Financial Statements (Unaudited) 2012-2013

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, 2013 and all information contained in these statements rests with the management of the Parole Board of Canada (PBC). 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 Parole Board of Canada financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Parole Board of Canada'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 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; and through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the Parole Board of Canada 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 on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.
The Parole Board of Canada is subject to periodic Core Control Audits performed by the Office of the Comptroller General and uses the results of such audits to comply with the Treasury Board Policy on Internal Control.
A Core Control Audit was performed in 2011-2012 by the Office of the Comptroller General of Canada (OCG). The Audit Report and related Management Action Plan are posted on the PBC website at http://www.pbc-clcc.gc.ca/rprts/rprt-eng.shtml.

The financial statements of the Parole Board of Canada have not been audited.

Harvey Cenaiko
Chairperson

Cathy Gaudet, CPA, CA
Chief Financial Officer

Ottawa, Canada
July XX, 2013


Statement of Financial Position (Unaudited)
As of March 31

(in thousands of dollars) 2013 2012
Liabilities
Accounts payable and accrued liabilities (note 4) 2,372 1,712
Vacation pay and compensatory leave 1,629 1,763
Employee future benefits (note 5) 1,928 3,170
Total liabilities 5,929 6,645
 
Financial assets
Due from Consolidated Revenue Fund 2,372 1,701
Accounts receivable and advances (note 6) 117 537
Total gross financial assets 2,489 2,238
Financial assets held on behalf of Government
Accounts receivable and advances (note 6) (62) (195)
Total financial assets held on behalf of Government (62) (195)
Total net financial assets 2,427 2,043
PBC net debt 3,502 4,602
 
Non-financial assets
Prepaid expenses 263 200
Tangible capital assets (note 7) 2,289 2,215
Total non-financial assets 2,552 2,415
PBC net financial position (950) (2,187)

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

Harvey Cenaiko
Chairperson

Cathy Gaudet, CPA, CA
Chief Financial Officer

Ottawa, Canada
July xx, 2013


Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31

(in thousands of dollars) 2013
2013 2012
  Planned Results
Expenses
Conditional release decisions 46,022 39,434 40,879
Conditional release openness and accountability 7,559 6,041 7,549
Record suspension decisions and clemency recommendations 6,116 6,455 3,687
Internal services 5,931 5,157 6,015
Total expenses 65,628 57,087 58,130
 
Revenues
Regulatory fees 7,578 7,261 3,148
Miscellaneous revenues 7 45
Revenues earned on behalf of Government - (1,861) (844)
Total Revenues 7,578 5,407 2,349
Net cost of operations before government funding and transfers 58,050 51,680 55,781
 
Government funding and transfers
Net cash provided by Government   45,560 52,343
Change in due from Consolidated Revenue Fund   671 (12)
Services provided without charge by
other government departments (note 9)
  6,991 6,799
Transfer of capital assets to other government departments   (305) (31)
Net cost of operations after government funding and transfers   (1,237) (3,318)
PBC net financial position – Beginning of year   (2,187) (5,505)
PBC net financial position – End of year   (950) (2,187)

Segmented Information (note 9)

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 thousands of dollars) 2013 2012
 
Net cost of operations after government funding and transfers (1,237) (3,318)
Change due to tangible capital assets
Acquisition of tangible capital assets 810 382
Amortization of tangible capital assets (425) (375)
Proceeds from disposal of tangible capital assets (6) (51)
Net gain or (loss) on disposal of tangible capital
assets including adjustments
- 28
Transfer to other government departments (305) (31)
Total change due to tangible capital assets 74 (47)
Change due to prepaid expenses 63 11
Net Increase (decrease) in departmental net debt (1,100) (3,354)
Departmental net debt – Beginning of year 4,602 7,956
Departmental net debt – End of year 3,502 4,602

The accompanying notes from an integral part of these financial statements


Statement of Cash Flow (Unaudited)
For the Year Ended March 31

(in thousands of dollars) 2013 2012
Operating activities:
Net cost of operations before government funding and transfers 51,680 55,781
Non cash items:
Services provided without charge by other
government departments (note 8a)
(6,991) (6,799)
Amortization of tangible capital assets (425) (375)
Gain (loss) on disposal of tangible capital assets - 28
Variations in Statement of Financial Position:
Increase (decrease) in net accounts receivable and advances (287) 309
Increase (decrease) in prepaid expenses 63 11
Decrease (increase) in accounts payable and accrued liabilities (660) (1)
Decrease (increase) in vacation pay and compensatory leave 134 (218)
Decrease (increase) in future employee benefits 1,242 3,276
Cash used in operating activities 44,756 52,012
Capital investing activities:
Acquisitions of tangible capital assets 810 382
Proceeds from disposal of tangible capital assets (6) (51)
Cash used in capital investing activities 804 331
Net cash provided by Government of Canada 45,560 52,343

The accompanying notes form an integral part of these financial statements

1. Authority and Objectives

The Parole Board of Canada (PBC or “the Board”) is an agency within the Public Safety Portfolio, which also includes the Royal Canadian Mounted Police (RCMP), the Canadian Security Intelligence Service (CSIS), the Canada Border Services Agency (CBSA) and the Correctional Service of Canada (CSC).

The Board is an independent administrative tribunal that has exclusive jurisdiction and absolute discretion under the Corrections and Conditional Release Act (CCRA)to grant, cancel, terminate or revoke day parole and full parole. The PBC may also order (on referral by CSC) that certain offenders be held in custody until the end of their sentence. This is called detention during the period of statutory release. Further, the Board has the authority to terminate or revoke a period of statutory release. In addition, the Board makes conditional release decisions for offenders in provinces and territories that do not have their own parole boards. Only the provinces of Ontario and Quebec currently have their own parole boards, which make parole decisions for offenders serving sentences of less than two years.

The Board has legislated responsibilities related to openness and accountability, which are the provision of information and assistance to victims of crime, observers at hearings, access to the PBC’s decision registry, and delivery of a program of public information.

The Board has exclusive jurisdiction and absolute discretion to order, refuse to order or revoke a record suspension under the Criminal Records Act (CRA). In addition, the PBC is authorized to investigate Royal Prerogative of Mercy (RPM) requests under Section 110 of the CCRA. The Board makes clemency recommendations to the Minister of Public Safety.

The Board has one strategic outcome: Conditional release and record suspension decisions and decision processes that safeguard Canadian communities. This strategic outcome is the cornerstone of the Board’s public accountability and reporting of results.

Further details on the Board’s authority, mandate and program activities may be found in the PBC’s Departmental Performance Report.

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:

  1. Parliamentary authorities – the Board is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Board 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 Departmental Net Financial Position and 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 Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-13 Report on Plans and Priorities.
  1. 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.
  1. Amounts due from or 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 authorities to discharge its liabilities.
  1. Revenues – Revenues are recorded 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 that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Department’s liabilities. While the Chairperson as Deputy Head 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.

  1. 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 contributions to the health and dental insurance plans, legal services and workers’ compensation are recorded as operating expenses at their estimated cost.

  1. Employee future benefits:
  1. Pension benefits: Eligible employees participate in the Public Service Superannuation Plan, a multiemployer pension plan administered by the Government. 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.
  1. 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.
  1. 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
  1. Contingent liabilities – Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
  1. Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $1,000 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.
  1. 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
Machinery and equipment 3 to 5 years
Other equipment (including furniture) 15 years
Motor vehicles 7 years
Leasehold Improvements Lesser of the remaining term of lease or useful life of the improvement

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.

  1. 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 Parole Board of Canada receives most of 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 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) Reconciliation of net cost of operations to current year authorities used
(in thousands of dollars) 2013 2012
 
Net cost of operations before government funding and transfers 51,680 55,781
Adjustments for items affecting net cost of operations but not affecting authorities:  
Services provided without charge by other government departments (6,991) (6,799)
Decrease in employee future benefits (note 5b) 1,162 3,276
Amortization of tangible capital assets (425) (375)
Prepaid expenses previously charged to authorities (100) (133)
Decrease (Increase) in vacation pay and compensatory leave 134 (218)
Gain (Loss) on disposal of tangible capital assets - 28
Bad debt expense - (1)
Refunds of prior year expenditures 86 126
Other (1) 28
Total items affecting net cost of operations but not affecting authorities (6,135) (4,068)
Adjustments for items not affecting net cost of operations but affecting authorities:  
Acquisitions of tangible capital assets 810 382
Proceeds from disposal of tangible capital assets (6) (51)
Prepaid Expenses 163 144
Total items not affecting net cost of operations but affecting authorities 967 475
Current year authorities used 46,512 52,188
 
b) Authorities provided and used 2013 2012
Authorities provided
Vote 35 - Program expenditures 48,838 50,776
Statutory amounts 6,337 6,343
Less
Authorities available for future years (6) (51)
Lapsed authorities: Program expenditures (8,657) (4,880)
Current year authorities used 46,512 52,188

4. Accounts payable and accrued liabilities

The following table presents details of Board’s accounts payable and accrued liabilities:

(in thousands of dollars) 2013 2012
Accounts payable - Other government departments and agencies 675 361
Accounts payable - External parties - 3
Total accounts payable 675 364
Accrued liabilities 1,697 1,348
Total Accounts Payable and Accrued Liabilities 2,372 1,712

5. Employee future benefits

  1. Pension benefits: The Board’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/Quebec Pension Plans benefits and they are indexed to inflation.

    Both the employees and the Board contribute to the cost of the Plan. The 2012-13 expense amounts to $4,480,889 ($4,512,640 in 2011-12), which represents approximately 1.7 times
    (1.8 times in 2011-12) the contributions by employees.

    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.
  1. Severance benefits: The Board 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 2012. 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 thousands of dollars) 2013 2012
Accrued benefit obligation, beginning of year * 3,170 6,446
Expense for the year (528) 1,388
Benefits paid during the year (714) (4,664)
Accrued benefit obligation, end of year 1,928 3,170

*In the current year (2012-13), a post closing entry of $80K was made which impacted authorities in that year. Accordingly, the expense and cash flow amounts differ by $80K.

6. Accounts receivable and advances

The following table presents details of the Board’s accounts receivable and advances balances:

(in thousands of dollars) 2013 2012
Receivables – Other government departments and agencies 77 514
Receivable – External parties 35 18
Petty cash advances 5 5
Gross accounts receivable 117 537
Accounts receivable held on behalf of Government 62 195
Net accounts receivable 55 342

7. Tangible Capital Assets

(in thousands of dollars)
Cost Accumulated
Amortization
Net Book Value
Capital
Asset
Class
Open-ing bal-
ance
Acqui-
sitions
Adjust-
ments
(1)
Dis-
posal and write-offs
Clos-ing bal-ance Open-ing Balance Amorti-zation Dis-
posal and write-offs
Adjust-ments (1) Clos-
ing balance
2013 2012
Machinery & equipment 331 67 (35) 60 303 248 32 (8) 60 212 91 83
Computer Hardware - 196 (196) - - - 11 (11) - - - -
Other equipment 1,761 248 - 25 1,984 745 109 - 19 835 1,149 1,016
Motor vehicles 750 27 - 19 758 266 105 - 19 352 406 484
Leasehold improve-ments 1,058 179 11 - 1,248 437 168 - - 605 643 621
Assets under construction 11 93 (104) - - - - - - - - 11
Total 3,911 810 (324) 104 4,293 1,696 425 (19) 98 2,004 2,289 2,215

(1) Adjustments are transfers of assets to Correctional Services Canada and Shared Services Canada.

8. Related party transactions

The Board is related as a result of common ownership to all Government departments, agencies and Crown Corporations. The Board enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Board received common services which were obtained without charge from other government departments as disclosed below.

  1. Common services provided without charge by other government departments

During the year, the Board received services without charge from certain common service organizations related to accommodation, legal services, the employer’s contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the Board's Statement of Operations and Net Financial Position as follows:

 

(in thousands of dollars) 2013 2012
Accommodation 3,706 3,370
Employer's contribution to the health and dental insurance plans 2,995 3,097
Legal services 288 330
Worker's compensation 2 2
Total 6,991 6,799

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 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 in the Board's Statement of Operations and Net Financial Position.

  1. Other transactions with related parties:
(in thousands of dollars) 2013 2012
Expenses – Other government departments and agencies 9,208 8,611

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

9. Segmented Information

Presentation by segment is based on the Parole Board of Canada 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 thousands of dollars)
Operating expenses Conditional Release Decisions Conditional Release Openness & Accountability Record Suspension Decisions & Clemency Recommendations Internal Services 2013 2012
Salaries and employee benefits 31,654 4,754 5,078 3,858 45,344 46,684
Accommodation 2,591 386 418 427 3,822 3,370
Professional and special services 1,965 624 520 408 3,517 3,410
Travel 1,573 117 34 73 1,797 2,559
Utilities, materials and supplies 445 20 136 122 723 637
Amortization of tangible capital assets 355 7 8 55 425 375
Relocation 282 61 16 - 359 126
Communication services 209 6 29 89 333 322
Information services 101 49 107 39 296 116
Postage, freight, express, and cartage 119 4 60 66 249 262
Rentals 67 13 20 32 132 196
Other 73 - 29 (12) 90 73
Total expenses 39,434 6,041 6,455 5,157 57,087 58,130
 
Regulatory fees - - 7,261 - 7,261 3,148
Miscellaneous revenues 6 - 1 - 7 45
Revenues earned on behalf of Government (6) - (1,855) - (1,861) (844)
Total revenues - - 5,407 - 5,407 2,349
Net cost of operations before government funding and transfers 39,434 6,041 1,048 5,157 51,680 55,781

10. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

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: