Future-oriented Financial Statements 2011-12

Office of the Commissioner of Official Languages

Statement of Management Responsibility

Management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 15, 2010, and reflect the plans described in the Report on Plans and Priorities.

Graham Fraser
Commissioner of Official Languages

Lise Cloutier
Chief Financial Officer
Assistant Commissioner
Corporate Management

  Ottawa, Canada
  February 8, 2011

Future-oriented Statements

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-oriented Statement of Financial Position (Unaudited)
As at March 31

(in dollars)
  Estimated Results 2011 Forecast 2012
Assets
Financial assets
Due from the Consolidated Revenue Fund
1,851,507 1,760,023
Accounts receivable and advances
213,578 223,133
Total financial assets 2,065,085 1,983,156
Non-financial assets
Tangible capital assets (Note 6)
1,294,430 1,090,124
Total non-financial assets 1,294,430 1,090,124
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (Note 7)
2,219,891 2,117,584
Vacation pay and compensatory leave
767,967 746,720
Employee future benefits (Note 8)
2,998,951 2,974,862
Total Liabilities 5,986,809 5,839,166
Equity of Canada (2,627,294) (2,765,886)

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

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-oriented Statement of Operations (Unaudited)
For the Year Ending March 31

(in dollars)
  Estimated Results 2011 Forecast 2012
Operating Expenses
Protection of Linguistic Rights
7,973,839 8,121,245
Promotion of Linguistic Duality
8,530,016 8,454,407
Internal Services
8,277,376 7,256,866

Segmented information (Note 10)

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

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-oriented Statement of Equity of Canada (Unaudited)
As at March 31

(in dollars)
  Estimated Results 2011 Forecast 2012
Equity of Canada, beginning of year (2,037,259) (2,627,294)
Net cost of operations
(24,781,231) (23,832,518)
Net cash provided by Government
20,838,494 20,771,107
Change in due from the Consolidated Revenue Fund
338,399 (91,484)
Services provided without charge from other government departments (Note 9)
3,014,303 3,014,303

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

OFFICE OF THE COMMISSIONER OF OFFICIAL LANGUAGES
Future-oriented Statement of Cash Flows (Unaudited)
For the Year Ending March 31

(in dollars)
  Estimated Results 2011 Forecast 2012
Operating activities
Net cost of operations 24,781,231 23,832,518
Non-cash items:
Amortization of tangible capital assets (Note 6)
(770,247) (610,183)
Services provided without charge by other government departments (Note 9)
(3,014,303) (3,014,303)
Variations in Statement of Financial Position:
Increase in accounts receivable and advances
165,517 9,555
Decrease (increased) in liabilities
(710,963) 147,643
Cash used in operating activities 20,451,235 20,365,230
Capital investing activities
Acquisition of tangible capital assets (Note 6)
387,259 405,877
Cash used in capital investing activities 387,259 405,877

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

Office of the Commissioner of Official Languages
Notes to the Future-oriented Financial Statements (unaudited)

1. Authority and Objectives

The Parliament of Canada adopted the first Official Languages Act in 1969. This Act provided that English and French would henceforth have “equality of status and equal rights and privileges as to their use in all the institutions of the Parliament and Government of Canada.”

A new Official Languages Act came into force in 1988 and was amended on November 25, 2005. The Act sets out three basic objectives of the Government of Canada:

  1. ensure respect for English and French as official languages of Canada, and ensure equality of status and equal rights and privileges as to their use in all federal institutions;
  2. set out the powers, duties and functions of federal institutions with respect to the official languages of Canada;
  3. support the development of English and French linguistic minority communities and generally advance the equality of status and use of the English and French languages within Canadian society.

The Office of the Commissioner of Official Languages (OCOL), which serves the public from its offices in Ottawa and its five regional offices, supports the Commissioner of Official Languages in fulfilling his mandate. The mandate of the Commissioner consists of taking all necessary measures to ensure recognition of the status of each of the official languages and compliance with the letter and the spirit of the Official Languages Act in the administration of the affairs of federal institutions, including any of their activities relating to the advancement of English and French in Canadian society.

The Office is named in Schedule I.1 of the Financial Administration Act (FAA) and is funded through annual appropriations.

The Commissioner of Official Languages is appointed after approval of the appointment by resolution of the Senate and the House of Commons for a seven-year term (renewable). The Commissioner reports directly to Parliament.

2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of OCOL as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. OCOL's activities will remain substantially the same as for the previous year;
  2. Expenses, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue;
  3. Estimated year end information for 2010-11 is used as the opening position for the 2011-12 forecasts.

These assumptions are adopted as at December 15, 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 these financial statements the Office of the Commissioner of Official Languages has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements 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 financial statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of equipment may affect gains/losses and amortization expense.
  2. Further changes to the operating budget through new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Office of the Commissioner of Official Languages will not be updating the forecasts for any changes to appropriations 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 financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are 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:

  1. Parliamentary authorities

    OCOL 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 statements are based on accrual accounting. Consequently, items presented in the Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

  2. Net Cash Provided by Government

    OCOL operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by OCOL is deposited to the CRF and all cash disbursements made by OCOL are paid from the CRF. Net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

  3. Due from/to the Consolidated Revenue Fund (CRF)

    Amounts due from/to 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 OCOL is entitled to draw from the CRF without further authorities to discharge its liabilities.

  4. Accounts receivable

    Accounts receivable are stated at amounts expected to be ultimately realized. A provision is made for receivables where recovery is considered uncertain.

  5. Tangible capital assets

    OCOL records as capital assets all expenses providing multi year benefits and having an initial cost of $1,000 or more. Similar items under $1,000 are expensed in the Statement of Operations. OCOL does not capitalize intangibles.

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

    Asset Class Amortization Period
    Machinery and equipment 5 years
    Informatics hardware 4 years
    Furniture 5 years
    Informatics software 3 years
    Motor vehicles 7 years
    Leasehold improvements Lesser of the remaining term of the lease or the useful life of the improvement
  6. Expenses

    Expenses are recorded on the accrual basis:

    1. Vacation pay and compensatory leave

      Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
    2. Services provided without charge by other government departments

      Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, audit and payroll services are recorded as operating expenses at their estimated cost.
    3. Workers' compensation benefits

      The Government of Canada sponsors workers' compensation benefits available across Canada. OCOL is charged for its share of the annual benefit payments incurred under this Plan. These amounts represent OCOL's contribution to the Plan and they are recorded by OCOL as an expense in the period incurred. As a participant, OCOL has no other obligation to any of these plans in addition to its annual contributions.
  7. Employee future benefits

    1. Severance benefits

      Employees are entitled to severance benefits, as provided for under labour contracts and conditions of employment. The cost of these benefits is 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.
    2. Pension benefits

      Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. OCOL's contributions to the Plan are charged to expenses in the year incurred and represent OCOL's total obligation to the Plan. Current legislation does not require OCOL to make contributions for any actuarial deficiencies of the Plan.

5. Parliamentary Authorities

OCOL receives its funding through annual Parliamentary authorities. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, OCOL 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) Authorities requested and to be used
(in dollars)
  Estimated 2011 Forecast 2012
Authorities requested
Vote 20
19,811,906 18,358,105
Statutory amounts
2,185,376 2,301,139
Forecasted lapse
663,314 0
(b) Reconciliation of net cost of operations to authorities to be used
(in dollars)
  Estimated 2011 Forecast 2012
Net cost of operations 24,781,231 23,832,518
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (Note 6)
(770,247) (610,183)
Decrease (increase) in employee future benefits
(85,605) 24,089
Decrease in vacation pay and compensatory leave
35,633 21,246
Services provided without charge by other government departments (Note 9)
(3,014,303) (3,014,303)
Total - Adjustments for items affecting net cost of operations but not affecting authorities (3,834,522) (3,579,151)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets (Note 6)
387,259 405,877
Total - Adjustments for items not affecting net cost of operations but affecting authorities 387,259 405,877

6. Tangible Capital Assets

Tangible capital assets (in dollars)
  Estimated Results 2011 Forecast 2012
Opening balance 1,677,418 1,294,430
Acquisitions of tangible capital assets 387,259 405,877
Less: Current year amortization (770,247) (610,183)

7. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities (in dollars)
  Estimated Results 2011 Forecast 2012
External parties
Accounts payable and accrued liabilities
1,377,780 1,200,640
Accrued salaries
647,972 716,549
Other government departments
Accounts payable
194,139 200,395

8. Employee Future Benefits

(a) Pension benefits

OCOL's employees participate in the Public Service Pension 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/Quebec Pension Plans benefits and they are indexed to inflation.

OCOL'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

OCOL 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 authorities. Information about the severance benefits, estimated as at the date of these statements, is as follows:

Severance benefits (in dollars)
  Estimated Results 2011 Forecast 2012
Accrued benefit obligation, beginning of year 2,913,346 2,998,951
Expense for the year 85,605 (24,089)

9. Related party transactions

OCOL is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. OCOL enters into transactions with these entities in the normal course of business and on normal trade terms.

During the year, OCOL is forecasted to receive without charge from other government departments and agencies, accommodation, employer's contribution to the health and dental insurance plans, audit and payroll services. These services without charge have been recognized in OCOL's future-oriented Statement of Operations as follows:

Common services provided without charge by other government departments (in dollars)
  Estimated Results 2011 Forecast 2012
Accommodation 1,730,473 1,730,473
Employer's contributions to the health and dental insurance plans  1,164,830 1,164,830
Audit services 112,000 112,000
Payroll services 7,000 7,000

10. Segmented Information

Segmented information (in dollars)
  2011 Protection of Linguistic Rights Promotion of Linguistic Duality Internal Services 2012
Operating Expenses
Salaries and employee benefits
16,214,151 6,171,015 5,351,461 4,682,263 16,204,739
Accommodation
1,730,473 605,666 605,666 519,141 1,730,473
Rentals
116,587 15,851 36,001 69,148 121,000
Professional and special services
4,083,284 765,868 1,377,491 1,195,641 3,339,000
Amortization
770,247 213,564 213,564 183,055 610,183
Transportation and communications
819,183 273,329 415,998 311,673 1,001,000
Repair and maintenance
185,425 24,370 51,912 156,718 233,000
Acquisition of equipment
130,020 13,190 80,835 45,098 139,123
Utilities, material and supplies
189,769 31,857 52,862 80,281 165,000
Information
374,820 5,592 266,968 10,440 283,000
Other
167,272 943 1,649 3,408 6,000