Financial Statements (Unaudited) for the Year Ended March 31, 2016

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, 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 2015-16, 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.

_______________________________________
Marie-Claude Landry, Ad. E.
Chief Commissioner
_______________________________________
Heather Troop
Chief Financial Officer

_______________________________________
Luc Bélanger
Deputy Chief Financial Officer

Ottawa, Canada

 

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2016 2015
Liabilities
Accounts Payable and Accrued Liabilities (note 4) 2,485,064 2,720,643
Vacation Pay and Compensatory Leave 820,600 823,200
Employee Future Benefits (note 5) 1,101,800 1,154,000
Total Liabilities 4,407,464 4,697,843
Financial Assets
Due from the Consolidated Revenue Fund 2,377,107 2,611,140
Accounts Receivable and Advances (note 6) 130,686 169,220
Total Financial Assets 2,507,793 2,780,360
Net Debt 1,899,671 1,917,486
Non-Financial Assets
Prepaid Expenses 9,733 7,360
Tangible Capital Assets (note 7) 1,181,219 1,138,315
Total Non-Financial Assets 1,190,952 1,145,675
Net Financial Position (708,719) (771,808)

Contractual obligations (note 8)

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

 

_______________________________________
Marie-Claude Landry, Ad. E.
Chief Commissioner

_______________________________________
Heather Troop
Chief Financial Officer

_______________________________________
Luc Bélanger
Deputy Chief Financial Officer

Ottawa, Canada

 

 

Statement of Operations and Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned Results 2016 2016 2015
Expenses
Human Rights Program - - 4,142,655
Discrimination Prevention Program - - 4,433,114
Human Rights Dispute Resolution Program - - 10,595,683
Human Rights Program 17,086,000 17,556,356 -
Internal Services 9,858,543 9,935,887 8,724,428
Expenses incurred on behalf of government - - (38,000)
Total Expenses 26,994,543 27,492,243 27,857,880
Revenues
Internal Support Services 1,200,000 1,296,780 1,143,237
Miscellaneous Revenues - 345 6,184
Revenues Earned on Behalf of Government - (345) (6,184)
Total Revenues 1,200,000 1,296,780 1,143,237
Net Cost of Operations Before Government Funding and Transfers 25,744,543 26,195,463 26,714,643
Government Funding and Transfers
Net Cash Provided by Government   22,506,254 22,357,940
Change in due from Consolidated Revenue Fund   (234,033) 797,383
Services Provided Without Charge by Other Government Departments (note 9)   3,989,424 3,975,040
Transfer of the Transition Payments for Implementing Salary Payments in Arrears (note 10)   (3,093) (608,659)
Net Cost (Revenue) of Operations after Government Funding and Transfers   (63,089) 192,939
Net Financial Position - Beginning of Year   (771,808) (578,869)
Net Financial Position - End of Year   (708,719) (771,808)

Segmented information (note 11)

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) 2016 2015
Net Cost (Revenue) of Operations after Government Funding and Transfers (63,089) 192,939
Change due to Tangible Capital Assets
Acquisition of tangible capital assets (note 7) 299,881 454,266
Amortization of tangible capital assets (note 7) (256,977) (288,332)
Loss on write-off of tangible capital assets (note 7) - (2,003)
Total change due to tangible capital assets 42,904 163,931
Change Due to Prepaid Expenses 2,373 793
Net Increase (Decrease) in Net Debt (17,812) 357,663
Net Debt - Beginning of Year 1,917,483 1,559,820
Net Debt - End of Year 1,899,671 1,917,483

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

 

Statement of Cash Flow (unaudited)

For the year ended March 31

(in dollars) 2016 2015
Operating Activities
Net Cost of Operations Before Government Funding and Transfers 26,195,463 26,714,643
Non-Cash Items:
Amortization of tangible capital assets (note 7) (256,977) (288,332)
Services provided without charge by other government departments (note 9) (3,989,424) (3,975,040)
Loss on write-off of tangible capital assets - (2,003)
Transition payments for implementing salary payments in arrears (note 10) 3,093 608,659
Variations in Statement of Financial Position:
(Decrease) Increase in accounts receivable and advances (38,534) 18,304
Increase in prepaid expenses 2,373 793
Decrease (increase) in accounts payable and accrued liabilities 235,579 (833,450)
Increase in vacation pay and compensatory leave 2,600 (46,500)
Decrease (increase) in employee future benefits 52,200 (293,400)
Cash used in operating activities 22,206,373 21,903,674
Capital Investing Activities
Acquisitions of tangible capital assets (note 7) 299,881 454,266
Cash used in capital activities 299,881 454,266
Net Cash Provided by Government of Canada 22,506,254 22,357,940

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 (the Commission) was established in 1977 under Schedule I.1 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). The CHRA prohibits discrimination and the EEA promotes equality in the workplace. Both laws apply the principles of equal opportunity and non-discrimination to federal government departments and agencies, Crown corporations, and federally regulated private sector organizations.

Human Rights Program

This program helps people and federally regulated organizations understand and comply with the Canadian Human Rights Act and the Employment Equity Act. It respects the Paris Principles, a set of international standards which frame and guide the work of national human rights institutions. The program promotes and protects human rights by developing and sharing knowledge, conducting audits, and managing complaints. It works collaboratively with people and organizations to conduct research, develop tools and policies, and raise awareness. It audits federally regulated employers to ensure that they are providing equal opportunities to the four designated groups: women, Aboriginal peoples, persons with disabilities, and members of visible minorities. It screens, investigates and resolves human rights complaints, and decides whether they should go to a full legal hearing. It represents the public interest in legal cases to advance human rights in Canada.

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. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities 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; and Acquisition Services.

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 “Expenses” and “Revenues” sections of the Statement of Operations and Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2015-16 Report on Plans and Priorities. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Net Financial Position and in the Statement of Change in Net Debt because these amounts were not included in the 2015-16 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, she 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, 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

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

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) 2016 2015
Net cost of operations before government funding 26,195,463 26,714,643
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (note 9) (3,989,424) (3,975,040)
Amortization of tangible capital assets (note 7) (256,977) (288,332)
Loss on write-off of tangible capital assets (note 7) - (2,003)
Decrease (increase) in vacation pay and compensatory leave 2,600 (46,500)
Decrease (increase) in employee future benefits 52,200 (293,400)
Refund of prior years' expenditures 4,832 2,393
Bad Debt Expense (4,655) -
Adjustments to prior year's accounts payable 42,768 43,683
  (4,148,656) (4,559,199)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets (note 7) 299,881 454,266
Transition payments for implementing salary payments in arrears (note 10) 3,093 608,659
Increase in prepaid expenses 2,373 793
  305,347 1,063,718
Current Year Authorities Used 22,352,154 23,219,162

 

b) Authorities provided and used

(in dollars) 2016 2015
Authorities Provided:
Vote 10 - Program expenditures 20,633,490 21,011,219
Proceeds from the disposal of surplus Crown assets 195 -
Statutory amounts - Contributions to employee benefits plan 2,615,151 2,678,046
Less:
Lapsed Authorities (896,487) (470,103)
Authorites available for future years (195) -
Current Year Authorities Used 22,352,154 23,219,162

4. Accounts Payable and Accrued Liabilities

(in dollars) 2016 2015
Accounts Payable - Other Government Departments and Agencies 180,890 510,827
Accounts Payable - External Parties 906,842 1,025,512
Total Accounts Payable 1,087,732 1,536,339
Accrued Salaries 1,397,332 1,184,304
Total Accounts Payable and Accrued Liabilities 2,485,064 2,720,643

In Canada's Economic Action Plan 2012, the Government announced various savings measures. The Commission was not directly impacted by these measures.

 

5. Employee Future Benefits

a) Pension benefits

The Commission's employees participate in the Public Service Pension Plan (the "Plan"), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the 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 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 2015-16 expense amounts to $1,802,624 ($1,830,711 in 2014-15). For Group 1 members, the expense represents approximately 1.25 times (1.41 times in 2014-15) the employee contributions and, for Group 2 members, approximately 1.24 times (1.39 times in 2014-15) 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) 2016 2015
Accrued benefit obligation, Beginning of year 1,154,000 860,600
Expense (adjustment) for the year 174,166 475,400
Benefits paid during the year (266,366) (182,000)
Accrued Benefit Obligation, End of Year 1,101,800 1,154,000

 

6. Accounts Receivable and Advances

(in dollars) 2016 2015
Accounts receivable - Other government departments and agencies 107,957 109,503
Accounts receivable - External parties 20,229 57,217
Employee advances - Petty cash 2,500 2,500
Net accounts receivable 130,686 169,220

 

7. Tangible Capital Assets

Cost Asset Class
(in dollars)
Opening Balance Acquisitions Disposals and Write-Offs Closing Balance
Informatics hardware 288,385 91,041 - 379,426
Informatics software 1,365,561 45,060 - 1,410,621
Other equipment 667,468 9,840 - 677,308
Leasehold improvements 533,533 76,242 - 609,775
Assets under construction 114,245 77,698 - 191,943
  2,969,192 299,881 - 3,269,073

 

Accumulated amortization
Asset class
(in dollars)
Opening Balance Amortization Disposals and Write-Offs Closing Balance
Informatics hardware 126,006 38,692 - 164,698
Informatics software 1,062,358 119,457 - 1,181,905
Other equipment 265,819 56,470 - 322,289
Leasehold improvements 376,694 42,268 - 418,962
  1,830,877 256,977 - 2,087,854

 

Net book value
Asset class
(in dollars)
2016 2015
Informatics hardware 214,728 162,379
Informatics software 228,716 303,203
Other equipment 355,019 401,649
Leasehold improvements 190,813 156,839
Assets under construction 191,943 114,245
  1,181,219 1,138,315

 

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
2017 849,414 28,323 877,737
2018 140,983 7,115 148,098
2019 142,462 6,919 149,381
2020 - 5,975 5,975
2021 and thereafter - 3,523 3,523

 

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 $1,296,780 in 2015-16 ($1,143,237 in 2014-15).

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, 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) 2016 2015
Accommodation 2,487,323 2,510,044
Employer's contribution to the health and dental insurance plans 1,494,912 1,457,841
Workers' compensation 7,189 7,155
  3,989,424 3,975,040

 

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) 2016 2015
Expenses - Other government departments and agencies 3,141,373 3,466,221
Revenues - Other government departments and agencies 1,296,780 1,143,237

 

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

10. Transfer of the transition payments for implementing salary payments in arrears

The Government of Canada implemented salary payments in arrears in 2014-15. As a result, a one-time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Commission. However, it did result in the use of additional spending authorities by the Commission. Prior to year end, the transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

 

11. 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 programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:

(in dollars) Human Rights Program Internal Services 2016 2015
Operating Expenses
Salaries and employee benefits 13,839,822 7,397,648 21,237,470 21,480,447
Accommodation 1,581,257 906,066 2,487,323 2,510,044
Professional and special services 946,158 673,653 1,619,811 1,718,348
Travel and relocation 493,335 17,118 510,453 431,815
Rentals 137,236 238,842 376,078 319,883
Communication 201,903 118,168 320,071 309,591
Amortization of tangible capital asset 83,952 173,025 256,977 288,332
Equipment expenses 89,238 160,761 249,999 283,385
Information services 74,623 124,792 199,415 279,656
Utilities, materials and supplies 79,558 75,812 155,370 106,922
Repair and maintenance 29,274 45,347 74,621 102,876
Bad debt - 4,655 4,655 38,000
Other - - - 15,578
Claims against the Crown and court - - - 9,000
Loss on write-off of tangible capital - - - 2,003
Expenses incurred on behalf of Government - -   (38,000)
Total operating expenses 17,556,356 9,935,887 27,492,243 27,857,880
Revenues
Internal Support Services - 1,296,780 1,296,780 1,143,237
Miscellaneous revenues - 345 345 6,184
Revenues earned on behalf of Government - (345) (345) (6,184)
Total Revenues - 1,296,780 1,296,780 1,143,237
Net cost of operations before government funding 17,556,356 8,639,107 26,195,463 26,714,643

12. Comparative Information

The Commission introduced significant changes to its Program Alignment Architecture (PAA) for 2015–16. Expenditures for 2014-15 have been provided according to the former PAA.