Departmental Performance Report - Financial Statements 2011-2012

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, 2012 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 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, the Commission has undertaken to document and evaluate key internal controls, in accordance with the Treasury Board Policy on Internal Control. This process will be completed for the financial statement ending March 31, 2013.


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

August 29, 2012

 

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2012 Restated
(note11)
2011
Liabilities
Accounts payable and accrued liabilities (note 4) 1,681,894 1,687,374
Vacation pay and compensatory leave 815,500 820,100
Employee future benefits (note 5) 1,958,600 3,700,900
Total liabilities 4,455,994 6,208,374
Financial assets
Due from the Consolidated Revenue Fund 1,596,089 1,640,780
Accounts receivable and advances (note 6) 183,095 173,472
Total gross financial assets 1,779,184 1,814,252
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 1,741,184 1,776,252
Net debt 2,714,810 4,432,122
Non-financial assets
Prepaid expenses 18,107 17,337
Tangible capital assets (note 7) 921,228 1,059,506
Total non-financial assets 939,335 1,076,843
Net financial position (1,775,475) (3,355,279)


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

August 29, 2012

 

 

Statement of Operations and Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned
Results
(note 2)
2012
2012 Restated
(note 11)
2011
Expenses      
Human Rights Knowledge Development and Dissemination Program 4,233,942 4,671,029 3,699,438
Discrimination Prevention Program 5,581,236 5,031,501 5,628,453
Human Rights Dispute Resolution Program 10,410,338 9,763,319 10,299,187
Internal Services 7,727,233 7,899,769 7,912,835
Total Expenses 27,952,749 27,365,618 27,539,913
     
Revenues
Internal Support Services - 884,027 855,321
Miscellaneous revenues - 342 673
Revenues earned on behalf of Government - (342) (673)
Total Revenues - 884,027 855,321
Net cost of operations before government funding 27,952,749 26,481,591 26,684,592
Government funding
Net cash provided by Government 23,791,868 24,265,688 23,317,268
Change in due from Consolidated Revenue Fund 371,784 (44,691) (514,908)
Services provided without charge by other government departments (note 9) 3,726,177 3,840,398 3,783,500
Net cost (revenue) of operations after government funding 62,920 (1,579,804) 98,732
Net financial position - Beginning of year (3,509,835) (3,355,279) (3,256,547)
Net financial position - End of year (3,572,755) (1,775,475) (3,355,279)


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
(note 2)
2012
2012 Restated
(note 11)
2011
Net cost (revenue) of operations after government funding and transfers 62,920 (1,579,804) 98,732
Change due to tangible capital assets
Acquisition of tangible capital assets 27,500 105,266 73,014
Amortization of tangible capital assets (249,793) (239,378) (198,398)
Loss on write-off of tangible capital assets - (4,166) -
Total change due to tangible capital assets (222,293) (138,278) (125,384)
Change due to prepaid expenses 2,208 770 (7,529)
Net increase in net debt (157,165) (1,717,312) (34,181)
Net debt - Beginning of year 4,557,055 4,432,122 4,466,303
Net debt - End of year 4,399,890 2,714,810 4,432,122


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

 

Statement of Cash Flow

For the year ended March 31

(in dollars) 2012 Restated
(note 11)
2011
Operating Activities    
Net cost of operations before government funding and transfers 26,481,591 26,684,592
     
Non-cash items:    
Amortization of tangible capital assets (note 7) (239,378) (198,398)
Services provided without charge by other government departments (note 9) (3,840,398) (3,783,500)
Loss on write-off of tangible capital assets (4,166) -
     
Variations in Statement of Financial Position:    
Increase in accounts receivable and advances 9,623 74,004
Increase (decrease) in prepaid expenses 770 (7,529)
Decrease in accounts payable and accrued liabilities 5,480 477,135
Decrease in vacation pay and compensatory leave 4,600 101,200
Decrease (increase) in employee future benefits 1,742,300 (103,250)
Cash used in operating activities 24,160,422 23,244,254
     
Capital activities    
Acquisitions of tangible capital assets (note 7) 105,266 73,014
Cash used in capital activities 105,266 73,014
     
Net cash provided by Government of Canada 24,265,688 23,317,268


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 2011-12 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 recognized in the accounts based on the services provided in the year.
  • 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 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, 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 Indian 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) 2012 Restated
(note 11)
2011
Net cost of operations before government funding 26,481,591 26,684,592
     
Adjustments for items affecting net cost of operations but not affecting authorities:    
Services provided without charge by other government departments (note 9) (3,840,398) (3,783,500)
Amortization of tangible capital assets (note 7) (239,378) (198,398)
Loss on write-off of tangible capital assets (4,166) -
Decrease in vacation pay and compensatory leave 4,600 101,200
Decrease (increase) in employee future benefits 1,742,300 (103,250)
Refund of prior years' expenditures 3,426 17,635
Adjustments to prior year's accounts payable 8,312 283,666
  (2,325,304) (3,682,647)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisition of tangible capital assets (note 7) 105,266 73,014
Increase (decrease) in prepaid expenses 770 (7,529)
  106,036 65,485
     
Current year authorities used 24,262,323 23,067,430

b) Authorities provided and used

(in dollars) 2012 Restated
(note 11)
2011
Authorities provided:    
Vote 10 - Program expenditures 22,895,397 21,496,477
Proceeds from the disposal of surplus Crown assets - 38
Statutory amounts - Contributions to employee benefits plan 2,804,563 2,727,661
Less:    
Lapsed authorities (1,437,637) (1,156,746)
Current year authorities used 24,262,323 23,067,430

4. Accounts payable and accrued liabilities

(in dollars) 2012 Restated
(note 11)
2011
Accounts payable - Other government departments and agencies 354,770 553,314
Accounts receivable - External parties 885,387 657,268
1,240,157 1,210,582
Accrued salaries 441,737 476,792
  1,681,894 1,687,374

5. Employee future benefits

(a) Pension benefits

The Commission's employees participate in the Public Service Pension 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 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 Commission contribute to the cost of the Plan. The 2011-12 expense amounts to $2,016,481 ($1,914,818 in 2010-11), which represents approximately 1.8 times (1.9 times in 2010-11) 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 2012. 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) 2012 Restated
(note 11)
2011
Accrued benefit obligation, beginning of year 3,700,900 3,597,650
Expense (adjustment) for the year (351,187) 364,524
Benefits paid during the year (1,391,113) (261,274)
Accrued benefit obligation, end of year 1,958,600 3,700,900

6. Accounts receivable and advances

(in dollars) 2012 Restated
(note 11)
2011
Accounts receivable - Other government departments and agencies 85,936 46,593
Accounts receivable - External parties 94,659 124,379
Employee advances - petty cash 2,500 2,500
Gross accounts receivable 183,095 173,472
Accounts receivable held on behalf of Government (38,000) (38,000)
Net accounts receivable 145,095 135,472

7. Tangible capital assets

Cost
Asset class

(in dollars)
Opening
Balance
Acquisitions Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 122,285 55,240 (9,901) 167,624
Informatics software 1,130,218 34,136 (20,833) 1,143,521
Other equipment 276,018 8,195 - 284,213
Leasehold improvements 431,864 7,695 - 439,559
  1,960,385 105,266 (30,734) 2,034,917

 

Accumulated amortization
Asset class

(in dollars)
Opening
Balance
Amortization Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 81,561 13,726 (9,901) 85,386
Informatics software 305,124 192,010 (16,667) 480,467
Other equipment 109,480 22,782 - 132,262
Leasehold improvements 404,714 10,860 - 415,574
  900,879 239,378 (26,568) 1,113,689

 

Net book value
Asset class

(in dollars)
2012 2011
Informatics hardware 82,238 40,724
Informatics software 663,054 825,094
Other equipment 151,951 166,538
Leasehold improvements 23,985 27,150
  921,228 1,059,506

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
2013 950,300 31,200 981,500
2014 - 30,900 30,900
2015 - 30,600 30,600
2016 - 26,300 26,300
2017 - 21,400 21,400

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, Procurement, Administration and Information Technology services. The value of those agreements is $884,027 in 2011-12 ($855,321 in 2010-11).

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) 2012 2011
Accommodation 2,475,688 2,474,300
Employer's contribution to the health and dental insurance plans 1,358,283 1,302,800
Workers' compensation 6,427 6,400
  3,840,398 3,783,500

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) 2012 2011
Expenses - Other government departments and agencies 3,910,194 3,344,078
Revenues - Other government departments and agencies 884,027 855,321

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 Office's program activity 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 activities, 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
2012 Restated
(note 11)
2011
Operating expenses        
Salaries and employee benefits 3,401,144 3,657,199 7,178,749 5,970,842 20,207,934 20,062,911
Accommodation 403,700 488,550 962,882 620,556 2,475,688 2,474,300
Professional and special services 432,033 438,657 884,974 619,285 2,374,949 2,838,826
Travel and relocation 221,469 176,853 319,148 16,110 733,580 691,271
Communication 38,422 79,530 149,314 101,523 368,789 361,969
Amortization of tangible 
capital assets
16,294 64,109 105,301 53,674 239,378 198,398
Equipment expenses 6,657 6,373 9,397 200,960 223,387 139,689
Rentals 16,681 21,569 65,824 117,750 221,824 231,896
Information services 64,548 22,719 16,026 113,344 216,637 225,186
Utilities, materials and supplies 56,470 27,087 33,116 46,027 162,700 153,064
Repair and maintenance 13,600 48,829 14,588 35,146 129,699 155,702
Claims against the 
Crown and court award
- - 32,124 - 6,464 3,961
Loss on write-off of 
tangible capital assets
- - 6,464 4,166 4,166 -
Other 11 26 386 423 2,740
Total operating expenses 4,671,029 5,031,501 9,763,319 7,899,769 27,365,618 27,539,913
Revenues
Internal Support Services - - - 884,027 884,027 855,321
Miscellaneous revenues - - - 342 342 673
Revenues earned on behalf 
of Government
- - - (342) (342) (673)
Total Revenues - - - 884,027 884,027 855,321
Net cost of operations 4,671,029 5,031,501 9,763,319 7,015,742 26,481,591 26,684,592

11. Accounting changes

During 2011, amendments were made to Treasury Board Accounting Standard 1.2–Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to the Commission’s financial statements are described below. These changes have been applied retroactively, and comparative information for 2010-11 has been restated.

Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, the Commission now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations before government funding by $342 for 2012 ($673 for 2011) and decrease the total net financial asset by $38,000 for 2012 ($38,000$ for 2011).

Government funding, as well as the credit related to services provided without charge by other government departments, are now recognized in the Statement of Operations and Net Financial Position below “Net cost of operations before government funding.” In previous years, the Commission recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations after government funding by $28,061,395 for 2012 ($26,585,860 for 2011).

(in dollars)
2011
As previously
stated
Effect of
change
 2011
Restated
Statement of Financial Position
Financial assets held on behalf of Government - (38,000) (38,000)
Net financial position (3,317,279) (38,000) (3,355,279)
Statement of Operations and Net Financial Position      
Net cost of operations before government funding 26,683,919 673 26,684,592
Government funding and transfers
Net cash provided by Government - 23,317,268 23,317,268
Change in due from Consolidated Revenue Fund - (514,908) (514,908)
Services provided without charge by other government departments - 3,783,500 3,783,500

12. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

Text Resize

-A +A