2013-2014 Future-Oriented Financial Statements

Table of Contents

Statement of Management Responsibility

Responsibility for the compilation, content, and presentation of the accompanying future-oriented financial statements for years ending March 31, 2013 and 2014 rests with the management of the Canadian Forces Grievance Board. These future-oriented financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. The future-oriented financial statements are submitted for Part III of Estimates (Report on Plans and Priorities). 

Management is responsible for the integrity and objectivity of the information contained in these future-oriented financial statements and for the process of developing assumptions. Assumptions and estimates are based upon information available and known to management at the time of development, reflect current business and economic conditions, and assume a continuation of current governmental priorities and consistency in departmental mandate and strategic objectives. Much of the future-oriented financial information is based on these assumptions, best estimates, and judgment and gives due consideration to materiality. At the time of preparation of these statements management believes the estimates and assumptions to be reasonable. However, as with all such assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The actual results achieved for the fiscal years covered in the accompanying future-oriented financial statements will vary from the information presented and the variations may be material.

The Future-Oriented Statements for Canadian Forces Grievance Board (Board) have not been audited.

[Original signed by Cynthia Beeman]
__________________________________
Cynthia Beeman, Chief Financial Officer
Ottawa
March 15, 2013

[Original signed by Bruno Hamel]
_______________________
Bruno Hamel, Chairperson
Ottawa
March 15, 2013

Future-oriented Statement of Financial Position

Future-Oriented Statement of Financial Position (Unaudited)
At March 31 (in thousands of dollars)
  Forecast
2013
Forecast
2014
Liabilities
Accounts payable and accrued liabilities (note 7) $ 338 $ 307
Vacation pay and compensatory leave 123 125
Future employee benefits (note 9) 304 241
Total liabilities 766 674
Financial assets
Due from Consolidated Revenue Fund 327 297
Accounts receivable and advances (note 6) 12 10
Total net financial assets 338 307
Departmental net debt 428 366
Non-financial assets
Tangible capital assets (note 8) 231 237
Departmental net financial position $ (196) $ (129)

Contractual obligations (note 10)

Totals may not add due to rounding.

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

Future-oriented Statement of Operations

Future-Oriented Statement of Operations
and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  Forecast
2013
Forecast
2014
Expenses
Review of Canadian Forces Grievances $ 4,661 $ 4,506
Internal Services 2,626 2,538
Total expenses 7,288 7,044
Net cost of operations before government funding 7,288 7,044
Government funding   
Net cash provided by government 7,082 6,851
Change in due from consolidated revenue fund (86) (29)
Services provided without charge by other government departments (note 11) 312 290
Total Government funding 7,308 7,111
Net cost (revenue) after government funding (20) (67)
Departmental net financial position – Beginning of year (216) (196)
Departmental net financial position – End of year $ (196) $ (129)

Segmented information (note 12)

Totals may not add due to rounding.

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

Future-Oriented Statement of Change in Departmental Net Debt

Future-Oriented Statement of Change in
Departmental Net Debt (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  Forecast
2013
Forecast
2014
Net cost of operations after government funding $ (20) $ (67)
Change due to tangible capital assets
Acquisition of tangible capital assets (note 8) 113 108
Amortization of tangible capital assets (note 8) (68) (103)
Total changes due to tangible capital assets 45 5
Net increase (decrease) in departmental net debt 25 (62)
Departmental net debt – Beginning of year 401 426
Departmental net debt – End of year $ 426 $ 365

Totals may not add due to rounding.

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

Future-Oriented Statement of Cash Flow

Future-Oriented Statement of Cash Flow (Unaudited)
For the Year Ended March 31 (in thousands of dollars)
  Forecast 2013 Forecast 2014
Operating Activities
Net Cost of Operations before government funding $ 7,288 $ 7,044
Non-cash items
Amortization of tangible capital assets (note 8) (68) (103)
Services provided without charge by other government departments (note 11)  (312)  (290)
Variations in Statement of Financial Position
Decrease (increase) in accounts payables and accrued liabilities 64   31
Increase (decrease) in receivables and advances 1   (2)
Decrease (increase) in vacation pay and compensatory leave (4) (1)
Decrease (increase) in future employee benefits 0 63
Cash used in operating activities 6,968 6,743
Capital Investing Activities
Acquisitions of tangible capital assets (note 8) 113 108
Cash used in capital investing activities 113 108
Net cash provided by Government of Canada $ 7,082 $ 6,851

Totals may not add due to rounding.

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

Notes to Future-oriented Financial Statements

1. Mandate and Objectives

The Canadian Forces Grievance Board (the Board) is an independent arms-length organization that was created through amendments to the National Defence Act (NDA) approved by Parliament on December 10, 1998. The amendments that were made to the NDA were aimed at modernizing and strengthening the military justice system, making the whole grievance review process simpler and shorter for members of the Canadian Forces (CF). The Board’s mandate is to review grievances in order to render fair and impartial findings and recommendations in a timely and informal manner to the Chief of Defence Staff (CDS) and the grievor.

The Board operates under the following programs:

  • Review of CF grievances referred by the CDS to conduct fair, transparent and timely reviews of grievances referred to the Board.
  • 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; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Materiel Services; Acquisition Services; 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. Methodology and Significant Assumptions

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

The main assumptions are as follows:

  1. the Organization'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, trend analysis and other analytical methodologies. The general historical pattern is expected to continue.
  3. according to the  requirements of Treasury Board Accounting Policies which are based on Canadian generally accepted accounting principles for the public sector.
  4. on the basis that the resources provided will enable the Board to deliver the expected results specified in the RPP.

3. Variations and Changes to the Forecast Financial information

While every attempt has been made to accurately forecast final results for the fiscal years 2012-13 and 2013-14, actual results achieved are likely to vary from the forecast information presented and this variation could be material.

In preparing these future-oriented financial statements the Board has made estimates and assumptions concerning the future. These may differ from the subsequent actual results. Estimates and assumptions 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.

Once the RPP is presented, the Board will not be updating the forecast 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 Treasury Board accounting policies which are consistent with 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 appropriations – the Canadian Forces Grievance Board is financed by the Government of Canada through Parliamentary appropriations. Financial reporting of authorities provided to the organization do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items presented in the Future-Oriented Statement of Operations and Departmental Net Financial Position and in the Future-Oriented Statement of Financial Position are not necessarily the same as those provided through appropriations from Parliament. Note 5 provides a reconciliation between the bases of reporting.
  2. Net Cash Provided by Government – The Board operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Board is deposited to the CRF and all cash disbursements made by the board 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.
  3. 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 the Board is entitled to draw from the CRF without further appropriations to discharge its liabilities.
  4. Revenues - (if applicable) are presented on an accrual basis:
    • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
    • Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
  5. 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 the employer’s contribution to the health and dental insurance plans and legal services are recorded as operating expenses at their estimated cost.
  6. Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The Board’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the plan. The Board'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. These benefits are accrued as employees render services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from results of the actuarially determined liability for employee severance benefits for the Government as a whole.
  7. Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is established for receivables where recovery is considered uncertain.
  8. Tangible capital assets – All tangible assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Board 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:
Amortization of tangible capital assets
Asset Class Amortization Period
Informatics Hardware 3 to 5 years
Informatics Software 3 years
Other Equipment 10 years

5. Parliamentary Appropriations

The Board receives most of its funding through expenditure authorities provided by Parliament. 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, the Board 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 (in thousands of dollars)
Forecast
2013
Forecast
2014
Vote 15 - Program expenditures 6,407 6,087
Statutory amounts 610 608
Forecast authorities available 7,017 6,695

Forecast authorities requested for the year ending March 31, 2014 are the planned spending amounts presented in the 2013-14 RPP. Estimated authorities requested for the year ending March 31, 2013 include amounts presented in the 2012-13 Main Estimates, the 2011-12 operating budget carry forward and the reimbursement of severance paid out.

(b) Reconciliation of net cost of operations to requested authorities
(in thousands of dollars)
  Forecast
2013
Forecast
2014
Net Cost of Operations before Government funding 7,288 7,044
Adjustments for items affecting net cost of operations but not affecting authorities
Services provided without charge by other Government departments (note 11) (312) (290)
Amortization of tangible capital assets (note 8) (68) (103)
Increase in Vacation pay and compensatory leave (4) (1)
Decrease in future employee benefits - (63)
Total (384) (457)
Adjustments for items not affecting net cost of operations but affecting appropriations
Acquisitions of tangible capital assets 113 108
Forecast authorities available 7,017 6,695

6. Accounts receivable and advances

(in thousands of dollars)
  Forecast
2013
Forecast
2014
Receivables from other Federal Government departments and agencies 11 9
Employee Advances 1 1
Total 12 10

7. Accounts payable and accrued liabilities

(in thousands of dollars)
Forecast
2013
Forecast
2014
Accrued salaries and wages 141 128
Accounts payable – External parties 126 115
Accounts payable – Other government departments 71 65
Total 338 307

8. Tangible Capital Assets

(in thousands of dollars)
Cost Accumulated Amortization Net book value
Capital asset class Opening balance Acquisitions Closing balance Opening balance Amorti-
zation
Closing balance Forecast
2013
Forecast
2014
Informatics Hardware 665 93 758 491 77 568 173 190
Informatics Software 70 10 80 39 21 60 33 20
Other Equipment 40 5 45 14 4 18 25 27
Total 775 108 883 543 103 646 231 237
Amounts may not add due to rounding.

Amortization expense for the year ended March 31, 2013 is $67,928 and for 2012 - $91,000.

9. Employee Benefits

  1. Pension benefits: The Board’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/Québec Pension plans benefits and they are indexed to inflation.
    Both the employees and the Board contribute to the cost of the Plan. The forecast expenses are $436,000 in 2012-13 and $434,000 in 2013-14.
    The Board’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.
  2. Severance benefits: The Board provides severance benefits to its employees based on eligibility, years of service and final salary. Information about the severance benefits, estimated as at the date of these statements, is as follows:
Employee Benefits (in thousands of dollars)
Forecast
2013
Forecast
2014
Accrued benefit obligation, beginning of year 304 304
Expense for the year 0 63
Accrued benefit obligation, end of year 304 241

10. Contractual obligations

The nature of the Board’s activities can result in some large multi-year contracts and obligations whereby the Board will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

Contractual obligations (in thousands of dollars)
2012 2013 2014 2015 2016
Operating Lease* 587 593 599 606 612
*The operating lease is due for renewal at the end of 2015.

11. Related party transactions

The Board is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The Board enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the Board will have received services obtained without charge from other Government departments.

During the year the Board is forecasted to receive without charge the employer’s contribution to the health and dental insurance plans. These services without charge have been recognized in the Board’s Statement of Operations as follows:

Statement of Operations (in thousands of dollars)
Forecast
2013
Forecast
2014
Employers contribution to the health and dental insurance plans 312 290

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 and audit services provided by the Office of the Auditor General are not included as an expense in the department’s Statement of operations.

12. Segmented information

(in thousands of dollars)
Forecast
2013
Forecast
2014
Operating expenses Total Internal services Review of CF Grievances Total
Salary and employee benefits 4,435 1,336 3,117 4,453
Professional and special services 1,601 434 1,012 1,445
Rental of office space and equipment 620 186 434 620
Transportation and telecommunications 331 60 140 200
Amortization of tangible capital assets 68 31 72 103
Other 233 67 156 223
Total operating expenses 7,288 2,113 4,931 7,044
Revenues
Net cost of operations before Government funding 7,288 2,113 4,931 7,044
Totals may not add due to rounding.
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: