Future-Oriented Financial Information 2011-2012
For the Years Ending March 31, 2011 and March 31, 2012
Statement of Management Responsibility
Departmental management is responsible for the future-oriented financial information, including responsibility for the appropriateness of the assumptions on which the statement is prepared. The statement is based on the best information available and assumptions adopted as at December 23, 2010 and reflect the plans described in the Report on Plans and Priorities.
Hon. Arthur Thomas Porter
Executive Director, Senior Financial Officer
January 24, 2011
Future-Oriented Statement of Operations (Unaudited)
|Expenses||Estimated Results 2011||Forecast 2012|
|Program Activity||(in thousands of dollars)|
|Net Cost of Operations||3,097||3,356|
Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 23, 2010. The information for the remainder of the fiscal year 2010-11 and for fiscal year 2011-12 is based on estimates.
Segmented information (Note 8)
The accompanying notes form an integral part of the future-oriented financial statement of operations.
Notes to Future-Oriented Financial Information (Unaudited)
1. Authority and Objectives
The Security Intelligence Review Committee was created to provide external review to the Canadian Security Intelligence Service (CSIS) performance of its duties and functions; and to examine complaints by individuals or reports by Ministers related to security of Canada.
The Security Intelligence Review Committee derives its powers from the Canadian Security Intelligence Service (CSIS) Act promulgated on July 16, 1984. The first Chair and Members were appointed by His Excellency the Governor General on November 30, 1984. Security Intelligence Review Committee is empowered to set its own Rules of Procedures, and to employ an executive director and adequate staff to support its activities. The Act requires Security Intelligence Review Committee to report annually to the Solicitor General of Canada who must, in turn, table the report in each House of Parliament on any of the first fifteen days on which that House is sitting after the day the Minister receives it. Security Intelligence Review Committee may also require CSIS or the Inspector General appointed under the CSIS Act to conduct a review of specific activities on the Service and provide Security Intelligence Review Committee with a report of the review.
2. Significant Assumptions
The future-oriented statement of operations has been prepared on the basis of government priorities and the plans of the Security Intelligence Review Committee as described in the Report on Plans and Priorities.
The main assumptions are as follows:
- The Security Intelligence Review Committee’s activities will remain substantially the same as for the previous year.
- Expenses, including the determination of amounts internal and external to the government, are based on forecasted or historical information. The general historical pattern is expected to continue.
These assumptions are adopted as at December 23, 2010.
3. Variations and Changes to the Forecast Financial Information
While every attempt has been made to accurately forecast final results for the remainder of 2010-11 and for 2011-12, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing the future-oriented statement of operations, the Security Intelligence Review Committee has made estimates and assumptions concerning the future. These estimates and judgments may differ from the subsequent actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Factors that could lead to material differences between the future-oriented statement of operations and the historical financial statement of operations include:
- The timing and number of equipment acquisitions and disposals may affect gains/losses and amortization expenses.
- Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
Once the Report on Plans and Priorities is presented, the Security Intelligence Review Committee will not be updating the forecasts for any changes to authorities or forecast financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.
4. Summary of Significant Accounting Policies
The future-oriented statement of operations has been prepared in accordance with Treasury Board accounting policies stated below, which is based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.
Significant accounting policies are as follows:
- Parliamentary authorities – The Security Intelligence Review Committee is financed by the Government of Canada through Parliamentary authorities. The cash accounting basis is used to recognize transactions affecting parliamentary authorities. The future-oriented financial statement of operations is based on accrual accounting. Consequently, items presented in the Future-oriented Statement of Operations are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.
- Net Cash Provided by Government – The Security Intelligence Review Committee operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Security Intelligence Review Committee is deposited to the CRF and all cash disbursements made by the Security Intelligence Review Committee 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.
- Expenses – are presented on an accrual basis:
- Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
- Services provided without charge by other government departments for accommodation and the employer’s contribution to the health and dental insurance plans are reported as operating expenses at their estimated cost.
- Employee future benefits
- Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government. The Security Intelligence Review Committee’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the Security Intelligence Review Committee to make contributions for any actuarial deficiencies of the Plan.
- Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. 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.
- Tangible capital assets – All tangible capital assets having an initial cost of $3,000 or more are recorded at their acquisition cost. The Security Intelligence Review Committee 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-lines basis over the estimated useful life of the asset as follows:
Tangible capital assets Asset Class Amortization Period Informatics hardware 3 years Other equipment 3 years
5. Parliamentary Authorities
The Security Intelligence Review Committee receives most of its funding through expenditure authorities provided by Parliament. Items recognized in the statement of operations in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Security Intelligence Review Committee 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:
|Estimated Results 2011||Forecast 2012|
|Authorities requested:||(in thousands of dollars)|
|Vote 1 - Program Expenditures||2,707||2,535|
|Vote 15 – Compensation Adjustments||16||-|
|Vote 25 – Operating Budget Carry Forward||133||-|
|Vote 30 –Paylist Requirements||226||92|
|Forecast authorities available||3,408||2,949|
Forecast authorities requested for the year ending March 31, 2012 are the planned spending amounts presented in the 2011-2012 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-2011 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board Central votes.
|Estimated Results 2011||Forecast 2012|
|(in thousands of dollars)|
|Net cost of operations||3,097||3,356|
|Adjustments for items affecting net cost of operations but not affecting authorities:|
|Services provided without charge by other government departments (Note 7)||(445)||(455)|
|Employee future benefits||(83)||(22)|
|Amortization of tangible capital assets||(9)||(24)|
|Refund of prior years’ expenditures||4||4|
|Adjustments for items not affecting net cost of operations but affecting authorities:|
|Acquisition of tangible capital assets||45||-|
|Forecast current year lapse||621||-|
|Other anticipated additional authorities||186||90|
|Forecast authorities available||3,408||2,949|
6. Employee Benefits
- Pension benefits: The Security Intelligence Review Committee’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 department contribute to the cost of the Plan. The forecast expenses are $247,351 in 2010-11 and $277,248 in 2011-12, representing approximately 1.9 times the contributions of employees.
The Security Intelligence Review Committee’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: The Security Intelligence Review Committee provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, estimated as the date of this statement of operations as follows:
Severance benefits Estimated Results 2011 Forecast 2012 (in thousands of dollars) Accrued benefits obligation, beginning of year 293 376 Expense for the year 83 22 Expected benefits payments during the year - - Accrued benefits obligation, end of year 376 398
7. Related Party Transactions
The Security Intelligence Review Committee is related, as a result of common ownership, to all Government of Canada departments, agencies, and Crown corporations. The Security Intelligence Review Committee enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Security Intelligence Review Committee has an agreement with Privy Council Office related to the provision of finance and administration services. During the year, the Security Intelligence Review Committee received common services which were obtained without charge from other Government departments as disclosed below:
- Common services provided without charge by other government departments
During the year, the Security Intelligence Review Committee is forecasted to receive without charge from certain other departments, accommodation, and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the Security Intelligence Review Committee’s future-oriented Statement of Operations as follows:
Common services provided without charge by other government departments Estimated Results 2011 Forecast 2012 (in thousands of dollars) Accommodation 307 310 Employer's contribution to the health and dental insurance plans 138 145 Total 445 455
The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all, without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada are not included as an expense in the Security Intelligence Review Committee’s Statement of Operations.
- Other transactions with related parties:
Other transactions with related parties Estimated Results 2011 Forecast 2012 (in thousands of dollars) Expenses – Other Government departments and agencies 996 1,146 Revenues – Other Government departments and agencies - -
8. Segmented information
Presentation by segment is based on the Security Intelligence Review Committee’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 4. The following table presents the expenses incurred generated for the main program activities, by major object of expenses. The segment results for the period are as follows:
|Salaries and employee benefits||2,188||540||1,003||713||2,256|
|Professional and special services||345||318||135||72||525|
|Transportation & Telecommunication||121||44||20||92||156|
|Acquisition of machinery & equipment||64||-||-||5||5|
|Repair & Maintenance||20||-||-||5||5|
|Utilities, material and supplies||17||-||-||24||24|
|Amortization of tangible capital assets||9||-||-||24||24|
|Net Cost of Operations||3,097||902||1,179||1,275||3,356|
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