Future Oriented Statements of Operations (March 31st, 2015)
Statement of Management Responsibility
Management of the Parole Board of Canada (PBC) is responsible for the future-oriented statement of operations, including responsibility for the appropriateness of the assumptions on which the statements are prepared. The statements are based on the best information available and assumptions adopted as at November 30th, 2013 and reflect the plans described in the Report on Plans and Priorities.
Cathy Gaudet, CPA, CA
Chief Financial Officer
January 14th, 2014
|Conditional release decisions||$ 41,751||$ 43,117|
|Conditional release openness and accountability||6,562||6,791|
|Record suspension decisions and clemency
|Revenues earned on behalf of Government||(1,610)||(1,927)|
|Net cost of operations||$ 58,576||$ 57,262|
Information for the year ended March 31st, 2014 includes actual amounts from April 1st, 2013 to November 30th, 2013.
Segmented information (note 10)
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.
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 Report on Plans and Priorities.
2. Methodology and Significant Assumptions
The future-oriented statement of operations has been prepared on the basis of government priorities and the PBC’s plans as described in the Report on Plans and Priorities.
The information in the estimated results for fiscal year 2013-14 is based on actual results as at November 30th, 2013 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014-15 (future year) fiscal year.
The main assumptions underlying the forecasts are as follows:
- The Board’s activities will remain substantially the same as for the previous year.
- Expenses and revenues, including the determination of amounts internal and external to the government are based on historical experience. The general historical pattern is expected to continue.
- Assets and liabilities are based on historical costs, trend analysis and other analytical methodologies.
- Assets and liabilities are based on historical costs, trend analysis and other analytical methodologies.
- Estimated year end information for 2013-14 is used as the opening position for the 2014-15 forecasts.
These assumptions are adopted as at November 30st, 2013.
3. Variation and Changes to the Forecast Financial Information
While every attempt has been made to forecast final results for the remainder of 2013-14 and for 2014-15, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing this future-oriented statement of operations the PBC has made estimates and assumptions concerning the future. These estimates and assumptions 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.
Factors that could lead to material differences between the future-oriented statement of operations and the historical financial statements include:
- The timing and amounts of acquisitions and disposals of equipment may affect gains/losses and amortization expense.
- Implementation of new collective agreements.
- Economic conditions may affect the amount of revenue earned.
- Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.
Once the Report on Plans and Priorities is presented, the PBC 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 statement of operations has been prepared using Government’s accounting policies that came in effect for the 2013-14 fiscal year which are based on 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:
- Parliamentary authorities - The PBC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the department 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 Future-oriented Statement of Operations and Net Financial Position 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.between the bases of reporting.
- 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 on a Vote Netted revenue basis. Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues. Revenues that are non-respendable are not available to discharge the Parole Board of Canada's liabilities. While the Deputy Head is expected to maintain accounting control, he or she 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.
- Expenses Expenses are recorded on an accrual basis. Expenses for the Department operations are recorded when goods are received or services are rendered including services provided without charges for accommodation, employee contributions to health and dental insurance plans, legal services and worker’s compensation which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave are accrued as the benefits are earned under the respective terms of employment. Expenses also include amortization of tangible capital assets which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.
- Employee future benefits:
- 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.
- 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.
- Tangible capital assets - All tangible capital assets and leasehold improvements having an initial cost of $5,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.
- Measurement uncertainty - The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. Actual results could significantly differ from those estimated.
|Asset Class||Amortization period|
|Machinery and equipment||3 to 5 years|
|Other equipment (including furniture)||15 years|
|Motor vehicles||7 years|
|Leasehold Improvements||Lesser of remaining term of lease or useful life|
5. Parliamentary Authorities
The PBC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to PBC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Items recognized in the Future-oriented Statements of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, PBC has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:
|Net cost of operations before government funding and transfers||$ 58,576||$ 57,262|
|Adjustments for items affecting net cost of operations but not affecting authorities:|
|Services provided without charge by other government departments||(7,615)||(7,603)|
|Amortization of tangible capital assets||(487)||(741)|
|Prepaid expenses previously charged to appropriation||(154)||(154)|
|Increase in employee future benefits||(282)||(62)|
|Decrease in vacation pay and compensatory leave||11||-|
|Adjustments for items not affecting net cost of operations but affecting authorities:|
|Acquisition of capital assets||690||700|
|Requested authorities||$ 50,891||$ 49554|
|Vote 35 - Program expenditures||$ 45,874||$ 43,783|
|Lapsed authorities: Program expenditures||(1,224)||-|
|Requested authorities||$ 50,891||$ 49,554|
6. Employee Future Benefits
- 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 forecasted expenses are $4,388K for 2013-14 and $4,454K for 2014-15, representing approximately 1.8 times 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.
- 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 estimated as at the date of these statements is as follows:
|Accrued benefit obligation, beginning of year||$1,928||$2,210|
|Expense for the year||1,112||722|
|Benefits paid during the year||(830)||(660)|
|Accrued benefit obligation, end of year||$ 2,210||$ 2,272|
7. Contingent liabilities
Claims have been made against the Board in the normal course of operations (conditional release decisions). However, the potential liabilities arising from the cases pending at March 31, 2014 are considered to be minimal by management as the Board is an independent administrative tribunal and is provided with an immunity clause (Section 154) in the Corrections and Conditional Release Act making the likelihood of future loss negligible. Consequently, no accrual for these contingent liabilities has been made in the financial statements.
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.
- Common Services provided without charge by other government departments: During the year, the Board received services without charge from certain common services 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 these statements as follows:
|Accommodation||$ 4,041||$ 4,174|
|Employer's contribution to the health insurance plan and to the dental insurance plan||3,263||3,120|
|Total||$ 7,615||$ 7,603|
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 Future-oriented Statement of Operations.
9. Accounting Changes
The Board changed the threshold value for the capitalization of assets from $1,000 to $5,000. This was done to better reflect materiality. Acquisitions of assets with original cost of $1,000 to $4,999 are now charged to expense. The net book value of assets previously capitalized with cost of $1,000 to $4,999 have been written-off and assets balances are being restated for 2013-14 financial statements.
10. Segmented Information
Presentation by segment is based on the Parole Board of Canada program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in note 4. The following table presents the forecasted expenses incurred and revenues generated for the main programs, by major object of expense and by major type of revenue. The segment results for the period are as follows:
|Operating expenses||Estimated Results 2013-14||Conditional Release Decisions||Conditional Release Openness & Accountability||Record Suspension Decisions & Clemency Recommendation||Internal Services||Planned Results 2014-15|
|Salaries and employee benefits||$ 50,222||$ 34,198||$ 5,091||$ 4,939||$ 4,804||$ 49,032|
|Professional and other services||3,832||2,059||910||459||572||4,000|
|Utilities, materials and supplies||1,206||892||96||119||133||1,240|
|Amortization of tangible capital assets||487||534||58||71||78||741|
|Repairs and maintenance||146||107||14||20||29||170|
|Postage, freight, express, and cartage||246||120||1||126||2||249|
|Revenues earned on behalf of Government||(1,610)||-||-||(1,927)||-||(1,927)|
|Net cost of operations before government funding and transfers||$58,576||$43,117||$6,791||$975||$6,379||$57,262|
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