Financial Statements (Unaudited) 2023-2024

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, 2024, 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 PBC’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the PBC’s Departmental Results 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; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the PBC; 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. A risk-based assessment of the system of ICFR for the year ended March 31, 2024 was completed in accordance with the Treasury Board Policy on Financial Management and the results and action plans are summarized in the annex.

The financial statements of the PBC have not been audited.

Contingent liabilities (note 9)
The accompanying notes form an integral part of these financial statements.

Segmented information (note 11)
The accompanying notes form an integral part of these financial statements.

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

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

1. Authority and Objectives
   

   As an independent administrative tribunal, the Parole Board of Canada (PBC) contributes to keeping Canadians safe by making timely conditional release, record suspension, and expungement decisions and clemency recommendations, in an open and accountable manner, while respecting the rights and dignity of both offenders and victims, in accordance with its statutory responsibilities and authorities. The legal authority under which the PBC operates includes the Corrections and Conditional Release Act and its Regulations, the Criminal Records Act and its Regulations, Expungement of Historically Unjust Convictions Act, the Letters Patent, the Criminal Code, the Canadian Charter of Rights and Freedoms, and other legislation.

   The PBC’s core responsibilities are:

   • Conditional release decisions: is based on the principle and supported by research that community safety is enhanced by the timely and gradual release of offenders to the community under supervision. Quality conditional release decisions, based on the risk of re-offending in conjunction with effective programs and treatment, and effective community supervision all contribute to a release process. Through this core responsibility, the Parole Board of Canada provides timely, accurate information for Board member decision-making, and develops training and policies that are essential tools for risk assessment and decision-making that are in accordance with the law;
   • Conditional release openness and accountability: This core responsibility ensures that the PBC operates in an open and accountable manner, consistent with the provisions of the Corrections and Conditional Release Act (CCRA). It includes working with victims of crime, offenders, and the public by providing information about our policies and programs, including access to the PBC's registry of decisions, as well as providing assistance for observers at hearings. The core responsibility also includes working to encourage citizen engagement, enhancing public education and awareness, investigating incidents in the community (i.e., when a new offence occurs), monitoring the PBC's performance and reporting on conditional release results;
   • Record suspension decisions and expungement/Clemency recommendations: A record suspension/pardon is designed to support the sustained reintegration of an individual into society. It is an administrative act to remove the stigma of a criminal record for people convicted of an offence under an Act of Parliament, who have completed their sentence, having met criteria in the Criminal Records Act and demonstrated law-abiding behaviour for a prescribed number of years. Record suspensions/pardons can be revoked or cease to have effect if a new offence is committed or a person is no longer found to be of good conduct. In meeting this core responsibility, the PBC screens applications for completeness and eligibility, collects information for Board member decision-making and develops policy to guide decision processes. In addition, under the Expungement of Historically Unjust Convictions Act (Expungement Act), the PBC will order the expungement of records of convictions for eligible offences that would be lawful today. Persons convicted of an offence listed in the schedule to the Expungement Act may apply, as well as authorized representatives in cases where the person is deceased. The difference between a record suspension/pardon and an expungement is that with a record suspension/pardon, the criminal record is held ‘separate and apart’ from other criminal records, while an expungement will completely destroy the record. The PBC is also accountable for assessing requests and providing recommendations under the Royal Prerogative of Mercy (i.e., clemency) and providing advice to the Minister of Public Safety, Democratic Institutions and Intergovernmental Affairs on the merits of each case; and
   • Internal services: are the services that are provided within a department so that it can meet its corporate obligations and deliver its programs. There are 10 categories of internal services:
     • management and oversight services
     • communications services
     • legal services
     • human resources management services
     • financial management services
     • information management services
     • information technology services
     • real property management services
     • materiel management services
     • acquisition management services
2. Summary of Significant Accounting Policies

   These financial statements are 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 PBC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the PBC 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 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 Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2023-2024 Departmental Plan. Planned results are not presented in the "Government funding and transfers" section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2023-2024 Departmental Plan.

   2. Net Cash Provided by Government

      The PBC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the PBC is deposited to the CRF, and all cash disbursements made by the PBC 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 or to the CRF

      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 PBC is entitled to draw from the CRF without further authorities to discharge its liabilities.

   4. Revenues

      Revenues are comprised of revenues earned from non-tax sources. They include exchange transactions where goods or services are provided for consideration where a performance obligation exists, and non-exchange transactions where no performance obligations exist to provide a good or service. These transactions can be recurring or non-recurring in nature. Recurring transactions are viewed as ongoing, routine activities that form part of normal course of operations and can be used to indicate if they can be reasonably expected to be earned again in future years.

      Revenues that are non-respendable are not available to discharge the department’s liabilities. While the Chairperson is expected to maintain accounting control, she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are earned on behalf of the Government of Canada and are therefore presented in reduction of the entity’s gross revenues. Revenues earned on behalf of Government consist of regulatory fees and gains on the sale of assets. These are recognized when earned.

   5. Expenses

      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 carrying value.

   6. Employee future benefits
      1. Pension benefits

      Eligible employees participate in the Public Service Superannuation Plan, a multiemployer pension plan administered by the Government. The PBC’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The PBC’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 accumulation of severance benefits for voluntary departures ceased for applicable employee groups. The remaining obligation for employees who did not withdraw benefits is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

   7. Accounts receivable

      Accounts are initially recorded at cost. When necessary, an allowance for valuation is recorded to reduce the carrying value of accounts receivable to amounts that approximate their net recoverable value.

   8. Non-financial assets

      The cost of acquiring equipment and other capital property are capitalized as tangible capital assets and are amortized to expense over the estimated useful lives of the assets as described in Note 7. All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost.  

   9. Contingent liabilities

      Contingent liabilities, including the allowance for guarantees, are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. If the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, a provision is accrued, and an expense recorded to other expenses. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

      For guarantees, an allowance is recorded when it is determined that a loss is likely and the amount of the allowance is estimated taking into consideration the nature of the guarantee, loss experience and current conditions. The allowance is reviewed on an ongoing basis and changes in the allowance are recorded as expenses in the year they become known.

   10. Measurement uncertainty

       The preparation of these financial statements requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes at March 31. The estimates are based on facts and circumstances, historical experience, general economic conditions and reflect the Government's best estimate of the related amount at the end of the reporting period. The most significant items where estimates are used are contingent liabilities, 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.

   11. Related party transactions

       Inter-entity transactions are transactions between commonly controlled entities. Inter-entity transactions, other than restructuring transactions, are recorded on a gross basis, and are measured at the carrying amount, except for the following:

       1. Services provided on a recovery basis are recognized as revenues and expenses on a gross basis and measured at the exchange amount.
       2. Certain services received on a without charge basis are recorded for departmental financial statement purposes at the carrying amount.
3. Parliamentary authorities

   The PBC receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental 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 PBC 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:

   1. Reconciliation of net cost of operations to current year authorities used

      (in thousands of dollars)	2024	2023
      Net cost of operations before government funding and transfers	$ 86,840	$ 77,453
      Adjustments for items affecting net cost of operations but not affecting authorities:
      Services provided without charge by other government departments	(10,460)	(8,678)
      Adjustment to tangible capital assets	793
      Amortization of tangible capital assets	(361)	(415)
      Bad Debt expense	(370)	(4)
      Decrease in vacation pay and compensatory leave	(55)	149
      Decrease in employee future benefits	25	94
      Refunds of prior years ’ expenditures	47	29
      Gain on disposal of tangible capital assets	-	24
      Total items affecting net cost of operations but not affecting authorities	(10,381)	(8,801)
      Adjustments for items not affecting net cost of operations but affecting authorities:
      Acquisitions of tangible capital assets	938	152
      Proceeds from disposal of tangible capital assets	-	(24)
      Receivables for salary overpayments and other advances	52	(3)
      Total items not affecting net cost of operations but affecting authorities	990	125
      Current year authorities used	$ 77,449	$ 68,777

   2. Authorities provided and used

      (in thousands of dollars)	2024	2023
      Authorities provided:
      Vote 1 - Program expenditures	$ 73,053	$ 67,479
      Statutory amounts	8,432	7,453
      Less:
      Lapsed: Program expenditures	(4,036)	(6,155)
      Current year authorities used	$ 77,449	$ 68,777

4. Accounts payable and accrued liabilities

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

   (in thousands of dollars)	2024	2023
   Accounts payable - Other government departments and agencies	$ 2,476	$ 1,772
   Accounts payable – External parties	436	512
   Total accounts payable	2,912	2,284
   Accrued liabilities	4,918	3,605
   Total accounts payable and accrued liabilities	$ 7,830	$ 5,889

5. Revenues

   PBC has the following major types of revenues: Regulatory fees, acquisition support services, miscellaneous revenues, and revenues earned on behalf of the Government. Regulatory fees are recorded when they are earned. Miscellaneous revenues include gain on the sale of assets and other fee.

   (in thousands of dollars)	2024	2023
   Regulatory fees (exchange)	687	654
   Acquisition support services (exchange)	157	-
   Miscellaneous (exchange)	1	24
   Revenues earned on behalf of Government (exchange)	(692)	(24)
   Total revenues	$ 153	$ 654

6. Employee future benefits
   1. Pension benefits

      The PBC’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 PBC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s 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 2023-24 expense amounts to $4,977,016 ($4,824,303 in 2022-23). For Group 1 members, the expense represents approximately 1.02 times (1.02 times in 2022-23) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2022-23) the employee contributions.

      The PBC’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the Consolidated Financial Statements of the Government of Canada, as the Plan’s sponsor.

   2. Severance benefits

      Severance benefits provided to the PBC’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011, the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2024, substantially all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities. 

      The changes in the obligations during the year were as follows:

      (in thousands of dollars)	2024	2023
      Accrued benefit obligation - Beginning of year	$ 890	$ 984
      Expense for the year	(19)	(32)
      Benefits paid during the year	(6)	(62)
      Accrued benefit obligation - End of year	$ 865	$ 890

7. Accounts receivable and advances

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

   (in thousands of dollars)	2024	2023
   Receivable – Other government departments and agencies	$ 110	$ 86
   Receivable – Salary overpayment	685	715
   Receivable – External parties	20	20
   Employee advances	58	47
   Subtotal	873	868
   Allowance for doubtful accounts on receivables from salary overpayments	(370)	-
   Gross accounts receivable	$ 503	$ 868
   Accounts receivable held on behalf of Government	(336)	(735)
   Net accounts receivable	$ 167	$ 133

8. Tangible Capital Assets

   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
   Software	5 years
   Other equipment (including furniture)	15 years
   Motor vehicles	7 years
   Leasehold improvements	Over the useful life of the improvement or the lease term, whichever is shorter
   Assets under construction	Once in service, in accordance with asset type

   Assets under construction are recorded in the applicable capital asset class in the year that they are put into service and are not amortized until they are put into service.

   (in thousands of dollars)

   		Cost				Accumulated Amortization				Net Book Value
   Capital Asset Class	Opening balance	Acquisitions	Adjustments*	Disposal and write-offs	Closing Balance	Opening balance	Amortization	Disposal and write-offs and other	Closing balance	2024	2023
   Machinery & equipment	$ 424	$ -	$ -	$ -	$ 424	$ 424	$ -	$ -	$ 424	$ -	$ -
   Software	1,981	-	-	-	1,981	1,804	64	-	1,868	113	177
   Other equipment	430	-	-	-	430	406	10	-	416	14	24
   Motor vehicles	1024	37	-	-	1,061	714	66	-	780	281	310
   Leasehold improvements	4,748	-	472	-	5,220	4,218	221	-	4,439	781	530
   Assets under construction - Refit	472	-	(472)	-	-	-	-	-	-	-	472
   Assets under construction – Software	-	901	793	-	1,694	-	-	-	-	1,694	-
   Total	$ 9,079	$ 938	$ 793	$ -	$ 10,810	7,566	$ 361	$ -	$ 7,927	$ 2,883	$ 1,513

   * Adjustments includes assets under construction – refit of $472 thousand that were transferred to leasehold improvement upon completion and $793 for assets under construction – software is from fiscal 2022-2023.

9. Contingent liabilities

   Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

   Claims and litigation

   Claims have been made against the PBC in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Claims and litigations for which the outcomes is not determinable, and a reasonable estimate can be made by management amount to approximately $1,712,500 at March 31, 2024 ($1,412,500 in 2022-2023).

10. Related party transactions

    The PBC is related as a result of common ownership to all government departments, agencies and Crown corporations.

    The PBC enters into transactions with these entities in the normal course of business and on normal trade terms.

    1. Common services provided without charge by other government departments

       During the year, the PBC 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 PBC’s Statement of Operations and Departmental Net Financial Position as follows:

       (in thousands of dollars)	2024	2023
       Accommodation	$ 4,793	$ 4,447
       Employer’s contribution to the health and dental insurance plans	5,343	3,872
       Legal services	321	356
       Workers’ compensation	3	3
       Total	$ 10,460	$ 8,678

       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 Services and Procurement Canada and audit services provided by the Office of the Auditor General are not included in the PBC's Statement of Operations and Departmental Net Financial Position.

    2. Other transactions with other government departments and agencies

       (in thousands of dollars)	2024	2023
       Expenses	14,613	16,224
       Revenues	156	-

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

11. Segmented information

    Presentation by segment is based on the PBC’s core responsibilities. 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 by the core responsibilities, by major object of expense and by major type of revenue. The segment results for the period are as follows:

    	Conditional Release Decisions	Conditional Release Openness & Accountability	Record Suspension Decisions and Expungement Decisions/ Clemency Recommendations	Internal Services	2024 Total	2023 Total
    Operating expenses	(in thousands of dollars)
    Salaries and employee benefits	$ 46,689	$ 5,854	$ 9,030	$ 10,294	$ 71,867	$ 61,447
    Professional and special services	2,805	81	347	4,571	7,804	8,694
    Accommodation	3,161	401	520	711	4,793	4,447
    Transportation and communication	1,440	162	91	208	1,901	1,628
    Rentals	215	12	14	241	482	358
    Amortization of tangible capital assets	270	-	-	91	361	415
    Acquisition of Machinery, Equipment and Software	173	-	8	48	229	729
    Utilities, materials and supplies	89	-	20	36	145	140
    Information	28	1	12	78	119	151
    Repair and maintenance	54	-	-	10	64	58
    Other	-	20	(793)	1	(772)	40
    Total operating expenses	54,924	6,531	9,249	16,289	86,993	78,107
    Revenues
    Regulatory fees	-	-	687	-	687	654
    Acquisition Support	-	-	-	157	157	-
    Miscellaneous revenues	1	-	-	-	1	24
    Revenues earned on behalf of Government	(1)	-	(691)	-	(692)	(24)
    Total revenues	-	-	(4)	157	153	654
    Net cost from continuing operations	54,924	6,531	9,253	16,132	86,840	77,453

    *Other operating expenses include an adjustment of $793 to capital assets for fiscal 2022-2023.

12. Adjustments to prior year’s results

    A review of the financial statements has been performed. The review noted that the Goods and services tax (including harmonized sales tax), the Quebec sales tax, the accounts receivables with other government departments and the employee advances should not be classified as Financial assets held on behalf of the Government. This change has been applied retroactively and comparative information for 2022-2023 has been restated. The effect of this adjustment is presented in the table below.

    (in thousands of dollars)	2022-2023 As previously stated	Effect of the adjustment	2022-2023 Restated
    Statement of Financial Position
    Financial Assets held on behalf of Government	868	(133)	735
    Total net financial assets	5,828	133	5,961
    Departmental net debt	3,833	(133)	3,700
    Departmental net Financial position	(2,320)	133	(2,187)
    Statement of Operations and Departmental Net Financial Position
    Net cash provided by Government	66,843	49	66,892
    Net cost of operations after government funding and transfers	43	(49)	(6)
    Departmental net financial position – end of year	(2,320)	133	(2,187)
    Statement of Change in Departmental Net Debt
    Net cost of operations after government funding and transfers	43	(49)	(6)
    Net increase (decrease) in departmental net debt	(220)	49	(269)
    Departmental net debt – End of year	3,833	133	3700
    Statement of Cash Flows
    Increase (decrease) in accounts receivable and advances	-	49	49
    Cash used in operating activities	66,715	49	66,764
    Net cash provided by Government of Canada	66,843	49	66,892

13. Comparative information

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

Annex to the Statement of Management Responsibility Including the Internal Control Over Financial Reporting of PBC for Fiscal year 2023-2024

1. Introduction

In support of an effective system of internal control, Parole Board of Canada (PBC) conducted self-assessments of key control areas that were identified to be assessed in the 2023-2024 fiscal year. A summary of the assessment results and action plan is provided in section 2.

PBC will assess all key control areas over five (5) years. The assessment plan is provided in section 3.

2. Assessment results during fiscal year 2023-2024

The results of the self-assessment were based on 2022-2023 transactions.

3. Assessment Plan