receivable and advances (note 6) 181,218 183,095
Total gross financial assets 2,580,933 1,779,184
Financial assets held on behalf of Government
Accounts receivable and advances (note 6) (38,000) (38,000)
Total financial assets held on behalf of Government (38,000) (38,000)
Total net financial assets 2,542,933 1,741,184
Net debt 2,240,220 2,714,810
Non-financial assets
Prepaid expenses 31,098 18,107
Tangible capital assets (note 7) 1,144,601 921,228
Total non-financial assets 1,175,699 939,335
Net financial position (1,064,521) (1,775,475)


Contractual obligations (note 8)

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

 

_______________________________________
David Langtry
Acting Chief Commissioner
_______________________________________
Heather Throop
Chief Financial Officer
 

_______________________________________
Denis Pelchat
Deputy Chief Financial Officer

July 31, 2013

 

 

Statement of Operations and Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned
Results
2013
2013 2012
Expenses      
Human Rights Knowledge Development and Dissemination Program 4,722,513 4,762,699 4,671,029
Discrimination Prevention Program 5,437,096 5,077,738 5,031,501
Human Rights Dispute Resolution Program 10,510,204 10,947,440 9,763,319
Internal Services 8,893,766 7,705,670 7,899,769
Total Expenses 29,563,579 28,493,547 27,365,618
     
Revenues
Internal Support Services 900,000 1,033,520 884,027
Miscellaneous revenues - 3,803 342
Revenues earned on behalf of Government - (3,803) (342)
Total Revenues 900,000 1,033,520 884,027
Net cost of operations before government funding 28,663,579 27,460,027 26,481,591
Government funding
Net cash provided by Government 24,357,847 23,557,949 24,265,688
Change in due from Consolidated Revenue Fund 40,271 803,626 (44,691)
Services provided without charge by other government departments (note 9) 3,837,547 3,809,406 3,840,398
Net cost (revenue) of operations after government funding 427,914 (710,954) (1,579,804)
Net financial position - Beginning of year (2,125,423) (1,775,475) (3,355,279)
Net financial position - End of year (2,553,337) (1,064,521) (1,775,475)


Segmented information (note 10)

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

 

Statement of Change in Net Debt (Unaudited)

For the year ended March 31

(in dollars) Planned
Results
2013
2013 2012
Net cost (revenue) of operations after government funding and transfers 427,914 (710,954) (1,579,804)
Change due to tangible capital assets
Acquisition of tangible capital assets 77,540 475,598 105,266
Amortization of tangible capital assets (282,308) (252,225) (239,378)
Loss on write-off of tangible capital assets - - (4,166)
Total change due to tangible capital assets (204,768) 223,373 (138,278)
Change due to prepaid expenses 1,288 12,991 770
Net increase in net debt 224,434 (474,590) (1,717,312)
Net debt - Beginning of year 3,183,661 2,714,810 4,432,122
Net debt - End of year 3,408,095 2,240,220 2,714,810


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

 

Statement of Cash Flow

For the year ended March 31

(in dollars) 2013 2012
Operating Activities    
Net cost of operations before government funding 27,460,027 26,481,591
     
Non-cash items:    
(Amortization of tangible capital assets (note 7) (252,225) (239,378)
Services provided without charge by other government departments (note 9) (3,809,406) (3,840,398)
Loss on write-off of tangible capital assets (note 7) - (4,166)
     
Variations in Statement of Financial Position:    
(Decrease) increase in accounts receivable and advances (1,877) 9,623
Increase in prepaid expenses 12.991 770
(Increase) decrease in accounts payable and accrued liabilities (812,659) 5,480
Decrease in vacation pay and compensatory leave 48,700 4,600
Decrease in employee future benefits 436,800 1,742,300
Cash used in operating activities 23,082,351 24,160,422
     
Capital activities    
Acquisitions of tangible capital assets (note 7) 475,598 105,266
Cash used in capital activities 475,598 105,266
     
Net cash provided by Government of Canada 23,557,949 24,265,688


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

 

Notes to the Financial Statements

1. Authority and objectives

The Canadian Human Rights Commission was established in 1977 under Schedule II of the Financial Administration Act in accordance with the Canadian Human Rights Act.

The Commission is responsible for the administration of the Canadian Human Rights Act(CHRA) and ensures compliance with the Employment Equity Act(EEA).

Human Rights Knowledge Development and Dissemination Program

This program helps foster both an understanding of and compliance with the CHRA and the EEA. Knowledge development also ensures that programs, interventions, and decisions are grounded in evidence and best practices. Knowledge products include research, policies, regulatory instruments, and special reports. Information and/or advice are provided to the Commission itself, Parliament, federal departments and agencies, Crown corporations, federally regulated private sector organizations, and the public. Partnerships with other human rights commissions as well as governmental, non-governmental, research and international organizations are formed and maintained to leverage knowledge development and dissemination activities in areas of common interest.

Discrimination Prevention Program

This program helps foster and sustain a human rights culture in federally regulated organizations by promoting continuous improvement of an organization's human rights competencies. Prevention initiatives, employment equity audits, learning programs and events are among the program's tools to prevent discrimination, and achieve employment equity objectives. Stakeholder engagement involves federal departments and agencies, Crown corporations, private sector organizations, provincial and territorial government bodies, international agencies, unions and other non-governmental organizations.

Human Rights Dispute Resolution Program

This program addresses discrimination by dealing with individual and systemic complaints and issues brought by individuals or groups of individuals against federally regulated employers and service providers. The Commission exercises its discretion in choosing the most appropriate dispute resolution method including investigation, mediation and conciliation. The Commission also serves as a screening body in determining whether further inquiry is warranted, participates in all pre-tribunal mediations and represents the public interest in appearing before the Tribunal.

Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

a) Parliamentary authorities

The Commission is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Commission do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt are the amounts reported in the future-oriented financial statements included in the 2012-13 Report on Plans and Priorities.

b) Net Cash Provided by Government

The Commission operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF, and all cash disbursements made by the Commission 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 Government.

c) Due from the CRF

Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Commission is entitled to draw from the CRF without further authorities to discharge its liabilities.

d) Revenues

  • Revenues from Internal Support Services are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
  • Revenues that are non-respendable are not available to discharge the Commission's liabilities. While the Chief Commissioner is expected to maintain accounting control, he has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

e) Expenses

Expenses are recorded on the accrual basis:

  • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation, employer's contributions to the health and dental insurance plans and workers' compensation are recorded as operating expenses at their estimated cost.

f) Employee future benefits

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan (Plan), a multiemployer pension plan administered by the Government of Canada. The Commission’s contributions to the Plan are charged to expenses in the year incurred and represent the Commission's total obligation to the Plan. The Commission’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.
  • Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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.

g) Accounts receivable

Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain. 

h) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The Commission does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on First Nations reserves and museum collections. 

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows: 

Asset class Amortization Period
Informatics hardware 3 to 5 years
Informatics software 3 to 5 years
Other equipment 1 to 15 years
Leasehold improvements Over the remaining term of lease


i) Measurement uncertainty

The preparation of these financial statements 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 future 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 Authorities

The Commission receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the Commission 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 authorities used

(in dollars) 2013 2012
Net cost of operations before government funding 27,460,027 26,481,591
     
Adjustments for items affecting net cost of operations but not affecting authorities:    
Services provided without charge by other government departments (note 9) (3,809,406) (3,840,398)
Amortization of tangible capital assets (note 7) (252,225) (239,378)
Loss on write-off of tangible capital assets - (4,166)
Decrease in vacation pay and compensatory leave 48,700 4,600
Decrease (increase) in employee future benefits 436,800 1,742,300
Refund of prior years' expenditures 1,171 3,426
Adjustments to prior year's accounts payable 8,120 8,312
  (3,566,840) (2,325,304)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisition of tangible capital assets (note 7) 475,598 105,266
Increase (decrease) in prepaid expenses 12,991 770
Increase in advances  1,400 -
  489,989  106,036 
Current year authorities used 24,383,176 24,262,323

b) Authorities provided and used

(in dollars) 2013 2012
Authorities provided:    
Vote 10 - Program expenditures 22,752,606 22,895,397
Statutory amounts - Contributions to employee benefits plan 2,907,363 2,804,563
Less:    
Lapsed authorities (1,276,793) (1,437,637)
Current year authorities used 24,383,176 24,262,323

4. Accounts payable and accrued liabilities

(in dollars) 2013 2012
Accounts payable - Other government departments and agencies 521,821 354,770
Accounts receivable - External parties 1,277,860 885,387
Total accounts payable 1,799,681 1,240,157
Accrued salaries 694,872 441,737
Total accounts payable and accrued liabilities 2,494,553 1,681,894

5. Employee future benefits

(a) Pension benefits

The Commission's employees participate in the Public Service Pension Plan (Plan), which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 % 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 Commission contribute to the cost of the Plan. The 2012-13 expense amounts to $2,075,859 ($2,016,481 in 2011-12), which represents approximately 1.7 times (1.8 times in 2011-12) the contributions by employees.

The Commission'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 Commission provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. 

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2011-12. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Information about the severance benefits, measured as at March 31, is as follows:

(in dollars) 2013 2012
Accrued benefit obligation, beginning of year 1,858,600 3,700,900
Expense (adjustment) for the year 457,634 (351,187)
Benefits paid during the year (894,434) (1,391,113)
Accrued benefit obligation, end of year 1,521,800 1,958,600

6. Accounts receivable and advances

(in dollars) 2013 2012
Accounts receivable - Other government departments and agencies 94,838 85,936
Accounts receivable - External parties 83,880 94,659
Employee advances - petty cash 2,500 2,500
Gross accounts receivable 181,218 183,095
Accounts receivable held on behalf of Government (38,000) (38,000)
Net accounts receivable 143,218 145,095

7. Tangible capital assets

Cost
Asset class

(in dollars)
Opening
Balance
Acquisitions Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 167,624 27,511 - 195,135
Informatics software 1,143,521 65,912 - 1,209,433
Other equipment 284,213 382,175 - 666,388
Leasehold improvements 439,559 - (58,429) 381,130
  2,034,917 475,598 (58,429) 2,452,086

 

Accumulated amortization
Asset class

(in dollars)
Opening
Balance
Amortization Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 85,386 23,659 - 85,386
Informatics software 480,467 191,155 - 480,467
Other equipment 132,262 25,012 - 132,262
Leasehold improvements 415,574 12,399 (58,429) 369,544
  1,113,689 252,225 (58,429) 1,307,485

 

Net book value
Asset class

(in dollars)
2013 2012
Informatics hardware 86,090 82,238
Informatics software 537,811 663,054
Other equipment 509,114 151,951
Leasehold improvements 11,586 23,985
  1,144,601 921,228

8. Contractual Obligations

The nature of the Commission's activities can result in some large multi-year contracts and obligations whereby the Commission will be obligated to make future payments when the goods or services are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in dollars) Acquisitions of
goods and
services
Operating
leases
 Total
2014 570,038 31,223 601,261
2015 - 30,985 30,985
2016 - 26,253 26,653
2017 - 21,407 21,407

9. Related party transactions

The Commission is related as a result of common ownership to all Government departments, agencies and Crown corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Commission provides Internal Support Services to other government departments related to the provision of Finance, Compensation, Human Resources, Procurement, Administration and Information Technology services. The value of those agreements is $1,033,520in 2012-13 ($884,027 in 2011-12).

a) Common services provided without charge by other government departments

During the year, the Commission received services without charge from certain common service organizations, related to accommodation,  the employer’s contribution to the health and dental insurance plans and worker's compensation coverage. These services provided without charge have been recorded in the Commission’s Statement of Operations and Net Financial Position as follows:

(in dollars) 2013 2012
Accommodation 2,395,724 2,475,688
Employer's contribution to the health and dental insurance plans 1,407,222 1,358,283
Workers' compensation 6,460 6,427
  3,809,406 3,840,398

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in the Commission's Statement of Operations and Net Financial Position.

b) Other transactions with related parties

(in dollars) 2013 2012
Expenses - Other government departments and agencies 3,817,147 3,910,194
Revenues - Other government departments and agencies 1,033,520 884,027

Expenses and revenues disclosed in b) exclude common services provided without charge, which are already disclosed in a).

10. Segmented Information

Presentation by segment is based on the Commission's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in dollars) Human Rights
Knowledge
Development
and
Dissemination
Program
Discrimination
Prevention
Program
Human Rights
Dispute
Resolution
Program
Internal
Services
2013 2012
Operating expenses        
Salaries and employee benefits 3,773,068 3,971,325 8,391,224 5,784,387 21,920,004 20,207,934
Accommodation 330,892 458,028 907,024 699,780 2,395,724 2,475,688
Professional and special services 307,319 273,905 953,114 597,436 2,131,774 2,374,949
Travel and relocation 114,854 115,474 303,793 6,897 541,018 733,580
Communication 34,977 75,110 154,069 97,636 361,792 368,789
Amortization of tangible 
capital assets
16,175 63,171 99,246 73,633 252,225 239,378
Equipment expenses 10,988 17,809 20,159 182,185 231,141 223,387
Rentals 15,741 14,333 49,402 117,120 196,596 221,824
Information services 115,841 72,276 34,215 64,594 286,926 216,637
Utilities, materials and supplies 42,413 15,488 31,369 51,714 140,984 162,700
Repair and maintenance 431 819 3,825 29,766 34,841 129,699
Claims against the 
Crown and court award
- - - - - 6,464
Loss on write-off of 
tangible capital assets
- - - - - 4,166
Other - - - 522 522 423
Total operating expenses 4,762,699 5,077,738 10,947,440 7,705,670 28,493,547 27,365,618
Revenues
Internal Support Services - - - 1,033,520 1,033,520 884,027
Miscellaneous revenues 36 - - 3,767 3,803 342
Revenues earned on behalf 
of Government
(36) - - (3,767) (3,803) (342)
Total Revenues - - - 1,033,520 1,033,520 884,027
Net cost of operations 4,762,699 5,077,738 10,947,440 6,672,150 27,460,027 26,481,591

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