Financial Statements 2020-2021

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, 2021 and all information contained in these statements rests with the management of Polar Knowledge Canada (POLAR). 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 POLAR’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in POLAR’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 POLAR 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 ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

POLAR will be subject to periodic Core Control Audits performed by the Office of the Comptroller General and will use the results of such audits to adhere to the Treasury Board Policy on Financial Management.

During 2020-2021, POLAR has continued to make progress towards ensuring that a risk-based departmental system of internal control over financial management is established, monitored and maintained. A multi-phase risk based assessment plan is being established. The plan is progressing from the documentation of the key internal control processes, through the design and operating effectiveness testing of controls, to the full ongoing monitoring stage. Additional information regarding POLAR’s progress is presented in the annex as required by the Treasury Board Policy on Financial Management.

The financial statements of POLAR have not been audited.

_____________________________
Jennifer C. Hubbard
President and Chief Executive Officer
Cambridge Bay, Canada
Date: September 8, 2021

_____________________________
Meghan Provost
Executive Director, Corporate Services & Chief Financial Officer
Ottawa, Canada
Date: September 8, 2021

Statement of Financial Position (Unaudited)

As at March 31

(in dollars) 2021 2020
Liabilities
  • Accounts payable and accrued liabilities (Note 4)
2,193,756 4,581,167
  • Vacation pay and compensatory leave
564,641 802,476
  • Employee future benefits (Note 5)
100,050 123,254
Total liabilities 2,858,447 5,506,897
Financial assets
  • Due from Consolidated Revenue Fund
1,357,474 4,376,232
  • Accounts receivable and advances (Note 6)
1,032,996 374,073
Total financial assets 2,390,470 4,750,305
Departmental net debt 467,977 756,592
Non-financial assets
  • Prepaid expenses
11,186 29,644
  • Tangible capital assets (note 7)
1,447,592 1,715,699
Total non-financial assets 1,458,778 1,745,343
Departmental net financial position 990,801 988,751

Contractual obligations (Note 8)

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

_____________________________
Jennifer C. Hubbard
President and Chief Executive Officer
Cambridge Bay, Canada
Date: September 8, 2021

_____________________________
Meghan Provost
Executive Director, Corporate Services & Chief Financial Officer
Ottawa, Canada
Date: September 8, 2021

Statement of Operations and Departmental Net Financial Position (Unaudited)

For the year ended March 31

(in dollars) Planned Results 2021 2021 2020
Expenses
  • Polar Science and Knowledge
17,552,954 9,648,603 15,871,352
  • Internal Services
15,083,589 13,029,183 15,802,147
Total expenses 32,636,543 22,677,786 31,673,499
Revenues
  • Lease and use of public property
300,140 293,872 300,815
  • Revenues earned on behalf of Government
(300,140) (1,832) (300,815)
Total revenues - 292,040 -
Net cost of operations before government funding and transfers 32,636,543 22,385,746 31,673,499
Government funding and transfers
  • Net cash provided by Government of Canada
29,954,573 29,954,573
  • Change in due from Consolidated Revenue Fund
(3,018,757) 354,875
  • Services provided without charge by other government departments (Note 9)
571,338 599,173
  • Transfer of other assets and liabilities (to) / from other government departments
525 (6,131)
Total government funding and transfers 22,387,796 30,902,490
Net cost of operations after government funding and transfers (2,050) 771,009
Departmental net financial position - Beginning of year 988,751 1,759,760
Departmental net financial position - End of year 990,801 988,751

Segmented information (Note 10)

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

Statement of Change in Departmental Net Debt (Unaudited)

For the year ended March 31

(in dollars) 2021 2020
Net cost of operations after government funding and transfers (2,050) 771,009
Change due to tangible capital assets
  • Acquisitions of tangible capital assets
- 119,621
  • Amortization of tangible capital assets
(268,107) (308,675)
  • Net loss on disposal of tangible capital assets including adjustments
- 119,621
Total change due to tangible capital assets (268,107) (189,390)
Change due to prepaid expenses (18,458) (11,766)
Net increase (decrease) in departmental net debt (288,615) 569,853
Departmental net debt - Beginning of year 756,592 186,739
Departmental net debt - End of year 467,977 756,592

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

Statement of Cash Flows (Unaudited)

For the year ended March 31

(in dollars) 2021 2020

Operating activities

Net cost of operations before government funding and transfers 22,385,746 31,673,499
  • Net loss on disposal of tangible capital assets including adjustments
- 119,621
Non-cash items:
  • Amortization of tangible capital assets
(268,107) (308,675)
  • Net loss on disposal of tangible capital assets including adjustments
- (336)
  • Services provided without charge by other government departments (Note 9)
(571,338) (599,173)
Variations in Statement of Financial Position:
  • Increase (decrease) in accounts receivable and advances
658,923 (56,928)
  • Decrease in prepaid expenses
(18,458) (11,766)
  • Decrease in prepaid expenses
(18,458) (11,766)
  • Decrease (increase) in accounts payable and accrued liabilities
2,387,412 (404,357)
  • Decrease (increase) in vacation pay and compensatory leave
237,834 (452,021)
  • Decrease (increase) in employee future benefits
23,203 (11,422)
  • Transfer of salary overpayments to other government departments
(525) 6,131
  • Cash used in operating activities
24,834,690 29,834,952

Operating activities

  • Acquisitions of tangible capital assets
- 119,621
Cash used in capital investing activities - 119,621
Net cash provided by Government of Canada 24,834,690 29,954,573

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

Notes to the Financial Statements (Unaudited)

1. Authority and objectives

Polar Knowledge Canada (POLAR) is a federal agency (departmental corporation) that was established with the coming into force of the Canadian High Arctic Research Station Act on June 1, 2015. POLAR is responsible for advancing Canada’s knowledge of the Arctic, strengthening Canadian leadership in polar science and technology, and promoting the development and distribution of knowledge of other circumpolar regions, including Antarctica. POLAR operates the Canadian High Arctic Research Station (CHARS) campus and conducts world-class cutting edge Arctic research out of this extraordinary facility.

The Statement of Operations and Departmental Net Financial Position presents the Core responsibilities and Internal services:

Polar Science and Knowledge: Polar Knowledge Canada is Canada’s polar science agency operating out of the world-class Canadian High Arctic Research Station campus in Cambridge Bay, Nunavut. Polar Knowledge Canada performs and publishes multi-disciplinary polar research. Through its grants and contributions program, it funds external partners such as academia, northern communities and organizations who conduct research and related projects. Polar Knowledge Canada aims to include Indigenous and local knowledge wherever possible, and increases domestic and international research coordination and collaboration by leveraging resources with partners. Through workshops, conferences, social media, and other tools, Polar Knowledge Canada shares and promotes the exchange of knowledge across polar scientific and policy communities and the general public. Throughout all of its core activities, Polar Knowledge Canada aims to fund and train the next generation of polar research personnel, with a focus on northern youth.

Internal Services: 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. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are; Management and Oversight Services, Communications Services, Legal Services, Human Resources Management Services, Financial Management Services, Information Management Services, Information Technology Services, Real Property Services, Materiel Services and Acquisition Services.

2. Summary of significant accounting policies

These financial statements are prepared using POLAR'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:

(a) Parliamentary authorities
POLAR is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to POLAR 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" section of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-oriented Statement of Operations included in the 2020-2021 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 2020-2021 Departmental Plan.

(b) Net cash provided by Government of Canada
POLAR operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by POLAR is deposited to the CRF, and all cash disbursements made by POLAR 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.

(c) Amounts due to the CRF
Amounts due from 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 POLAR is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Revenues
Revenues from the lease and use of public property are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge POLAR's liabilities. While the President and Chief Executive Officer is expected to maintain accounting control, 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 as a reduction of the entity's gross revenues.

(e) Expenses
Expenses are recorded on the accrual basis:

  • Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.
  • 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 employer contributions to the health and dental insurance plans are recorded as operating expenses at their carrying value.

(f) Employee future benefits

  • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. POLAR’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. POLAR’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 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.

(g) Accounts receivable
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.

(h) Non-financial assets
The costs of acquiring land, buildings, equipment and other capital property are capitalized as tangible capital assets and, except for land, 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 $10,000 or more are recorded at their acquisition cost. Tangible capital assets do not include immovable assets located on reserves as defined in the Indian Act, works of art, museum collection and Crown land to which no acquisition cost is attributable; and intangible assets.

(i) Contingent liabilities
Contingent liabilities 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.

(j) 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.

(k) Related party transactions
Related party transactions, other than inter-entity transactions, are recorded at the exchange amount.

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:

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

3. Parliamentary authorities

POLAR receives 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, POLAR 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 dollars) 2021 (Note 11) 2020
Net cost of operations before government funding and transfers 22,385,746 31,673,499
Revenues received pursuant to subsection 6(2) of the Canadian High Arctic Research Station Act 293,063 -
Adjustments for items affecting net cost of operations but not affecting authorities:
  • Services provided without charge by other government departments
(571,338) (599,173)
  • Amortization of tangible capital assets
(268,107) (308,675)
  • Net loss on disposal of tangible capital assets including adjustments
- (336)
  • Decrease (increase) in vacation pay and compensatory leave
237,834 (452,021)
  • Decrease (increase) in employee future benefits
23,203 (11,422)
  • Refund of prior years' expenditures
132,810 135,740
  • Other
(1) -
Total items affecting net cost of operations but not affecting authorities (445,599) (1,235,887)
Adjustments for items not affecting net cost of operations but affecting authorities:
  • Variation in prepaid expenses
(18,458) (11,766)
  • Acquisition of tangible capital assets
- 119,621
  • Variation in advances
60,519 32,025
  • Transition payments for implementing salary payments in arrears
- -
Total items not affecting net cost of operations but affecting authorities 42,061 139,880
Current year authorities used 22,275,271 30,577,492

(b) Authorities provided and used

(in dollars) 2021 2020
Authorities provided:
Vote 1 – Program expenditures 30,758,027 32,794,357
Statutory amounts:
Revenues received pursuant to subsection 6(2) of the Canadian High Arctic Research Station Act 293,063 -
Contributions to employee benefits plan 1,113,593 1,143,190
Refunds of amounts credited to revenues in previous years 1,023 -
Total authorities 32,165,706 33,937,547
Less:
Lapsed authorities (9,597,372) (3,360,055)
For the year ended March 31
Authorities available in future years (293,063) -
Current year authorities used 22,275,271 30,577,492

4. Accounts payable and accrued liabilities

The following table presents details of POLAR's accounts payable and accrued liabilities:

(in dollars) 2021 2020
Accounts payable - Other government departments and agencies 501,266 1,754,466
Accounts payable - External parties 712,075 1,674,992
1,213,341 3,429,458
Accrued liabilities 980,415 1,151,709
Total accounts payable and accrued liabilities 2,193,756 4,581,167

5. Employee future benefits

(a) Pension benefits
POLAR'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/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and POLAR contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to the 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 2020-2021 expense amounts to $759,916 ($792,002 in 2019-2020). For Group 1 members, the expense represents approximately 1.01 times (1.01 times in 2019-2020) the employee contributions and, for Group 2 members, approximately 1.00 times (1.00 times in 2019-2020) the employee contributions.

POLAR's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits
Severance benefits provided to POLAR'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, 2021, 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 dollars) 2021 2020
Accrued benefit obligation - Beginning of year 123,254 111,832
Expense for the year 26,697 11,422
Benefits paid during the year (49,901) -
Accrued benefit obligation - End of year 100,050 123,254

6. Accounts receivable and advances

The following table presents details of POLAR's accounts receivable and advances:

(in dollars) 2021 2020
Receivables - Other government departments and agencies 836,348 204,927
Receivables - External parties 115,815 103,318
Employee advances 80,833 65,828
1,032,996 374,073
Allowance for doubtful accounts on receivables from external parties - -
Total accounts receivable and advances 1,032,996 374,073

7. Tangible capital assets

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

Asset Class Amortization Period
Machinery and equipment 5 years
Informatics hardware 5 years
Informatics software 3 years
Other equipment, including furniture 5 to 10 years
Ships and boats 10 years
Motor vehicles (Non-military) 4 to 7 years
Other vehicles 10 years
Leasehold improvements Lesser of the remaining term of lease or useful life of the improvement

Cost

(in dollars) Opening Balance Acquisitions Adjustments Disposals and Write-offs Closing Balance
Machinery and equipment 1,408,719 - - - 1,408,719
Informatics hardware 62,221 - - - 62,221
Other equipment, including furniture 23,504 - - - 23,504
Ships and Boats 45,515 - - - 45,515
Motor Vehicles (Non-Military) 291,092 - - - 291,092
Other Vehicles 341,333 - - - 341,333
Leasehold improvements 539,328 - - - 539,328
Total 2,711,712 - - - 2,711,712

Accumulated Amortization

(in dollars) Opening Balance Acquisitions Adjustments Disposals and Write-offs Closing Balance
Machinery and equipment 481,246 137,205 - - 618,451
Informatics hardware 24,889 12,444 - - 37,333
Informatics software - - - - -
Other equipment, including furniture 12,927 2,350 - - 15,277
Ships and Boats 14,150 4,551 - - 18,701
Motor Vehicles (Non-Military) 255,896 22,577 - - 278,473
Other Vehicles 42,365 34,133 - - 76,498
Leasehold improvements 164,540 54,847 - - 219,387
Total 996,013 268,107 - - 1,264,120

Net book value

(in dollars) 2021 2020
Machinery and equipment 790,268 927,473
Informatics hardware 24,888 37,332
Informatics software - -
Other equipment, including furniture 8,227 10,577
Ships and Boats 26,814 31,365
Motor Vehicles (Non-Military) 12,619 35,196
Other Vehicles 264,835 298,968
Leasehold improvements 319,941 374,788
Total 1,447,592 1,715,699

8. Contractual obligations

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

(in dollars) 2022 2023 2024 2025 2026 and subsequent Total
Transfer payments 2,404,345 2,151,909 543,021 - - 5,099,275
Other obligations 5,037,027 262,696 93,965 17,346 - 5,411,034
Total 7,441,372 2,414,605 636,986 17,346 - 10,510,309

9. Related party transactions

POLAR is related as a result of common ownership to all government departments, agencies, and Crown corporations. Related parties also include individuals who are members of key management personnel or close family members of those individuals, and entities controlled by, or under shared control of, a member of key management personnel or a close family member of that individual.

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

a) Common services provided without charge by other government departments
During the year, POLAR received services without charge from certain common service organizations, related to the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in POLAR’s Statement of Operations and Departmental Net Financial Position as follows:

(in dollars) 2021 2020
Employer's contribution to the health and dental insurance plans 571,338 599,173
Total 571,338 599,173

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 the payroll and cheque issuance services provided by Public Services and Procurement Canada are not included in the Department’s Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with other government departments and agencies
During the year, POLAR received services without charge from certain common service organizations, related to the employer’s contribution to the health and dental insurance plans. These services provided without charge have been recorded at the carrying value in POLAR’s Statement of Operations and Departmental Net Financial Position as follows:

(in dollars) 2021 2020
Accounts receivable 836,348 204,927
Accounts payable 501,266 1,754,466
Expenses 6,704,849 9,484,999

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

10. Segmented Information

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

(in dollars) Polar Science and Knowledge Internal Services 2021 2020
Transfer payments
  • Other Levels of Government
1,949,779 - 1,949,779 4,451,598
  • Non-profit institutions and other organizations
400,112 - 400,112 1,467,137
  • Indigenous peoples
584,597 - 584,597 472,912
  • Industry
1,201,072 - 1,201,072 429,400
  • Individuals
- - - 13,000
Total transfer payments 4,135,560 - 4,135,560 6,834,047
Operating expenses
Salaries and employee benefits 4,611,028 4,719,337 9,330,365 10,189,316
Accommodation - - - -
Professional services 352,209 1,561,934 1,914,143 3,146,001
Transportation and telecommunications 48,577 1,229,865 1,278,442 4,223,991
Rentals 9,585 1,194,552 1,204,137 1,127,262
Repairs and maintenance 17,664 2,587,238 2,604,902 2,437,121
Utilities, materials and supplies 58,634 1,442,545 1,501,179 1,910,690
Machinery and equipment 139,066 34,158 173,224 621,335
Amortization of tangible capital assets 200,816 67,291 268,107 308,675
Information 60,986 134,839 195,825 783,218
Other 14,478 57,424 71,902 91,843
Total Operating expenses 5,513,043 13,029,183 18,542,226 24,839,452
Total expenses 5,513,043 13,029,183 22,677,786 31,673,499
Revenues
  • Lease and use of public property
247,431 46,441 293,872 294,238
  • Revenues earned on behalf of Government
(1,832) - (1,832) (294,238)
Total revenues 245,599 46,441 292,040 -
Net cost from continuing operations 9,403,004 12,982,742 22,385,746 31,673,499

11. Comparative information

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

Annex: Internal Control Over Financial Reporting

1. Introduction

As a new department, created in 2015, Polar Knowledge Canada (POLAR) is continually strengthening its system of internal control as the organization matures, its governance structures are refined and it approaches steady-state operations.

During 2018-19, the department undertook the requisite preliminary steps towards enabling the structured ongoing assessment of the performance of its financial controls by documenting the following key business processes:

  • Delegation of Authorities
  • Allotment, Budgeting and Forecasting
  • Transfer Payments
  • Pay and Benefits
  • Purchases, Payables and Payments

Key control points for these business processes, as well as entity level controls and IT general controls, were identified and their design effectiveness assessed. That assessment identified some control deficiencies and during 2019-2020, attention was directed towards remediating those deficiencies.

2. Remediation activities

Activities undertaken to address risks related to control deficiencies noted during the design effectiveness testing include:

  • Practices related to FAA Section 34 approval for timesheets and overtime were strengthened;
  • Personnel files were reviewed for completeness and missing documentation obtained;
  • Concise guidance on the various procurement methods was developed and incorporated into the updated Supporting Notes to the Delegation of Spending and Financial Signing Authorities Chart;
  • A Departmental Security Plan was developed and approved by the President;
  • POLAR’s first compliance audits of contribution recipients were conducted by a third party service provider; and
  • A Manager, IM/IT was hired.

3. Assessment plan

POLAR intended to conduct operational effectiveness testing of the controls referred to in Section 1 in fiscal year 2020-21 however this timeline was revised to fiscal year 2021-22 due to operational challenges. POLAR will leverage the results of the periodic core control audits performed by the Office of the Comptroller General (OCG), as well as OCG Small Department Self-Assessment Tools in order to assess, maintain and improve controls, as needed, in between audit cycles

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