Financial Statements (Unaudited) for the Year Ended March 31, 2014

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, 2014 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, directives 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 2011-12 by the OCG. The Audit Report and related Management Action Plan are posted on the Commission's web site. 

Also, during the fiscal year 2013-14, the Commission revisited the design effectiveness of its key internal controls and performed operating effectiveness testing, in accordance with the Treasury Board Policy on Internal Control. A monitoring 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 22, 2014

 

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2014 2013
Liabilities
Accounts payable and accrued liabilities (note 4) 1,887,193 2,494,553
Vacation pay and compensatory leave 776,700 766,800
Employee future benefits (note 5) 860,600 1,521,800
Total liabilities 3,524,493 4,783,153
Financial assets
Due from the Consolidated Revenue Fund 1,813,757 2,399,715
Accounts receivable and advances (note 6) 188,916 181,218
Total gross financial assets 2,002,673 2,580,933
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 1,964,673 2,542,933
Net debt 1,559,820 2,240,220
Non-financial assets
Prepaid expenses 6,567 31,098
Tangible capital assets (note 7) 974,384 1,144,601
Total non-financial assets 980,951 1,175,699
Net financial position (578,896) (1,064,521)


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 22, 2014

 

 

Statement of Operations and Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned
Results
2014
2014 2013
Expenses      
Human Rights Knowledge Development and Dissemination Program 4,226,670 4,983,979 4,762,699
Discrimination Prevention Program 4,934,350 4,196,713 5,077,738
Human Rights Dispute Resolution Program 10,412,676 11,516,098 10,947,440
Internal Services 8,688,928 7,749,411 7,705,670
Total Expenses 28,262,624 28,446,201 28,493,547
     
Revenues
Internal Support Services 1,218,000 1,197,309 1,033,520
Miscellaneous revenues - 646 3,803
Revenues earned on behalf of Government - (646) (3,803)
Total Revenues 1,218,000 1,197,309 1,033,520
Net cost of operations before government funding 27,044,624 27,248,892 27,460,027
Government funding
Net cash provided by Government 23,459,744 24,251,807 23,557,949
Change in due from Consolidated Revenue Fund 23,693 (585,958) 803,626
Services provided without charge by other government departments (note 9) 3,868,612 4,068,695 3,809,406
Net cost (revenue) of operations after government funding (307,425) (485,652) (710,954)
Net financial position - Beginning of year (1,236,856) (1,064,521) (1,775,475)
Net financial position - End of year (929,431) (578,869) (1,064,521)


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
2014
2014 2013
Net cost (revenue) of operations after government funding (307,425) (485,652) (710,954)
Change due to tangible capital assets
Acquisition of tangible capital assets (note 7) 56,000 100,599 475,598
Amortization of tangible capital assets (note 7) (287,515) (270,816) (252,225)
Total change due to tangible capital assets (231,515) (170,217) 223,373
Change due to prepaid expenses 1,171 (24,531) 12,991
Net decrease in net debt (537,769) (680,400) (474,590)
Net debt - Beginning of year 2,386,282 2,240,220 2,714,810
Net debt - End of year 1,848,513 1,559,820 2,240,220


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

 

Statement of Cash Flow (unaudited)

For the year ended March 31

(in dollars) 2014 2013
Operating activities    
Net cost of operations before government funding 27,248,892 27,460,027
     
Non-cash items:    
Amortization of tangible capital assets (note 7) (270,816) (252,225)
Services provided without charge by other government departments (note 9) (4,068,695) (3,809,406)
     
Variations in Statement of Financial Position:    
Increase (decrease) in accounts receivable and advances (7,698) (1,877)
(Decrease) increase in prepaid expenses (24,531) 12,991
Decrease (increase) in accounts payable and accrued liabilities 607,360 (812,659)
(Increase) decrease in vacation pay and compensatory leave (9,900) 48,700
Decrease in employee future benefits 661,200 436,800
Cash used in operating activities 24,151,208 23,082,351
     
Capital investing activities    
Acquisitions of tangible capital assets (note 7) 100,599 475,598
Cash used in capital activities 100,599 475,598
     
Net cash provided by Government of Canada 24,251,807 23,557,949


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

 

Notes to the Financial Statements (unaudited)

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 2013-14 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 Consolidated Revenue Fund

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 and transcription services 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) 2014 2013
Net cost of operations before government funding 27,248,892 27,460,027
     
Adjustments for items affecting net cost of operations but not affecting authorities:    
Services provided without charge by other government departments (note 9) (4,068,695) (3,809,406)
Amortization of tangible capital assets (note 7) (270,816) (252,225)
(Increase) decrease in vacation pay and compensatory leave (9,900) 48,700
Decrease  in employee future benefits 661,200 436,800
Refund of prior years' expenditures 2,140 1,171
Adjustments to prior year's accounts payable 36,161 8,120
  (3,649,910) (3,566,840)
Adjustments for items not affecting net cost of operations but affecting authorities:    
Acquisition of tangible capital assets (note 7) 100,599 475,598
(Decrease) increase in prepaid expenses (24,531) 12,991
(Decrease) increase in advances (1,400) 1,400
   74,668  489,989
Current year authorities used 23,673,650 24,383,176

b) Authorities provided and used

(in dollars) 2014 2013
Authorities provided:    
Vote 10 - Program expenditures 21,231,835 22,752,606
Proceeds from the disposal of surplus Crown assets 159 -
Statutory amounts - Contributions to employee benefits plan 2,973,433 2,907,363
Less:    
Lapsed authorities (531,777) (1,276,793)
Current year authorities used 23,673,650 24,383,176

4. Accounts payable and accrued liabilities

(in dollars) 2014 2013
Accounts payable - Other government departments and agencies 499,366 521,821
Accounts payable - External parties 775,546 1,277,860
Total accounts payable 1,274,912 1,799,681
Accrued salaries 612,281 694,872
Total accounts payable and accrued liabilities 1,887,193 2,494,553

In Canada's Economic Action Plan 2012, the Government announced various savings measures. The Commission was not directly impacted by these measures. Following the government-wide budget freeze for three years, the Commission undertook an efficiency review and as a result, has recorded at March 31, 2014, an obligation for termination benefits for an amount of $51,715 as part of accrued liabilities to reflect the estimated workforce adjustment costs.

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. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada's Economic Action Plan 2012, employee contributors have been divided into two groups - Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate. 

The 2013-14 expense amounts to $2,090,622 ($2,075,859 in 2012-13).  For Group 1 members, the expense represents approximately 1.6  times (1.7 times in 2012-13) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-13) the employee contributions.

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) 2014 2013
Accrued benefit obligation, beginning of year 1,521,800 1,958,600
Expense (adjustment) for the year (149,382) 457,634
Benefits paid during the year (511,818) (894,434)
Accrued benefit obligation, end of year 860,600 1,521,800

6. Accounts receivable and advances

(in dollars) 2014 2013
Accounts receivable - Other government departments and agencies 73,435 94,838
Accounts receivable - External parties 112,981 83,880
Employee advances - Petty cash 2,500 2,500
Gross accounts receivable 188,916 181,218
Accounts receivable held on behalf of Government (38,000) (38,000)
Net accounts receivable 150,916 143,218

7. Tangible capital assets

Cost
Asset class

(in dollars)
Opening
Balance
Acquisitions Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 195,135 25,300 - 220,435
Informatics software 1,209,433 74,219 - 1,283,652
Other equipment 666,388 1,080 - 667,468
Leasehold improvements 381,130 - - 381,130
  2,452,086 100,599 - 2,552,685

 

Accumulated amortization
Asset class

(in dollars)
Opening
Balance
Amortization Disposals
and
Write-Offs
Closing
Balance
Informatics hardware 109,045 26,682 - 135,727
Informatics software 671,622 190,587 - 862,209
Other equipment 157,274 49,972 - 207,246
Leasehold improvements 369,544 3,575 - 373,119
  1,307,485 270,816 - 1,578,301

 

Net book value
Asset class

(in dollars)
2014 2013
Informatics hardware 84,708 86,090
Informatics software 421,443 537,811
Other equipment 460,222 509,114
Leasehold improvements 8,011 11,586
  974,384 1,144,601

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
2015 689,058 32,789 721,847
2016 - 28,413 28,413
2017 - 22,547 22,547
2018 - 1,140 1,140
2019 and thereafter - 1,140 1,140

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 some other government departments related to the provision of Finance, Compensation, Human Resources, Procurement, Administration and Information Technology services. The value of those agreements is $1,197,309 in 2013-14 ($1,033,520 in 2012-13).

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 and transcription services. These services provided without charge have been recorded in the Commission’s Statement of Operations and Net Financial Position as follows:

(in dollars) 2014 2013
Accommodation 2,531,588 2,395,724
Employer's contribution to the health and dental insurance plans 1,504,736 1,407,222
Workers' compensation 7,120 6,460
Transcription Services 25,251 -
  4,068,695 3,809,406

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) 2014 2013
Expenses - Other government departments and agencies 4,095,551 3,817,147
Revenues - Other government departments and agencies 1,197,309 1,033,520

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
2014 2013
Operating expenses        
Salaries and employee benefits 4,027,724 3,317,615 9,067,192 5,710,645 22,123,176 21,920,004
Accommodation 328,263 462,942 985,525 754,858 2,531,588 2,395,724
Professional and special services 232,735 161,670 690,517 594,946 1,679,768 2,131,774
Travel and relocation 150,260 42,864 303,980 6,451 503,555 541,018
Communication 57,037 61,884 151,383 116,958 387,262 361,792
Equipment expenses 23,162 30,322 34,862 215,851 304,197 231,141

Amortization of tangible capital assets

15,244 62,239 104,761 88,572 270,816 252,225
Rentals 25,564 19,239 84,791 132,581 262,175 196,596
Information services 81,048 8,897 34,599 58,732 183,276 286,926
Utilities, materials and supplies 34,460 20,877 38,156 39,389 132,882 140,984
Repair and maintenance 8,045 8,156 20,021 30,477 66,699 34,841
Other 437 8 311 51 807 522
Total operating expenses 4,983,979 4,196,713 11,516,098 7,749,411 28,446,201 28,493,547
Revenues
Internal Support Services - - - 1,197,309 1,197,309 1,033,520
Miscellaneous revenues - - - 646 646 3,803
Revenues earned on behalf 
of Government
- - - (646) (646) (3,803)
Total revenues - - - 1,197,309 1,197,309 1,033,520
Net cost of operations before government funding 4,983,979 4,196,713 11,516,098 6,552,102 27,248,892 27,460,027

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